Document:

Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”), is made and entered into this 18th day of July, 2013 (the “Effective Date”), by and between RLJ Entertainment, Inc. (the “Company”), and Miguel Penella (“Executive”) (each, a “Party,” and collectively, the “Parties”).

 

Recital:

 

The Company desires to employ Executive as an employee of the Company, and Executive desires to be employed as an employee, on the terms and conditions provided in this Agreement.

 

NOW, THEREFORE, in consideration of the mutual representations, warranties, covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties hereto agree as follows:

 

Section 1.             Term.  The Company will employ Executive, and Executive will serve the Company, as an employee under the terms of this Agreement until terminated pursuant to Section 4.  The term of this Agreement, as in effect from time to time in accordance with the foregoing, shall be referred to herein as the “Term.”  The period of time between the commencement and the termination of Executive’s employment hereunder shall be referred to herein as the “Employment Period.”

 

Section 2.             Employment.

 

(a)         Position and Reporting.  The Company hereby employs Executive as the Chief Executive Officer (“CEO”) and President of the Company, for the Employment Period on the terms and conditions set forth in this Agreement.  Executive represents and warrants that (i) his employment with the Company does not and will not breach any agreements with or duties to any former employer or any other third party; and (ii) Executive has no obligations inconsistent with the terms of this Agreement or with his undertaking a relationship with the Company, and Executive will not enter into any agreement in conflict with this Agreement.

 

(b)         Authority and Duties.  Executive shall exercise such authority, perform such financial and executive duties and functions and discharge such responsibilities as are reasonably associated with Executive’s position as CEO, commensurate with the authority vested in Executive’s position, pursuant to this Agreement and consistent with the direction provided by the Board of Directors of the Company (the “Board”).  During the Employment Period, Executive shall devote his full business time, skill and efforts to the business of the Company, and to no other economic endeavor.  Notwithstanding the foregoing, Executive may make and manage passive personal business investments of his choice (in the case of publicly-held corporations, not to exceed five percent (5%) of the outstanding voting stock) and serve in any capacity that does not interfere with his duties and obligations hereunder, with any civic, educational or charitable organization without seeking or obtaining prior approval by the Board.

Section 3.             Compensation and Benefits.

 

(a)         Base Salary.  During the Employment Period, the Company shall pay to Executive, as compensation for the performance of his duties and obligations under this Agreement, a base salary at the rate of $500,000 per annum, less all applicable deductions required by law, payable in arrears not less frequently than monthly in accordance with the normal payroll practices of the Company (“Base Salary”).  Such Base Salary shall be subject to review by the Board each year for possible increase by the Company, but shall in no event be decreased from its then-existing level during the Employment Period.  Any such increase shall be in the discretion of the Board.

 

(b)         Annual Bonus.  In each year of the Employment Period, the Company shall pay to Executive, as further compensation for the performance of his duties and obligations under this Agreement, incentive compensation (the “Annual Bonus”) under the terms and conditions set forth in this Section 3(b).  If the applicable performance targets are met, the Annual Bonus amount shall be $400,000 for calendar year 2013.  The Annual Bonus amount for each of calendar years 2014, 2015 and any subsequent year shall be set by the Board no later than March 31st of such year provided that the Annual Bonus amount for each such year shall not be less than $250,000.   The Annual Bonus shall be paid upon the achievement by the Company of 97% of the EBITDA or revenue targets (the “Performance Target Levels”) proposed by management and approved and adopted by the Board, in its sole discretion, for each of calendar years 2013, 2014, 2015 and any subsequent year.  Notwithstanding the failure of the Company to achieve 97% of the Performance Target Level in any year, the Board may, upon recommendation of the Compensation Committee, taking into consideration all relevant facts and circumstances, determine to award Executive all or a portion of the Annual Bonus amount for such year or other incentive compensation.  The Board shall use reasonable efforts to set a target bonus and performance criteria for each year after 2013 by March 31 of such year.  The Annual Bonus shall be paid within 75 days following the end of a calendar year.

 

(c)         Other Benefits.  During the Employment Period, (i) Executive shall be entitled to participate in all of the employee benefit plans, programs and arrangements in effect during the Employment Period that are generally available to senior employees of the Company, including health insurance and life insurance, subject to and on a basis similar to the terms, conditions and overall administration of such plans, programs and arrangements, and (ii) Executive shall be entitled to fringe benefits and perquisites comparable to those of other senior employees of the Company (the items in (i) and (ii), collectively, “Benefits”).  Executive shall be entitled to four (4) weeks’ vacation per year, subject to the accrual rate, accrual carry-over limitations and other provisions set forth in the employee handbook as amended from time to time (the “Employee Handbook”) and by which Executive hereby acknowledges he is bound.

 

(d)         Business Expenses.  During the Employment Period, the Company shall reimburse Executive for all documented reasonable business expenses actually incurred by Executive in the performance of his duties under this Agreement, in accordance with the Company’s policies as set forth in the Employee Handbook and Section 12(b) of this Agreement.  All expenses for a single activity or event in excess of $10,000 shall require the advance written approval of the Board.  Executive shall comply with all budget limitations, approval and reporting requirements as the Company may establish from time to time.

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Section 4.             Termination of Employment.

 

(a)         Termination for Cause.  The Company may, in its discretion, terminate Executive’s employment hereunder, with Cause, without prior notice.  For purposes of this Agreement, the term “Cause” shall mean any one or more of the following:

 

		(i)	Dishonesty, theft, misrepresentation, deceit, or fraud; in each case that is material, in connection with Executive’s performance of his duties or functions hereunder;

 

		(ii)	Dishonesty, theft, misrepresentation, deceit, or fraud, other than in connection with Executive’s performance of his duties or functions hereunder, provided such actions cause material harm, or potential material harm, to the Company, including material harm to the reputation or functioning of the Company, or to Executive’s ability to fully perform all duties or functions hereunder;

 

		(iii)	Executive’s negligence or insubordination, as determined in the good faith, reasonable discretion of the Company, to perform the duties and functions reasonably assigned to Executive by the Company, provided however, that if the failure is such as may, in the reasonable opinion of the Company, be of the nature that Executive may cure such breach, the Company shall give notice of such failure, and the Executive shall have up to thirty (30) calendar days to remedy the deficiency to the Company’s reasonable satisfaction.

 

		(iv)	at any time prior to or after the execution of this Agreement, Executive’s conviction for, or plea of nolo contendere to, a charge or commission of a felony;

 

		(v)	any material breach by Executive of the provisions of Sections 6-9 of this Agreement; provided however, that if the breach is such as may, in the reasonable opinion of the Company, be of the nature that Executive may cure such breach, Executive shall have thirty (30) days following written notice from the Company to Executive to fully cure the same.

 

(b)        Termination Upon Death or Permanent and Total Disability.  Executive’s employment shall be terminated immediately and automatically upon the death of Executive.  Executive’s employment may be terminated, at the option of the Board, if Executive shall be rendered incapable of performing the normal duties and functions of his employment, as determined in the reasonable discretion of the Company, by reason of a Disability (as defined herein).  For purposes of this Agreement, “Disability” shall mean any mental or physical condition either: (i) defined to be a “disability” for purposes of eligibility to receive long term disability benefits under the Company’s long term disability insurance policy or contract as may be in effect from time to time for the benefit of employees of the Company, or (ii) that impairs the ability of the Executive to perform the normal duties and functions of his employment and which can be expected to last, or which has lasted, for a period of six (6) or more consecutive months from the first date of first onset.  If the Employment Period is terminated by reason of the Disability of Executive, the Company shall give thirty (30) days’ advance written notice to that effect to Executive.

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(c)         Termination for Good Reason.  Executive may terminate his employment hereunder for “Good Reason.”  For purposes of this Agreement, the term “Good Reason” shall mean either: (i) a material diminution in the Executive's duties or responsibilities (considered as a whole) as set forth herein, including removing Executive as CEO or President of the Company; (ii) a material breach by the Company of this Agreement, including of the compensation and benefits provision set forth in Section 3 hereof or a material reduction in the base compensation (or the amount of performance based target bonus for 2013, 2014, or 2015) or benefits payable or available to Executive as the case may be; subject in either event (i) or (ii), to the Company’s thirty (30) day right to cure after notification from Executive; or (iii) Executive is required by the Company to relocate to an office or facility on a regular basis that is more than fifty (50) miles from the Company’s present location at 8518 Georgia Avenue, Silver Spring, Maryland.

 

(d)        Termination without Cause.  The Company may terminate Executive’s employment without Cause, at any time, on thirty (30) days’ prior written notice.

 

(e)         Termination by Executive.  Executive may terminate the Executive’s employment for any reason, at any time, upon thirty (30) days’ prior written notice to the Company.

 

Section 5.             Consequences of Termination.

 

(a)         Termination without Cause or for Good Reason.  In the event of termination of Executive’s employment hereunder by the Company without Cause or by the Executive for Good Reason (other than upon death or Disability), Executive shall be entitled to the following exit pay and benefits:

 

  (i)            Exit Pay - For a period of twelve (12) months following termination of employment (the “Severance Period”), Executive shall continue to receive payment of Executive’s Base Salary as in effect immediately prior to such termination.  In addition, Executive shall be entitled, based upon the date of termination of employment, to a pro rata portion of the entire bonus to which he would have been entitled for the year in which the termination occurs, if 97% of the Performance Target Levels for such year are achieved, payable as provided for in Section 3 (a).  Executive shall receive a lump sum payment for all accrued but unused vacation earned up to the date of termination of his employment (in accordance with Company policy) and to any other compensation or other benefits as may be required by applicable laws, rules or regulations or the compensation  or benefit plans and arrangements in which Executive participates or as set forth in the Employee Handbook (such benefits to be paid, except as otherwise provided by Company policy, not later than thirty (30) days after the date of termination of Executive’s employment).  For the avoidance of doubt, no exit pay shall be due or payable in the event of death or disability.

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  (ii)          Benefits Continuation - Executive shall continue all Benefits through the Severance Period (Benefits, however, shall not be deemed to include participation in new grants or awards under incentive compensation or bonus plans.)

 

  (iii)         As a condition to payment, Exit Pay and Benefits Continuation, Executive shall, within thirty (30) days following the date of termination of employment, execute a general release in favor of the Company in the form attached to this Agreement as Exhibit A, and shall resign as director of the Company and as an officer or director of any affiliate of the Company.

 

(b)        Other Terminations.  In the event of termination of Executive’s employment hereunder for any reason other than those specified in Section 5(a)(i) hereof, including but not limited to Executive’s voluntary termination without Good Reason, Executive shall not be entitled to any compensation, or other benefits provided hereunder, except as may otherwise be required by applicable laws, rules or regulations or the compensation or benefit plans and arrangements in which Executive participates or as set forth in the Employee Handbook (such benefits to be paid, except as otherwise provided by Company policy, not later than thirty (30) days after the date of termination of Executive’s employment).

 

Section 6.             Confidentiality.

 

(a)        Generally.  All Confidential and Proprietary Information, as defined herein, shall be and remain the sole and exclusive property of the Company, without regard to any involvement Executive may have (or have had) in the conception, development, creation, and/or modification of same.  Executive agrees that he will not at any time during the Term or at any time thereafter (regardless of the reason for termination), in any fashion, form or manner, either directly or indirectly, divulge, disclose or communicate to any Person, in any manner whatsoever, any Confidential and Proprietary Information.  For purposes of this Agreement, a “Person” means any legal person, including, any natural person, corporation, partnership, joint venture, association, limited liability company, joint-stock company, business trust, unincorporated organization, governmental entity or any other entity of every nature, kind and description whatsoever.

 

(b)       “Confidential and Proprietary Information” Defined.  “Confidential and Proprietary Information” means any and all information or material: (i) disclosed or communicated by the Company to Executive; (ii) developed, learned, or otherwise acquired by Executive and relating, directly or indirectly, to his employment with the Company; (iii) entrusted to the Company by third parties; and/or (iv) disclosed or communicated to the Executive during his employment with the Company by any third party that owes a duty of confidentiality with respect to the information and/or material so disclosed or communicated.  Confidential and Proprietary Information includes, but is not limited to, inventions, confidential information, trade secrets, copyrighted works (registered, unregistered, and/or common law), product ideas, techniques, processes, formulas, computer software source and/or object code and documentation, algorithms, system design, architecture, logic, structure, software, mask works, data and/or any other information of any type relating to research, development, marketing, forecasts, sales, profit margins, costs, pricing, non-public financial or accounting information, lists of actual or potential clients suppliers or partners, and/or personnel data, including the salaries, duties, qualifications, performance levels, and terms of compensation of other Company employees, without regard in any event to whether such information or material is or is not marked as “proprietary” and/or “confidential.”  Confidential and Proprietary Information may (but need not) be contained in material such as drawings, samples, procedures, specifications, reports, studies, analyses, client or supplier lists, budgets, cost or price lists, compilations and/or computer programs, or may be in the nature of unwritten knowledge or know-how, without regard to whether such knowledge or know-how is protected by the law of trade secrets.

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(c)         Exclusions.  The provisions of this Section 6 shall not apply to: (i) information that is public knowledge or available to the public other than as a result of disclosure by Executive in breach of this Section 6; (ii) information disseminated by the Company to third parties in the ordinary course of business; (iii) information lawfully received by Executive from a third party who, based upon inquiry by Executive, is not bound by a confidential relationship to the Company or any of its Affiliates (as defined herein); or (iv) information disclosed under a requirement of law or as directed by applicable legal authority having jurisdiction over Executive.  For purposes of this Agreement, an “Affiliate” of any Person means any Person, directly or indirectly controlling, controlled by or under common control with such Person.  A Person shall be deemed to have control when such Person possesses the power, directly or indirectly, or has the power to direct or to cause the direction of, the management and policies of a Person through the ownership of voting securities, by contract or otherwise.

 

Section 7.             Ownership of Company Documents.  All Company Documents (as defined herein) shall be and remain the sole and exclusive property of the Company without regard to any involvement Executive may have (or have had) in the conception, development, creation, and/or modification of such Company Documents.  All Company Documents, materials, and property in Executive’s possession or under his control shall be returned to the Company as and when requested, excepting only his personal copies of records relating to his compensation (“Personal Documents”).  Even if the Company does not so request, Executive shall return all Company Documents, materials, and property immediately upon the termination of employment without regard to the reason for the termination, and, except for his Personal Documents, will not take with him or give to any third party any Company Documents, materials, or property or any reproduction thereof upon said termination of employment.  “Company Documents” means documents or other media that contain or relate to Confidential and Proprietary Information or any other information concerning the business, operations, or plans of the Company, whether such documents have been prepared by Executive or by others.  Company Documents include, but are not limited to, papers, drawings, photographs, charts, graphs, notebooks, client lists, sound recordings and other printed, typewritten or handwritten documents.

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Section 8.             Inventions; Copyrights; Further Assurances.

 

(a)        Inventions.  Executive hereby transfers, assigns, and conveys to the Company any and all rights he presently has or may acquire in any and all Inventions (as defined herein) conceived, made, developed, or first reduced to practice or learned by him and/or others during the term of his employment with the Company.  This assignment shall include: (i) the right to file and prosecute patent applications on such Inventions in any and all countries, (ii) the patent applications filed and patents issuing thereon, and (iii) the right to obtain copyright, trademark or trade name protection for any related work product.  Executive shall promptly and fully disclose all such Inventions to the Company conceived, made, developed, or first reduced to practice or learned, either alone or jointly with others, during the term of his employment with the Company and assist the Company in obtaining and protecting the rights therein (including patents thereon) in any and all countries (at the Company’s sole cost and expense); provided, however, that said Inventions will be the sole property of the Company, whether or not patented or registered for copyright, trademark or trade name protection, as the case may be, and which relate, directly or indirectly, to his work for the Company.  Such disclosure shall be made promptly after each Invention is conceived, made, developed, or first reduced to practice or learned, whichever is earliest in time.  “Invention(s)” means any and all discoveries, developments, concepts, designs, ideas, improvements, inventions and/or works of authorship (including interim work product, modifications, and derivative works), whether or not patentable, copyrightable, or otherwise legally protectable.  This includes, but is not limited to, any new product, method, procedure, process, formulation, algorithm, computer program, software, technique, use, equipment, device, apparatus, system, compound, composition of matter, design or configuration of any kind, and/or any improvement(s) thereon.

 

(b)       Copyrights.  Executive agrees to promptly and fully disclose to the Company any and all copyrighted (registered, unregistered, or common law) and potentially copyrightable subject matter that Executive conceives, creates, develops, or modifies during the term of his employment by the Company and which relates, directly or indirectly, to his work as an employee, including all computer programs, documentation, technical descriptions for products, user’s guides, and/or illustrations, including any contributions to such subject matter (“Copyright Product”).  All Confidential and Proprietary Information which is Copyright Product shall be considered "work made for hire" under the copyright laws of the United States, and the copyright for any and all Copyright Product shall automatically be and remain the sole and exclusive property of the Company.  Furthermore, Executive hereby transfers and assigns to the Company any and all rights he presently possesses or may acquire in any and all Copyright Product which, for any reason, does not qualify as "work made for hire".  If any Copyright Product embodies or reflects any of preexisting rights, Executive hereby grants to the Company an irrevocable, perpetual, nonexclusive, worldwide, royalty-free right and license to use, reproduce, display, perform, distribute copies of and prepare derivative works based upon such preexisting rights and to authorize others to do any or all of the foregoing.

 

(c)        Further Assurances.  During and at any time after employment by the Company and upon Company request, Executive will execute all papers in a timely manner and do all reasonable acts necessary or desired to apply for, secure, maintain and/or enforce patents, copyrights, trademarks and any other legal rights in the United States and any foreign countries in any and all inventions, Confidential and Proprietary Information and Copyright Product and other intangible assets owned by and/or assigned to Company under this Agreement or otherwise.  Executive will execute all papers and do any and all reasonable acts necessary or desired to assign and transfer to Company, or any Person to whom Company is obligated to assign its rights, Executive’s entire right, title, and interest in and to any and all inventions, Confidential and Proprietary Information and Copyright Product and other intangible assets.  In the event that Company is unable for any reason whatsoever to secure Executive’s signature to any document reasonably necessary or desired for any of the foregoing purposes (including, but not limited to, renewals, extensions, re-registrations, continuations, divisions or continuations in part), Executive hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as his agents and attorneys-in-fact to act for and in his behalf and in his stead, but only for the purpose of executing and filing any such document(s) and doing all other lawfully permitted acts to accomplish the foregoing purposes with the same legal force and effect as if executed by Executive.

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Section 9.            Non-Solicitation of Executives.  Executive agrees that he shall not during the Employment Period and for a period of twenty-four (24) months following the end of the Employment Period, directly or indirectly, alone or as principal, partner, joint venturer, officer, director, employee, consultant, agent, independent contractor or stockholder, or in any other capacity whatsoever: (i) hire, solicit for hire, employ, retain, or enter into any employment, agency, consulting or other similar agreement or arrangement with, any Person who, within the twenty-four (24) month period prior to the termination of Executive’s employment by the Company, to the Knowledge of Executive, was an employee the Company or a Company Affiliate, (ii)  induce or attempt to induce such Person to terminate his employment with the Company or any Company Affiliate.

 

Section 10.         Non-Competition.  Executive agrees that he shall not during the Employment Period and during the Restricted Period (as herein defined), directly or indirectly, alone or as principal, partner, joint venture, officer, director, employee, consultant, agent, independent contractor or stockholder, or in any other capacity whatsoever, engage in, provide services to, consult or assist any other entity that is engaged, or proposed to be engaged, in any material respect in (a) the sale, distribution, marketing, production and/or acquisition of video programming content for sale directly to end users or for distribution to end users by means of the internet, or (b) performing any other business activities which are the same or substantially similar to any business activity provided or performed by the Company at anytime during the Employment Period.  The foregoing restriction will apply throughout North America, or such other geographical area as a court shall find reasonably necessary to protect the goodwill and business of the Company and its Affiliates (the “Restricted Territory”).  For purposes of this Agreement, the term “Restricted Period” shall mean the period of time following the date of Executive’s termination equal to twelve (12) months.

 

Section 11.        Breach of Restrictive Covenants; Specific Enforcement.  The restrictions contained in Sections 6 through 11 hereof, inclusive, are necessary for the protection of the business and goodwill of the Company and its Affiliates and are considered by the Executive to be reasonable for such purposes.  It is acknowledged that it may be impossible to determine the monetary damages incurred by Executive’s violation of this Agreement and that any violation of this Agreement will cause irreparable, immediate and substantial injury to the Company.  Accordingly, Executive agrees that Company will be entitled, in addition to all other rights and remedies which may be available, to an injunction enjoining and restraining Executive from committing a violation of this Agreement and Executive agrees to the issuance and entry of such injunction.  In addition, Company will be entitled to such damages as it can demonstrate it has sustained by reason of the violation of this Agreement by Executive.

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Section 12.         Compliance with Code Section 409A.  All payments pursuant to this Agreement shall be subject to the provisions of this Section 12.  Notwithstanding anything herein to the contrary, this Agreement is intended to be interpreted and operated to the fullest extent possible so that the payments and benefits under this Agreement either shall be exempt from the requirements of  section 409A of the Internal Revenue Code of 1986, as amended ("Code Section 409A") or shall comply with the requirements of such provision; provided however that notwithstanding anything to the contrary in this Agreement, in no event shall the Company be liable to the Executive for or with respect to any taxes, penalties or interest which may be imposed upon the Executive pursuant to Code Section 409A.

 

(a)         Payments to Specified Executives.  To the extent that any payment or benefit pursuant to this Agreement constitutes a “deferral of compensation” subject to Code Section 409A (after taking into account to the maximum extent possible any applicable exemptions) (a “409A Payment”) treated as payable upon a “separation from service” pursuant to Code Section 409A (“Separation from Service”), then, if on the date of the Executive’s Separation from Service, the Executive is a Specified Executive, then to the extent required for Executive not to incur additional taxes pursuant to Code Section 409A, no such 409A Payment shall be made to the Executive earlier than the earlier of (i) six (6) months after the Executive’s Separation from Service; or (ii) the date of his death.  Should this Section 12 result in a delay of payments or benefits to Executive, on the first day any such payments or benefits may be made without incurring additional tax pursuant to Code Section 409A (the “409A Payment Date”), the Company shall make such payments and provide such benefits as provided for in this Agreement, provided that any amounts that would have been payable earlier but for the application of this Section 12, shall be paid in lump-sum on the 409A Payment Date.  For purposes of this Section 12, the terms “Specified Executive” and “Separation from Service” shall have the meaning set forth in Code Section 409A as determined in accordance with the methodology established by the Company.  For purposes of determining whether a Separation from Service has occurred for purposes of Code Section 409A, a Separation from Service is deemed to include a reasonably anticipated permanent reduction in the level of services performed by the Executive to less than twenty (20%) of the average level of services performed by the Executive during the immediately preceding 12-month period (or period of service if less than 12 months).

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(b)        Reimbursements.  For purposes of complying with Code Section 409A and without extending the payment timing otherwise provided in this Agreement, taxable reimbursements under this Agreement, subject to the following sentence and to the extent required to comply with Code Section 409A, will be made no later than the end of the calendar year following the calendar year the expense was incurred.  To the extent required to comply with Code Section 409A, any taxable reimbursements and any in-kind benefit under this Agreement will be subject to the following:  (a) payment of such reimbursements or in-kind benefits during one calendar year will not affect the amount of such reimbursement or in-kind benefits provided during any other calendar year (other than for medical reimbursement arrangements as excepted under Treasury Regulations §1.409A-3(i)(1)(iv)(B) solely because the arrangement provides for a limit on the amount of expenses that may be reimbursed under such arrangement over some or all of the period the arrangement remains in effect); (b) such right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another form of compensation to the Executive and (c) the right to reimbursements under this Agreement will be in effect for the lesser of the time specified in this Agreement or ten years plus the lifetime of the Executive.  Any taxable reimbursements or in-kind benefits shall be treated as not subject to Code Section 409A to the maximum extent provided by Treasury Regulations §1.409A-1(b)(9)(v) or otherwise under Code Section 409A.

 

(c)         Release.  The requirements for a release in Section 5(a)(i) shall be construed in accordance with this Section 12 and Code Section 409A, and the Executive shall not have the ability to determine the timing of any 409A Payments by virtue of the time the Executive executes and delivers the release.

 

(d)        No Acceleration; Separate Payments; Termination of Employment.  No 409A Payment payable under this Agreement shall be subject to acceleration or to any change in the specified time or method of payment, except as otherwise provided under this Agreement and consistent with Code Section 409A.  If under this Agreement, a 409A Payment is to be paid in two or more installments, for purposes of Section 409A, each installment shall be treated as a separate payment.  Notwithstanding anything contained in this Agreement to the contrary, the date on which a Separation from Service occurs shall be treated as the termination of employment date for purposes of determining the timing of payments under this Agreement to the extent necessary to have such payments and benefits under this Agreement be exempt from the requirements of Code Section 409A or comply with the requirements of Code Section 409A.

 

(e)        Cooperation.  If the Company or Executive determines that any provision of this Agreement is or might be inconsistent with the requirements of Code Section 409A, the parties shall attempt in good faith to agree on such amendments to this Agreement as may be necessary or appropriate to avoid subjecting Executive to the imposition of any additional tax under Code Section 409A without changing the basic economic terms of this Agreement.  Notwithstanding the foregoing, no provision of this Agreement shall be interpreted or construed to transfer any liability for failure to comply with Code Section 409A from Executive or any other individual to the Company.  This Section 12 is not intended to impose any restrictions on payments or benefits to Executive other than those otherwise set forth in this Agreement or required for Executive not to incur additional tax under Code Section 409A and shall be interpreted and operated accordingly.

 

Section 13.         Grant of Restricted Shares.  Grant of Restricted Shares.  In consideration of Executive’s employment and Executive’s execution of this Agreement, the Company and Executive have entered into a Restricted Stock Award Agreement, of even date herewith (the “Grant Agreement”), for the grant to Executive of certain shares of the Company’s stock (the “Restricted Shares”).  The Restricted Shares shall be subject to the terms and conditions of the Grant Agreement, attached hereto as Exhibit B, and the RLJ Entertainment, Inc. 2012 Incentive Compensation Plan attached hereto as Exhibit C, as it may be amended from time to time.

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Section 14.         Use of Proprietary Information.  Executive will not use in the performance of his duties any documents or materials of a former employer that are not generally available to the public or have not been legally transferred to Company.  Company understands that situations may arise in the future that may require Company to discuss with his future employers the existence of this Agreement and Executive hereby expressly grants Company permission to do so.

 

Section 15.         Notices.  For the purposes of this Agreement, notices, demands and all other communications provided for in this Agreement shall be in writing and shall be personally  delivered or (unless otherwise specified) mailed by United States certified or registered mail, return receipt requested, postage prepaid, addressed as follows:

 

If to Executive:

Miguel Penella

6039 N. 27th Street

Arlington, VA  22207

With copy to:

Womble Carlyle Sandridge & Rice, LLP

8065 Leesburg Pike, Fourth Floor

Vienna, VA  22182

Attention:   Keith J. Mendelson, Esquire

 

If to the Company:

RLJ Entertainment, Inc.

8515 Georgia Avenue, Suite 650

Silver Spring, Maryland  20910

Attention: ___________________

 

With copy to:

The RLJ Companies

3 Bethesda Metro Center

Suite 1000,

Bethesda, MD  20814

Attention:  H. Van Sinclair

 

and

 

Image Entertainment, Inc.

20525 Nordhoff Street Suite 200

Chatsworth, California 91311

Attention: Michael Bayer

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or to such other address as a Party hereto shall designate to the other Party by like notice, provided that notice of a change of address shall be effective only upon receipt thereof.  Notice shall be deemed duly given when received by the addressee thereof, provided that any Notice sent by registered or certified mail shall be deemed to have been duly given three (3) days from date of deposit in the United States mails, unless sooner received.

 

Section 16.          Waiver of Breach.  Any waiver of any breach of the Agreement shall not be construed to be a continuing waiver or consent to any subsequent breach on the part of either Executive or of the Company.

 

Section 17.          Assignment.  Executive may not assign his rights or delegate his duties under this Agreement; provided, however, that this Agreement shall inure to the benefit of and be binding upon the heirs, assigns or designees of Executive to the extent of any payments due to Executive hereunder.  Notwithstanding anything to the contrary contained herein, the Company shall be free to assign its rights and delegate its duties under this Agreement, and this Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Company, all as though such successors and assigns of the Company and their respective successors and assigns were the Company.  As used in this Agreement, the term “Company” shall be deemed to refer to any such successor or assign of the Company referred to in the preceding sentence.

 

Section 18.         Withholding of Taxes.  All payments required to be made by the Company to Executive under this Agreement shall be subject to the withholding of such amounts, if any, relating to tax, and other payroll deductions as the Company may reasonably determine it should withhold pursuant to any applicable law or regulation.

 

Section 19.         Severability.  To the extent any provision of this Agreement or portion thereof shall be invalid or unenforceable, it shall be considered deleted therefrom and the remainder of such provision and of this Agreement shall be unaffected and shall continue in full force and effect.

 

Section 20.         Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

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Section 21.          Governing Law.  This Agreement has been entered into within the State of Maryland and shall be deemed performed therein.  This Agreement shall be construed, interpreted and enforced in accordance with the laws of the State of Maryland, without regard to conflicts of law principles.  The Company and Executive hereby agree that any suit, action or proceeding arising out of or based upon any claim under this Agreement shall be instituted against Executive in state or federal court in Maryland, and Executive and Company waive any objection they may have to the laying of venue of such suit, action or proceeding therein.  EACH OF THE PARTIES HERETO HEREBY VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT EACH MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT.

 

Section 22.         Amendments.  No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by Executive and an officer of the Company.  No waiver by either Party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.  No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either Party which are not set forth expressly in this Agreement.

 

Section 23.         No Third Party Beneficiaries.  This Agreement shall not confer any rights or remedies upon any Person other than the Parties and their respective successors and permitted assigns.

 

Section 24.         Press Releases.  Executive shall not issue any press release or make any public announcement relating to the subject matter of this Agreement without the prior written approval of the Company.  The Company may use Executive’s name, photograph, likeness, voice, other personal attribute, and biographical and other information in any media during his employment for any business purpose.

 

Section 25.        Headings; Explanatory Note.  The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.  The explanatory appearing at the beginning of this Agreement are not mere recitals but are an integral part of the agreement embodied hereby.

 

Section 26.         Expenses.  Each of the Parties will bear its own costs and expenses (including legal fees and expenses) incurred in connection with this Agreement and the transactions contemplated hereby; provided however, the Company will reimburse Executive up to $30,000 for legal fees incurred by Executive in connection with the negotiations and drafting of this Agreement.  Notwithstanding the foregoing, the Parties agree that in the event that a Party is successful in whole or in part in any legal action against the other Party under this Agreement (including, without limitation, an action to enforce the restrictions contained in Sections 6 through 9 hereof, inclusive), the prevailing Party will be entitled to recover all costs associated with such action, including reasonable attorneys’ fees, from the other Party.

13

Section 27.         Construction.

 

(a)        Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise.  Words in the singular shall be held to include the plural and vice versa, and words of one gender shall be held to include the other genders as the context requires.  The terms “hereof,” “herein,” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole (including all of the Schedules and Exhibits hereto) and not to any particular provision of this Agreement.  The word “including” and words of similar import when used in this Agreement shall mean “including, without limitation,” unless otherwise specified.  The word “or” shall not be exclusive, and references to a Person are also references to its permitted successors and assigns.

 

(b)       This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the Party drafting or causing any instrument to be drafted.

 

Section 28.          Entire Agreement.  This Agreement and the Award Agreement constitutes the entire agreement by the Company (and its affiliates) and Executive with respect to the subject matter hereof and supersedes any and all prior agreements or understandings between Executive and the Company with respect to the subject matter hereof, whether written or oral, including, but not limited to, that certain Retention Bonus and Severance Agreement between Acorn Media Group and Executive dated June 22, 2010, which agreement shall be of no further force or effect.  This Agreement may be amended or modified only by a written instrument executed by Executive and the Company.

 

Section 29.          Survival.  The obligations of Sections 5 through 11, 13, 15, 21, 24, 25, 28 and 30 inclusive, and this Section 29, shall survive any termination or expiration of this Agreement.

 

Section 30.         Arbitration.  Whenever a “dispute” arises between the Parties concerning this Agreement (other than a dispute arising out of Executive’s violation of Sections 6-10 in which case the Company may elect to utilize the options available in Section 11), or any other matter arising out of Executive’s employment with the Company, the Parties shall use their best efforts to resolve the “dispute” by mutual agreement.  If such a “dispute” cannot be so resolved within fifteen (15) calendar days, it shall be submitted to final and binding arbitration to the exclusion of all other avenues of relief and adjudicated pursuant to the American Arbitration Association’s Rules for Employment Arbitration then in effect, except as otherwise provided herein.  The parties agree that the hearing in any such arbitration shall be held as soon as practicable in Washington, D.C., and that a written decision shall be rendered by the arbitrator within a reasonable time period after the conclusion of the hearing.  The Parties may submit written requests for relevant documents and a written list of witnesses to the other Party.  Such requests must be served no later than for forty-five (45) days prior to the hearing and responses to such requests must be made no later than fifteen (15) days prior the hearing.  Neither Party may introduce any documents or witnesses at the hearing if omitted from such a response.  The decision of the arbitrator must be in writing and shall be final and binding on the Parties, and judgment may be entered on the arbitrator’s award in any court having jurisdiction thereof.  For any federal equal employment claims or for any claims which would require the Company to bear the administrative costs of the arbitration for the claim to be arbitrable, the administrative cost of the arbitration and the arbitrator’s compensation shall be borne by the Company and each party shall be responsible for his or its own costs and attorneys’ fees, unless otherwise agreed to by the parties.  Otherwise, the parties shall bear the cost of the arbitration and the arbitrator’s compensation equally and shall be responsible for his or its own attorneys’ fees.  This section shall survive the termination of this Agreement.

[Signature page follows]

14

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

 

	
 

	
RLJ ENTERTAINMENT, INC.

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
/s/ TYRONE BROWN

	
 

	
 

	
Name:    Tyrone Brown

	
 

	
 

	
Title:      Director

	
 

	
 

	
EXECUTIVE

	
 

	
 

	
 

	
 

	
 

	
/s/ MIGUEL PENELLA

	
 

	
 

	
Miguel Penella

	
 

 

[Signature Page to Employment Agreement

 between RLJ Entertainment, Inc. and Miguel Penella]

EXHIBIT A

WAIVER AND RELEASE AGREEMENT

THIS WAIVER AND RELEASE AGREEMENT (this “Agreement”) is made and entered into this _____ day of __________________, 20__, by and between ________________ (“Executive”) and RLJ Entertainment, Inc. (the “Company”).

 

Recitals:

WHEREAS, Executive is currently employed by the Company in the role of ______________________________, pursuant to that certain Employment Agreement, dated _________________, 20___ (the “Employment Agreement”);

 

WHEREAS, [____________________________________________________].

 

WHEREAS, [____________________________________________________].

 

WHEREAS, Executive acknowledges that, but for Executive’s agreement to execute this Waiver and Release Agreement, Executive would not be eligible for the severance benefits set forth in the Employment Agreement;

 

NOW THEREFORE, the parties hereby agree as follows:

 

Agreement

1.           Separation of Employment.  Executive’s last day of employment with the Company shall be ________________________, 20___ (the “Termination Date”).  On and after the Termination Date, Executive shall no longer be employed by the Company or any of its affiliates in any capacity, nor shall Executive serve the Company as an officer or director of the Company or any of its affiliates and the Employment Agreement shall terminate and be of no further force or effect.

 

2.           Severance Benefits.  In consideration for the promises set forth in this Agreement, the Company agrees that, following the Company’s receipt of a duly executed original of this Agreement, the Company shall continue to pay Executive’s base salary, minus all applicable federal, state and local taxes, in accordance with the Company’s regular payroll practices, through ________________________, 20___,  and Executive shall be entitled to receive such bonus payment and benefits continuation coverage, if any, expressly provided in the Employment Agreement.

 

3.           Warranty. Executive acknowledges that, other than the Severance Benefits set forth in Section 2, above, Executive has received all wages, accrued but unused vacation pay, equity interests and other benefits due Executive as a result of Executive’s employment with and termination from the Company.

Exhibit A - page 1

4.           Release of Known and Unknown Claims By Executive. In exchange for the Severance Benefits set forth in Section 2 above, and in consideration of the further agreements and promises set forth herein, Executive agrees unconditionally and forever to release and discharge the Company, including, without limitation, the Company’s current and former officers, directors, shareholders, employees, representatives, attorneys and agents, as well as all of their predecessors, parents, subsidiaries, affiliates, successors in interest and assigns (collectively, the “Releasees”) from any and all claims, actions, causes of action, demands, rights, or damages of any kind or nature which Executive may now have, or ever have, whether known or unknown, including any claims, causes of action or demands of any nature arising out of or in any way relating to Executive’s employment with, or termination from the Company on or before the date Executive signs this Agreement.

 

This release specifically includes, but is not limited to, any claims for fraud; breach of contract; breach of implied covenant of good faith and fair dealing; inducement of breach; interference with contract; wrongful or unlawful discharge or demotion; violation of public policy; assault and battery; invasion of privacy; intentional or negligent infliction of emotional distress; intentional or negligent misrepresentation; conspiracy; failure to pay wages, benefits, vacation pay, severance pay, attorneys’ fees, or other compensation of any sort; wrongful termination; retaliation; wrongful demotion; discrimination or harassment on any basis protected by federal, state or local law including, but not limited to race, color, sex, gender identity, national origin, ancestry, religion, disability, handicap, medical condition, marital status, and sexual orientation; any claim under Title VII of the Civil Rights Act of 1964, as amended, the Americans with Disabilities Act, or Section 1981 of Title 42 of the United States Code; violation of any safety and health laws, statutes or regulations; or any other wrongful conduct, based upon events occurring prior to the date of execution of this Agreement.

 

The parties intend this release by Executive to be a full and comprehensive general release waiving and releasing all claims, demands, and causes of action, known or unknown, to the fullest extent permitted by law.  Nothing in this Agreement is intended to nor shall it be interpreted to release any claim which, by law, may not be released.

 

5.           Additional Representations and Warranties By Executive.  Executive represents that Executive has no pending complaints or charges against the Releasees, or any of them, with any state or federal court, or any local, state or federal agency, division, or department based on any event(s) occurring prior to the date Executive signs this Agreement.  Executive further represents that Executive will not in the future file, participate in, encourage, instigate or assist in the prosecution of any claim, complaints, charges or in any lawsuit by any party in any state or federal court against the Releasees, or any of them, unless such aid or assistance is ordered by a court or government agency or sought by compulsory legal process, claiming that the Releasees, or any of them, have violated any local, state or federal laws, statutes, ordinances or regulations based upon events occurring prior to the execution of this Agreement.  Nothing in this Agreement shall be construed as prohibiting Executive from making a future claim with the Equal Employment Opportunity Commission or any similar state agency; provided, however, that should Executive pursue such an administrative action against the Releasees, or any of them, to the maximum extent allowed by law, Executive agrees and acknowledges that Executive will not seek, nor shall Executive be entitled to recover, any monetary damages from any such proceeding.

Exhibit A - page 2

6.           Knowing and Voluntary. Executive represents and agrees that, prior to signing this Agreement, Executive has had the opportunity to discuss the terms of this Agreement with legal counsel of Executive’s choosing.  Executive further represents and agrees that Executive is entering into this Agreement knowingly and voluntarily.  Executive affirms that no promise was made to cause Executive to enter into this Agreement, other than what is promised in this Agreement.  Executive further confirms that Executive has not relied upon any other statement or representation by anyone other than what is in this Agreement as a basis for Executive’s agreement.

 

7.           No Admission of Liability. By entering into this Agreement, neither the Company nor Executive suggests or admits to any liability to one another nor that they violated any law or any duty or obligation to one another.

 

8.           Confidentiality.  Executive represents, warrants and agrees that neither Executive nor any of Executive’s agents or representatives has already disclosed or publicized, nor will at any time in the future disclose or publicize or cause or permit to be disclosed or publicized, the existence of this Agreement, any of the terms of this Agreement, or the facts underlying this Agreement, to any person, corporation, association or governmental agency or other entity except: (a) to the extent necessary to report income to appropriate taxing authorities; (b) to members of Executive’s immediate family; (c) in response to an order of a court of competent jurisdiction or subpoena issued under the authority thereof; or (d) in response to any inquiry or subpoena issued by a state or federal governmental agency; provided, however, that notice of receipt of such judicial order or subpoena shall be immediately communicated by Executive to the Company telephonically, and confirmed immediately thereafter in writing, so that the Company will have the opportunity to assert what rights it has to non-disclosure prior to Executive’s response to the order, inquiry or subpoena.  Executive further represents, warrants and agrees that Executive has to date maintained and will continue to maintain all non-public information regarding the Releasees, or any of them, as strictly confidential and has not disclosed and shall not disclose such information to any person or entity or cause such information to be disclosed to any person or entity, either directly or indirectly, specifically or generally.

 

9.           Cooperation. Executive agrees to consult with the Company regarding on-going matters that commenced during Executive’s employment with the Company and to cooperate with the Company in connection with disputes between the Company and third parties (including, but not limited to, current or former employees) when requested by the Company.  This cooperation may include, but is not limited to, conferring with and assisting the Company in preparatory work in litigation matters, providing factual information to the Company, and giving depositions and testimony in judicial and administrative proceedings.  Executive agrees that Executive will not be paid by the Company for Executive’s cooperation, except that the Company will reimburse Executive for Executive’s reasonable out-of-pocket expenses incurred in connection therewith, provided that such expenses are approved in advance by the Company.

 

10.       No Disparagement.  Executive represents, warrants and agrees that on or after the Termination Date Executive has not disparaged or made derogatory or negative comments, nor will Executive at any time in the future disparage or make derogatory or negative comments, to any third party (including but not limited to employees of the Company) concerning the Releasees, or any of them, at any time.  Nothing in this Section shall preclude Executive from testifying truthfully in any deposition or judicial or administrative proceeding.

Exhibit A - page 3

11.       Return of Property.  By signing below, Executive represents and warrants that Executive has returned to the Company all of the Company’s property, documents (hard copy or electronic files) and information prior to signing this Agreement and that Executive has not, nor will Executive, copy or transfer any Company information, nor will Executive maintain any Company information, after the Termination Date.

 

12.       Assignment.  The Company may assign this Agreement and/or any of its rights or privileges hereunder, in one or more assignments, and this Agreement shall inure to the benefit of all such successors and assigns.

 

13.       Governing Law.  This Agreement shall be governed by the laws of the State of Maryland as applied to agreements made and wholly to be performed in State of Maryland.

 

14.       Entire Agreement.  This Agreement constitutes the entire understanding between the parties with respect to its subject matter, superseding all prior agreements and understandings, written or oral, with respect to its subject matter; provided, however that this agreement shall not be deemed to supersede the Company’s Code of Conduct and/or any agreements between the Company and Executive with respect to the protection of the Company’s confidential, proprietary and/or trade secret information all of which survives. This Agreement may not be amended or modified, nor any provision hereof waived, other than by a writing signed by Executive and an authorized representative of the Company.

 

15.       Ambiguities. The general rule that ambiguities are to be construed against the drafter shall not apply to this Agreement.  In the event that any language of this Agreement is found to be ambiguous, all parties shall have the opportunity to present evidence as to the actual intent of the parties with respect to any such ambiguous language.

 

16.       Severability.  If any sentence, phrase, paragraph, subparagraph or portion of this Agreement is found to be illegal or unenforceable, such action shall not affect the validity or enforceability of the remaining sentences, phrases, paragraphs, subparagraphs or portions of this Agreement.

 

17.       Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, all of which together shall constitute one and the same instrument.

Exhibit A - page 4

PLEASE READ CAREFULLY. THIS AGREEMENT CONTAINS A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

 

THE UNDERSIGNED AGREE TO THE TERMS OF THIS AGREEMENT AND VOLUNTARILY ENTER INTO IT WITH THE INTENT TO BE BOUND THEREBY.

	
 

	
EXECUTIVE:

	
 

	
 

	
 

	
 

	
 

	
Name:

	
 

	
 

	
 

	
Date:

	 

	
 

	
RLJ ENTERTAINMENT, INC.

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	
Name:

	
 

	
 

	
Title:

	
 

	
 

	
 

	
 

	
Date:

	
 

 

 

Exhibit A - page 5Exhibit 10.1

 

CONSENT, TRANSFER, ASSUMPTION AND AMENDMENT AGREEMENT

 

This Consent, Transfer, Assumption and Amendment Agreement (the "Loan Transfer Consent" or this "Agreement"), is made and entered into as of August 12, 2013, by and among (i) XOMA Ireland Limited, a company with limited liability incorporated organized and existing under the laws of Ireland (registered number 307875), having its registered head office at 26 Upper Pembroke Street, Dublin 2, Ireland ("XOMA Ireland"), (ii) XOMA (US) LLC, a limited liability company organized and existing under the laws of Delaware, having its registered office at 2910 Seventh Street, Berkeley, California 94710, USA ("XOMA US"), and (iii) Les Laboratoires Servier, a corporation organized and existing under the laws of France, 50 rue Carnot, 92284 Suresnes, France ("SERVIER").

 

WITNESSETH:

 

WHEREAS, XOMA Ireland and SERVIER entered into a Loan Agreement dated December 30, 2010 (the "Loan Agreement"), pursuant to which SERVIER made the Advance to XOMA Ireland;

 

WHEREAS, in connection with and pursuant to the Loan Agreement, the following documents were delivered and filed:

 

		
Ø

	XOMA Ireland issued a Promissory Note to SERVIER on January 13, 2011 with a principal amount equal to the Advance (the "Original Note");

 

		
Ø

	XOMA Ireland and SERVIER entered into a Fixed Charge (the "Fixed Equitable Charge") dated January 13, 2011 pursuant to which XOMA Ireland charged certain contractual and intellectual property rights (the "Collateral") related to its proprietary IL-ip antibody designated gevokizumab (formerly known as XOMA 052 and/or S- 78989, "GEVO") as a security for the benefit of SERVIER to guarantee the repayment of the amounts due to SERVIER pursuant to the Loan Agreement;

 

		
Ø

	the Fixed Equitable Charge was registered with the Irish Companies Registry on January 25, 2011;

 

		
Ø

	XOMA Ltd., XOMA Ireland's parent company organized under the laws of Bermuda, issued a Guarantee to SERVIER on December 30, 2010, to guarantee the payment by XOMA Ireland to SERVIER of all amounts due under the Loan Agreement (the "XOMA Ltd. Guarantee"); and

 

		
Ø

	XOMA US issued a Guarantee to SERVIER on December 30, 2010, to guarantee the payment by XOMA Ireland to SERVIER of all amounts due under the Loan Agreement (the "XOMA US Guarantee").

 

WHEREAS, XOMA Ireland has entered into an Asset Transfer Agreement (the "Asset Transfer Agreement") with its Affiliate, XOMA US, pursuant to which they have, subject to the satisfaction of certain conditions, agreed to (i) the transfer by XOMA Ireland to XOMA US of various assets relating to GEVO, including the Collateral and (ii) the assumption by XOMA US of certain liabilities of XOMA Ireland, including under the Loan Agreement and the Loan Documents (collectively, the "GEVO Asset Transfer"), the completion of which in accordance with the terms of the Asset Transfer Agreement is expected to occur on or about August 12, 2013 or at such other date as may be notified in writing at least 5 days prior to the occurrence thereof, by XOMA US to SERVIER (the "Transfer Completion Date");

WHEREAS, XOMA Ireland wishes to obtain SERVIER's consent to the transfer of the Loan Agreement to XOMA US in accordance with Section 9.2 thereof, to the termination and release of the Fixed Equitable Charge and corresponding registration with the Irish Companies Registry and to various other matters relating to the Loan Agreement that are necessary or useful to enable XOMA Ireland to complete the GEVO Asset Transfer;

 

WHEREAS, SERVIER is willing to provide such consents subject to (a) XOMA US undertaking to assume and perform all of XOMA Ireland's obligations under the Loan Agreement in accordance with and as modified by the terms hereof, and (b) the satisfaction of the Conditions (as defined in Section 3.1.1 below); and

 

WHEREAS, XOMA US is willing to assume XOMA Ireland's obligations under the Loan Agreement and to deliver to SERVIER and file such documents.

 

NOW, THEREFORE, in consideration of the covenants and conditions set forth below, the Parties hereto, intending to be legally bound, hereby agree to the following:

 

ARTICLE 1 - TRANSFER OF LOAN AGREEMENT

 

	1.1	Subject to Section 3.1, SERVIER hereby irrevocably consents to the transfer of all of XOMA Ireland's rights and obligations under the Loan Agreement to XOMA US.

 

	1.2	Effective as of the Transfer Completion Date, all references to XOMA Ireland in the Loan Agreement shall be deemed to refer to XOMA US and XOMA Ireland shall have no further obligations under the Loan Agreement.

 

	1.3	XOMA US hereby irrevocably agrees effective as of the Transfer Completion Date to assume all of XOMA Ireland's obligations under the Loan Agreement and shall perform and discharge all such obligations in accordance with the terms thereof.

 

	1.4	The representations and warranties contained in Article 5 of the Loan Agreement, shall be true and correct as of the Transfer Completion Date, provided that: (a) each reference in such provisions to XOMA Ireland shall be deemed to refer to XOMA US, and (b) for purposes of Sections 5.1 and 5.4 of the Loan Agreement, each representation and warranty by XOMA Ireland as an Irish limited company shall mean and refer to XOMA US, a Delaware limited liability company, with all such representations and warranties meaning and referring to XOMA US as such.

 

ARTICLE 2 - AMENDMENT

 

	2.1	Termination and Replacement of the Fixed Equitable Charge.

 

	2.1.1	Subject to Section 3.1, XOMA Ireland, SERVIER and XOMA US agree that the Fixed Equitable Charge shall be cancelled and released effective as of the Transfer Completion Date.

 

	2.1.2	Subject to Section 3.1, SERVIER shall at the latest on the Transfer Completion Date deliver to XOMA US a Deed of Release in substantially the form attached as Exhibit 3 hereto dated as of the date hereof giving effect to SERVIER's cancellation and release of the Fixed Equitable Charge.

2

	2.1.3	The definition "Fixed Equitable Charge" in Section 1.2 of the Loan Agreement shall be deleted in its entirety and replaced by the definition of "Security Agreement" set out in Section 3.1 hereof. All references to the term "Fixed Equitable Charge" in the Loan Agreement shall thereinafter be understood as referring to the Security Agreement.

 

	2.2	Cancellation and Replacement of the Note.

 

	2.2.1	Subject to Section 3.1, the Original Note shall be cancelled and of no further effect and validity effective as of the Transfer Completion Date, and replaced by the XOMA US Note (as defined in Section 3.1 hereof) in accordance with terms hereof. Upon receipt of the XOMA US Note, SERVIER shall deliver to XOMA Ireland the cancelled Original Note.

 

	2.2.2	All references to the term "Note" in the Loan Agreement shall thereinafter refer to the XOMA US Note.

 

	2.3	Cancellation of the XOMA US Guarantee to SERVIER.

 

	
2.3.1

	
Subject to Section 3.1, the XOMA US Guarantee shall be terminated and of no further effect effective as of the Transfer Completion Date.

 

	2.4	Tax Cooperation.

 

	2.4.1	Effective as of the Transfer Completion Date, the first three sentences of Section 3.10(a) of the Loan Agreement shall be deleted in their entirety and replaced by the following text:

 

u(a) The Parties agree to cooperate with one another and use reasonable efforts to reduce or eliminate tax withholding or similar obligations in respect of payments of interest and other Indebtedness made by XOMA US to Servier under this Loan Agreement. XOMA US agrees that under the current French/United States Tax Treaty, payments made by XOMA US to Servier under this Loan Agreement are not subject to withholding tax in the United States so long as Servier provides XOMA US a valid Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding ("Form W-8BEN") evidencing its eligibility for a reduced withholding tax rate of 0% under the current French/United States Tax Treaty. Servier shall provide to XOMA US, who shall complete any required portions of any tax forms that may be reasonably necessary in order for XOMA US not to withhold tax or to withhold tax at a reduced rate under an applicable bilateral income tax treaty, including a valid Form W-8BEN ("Tax Forms ")."

 

The remainder of Section 3.10(a) shall remain unchanged, other than the replacement of XOMA Ireland by XOMA US.

 

	2.4.2	Effective as of the Transfer Completion Date, Section 3.10(b) of the Loan Agreement shall be deleted in its entirety and replaced by the following text:

3

(b) If despite Servier's submission of the Tax Forms, XOMA US is required by US tax laws to deduct any taxes from any amount payable under this Loan Agreement or any Note, (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 3.10(b)), Servier receives an amount equal to the sum it would have received had no such deductions been made, (ii) XOMA US shall make such deductions, (Hi) XOMA US shall pay the full amount deducted to the relevant governmental authority in accordance with applicable law and (iv) XOMA US shall furnish to Servier evidence of such payment as may be reasonably acceptable to Servier; provided, however, that XOMA US' obligations under this Section 3.10(b) shall not be applicable to the extent that (x) the withholding results from any modification in Servier's tax status or (y) Servier is able to obtain a reimbursement of or credit for the withheld amount."

 

	2.5	Effective as of the Transfer Completion Date, Section 9.4 (Notices) of the Loan Agreement shall be amended by including the following as XOMA US' address and designated contact person for notices:

 

XOMA (US) LLC 

2910 Seventh Street 

Berkeley, CA 94710 

United States

Attention: Chief Financial Officer 

FAX: 510-649-0315

 

	2.6	Effective as of the Transfer Completion Date, all references to the Republic of Ireland in the Loan Agreement shall be amended to refer to the State of Delaware.

 

	2.7	Effective as of the Transfer Completion Date, all references in the Loan Agreement to Belgium law and Belgium choice of law shall be changed to New York law and New York choice of law; and Sections 9.6 (Governing Law) and 9.7 (Binding Arbitration) of the Loan Agreement shall be deleted and replaced by Section 9 of the Security Agreement, which shall be incorporated by reference to the Loan Agreement and apply thereto mutatis mutandis.

 

	2.8	Effective as of the Transfer Completion Date, the definition of "Collateral" set forth in Section 1.1 of the Loan Agreement shall be deleted in its entirety and replaced by the following text:

 

""Collateral" shall have the meaning ascribed thereto in the Security Agreement."

 

ARTICLE 3 - CONDITIONS TO EFFECTIVENESS - RELEASE 

 

3.1             Conditions to Effectiveness.

 

	3.1.1	XOMA Ireland and XOMA US acknowledge and agree that, pursuant to the terms of the Loan Agreement, SERVIER's consent is required prior to any transfer of the Loan Agreement, and that SERVIER's consent given in this Loan Transfer Consent and the amendments in Article 2 hereof are subject to the prior satisfaction of the Conditions. Upon the satisfaction of the Conditions, SERVIER undertakes to deliver to XOMA Ireland and XOMA US a written confirmation of the Conditions having been satisfied, in substantially the form set out in Exhibit 4 hereto.

4

For the purposes hereof "Conditions" shall mean (a) the completion of the GEVO Asset Transfer as evidenced by the delivery by XOMA US to SERVIER of a written confirmation thereof, and (b) the delivery, at the latest on the Transfer Completion Date, to SERVIER of (i) a replacement promissory note by XOMA US in favor of SERVIER in substantially the form set out in Exhibit 2 hereto (the "XOMA US Note"), and (ii) a security agreement in substantially the form set out in Exhibit 1 hereto pursuant to which XOMA US will grant a security interest in the Collateral to SERVIER to secure all of the obligations of XOMA US under the Loan Agreement, the Loan Documents and the XOMA US Note (the "Security Agreement").

 

	3.1.2	Subject to the satisfaction of the Conditions, SERVIER acknowledges and agrees that neither the consummation of the Asset Transfer Agreement and the GEVO Asset Transfer nor the transfer of the Collateral to XOMA US in accordance with the terms and conditions of the Asset Transfer Agreement and this Loan Transfer Consent shall constitute a breach or default under the Loan Agreement.

 

	3.2	Release. Subject to the satisfaction of the Conditions, SERVIER consequently releases XOMA Ireland from any and all obligations towards SERVIER under the Loan Agreement as of the Transfer Completion Date. Similarly, subject to the satisfaction of the Conditions, XOMA Ireland consequently releases SERVIER from any and all obligations towards XOMA Ireland under the Loan Agreement as of the Transfer Completion Date.

 

ARTICLE 4 - POST-COMPLETION COVENANTS

 

	4.1	Reimbursement of Costs. XOMA US covenants to pay or reimburse the reasonable fees and out-of-pocket expenses of outside counsel incurred by SERVIER in connection with the preparation, execution and delivery of this Loan Transfer Consent and the related agreements.

 

	4.2	Patent Transfer Registration. Following the Transfer Completion Date (within three (3) months for European Union countries and within six (6) months for all other countries listed below), XOMA US (or an appropriate affiliate) and XOMA Ireland shall carry out all formalities that are necessary or helpful to register with the relevant regional or national patent offices in the countries / regions listed below the transfer to XOMA US of the rights in the patent applications or patents, as applicable, that are transferred to XOMA US in connection with the transactions contemplated by the Asset Transfer Agreement. XOMA US and XOMA Ireland shall thereafter use their respective best efforts to have this transfer registered promptly after the filing of such transfer request.

 

The list of countries / regions is: European Union, China, Russia, Indonesia, Turkey, South Korea, South Africa, Australia and Canada. There are, among the patent applications and patents relating to GEVO to be transferred to XOMA US in connection with the GEVO Asset Transfer, no patent applications or patents in Egypt.

5

XOMA US and XOMA Ireland's obligation under this Section 4.2 shall include registering any previous transfer of the rights in the patent applications or patents, as applicable, that are transferred to XOMA US in connection with the transactions contemplated by the Asset Transfer Agreement if and where such supplementary registration is required for the purpose of registering the transfer to XOMA US of such rights.

 

Servier shall reimburse all reasonable out-of-pocket expenses, including registration fees, translation fees and outside patent and legal counsel fees, incurred by XOMA US (or an appropriate affiliate) and/or XOMA Ireland in connection with these patent right transfer registrations.

 

ARTICLE 5 - MISCELLANEOUS

 

	5.1	Further Assurances. XOMA Ireland, XOMA US and SERVIER hereby covenant that each will, at any time and from time to time upon request by any other, and without the assumption of any additional liability thereby, execute and deliver such further documents and do such further acts as such party may reasonably request in order to fully effect the purpose of this Loan Transfer Consent

 

	5.2	Counterparts. This Loan Transfer Consent may be executed in any number of counterparts, each of which shall be deemed an original, but all of which when taken together shall constitute but one and the same agreement.

 

	5.3	Governing Law - Arbitration. This Loan Transfer Consent shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, excluding conflict of laws principles that would cause the application of laws of any other jurisdiction. The provisions of Section 9 of the Security Agreement are hereby incorporated by reference and this Agreement and the parties hereto shall otherwise be subject to all of the terms and conditions of Section 9 of the Security Agreement, mutatis mutandis.

 

	5.4	All capitalized terms used but not defined in this Loan Transfer Consent shall have the meanings ascribed thereto in the Loan Agreement.

 

	5.5	Except as explicitly amended hereby, the Loan Agreement remains in full force and effect.

 

IN WITNESS WHEREOF, the parties hereto have executed or caused this Loan Transfer Consent to be executed as of the date first above written.

 

[Remainder of page intentionally left blank; signature page follows.]

6

	
XOMA Ireland Limited

		
XOMA (US) LLC

	
	
 

			
 

		
	
By:

	/s/ Alan kane		
By:

	/s/ James R. Neal	
	
 

			
 

		
	
Name:

	ALAN KANE		
Name:

	JAMES R. NEAL	
	
 

			
 

		
	
Title:

	DIRECTOR		
Title:

	VP BUSINESS DEVELOPMENT	

	
LES LABORATOIRES SERVIER

	
	
 

	
 

	
	
By:

	
 

	
	
 

	
 

	
	
Name:

	
 

	
	
 

	
 

	
	
Title:

	
 

	

	
XOMA Ireland Limited

		
XOMA (US) LLC

	
	
 

			
 

		
	
By:

	 		
By:

	 	
	
 

			
 

		
	
Name:

	 		
Name:

	 	
	
 

			
 

		
	
Title:

	 		
Title:

	 	

	
LES LABORATOIRES SERVIER

	
 

	
 

		
 

	
By:

	 	
 

	
 

		
 

	
Name:

	 	
 

	
 

		
 

	
Title:

	Legal Affair Director	
 

EXHIBIT 1

 

SECURITY AGREEMENT

 

This Security Agreement (this "Agreement") is made and entered into as of_____, 2013 by and between XOMA (US) LLC, a Delaware limited liability company ("Debtor"), and LES LABORATOIRES SERVIER, a corporation organized and existing under the laws of France (the "Secured Party").

 

RECITALS

 

Whereas, XOMA Ireland Limited ("XOMA Ireland") and Secured Party are parties to that certain Amended and Restated Collaboration and License Agreement, dated February 14, 2012 (the "Collaboration and License Agreement"), a Loan Agreement, dated December 30, 2010 (as amended from time to time, the "Loan Agreement"), a Promissory Note, dated January 13, 2011, issued by XOMA Ireland to Secured Party (the "Original Note"), and a Fixed Charge, dated January 13, 2011, granted by XOMA Ireland in favor of Secured Party (the "Ireland Fixed Charge").

 

Whereas, pursuant to that certain Asset Transfer Agreement, dated of even date herewith, by and between XOMA Ireland and Debtor and that certain Consent, Transfer, Assumption and Amendment Agreement, dated of even date herewith, by and among XOMA Ireland, the Secured Party and Debtor (the "Assumption Agreement") (collectively, the "Asset Transfer Documents"), XOMA Ireland intends to transfer certain assets, including, without limitation, certain assets relating to the Collaboration and License Agreement, and certain rights and obligations under the Loan Agreement to Debtor, as further set forth in the Asset Transfer Documents.

 

Whereas, pursuant to the Assumption Agreement, Debtor will assume all of the obligations and rights of XOMA Ireland under the Loan Agreement, which the Secured Party has consented to, and the Original Note and Ireland Fixed Charge will be cancelled and released by the Secured Party upon the satisfaction of the conditions contained in the Assumption Agreement. Whereas, the parties intend that a new Promissory Note, dated of even date herewith, will be issued by Debtor to Secured Party (as amended from time to time, the "XOMA US Promissory Note" and, collectively with the Loan Agreement, following the execution of the Assumption Agreement, the "Secured Agreements"), and Debtor and Secured Party wish to secure performance and payment of all obligations of Debtor to Secured Party under the Loan Agreement and the XOMA US Promissory Note (the "Obligations") with liens on certain assets as described herein, in favor of Secured Party. All terms used without definition in this Agreement shall have the meaning assigned to them in the Asset Transfer Documents and the Secured Agreements. All terms used without definition in this Agreement, the Asset Transfer Documents, or the Secured Agreements shall have the meaning assigned to them in the UCC.

1

Now, THEREFORE, Debtor and the Secured Party agree as follows:

 

1.          Grant of Security Interest. To secure all of the Obligations and the performance by Debtor of its obligations under the Secured Agreements, Debtor grants to the Secured Party a security interest in the property described in Exhibit A (the "Collateral").

 

2.          Debtor's Representations and Warranties. Debtor represents and warrants as follows:

 

(a)          Authorization. Debtor has authority and has obtained all approvals and consents necessary to enter into this Agreement, and Debtor's execution, delivery and performance of this Agreement will not violate or conflict with the terms of Debtor's Limited Liability Company Agreement or other charter document, or any law, agreement, or other instrument or writing to which Debtor is party or by which is it bound.

 

(b)          Title. The Collateral is owned by Debtor and is free and clear of all liens, encumbrances and other security interests.

 

(c)          Solvency, Payment of Debts, (a) Debtor is able to pay its debts and other liabilities, contingent obligations and other commitments as they mature in the ordinary course of business, (b) Debtor does not intend to, and does not believe that it will, incur debts or liabilities beyond its ability to pay such debts and liabilities as they mature in the ordinary course of business, (c) Debtor is not engaged in a business or a transaction, and is not about to engage in a business or a transaction, for which its property would constitute unreasonably small capital under applicable laws and after giving due consideration to the prevailing practice in the industiy in which it is engaged or is to engage, (d) the fair value of the property of Debtor is greater than the total amount of liabilities, including contingent liabilities, of Debtor and (e) the present fair salable value of the property of Debtor is not less than the amount that will be required to pay the probable liability of Debtor on its debts as they become absolute and matured. In computing the amount of contingent liabilities at any time, it is intended that such liabilities will be computed at the amount which, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

 

(d)        Further Representations. Debtor further represents, warrants, and covenants that (i) Debtor is not in default under any agreement under which Debtor owes any money, or any agreement, the violation or termination of which could have a material adverse effect on Debtor; (ii) the information provided to Secured Party on or prior to the date of this Agreement is true and correct in all material respects; (iii) Debtor is in compliance with all laws and orders applicable to it; (iv) Debtor is not a party to any litigation or is the subject of any government investigation, and Debtor has no knowledge of any pending litigation or investigation or the existence of circumstances that reasonably could be expected to give rise to such litigation or investigation; (v) Debtor's principal place of business is located at the address specified in this Agreement; (vi) Debtor is a limited liability company organized under the laws of the State of Delaware; (vii) Debtor has not granted any security interest in the Collateral; (vii) each of the representations and warranties contained in the Loan Agreement and the other Loan Documents shall be true and correct as of the date hereof, provided that each reference in such provisions to XOMA Ireland shall be deemed to refer to the Debtor, and as otherwise modified in the Assumption Agreement; and (ix) no representation or other statement made by Debtor to Secured Party contains any untrue statement of a material fact or omits to state a material fact necessary to make any statements made to Secured Party not misleading.

2

3.          Covenants.

 

(a)          Encumbrances. Debtor shall (i) not grant a security interest in any of the Collateral other than to Secured Party or (ii) execute, or consent to the filing of, any financing statements covering any of the Collateral in favor of any person other than Secured Party.

 

(b)          Perfection of Security Interest. Debtor shall execute and deliver such documents as Secured Party reasonably deems necessary to create, perfect and continue the security interest in the Collateral contemplated hereby.

 

(c)          Records. Debtor shall prepare and keep, in accordance with generally accepted accounting principles consistently applied, complete and accurate records regarding the Collateral and, if and when requested by Secured Party, shall prepare and deliver a complete and accurate schedule of all the Collateral in such detail as Secured Party may reasonably require.

 

(d)          Fees and Costs. Debtor shall pay all expenses, including reasonable attorneys' fees, incurred by Secured Party in the preservation, realization, enforcement or exercise of any Secured Party's rights under this Agreement.

 

(e)          Company Existence. Debtor will maintain its company existence and good standing and will maintain in force all licenses and agreements, the loss of which could have a material adverse effect on Debtor's business. Debtor will pay all taxes on or before the date such taxes are due, and will comply with all laws and orders applicable to it.

 

(f)          Negative Covenant. Debtor will not (i) relocate its chief executive office, or change its name or state of organization, without at least 30 days prior written notice to Secured Party, or (ii) sell, lease, transfer or otherwise dispose of any of the Collateral without Secured Party's prior written consent.

 

(g)          Further Assurances. At any time and from time to time, upon the written request of Secured Party, and at the sole expense of Debtor, Debtor shall promptly and duly execute and deliver any and all such further instruments and documents and take such further action as Secured Party may reasonably deem desirable to obtain the full benefits of this Agreement and of the rights and powers herein granted, including, without limitation, (a) to secure all consents and approvals necessary or appropriate for the grant of a security interest to Secured Party in any Collateral held by Debtor or in which Debtor has any rights not heretofore assigned, (b) execute, acknowledge and deliver all deeds, conveyances, assignments, demises, mortgages, charges, documents and assurances at law as are necessary or advisable or as the Secured Party may reasonably require for the better granting, conveying, assigning, transfer, demising or charging the same, and every such further to the Secured Party for the purpose referred to in this Section 3.1(h) and for conferring upon the Secured Party such power of sale and other powers over the said property as are expressed to be conferred by this Agreement, and (b) filing any financing or continuation statements under the UCC with respect to the security interests granted hereby. Debtor also hereby authorizes Secured Party to file any such financing or continuation statement without the signature of Debtor.

3

(h)        This Agreement will be a continuing security notwithstanding any settlement of account or other matter or thing whatsoever and in particular will not be considered satisfied by any intermediate repayment or satisfaction of all or any of the monies, liabilities and obligations secured by this Agreement and will continue in full force and effect until final repayment in full and total satisfaction of all monies, liabilities and obligations secured by this Agreement; and if upon such final repayment and satisfaction there shall exist any right on the part of the Borrower or any other person to draw funds or otherwise which, if exercised, would or might cause the Borrower to become actually or contingently liable to the Secured Party whether as principal debtor or as surety for another person, then the Secured Party will be entitled to retain this security and all rights, remedies and powers conferred by this Agreement in the Collateral, for so long as shall or might be necessary to secure the discharge of such actual or contingent liability; and in the event that any demand is made by the Secured Party under this Agreement the said monies will become due and shall be paid and discharged to the Secured Party and all provisions of this Agreement will apply accordingly.

 

(i)          The security constituted by this Agreement will be in addition to and will not operate so as in any way to prejudice or affect any other security which the Secured Party may now or at any time in the future hold for or in respect of all or any part of the monies and liabilities secured by this Agreement, if any, nor will any such other security or any lien to which the Secured Party may be otherwise entitled or the liability of any person not party to this Agreement for all or any part of the monies and liabilities secured by this Agreement be in any way prejudiced or affected by this security. The Secured Party will have full power at its discretion to give time for payment to or make any other arrangement with any such other person without prejudice to the liability of the Borrower under this Agreement.

 

(j)          If the Obligations covenanted to be paid and discharged in this Agreement have been unconditionally and irrevocably paid and discharged in full the Secured Party shall, as soon as reasonably practicable after such payment and discharge and at the request and cost of the Borrower, execute such documents as may be necessary to release the security created by this Agreement.

 

4.          Events of Default. The occurrence of any Event of Default under the Secured Agreements, or the breach of any material representation under this Agreement, or the failure to perform any material obligation under Section 3 of this Agreement, shall constitute an "Event of Default" under this Agreement.

 

5.          Remedies on Default. Upon the occurrence and during the continuance of an Event of Default, Secured Party shall have all rights, privileges, powers and remedies provided by law, including, but not limited to, exercise of any or all of the following remedies.

4

(a)         Secured Party may declare all amounts outstanding under the Secured Agreements to be immediately due and payable, and thereupon all such amounts shall be and become immediately due and payable to the Secured Party; provided that upon an Event of Default under Section 7.3 of the Loan Agreement, all amounts outstanding shall be immediately due and payable without any action by Secured Party.

 

(b)          Secured Party may dispose of the Collateral in accordance with applicable law.

 

(c)          Secured Party may use, operate, consume and sell the Collateral in its possession as appropriate for the purpose of performing Debtor's obligations with respect thereto to the extent necessary to satisfy the obligations of Debtor.

 

(d)          All payments received and amounts realized by Secured Party shall be promptly applied and distributed by the Secured Party in the following order of priority:

 

(i)          first, to the payment of all costs and expenses, including reasonable legal expenses and attorneys fees, incurred or made hereunder by Secured Party, including any such costs and expenses of foreclosure or suit, if any, and of any sale or the exercise of any other remedy under this Section 5, and of all taxes, assessments or liens superior to the lien granted under this Agreement; and

 

(ii)       second, to the payment to Secured Party of the amount then owing under the Secured Agreements.

 

6.          Power of Attorney. Debtor hereby appoints Secured Party, its attorney-in-fact to prepare, sign and file or record, for Debtor in Debtor's name, any financing statements, applications for registration and like papers and to take any other action deemed by Secured Party necessary or desirable in order to perfect the security interest of the Secured Party hereunder, and, following the occurrence and continuance of an Event of Default, Debtor hereby appoints Secured Party, its attorney-in-fact (i) to dispose of any Collateral, (ii) to perform any obligations of Debtor hereunder, (iii) to commence and prosecute any actions at any court for the purposes of collecting any Collateral and enforcing any other right in respect thereof, (iv) to defend, settle or compromise any action brought and, in connection therewith, give such discharge or release as the Secured Party may deem reasonably appropriate, (v) institute any foreclosure proceedings that the Secured Party may deem appropriate, (vi) to sign and endorse any drafts, assignments, verifications, notices and other documents relating to the Collateral, (vii) to pay or discharge taxes, liens, security interests or other encumbrances levied or placed on or threatened against the Collateral, (viii) to direct any parties liable for any payment in connection with any of the Collateral to make payment of any and all monies due and to become due thereunder directly to the Secured Party or as the Secured Party shall direct, (ix) to receive payment of and receipt for any and all monies, claims, and other amounts due and to become due at any time in respect of or arising out of any Collateral, and (x) do and perform all such other acts and things as the Secured Party may reasonably deem to be necessary, proper or convenient in connection with the Collateral, in each case at Debtor's expense, but without obligation to do so.

 

5

7.          Remedies Cumulative. Secured Party's rights and remedies under this Agreement, the Loan Documents, and all other agreements shall be cumulative. Secured Party shall have all other rights and remedies as provided under the New York Uniform Commercial Code (the "UCC"), by law, or in equity. No exercise by Secured Party of one right or remedy shall be deemed an election, and no waiver by Secured Party of any Event of Default on Borrower's or Debtor's part shall be deemed a continuing waiver. No delay by Secured Party shall constitute a waiver, election, or acquiescence by it. No waiver by Secured Party shall be effective unless made in a written document signed on behalf of Secured Party and then shall be effective only in the specific instance and for the specific purpose for which it was given.

 

8.          Notices. Unless otherwise provided in this Agreement, all notices or demands by any party relating to this Agreement or any other agreement entered into in connection herewith shall be in writing and shall be personally delivered or sent by a recognized overnight delivery service, certified mail, postage prepaid, return receipt requested, or by electronic mail or telefacsimile to Debtor or to Secured Party, as the case may be, at its addresses set forth below:

 

If to Debtor:

 

XOMA (US) LLC

2910 7th Street, No. 100

Berkeley, CA 94710

Fax: 510-649-0315

Attn: Chief Financial Officer

Email: kurland@xoma.com

 

If to Secured Party:

 

Les Laboratoires Servier

50 rue Carnot

92284 Suresnes Cedex, France

Fax: + 33 1 55 72 54 66

Attn: Alliance Manager Business Partenariat Xoma

Email: guillaume.rouland@fr.netgrs.com

 

The parties hereto may change the address at which they are to receive notices hereunder, by notice in writing in the foregoing manner given to the other.

 

9.          Dispute Resolution; Choice of Law and Venue.

 

(a)          EACH PARTY HERETO AGREES THAT ANY ACTION, DISPUTE, PROCEEDING, CLAIM OR CONTROVERSY BETWEEN OR AMONG THE PARTIES, OR THEIR SUCCESSORS OR ASSIGNS, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE ARISING IN CONNECTION WITH THIS AGREEMENT, THE LOAN AGREEMENT OR THE XOMA US PROMISSORY NOTE ("DISPUTE" OR "DISPUTES") SHALL BE FINALLY SETTLED UNDER THE RULES OF ARBITRATION OF THE INTERNATIONAL CHAMBER OF COMMERCE BY ONE OR MORE ARBITRATORS APPOINTED IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION AND THE SAID RULES.

 

(b)          A SINGLE ARBITRATOR SHALL DECIDE ANY CLAIM OF $100,000 OR LESS. WHERE THE CLAIM OF ANY PARTY IS NOT QUANTIFIED OR EXCEEDS $100,000, THE DISPUTE SHALL BE DECIDED BY A MAJORITY VOTE OF THREE ARBITRATORS.

6

(c)          THE PLACE OF ARBITRATION SHALL BE IN BRUSSELS, BELGIUM AND THE ARBITRATION SHALL BE HELD IN ENGLISH.

 

(d)          THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

 

(e)          THE ARBITRATOR SHALL NOT HAVE THE POWER OR AUTHORITY TO AWARD PUNITIVE DAMAGES TO ANY PARTY.

 

(f)          THE PARTIES AGREE THAT US PROCEDURAL RULES (INCLUDING DISCOVERY AND CROSS-EXAMINATION) WILL NOT APPLY AND THAT THE ARBITRATORS MAY ORDER DISCLOSURE OF A DOCUMENT ONLY IF AND TO THE EXTENT THAT IT IS HIGHLY RELEVANT TO THE RESOLUTION OF THE DISPUTE; PROVIDED, HOWEVER, THAT ALL PRIVILEGES RESTRICTING DISCLOSURE ESTABLISHED UNDER THE LAWS GOVERNING THIS AGREEMENT SHALL APPLY AND MAY BE INVOKED BY BOTH PARTIES.

 

(g)          JUDGMENT UPON THE AWARD RENDERED MAY BE ENTERED IN ANY COURT HAVING JURISDICTION.

 

No provision of, nor the exercise of any rights under, subsection (a) or subsection (b) above shall limit the right of any party (i) to foreclose against any Collateral, pursuant to applicable provisions of the UCC, or otherwise pursuant to applicable law, (ii) to exercise self help remedies including but not limited to setoff and repossession, or (ii) to request and obtain from a court having jurisdiction before, during or after the pendency of any arbitration provisional or ancillary remedies and relief including but not limited to injunctive or mandatory relief or the appointment of a receiver. The institution and maintenance of an action or judicial proceeding for, or pursuit of, provisional or ancillary remedies or exercise of self help remedies shall not constitute a waiver of the right of Secured Party, even if Secured Party would otherwise have such right.

 

   10.       General Provisions.

 

 10.1          Successors and Assigns. This Agreement shall bind and inure to the benefit of the respective successors and permitted assigns of each of the parties; provided, however, that neither this Agreement nor any rights hereunder may be assigned by Debtor without Secured Party's prior written consent, which consent may be granted or withheld in Secured Party's sole discretion. Secured Party shall have the right without the consent of or notice to Debtor to sell, transfer, negotiate, or grant participation in all or any part of, or any interest in, Secured Party's obligations, rights and benefits hereunder.

 

 10.2          Time of Essence. Time is of the essence for the performance of all obligations set forth in this Agreement.

7

 10.3          Severability of Provisions. Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision.

 

 10.4          Amendments in Writing, Integration. This Agreement cannot be amended or terminated orally. All prior agreements, understandings, representations, warranties, and negotiations between the parties hereto with respect to the subject matter of this Agreement, if any, are merged into this Agreement and the Loan Documents.

 

 10.5          Counterparts. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement.

 

 10.6          Survival. All covenants, representations and warranties made in this Agreement shall continue in full force and effect so long as any Obligations remain outstanding, any Obligations remain outstanding, or Secured Party has any obligation to make credit extensions to Borrower under the Loan Agreement. This Agreement shall terminate upon the payment and performance in foil of the Obligations.

 

 10.7          Terms. In this Agreement (except where the context otherwise requires):

 

 (a)              the singular includes the plural and vice versa and any gender includes the other gender;

 

 (b)             words importing persons include natural persons, firms, partnerships, companies, corporations, associations, organisations, governments, states, foundations and trusts (in each case whether or not having a separate legal personality);

 

 (c)             any reference to a statute, statutory provision or subordinate legislation ("legislation") is (unless the contrary is clearly stated) to be construed as a reference to legislation operative in New York and is (except where the context otherwise requires) to be construed as referring to such legislation as amended and in force from time to time and to any legislation which re-enacts or consolidates (with or without modification) any such legislation;

 

 (d)             save as otherwise provided in this Agreement, any reference to a section, clause, paragraph, sub-clause, sub-paragraph or schedule is a reference to a section, clause, paragraph, sub-clause, sub-paragraph or schedule (as the case may be) of this Agreement;

 

 (e)              the index and headings are inserted for convenience only and are not to affect the construction of this Agreement;

 

 (f)               a reference to any document includes that document as it has or may be amended, varied, assigned, novated, restated or supplemented from time to time;

 

 (g)             the Borrower and the Secured Party or any other person shall be construed so as to include its successors in title, permitted assigns and permitted transferees;

 

 (h)            any reference to a legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any legal concept or thing is, in respect of any jurisdiction other than New York, to be deemed to include a reference to what most nearly approximates in that jurisdiction to the legal term under New York law;

8

 (i)              any phrase introduced by the terms "including", "include", "in particular" or any similar expression is to be construed as illustrative and shall not limit the sense of the words preceding those terms.

 

IN WITNESS WHEREOF, the parties have executed this Agreement on the date set forth above.

	
DEBTOR:

XOMA (US) LLC

		
SECURED PARTY:

LES LABORATOIRES SERVIER

	
	
 

	
 

		
 

	
 

	
	
By:

	
 

		
By:

	
 

	
	
Name:

	
 

		
Name:

	
 

	
	
Title:

	
 

		
Title:

	
 

	

9

DEBTOR:                                      XOMA (US) LLC

SECURED PARTY:              LES LABORATOIRES SERVIER

 

EXHIBIT A

 

COLLATERAL DESCRIPTION ATTACHMENT

TO SECURITY AGREEMENT

 

The following personal property of Debtor:

 

1.  All of Debtor's right, title and interest in that certain Transfer Agreement relating to the Intellectual Property Rights (as defined below), effective as of December 30, 2010, by and between XOMA Technology Ltd. and XOMA Ireland Limited, which rights of XOMA Ireland Limited have been assigned to and assumed by Debtor pursuant to that certain Asset Transfer Agreement, dated as of August,2013;

 

2.  All of Debtor's right, title and interest in the patents and patent applications in the Licensed Territory listed in Schedule A hereto (including any rights transferred under the above mentioned December 30, 2010 Transfer Agreement), including any and all related continuations, continuations in-part, divisions, extensions, reissues, re-examinations, renewals or substitutions, any and all other proprietary rights related to the foregoing (including, without limitation, remedies against infringements thereof and rights of protection of and interest therein under the laws of all jurisdictions) in the Licensed Territory (as defined below).

 

"Licensed Territory" means all countries of the world other than (a) the United States of America, and (b) Japan, including their respective territories and possessions.

SCHEDULE A

 

FAMILY 1

Title:                       ILl-Beta binding antibodies and fragments thereof

Inventors:           Linda Masat; Mary Haak-Frendscho; Gang Chen; Arnold Horwitz; Marina Roell

	
COUNTRY

	
APPLICATION NO.

	
FILE DATE

	
PATENT/PUBLICATION

	
US Provisional

	
61/692,830

	
06/21/05

	
 

	
PCT

	
PCT/US06/024261

	
06/21/06

	
W02007/002261

	
Australia

	
2006 262179

	
06/21/06

	
2006262179 B2

	
Brazil

	
PI0612273-6

	
06/21/06

	
BRPI0612273 A2

	
Canada

	
2,612,760

	
06/21/06

	
CA2612760 A1

	
China

	
2006 80026551.9

	
06/21/06

	
CN101228188 A

	
China

	
201210157441.3

	
05/18/12

	
CN102775493A

	
EP (all countries):

	
06773749.4

	
06/21/06

	
1899378

	
Austria

	
06773749.4

	
06/21/06

	
1899378

	
Belgium

	
06773749.4

	
06/21/06

	
1899378

	
Bulgaria

	
06773749.4

	
06/21/06

	
1899378

	
Cyprus

	
06773749.4

	
06/21/06

	
1899378

	
Czech Republic

	
06773749.4

	
06/21/06

	
1899378

	
Denmark

	
06773749.4

	
06/21/06

	
1899378

	
Estonia

	
06773749.4

	
06/21/06

	
E004059

	
Finland

	
06773749.4

	
06/21/06

	
1899378

	
France

	
06773749.4

	
06/21/06

	
1899378

	
Germany

	
06773749.4

	
06/21/06

	
60 2006 010 072.8-08

	
Greece

	
06773749.4

	
06/21/06

	
3070850

	
Hungary

	
06773749.4

	
06/21/06

	
E007716

	
Iceland

	
06773749.4

	
06/21/06

	
1899378

	
Ireland

	
06773749.4

	
06/21/06

	
1899378

	
Italy

	
06773749.4

	
06/21/06

	
73749BE/2009

	
Latvia

	
06773749.4

	
06/21/06

	
1899378

	
Lithuania

	
06773749.4

	
06/21/06

	
1899378

	
Luxembourg

	
06773749.4

	
06/21/06

	
1899378

	
Monaco

	
06773749.4

	
06/21/06

	
1899378

	
Netherlands

	
06773749.4

	
06/21/06

	
1899378

	
Poland

	
06773749.4

	
06/21/06

	
1899378

	
Portugal

	
06773749.4

	
06/21/06

	
1899378

	
Romania

	
06773749.4

	
06/21/06

	
RO/EP 1 899 378

	
Slovak Republic

	
06773749.4

	
06/21/06

	
1899378

	
Slovenia

	
06773749.4

	
06/21/06

	
1899378

	
Spain

	
06773749.4

	
06/21/06

	
1899378

	
Sweden

	
06773749.4

	
06/21/06

	
1899378

	
Switzerland

	
06773749.4

	
06/21/06

	
1899378

	
Turkey

	
06773749.4

	
06/21/06

	
TR 2009 09878 T4

	
United Kingdom

	
06773749.4

	
06/21/06

	
1899378

	
EP

	
09 174 190.0

	
10/27/09

	
2 163 562 A2

	
EP

	
10 179 088.9

	
09/23/10

	
2314623 B1

	
Austria

	
10 179 088.9

	
09/23/10

	
2314623 B1

	
Belgium

	
10 179 088.9

	
09/23/10

	
2314623 B1

	
Bulgaria

	
10 179 088.9

	
09/23/10

	
2314623 B1

	
Cyprus

	
10 179 088.9

	
09/23/10

	
2314623 B1

	
Czech Republic

	
10 179 088.9

	
09/23/10

	
2314623 B1

	
Denmark

	
10 179 088.9

	
09/23/10

	
2314623 B1

	
Estonia

	
10 179 088.9

	
09/23/10

	
2314623 B1

	
Finland

	
10 179 088.9

	
09/23/10

	
2314623 B1

	
France

	
10 179 088.9

	
09/23/10

	
2314623 B1

	
Germany

	
10 179 088.9

	
09/23/10

	
2314623 B1

	
Greece

	
10 179 088.9

	
09/23/10

	
2314623 B1

	Hungry	10 179 088.9	09/23/10	2314623 B1
	
Iceland

	
10 179 088.9

	
09/23/10

	
2314623 B1

	
Ireland

	
10 179 088.9

	
09/23/10

	
2314623 B1

	
Italy

	
10 179 088.9

	
09/23/10

	
2314623 B1

	
Latvia

	
10 179 088.9

	
09/23/10

	
2314623 B1

	
Lithuania

	
10 179 088.9

	
09/23/10

	
2314623B1

	
Liechtenstein

	
10 179 088.9

	
09/23/10

	
2314623 B1

	
Luxembourg

	
10 179 088.9

	
09/23/10

	
2314623 B1

	 			
	
Monaco

	
10 179 088.9

	
09/23/10

	
2314623 B1

	
Netherlands

	
10 179 088.9

	
09/23/10

	
2314623 B1

	
Poland

	
10 179 088.9

	
09/23/10

	
2314623 B1

	
Portugal

	
10 179 088.9

	
09/23/10

	
2314623 B1

	
Romania

	
10 179 088.9

	
09/23/10

	
2314623 B1

	
Spain

	
10 179 088.9

	
09/23/10

	
2314623 B1

	
Sweden

	
10 179 088.9

	
09/23/10

	
2314623 B1

	
Slovenia

	
10 179 088.9

	
09/23/10

	
2314623 B1

	
Slovak Republic

	
10 179 088.9

	
09/23/10

	
2314623 B1

	
Switzerland

	
10 179 088.9

	
09/23/10

	
2314623 B1

	
Turkey

	
10 179 088.9

	
09/23/10

	
2314623 B1

	
United Kingdom

	
10 179 088.9

	
09/23/10

	
2314623 B1

	
EP

	
10 179 089.7

	
09/23/10

	
2 322 552 A2

	
Hong Kong

	
09100795.8

	
06/21/06

	
1123560

	
Hong Kong

	
10107181.2

	
07/27/10

	
1140781A

	
Hong Kong

	
11111525.8

	
10/26/11

	
1157351 B

	
Hong Kong

	
11112428.4

	
11/17/11

	
1158218A

	
Israel

	
188094

	
06/21/06

	
188094

	
Israel

	
202630

	
12/09/09

	
202630

	
India

	
320/CHENP/2008

	
06/21/06

	
 

	
Korea

	
10-2008-7001520

	
06/21/06

	
KR 20080039875 A

	
Mexico

	
MX/a/2007/016032

	
06/21/06

	
282003

	
Mexico

	
MX/a/2010/00263 8

	
03/08/10

	
 

	
New Zealand

	
565138

	
06/21/06

	
565138

	
Philippines

	
1-2007-502895

	
06/21/06

	
1-2007-502895

	
Russian Federation

	
2008102135

	
06/21/06

	
RU 2008102135 A

	
Singapore

	
200718904-6

	
06/21/06

	
140638

	
South Africa

	
2008/00555

	
06/21/06

	
2008/00555

FAMILY 2

Title:                       Methods for Treatment of IL-1 Beta Related Diseases

Inventors:           Alan M. Solinger; Patrick J. Scannon; Robert J. Bauer; David Alleva

	
COUNTRY

	
APPLICATION NO.

	
FILE DATE

	
PATENT/PUBLICATION

	
US Provisional

	
60/871,046

	
12/20/06

	
 

	
US Provisional

	
60/908,389

	
03/27/07

	
 

	
US Provisional

	
60/911,033

	
04/10/07

	
 

	
PCT

	
PCT/US2007/088411

	
12/20/07

	
WO 2008/077145

	
Europe

	
07869675.4

	
12/20/07

	
EP2094306A2

	
Australia

	
2007333635

	
12/20/07

	
AU2007333635 A1

	
Brazil

	
PI 0720928-2

	
12/20/07

	
 

	
Canada

	
2,673,592

	
12/20/07

	
 

3

	
China

	
200780051536.4

	
12/20/07

	
CN 101616690A

	
Hong Kong

	
10102012.8

	
02/25/10

	
1135323A

	
India

	
4626/DELNP/2009

	
12/20/07

	
 

	
Indonesia

	
WOO 2009 01721

	
12/20/07

	
050.2064A

	
Mexico

	
MX/a/2009/006709

	
12/20/07

	
299543

	
Russia

	
2009127066

	
12/20/07

	
 

	
South Africa

	
2009/04660

	
12/20/07

	
2009/04660

FAMILY 3

Title:                       Methods for Treatment of Gout

Inventors:          Alan M. Solinger

	
COUNTRY

	
APPLICATION NO.

	
FILE DATE

	
PATENT/PUBLICATION

	
US Provisional

	
61/015,633

	
12/20/07

	
 

	
US Provisional

	
61/059,378

	
06/06/08

	
 

	
US Provisional

	
61/095,191

	
09/08/08

	
 

	
PCT

	
PCT/US08/087519

	
12/18/08

	
WO 2009/086003

	
Australia

	
2008343085

	
07/12/10

	
 

	
Canada

	
2,710,252

	
12/18/08

	
 

	
China

	
200880126879.7

	
12/18/08

	
 

	
EP

	
08866346.3

	
07/19/10

	
2 391 650 A1

	
Mexico

	
MX/a/2010/006823

	
06/18/10

	
293693

	
Russia

	
2010129783

	
07/20/10

	
 

FAMILY 4

Title:                       Methods for the Treatment of Rheumatoid Arthritis

Inventors:          Alan M. Solinger, Alexander Owyang

	
COUNTRY

	
APPLICATION NO.

	
FILE DATE

	
PATENT/PUBLICATION

	
US Provisional

	
61/059,711

	
06/06/08

	
 

	
US Provisional

	
61/095,232

	
09/08/08

	
 

	
PCT

	
PCT/US09/46441

	
06/05/09

	
WO 2009/149370

	
Canada

	
2,727,171

	
12/06/10

	
 

	
Australia

	
2009256072

	
12/14/10

	
 

	
Europe:

	
09 759 528.4

	
12/22/10

	
2293816B1

	
Austria

	
09 759 528.4

	
12/22/10

	
2293816 B1

	
Belgium

	
09 759 528.4

	
12/22/10

	
2293816B1

	
Bulgaria

	
09 759 528.4

	
12/22/10

	
2293816 B1

	
Croatia

	
09 759 528.4

	
12/22/10

	
2293816B1

	
Cyprus

	
09 759 528.4

	
12/22/10

	
2293816B1

	
Czech Repub

	
09 759 528.4

	
12/22/10

	
2293816B1

	
Denmark

	
09 759 528.4

	
12/22/10

	
2293816 B1

	
Estonia

	
09 759 528.4

	
12/22/10

	
2293816B1

	
Finland

	
09 759 528.4

	
12/22/10

	
2293816B1

	
France

	
09 759 528.4

	
12/22/10

	
2293816B1

	
Germany

	
09 759 528.4

	
12/22/10

	
2293816 B1

	
Greece

	
09 759 528.4

	
12/22/10

	
2293816B1

	
Hungary

	
09 759 528.4

	
12/22/10

	
2293816B1

	
Iceland

	
09 759 528.4

	
12/22/10

	
2293816B1

	
Ireland

	
09 759 528.4

	
12/22/10

	
2293816B1

	
Italy

	
09 759 528.4

	
12/22/10

	
2293816 B1

	
Latvia

	
09 759 528.4

	
12/22/10

	
2293816 B1

	
Lithuania

	
09 759 528.4

	
12/22/10

	
2293816 B1

	
Luxembourg

	
09 759 528.4

	
12/22/10

	
2293816B1

4

	
Macedonia

	
09 759 528.4

	
12/22/10

	
2293816 B1

	
Malta

	
09 759 528.4

	
12/22/10

	
2293816 B1

	
Monaco

	
09 759 528.4

	
12/22/10

	
2293816 B1

	
Netherlands

	
09 759 528.4

	
12/22/10

	
2293816B1

	
Norway

	
09 759 528.4

	
12/22/10

	
2293816B1

	
Poland

	
09 759 528.4

	
12/22/10

	
2293816B1

	
Portugal

	
09 759 528.4

	
12/22/10

	
2293816B1

	
Romania

	
09 759 528.4

	
12/22/10

	
2293816B1

	
Slovak Repub

	
09 759 528.4

	
12/22/10

	
2293816B1

	
Slovenia

	
09 759 528.4

	
12/22/10

	
2293816B1

	
Spain

	
09 759 528.4

	
12/22/10

	
2293816 B1

	
Sweden

	
09 759 528.4

	
12/22/10

	
2293816B1

	
Switzerland/ Liechtenstein

	
09 759 528.4

	
12/22/10

	
2293816B1

	
Turkey

	
09 759 528.4

	
12/22/10

	
2293816B1

	
UK

	
09 759 528.4

	
12/22/10

	
2293816 B1

FAMILY 5

	
Title:

	
Methods for Treating or Preventing IL-lBeta Related Diseases

	
Inventors:

	
Patrick J. Scannon, Alan M. Solinger, Robert J. Bauer

	
COUNTRY

	
APPLICATION NO.

	
FILE DATE

	
PATENT/PUBLICATION

	
US Provisional

	
61/094,842

	
09/05/08

	
 

	
US Provisional

	
61/121,451

	
12/10/08

	
 

	
PCT

	
PCT/US09/56086 

	
09/04/09 

	
WO 2010/028275

	Australia	2009289547	03/03/11	
	
Canada

	
2,735,940

	
03/02/11

	
 

	
Europe

	
09 812 306.0

	
04/04/11

	
2 341 936 A1

FAMILY 6

	
Title:

	
METHODS FOR IMPROVEMENT OF BETA CELL FUNCTION

	
Inventors:

	
Patrick J. Scannon, Alan M. Solinger, Robert J. Bauer

	
COUNTRY

	
APPLICATION NO.

	
FILE DATE

	
PATENT/PUBLICATION

	
US Provisional

	
61/094,857

	
09/05/08

	
 

	
US Provisional PCT

	
61/121,486 PCT/US09/56084

	
12/10/08 09/04/09

	
WO 2010/028273

	
Australia

	
2009289545

	
03/03/11

	
 

	
Canada

	
2,735,939

	
03/02/11

	
 

	
Europe

	
09 812 304.5

	
04/04/11

	
2 341 935 A1

FAMILY 7

	
Title:

	
CARDIOVASCULAR RELATED USES OF IL-ip ANTIBODIES AND BINDING FRAGMENTS THEREOF

	
Inventors:

	
Patrick J. Scannon, Alan M. Solinger, Jeffrey D. Feldstein

	
COUNTRY

	
APPLICATION NO.

	
FILE DATE

	
PATENT/PUBLICATION

	
US Provisional

	
61/182,679

	
05/29/09

	
 

	
US Provisional

	
61/252,571

	
10/16/09

	
 

	
US Provisional

	
61/313,001

	
03/11/10

	
 

	
PCT

	
PCT/US10/36761

	
05/28/10

	
WO 2010/138939

	
Australia

	
2010253924

	
05/28/10

	
 

	
Australia

	
2013203560

	
04/10/13

	
 

5

	
Brazil

	
PI1011228-6

	
11/29/11

	
 

	
Canada

	
2,763,161

	
05/28/10

	
 

	
China

	
201080033031.7

	
05/28/10

	
CN 102573893A

	
EPO

	
10 781 360.2

	
12/20/11

	
EP 2 435 073 A1

	
Eurasia

	
201101643

	
12/15/11

	
 

	
Hong Kong

	
12108509.3

	
08/XX/12

	
1167814A

	
India

	
9944/DELNP/2011

	
12/16/11

	
 

	
Indonesia

	
WOO 2011 04690

	
12/21/11

	
2012/01714 A

	
Israel

	
216660

	
11/28/11

	
 

	
Korea

	
10-2011-7031198

	
12/27/11

	
10-2012-006104

	
Mexico

	
MX/a/2011/012666

	
11/28/11

	
 

	
New Zealand

	
597024

	
11/12/11

	
 

	
Philippines

	
1-2011-502479

	
11/28/11

	
 

	
Singapore

	
201108772-3

	
11/28/11

	
 

	
South Africa

	
2011/09050

	
12/08/11

	
 

FAMILY 8

	
Title:

	
Methods for the treatment of IL-lBeta related conditions

	
Inventors:

	
Alan M. Solinger, Ahmet GUI

	
COUNTRY

	
APPLICATION NO.

	
FILE DATE

	
PATENT/PUBLICATION

	
US Provisional

	
61/332,658

	
05/07/10

	
 

	
US Provisional

	
61/334,125

	
05/12/10

	
 

	
US Provisional

	
61/444,638

	
02/18/11

	
 

	
PCT

	
PCT/US11/35646

	
05/06/11

	
WO 2011/140522

	
Australia

	
2011249854

	
05/06/11

	
 

	
Australia

	
2013203214

	
04/09/13

	
 

	
Brazil

	
BR 11 2012 028557 2

	
05/06/11

	
 

	
Canada

	
2,797,846

	
05/06/11

	
 

	
China

	
201180022684.X

	
05/06/11

	
2013-509314

	
Europe

	
11778465.2

	
05/06/11

	
2 566 520 A

	
Eurasia

	
201201526

	
05/06/11

	
 

	
India

	
9496/DELNP/2012

	
05/06/11

	
 

	
Indonesia

	
W00201204922

	
05/06/11

	
 

	
Israel

	
222890

	
05/06/11

	
 

	
Korea

	
10-2012-7031454

	
05/06/11

	
 

	
Mexico

	
MX/a/2012/012901

	
05/06/11

	
 

	
New Zealand

	
603191

	
05/06/11

	
 

	
Philippines

	
1-2012-502143

	
05/06/11

	
 

	
Singapore

	
201208230-1

	
05/06/11

	
 

	
South Africa

	
2012/08172

	
05/06/11

	
 

FAMILY 9*

	
Title:

	
METHODS FOR TREATING ACNE

	
Inventors:

	

Paul Rubin

 

	
COUNTRY

	
APP. NO.

	
FILE DATE

	
PATENT/PUBLICATION

	
US Provisional

	
61/577,450

	
12/19/11

	
 

	
PCT

	
PCT/US12/70734

	
12/19/12

	
 

*Future ROW (non-US, non-Japan) rights

6

EXHIBIT 2

 

PROMISSORY NOTE

 

	
€15,000,000

	
August__, 2013

	
 

	
Berkeley, California

 

FOR VALUE RECEIVED, XOMA (US) LLC, a Delaware limited liability company {"Borrower"), hereby promises to pay to the order of LES LABORATOIRES SERVIER, a corporation organized under the laws of France ("Lender"), the principal sum of Fifteen Million Euros (€15,000,000) (the "Loan") together with accrued and unpaid interest thereon, each due and payable on the dates and in the manner set forth below.

 

This Promissory Note is the Note referred to in and is executed and delivered in connection with that certain Security Agreement, dated as of even date herewith, executed by Borrower in favor of Lender (as the same may from time to time be amended, modified or supplemented or restated, the "Security Agreement"), and that certain Loan Agreement, dated as of December 30, 2010, as amended, by and between Borrower and Lender (as the same may from time to time be amended, modified or supplemented or restated, the "Loan Agreement"), among other agreements. Additional rights and obligations of Lender are set forth in the Security Agreement and the Loan Agreement. All capitalized terms used herein and not otherwise defined herein shall have the respective meanings given to them in the Loan Agreement and the Security Agreement.

 

1.    Original Note; Loan Agreement. This Promissory Note replaces the Promissory Note, dated as of January 13, 2011, issued by Xoma Ireland Limited to Lender (the "Original Note"). Lender shall deliver the cancelled Original Note to Xoma Ireland Limited upon its receipt of this Promissory Note, executed by the Borrower. This Promissory Note shall be the Note referred to in the Loan Agreement and is entitled to the benefits of all provisions of the Loan Agreement. All references in the Loan Agreement to the "Note" shall be deemed to refer to this Promissory Note.

 

2.    Principal Repayment. The total outstanding principal amount of the indebtedness evidenced by this Promissory Note shall be due and payable in accordance with the terms of the Loan Agreement. Demand, diligence, presentment, protest and notice of non­payment and protest are hereby waived by the Borrower.

 

3.    Interest Rate. Borrower further promises to pay interest on the outstanding principal amount hereof at the rate or rates per annum and in the manner set forth in the Loan Agreement, or the maximum rate permissible by law, whichever is less.

 

4.    Payment on Non-Business Day. In the event that any payment of any principal, interest, fees or other amounts payable by Borrower under or pursuant to the Loan Agreement, or under any other Loan Document shall become due on any day which is not a Business Day, such due date shall be extended to the next succeeding Business Day, further provided that no interest shall accrue from and during any such extension.

 

5.    Default. Upon the occurrence and during the continuance of an Event of Default under the Loan Agreement or any of the other Loan Documents, all unpaid principal, accrued interest and other amounts owing hereunder shall become due and payable as provided in the Loan Agreement and the Lender shall have all rights and remedies against the Borrower as provided in the Loan Agreement, the Security Agreement and under applicable law.

7

6.    Secured Note. The full amount of this Note is secured by the Collateral identified and described as security therefore in the Security Agreement executed by and delivered by Borrower to Lender. Borrower shall not, directly or indirectly, create, permit or suffer to exist, and shall defend the Collateral against and take such other action as is necessary to remove, any Lien on or in the Collateral, or in any portion thereof.

 

7.    Representations and Warranties. By its execution hereof, Borrower hereby represents and warrants that each of the representations and warranties contained in the Loan Agreement and the other Loan Documents shall be true and correct as of the date hereof, provided that each reference in such provisions to XOMA Ireland shall be deemed to refer to the Borrower.

 

8.    Governing Law. This Note shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, excluding conflict of laws principles that would cause the application of laws of any other jurisdiction. The provisions of Section 9 of the Security Agreement are hereby incorporated by reference (including with respect to arbitration) and this Promissory Note and the parties hereto shall otherwise be subject to all of the terms and conditions of Section 9 of the Security Agreement, mutatis mutandis.

 

9.    Successors and Assigns. The provisions of this Note shall inure to the benefit of and be binding on any successor to Borrower and shall extend to any holder hereof.

	
BORROWER

	
XOMA (US) LLC

	
	
 

	
 

	
 

	
	
 

	
By:

	
 

	
	
 

	
 

	
 

	
	
 

	
Printed Name:

	
 

	
	
 

	
 

	
 

	
	
 

	
Title:

	
 

	

8

EXHIBIT 3

 

Dated                                                  2013

 

XOMA IRELAND LIMITED

 

as Chargor

 

LES LABORATOIRES SERVIER

 

as Chargee

 

and

 

DEED OF RELEASE

 

Re: Fixed Equitable Charge dated 13 January 2011

 

A & L GOODBODY

9

THIS DEED OF RELEASE is dated                                                                                    2013 and made between:

(1)          XOMA IRELAND LIMITED, a company incorporated in Ireland with registration number 307875 and having its registered office at 26 Pembroke Street Upper, Dublin 2, Ireland (the Chargor); and

 

(2)          LES LABORATOIRES SERVIER, a company organised and existing under the laws of France having its principal place of business at 50 rue Carnot, 92284 Suresnes, France (the Chargee).

 

WHEREAS:

 

A.          By a fixed charge dated 13 January 2011 between the Chargor and Chargee in respect of the Loan Agreement, the Chargor has granted security to the Chargee for the payment and discharge of the Obligations (the Fixed Charge).

 

B.          Pursuant to a consent, transfer and assumption agreement dated the date hereof between the Chargor, the Chargee and XOMA (US) LLC (the Consent, Transfer, Assumption and Amendment Agreement) the Chargee has agreed to release the Chargor in full from its obligations under the Fixed Charge and has agreed to do so on and subject to the terms of this Deed.

 

WITNESSES as follows:

 

	
1.

	
DEFINITIONS AND INTERPRETATION

 

Unless the context otherwise requires, terms used and not defined shall have the same meaning given to them in the Fixed Charge.

 

Indebtedness has the same meaning as in the Loan Agreement;

 

Intellectual Property Rights has the same meaning as in the Loan Agreement;

 

Loan Agreement means the loan agreement dated 30 December, 2010 between the Chargor and the Chargee pursuant to which the Chargee made a loan available to the Chargor, as amended from time to time;

 

Loan Documents has the same meaning as in the Loan Agreement;

 

Obligations has the same meaning as in the Loan Agreement;

Transfer Agreement means the transfer agreement between Xoma Technology Ltd. and the Chargor dated 30 December 2010 relating to the Intellectual Property Rights;

 

	
2.

	
DISCHARGE AND RELEASE

 

2.1.         In accordance with the terms of the Fixed Charge, the Chargee hereby irrevocably and unconditionally

10

		2.1.1.	RELEASES and DISCHARGES unto the Chargor, to the extent charged by way of security in favour of the Chargee pursuant to the Fixed Charge, all rights, interests and titles in and to the Transfer Agreement present or future;

 

		2.1.2.	RELEASES and DISCHARGES unto the Chargor, to the extent charged by way of security in favour of the Chargee pursuant to the Fixed Charge, all rights, interests and titles in and to the Intellectual Property Rights, including without limitation, all Intellectual Property Rights specified in the schedule attached to the Fixed Charge; and

 

		2.1.3.	RELEASES and DISCHARGES the Chargor from all obligations, absolute and contingent, pursuant to the Fixed Charge and all claims and demands thereunder, so that such obligations, claims and demands are, with effect from the execution and delivery of this Deed, discharged and of no further effect.

 

2.2.         The Chargor and the Chargee hereby agree that the Fixed Charge be and is hereby terminated.

 

3.             INVALIDITY

 

3.1.        If a provision of this Deed is or becomes illegal, invalid or unenforceable in any jurisdiction, that will not affect:

 

		3.1.1.	the legality, validity or enforceability in that jurisdiction of any other provision of this Deed; or

 

		3.1.2.	the legality, validity or enforceability in any other jurisdiction of that or any other provision of this Deed.

 

The illegal, invalid or unenforceable provision shall be substituted by a valid provision which accomplishes as far as legally possible the economic purposes of the void or unenforceable provision.

 

	
4.

	
REPRESENTATIONS AND WARRANTIES

 

4.1.         Each of the parties hereto hereby represents and warrants that:

 

		4.1.1.	it has full power and authority to execute, deliver and perform its obligations under this Deed; and

 

		4.1.2.	this Deed constitutes its legal, valid and binding obligations enforceable against it in accordance with its terms.

 

	
5.

	
FURTHER ASSURANCES

 

The Chargee shall, at the cost and expense of the Chargor, from time to time sign, seal, execute, acknowledge, deliver, file and register, all such further and additional documents, instruments, agreements, certificates, consents and assurances and do all such other acts and things as may be reasonably required by the Chargor for the purpose of more effectively carrying out the intent and purpose of this Deed.

11

	
6.

	
COUNTERPARTS

 

This Deed may be executed in any number of counterparts and by the different parties to this Deed on different counterparts each of which, when executed and delivered, shall constitute an original, but all the counterparts shall together constitute but one and the same instrument.

 

	
7.

	
GOVERNING LAW

 

This Deed shall be governed by and construed in accordance with the laws of Ireland.

 

IN WITNESS whereof the parties have executed and delivered this Deed on the date at the beginning of this Deed.

 

GIVEN UNDER THE COMMON SEAL OF

XOMA IRELAND LIMITED

	
LES LABORATORIES SERVIER

	
 

	
 

	
 

	
By:

	
 

	
 

	
Name:

	
 

	
 

	
Title:

	
 

	
 

12

EXHIBIT 4

 

CONFIRMATION OF SATISFACTION

 

Pursuant to Section 3.1 of that certain Consent, Transfer, Assumption and Amendment Agreement dated August____, 2013 (the "Loan Transfer Consent"), by and among XOMA Ireland, XOMA US and Servier, the undersigned as [INSERT TITLE] of Servier hereby confirms and declares that it has received from XOMA US (i) confirmation of the completion of the GEVO Asset Transfer, (ii) the signed XOMA US Note and (iii) the fully signed Security Agreement; and that the Conditions have thus been satisfied as of the Transfer Completion Date (all capitalized terms shall have the meanings assigned thereto in the Loan Transfer Consent).

	
 

	
For and on behalf of LES

LABORATOIRES SERVIER

	
 

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	
Name:

	
 

	
 

	
 

	
Title:

	
 

	
 

	
 

	
Date:

	
 

	
 

 

 

13

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00223-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00223-of-00352.parquet"}]]