Document:

A.M. CASTLE & CO. 8-K

 

Exhibit 10.1

 

THIRD AMENDMENT

TO CREDIT AND GUARANTY AGREEMENT

 

This THIRD AMENDMENT TO CREDIT AND GUARANTY AGREEMENT
(this “Third Amendment”) is dated as of May 4, 2017 and entered into by and among A.M. CASTLE & CO.,
a corporation organized under the laws of the state of Maryland (the “Company”) and TOTAL PLASTICS INC.,
a corporation organized under the laws of the state of Michigan (“TPI”; and together with the Company, each,
a “Borrower” and collectively, the “Borrowers”), A.M. CASTLE & CO. (CANADA) INC.,
a corporation existing under the laws of the province of British Columbia, Canada (“Castle Canada”), HY-ALLOY
STEELS COMPANY, a corporation organized under the laws of the state of Delaware (“HY-Alloy”), KEYSTONE
SERVICE, INC., a corporation organized under the laws of the state of Indiana (“Keystone Service”) and KEYSTONE
TUBE COMPANY, LLC, a limited liability company organized under the laws of the state of Delaware (“Keystone”;
and together with Castle Canada, HY-Alloy, Keystone Service and each other Subsidiary (as defined in the Agreement that is defined
below) of the Company party hereto from time to time as a guarantor, a “Guarantor” and collectively, the “Guarantors”),
the Lenders party to the Agreement from time to time, CANTOR FITZGERALD SECURITIES (“Cantor Fitzgerald”,
as Administrative Agent (in such capacity, the “Administrative Agent”) and Collateral Agent (in such capacity,
the “Collateral Agent”), and is made with reference to that certain Credit
and Guaranty Agreement dated as of December 8, 2016 (as the same may be amended, restated, supplemented or otherwise
modified from time to time, the “Agreement”), by and between the Borrowers, the Guarantors, the Lenders, the
Administrative Agent, and the Collateral Agent. Capitalized terms used herein without definition shall have the meanings ascribed
to them in the Agreement.

RECITALS

WHEREAS, the Borrowers, the Lenders,
the Guarantors, the Administrative Agent, and the Collateral Agent entered into the Agreement on or about December 8, 2016;

WHEREAS, the Agreement contemplates
that the next Delayed Draw Term Loan Commitment in the amount of $12,500,000.00 will be available to the Borrowers on or after
June 12, 2017;

WHEREAS, given the Borrowers’
liquidity needs, the Lenders are willing to advance the availability date of such Delayed Draw Term Loan Commitment to May 10,
2017 or thereafter;

WHEREAS, the Agreement imposes
certain mandatory prepayment provisions on the Borrowers;

WHEREAS, the Lenders are willing
to waive such mandatory prepayment provisions as to the contemplated receipt of certain funds by the Borrowers; and

WHEREAS, the Borrowers, the Guarantors,
the Lenders, the Administrative Agent and the Collateral Agent desire to amend the Agreement accordingly as set forth below on
the terms and conditions set forth herein.

NOW, THEREFORE, in consideration
of the premises and the agreements, provisions and covenants herein contained, the Borrowers, the Guarantors, the Lenders, the
Administrative Agent, and the Collateral Agent hereby agree as follows:

 

    	 

    	 

    

 

Section 1.

AMENDMENTS TO THE AGREEMENT

1.1       

Amendments to Section 2.2(a):
Delayed Draw Term Loans

A.       

Section 2.2(a) (Delayed
Draw Term Loan Commitments) of the Agreement is hereby amended in its entirety to read as follows:

Delayed Draw Term Loan Commitments. Subject to
the terms and conditions hereof, each Lender severally agrees to make the Delayed Draw Term Loans to the Borrowers in an
aggregate amount up to but not exceeding such Lender’s Delayed Draw Term Loan Commitment; provided, that (i) the
Borrowers shall not be entitled to issue more than two Delayed Draw Funding Notices in total in respect of the Delayed Draw
Term Loan Commitments, (ii) $24,500,000 of the Delayed Draw Term Loan Commitment will be available to the Borrowers on or
after December 12, 2016, (iii) $12,500,000 of the Delayed Draw Term Loan Commitment will be available to the Borrowers on or
after May 10, 2017, and (iv) after giving effect to the making of any Delayed Draw Term Loans, in no event shall the Total
Utilization of the Delayed Draw Term Loan Commitments exceed the Delayed Draw Term Loan Commitments then in effect. Any
amount borrowed pursuant to this Section 2.2(a) and subsequently repaid or prepaid may not be reborrowed. The portion of each
Lender’s Delayed Draw Term Loan Commitment funded after giving making a Delayed Draw Term Loan shall terminate
immediately and without further action after giving effect to the funding by such Lender on such date. The Lenders agree
that: (i) the solvency requirement in Section 4.20 below shall not apply for purposes of the Delayed Draw Term Loan
Commitment that will be available to the Borrowers pursuant to subclause (iii) above; and (ii) execution of the Restructuring
Support Agreement dated as of April 6, 2017 by the Borrowers and the Guarantors does not constitute a Material Adverse
Effect.

1.2       

Amendments to Section 2.10:
Mandatory Prepayments

A.       

Section 2.10(f) (Extraordinary
Receipts) of the Agreement is hereby amended in its entirety to read as follows:

Extraordinary Receipts. No later
than the third Business Day following the date of receipt by the Company or any of its Subsidiaries of any Extraordinary Receipts
or tax refunds in an amount greater than $500,000 either individually or in aggregate in any financial year, the Company shall
prepay the Loans together with all amounts owing in accordance with Section 2.12(b), which amounts, including any Exit Fee, will
be payable solely from the proceeds of such Extraordinary Receipts or tax refunds in an aggregate amount equal to such Extraordinary
Receipts or tax refunds; provided, that notwithstanding the foregoing, neither the Company nor any of its Subsidiaries shall
be required to prepay the Loan from any net cash proceeds received by the Company pursuant to the release of any letter of credit
cash collateral account related to its Janesville, Wisconsin location.

Section 2.

CONDITIONS TO EFFECTIVENESS

Section 1 of this Third Amendment shall
become effective only upon (a) execution of this Third Amendment by each of the parties hereto and (b) written consent hereto by
each Lender.

Section 3.

REPRESENTATIONS AND WARRANTIES

A.       

Credit Party Representations and Warranties.
Each of the Credit Parties represents and warrants as follows:

(i)       

Authorization. The execution, delivery
and performance by each Credit Party of this Third Amendment and the incurrence of all obligations hereunder, are within such Credit
Party’s corporate powers and have been duly authorized by all necessary corporate action.

(ii)       

No Conflict. The execution, delivery
and performance by each Credit Party of this Third Amendment do not (i) violate such Credit Party’s certificate of formation
or operating agreement, or (ii) violate any law or regulation or any order, judgment or decree of any court or governmental agency
body binding on such Credit Party, or (iii) result in a breach of or a default under, or result in or require the imposition of
a Lien pursuant to any contract. 

    	 

    	 

    

 

(iii)       

Governmental Consents. No authorization
or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for
the due execution, delivery and performance by the Credit Parties of this Third Amendment.

(iv)       

Validity. This Third Amendment
and the Agreement as amended hereby are legal, valid, and binding obligations of each Credit Party, enforceable against each Credit
Party in accordance with each such document’s terms, except as enforcement may be limited by applicable laws relating to
or limiting creditors’ rights generally or by equitable principles relating to enforceability.

Section 4.

MISCELLANEOUS

A.       

Reference to and Effect on the
Agreement and the Other Credit Documents. 

(i)       

Except as specifically amended by this
Third Amendment, the Agreement and the other Credit Documents shall remain in full force and effect and are hereby ratified and
confirmed.

(ii)       

The execution, delivery and performance
of this Third Amendment shall not, except as expressly provided herein, constitute a waiver of any provision of, or operate as
a waiver of any right, power or remedy of the Lenders under the Agreement or any of the other Credit Documents.

B.       

Fees and Expenses. The Borrowers
acknowledge that all costs, fees and expenses as described in Section 10.2 of the Agreement incurred by any Agent and the Lenders
with respect to this Third Amendment and the documents and transactions contemplated hereby shall be for the account of the Borrowers.

C.       

Instruction to the Agents. Each of
the Lenders signatory hereto (constituting all of the Lenders) directs the Administrative Agent and the Collateral Agent to execute
and deliver this Third Amendment and authorize the Administrative Agent and the Collateral Agent to take action as agent on its
behalf and to exercise such powers and discretion under the Agreement and the other Credit Documents as are delegated to the Administrative
Agent and the Collateral Agent by the terms thereof, together with such powers and discretion as are reasonably incidental thereto. 
The Loan Parties and Lenders agree that the indemnifications provided in Sections 9.4, 9.7 and 10.3 of the Agreement apply to the
foregoing instruction and the execution and delivery of this Third Amendment.

D.       

Headings. Section headings in this
Third Amendment are included for convenience of reference only and shall not be given any substantive effect.

E.       

Applicable Law. THIS THIRD AMENDMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES
THAT WOULD REQUIRE APPLICATION OF ANOTHER LAW.

F.       

Counterparts; Effectiveness. This
Third Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

[Remainder of page intentionally left
blank] 

    	 

    	 

    

 

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

	 	BORROWERS:
	 	 
	 	A.M. CASTLE & CO.
	 	 
	 	By:	/s/ Patrick R. Anderson
	 	 	Name:  Patrick R. Anderson
	 	 	Title:  Executive Vice President, Chief Financial Officer & Treasurer
	 	 
	 	TOTAL PLASTICS INC.
	 	 
	 	By:	/s/ Patrick R. Anderson
	 	 	Name:  Patrick R. Anderson
	 	 	Title:  Vice President & Treasurer
	 	 
	 	GUARANTORS:
	 	 
	 	A.M. CASTLE & CO. (CANADA) INC.
	 	By:	/s/ Patrick R. Anderson
	 	 	Name:  Patrick R. Anderson
	 	 	Title:  Vice President, Chief Financial Officer & Treasurer
	 	 
	 	HY-ALLOY STEELS COMPANY
	 	 
	 	By:	/s/ Patrick R. Anderson
	 	 	Name:  Patrick R. Anderson
	 	 	Title:  Treasurer
	 	 
	 	KEYSTONE SERVICE, INC.
	 	 
	 	By:	/s/ Patrick R. Anderson
	 	 	Name:  Patrick R. Anderson
	 	 	Title:  Treasurer
	 	 
	 	KEYSTONE TUBE COMPANY, LLC
	 	 
	 	By:	/s/ Patrick R. Anderson
	 	 	Name:  Patrick R. Anderson
	 	 	Title:  Treasurer

 

    	 

    	 

    

 

	 	HIGHBRIDGE INTERNATIONAL LLC
	 	as Lender
	 	 
	 	By: 	HIGHBRIDGE CAPITAL MANAGEMENT, LLC,
	 	 	as Trading Manager
	 	 
	 	By:	/s/ Jonathan Segal
	 	 	Name: Jonathan Segal
	 	 	Title: Managing Director
	 	 
	 	HIGHBRIDGE TACTICAL CREDIT & CONVERTIBLES MASTER FUND, L.P.,
	 	as Lender
	 	 
	 	By: 	HIGHBRIDGE CAPITAL MANAGEMENT, LLC,
	 	 	as Trading Manager
	 	 
	 	By:	/s/ Jonathan Segal
	 	 	Name: Jonathan Segal
	 	 	Title: Managing Director

 

    	 

    	 

    

 

	 	WHITEBOX ASYMMETRIC PARTNERS, L.P.,
	 	as Lender
	 	 
	 	 
	 	By:	/s/ Mark Strefling
	 	 	Name: Mark Strefling
	 	 	Title: Chief Operating Officer & General Counsel
	 	 
	 	 
	 	WHITEBOX CREDIT PARTNERS, L.P.,
	 	as Lender
	 	 
	 	 
	 	By:	/s/ Mark Strefling
	 	 	Name: Mark Strefling
	 	 	Title: Chief Operating Officer & General Counsel
	 	 
	 	 
	 	WHITEBOX MULTI-STRATEGY PARTNERS, L.P.,
	 	as Lender
	 	 
	 	 
	 	By:	/s/ Mark Strefling
	 	 	Name: Mark Strefling
	 	 	Title: Chief Operating Officer & General Counsel
	 	 
	 	 
	 	WHITEBOX INSTITUTIONAL PARTNERS, L.P.,
	 	as Lender
	 	 
	 	 
	 	By:	/s/ Mark Strefling
	 	 	Name: Mark Strefling
	 	 	Title: Chief Operating Officer & General Counsel

 

    	 

    	 

    

 

	 	CORRE OPPORTUNITIES QUALIFIED MASTER FUND, LP,
	 	as Lender
	 	 
	 	 
	 	By:	/s/ Eric Soderlund
	 	 	Name: Eric Soderlund
	 	 	Title: Authorized Signatory
	 	 
	 	 
	 	CORRE OPPORTUNITIES FUND, LP,
	 	as Lender
	 	 
	 	 
	 	By:	/s/ Eric Soderlund
	 	 	Name: Eric Soderlund
	 	 	Title: Authorized Signatory
	 	 
	 	 
	 	CORRE OPPORTUNITIES II MASTER FUND, LP,
	 	as Lender
	 	 
	 	 
	 	By:	/s/ Eric Soderlund
	 	 	Name: Eric Soderlund
	 	 	Title: Authorized Signatory

 

    	 

    	 

    

 

	 	WFF CAYMAN II LTD.,
	 	as Lender
	 	 
	 	By: 	WOLVERINE ASSET MANAGEMENT, LLC, its investment manager
	 	 
	 	 
	 	By:	/s/ Kenneth L. Nadel
	 	 	Name: Kenneth L. Nadel
	 	 	Title: Chief Operating Officer

     

     

    

	 	SGF, LLC

	 	as Lender 
	 	 
	 	 
	 	By:	/s/ Jonathan B. Mellin
	 	 	Name: Jonathan B. Mellin
	 		Title: Member

     

     

    

 

	 	CANTOR FITZGERALD SECURITIES, 
	 	as Administrative Agent and Collateral Agent 
	 	 
	 	 
	 	By:	/s/
    Shawn P. Matthews
	 	 	Name: Shawn P. Matthews
	 	 	Title: Chief Executive OfficerExhibit

EXHIBIT 10.1

ESCROW AGREEMENT

This ESCROW AGREEMENT (this “Agreement”) is entered into as of March 22, 2017 by and among Curis Royalty LLC (“Borrower”), HealthCare Royalty Partners III, L.P. (“Lender”), Curis, Inc. (“Parent”), and Boston Private Bank and Trust Company (“Bank”), as Escrow Agent (“Escrow Agent”).

WITNESSETH:

WHEREAS, Escrow Agent has been advised that Borrower is a party to that certain Credit Agreement, dated as of March 6, 2017, among Borrower, Lender and Parent (the “Credit Agreement”), and it is a condition to the effectiveness of the Credit Agreement that the parties execute and deliver this Agreement; 

WHEREAS, Escrow Agent has agreed to act as escrow agent in connection with the Credit Agreement on the terms and conditions set forth in this Agreement; and

WHEREAS, Borrower has granted to Lender a first-priority security interest and lien on, to the extent of Borrower’s interest therein, the Escrow Account (as defined below) and the Escrow (as defined below), and in connection with such security interest and lien, Escrow Agent has agreed to only comply with instructions originated by Lender in connection with this Agreement, the Escrow Account and Escrow and without any further consent from Borrower or Parent.

NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties hereto, intending to be legally bound, agree as follows:

(1)    Capitalized terms used but not otherwise defined in this Agreement shall have the respective meanings given to such terms in the Credit Agreement, a fully executed copy of which has been delivered to Escrow Agent on or before the date hereof.

(2)    Borrower and Lender hereby appoint on the date hereof Bank to serve as Escrow Agent hereunder, and Bank hereby agrees on the date hereof to serve as Escrow Agent hereunder.  Escrow Agent agrees to serve as Escrow Agent hereunder indefinitely until Escrow Agent resigns or is discharged as escrow agent in accordance with Section 11 or this Agreement terminates pursuant to a written termination notice to the Escrow Agent pursuant to Section 19.

(3)    (a)  On or prior to the Effective Date, Escrow Agent shall establish a non-interest bearing deposit account with Bank entitled “Boston Private Bank & Trust Company, as escrow agent pursuant to the Escrow Agreement” (the “Escrow Account”).  The Escrow Account shall be a “deposit account” (as defined in Section 9-102(a)(29) of the Code).  All funds held in or credited to the Escrow Account that are not Excluded Collateral (as that term is defined in the Credit Agreement) shall be held for the exclusive benefit of Lender, and shall be applied and disbursed only as provided herein. All such funds shall be held in or credited to the Escrow Account until disbursed or paid in accordance with the terms hereof.  Escrow Agent shall segregate the funds held in or credited to the Escrow Account from its other funds held as an agent or in trust. 

(b)  Escrow Agent shall deposit in the Escrow Account any funds it receives from Genentech.  Lender agrees to provide Escrow Agent with specific instructions with respect to any deposits to be held in the Escrow Account.  Any and all amounts deposited in the Escrow Account that are not Excluded Collateral (as that term is defined in the Credit Agreement) shall be referred to herein as the “Escrow”.

(4)    (a)  Escrow Agent shall provide Lender, Parent and Borrower with electronic access to view the balance of the Escrow Account, without any right or ability to make or authorize any electronic transfers or instructions with respect to said Escrow Account.
 
(c)  All income earned, including gains, on the Escrow Account, if any, shall be treated as income or gain to Borrower for Tax purposes.

(5)    Escrow Agent will disburse any portion of or all the funds held in the Escrow Account from time to time as may be designated in a written notice (a “Disbursement Instruction”) duly executed and delivered by Lender, which such Disbursement Instruction shall indicate the amount of such funds to be transferred, the date such funds are to be transferred (the “Fund Transfer Date”) and the account or name and address to which the funds are to be delivered.  If the Lender desires the funds to be delivered in immediately available funds, the Disbursement Instruction shall provide such wire instructions as the Escrow Agent may require.  If wire instructions are not provided, the Escrow Agent shall provide the funds by bank check delivered to the address or addresses set forth in the Disbursement Instruction.  The Funds Transfer Date shall be not less than two (2) Business Days after the receipt by Escrow Agent of such Disbursement Instruction.  On the Funds Transfer Date set forth in the Disbursement Instruction, the 

Escrow Agent shall disburse the funds from the Escrow Account as set forth in the Disbursement Instruction.

(6)    Each of Escrow Agent, Parent and Borrower acknowledges that Borrower, by the security granting provisions in the Credit Agreement, has granted to Lender a first-priority security interest and lien on the Escrow Account and the Escrow to the extent of Borrower’s interest therein.  

(7)    It is understood and agreed, further, that Escrow Agent shall:

(a)  be under no duty to enforce or collect any payment of any amounts which are to be paid to and held by it hereunder;

(b)  be under no duty to accept funds, checks, drafts or instructions for the payment of money from anyone other than Genentech or Lender or to give any receipt therefore except to Genentech or Lender, as applicable;

(c)  have no liability for following the instructions herein or expressly provided for, including Disbursement Instructions issued pursuant to Section 5; 

(d)  promptly notify Borrower, Parent and Lender if the amount deposited in the Escrow Account is less than any amount set forth in any Disbursement Instruction provided by Lender pursuant to Section 5; 

(e)  only be responsible for: (i) depositing in the Escrow Account funds delivered to Escrow Agent by Genentech pursuant to this Agreement, and (ii) disbursing and transferring funds from the Escrow Account in accordance with the instructions herein or expressly provided for, including Disbursement Instructions issued pursuant to Section 5; and

(f) only comply with instructions (including any Disbursement Instruction) originated by Lender without any further consent from Borrower or Parent.

(8)    The duties and responsibilities of Escrow Agent hereunder shall be determined solely by the express provisions of this Agreement, and Escrow Agent undertakes to perform only such duties as are expressly set forth herein.  No further duties or responsibilities of Escrow Agent shall be implied.  Escrow Agent shall not be bound by the Credit Agreement or have any duties thereunder.  In the event that Escrow 

Agent shall be uncertain as to its duties or rights hereunder or shall receive instructions from Lender (including any Disbursement Instruction) or from any other Person  with respect to the Escrow which, in the opinion of Escrow Agent, are in conflict with or do not strictly comply with the provisions of this Agreement, it shall be entitled, without liability to Borrower, Parent, Lender or any other Person, to refrain from taking any action other than to safely keep the Escrow in the Escrow Account until it shall be directed otherwise in writing by Lender or by a final order of a court of competent jurisdiction or arbitrator.  

(9)    Escrow Agent may rely and shall be protected in acting or refraining from acting upon any written notice, instruction or request furnished to it hereunder and believed by it to be genuine and to have been signed or presented by the proper party or parties.  Escrow Agent shall be under no duty to inquire into or investigate the validity, accuracy or content of any such notice, instruction, request or other document.  The Escrow Agent shall have no duty to solicit any payments that may be due it hereunder.

(10)    Escrow Agent shall not be liable to Borrower, Parent, Lender or any other Person, including any academic institution to whom royalties are due and payable under the Existing License Agreement, for any action taken or omitted by Escrow Agent unless a court of competent jurisdiction by a final, non-appealable order, determines that any loss incurred by Borrower, Parent, Lender or any other Person, including any academic institution to whom royalties are due and payable under the Existing License Agreement, was caused by Escrow Agent’s willful misconduct or gross negligence.  In the administration of the Escrow Account hereunder, Escrow Agent may execute any of its powers and perform its duties hereunder directly or through agents or attorneys and may consult with counsel, accountants and other skilled persons to be selected and retained by it.  Notwithstanding anything to the contrary contained in this Agreement, Escrow Agent shall not be liable for anything done, suffered or omitted by it in accordance with the advice or opinion of any such counsel, accountants or other skilled persons unless a court of competent jurisdiction by a final, non-appealable order determines that a loss suffered by Borrower, Parent, Lender or any academic institution to whom royalties are due and payable under the Existing License Agreement was caused by Escrow Agent’s gross negligence or willful misconduct. 

(11)    Escrow Agent may resign from its duties and obligations hereunder by giving not less than thirty (30) days’ notice in writing of such resignation or may be removed by Lender at any time upon written notice to Escrow Agent by Lender.  In the event of resignation or discharge of Escrow Agent, Lender shall appoint a successor agent, to hold the Escrow, and any such successor escrow agent shall 

execute and deliver to the predecessor escrow agent an instrument accepting such appointment, upon which successor agent shall, without further act, become vested with all of the rights, powers and duties of the predecessor escrow agent as if originally named herein.  Borrower and Parent, jointly and severally, shall be liable for any expenses incurred by Escrow Agent in transferring the Escrow to a successor escrow agent.  If no successor escrow agent is appointed prior to the effective date of the termination or resignation of Escrow Agent, Escrow Agent, at the joint and several expense of Borrower and Parent, may place all of the Escrow at the disposal of a court and petition the court to act as the successor escrow agent or to appoint another entity to act as the successor escrow agent.  

(12)     The fees of Escrow Agent for the provision of all services under this Agreement are set forth on Schedule 1 attached hereto (the “Escrow Agent Fees”) and shall be paid in accordance with the provisions set forth on Schedule 1. 

(13)    Borrower and Parent, jointly and severally, shall indemnify, defend and save harmless Escrow Agent and its directors, officers, agents and employees and attorneys (collectively, the “Indemnitees”) from and against any and all claims, losses, liabilities, damages, fines, penalties and expenses (including the out-of-pocket and incidental  expenses and legal fees and expenses (“Liabilities”)) that may be imposed on, incurred by, or asserted against Indemnitees or any of them arising out of or in connection with (i) the Escrow Agent’s execution and performance of this Agreement or (ii) the following of any instructions or directions upon which Escrow Agent is authorized to rely pursuant to the terms of this Agreement.  In addition to and not in limitation of the immediately preceding sentence, Borrower and Parent, jointly and severally, also agree to indemnify and hold the Indemnitees and each of them harmless from and against any and all Liabilities that may be imposed on, incurred by, or asserted against the Indemnitees or any of them in connection with or arising out of Escrow Agent’s performance under this Agreement, provided that the Indemnitees have not acted with gross negligence or engaged in willful misconduct, as determined by a final, non-appealable order of a court of competent jurisdiction.  The parties hereto acknowledge that this provision shall survive the resignation or removal of Escrow Agent for any reason and/or termination of this Agreement.
 
(14)    Anything in this Agreement to the contrary notwithstanding, in no event shall Escrow Agent be liable for special, indirect or consequential losses or damages of any kind whatsoever (including but not limited to lost profits), even if Escrow Agent has been advised of the likelihood of such losses or damages and regardless of the form of action.  The parties hereto acknowledge that this provision shall survive the resignation or removal of Escrow Agent for any reason and/or termination of this Agreement.

(15)    Borrower, Parent and Lender each acknowledges that Federal law requires all financial institutions to obtain, verify, and record information that identifies each Person who opens an account in order to help the government fight the funding of terrorism and money laundering activities.  Accordingly, Borrower, Parent and Lender shall provide Escrow Agent with such information as Escrow Agent shall request to identify the relevant parties to this Agreement, and Escrow Agent shall only use such information for that purpose.  

(16)    All notices, demands, and communications hereunder shall be in writing and shall be deemed to be duly given if delivered in person, by email or fax, by United States mail, certified or registered mail, return receipt requested, or by a nationally recognized overnight courier service, or otherwise actually delivered as follows:

		
	(a)
	if to Escrow Agent:

Boston Private Bank and Trust Company
Ten Post Office Square
Boston, MA 02109
Attn: Karen Shaw 
Tel: 617-912-3607
Fax: 617-912-3620
Email: kshaw@bostonprivatebank.com

		
	(b)
	if to Borrower or Parent: 

Curis Royalty LLC    
4 Maguire Road
Lexington, MA 02421
Attn: Secretary
Tel: (617) 503-6632
Fax: (617) 503-6501
            
Curis, Inc.
4 Maguire Road
Lexington, MA 02421

Attn: Chief Financial Officer
Tel: (617) 503-6632
Fax: (617) 503-6501

with copies (which shall not constitute notice) to:

Wilmer Cutler Pickering Hale and Dorr LLP
60 State Street
Boston, MA 02109
Attn:  Cynthia T. Mazareas, Esq.
Tel: (617) 526-6393
Fax: (617) 526-5000
Email: cynthia.mazareas@wilmerhale.com

		
	(c)
	 if to Lender:

c/o HealthCare Royalty Partners III, L.P.
300 Atlantic Street
Suite 600
Stamford, CT 06901
Attn: John A. Urquhart
Email: John.Urquhart@hcroyalty.com
            
with copies (which shall not constitute notice) to:

HealthCare Royalty Partners III, L.P.
300 Atlantic Street
Suite 600
Stamford, CT 06901
Attn: Chief Legal Officer
Email: royalty-legal@hcroyalty.com

Morgan Lewis & Bockius LLP
101 Park Avenue
New York, NY  10178

Attn: Patricia F. Brennan
Email: patricia.brennan@morganlewis.com

or at such other address as any of the above may have furnished in writing to the other parties.   Any such notice, demand or communication shall be deemed to have been given (i) on the date given, if delivered in person, emailed or faxed or otherwise actually delivered, (ii) on the date received, if given by registered or certified mail, return receipt requested, or given by overnight courier service, or (iii) three (3) days after the date mailed, if by first class mail, postage prepaid.  

(17)    The provisions of this Agreement may be waived, altered, amended, supplemented, or replaced, in whole or in part, only by a writing signed by all of the parties hereto.

(18)    The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.  Except as set forth in the following sentence, this Agreement may not be transferred or assigned by Borrower, Parent, Lender or Escrow Agent without the prior written consent of the other parties; provided, however, that Lender may transfer or assign any of its rights or obligations hereunder to any Person to whom Lender has assigned any or all of its rights and obligations under the Credit Agreement in accordance with Section 9.06 of the Credit Agreement without the prior written consent of Borrower (unless required under Section 9.06 of the Credit Agreement), Parent or Escrow Agent.  Escrow Agent shall not recognize any transfer or assignment of Lender’s rights or obligations hereunder until such time that it has received a written notice of such transfer or assignment duly executed and delivered by Lender.  Any corporation, association, or other entity into which Escrow Agent may be converted or merged, or with which it may be consolidated, or to which it may sell or otherwise transfer all or substantially all of its corporate trust business, or any corporation, association or other entity resulting from any such merger, conversion, consolidation, sale or other transfer, shall, ipso facto, be and become successor Escrow Agent hereunder, vested with all of the powers, discretions, immunities, privileges and all other matters as was its predecessor, without the execution or filing of any instrument or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding; provided that any successor Escrow Agent shall promptly notify Borrower and Lender in writing upon its appointment hereunder.

(19)    This Agreement and the Escrow Account shall automatically terminate upon Escrow Agent’s receipt of a written termination notice signed by Lender setting forth (i) the requested termination date (which date shall be at least two (2) Business Days after the date on which Escrow Agent receives 

such termination notice) and (ii) instructions for the return or delivery of funds (if any) then held in the Escrow Account.  Upon termination of this Agreement, the Escrow Agent shall be discharged from any further obligation hereunder.

(20)    This Agreement may be executed and delivered, including by electronic mail, in two (2) or more counterparts, each of which shall be deemed an original; and any Person may become a party hereto by executing a counterpart hereof, but all of such counterparts together shall be deemed to be one and the same instrument.  It shall not be necessary in making proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts.

(21)    Nothing in this Agreement is intended to or shall confer upon anyone other than the parties hereto any legal right, remedy or claim.

(22)    This Agreement shall be governed by and construed and enforced in accordance with the laws of The Commonwealth of Massachusetts (and United States federal law, to the extent applicable), irrespective of the principal place of business, residence or domicile of the parties hereto, and without giving effect to otherwise applicable principles of conflicts of laws.  The parties hereto agree that any action brought hereunder shall be brought in the courts located in the County of Suffolk, Commonwealth of Massachusetts.  Each party hereto irrevocably waives any objection on the grounds of venue, forum non-conveniens or any similar grounds and irrevocably consents to service of process by mail or in any other manner permitted by applicable law and consents to the jurisdiction of said courts.

(23)    This Agreement constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, both written and oral, among such parties with respect to the subject matter of this Agreement.  In the event of a conflict between the terms of the Credit Agreement and the provisions hereof, the provisions hereof shall control in respect of Escrow Agent’s rights and duties.  

(24)    The invalidity or unenforceability of any particular provision, or part of any provision, of this Agreement shall not affect the other provisions or parts hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable provisions or parts were omitted, provided that the obligations and responsibilities of Escrow Agent are not materially altered or modified.

(25)    In the event that a dispute concerning the subject matter of this Agreement is such that Escrow Agent deems it necessary or appropriate for its protection to do so, Escrow Agent may deposit the 

Escrow into a court of competent jurisdiction and thereupon shall have no further duties with respect to this Agreement.  Without limiting the foregoing, in the event that all or any portion of the Escrow shall be attached, garnished or levied upon by any court order, or if the delivery of any portion of the Escrow shall be stayed or enjoined by any court order, or if any court order, judgment or decree shall be entered affecting the Escrow or Escrow Agent in respect of the Escrow, Escrow Agent may, in its sole discretion, obey and comply with such orders, decrees, writs and judgments so issued or entered, notwithstanding any other provision of this Agreement to the contrary.

(26)    If any payment under this Agreement is to be made on a day which is a Saturday, Sunday or a day on which Escrow Agent is closed, then such payment shall be made, with no penalty or interest being due because of such delayed payment, on the next succeeding day which is not a Saturday, Sunday or a day on which Escrow Agent is closed.

(27)    BORROWER, PARENT, LENDER AND ESCROW AGENT AGREE THAT NONE OF THEM NOR ANY ASSIGNEE OR SUCCESSOR SHALL (A) SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY OTHER ACTION BASED UPON OR ARISING OUT OF, THIS AGREEMENT OR THE DEALINGS OR THE RELATIONSHIP BETWEEN OR AMONG ANY OF THEM, OR (B) SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.  THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY BORROWER, PARENT, LENDER AND ESCROW AGENT, AND THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS.  

[Remainder of Page Intentionally Left Blank]
    

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.

BOSTON PRIVATE BANK AND TRUST CO.,
as Escrow Agent

By:  /s/ Torrance Childs                

Name: Torrance Childs
Title:     Co-President

CURIS ROYALTY LLC,
as Borrower

By:  /s/ James E. Dentzer                
Name: James E. Dentzer
Title:   Senior Vice President, Finance & Treasurer
        & Secretary

CURIS, INC.,
as Parent

By:  /s/ James E. Dentzer                
Name: James E. Dentzer
Title:   Chief Financial Officer & Chief Administrative 
      Officer

HEALTHCARE ROYALTY PARTNERS III, L.P.
as Lender 

By:  Healthcare Royalty Management, LLC,
its investment manager

By:  /s/ Clarke B. Futch            
Name: Clarke B. Futch
Title:     Founding Managing Partner
                        

 

Schedule 1

(1)    $1,500 for establishing the Escrow Account, plus all expenses, disbursements and advancements, including reasonable attorneys’ fees incurred or made by Bank in connection with the preparation, execution, and delivery of this Agreement.  This fee shall be payable by Borrower and Parent, jointly or severally, upon execution of this Agreement.
(2)    In addition, in the event that there is a dispute between Escrow Agent and any other party hereto, Borrower and Parent, jointly and severally, agree to reimburse Escrow Agent for all expenses, disbursements and advances, including reasonable attorneys’ fees, incurred or made by the Escrow Agent in connection with any such dispute.  Such amounts shall be paid by Borrower and Parent, jointly and severally, upon invoice by Escrow Agent.
(3)    In addition, Borrower and Parent, jointly and severally, hereby agree to reimburse Escrow Agent for all expenses, disbursements and advances, including reasonable attorneys’ fees, incurred or made by the Escrow Agent in connection with the modification, extension or termination of this Agreement.  Such amounts shall be paid by Borrower and Parent, jointly and severally, upon invoice by Escrow Agent.
(4)    In addition, Borrower and Parent, jointly or severally, agree to pay Bank an annual maintenance fee of $500 for the Escrow Account payable on the first anniversary of this Agreement and on each anniversary thereafter.

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