Document:

pstx-ex1022_10.htm

Exhibit 10.22

 

CERTAIN INFORMATION CONTAINED IN THIS EXHIBIT, MARKED BY [***], HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE THE REGISTRANT HAS DETERMINED THAT IT IS BOTH NOT MATERIAL AND IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

EXECUTION VERSION

 

 

 

 

 

 

 

COLLABORATION AND LICENSE AGREEMENT

 

by and between

Poseida Therapeutics, Inc.

and

Takeda Pharmaceuticals USA, Inc.

 

Dated as of October 11, 2021

 

 

 

 

 

COLLABORATION AND LICENSE AGREEMENT

THIS COLLABORATION AND LICENSE AGREEMENT (this “Agreement”) is entered into as of October 11, 2021 (the “Effective Date”), by and between Takeda Pharmaceuticals USA, Inc., a Delaware corporation having a place of business at 95 Hayden Avenue, Lexington, MA 02421, United States (“Takeda”), and Poseida Therapeutics, Inc., a Delaware corporation, having a place of business at 9390 Towne Centre Drive, Suite 200, San Diego, CA 92121 (“Poseida”).

INTRODUCTION

WHEREAS, Takeda is in the business of developing and delivering new treatments in multiple therapeutic areas, including rare diseases.

WHEREAS, Poseida has a suite of technology platforms with applicability to create transformative, curative therapies for rare diseases.

WHEREAS, the Parties desire to collaborate to evaluate and apply Poseida’s current and next generation technology platforms to develop Licensed Products (as defined herein) targeted to rare diseases. 

WHEREAS, Takeda shall have the option to exclusively license the Licensed IP (as defined herein) for designated Indications (as defined herein), and thereafter Takeda would independently assume further development, manufacturing and commercialization related to such Licensed Products on the terms and conditions set forth in this Agreement. 

NOW, THEREFORE, in consideration of the respective representations, warranties, covenants and agreements contained herein, and for other valuable consideration, the receipt and adequacy of which are hereby acknowledged, Poseida and Takeda agree as follows:

ARTICLE I

DEFINITIONS

1.1Definitions.

 For the purpose of this Agreement, the following terms, whether used in singular or plural form, shall have the respective meanings set forth below:

1.1.1“Acquired Party” has the meaning set forth in Section 5.7.

1.1.2“Acquirer” has the meaning set forth in Section 5.7.

1.1.3“Action” means any legal action, claim, suit or proceeding.

1.1.4“Additional Indication License Option” has the meaning set forth in Section 3.3(b)(i).

1.1.5“Additional Indication Option Period” has the meaning set forth in Section 3.3(b)(i).

1.1.6“Additional Indication Program” has the meaning set forth in Section 3.3(b)(i).

1.1.7“Additional Indication Program Notice” has the meaning set forth in Section 3.3(b)(i).

*** Certain Confidential Information Omitted

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1.1.8“Additional Technology Transfer” has the meaning set forth in Section 4.4(b).

1.1.9“Affiliate” means, with respect to a particular Person, any other Person that controls, is controlled by or is under common control with such Person. For the purposes of this definition, the word “control” (including, with correlative meaning, the terms “controlled by” or “under the common control with”) means the actual power, either directly or indirectly through one or more intermediaries, to direct or cause the direction of the management and policies of such entity, whether by the ownership of more than fifty percent (50%) of the voting stock of such entity, by contract or otherwise.

1.1.10“Agreement” has the meaning set forth in the Preamble, and shall include, for the avoidance of doubt, all Exhibits hereto.

1.1.11“Alliance Manager” has the meaning set forth in Section 2.4(a). 

1.1.12“Applicable Accounting Standards” means (a) with respect to Takeda, International Financial Reporting Standards (“IFRS”), (b) with respect to Poseida, United States generally accepted accounting principles (“GAAP”), and (c) with respect to any Related Party, GAAP or IFRS, as applicable, in each case as generally and consistently applied throughout such Party’s or its Related Party’s organization.

1.1.13“Arising IP” has the meaning set forth in Section 7.1.

1.1.14“Arising Product IP” has the meaning set forth in Section 7.2(b)(i)(2).

1.1.15“Arising Product Patent” has the meaning set forth in Section 7.3(a).

1.1.16“Audit Arbitrator” has the meaning set forth in Section 6.9.

1.1.17“Availability” or “Available” means, as of the date of Poseida’s receipt of the Additional Indication Program Notice or Further Indication Program Notice, as applicable, that an Indication is not (a) the subject of [...***...], or (b) the subject of [...***...].

1.1.18“Bankrupt Party” has the meaning set forth in Section 5.5.

1.1.19[...***...].

1.1.20“Biosimilar Product” means, with respect to a Licensed Product in a country, [...***...]

*** Certain Confidential Information Omitted

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[...***...]. 

1.1.21“BLA” means a Biologics License Application, New Drug Application, Marketing Authorization Application or similar application or submission filed with a Regulatory Authority in a country or group of countries to obtain Regulatory Approval for a biological, pharmaceutical or other therapeutic or prophylactic product in that country or in that group of countries, and all supplements and amendments that may be filed with respect to the foregoing.

1.1.22“Breaching Party” has the meaning set forth in Section 10.3(a).

1.1.23“Business Day” means a day on which banking institutions in New York, New York and Tokyo, Japan are open for business.

1.1.24“Calendar Quarter” means the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30 and December 31 of each Calendar Year; provided that (a) the first Calendar Quarter of the Term shall begin on the Effective Date and end on the first to occur of March 31, June 30, September 30 or December 31 thereafter and (b) the last Calendar Quarter of the Term shall end on the last day of the Term.

1.1.25“Calendar Year” means each successive period of twelve (12) months commencing on January 1 and ending on December 31; provided that (a) the first Calendar Year of the Term shall begin on the Effective Date and end on the first December 31 thereafter and (b) the last Calendar Year of the Term shall end on the last day of the Term.

1.1.26“Candidate Selection” means selection by Takeda of a product candidate arising from the Collaboration, that comprises [...***...] (a) [...***...] or (b) [...***...] (such candidate, a “Selected Candidate”). 

1.1.27“Cas-CLOVER” has the meaning set forth in Section 1.1.125.

1.1.28“Change of Control” means, with respect to a Person, any of the following: (a) the sale or disposition of all or substantially all of the assets of such Person or its direct or indirect controlling Affiliate to a Third Party, other than to an entity of which more than fifty percent (50%) of the voting capital stock are owned after such sale or disposition by shareholders of such Person or its direct or indirect controlling Affiliate (in either case, whether directly or indirectly through any parent entity); or (b) (i) the acquisition by a Third Party, alone or together with any of its Affiliates, other than an employee benefit plan (or related trust) sponsored or maintained by such Person or any of its Affiliates, of more than fifty percent (50%) of the outstanding shares of voting capital stock of such Person or its direct or indirect controlling Affiliate, or (ii) the acquisition, merger or consolidation of such Person or its direct or indirect controlling Affiliate with or into another Person, other than, in the case of this clause (b), an acquisition or a

*** Certain Confidential Information Omitted

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merger or consolidation of such Person or its controlling Affiliate in which the holders of shares of voting capital stock of such Person or its controlling Affiliate, as the case may be, immediately prior to such acquisition, merger or consolidation will beneficially own, directly or indirectly, at least fifty percent (50%) of the shares of voting capital stock of the acquiring Third Party or the surviving corporation in such acquisition, merger or consolidation, as the case may be, immediately after such acquisition, merger or consolidation, and in each case (a) or (b), whether through a single transaction or a series of related transactions.

1.1.29“Clinical Trial” means (a) any Phase 1 Clinical Trial, Phase 2 Clinical Trial or Phase 3 Clinical Trial, (b) such other tests and studies in human subjects that are required by Law or otherwise recommended by the Regulatory Authorities, to obtain or maintain Regulatory Approvals for a Licensed Product for an Indication, and (c) any open label extension study of a Licensed Product; provided, however, that solely for the purposes of determining milestone payments required under ARTICLE VI, “Clinical Trial” shall exclude any investigator initiated sponsored research.

1.1.30“CMO Agreement” has the meaning set forth in Section 4.5(b).

1.1.31“Collaboration” means the collaboration between the Parties under this Agreement for the activities under the Platform Evaluation Work Plan and the performance of the Research Activities during the applicable Research Period.

1.1.32“Collaboration Infringement” has the meaning set forth in Section 7.6(e).

1.1.33“Combination Product” means [...***...].

1.1.34“Commercial Milestone” has the meaning set forth in Section 6.5.

1.1.35“Commercial Milestone Payment” has the meaning set forth in Section 6.5.

1.1.36“Commercialization” or “Commercialize” means, with respect to a Licensed Product, activities directed to the preparation for sale or sale of a Licensed Product, including activities related to marketing, promoting, detailing, distributing, importing, having imported, exporting, having exported, selling or offering to sell, or seeking to obtain reimbursement for, such Licensed Product, whether before or after Regulatory Approval for such Licensed Product has been obtained. 

1.1.37“Commercially Reasonable Efforts” means, [...***...]

*** Certain Confidential Information Omitted

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[...***...].

1.1.38“Competing Program” has the meaning set forth in Section 5.7(b). 

1.1.39“Confidential Information” of a Party means the terms of this Agreement and [...***...].

1.1.40“Confidentiality Agreement” means that certain Confidentiality Agreement by and between Poseida and Takeda, dated of as [...***...].

1.1.41“Control” or “Controlled” means, with respect to any Know-How, Patent Right or other Intellectual Property right and a Party, subject to Section 5.7, the ability of such Party or its Affiliates (whether by ownership or license, other than pursuant to a license granted under this Agreement) to assign, transfer or grant access to, or a license or sublicense of, or grant the ability to prosecute, maintain or enforce, such item or right as provided for herein without violating the terms of any agreement or other arrangement with any Third Party[...***...].

1.1.42“Cover” or “Covered” means, with respect to Know-How or Patent Rights and any Licensed Product, that, in the absence of Takeda obtaining ownership of or a license to such Know-How or Patent Rights, the Exploitation of such Licensed Product by Takeda would infringe or misappropriate such Know-How or Patent Rights.

 

*** Certain Confidential Information Omitted

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1.1.43“Debarred” or “Debarment” means (a) being debarred, or being subject to a pending debarment, pursuant to section 306 of the FDCA, 21 U.S.C. § 335a, (b) being listed by any federal or state agencies as excluded, debarred, suspended or otherwise made ineligible to participate in federal or state healthcare programs or federal procurement or non-procurement programs (as that term is defined in 42 U.S.C. § 1320a-7b(f)), or being subject to any pending process by which any such listing, exclusion, debarment, suspension or other ineligibility could occur, (c) being disqualified by any government or regulatory agency from performing specific services, or being subject to a pending disqualification proceeding, or (d) being convicted of or pleading nolo contendere to a criminal offense related to the provision of healthcare items or services or being subject to any pending criminal Action related to the provision of healthcare items or services.

1.1.44“Develop” or “Development” means, with respect to a product, discovery, research, preclinical development, clinical development, and regulatory activities with respect to such product, including test method development and stability testing, design, compatibility testing, toxicology, animal efficacy studies, formulation, quality assurance/quality control development, statistical analysis, clinical studies, regulatory affairs, regulatory approval (including the preparation and submission of applications for such regulatory approval) and registration, chemical development, manufacturing development, packaging development and manufacturing and development documentation efforts in support of development activities anywhere in the world, whether before or after regulatory approval for such product has been obtained. 

1.1.45“Development and Regulatory Milestone” has the meaning set forth in Section 6.4.

1.1.46“Development and Regulatory Milestone Payment” has the meaning set forth in Section 6.4.

1.1.47“Disclosing Party” has the meaning set forth in Section 8.1(a).

1.1.48“Dollars” and “$” means United States dollars. 

1.1.49“EMA” means the European Medicines Agency and any successor Governmental Authority having substantially the same function.

1.1.50[...***...].

1.1.51“Excess Cost” has the meaning set forth in Section 3.4(a).

1.1.52“Effective Date” has the meaning set forth in the Preamble.

1.1.53“Excluded In-License Agreements” means those agreements set forth on Exhibit 1.1.53.

1.1.54“Executive Officer” means (a) with respect to Takeda, its President of Research and Development or another senior executive officer or their respective designee and (b) with respect to Poseida, its Chief Executive Officer (or his or her designee).

 

*** Certain Confidential Information Omitted

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1.1.55“Exploit” or “Exploitation” means to Develop, have Developed, use, Manufacture, have Manufactured, sell, have sold, offer for sale, Commercialize, import, export, register, and otherwise exploit a Licensed Product. 

1.1.56“FDA” means the United States Food and Drug Administration or any successor Governmental Authority having substantially the same function.

1.1.57[...***...].

1.1.58“Field” means all uses. 

1.1.59“Final Data Package” means the final written data package delivered by Poseida to Takeda promptly, and in any case within [...***...], after the completion of the activities under the Platform Evaluation Work Plan, containing all data, findings, results and information described in the Platform Evaluation Work Plan or set forth on Exhibit 1.1.59.

1.1.60“First Commercial Sale” means [...***...].

1.1.61 “FTE” means, with respect to a Program, a full-time employee of Poseida dedicated to activities under the Program or full-time equivalent employee of Poseida based on a total of [...***...] hours of scientific, technical or managerial activities under the Program per year.

1.1.62“FTE Costs” means, with respect to Poseida for any period, the applicable FTE Rate multiplied by the applicable number of FTEs of Poseida performing activities under a given Program in accordance with the applicable Research Plan. 

1.1.63“FTE Rate” means [...***...] per FTE per year.  [...***...].

1.1.64“Further Indication License Option” has the meaning set forth in Section 3.3(b)(ii).

1.1.65“Further Indication Option Period” has the meaning set forth in Section 3.3(b)(ii).

1.1.66“Further Indication Program” has the meaning set forth in Section 3.3(b)(ii).

1.1.67 “Further Indication Program Notice” has the meaning set forth in Section 3.3(b)(ii).

1.1.68“Governmental Authority” means any applicable government authority, court, tribunal, arbitrator, agency, legislative body, commission or other instrumentality of (a) any government of any country or jurisdiction, (b) any state, province, county, city or other political subdivision thereof or (c) any supranational body.

1.1.69“Hemophilia A Milestone 1” means [...***...]

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[...***...].

1.1.70“Hemophilia A Milestone 2” means [...***...].

1.1.71“[...***...]” has the meaning set forth in Exhibit 1.1.72. 

1.1.72“In-License Agreements” means any contract or agreement with a Third Party pursuant to which Poseida, during the Term, in-licenses or otherwise maintains Control of Patent Rights, Know-How or other Intellectual Property rights that constitute Licensed IP for purposes of this Agreement.  The In-License Agreements existing as of the Effective Date, as set forth on Exhibit 1.1.72 (which, for clarity, subject to Section 5.2(g)(iii), exclude the Excluded In-License Agreements), are deemed Controlled by Poseida as of the Effective Date and additional payments by Takeda are not required thereunder. 

1.1.73“IND” means an application submitted to a Regulatory Authority to initiate human clinical trials, including (a) an Investigational New Drug application or any successor application or procedure filed with the FDA, (b) any equivalent of a U.S. Investigational New Drug application in any country outside the United States, and (c) all supplements and amendments that may be filed with respect to the foregoing.

1.1.74“Indemnified Party” has the meaning set forth in Section 11.4.

1.1.75“Indemnifying Party” has the meaning set forth in Section 11.4.

1.1.76“Indications” means, collectively, the [...***...] Indications and the [...***...] Indications.

1.1.77“Initial Indication Program” has the meaning set forth in Section 3.3(a)(i).

1.1.78“Initial Technology Transfer” has the meaning set forth in Section 4.4(a)(i).

1.1.79“Intellectual Property” means all intellectual property and proprietary rights, including (a) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all patents, patent applications, and patent and invention disclosures, together with all provisionals, reissuances, continuations, continuations-in-part, divisions, revisions, extensions, and reexaminations thereof, (b) all trademarks, service marks, trade dress, logos, slogans, brand names, trade names, domain names, and business and product names, and all applications and registrations therefor, and all extensions and renewals thereof, and all goodwill of the business connected with the use of and symbolized by the foregoing, (c) all copyrights and copyrightable works, works of authorship (whether or not copyrightable), all mask

*** Certain Confidential Information Omitted

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works, industrial designs, and protectable designs, and all applications and registrations therefor, and all extensions and renewals thereof, (d) all trade secrets and confidential business information (including research and development, know-how, formulae, compositions, processes, techniques, methodologies, technical information, designs, industrial models, manufacturing, engineering and technical drawings, specifications, research records, records of inventions, test information, customer and supplier lists, customer data, pricing and cost information, and business and marketing plans and proposals), and (e) all rights to use all of the foregoing and all other rights in, to, and under the foregoing.

1.1.80“Invention” means any invention or discovery, whether or not patentable, that is conceived, in whole or in part, under this Agreement. 

1.1.81“[...***...]” has the meaning set forth in Exhibit 1.1.53. 

1.1.82“Joint Arising IP” has the meaning set forth in Section 7.2(b)(iii).

1.1.83“Joint Manufacturing Working Group” has the meaning set forth in Section 2.1(i).

1.1.84“Joint Patents” includes any Patent Rights under the Joint Arising IP, but excluding, for clarity, any Poseida Patents or Takeda Patents.

1.1.85“JSC” has the meaning set forth in Section 2.1(a).

1.1.86“Know-How” means any intangible information, including data, inventions (including, for clarity, Inventions), practices, methods, protocols, formulas, knowledge, know-how, trade secrets, processes, assays, skills, experience, techniques, governmental or regulatory information (including all regulatory materials submitted or required to be submitted to a Regulatory Authority, or received from a Regulatory Authority, in connection with a clinical trial, manufacturing or marketing authorization), and results of experimentation and testing, including pharmacological, toxicological and pre-clinical and clinical data and analytical and quality control data, patentable or otherwise.

1.1.87“Knowledge” means the good faith understanding of the facts and information after performing a diligent investigation with respect to such facts and information, of [...***...]. 

1.1.88“Law” means any applicable law, statute, rule, regulation, ordinance or other pronouncement having the effect of law of any Governmental Authority, including any rules, regulations, regulatory guidelines or other requirements of any Regulatory Authorities, major national securities exchanges or major securities listing organizations that may be in effect from time to time during the Term and applicable to a particular activity or country or other jurisdiction hereunder, including, to the extent applicable, current good clinical practice, good laboratory practice and good manufacturing practice.

1.1.89“License Option” means each Additional Indication License Option and each Further Indication License Option, as applicable.

*** Certain Confidential Information Omitted

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1.1.90“License Option Period” means the Additional Indication Option Period and the Further Indication Option Period, as applicable.

1.1.91“Licensed IP” means, collectively, the Licensed Know-How and the Licensed Patent Rights.

1.1.92“Licensed Know-How” means all Know-How, including Know-How included in Poseida Background IP, Poseida Arising IP and Joint Arising IP, owned or otherwise Controlled by Poseida or any of its Affiliates as of the Effective Date, or during the Term, that is necessary or reasonably useful to Develop, Manufacture, Commercialize, use, sell, offer for sale, or otherwise Exploit Licensed Products for the Field in the Territory.  

1.1.93“Licensed Patent Rights” means any and all Patent Rights, including Patent Rights included in Poseida Background IP, Poseida Arising IP and Joint Arising IP, owned or otherwise Controlled by Poseida or any of its Affiliates as of the Effective Date, or during the Term, that are necessary or reasonably useful to Develop, Manufacture, Commercialize, use, sell, offer for sale, or otherwise Exploit Licensed Products for the Field in the Territory.  

1.1.94“Licensed Product” means any product that contains or incorporates a Selected Candidate, including all methods, forms, presentations, dosage strengths, dosage forms and formulations thereof, for administration by any method of delivery. For clarity, [...***...]. 

1.1.95[...***...].

1.1.96“Losses” means liabilities, costs, expenses, and losses, including reasonable legal expenses and attorneys’ fees.

1.1.97“Manufacture” or “Manufacturing” means, with respect to a product and as applicable, all activities associated with the production, manufacture, supply, processing, filling, packaging, labeling, shipping, and storage of such product or any components thereof, including process and formulation development, process validation, stability testing, manufacturing scale-up, preclinical, clinical and commercial manufacture and analytical development, product characterization, quality assurance and quality control development, testing and release.

1.1.98“Materials” has the meaning set forth in Section 3.6. 

1.1.99“Net Sales” means for any period and for any country or other jurisdiction in the Territory, [...***...]

[...***...]

*** Certain Confidential Information Omitted

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[...***...].

1.1.100“Non-Acquired Party” has the meaning set forth in Section 5.7.

1.1.101“Non-Bankrupt Party” has the meaning set forth in Section 5.5. 

1.1.102“Non-Breaching Party” has the meaning set forth in Section 10.3(a).

1.1.103“Out-of-Pocket Costs” means amounts paid to permitted subcontractors (without mark-up) under arm’s length arrangements for services or material provided by them in performance of activities under the applicable Research Plan. 

1.1.104“Party” or “Parties” means Poseida or Takeda. 

1.1.105“Patent Rights” means patents, patent applications or provisional patent applications, utility models and utility model applications, design patents or registered industrial designs and design applications or applications for registration of industrial designs, and all substitutions, divisionals, continuations, continuation‐in-part applications, continued prosecution applications, requests for continued examinations, reissues, reexaminations and extensions thereof, in any country of the world. 

1.1.106“Patent Subcommittee” has the meaning set forth in Section 2.1(f)(i).

1.1.107“Payload” means a Poseida Payload, a Takeda Payload or any Public Domain Payload.

1.1.108 “Person” means any corporation, limited or general partnership, limited liability company, joint venture, trust, unincorporated association, governmental body, authority, bureau or agency, any other entity or body, or an individual.

1.1.109“Phase 1 Clinical Trial” means a study of a Licensed Product, the principal purpose of which is a preliminary determination of safety, tolerability, pharmacological activity or pharmacokinetics in the target patient population, or a similar Clinical Trial prescribed by the applicable Regulatory Authorities, pursuant to Law or otherwise, including the trials referred to in 21 C.F.R. § 312.21(a), as amended, or an equivalent Clinical Trial required by a Regulatory Authority outside of the United States, in each case, sponsored by Takeda or its Affiliate or Sublicensee.

1.1.110“Phase 2 Clinical Trial” means a study of a Licensed Product, the principal purpose of which is to evaluate preliminary efficacy and establish safety, appropriate dosage and pharmacological activity in the target patient population, or a similar Clinical Trial

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prescribed by the applicable Regulatory Authorities, pursuant to Law or otherwise, including the trials referred to in 21 C.F.R. § 312.21(b), as amended, or an equivalent Clinical Trial required by a Regulatory Authority outside of the United States, in each case, sponsored by Takeda or its Affiliate or Sublicensee. For purposes of this Agreement, a human clinical trial that combines elements of a Phase 1 Clinical Trial and a Phase 2 Clinical Trial (a phase 1/2 clinical trial) shall be deemed a Phase 2 Clinical Trial upon the initiation of the Phase 2 Clinical Trial portion or cohort of such Clinical Trial.

1.1.111“Phase 3 Clinical Trial” means a human clinical trial that is prospectively designed to demonstrate statistically whether a Licensed Product is safe and effective for use in humans in a manner sufficient to obtain Regulatory Approval to market such Licensed Product in patients having the disease or condition being studied as described in U.S. 21 C.F.R. § 312.21(c), or an equivalent Clinical Trial required by a Regulatory Authority outside of the United States, in each case, sponsored by Takeda or its Affiliate or Sublicensee. For purposes of this Agreement, a human clinical trial that combines elements of a Phase 2 Clinical Trial and a Phase 3 Clinical Trial (a phase 2/3 clinical trial) shall be deemed a Phase 3 Clinical Trial upon the initiation of the Phase 3 Clinical Trial portion or cohort of such Clinical Trial.

1.1.112“Platform Evaluation Subcommittee” has the meaning set forth in Section 2.1(g). 

1.1.113“Platform Evaluation Work” means the research, development and evaluation of the Poseida Technology Platforms conducted by Poseida following the Effective Date and pursuant to the Platform Evaluation Work Plan. 

1.1.114“Platform Evaluation Work Plan” means a research and evaluation work plan for the Poseida Technology Platforms set forth on Exhibit 1.1.114, as may be amended from time to time in accordance with this Agreement.

1.1.115[...***...].

1.1.116[...***...].

1.1.117“Poseida” has the meaning set forth in the Preamble.

1.1.118“Poseida Arising IP” has the meaning set forth in Section 7.2(b)(i)(1).

1.1.119“Poseida Background IP” has the meaning set forth in Section 7.2(a)(i). For clarity, Poseida Background IP includes all Poseida Technology Platforms existing either (x) prior to the Effective Date or (y) on or after the Effective Date and independent of this Agreement.

1.1.120“Poseida Indemnitee” has the meaning set forth in Section 11.2.

1.1.121“Poseida LNP” has the meaning set forth in Section 1.1.125.

1.1.122“Poseida Patents” includes any Patent Rights under the Poseida Arising IP, but excluding, for clarity, any Joint Patents.

1.1.123“Poseida Payload” means Poseida’s proprietary (including Covered by Poseida Background IP and not otherwise publicly available) DNA or RNA material, which may include [...***...]

*** Certain Confidential Information Omitted

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[...***...].

1.1.124“Poseida Platform Trademarks” means those trademarks Controlled by Poseida set forth in Exhibit 1.1.124.

1.1.125“Poseida Technology Platforms” means, as of the Effective Date or thereafter during the Term, (a) nucleic acid modification technology platforms Controlled by Poseida that are relevant to the applicable Program, including without limitation, (i) gene insertion technologies, such as Super piggyBac (“SPB”) and site-specific Super piggyBac (“ssSPB”), and (ii) gene editing technologies, such as Cas-CLOVER (“Cas-CLOVER”), and (b) proprietary LNP delivery technologies Controlled by Poseida, including any and all LNP delivery compositions (“Poseida LNP”), in each case of (a) and (b) as further described on Exhibit 1.1.125, and any improvements thereto.

1.1.126“Pre-Existing Affiliates” has the meaning set forth in Section 5.7.

1.1.127“Product Trademark” means any trademark or service mark for use in connection with the distribution, marketing, promotion and sale of Licensed Products, or accompanying logos, trade dress or indicia of origin, but specifically excluding the corporate names and logos of the Parties and their Related Parties.

1.1.128“Program” means each of the Initial Indication Programs, the Additional Indication Programs and the Further Indication Programs, which, for clarity, shall continue for the Term of this Agreement or until terminated by Takeda.

1.1.129“Program Failure” means, with respect to a given Program, that further progression of such Program is not commercially reasonable due to (a) [...***...], (b) [...***...], or (c) [...***...].

1.1.130“Program Subcommittee” has the meaning set forth in Section 2.1(h).

1.1.131“Public Domain Payload” means DNA or RNA material that is either wild-type or otherwise entirely in the public domain, including with respect to components of such DNA or RNA material and configuration thereof, where such DNA or RNA material comprises[...***...].

1.1.132“Receiving Party” has the meaning set forth in Section 8.1(a). 

1.1.133“Regulatory Approval” means the approvals, licenses, registrations or authorizations of the applicable Regulatory Authority necessary for the marketing and sale of a Licensed Product for a particular Indication in a country, including separate pricing or reimbursement approvals that may be required or desirable in a given jurisdiction. 

1.1.134“Regulatory Authority” means the federal, national, multinational, state, provincial or local regulatory agency, department, bureau or other governmental entity with authority over the testing, manufacture, use, storage, import, promotion, marketing or sale of a Licensed Product in a country or jurisdiction.

*** Certain Confidential Information Omitted

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1.1.135“Related Party” means, with respect to a Party, such Party’s Affiliates and permitted Sublicensees.

1.1.136“[...***...]” has the meaning set forth in Section 3.3(a)(ii).

1.1.137“Research Activities” means the activities to be conducted by the Parties in support of the Collaboration, as set forth in the Research Plans.

1.1.138“Research Costs” means all reasonable and documented costs, including the FTE Costs incurred, and the Out-of-Pocket Costs recorded as an expense in accordance with the Applicable Accounting Standards, incurred by Poseida that are reasonably identifiable or allocable to its activities under a given Program consistent with the applicable Research Plan, including, for the avoidance of doubt, [...***...].

1.1.139“Research Costs Cap” means, with respect to each Program, the budget amount specified in the Research Plan for such Program, and excess amounts to the extent such amounts do not exceed [...***...] of the total amounts to be incurred under the applicable Research Plan; provided, however that additional excess amounts may, subject to the unanimous approval of the JSC, be included in Research Costs if such additional excess amounts were caused by circumstances not within the reasonable control of Poseida. 

1.1.140“Research Period” means (a) with respect to the Initial Indication Programs, the period from the Effective Date until Candidate Selection or (b) with respect to the Additional Indication Programs and the Further Indication Programs, from Takeda’s exercise of the relevant License Option until Candidate Selection, in each case of (a) and (b), unless extended by mutual agreement of the Parties.

1.1.141“Research Plan” means a research plan setting forth in reasonable detail the work projects, Indication, scientific objectives and criteria, Research Activities with respect to a Program, timeframe for such Research Activities, and related budget, as such may be reviewed and amended by the JSC from time to time pursuant to Section 2.1(d)(iii). The initial Research Plans for each of the Initial Indication Programs as of the Effective Date are attached hereto as Exhibit 1.1.141A and Exhibit 1.1.141B, respectively.

1.1.142“Reversion IP” has the meaning set forth in Section 10.5(b)(i)(1).

1.1.143“Reversion Products” has the meaning set forth in Section 10.5(b)(i)(1).

1.1.144“Royalty Term” has the meaning set forth in Section 6.6(b).

1.1.145“Safety Concern” means, with respect to any Licensed Product, (a) [...***...] or (b) [...***...].

1.1.146“Selected Candidate” has the meaning set forth in Section 1.1.26.

1.1.147“SPB” has the meaning set forth in Section 1.1.125.

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1.1.148“ssSPB” has the meaning set forth in Section 1.1.125.

1.1.149“Step-In Right” has the meaning set forth in Section 10.4.

1.1.150“Sublicensee” means a Third Party to whom Poseida has granted or grants rights to conduct Research Activities, or to whom Takeda has granted or grants rights to conduct any activities of Takeda pursuant to this Agreement or to otherwise Exploit any Licensed Product, or any further sublicensee of such rights (regardless of the number of tiers, layers or levels of sublicenses of such rights), in each case, in accordance with Sections 5.2(a), 5.2(b), and 5.2(c). 

1.1.151“Takeda” has the meaning set forth in the Preamble.

1.1.152“Takeda Arising IP” has the meaning set forth in Section 7.2(b)(ii)(1).

1.1.153“Takeda Background IP” has the meaning set forth in Section 7.2(a)(ii). For clarity, Takeda Background IP includes Takeda Payload and Takeda Materials.

1.1.154“Takeda Indemnitee” has the meaning set forth in Section 11.1.

1.1.155“Takeda Materials” means the Takeda Payload or other materials or research tools, [...***...], which Takeda may provide to Poseida for use in connection with the Platform Evaluation Work Plan or a Research Plan.

1.1.156“Takeda Patents” includes any Patent Rights under the Takeda Arising IP, but excluding, for clarity, any Joint Patents.

1.1.157“Takeda Payload” means Takeda’s proprietary (including covered by Takeda Background IP and not otherwise publicly available) DNA or RNA material, which may include [...***...].

1.1.158“Tax” or “Taxes” means any form of tax or taxation, levy, duty, charge, social security charge, contribution or withholding of whatever nature (including any related fine, penalty, surcharge or interest) imposed by, or payable to, any government, state or municipality, or any local, state, federal or other fiscal, revenue, customs, or excise authority, body or official in the Territory.

1.1.159“Term” has the meaning set forth in Section 10.1. 

1.1.160“Territory” means worldwide.

1.1.161“Third Party” means any Person other than Poseida or Takeda and their respective Affiliates. 

1.1.162“Third Party Claim” means any claim, demand, action or other proceeding by any Third Party. 

1.1.163“Third Party Infringement” has the meaning set forth in Section 7.6(a).

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1.1.164“[...***...] Indication Exclusivity Period” means from the Effective Date until [...***...].

1.1.165“[...***...] Indications” means the indications listed on Exhibit 1.1.165.

1.1.166“[...***...] Indications” means the indications listed on Exhibit 1.1.166.

1.1.167“United States” or “U.S.” means the United States of America and its territories and possessions.

1.1.168“Valid Claim” means (a) a composition of matter claim or method of use in an issued and unexpired Licensed Patent Right to the extent such claim has not expired or irretrievably lapsed or been abandoned, dedicated to the public, revoked, held invalid or unenforceable by a patent office, court or other governmental agency of competent jurisdiction in a final order, from which no further appeal can be taken, and which claim has not been disclaimed, denied or admitted to be invalid or unenforceable through reissue, re-examination or disclaimer or otherwise or (b) a pending application for a Licensed Patent Rights that (i) has been pending for less than [...***...] from [...***...] and (ii) has not been finally cancelled, withdrawn, abandoned or rejected by an administration agency action from which no appeal can be taken.

1.1.169“VAT” means, within the European Union, such Tax as may be charged in accordance with (but subject to derogations from) Directive 2006/112/EC and, outside the European Union, value added Tax or any form of consumption Tax, as well as all other forms of Taxes charged on the supply of a good or a service, including sales Tax and goods and services Tax.  

ARTICLE II

GOVERNANCE

2.1Joint Steering Committee.

(a)Formation. Within [...***...] after the Effective Date, the Parties shall establish a joint steering committee (the “JSC”) that shall oversee the activities of the Parties under the Collaboration. The JSC shall be comprised of at least [...***...] representatives from each Party. Each Party’s JSC representatives shall have appropriate technical credentials, experience, knowledge, and authority within such Party’s organization for service on the JSC in light of the functions, responsibilities and authority of the JSC. Each Party may replace any or all its representatives on the JSC with individual(s) of appropriate credentials, experience, knowledge and authority at any time upon written notice to the other Party. Additional representatives or consultants of a Party may from time to time, by mutual consent of the Parties, be invited to attend JSC meetings; provided that such representatives and consultants are subject to written confidentiality and non-use obligations no less stringent than the requirements of ARTICLE VIII.

(b)JSC Chairperson. The JSC shall be co-chaired, with one chairperson designated by Poseida and one chairperson designated by Takeda, whose responsibilities shall include conducting meetings, including, when feasible, ensuring that objectives for each meeting

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are set and achieved. Responsibility for running each meeting of the JSC will alternate between the co-chairpersons from meeting-to-meeting, with Poseida’s chairperson running the first meeting.

(c)Meetings. The JSC shall meet in person or by teleconference at least [...***...], or more frequently as Poseida and Takeda deem appropriate or as reasonably requested by either Party, on such dates and at such times as the Parties shall agree; provided that the Parties shall endeavor to have the first meeting of the JSC within [...***...] after its formation. Meetings of the JSC, when conducted in person, shall alternate between the offices of Poseida and Takeda, or such other places as the Parties may agree. The members of the JSC also may convene or be consulted from time to time by means of telecommunications, video conferences, electronic mail or correspondence, as deemed necessary or appropriate. At least [...***...] from each Party must be present at a meeting of the JSC to have a quorum.

(d)JSC Responsibilities. The JSC shall have the following responsibilities with respect to the Collaboration:

(i)monitoring, reviewing, discussing and coordinating the overall progress of the Parties under the Collaboration;

(ii)monitoring, reviewing, discussing and coordinating the overall progress of the Parties under the Platform Evaluation Work Plan and the Research Plans;

(iii)reviewing, discussing and preparing any amendments to any Research Plan or the Platform Evaluation Work Plan, including for Takeda to take over responsibility for certain Research Activities prior to Candidate Selection;

(iv)overseeing the conduct of activities under the Platform Evaluation Work Plan and Research Plans, including receiving and reviewing progress reports, data, and other information provided by the Parties in connection with such plans;

(v)maintaining a current list of Available Indications;

(vi)establishing, but not delegating decision making authority to, such additional subcommittees as it deems necessary to achieve the objective and intent of this Agreement;

(vii)overseeing the JSC’s subcommittees, if any, and ensuring effective participation in each such subcommittee’s operations by any of its members;

(viii)determining the occurrence of a Program Failure;

(ix)addressing any other matters referred to the JSC by the terms of this Agreement; 

(x)attempting to resolve any disputes on matters within the JSC’s or any subcommittee’s authority on an informal basis and in good faith prior to the initiation of escalation or other formal dispute resolution mechanisms hereunder; and

(xi)performing such other activities as the Parties agree in writing shall be the responsibility of the JSC.

(e)Appointment of Subcommittees and Project Teams. The JSC shall be empowered to create such subcommittees of itself and project teams as it may deem appropriate or necessary, including a Patent Subcommittee, Platform Evaluation Subcommittee, Program

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Subcommittee and Joint Manufacturing Working Group, each as described further below, among others. Each such subcommittee and project team shall report to the JSC, which shall have authority to approve or reject recommendations or actions proposed thereby, subject to the terms of this Agreement. The provisions of Section 2.1(a) (excluding the first sentence thereof), Section 2.1(b) and Section 2.1(c) shall apply to each subcommittee, mutatis mutandis, unless otherwise determined by the JSC.

(f)Patent Subcommittee.

(i)Formation. Within [...***...] of the formation of the JSC, the Parties shall establish a subcommittee to manage the overall coordination, communication and oversight of the Parties’ activities with respect to the Patent Rights arising under this Agreement (the “Patent Subcommittee”). Each Party shall designate [...***...] for the Patent Subcommittee, which representative may, but need not be, an employee of such Party.  Each representative shall have the appropriate level of experience regarding patent prosecution, maintenance, enforcement, and defense of Patent Rights.  Each Party may designate a substitute for its Patent Subcommittee representative if such Party’s designated representative is unable to be present at a meeting.  From time to time each Party may replace its representative by written notice to the other Party specifying the prior representative and his or her replacement.

(ii)Responsibilities. The Patent Subcommittee’s responsibilities shall be to serve as a discussion and information sharing forum with respect to the determination of  and filing strategies for Poseida Arising IP and Takeda Arising IP pursuant to Section 7.2(b)(i) and Section 7.2(b)(ii), respectively, and Joint Arising IP pursuant to Section 7.2(b)(iii) and the matters set forth in Section 7.4(d) and Section 7.4(e).

(g)Platform Evaluation Subcommittee. Within [...***...] of the formation of the JSC, the Parties shall establish a subcommittee to serve as a discussion and information sharing forum with respect to managing the review and transfer, in accordance with Section 4.4, of material data, reports and other information, including scientific and other know-how, sequences (including nucleic acid and amino acid sequences), assembly procedures, specifications, skills, techniques, procedures and experiences, resulting from the conduct of the Platform Evaluation Work Plan or otherwise necessary or reasonably useful for the conduct of the Research Plans (the “Platform Evaluation Subcommittee”). Each Party shall provide the materials and information listed in this Section 2.1(g) to the Platform Evaluation Subcommittee. The Platform Evaluation Subcommittee shall consist of an equal (and agreed upon) number of representatives from each of the Parties. The Platform Evaluation Subcommittee shall meet quarterly, or as otherwise mutually agreed by the Parties. Each Party may designate a substitute for one or more of its Platform Evaluation Subcommittee representatives if one or more of such Party’s designated representatives is unable to be present at a meeting.  From time to time each Party may replace a representative by written notice to the other Party specifying the prior representative and his or her replacement. The Platform Evaluation Subcommittee shall be subject to the oversight, review and approval of, and shall report to, the JSC.

(h)Program Subcommittee. Within [...***...] of the formation of the JSC, the Parties shall establish a subcommittee to manage the overall coordination, communication and oversight of therapeutics developed for a Program (the “Program Subcommittee”). The Program Subcommittee shall consist of an equal (and agreed upon) number of representatives from each of the Parties. The Program Subcommittee shall meet quarterly, or as otherwise mutually agreed by the Parties. Each Party may designate a substitute for one or more of its Program Subcommittee representatives if one or more of such Party’s designated representatives is unable

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to be present at a meeting.  From time to time each Party may replace a representative by written notice to the other Party specifying the prior representative and his or her replacement. The Program Subcommittee shall be subject to the oversight, review and approval of, and shall report to, the JSC.

(i)Joint Manufacturing Working Group. Within [...***...] of the formation of the JSC, the Parties shall establish a subcommittee that will be responsible for Manufacturing and supply matters delegated to it by the JSC (the “Joint Manufacturing Working Group”). The Joint Manufacturing Working Group shall consist of an equal (and agreed upon) number of representatives from each of the Parties, each with requisite experience and seniority to enable such person to oversee and make decisions regarding CMC activities and matters under this Agreement. The Joint Manufacturing Working Group shall meet monthly, or as otherwise mutually agreed by the Parties. Each Party may designate a substitute for one or more of its Joint Manufacturing Working Group representatives if one or more of such Party’s designated representatives is unable to be present at a meeting.  From time to time each Party may replace a representative by written notice to the other Party specifying the prior representative and his or her replacement. The Joint Manufacturing Working Group shall be subject to the oversight, review and approval of, and shall report to, the JSC.

(j)Decision-Making Authority. 

(i)Subject to the remainder of this Section 2.1(j), all decisions of the JSC shall be made by consensus, with each Party’s JSC representatives collectively having [...***...]. 

(ii)If the JSC is unable to reach a consensus with respect to a dispute within [...***...], then the dispute shall be submitted to the Executive Officers of Poseida and Takeda for resolution, who shall promptly initiate discussions in good faith to resolve such dispute. 

(iii)If such escalated dispute cannot be resolved within [...***...] of the dispute being submitted to the Executive Officers, then subject to clause (iv) below, (A) [...***...]. 

(iv)[...***...].

(v)Upon [...***...] prior written notice, either Party may convene a special meeting of the JSC for the purpose of resolving any failure to reach agreement on a matter within the scope of the authority and responsibility of the JSC.

(k)Dissolution of JSC. With respect to each Program, the JSC’s responsibilities, and the responsibilities of any subcommittee under the JSC, shall terminate automatically upon [...***...]

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[...***...]. Thereafter, each Party shall designate, to the extent necessary, a contact person for the exchange of information under this Agreement or such exchange of information shall be made through the Alliance Managers, and decisions of the JSC, if any, shall be decisions as between the Parties, subject to the other terms and conditions of this Agreement.

2.2Limitation on JSC Authority. The JSC shall conduct its activities in good faith and shall not have the power to (a) amend or modify the Parties’ respective rights and obligations under this Agreement, (b) waive either Party’s compliance with the terms and conditions of this Agreement, (c) determine any issue in a manner that would conflict with the express terms and conditions of this Agreement, (d) resolve any dispute between the Parties regarding such rights and obligations or (e) require the other Party to violate any applicable Law, ethical requirement or any agreement it may have with any Third Party. For clarity, [...***...] shall have the sole authority and discretion for Candidate Selection with respect to a Program.

2.3Expenses. Each Party shall be responsible for all costs and expenses for its members and other representatives to attend meetings of, and otherwise participate in, the JSC and any subcommittees and project teams, including all travel and related costs and expenses.

2.4Alliance Managers. 

(a)Each Party shall appoint an alliance manager who is an employee of such Party (each, an “Alliance Manager”). Each Alliance Manager shall be responsible to ensure a collaborative work environment between the Parties and that the Collaboration is run smoothly, professionally and productively. Each Alliance Manager shall act in his or her discretion to facilitate the execution of the Collaboration throughout their organization and will (i) oversee and support implementation plans, (ii) promote effectiveness of the governance model and implementation of contractual provisions and lead any changes to enhance the Collaboration, (iii) facilitate the JSC and any subcommittees and project teams for effective decision making in a timely manner, and (iv) undertake such other tasks as are detailed in this Agreement or as may be assigned by the JSC. Each Alliance Manager will serve as the primary point of contact for the other Party under the Collaboration. Each Alliance Manager shall attend each meeting of the JSC. Each Party may change its Alliance Manager at any time in its sole discretion with written notice to the other Party. 

(b)The Alliance Managers shall be responsible for (i) scheduling meetings of the JSC and subcommittees, (ii) setting agendas for JSC and subcommittee meetings with solicited input from the co-chairs and other members and (iii) for acting as secretary at each such meeting and preparing the draft minutes of such meeting, which shall provide a description in reasonable detail of the discussions held at the meeting and a list of any actions, decisions or determinations approved by the JSC or subcommittee. Within [...***...] after each such meeting, the drafting Alliance Manager shall provide the draft minutes to the other Alliance Manager for review and comment. The drafting Alliance Manager shall reasonably consider all comments from the other Alliance Manager that are provided within [...***...]. The drafting Alliance Manager shall prepare and submit revised minutes for approval within [...***...] after receipt of such comments or upon the expiration of such [...***...] comment period. Beginning with Poseida’s Alliance Manager, such responsibilities shall alternate between the Alliance Managers on a meeting-by-meeting basis after each meeting of the JSC or subcommittee, as applicable.

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ARTICLE III

COLLABORATION

3.1Platform Evaluation Work Plan and Activities.

 

(a)Initial Platform Evaluation Work Activities. Poseida shall perform the activities set forth in the Platform Evaluation Work Plan, which shall be at its own cost, in accordance with the timelines set forth therein, including all activities required to complete engineering and evaluation work and deliver the Final Data Package to Takeda.

(b)Final Data Package. Within [...***...] after the completion of the activities under the Platform Evaluation Work Plan, Poseida shall provide Takeda with the Final Data Package ([...***...]). During the [...***...] period following delivery to Takeda of the Final Data Package, Takeda shall have the opportunity to review and inspect the Final Data Package and to ask [...***...] questions of, or request [...***...] additional information from, Poseida and receive [...***...] answers or receipt of information from Poseida related thereto. [...***...]. Notwithstanding the foregoing, no limitation on additional information or data shall modify the contents required to be in the Final Data Package. Poseida shall use Commercially Reasonable Efforts to provide to Takeda such requested supplemental data or information within [...***...] of its receipt of such notice and [...***...].

 

(c)Amendment of the Platform Evaluation Plan. Either Party, directly or through its representatives on the JSC, may propose amendments to the Platform Evaluation Work Plan from time to time, as appropriate, including in light of changed circumstances. Any and all such amendments shall be subject to approval by the JSC as set forth in Section 2.1(d), subject to the decision-making authority of Section 2.1(j). 

3.2Research Plans.

 

(a)Research Activities. Subject to the terms and conditions of this Agreement, the Parties agree to conduct research and pre-clinical development on a collaborative basis in connection with the Programs as further described below. Each Party will use [...***...] to perform its assigned activities as set forth in the Research Plans for each Program during the Research Period in accordance with the timelines specified therein; provided

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that, prior to Candidate Selection, Takeda may, in its sole discretion, upon [...***...] prior written notice to Poseida, [...***...]; provided, further, that, during such [...***...] period, the Parties [...***...]. Without limiting the foregoing, each Party will conduct the Research Activities assigned to it under the Research Plans in a good scientific manner and in compliance in all material respects with applicable Law, including applicable national and international (e.g., ICH, GCP, GLP, and GMP) guidelines.

(b)Additional Research Plans and Amendment. Takeda shall be responsible for the preparation, in its sole discretion, and presentation to the JSC for approval, of the Research Plan for any Additional Indication Program or Further Indication Program, provided that the FTE requirements shall not be [...***...]. Either Party, directly or through its representatives on the JSC, may propose amendments to the Research Plans from time to time, as appropriate, including in light of changed circumstances. Any and all such Research Plans and amendments to any Research Plan (including with respect to any [...***...]) shall be subject to approval by the JSC as set forth in Section 2.1(d), subject to the decision-making authority of Section 2.1(j). In the event of any inconsistency between the Research Plans and this Agreement, the terms of this Agreement shall prevail. For clarity, Research Activities under the Research Plans may be conducted in parallel to the Platform Evaluation Work.

(c)Takeda Technology Transfer. Takeda shall make available to Poseida [...***...], the Takeda Background IP and any other information or materials Controlled by Takeda or any of its Affiliates that in each case is necessary for Poseida to conduct its activities under the Research Plan. Takeda shall make its relevant scientific and technical personnel reasonably available to answer any questions or provide instructions as reasonably requested by Poseida concerning the use and understanding of the items delivered pursuant to this Section 3.2(c).

3.3Research Activities.

(a)Initial Indication Programs. 

(i)Takeda has initiated and elected to initiate, respectively, [...***...] programs for the Indications of (A) hemophilia A and (B) [...***...] (each an “Initial Indication Program” and together, the “Initial Indication Programs”). Pursuant to the terms of this Agreement and as further provided in this ARTICLE III, each Party shall use Commercially Reasonable Efforts to carry out the activities assigned to it as specified in the applicable Research Plan through Candidate Selection. [...***...].

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(ii)[...***...].

(b)Takeda Option for Additional Programs.

(i)Additional Indication Programs. Takeda shall have the right to select Indications, in accordance with Section 3.3(c), for up to four (4) additional programs (each an “Additional Indication Program”) at any time not later than [...***...], as such period may be extended pursuant to Section 3.1(b) (the “Additional Indication Option Period”). Takeda shall have the right to exercise its option (the “Additional Indication License Option”) by providing written notice of such election to Poseida (“Additional Indication Program Notice”) at any time after the Effective Date and prior to the end of the Additional Indication Option Period. Upon exercising the Additional Indication License Option and Poseida’s receipt of the Additional Indication Program Notice, Takeda shall be deemed to have entered into the license set forth in Section 5.2(c). [...***...].

(ii)Further Indication Programs. Takeda shall have the right to select Indications, in accordance with Section 3.3(c), for up to two (2) further Programs (each a “Further Indication Program”) at any time not later than [...***...], as such period may be extended pursuant to Section 3.1(b) (the “Further Indication Option Period”). Takeda shall have the right to exercise its option (the “Further Indication License Option”) by providing written notice of such election to Poseida (“Further Indication Program Notice”) at any time after the Effective Date and prior to the end of the Further Indication Option Period. Upon exercising the Further Indication License Option and Poseida’s receipt of the Further Indication Program Notice, Takeda shall be deemed to have entered into the license set forth in Section 5.2(c). [...***...].  

(iii)Diligence.  Pursuant to the terms of this Agreement and as further provided in this ARTICLE III, each Party shall use [...***...] to carry out the activities assigned to it as specified in the applicable Research Plan for any Additional Indication Program and Further Indication Program.

[...***...]

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[...***...]

(c)Indication Availability.

(i)[...***...] Indications. Takeda may select a [...***...] Indication for use in an Additional Indication Program, Further Indication Program or as a [...***...] at any time during the [...***...] Indication Exclusivity Period. Following the [...***...] Indication Exclusivity Period, with respect to the Additional Indication Programs and Further Indication Programs, Takeda shall still have the right to [...***...].

(ii)[...***...] Indications. Takeda may select a [...***...] Indication as a [...***...] or as the Indication for an Additional Indication Program or Further Indication Program, in each case, subject to Availability. 

3.4Research Costs. 

(a)Within [...***...] after the end of each Calendar Quarter of the Research Plans, Poseida shall invoice Takeda for the Research Costs incurred by Poseida in connection with the performance of activities under the Research Plans, in accordance with the budgets set forth therein, during such Calendar Quarter and in accordance with the Research Plans, and Takeda shall pay each invoice in accordance with Section 6.11 within [...***...] of receipt of such invoice. Notwithstanding the foregoing, if cumulative Research Costs with respect to any Research Plan exceed the applicable Research Costs Cap, as adjusted pursuant to Section 1.1.139 (the “Excess Cost”), then [...***...].

(b)Except as expressly set forth in this Agreement and subject to Section 6.6(c)(ii), as between the Parties, [...***...] shall be solely responsible for any obligations, financial or otherwise, owed by [...***...] or its Affiliates to Third Parties, including with respect to any Intellectual Property rights licensed to [...***...] by such Third Parties.

(c)Takeda shall be responsible for all costs incurred by Takeda in performing the Research Activities pursuant to the Research Plans. 

3.5Records.

  Each Party will maintain scientific records, accounts, notes, reports and data with respect to its Research Activities, in accordance with applicable Law and standard pharmaceutical industry practices and in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes, which will fully and properly reflect all work done and results achieved in the performance of the Research Activities by such Party under the Research Plans; provided that in no case shall such records be maintained for less than [...***...] following the Calendar Year to which such records pertain or such longer period as required by applicable Law or any In-License Agreement [...***...]. Upon the other Party’s written request, the Party receiving such written request shall send legible copies of the aforesaid to the other Party throughout the Term and for a minimum of [...***...] following such Term. In accordance with (a) the reporting format and schedule approved by the JSC, each Party shall promptly disclose to the other Party in writing any material data, including material pre-clinical data, formulation data and manufacturing data, generated by or on behalf of such Party under the Collaboration, and (b) any reporting format and schedule established by the Parties after Candidate Selection, [...***...].

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3.6Materials Transfer.

  In order to facilitate the activities contemplated under the Platform Evaluation Work Plan or Research Plans, either Party may provide to the other Party certain biological materials technologies, including, with respect to Takeda, the Takeda Materials (collectively, “Materials”) for use by the other Party in furtherance of the Platform Evaluation Work Plan or Research Plans. Except as otherwise provided for under this Agreement, all such Materials delivered to the other Party will remain the sole property of the supplying Party, will be used only in furtherance of the activities conducted in accordance with the Platform Evaluation Work Plan or Research Plans, will not be used or delivered to or for the benefit of any Third Party (except for subcontractors permitted under this Agreement in furtherance of the Research Plans), without the prior written consent of the supplying Party, and will be used in compliance with applicable Law. The Materials supplied under this Agreement must be used with prudence and appropriate caution in any experimental work because not all of their characteristics may be known. The supplying Party will provide the other Party the most current material safety data sheet for the Materials upon transfer of any Materials. Except as expressly set forth in this Agreement, THE MATERIALS ARE PROVIDED “AS IS” AND WITHOUT ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR ANY PARTICULAR PURPOSE OR ANY WARRANTY THAT THE USE OF THE MATERIALS WILL NOT INFRINGE OR VIOLATE ANY PATENT OR OTHER PROPRIETARY RIGHTS OF ANY THIRD PARTY. At either Party’s request, the Parties shall enter into a materials transfer agreement to govern the transfer of Materials between the Parties. 

3.7Adverse Event Reporting.

  Each Party shall be responsible for the monitoring and reporting of safety information, if any, generated in the conduct of its Research Activities and will promptly report such information to the other Party.

3.8Regulatory Matters.

  Until Candidate Selection for a particular Program, (a) Poseida shall provide reasonable assistance to Takeda, at Takeda’s reasonable request [...***...], with respect to any activities related to Regulatory Approval of any Licensed Product, and (b) Takeda shall provide reasonable assistance to Poseida at Poseida’s reasonable request [...***...] with respect to any activities related to Regulatory Approval of any Poseida Technology Platform or Reversion Product, including any filing, application or submission to any Regulatory Authority, including, in each of clauses (a) and (b), any filing, application or submission to any Regulatory Authority. Following Candidate Selection, Poseida shall provide reasonable assistance to Takeda, at Takeda’s reasonable request and at no additional cost to Takeda for up to [...***...] per year with respect to any activities related to Regulatory Approval of any Licensed Product; [...***...].

3.9Third Parties.

  Takeda shall be entitled to utilize the services of Third Party contract research organizations to perform its activities under the Research Plans and this ARTICLE III. Unless agreed in a Research Plan, Poseida may not engage a subcontractor to conduct any Research Activities without Takeda’s prior written consent. Poseida shall be entitled to engage subcontractors to conduct its activities under the Platform Evaluation Work Plan, without Takeda’s prior written consent.

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ARTICLE IV

DEVELOPMENT, MANUFACTURE, COMMERCIALIZATION AND REGULATORY MATTERS

4.1Responsibility for Development and Commercialization.

 Following Candidate Selection with respect to a Program, Takeda shall be solely responsible, at its sole cost and expense, for all activities related to the Development and Commercialization of the Licensed Products under such Program and Poseida shall have no right or obligation (including research obligations) to Exploit any such Licensed Products; provided that upon mutual agreement of the Parties, Poseida may perform further research activities with respect to such Program.

4.2Diligence.

 Following Candidate Selection with respect to a Program, Takeda shall use Commercially Reasonable Efforts to Develop and, following Regulatory Approval, Commercialize [...***...].

4.3Regulatory Matters.

 At all times during the Term, Takeda shall be responsible for obtaining Regulatory Approval with respect to the Licensed Products, communicating with Regulatory Authorities and otherwise carrying out regulatory activities as set forth in this Agreement. Takeda shall own the INDs, BLAs and related regulatory documents submitted to the applicable Regulatory Authorities by it with respect to the Licensed Products and shall (a) oversee, monitor and coordinate all regulatory actions, communications and filings with, and submissions to, each Regulatory Authority, (b) be responsible for interfacing, corresponding and meeting with each Regulatory Authority, and (c) be responsible for maintaining all regulatory filings. In the event Poseida receives a communication from any Regulatory Authority related to any Licensed Product, Poseida will provide Takeda with a copy of such communication within [...***...] of Poseida’s receipt thereof and will reasonably assist Takeda in responding to such communication, provided, for clarity, that Takeda will be the lead in such response.

4.4Know-How and Technology Transfer.

 

(a)Following Candidate Selection with respect to a Program and at no additional cost to Takeda except as set forth in Section 4.4(c), the Parties shall perform a technology transfer as follows:

(i)Poseida shall make available to Takeda, in a format specified by Takeda (and reasonably acceptable to Poseida), the following items then in existence: [...***...] (the “Initial Technology Transfer”). Poseida shall make its relevant scientific and technical personnel reasonably available to answer any questions or provide instructions as reasonably requested by Takeda concerning the use and understanding of the items delivered pursuant to this Section 4.4(a)(i). The Parties shall use [...***...] to ensure that the Initial Technology Transfer is efficient and occurs in a reasonably timely manner.  

(ii)[...***...].

*** Certain Confidential Information Omitted

26

 

 

(b)Following the Initial Technology Transfer, Takeda shall have the right, at any time and from time to time through Regulatory Approval, to require Poseida to effect a full transfer to Takeda or its designee (which designee may be an Affiliate or a Third Party manufacturer or CMO) of [...***...] (each such transfer, an “Additional Technology Transfer”). In furtherance of each Additional Technology Transfer, Poseida shall, and shall use Commercially Reasonable Efforts to cause its CMOs to, [...***...] 

(c)Poseida shall provide up to [...***...] in support of Poseida’s activities under Section 4.4(b); provided, that any FTEs in excess of [...***...] shall be at Takeda’s sole cost and expense and Poseida shall invoice Takeda for its costs (including FTE Costs at the FTE Rate) incurred in connection therewith on a quarterly basis. For clarity, the [...***...] provided by Poseida under this Section 4.4(c) are separate and in addition to the [...***...] provided by Poseida under Section 3.8. 

4.5Manufacture by CMO.

 

(a)Unless otherwise agreed by the Parties, if Poseida is performing any Manufacturing activities that are specific to [...***...], through one or more CMOs, then, in connection with the Initial Technology Transfer to Takeda, the Parties will discuss in good faith the assignment or transfer or sublicense to Takeda, to the extent practicable, of the agreements between Poseida and one or more of such CMOs, to the extent such agreements [...***...].

(b)As of the Effective Date, with respect to any agreement that Poseida enters into with a CMO to supply Licensed Products (each such agreement, a “CMO Agreement”), Poseida shall use Commercially Reasonable Efforts to provide that such CMO Agreement provides that [...***...].

(c)Notwithstanding anything in this Agreement to the contrary, except as otherwise agreed by the Parties and except for [...***...] 

*** Certain Confidential Information Omitted

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[...***...].

	
4.6
	
Cooperation.

 At Takeda’s reasonable request and expense (and not, for the avoidance of doubt, subject to the Research Cost Cap), and [...***...], after Candidate Selection with respect to a Program, Poseida will cooperate with Takeda in the conduct of the Development of the Licensed Products, including providing Takeda with technical assistance and regulatory-related support on an as-needed basis. 

4.7Third Parties.

 Takeda shall be entitled to utilize the services of Third Parties to perform its Development, Manufacturing and Commercialization activities under this ARTICLE IV or to otherwise Exploit the Licensed Products; provided that it shall comply with Section 5.2(d). 

ARTICLE V

GRANT OF LICENSE RIGHTS

5.1Poseida Technology Platforms.

 

(a)Poseida Technology Platform [...***...]. Takeda shall have the right, in its sole discretion [...***...], to [...***...], as may be described in the Final Data Package at any time not later than (i) [...***...], or (ii) [...***...], in each case of (i) and (ii) upon written notice to Poseida [...***...]; provided, that, in the event of [...***...], such period limitation shall not apply and Takeda shall have the right to [...***...]. For clarity, [...***...].

*** Certain Confidential Information Omitted

28

 

 

(b)Future Poseida Technology Platforms. To the extent Takeda uses, in connection with a Licensed Product, [...***...], pursuant to an In-License Agreement entered into after the Effective Date, [...***...].

5.2License Grants to Takeda. 

(a)Research License. Subject to the terms and conditions of this Agreement, Poseida hereby grants to Takeda a non-exclusive, royalty-free, worldwide, sublicensable (solely to its Affiliates and Third Parties who engage in research activities in collaboration with, or as a fee-for-service for, Takeda or any of its Affiliates) license under the Licensed IP to perform Takeda’s obligations under the Platform Evaluation Work Plan and Research Plans (including any additional activities assumed by Takeda pursuant to Section 3.2(a)).

(b)Initial Indication Programs. Subject to the terms and conditions of this Agreement, with respect to each Initial Indication Program, Poseida hereby grants to Takeda an exclusive, royalty-bearing license, with the right to grant sublicenses to Affiliates and Third Parties (through multiple tiers), under the Licensed IP and Poseida’s interest in the Joint Arising IP, to Exploit any and all Selected Candidates and Licensed Products under such Initial Indication Program in the Territory in the Field.

(c)Additional Indication Programs and Further Indication Programs. Subject to the terms and conditions of this Agreement (including Section 3.3(b)(i) and Section 3.3(b)(ii)), with respect to each Additional Indication Program or Further Indication Program and effective as of the exercise by Takeda of the applicable Additional Indication License Option or Further Indication License Option, Poseida hereby grants to Takeda an exclusive, royalty-bearing license, with the right to grant sublicenses to Affiliates and Third Parties (through multiple tiers), under the Licensed IP and Poseida’s interest in the Joint Arising IP to Exploit any and all Selected Candidates and Licensed Products under such Additional Indication Program or Further Indication Program in the Territory in the Field.

(d)Sublicensing Terms. 

(i)Takeda shall have the right to sublicense (through multiple tiers) any of its rights under Section 5.2(b) or Section 5.2(c) to any Affiliate of Takeda or any Third Party, provided that any such sublicense shall comply with the applicable terms of this Agreement. As soon as reasonably practicable (but in any event within [...***...] following the grant of any such sublicenses, other than non-exclusive sublicenses in the normal course of business that do not grant commercialization rights to the Sublicensee or sublicenses to Affiliates, Takeda shall notify Poseida of the grant of such sublicense and provide to Poseida a copy of the applicable sublicense agreement, which copy may be redacted with respect to information not pertinent to compliance with this Agreement.

(ii)Notwithstanding any sublicense, Takeda shall remain primarily liable to Poseida for the performance of all of Takeda’s obligations under, and Takeda’s compliance with all terms and conditions of, this Agreement, including all obligations delegated to its Sublicensees.

(e)Retained Rights.  Poseida shall retain rights under the licenses granted to Takeda in this Section 5.2 solely to the extent necessary to conduct its Research Activities under the Research Plans.

*** Certain Confidential Information Omitted

29

 

(f)Limitations.  Notwithstanding anything to contrary herein, the foregoing licenses do not include the grant of any rights under the Licensed IP or Poseida’s interest in the Joint Arising IP for purposes of [...***...].  For clarity, [...***...]. 

(g)In-License Agreements.  

(i)The terms of this Agreement, including the licenses and rights granted to Takeda hereunder, are subject in all respects to terms of the In-License Agreements [...***...] and Takeda shall comply with such terms.

(ii)To the extent such information is not the Confidential Information of Takeda, Poseida shall have the right to incorporate information received from Takeda at the JSC or otherwise under this Agreement as needed to fulfill its reporting obligations under any In-License Agreements.  If Poseida reasonably believes that it requires any additional information from Takeda to comply with its reporting obligations under any In-License Agreements, then Poseida shall specify in writing to Takeda such information so required and Takeda shall provide Poseida such information within Takeda’s Control in a timely manner so as to enable Poseida to comply with such reporting requirements; provided that if such information is Confidential Information of Takeda and Takeda objects to providing any such Confidential Information to such Third Party, the Parties shall [...***...] (A) [...***...], or (B) [...***...].  In no event will the failure by Poseida to comply with such reporting requirement under an In-License Agreement, if due solely to any failure by Takeda to provide Poseida such information in a timely manner, be deemed a breach by Poseida of such In-License Agreement for purposes of this Agreement or create any liability of Poseida to Takeda therefor.

(iii)Notwithstanding anything to the contrary herein, subject to the remainder of this Section 5.2(g)(iii), Poseida grants to Takeda no rights or licenses under the Excluded In-License Agreements; provided that, if at any time during the Term, [...***...].  For clarity, the Parties agree that as of the Effective Date, no activities are planned under this Agreement that would require the inclusion of any Excluded In-License.

*** Certain Confidential Information Omitted

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5.3License Grant to Poseida.  Subject to the terms and conditions of this Agreement, during the Research Period, Takeda hereby grants to Poseida a non-exclusive, worldwide license under the Takeda Background IP (to the extent made available from Takeda to Poseida in connection with this Agreement), Takeda Arising IP and Takeda’s interest in the Joint Arising IP to conduct its Research Activities under the Research Plan. For clarity, Poseida may subcontract its rights under this Section 5.3 in connection with the completion of Research Activities under a Research Plan.

5.4Exclusivity.

(a)Poseida and its Affiliates shall not (i) work with any Third Party to use the [...***...], or (ii) grant any rights or enter into negotiations with a Third Party for the purpose of granting any right or license under, or any covenant to not sue with respect to, [...***...].  

(b)From the Effective Date through the [...***...] Indication Exclusivity Period, Poseida will not, nor will it authorize, permit or enable any of its Affiliates or any Third Party to, conduct, directly or indirectly, [...***...].

(c)From the Effective Date with respect to the Initial Indication Programs, and following Takeda’s selection of an Indication as [...***...] or for an Additional Indication Program or Further Indication Program, Poseida will not, nor will it authorize, permit or enable any of its Affiliates or any Third Party to, [...***...].

(d)During the Term, Takeda shall not, nor shall it authorize, permit or enable any of its Affiliates or any Third Party to, [...***...].

(e)This Section 5.4 shall not limit any activities of an Acquirer of Poseida (or such Acquirer’s pre-existing Affiliates) for which Poseida or such Acquirer institute commercially reasonable technical and administrative safeguards, including by [...***...]. Notwithstanding anything herein to the contrary, this Section 5.4 shall cease to apply with respect to each Indication upon termination of the applicable Program or, in the case of an Initial Indication, [...***...]; provided that this Section 5.4 shall continue to apply to any such Indication for as long as such Indication is the subject of any other active Program.

5.5Section 365(n) of the Bankruptcy Code.

 All rights and licenses granted under or pursuant to this Agreement by a Party to the other Party, including those set forth in Section 5.2

*** Certain Confidential Information Omitted

31

 

 

and Section 5.3, are and shall otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of rights to “intellectual property” as defined under Section 101 of the U.S. Bankruptcy Code. The Parties agree that the Parties and their respective Related Parties, as Sublicensees of such rights under this Agreement, shall retain and may fully exercise all of their rights and elections under the U.S. Bankruptcy Code and any foreign counterpart thereto. The Parties further agree that upon commencement of a bankruptcy proceeding by or against a Party (the “Bankrupt Party”) under the U.S. Bankruptcy Code, the other Party (the “Non-Bankrupt Party”) will be entitled to a complete duplicate of, or complete access to (as the Non-Bankrupt Party deems appropriate), all such intellectual property and all embodiments of such intellectual property. Such intellectual property and all embodiments of such intellectual property will be promptly delivered to the Non-Bankrupt Party (a) upon any such commencement of a bankruptcy proceeding and upon written request by the Non-Bankrupt Party, unless the Bankrupt Party elects to continue to perform all of its obligations under this Agreement, or (b) if not delivered under (a) above, upon the rejection of this Agreement by or on behalf of the Bankrupt Party and upon written request by the Non-Bankrupt Party. The Bankrupt Party (in any capacity, including debtor-in-possession) and its successors and assigns (including any trustee) agrees not to interfere with the exercise by the Non-Bankrupt Party or its Related Parties of its rights and licenses to such intellectual property and such embodiments of intellectual property in accordance with this Agreement, and agrees to assist the Non-Bankrupt Party and its Related Parties in obtaining such intellectual property and such embodiments of intellectual property in the possession or control of Third Parties as reasonably necessary or desirable for the Non-Bankrupt Party to exercise such rights and licenses in accordance with this Agreement. The foregoing provisions are without prejudice to any rights the Non-Bankrupt Party may have arising under the U.S. Bankruptcy Code or other Laws.

5.6No Other Rights.

 Except as otherwise expressly provided in this Agreement, under no circumstances shall a Party, as a result of this Agreement, obtain any ownership interest or other right in any Know‐How, Patent Rights or other Intellectual Property rights of the other Party, including items owned, controlled or developed by the other Party, or provided by the other Party to the receiving Party at any time pursuant to this Agreement.

5.7Change of Control.

 

(a)Notwithstanding anything in this Agreement to the contrary, following the closing of a Change of Control of a Party (the “Acquired Party”), the Parties agree that [...***...]

*** Certain Confidential Information Omitted

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[...***...].

(b)[...***...].

ARTICLE VI

FINANCIAL PROVISIONS

6.1Upfront Payment and Initial Research Funding.

 As partial consideration for the exclusive rights and covenants granted by Poseida to Takeda pursuant to this Agreement, within [...***...] after receipt of a valid invoice from Poseida promptly issued following the Effective Date, Takeda shall make to Poseida (a) a one-time non-refundable, non-creditable up-front payment of forty million Dollars ($40,000,000) and (b) a one-time non-refundable, non-creditable payment of five million Dollars ($5,000,000) to fund research for the Initial Indication Programs.

6.2Option Exercise Payment.

 

(a)Additional Indication Programs. As partial consideration for the exclusive rights and covenants granted by Poseida to Takeda pursuant to this Agreement, within [...***...] after Takeda’s selection of an Indication for an Additional Indication Program, Takeda shall make to Poseida a one-time non-refundable, non-creditable payment of [...***...] for each such Additional Indication Program. In no event will the total amount of option exercise payments for the Additional Indication Programs exceed [...***...]. 

(b)Further Indication Programs. As partial consideration for the exclusive rights and covenants granted by Poseida to Takeda pursuant to this Agreement, within [...***...] after Takeda’s selection of an Indication for a Further Indication Program, Takeda shall make to Poseida a one-time non-refundable, non-creditable payment of [...***...] for each such Further Indication Program. In no event will the total amount of option

*** Certain Confidential Information Omitted

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exercise payments for the Further Indication Programs exceed [...***...].

For clarity, no such payment shall be made in connection with either Initial Indication Program (or [...***...]) or in connection with [...***...].

6.3Research and Pre-Clinical Milestones.

 As partial consideration for the exclusive rights and covenants granted by Poseida to Takeda pursuant to this Agreement, Takeda shall make to Poseida non-refundable, non-creditable milestone payments (each, a “Research and Pre-Clinical Milestone Payment”) on a Program-by-Program basis upon achievement of the milestones set forth below. Takeda will notify Poseida of the achievement of each such milestone no later than [...***...] after Takeda becoming aware of the achievement thereof.  Thereafter, Poseida will provide Takeda with an invoice for the corresponding Research and Pre-Clinical Milestone Payment, and Takeda shall pay each Research and Pre-Clinical Milestone Payment within [...***...] after receipt of such invoice. 

		
	
Milestone Event
	
Milestone Payment

	
[...***...]

	
[...***...]
	
[...***...]

	
[...***...]
	
[...***...]

	
[...***...]

	
[...***...]
	
[...***...]

	
[...***...]
	
[...***...]

	
[...***...]
	
[...***...]

 

Each Research and Pre-Clinical Milestone Payment set forth above shall be payable only once for the first occurrence of the specified milestone event for each Program, as applicable, regardless of the number of Licensed Products that achieve the applicable milestone event with respect to such Program, and in no event will the Research and Pre-Clinical Milestone Payments set forth in this Section 6.3 exceed [...***...] in the aggregate across the Initial Indication Programs and the Additional Indication Programs. For clarity, if a Research and Pre-Clinical Milestone Payment is made with respect to a milestone event for a Program and subsequently there is a [...***...], then the achievement of such milestone event with respect to such [...***...] or [...***...] shall not trigger another Research and Pre-Clinical Milestone Payment.  If the [...***...] milestone for any Program is achieved before achievement of the preceding milestone for such Program (i.e., [...***...]

*** Certain Confidential Information Omitted

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[...***...]), [...***...].

6.4Development and Regulatory Milestones.  As partial consideration for the exclusive rights and covenants granted by Poseida to Takeda pursuant to this Agreement, Takeda shall make non-refundable, non-creditable milestone payments (each, a “Development and Regulatory Milestone Payment”) to Poseida upon achievement of the milestones set forth below (each, a “Development and Regulatory Milestone”) on a Program-by-Program basis. Takeda will notify Poseida of the achievement of each Development and Regulatory Milestone no later than [...***...] after Takeda becoming aware of the achievement thereof. Thereafter, Poseida will provide Takeda with an invoice for the corresponding Development and Regulatory Milestone Payment, and Takeda will pay to Poseida such Development and Regulatory Milestone Payment no later than [...***...] after receipt by Takeda thereof. 

 

			
	
#
	
Milestone Event
	
Milestone Payment

	
1
	
[...***...]
	
[...***...]

	
2
	
[...***...]
	
[...***...]

	
3
	
[...***...]
	
[...***...]

	
4
	
[...***...]
	
[...***...]

	
5
	
[...***...]
	
[...***...]

 

Each Development and Regulatory Milestone Payment set forth above shall be payable only once for the first occurrence of the specified milestone event for each Program, regardless of the number of Licensed Products that achieve the applicable milestone event with respect to such Program, and in no event will the Development and Regulatory Milestone Payments set forth in this Section 6.4 exceed [...***...] per Program. In the event that Development and Regulatory Milestone number [...***...] is skipped, it will be payable at the next milestone event (that is, achievement of Development and Regulatory Milestone number [...***...]). For clarity, if a Development and Regulatory Milestone Payment is made with respect to a milestone event for a Program and subsequently there is [...***...], then the achievement of such milestone event with respect to such [...***...] shall not trigger another Development and Regulatory Milestone Payment.

6.5Commercial Milestone Payments. As partial consideration for the exclusive rights and covenants granted by Poseida to Takeda pursuant to this Agreement, Takeda shall make non-refundable, non-creditable milestone payments (each, a “Commercial Milestone Payment”) to Poseida upon achievement of the milestones set forth below (each, a “Commercial Milestone”) on a Program-by-Program basis. Takeda will notify Poseida of the achievement of each Commercial Milestone no later than [...***...] after the end of the Calendar Year in which such Commercial Milestone is achieved. Thereafter, Poseida will provide Takeda with an invoice for the corresponding Commercial Milestone Payment, and Takeda will pay to Poseida such Commercial Milestone Payment no later than [...***...] following receipt by Takeda thereof.

*** Certain Confidential Information Omitted

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Commercial Milestone Event
	
Commercial Milestone Payment

	
[...***...]
	
[...***...]

	
[...***...]
	
[...***...]

	
[...***...]
	
[...***...]

	
[...***...]
	
[...***...]

	
[...***...]
	
[...***...]

 

Each Commercial Milestone Payment set forth above shall be payable only once, upon the first occurrence of the applicable Commercial Milestone. For the avoidance of doubt, in no event shall the aggregate amount of the Commercial Milestone Payments set forth in this Section 6.5 exceed [...***...] per Program. In the event that [...***...] or more Commercial Milestones are achieved in the same Calendar Year, then all such Commercial Milestones will be paid in such Calendar Year.

6.6Royalties. 

(a)Subject to this Section 6.6, as partial consideration for the exclusive rights and covenants granted by Poseida to Takeda pursuant to this Agreement, during the Royalty Term, Takeda shall pay to Poseida a royalty on aggregate, worldwide annual Net Sales of each Licensed Product in the Territory during each Calendar Year at the following rates:

		
	
Increments of Worldwide Aggregate Annual Net Sales in a Calendar Year
	
Royalty Rate

	
Calendar Year Net Sales up to [...***...]
	
[...***...]

	
Calendar Year Net Sales from [...***...] up to and including [...***...]
	
[...***...]

	
Calendar Year Net Sales from [...***...] up to and including [...***...]
	
[...***...]

	
Calendar Year Net Sales that exceeds [...***...]
	
[...***...]

 

Royalties will be paid on a quarterly basis within the later of (i) [...***...] after receipt by Takeda of an invoice from Poseida setting forth the royalty amount due as stated in the royalty

*** Certain Confidential Information Omitted

36

 

 

report for each Calendar Quarter under Section 6.6(d) or (b) [...***...] after the end of each Calendar Quarter.

(b)Royalty Term. Royalties will be payable on a Licensed Product-by-Licensed Product and country-by-country basis from the date of the First Commercial Sale of a Licensed Product until the later of (i) ten (10) years from First Commercial Sale of such Licensed Product in such country, (ii) expiry of the last Valid Claim of any Licensed Patent Rights [...***...] or (iii) the expiration of regulatory exclusivity for such Licensed Product in such country (the “Royalty Term”).

(c)Royalty Reductions. Notwithstanding the foregoing (and subject to Section 7.6(c)(ii)):

(i)in the event that a Licensed Product is sold in a country or other jurisdiction and [...***...], the royalty rate set forth in Section 6.6(a) shall be reduced by [...***...] with respect to such country or other jurisdiction; 

(ii)in the event that [...***...] (subject to Section 7.6(e));

(iii)in the event that [...***...]; 

(iv)in the event that [...***...]; and

(v)In no event will [...***...]

*** Certain Confidential Information Omitted

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[...***...].

(d)Royalty Reports. Takeda shall calculate all amounts payable to Poseida pursuant to this Section 6.6 at the end of each Calendar Quarter. Within [...***...] of the end of each Calendar Quarter, Takeda shall provide to Poseida a statement of the amount of Net Sales of each Licensed Product in each country or other jurisdiction in the Territory during the applicable Calendar Quarter, in sufficient detail to permit confirmation of the accuracy of the royalty payment made, the gross sales and Net Sales of Licensed Products by country or jurisdiction, as applicable (including the deductions from gross sales to arrive at Net Sales and any withholding taxes required to be withheld hereunder, if any)  and a calculation of the amount of royalty payment due on such Net Sales for such Calendar Quarter.  If no royalties are due for any Calendar Quarter hereunder Takeda will so report. Any such information shared by Takeda under this Section 6.6(d) shall be deemed Takeda’s Confidential Information.

6.7Financial Records.

 Each Party shall, and shall cause its Affiliates to, keep complete and accurate books and records pertaining to Research Costs, including books and records of actual expenditures with respect to the budgets set forth in each Research Plan, in sufficient detail to calculate all amounts payable hereunder and to verify compliance with its obligations under this Agreement. Such books and records shall be retained by such Party and its Affiliates until the later of (a) [...***...] after the end of the period to which such books and records pertain, and (b) the expiration of the applicable tax statute of limitations (including any extensions thereof), or for such longer period as may be required by applicable Law.

6.8Audits.

 At the request of the other Party, each Party shall, and shall cause its Affiliates to, permit an independent public accounting firm of nationally recognized standing designated by the other Party and reasonably acceptable to the audited Party, at reasonable times during normal business hours and upon reasonable notice, to audit the books and records maintained pursuant to Section 6.7 to ensure the accuracy of all reports and payments made hereunder. Such examinations may not (a) be conducted for any [...***...] more than [...***...] after the end of such [...***...], (b) be conducted more than [...***...] in any [...***...] period (unless a previous audit during such [...***...] period revealed an underpayment with respect to such period) or (c) be repeated for any [...***...].  The accounting firm shall disclose to the auditing Party only whether the reports are correct or not, and the specific details concerning any discrepancies. No other information shall be shared.  Except as provided below, the cost of this audit shall be borne by the auditing Party, unless the audit reveals a variance of more than the greater of [...***...] and [...***...] from the reported amounts, in which case the audited Party shall bear the cost of the audit. Unless disputed pursuant to Section 6.9 below, if such audit concludes that (i) additional amounts were owed by the audited Party, the audited Party shall pay the additional amounts, or (ii) excess payments were made by the audited Party, the auditing Party shall reimburse such excess payments, in either case ((i) or (ii)), within [...***...] after the date on which such audit is completed by the auditing Party.

6.9Audit Dispute.

 In the event of a dispute with respect to any audit under Section 6.8, Poseida and Takeda shall work in good faith to resolve the disagreement. If the Parties are unable to reach a mutually acceptable resolution of any such dispute within [...***...], the dispute shall be submitted for resolution to a certified public accounting firm jointly selected by each Party’s certified public accountants or to such other Person as the Parties shall mutually agree (the “Audit Arbitrator”). If resolved by an Audit Arbitrator, the decision of the Audit Arbitrator shall

*** Certain Confidential Information Omitted

38

 

be final and the costs of such arbitration as well as the initial audit shall be borne between the Parties in such manner as the Audit Arbitrator shall determine. Not later than [...***...] after the decision by the Audit Arbitrator and in accordance with such decision, the audited Party shall pay the additional amounts, or the auditing Party shall reimburse the excess payments, as applicable.

6.10Currency Exchange.

 For purposes of determining the Commercial Milestone Payments and royalties payable hereunder, sales of Licensed Products invoiced in a currency other than Dollars shall be expressed in their Dollar equivalent calculated using Takeda’s own standard currency translation methodology for the conversion of foreign sales currencies into Dollars, which methodology shall be in accordance with the Applicable Accounting Standards and shall be the methodology generally used by Takeda for currency conversions in Takeda’s audited financial statements.

6.11Manner of Payment.

 Any payment to be made by one Party to the other Party under this Agreement shall be payable in Dollars and shall be paid by wire transfer in immediately available funds to the bank account designated by the payee Party. Each Party shall have the right to change such information at any time by providing written notice to the other Party; provided that such new bank information shall not be deemed effective until the date that is [...***...] weeks after the receipt of such new information. 

6.12Tax.

 

(a)Withholding Tax. The amounts payable pursuant to this Agreement shall not be reduced on account of any Taxes unless required by applicable Law. Takeda shall deduct and withhold from its payments any Taxes that it is required by applicable Law to deduct or withhold. Prior to making any deduction or withholding in respect of Taxes from any payment under this Agreement, Takeda shall (i) timely provide a prior written notice to Poseida of the amounts subject to deduction or withholding, and the legal basis therefore (ii) inform Poseida in writing of any the forms, certificates or other items that are necessary in order to reduce or eliminate such deduction or withholding; and (iii) provide to Poseida a reasonable opportunity to furnish such forms, certificates or other items that would reduce or eliminate such deduction or withholding. In such case Takeda shall apply the reduced rate of withholding, or not withhold, as the case may be; provided that Takeda is in receipt of evidence, in a form reasonably satisfactory to Takeda, for example Poseida’s delivery of all applicable documentation, at least [...***...] weeks prior to the time that the payments are due. If, in accordance with the foregoing, there is no applicable Tax treaty, or the applicable Tax treaty reduces but does not eliminate the required withholding for Taxes, then, except as otherwise provided in Section 6.12(d), Takeda shall (1) withhold the amount required by Law from any payment due to Poseida under this Agreement and  pay to Poseida the balance when due, (2) timely pay such amount to the proper taxing authority, and (3) promptly send to Poseida the best available evidence of such payment, including official receipts.

(b)Tax Cooperation. Each Party will provide the other with reasonable assistance to enable the recovery, as permitted by Law, of withholding Taxes, VAT or similar obligations resulting from payments made under this Agreement, such recovery to be for the benefit of the Party bearing such withholding Tax, VAT or similar obligations.

(c)Tax Exemptions, Credits and Deductions. The Parties will reasonably cooperate with each other in seeking any Tax exemption or credits that may be available with respect to any Licensed Product, including the Tax credit available under Section 45C of the Code by reason of a Party’s Development expenditures contributing to the Licensed Product being granted orphan drug status by the FDA, or equivalent applicable Law of any other country and the

*** Certain Confidential Information Omitted

39

 

deduction available under Section 250 of the Code relating to foreign-derived intangible income, or any successor provision. Takeda shall use commercially reasonable efforts to provide, and to cause its Affiliates, subcontractors, sub-licenses, customers and applicable Third Parties to provide, any information and documentation reasonably requested by Poseida to obtain the benefits of Section 250 of the Internal Revenue Code of 1986, as amended (or any successor provision) and the applicable Treasury Regulations including, without limitation, information required to demonstrate the extent to which the Licensed Products will be sold, consumed, used and/or manufactured outside the United States.

(d)Redomicile, Assignment or Sublicense. Notwithstanding anything in this Agreement to the contrary, the Parties acknowledge and agree that if either Party redomiciles, or assigns or sublicenses its rights or obligations under this Agreement (including an assignment of this Agreement as permitted under this Agreement), and such action leads to the imposition of withholding Tax liability or VAT on the other Party that would not have been imposed in the absence of such action or in an increase in such liability above the liability that would have been imposed in the absence of such action, then such Party will increase such payment by the amount necessary to ensure that the other Party receives an amount equal to the amount it would have received had no such action occurred.

(e)VAT/Sales Tax. All payments or amounts due under this Agreement, whether monetary or non-monetary are exclusive of VAT/sales tax and their equivalents. Takeda hereby covenants that it will pay any such VAT/sales tax correctly charged in addition to any amounts due under this Agreement.  Where the prevailing legislation requires a VAT/sales tax reverse charge, then Takeda covenants that it shall correctly account for VAT/sales tax in respect of the services received. Poseida agrees that it will raise a tax invoice (or equivalent document) to support the charge to VAT/sales tax. If Poseida bears any VAT/ sales taxes directly related to amounts due under this Agreement from Takeda, Takeda shall reimburse Poseida for such taxes promptly upon receipt of an invoice. For the purposes of VAT, the services, rights and licenses provided by Poseida under this Agreement shall be considered to be Taxed under by Art 44 of Council Directive 2006/112/EC or any equivalent provision in the country of performance if performed outside the European Union and as such will be considered to be taxed for VAT/sales taxes purposes in the country of the recipient. Any supply of products or provision of services under this Agreement shall be Taxed (where applicable) in accordance with the prevailing VAT/sales tax legislation.  The Parties agree that they will reasonably cooperate to ensure the use of any VAT/sales tax exemptions, suspensions or other reliefs.

ARTICLE VII

INTELLECTUAL PROPERTY OWNERSHIP, PROTECTION AND RELATED MATTERS

7.1Disclosure.

 During the Term, each Party shall promptly disclose and report to the other Party each discovery, improvement, Invention, idea, process and technique, whether or not patentable, made, conceived or first reduced to practice, whether solely by Poseida or its representatives, solely by Takeda or its representatives, or jointly by Poseida or its representatives and by Takeda or its representatives (or Affiliates or Sublicensees), alone or jointly with any Third Party, arising out of the performance of activities under the Collaboration (“Arising IP”).  Such disclosure shall be made in reasonable scientific detail within [...***...] of personnel responsible for Intellectual Property management of such Party first being advised of the Arising IP.

*** Certain Confidential Information Omitted

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7.2Ownership.

 

(a)Ownership of Background IP.

(i)Poseida Background IP. As between the Parties, Poseida owns and Controls all right, title and interest in and to all Intellectual Property that is owned or Controlled by Poseida as of the Effective Date, including Licensed IP as of the Effective Date, or that is generated or acquired by Poseida outside of the scope of this Agreement (“Poseida Background IP”).

(ii)Takeda Background IP. As between the Parties, Takeda owns and Controls all right, title and interest in and to all Intellectual Property that is owned or Controlled by Takeda as of the Effective Date or generated or acquired outside the scope of this Agreement (“Takeda Background IP”).

(b)Ownership of Arising IP. All determinations of ownership of Arising IP shall follow inventorship in accordance with US patent law, except that regardless of inventorship, the following shall apply:

(i)[...***...]

(ii)[...***...]

 

*** Certain Confidential Information Omitted

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[...***...].

(3)[...***...].

(iii)Joint Arising IP. Ownership of all Inventions and Intellectual Property rights therein arising out of the performance of the activities under the Collaboration that is neither Takeda Arising IP nor Poseida Arising IP shall be jointly owned by Takeda and Poseida (“Joint Arising IP”).  Subject to the licenses granted under this Agreement, and the obligations of the Parties under Section 5.4, each Party shall have the right to Exploit the Joint Arising IP without a duty of seeking consent from or accounting to the other Party.

(iv)Each Party shall promptly disclose to the other Party in writing, and shall cause its Affiliates, licensees and sublicensees to so disclose, the conception, discovery, development, making, or reduction to practice of any Joint Arising IP and any Poseida Arising IP or Takeda Arising IP, as applicable, to be assigned by such Party to the other Party pursuant to this Section 7.2(b).

7.3Prosecution and Maintenance of Patent Rights.

(a)Takeda has the sole right (but not the obligation) to control the filing, prosecution and maintenance of (including the defense of any interference or derivation proceeding, opposition or any other pre- or post-grant proceedings or challenges, including any patent term extensions) of all Takeda Patents and all Patent Rights within the Takeda Background IP, using counsel of its own choice.  

(b)Poseida has the first right (but not the obligation) to control the filing, prosecution and maintenance of (including the defense of any interference or derivation proceeding, opposition or any other pre- or post-grant proceedings or challenges, including any patent term extensions) all Poseida Patents and all Patent Rights within the Poseida Background IP, using counsel of its own choice; provided, that with respect to Licensed Patent Rights that [...***...]. In the event that Poseida decides not to prepare, file, prosecute, defend or maintain a Poseida Patent that Covers a Licensed Product or a component thereof in a country or other jurisdiction in the Territory, Poseida shall provide reasonable prior written notice to Takeda of such intention, and Takeda shall thereupon have the option, in its sole discretion, to assume the control and direction of the preparation, filing, prosecution, defense and maintenance of such Poseida Patent at Takeda’s expense in such country or other jurisdiction.  Upon Takeda’s written acceptance of such option, Takeda shall assume the responsibility and control for the preparation, filing, prosecution, and maintenance of such Poseida Patent.  In such event, Poseida shall reasonably cooperate with Takeda in such country or other jurisdiction as provided under Section 7.4, provided, that, in the event this Agreement terminates in its entirety, Takeda shall no longer have the right to control or direct the preparation, filing, prosecution, defense and maintenance of any such Poseida Patent for which it has assumed control under this Section 7.3(b), and Poseida shall assume the responsibility and

*** Certain Confidential Information Omitted

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control for the preparation, filing, prosecution, and maintenance of such Poseida Patents, and Takeda shall cooperate in transitioning such control back to Poseida (or Poseida’s designee).

(c)Takeda shall have the first right, but not the obligation, to prepare, file, prosecute, and maintain the Joint Patents worldwide, at Takeda’s sole cost and expense and in the name of both Parties. Takeda shall keep Poseida fully informed of all material steps with regard to the preparation, filing, prosecution, and maintenance of Joint Patents, including by providing Poseida with a copy of material communications to and from any patent authority in the Territory regarding such Joint Patents, and by providing Poseida drafts of any material filings or responses to be made to such patent authorities in the Territory sufficiently in advance of submitting such filings or responses so as to allow for a reasonable opportunity for Poseida to review and comment thereon.  Takeda shall consider in good faith the requests and suggestions of Poseida with respect to such Takeda drafts and with respect to strategies for filing and prosecuting the Joint Patents in the Territory.  In the event that Takeda decides not to prepare, file, prosecute, or maintain a Joint Patent in a country or other jurisdiction in the Territory, Takeda shall provide reasonable prior written notice to Poseida of such intention (which notice shall, in any event, be given no later than [...***...] prior to the next deadline for any action that may be taken with respect to such Joint Patent in such country or other jurisdiction), and Poseida shall thereupon have the option, in its sole discretion, to assume the control and direction of the preparation, filing, prosecution, and maintenance of such Joint Patent at its expense in such country or other jurisdiction.  Upon Poseida’s written acceptance of such option, Poseida shall assume the responsibility and control for the preparation, filing, prosecution, and maintenance of such specific Joint Patent at its sole cost and expense.  In such event, Takeda shall reasonably cooperate with Poseida in such country or other jurisdiction as provided under Section 7.4 and Poseida’s interest in such Joint Patent shall no longer be included in the Licensed IP.

7.4Cooperation.

 Each Party hereby agrees: (a) to cooperate, and to cause any of its Affiliates and their respective employees, agents and consultants to cooperate, with the other Party to effectuate and perfect the ownership contemplated by this Agreement, including by promptly executing and recording assignments and other documents consistent with the ownership set forth in this Agreement; (b) to make its employees, agents and consultants reasonably available to the other Party (or to the other Party’s authorized attorneys, agents or representatives), to the extent reasonably necessary to enable such Party to undertake patent prosecution; (c) to cooperate, if necessary and appropriate, with the other Party in gaining patent term extensions wherever applicable to Patent Rights licensed under this Agreement; (d) to discuss and coordinate with the other Party through the Patent Subcommittee with respect to strategies for filing the Arising Product Patents, including with respect to the separation of Licensed Product-related and any Poseida Technology Platform-related subject matter; (e) work in good faith with the other Party and the Patent Subcommittee to determine Poseida Arising IP and Takeda Arising IP pursuant to Section 7.2(b)(i) and Section 7.2(b)(ii), respectively, and Joint Arising IP pursuant to Section 7.2(b)(iii), which determination shall be made only upon the mutual agreement of the Parties, subject to Section 12.3; (f) to endeavor in good faith to coordinate its efforts with the other Party through the Patent Subcommittee to minimize or avoid interference with the prosecution and maintenance of the other Party’s patent applications; and (g) with respect to Takeda, to keep Poseida reasonably informed regarding the status and material activities with regard to the prosecution and maintenance of any Patent Right that claims any Arising Product IP, except with respect to a Takeda Payload or component thereof (“Arising Product Patent”), including by providing Poseida with a copy of material communications to and from any patent authority in the Territory regarding such Arising Product Patents.

*** Certain Confidential Information Omitted

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7.5Patent Expenses.

 The patent filing, prosecution and maintenance expenses incurred after the Effective Date with respect to Patent Rights shall be borne by the Party having the right to file, prosecute and maintain such Patent Rights under Section 7.3. 

7.6Third Party Infringement and Validity Challenges.

(a)Notices. Each Party shall promptly report in writing to the other Party any (i) known or suspected infringement by a Third Party of any Licensed Patent Rights, or (ii) unauthorized use or misappropriation of any Confidential Information or Know-How of a Party by a Third Party of which it becomes aware (each, a “Third Party Infringement”), and shall provide the other Party with all available evidence of such Third Party Infringement. 

(b)Patent Validity Challenges. Each Party shall notify the other Party if it receives a notice of any legal or administrative action by a Third Party against a Licensed Patent Right, including any oppositions, nullity actions, revocations, inter partes reviews, post grant reviews, compulsory license proceedings or declaratory judgment actions. Poseida shall have the first right, but not the obligation, to defend any validity challenges against the Licensed Patent Rights, including against all declaratory judgment actions, any compulsory licensing proceedings and any post-grant proceedings before the United States Patent Office or a foreign patent office.  Poseida shall keep Takeda reasonably informed as to the status of such actions and proceedings and shall consider in good faith any reasonable comments from Takeda with respect thereto. If Poseida elects not to defend such validity challenges with respect to a Licensed Patent Right that Covers a Licensed Product or a component thereof, Poseida shall inform Takeda in writing and Takeda may elect to defend such validity challenge at Takeda’s sole cost and expense, and Takeda shall keep Poseida reasonably informed as to the status of such actions and proceedings and shall consider in good faith any reasonable comments from Poseida with respect thereto; provided, that, in the event this Agreement terminates in its entirety, Takeda shall no longer have the right to control the defense to such challenge, and Poseida may assume control of such defense, and Takeda shall cooperate in transitioning such control back to Poseida (or Poseida’s designee). 

(c)Rights to Enforce. 

(i)Takeda Background IP; Takeda Arising IP. As between the Parties, Takeda shall have the sole and exclusive right, but not the obligation, to initiate and manage any Action anywhere in the world relating to any Third Party Infringement of the Takeda Background IP and Takeda Arising IP at its sole expense. 

(ii)Licensed IP.  As between the Parties, Poseida shall have the sole and exclusive right, but not the obligation, to initiate and manage any Action anywhere in the world relating to any Third Party Infringement of the Poseida Background IP and Poseida Arising IP.  Poseida shall keep Takeda reasonably informed with regard to the preparation and filing of such infringement action and shall consider in good faith the requests of Takeda with respect to strategies for the infringement action. [...***...].

*** Certain Confidential Information Omitted

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(iii)Joint Arising IP. Takeda shall have the first right, but not the obligation, to initiate and manage of any Action in the Field and in the Territory relating to any Third Party Infringement of the Joint Arising IP. Poseida shall have a right to comment on Takeda’s enforcement strategy, and Takeda shall reasonably consider any such comment. Poseida shall join any such Action, at Takeda’s request and expense. If Takeda does not wish to exercise the foregoing right, it shall provide Poseida with written notice that Takeda declines such right, and Poseida shall have the right, but not the obligation, to initiate or manage such Action at its own expense. 

(d)Procedures; Expenses and Recoveries. The Party having the right to initiate or manage any Third Party Infringement Action under Section 7.6(b) shall have the sole and exclusive right to select counsel for any such Action and shall pay all expenses of such Action, including attorneys’ fees and court costs and reimbursement of the other Party’s reasonable out-of-pocket expense in rendering assistance requested by the first Party. If (i) required under Law in order for the initiating Party to initiate or maintain such Action, (ii) either Party is unable to initiate or prosecute such Action solely in its own name or (iii) it is otherwise advisable to obtain an effective legal remedy, then in each such case, the other Party shall join as a party to such Action and will execute and cause its Affiliates to execute all documents, and take all actions, reasonably necessary for the initiating Party to initiate and maintain such Action. In addition, at the initiating Party’s request, the other Party shall provide other reasonable assistance to the initiating Party in connection with such Action at no charge to the initiating Party except for reimbursement by the initiating Party of reasonable out-of-pocket expenses incurred in rendering such assistance. The non-initiating Party shall have the right to participate and be represented in any such Action under Section 7.6(b) by its own counsel at its own expense. If the Parties obtain from a Third Party, in connection with any such Action under Section 7.6(b), any damages, license fees, royalties or other compensation (including any amount received in settlement of such suit), such amounts shall be allocated in all cases as follows:

(i)[...***...]

(ii)[...***...].

(e)Party Infringement of Third Party IP. If either Party becomes aware that the Exploitation of any Licensed Product in the Territory results in, or may result in, any Action, by a Third Party alleging infringement of Patent Rights or unauthorized use or misappropriation of Confidential Information or Know-How by a Party or its Affiliates or Sublicensees (a “Collaboration Infringement”), then such Party shall promptly report such Collaboration Infringement in writing to the other Party. [...***...]. Furthermore, Takeda shall have the first right, but not the obligation, to defend and control the defense of any such Action at its own expense, using counsel of its own choice; provided, that Poseida shall pay all expenses in connection with the defense of any Action or portion thereof to

*** Certain Confidential Information Omitted

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the extent related to the Poseida Technology Platform. Poseida may participate in any such Action with counsel of its choice at its own expense. Without limitation of the foregoing, if Takeda finds it necessary or desirable to join Poseida as a party to any such action, Poseida shall, at Takeda’s cost and expense, execute all papers and perform such acts as shall be reasonably required. If Takeda elects (in a written communication to be submitted to Poseida within a reasonable amount of time after notice of the alleged Collaboration Infringement) not to defend or control the defense of such Action, Poseida may conduct and control the defense of any such Action, at its own expense; provided, that, if Poseida obtains a license from a Third Party with respect to a Collaboration Infringement to the extent necessary to Exploit Licensed Products pursuant to this Agreement, then Takeda shall have rights to such license as provided in this Agreement. Each Party shall keep the other Party reasonably informed of all material developments in connection with any such Action. If the Parties obtain from a Third Party, in connection with any such Action under this Section 7.6(e), any damages, license fees, royalties or other compensation (including any amount received in settlement of such suit), such amounts shall be allocated in all cases as follows:

(i)[...***...]

(ii)[...***...].

7.7Common Interest.

 The Parties acknowledge and agree that, with respect to the prosecution, maintenance, enforcement and defense of Licensed Patent Rights, [...***...]. The Parties agree and acknowledge that [...***...]. 

7.8Trademarks.

 Takeda and its Related Parties have the sole right to use any trademark that Takeda Controls for Licensed Products in the Territory at its sole discretion. Takeda will develop one or more Product Trademark(s) for use by Takeda and its Related Parties in the Territory to Commercialize Licensed Products which have received Regulatory Approval in the Field in the Territory. Takeda (or its Related Parties, as appropriate) shall own all rights to such Product Trademarks and all goodwill associated therewith throughout the Territory and the rights to any internet domain names incorporating the applicable Product Trademarks or any variation or part of such Product Trademarks used as its URL address or any part of such address.  Upon mutual agreement of the Parties, Takeda may use the Poseida Platform Trademarks in connection with its Exploitation of the Licensed Products, subject to customary terms related to marking, quality control, approval and inspection mutually agreed by the Parties prior to the first use thereof.  Each Party and its Related Parties shall retain all right, title and interest in and to its and their respective corporate names and logos. For the avoidance of doubt, neither Party shall have any right to use the other Party’s or the other Party’s Related Parties’ corporate names or logos in connection with Commercialization of Licensed Products without the prior written consent of the other Party.

*** Certain Confidential Information Omitted

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ARTICLE VIII

CONFIDENTIAL INFORMATION

8.1Nondisclosure Obligation.

(a)At all times during the Term and for a period of [...***...] following termination or expiration of this Agreement in its entirety, all Confidential Information disclosed by one Party (the “Disclosing Party”) to, or otherwise accessed by, the other Party (the “Receiving Party”) hereunder shall be maintained in confidence by the Receiving Party and shall not be published or otherwise disclosed to a Third Party or used for any purpose except as expressly set forth herein without the prior written consent of the Disclosing Party; provided that the confidentiality obligations with respect to any Confidential Information that the Disclosing Party identifies as a trade secret shall extend until such Confidential Information is no longer a trade secret under applicable Law. Information exchanged by the Parties pursuant to the Confidentiality Agreement shall be deemed Confidential Information disclosed under this Agreement, and shall be subject to the terms of this Agreement from and after the Effective Date.  Each Party may use the other Party’s Confidential Information solely to the extent required to perform its obligations or exercise any rights under this Agreement. The confidentiality and non-use provisions of this ARTICLE VIII shall not apply to the extent that the Receiving Party can demonstrate by competent evidence that such Confidential Information:

(i)is known by the Receiving Party at the time of its receipt, and not through a prior disclosure by the Disclosing Party, as documented by the Receiving Party’s business records;

(ii)is in the public domain or publicly known by use or publication before its receipt from the Disclosing Party, or thereafter enters the public domain or becomes publicly known through no fault of the Receiving Party;

(iii)is subsequently disclosed to the Receiving Party by a Third Party without restriction who may lawfully do so and is not under an obligation of confidentiality to the Disclosing Party; or

(iv)is developed by the Receiving Party independently of Confidential Information received from the Disclosing Party and independent of the Collaboration, as documented by the Receiving Party’s business records.

Specific aspects or details of Confidential Information shall not be deemed to be within the public domain or in the possession of the Receiving Party merely because the Confidential Information is embraced by more general information in the public domain or in the possession of the Receiving Party. Further, any combination of Confidential Information shall not be considered in the public domain or in the possession of the Receiving Party merely because individual elements of such Confidential Information are in the public domain or in the possession of the Receiving Party unless the combination and its principles are in the public domain or in the possession of the Receiving Party.

(b)Notwithstanding the obligations of confidentiality and non-use set forth in Section 8.1(a) and Section 8.2, the Receiving Party may disclose Confidential Information of the Disclosing Party, and disclose the existence and terms of this Agreement, to the extent such disclosure is reasonably required, to (i) Related Parties, and its and their employees, directors, agents, consultants, advisors, and Third Party contractors who have a need to know such

*** Certain Confidential Information Omitted

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Confidential Information for the performance of its obligations (or for such entities to determine their interest in performing such activities) in accordance with this Agreement, or, in the case of Takeda, as necessary to Exploit the Licensed Products or determine its interest in exercising a License Option, in each case who are obligated to keep such Confidential Information confidential and use such Confidential Information on terms no less stringent than those in this Section 8.1; (ii) Governmental Authorities or other Regulatory Authorities in order to obtain and maintain Patent Rights and Regulatory Approvals in accordance with this Agreement, or otherwise perform its obligations or exploit its rights under this Agreement, provided, that such Confidential Information shall be disclosed only to the extent reasonably necessary to do so; (iii) prosecute or defend litigation, including by responding to a subpoena in a Third Party litigation; (iv) the extent required by a court, administrative order or Law, including by the rules or regulations of the United States Securities and Exchange Commission or similar regulatory agency in a country other than the United States or of any stock exchange or listing entity; and (v) any bona fide actual or prospective underwriters, investors, lenders, other financing sources, acquirers, permitted Sublicensees, collaborators or strategic partners and to consultants and advisors of such Party, in each case who are obligated to keep such Confidential Information confidential and use such Confidential Information on terms no less stringent than those in this Section 8.1.

(c)If a Receiving Party is required by Law (including regulations promulgated by securities exchanges or listing entities) to disclose Confidential Information of the Disclosing Party pursuant to Sections 8.1(b)(ii), 8.1(b)(iii) or 8.1(b)(iv), such Party shall, to the extent permitted by Law, promptly inform the Disclosing Party of the disclosure that is being sought (and to the extent possible, at least [...***...] notice) in order to provide the Disclosing Party an opportunity to challenge or limit the disclosure obligations and the Receiving Party shall endeavor in good faith, at the Disclosing Party’s expense, to secure confidential treatment of such Confidential Information or reasonably assist the Disclosing Party in seeking a protective order or other confidential treatment. Confidential Information that is required to be disclosed by Law shall remain otherwise subject to the confidentiality and non-use provisions of this Section 8.1 and Section 8.2. If either Party concludes that a copy of this Agreement must be filed with the United States Securities and Exchange Commission or similar regulatory agency in a country other than the United States, at least [...***...] in advance of any such filing, such Party will provide the other Party with a copy of this Agreement showing any provisions hereof as to which the Party proposes to request confidential treatment, will provide the other Party with a reasonable opportunity to comment on any such proposed redactions and to suggest additional redactions, and will take such Party’s reasonable and timely comments into consideration before so filing this Agreement.

8.2Publication and Publicity.

(a)Publication. Each Party recognizes that the publication of papers regarding results of and other information regarding activities pursuant to the Collaboration, including oral presentations and abstracts, may be beneficial to both Parties; provided that such publications are subject to reasonable controls to protect the Confidential Information of the Parties. In particular, it is the intent of the Parties to maintain the confidentiality of any Confidential Information included in any Invention disclosures or any draft patent application until such patent application has been filed. Subject to the foregoing, [...***...]

*** Certain Confidential Information Omitted

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[...***...]. 

(b)Publicity. 

(i)The Parties have agreed upon the content of a press release which shall be issued by Poseida and substantially in the form attached hereto as Exhibit 8.2(b). The Parties shall reasonably coordinate in order to issue such press release promptly upon execution of this Agreement.  Except as set forth in Section 8.1, Section 8.2(a) and Section 8.2(b)(ii) or as otherwise expressly permitted by this Agreement, the terms of this Agreement may not be disclosed by either Party, and no Party shall use the name, trademark, trade name or logo of the other Party or its employees in any publicity, news release or disclosure relating to this Agreement or its subject matter, without the prior express written permission of the other Party, except as may be required by Law. 

(ii)Notwithstanding the foregoing, Takeda and its Related Parties may make public announcements or disclosures necessary or useful to Develop or Commercialize the Licensed Products, including disclosures regarding clinical studies and disclosures to advertise, promote and otherwise Commercialize the Licensed Products.

8.3Return of Confidential Information.

 Upon the effective date of the expiration or termination of this Agreement for any reason, either Party may request in writing, and the other Party shall either, with respect to Confidential Information to which such other Party does not retain rights under the surviving provisions of this Agreement: (a) promptly destroy all copies of such Confidential Information in the possession of the other Party and confirm such destruction in writing to the requesting Party; or (b) promptly deliver to the requesting Party, at the other Party’s expense, all copies of such Confidential Information in the possession of the other Party; provided, however, the other Party shall be permitted to retain one (1) copy of such Confidential Information for the sole purpose of performing any continuing obligations hereunder or for archival purposes. Notwithstanding the foregoing, such other Party also shall be permitted to retain such additional copies of or any computer records or files containing such Confidential Information that have been created solely by such other Party’s archiving and back-up procedures, to the extent created and retained in a manner consistent with such other Party’s standard archiving and back-up procedures, but not for any other use or purpose. The confidentiality and non-use provisions set forth in this ARTICLE VIII shall survive expiration or termination of this Agreement.

 

*** Certain Confidential Information Omitted

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ARTICLE IX

REPRESENTATIONS, WARRANTIES AND COVENANTS

9.1Mutual Representations and Warranties.

 Each Party represents and warrants to the other Party that, as of the Effective Date:

(a)Representations of Authority. It is duly organized and validly existing under the Laws of its jurisdiction of incorporation or formation, and has full corporate right, power and authority to enter into this Agreement and to perform its obligations under this Agreement.

(b)Consents. All necessary consents, approvals and authorizations of all Governmental Authorities and other Persons required to be obtained by it as of the Effective Date in connection with the execution, delivery and performance of this Agreement have been obtained.

(c)No Conflict. The execution and delivery of this Agreement and the performance of its obligations hereunder (i) do not violate or conflict with the provisions of its certificate of incorporation or by-laws, (ii) do not conflict with or violate any requirement of Law effective as of the Effective Date, and (iii) do not and will not conflict with, violate, breach or constitute a default under any contractual obligations of it or any of its Affiliates existing or known as of the Effective Date.

(d)Authorization and Binding Nature. The execution, delivery and performance of this Agreement and the performance of all obligations hereunder have been duly authorized by all requisite corporate action on the part of such Party. This Agreement constitutes the valid and legally binding obligations of such Party, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other Laws of general application affecting the enforcement of creditors’ rights generally and Laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

(e)No Debarment. Neither it nor any of its Affiliates, nor its or their respective employees, have been Debarred or are subject to Debarment.

(f)No Misstatements or Omissions. The representations and warranties of such Party in this Agreement, and the information, documents and materials furnished to the other Party in response to such Party’s written requests for due diligence information prior to the Effective Date, do not, taken as a whole, (i) contain any untrue statement of a material fact, or (ii) omit to state any material fact necessary to make the statements or facts contained therein, in light of the circumstances under which they were made, not misleading.

(g)Protection of Information.  Each Party agrees that during the Term of this Agreement, and without limiting its obligations hereunder, each Party shall implement technical and organizational measures to protect all Confidential Information under this Agreement that are appropriate and that provide no less protection than such Party’s measures to protect its own information of a similar nature or importance.

9.2Representations and Warranties of Poseida.

 Poseida represents and warrants to Takeda that, as of the Effective Date: 

(a)Ownership. (i) Poseida is the sole and exclusive owner of, or otherwise has the right to license, the Licensed IP, (ii) Poseida has the right to grant to Takeda the licenses hereunder, and (iii) there are no contractual or other obligations entered into by Poseida which 

 

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would limit or otherwise prevent Poseida from granting the rights purported to be granted to Takeda in this Agreement.

(b)Notice of Infringement. Neither Poseida nor any of its Affiliates have received any written notice of any claim that any Intellectual Property right Controlled by a Third Party would be infringed or misappropriated by the exploitation of the Licensed IP or Excluded In-License Agreements as contemplated by the Research Plans.

(c)No Infringement. To Poseida’s Knowledge, the conception, development and reduction to practice of the Licensed IP have not constituted or involved the infringement or misappropriation of Patent Rights, Know-How or similar rights or property of any Person.

(d)No Claim. There is no (i) claim, demand, suit, proceeding, arbitration, inquiry, investigation or other legal Action of any nature, civil, criminal, regulatory or otherwise, pending or, to Poseida’s Knowledge, threatened against Poseida or any of its Related Parties or (ii) judgment or settlement against or owed by Poseida or any of its Related Parties, in each case in connection with the Licensed IP. 

(e)Employee Obligations. All of Poseida’s employees, officers and consultants performing activities under this Agreement on behalf of Poseida have executed agreements or have existing obligations under Law requiring assignment to Poseida or its Affiliates of all Intellectual Property and proprietary rights made during the course of and as the result of their association with Poseida, including all Intellectual Property created in the performance of this Agreement, or otherwise granting to Poseida or its Affiliates sufficient rights to such inventions to the extent necessary to effect the license and ownership provisions of this Agreement, in each case obligating such individuals to maintain as confidential the Confidential Information of Poseida and the Confidential Information of Takeda as the Disclosing Party under this Agreement. 

(f)Material Information. As of the Effective Date, (i) Poseida has provided or made available to Takeda true, correct and complete copies of all In-License Agreements and Excluded In-License Agreements and (ii) to Poseida’s Knowledge, all other information with respect to the Licensed Know-How and Licensed Patent Rights provided or made available to Takeda is true, correct and complete.

(g)Third Party Agreements. Neither Poseida nor any of its Affiliates has previously entered into, nor will enter into during the Term, any agreement, whether written or oral, with respect to the Licensed IP (including by granting any covenant not to sue with respect thereto) that would conflict with or otherwise diminish the rights granted to Takeda hereunder.

9.3No Warranties.

 EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, TO THE OTHER PARTY WITH RESPECT TO ANY TECHNOLOGY, PRODUCT, GOODS, SERVICES, RIGHTS OR OTHER SUBJECT MATTER OF THIS AGREEMENT AND HEREBY DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT WITH RESPECT TO ANY AND ALL OF THE FOREGOING, AND EACH PARTY HEREBY DISCLAIMS ANY REPRESENTATION OR WARRANTY THAT THE DEVELOPMENT, MANUFACTURE OR COMMERCIALIZATION OF THE LICENSED PRODUCTS PURSUANT TO THIS AGREEMENT WILL BE SUCCESSFUL OR THAT ANY PARTICULAR SALES LEVEL WITH RESPECT TO THE LICENSED PRODUCTS WILL BE ACHIEVED.

 

 

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9.4Additional Covenants.

(a)Conflicting Transactions. During the Term, neither Party will, or will allow its Affiliates to, enter into any agreement granting a license or other right that is inconsistent with the rights granted to the other Party under this Agreement. 

(b)Compliance. Each Party and its Related Parties shall conduct the Collaboration and perform its obligations and other activities under this Agreement in accordance in all material respects with all Laws and industry standards, including, to the extent applicable, then-current governmental regulations concerning good laboratory practices, good clinical practices and good manufacturing practices. Neither Party shall export any technology licensed to it by the other Party under this Agreement, except in compliance with applicable export Laws.

(c)Debarment. Neither Party nor any of its Affiliates will use in any capacity, in connection with the Collaboration or the performance of its obligations under this Agreement, any Person that has been Debarred. Each Party agrees to inform the other Party in writing promptly if it learns that it or any Person that is performing activities in the Collaboration or under this Agreement is Debarred or is subject to Debarment, or, to the notifying Party’s Knowledge, if Debarment of the notifying Party or any Person used in any capacity by such Party or any of its Affiliates in connection with the Collaboration or the performance of its other obligations under this Agreement, is threatened.

(d)Existing Poseida In-License Agreements. Poseida shall (i) not amend, terminate or otherwise modify, or permit to be amended, terminated or modified, any of the In-License Agreements or Excluded In-License Agreements or (ii) exercise any right under any of the In-License Agreements or Excluded In-License Agreements, in each case of (i) and (ii), in a manner that impairs or diminishes the rights granted by Poseida to Takeda under such In-License Agreements or Excluded In-License Agreements. Poseida will promptly notify Takeda of any written notice that Poseida receives from the counterparty to any In-License Agreement or Excluded In-License Agreement alleging Poseida’s material breach of such In-License Agreement or Excluded In-License Agreement. Without limiting any other right or remedy of Takeda under this Agreement and in order to prevent, ameliorate, mitigate or cure a material breach by Poseida of any In-License Agreement or Excluded In-License Agreement, in the event that Poseida receives notice form the counterparty to any In-License Agreement or Excluded In-License Agreement alleging the material breach by Poseida of such In-License Agreement or Excluded In-License Agreement, after promptly notifying Takeda in writing, if such material breach is not cured within [...***...] after such written notice to Takeda, then Takeda shall have the right to perform such obligation on behalf of Poseida or otherwise remedy such material breach and Poseida shall reimburse Takeda for its costs and expenses in connection therewith.

(e)Exclusive License in [...***...]. Poseida covenants that it will fulfill, by [...***...], its [...***...].

ARTICLE X

TERM AND TERMINATION

10.1Term.

 This Agreement shall be effective as of the Effective Date and, unless terminated earlier pursuant to Section 10.2 or Section 10.3, shall continue in force and effect until

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expiration of the last-to-expire Royalty Term for any and all Licensed Products (the “Term”). On a Licensed Product-by-Licensed Product and country-by-country basis, upon expiration of the Royalty Term for a Licensed Product in a country, the licenses granted to Takeda pursuant to Section 5.2(b) with respect to such Licensed Product in such country shall become fully paid-up, royalty-free, perpetual and irrevocable.

10.2Termination for Convenience.

 Takeda shall have the right to terminate this Agreement for any reason in its entirety or on a Program-by-Program or Licensed Product-by-Licensed Product basis, as applicable, on sixty (60) days’ prior written notice to Poseida at any time.

10.3Termination for Cause.

(a)This Agreement may be terminated at any time during the Term upon written notice by either Party (the “Non-Breaching Party”) if the other Party (the “Breaching Party”) is in material breach of its obligations hereunder and has not cured such breach within thirty (30) days in the case of a payment breach, or within sixty (60) days in the case of all other breaches, after notice requesting cure of the breach, or, if cure of such breach other than non-payment cannot reasonably be effected within such sixty (60)-day period, to deliver to the Non-Breaching Party a plan reasonably calculated to cure such breach within a timeframe that is reasonably prompt in light of the circumstances then prevailing, but in no event more than an additional six (6) months. Following delivery of such a plan, the Breaching Party will carry out the plan and cure the breach. If the Breaching Party fails to cure a material breach of this Agreement as provided above, then the Non-Breaching Party may terminate this Agreement upon written notice to the Breaching Party.

(b)If the alleged Breaching Party disputes in good faith the existence or materiality of a breach specified in a notice provided by the other Party in accordance with Section 10.3(a) or disputes that it has not timely cured such breach, and such alleged Breaching Party provides the other Party notice of such dispute within such thirty (30) or sixty (60)-day period, as applicable, then the Non-Breaching Party shall not have the right to terminate this Agreement under Section 10.3(a) unless and until such dispute is resolved in accordance with ARTICLE XII. It is understood and agreed that, during the pendency of such dispute, all of the terms and conditions of this Agreement shall remain in effect and the Parties shall continue to perform all of their respective obligations hereunder.

(c)Termination for Safety Concern. On a Licensed Product-by-Licensed Product basis, Takeda may, at its election, terminate this Agreement with respect to such Licensed Product immediately upon written notice to Poseida as a result of a Safety Concern.

(d)Termination for Insolvency. Each Party shall have the right to terminate this Agreement upon delivery of written notice to the other Party in the event that (i) such other Party files in any court or agency pursuant to any statute or regulation of any jurisdiction a petition in bankruptcy or insolvency or for reorganization or similar arrangement for the benefit of creditors or for the appointment of a receiver or trustee of such other Party or its assets, (ii) such other Party is served with an involuntary petition against it in any insolvency proceeding and such involuntary petition has not been stayed or dismissed within [...***...] of its filing, or (iii) such other Party makes an assignment of substantially all of its assets for the benefit of its creditors.

(e)Termination for Patent Challenge.  Either Party shall have the right to terminate this Agreement immediately in its entirety upon written notice to the other Party if (i) a Party or any of its Affiliates or Sublicensees directly, or indirectly through any Third Party, commences any interference or opposition proceeding with respect to, challenges the validity or

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enforceability of, or opposes any extension of or the grant of a supplementary protection certificate with respect to, any Patent Right within (A) in the case where such Party is Takeda, the Licensed IP, and (B) in the case where such Party is Poseida, the Takeda Background IP or Takeda Arising IP (each, as applicable, a “Patent Challenge”) and (ii) such Party does not (A) [...***...] or (B) [...***...], in each case of (A) and (B), within [...***...].  Notwithstanding the foregoing, either Party may not terminate this Agreement due to a Patent Challenge if: (x) [...***...]; or (y) [...***...]. 

10.4[...***...] Remedy. [...***...]. 

10.5Effects of Termination. 

(a)All Terminations. Upon any termination of this Agreement in whole or in part by either Party, the following terms will apply (in the event of a termination of this Agreement in part, the following shall apply with respect to the applicable Program or Licensed Product):

(i)The licenses granted by Poseida to Takeda pursuant to Section 5.2 shall terminate, and the license granted by Takeda to Poseida pursuant to Section 5.3 shall terminate.

(ii)Except as set forth in this Section 10.5, all of the rights and obligations of the Parties hereunder with respect to this Agreement shall terminate.

	
(iii)
	
Poseida shall submit a final invoice for all Research Costs incurred up to the effective date of termination and [...***...] comprising such Research Costs (which, in the event of a termination by Takeda pursuant to Section 10.2, shall include any such [...***...] for the [...***...] period following such termination).  Takeda shall pay all such amounts within [...***...] of receipt of such invoice.

(iv)Except in the event of a termination by Takeda pursuant to Section 10.3(c), Takeda may sell off its existing inventory of Licensed Products for a period of [...***...].

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(b)Takeda Termination for Convenience; Termination by Poseida for Breach or Insolvency. Upon any termination of this Agreement (in whole or in part) by Takeda pursuant to Section 10.2, or by Poseida pursuant to Section 10.3(a) or Section 10.3(d), at Poseida’s sole election by written notice to Takeda (which Poseida shall have the right to exercise with respect to all or part of the following), the following shall apply: 

(i)Poseida Reversion Rights.

(1)To the extent a Licensed Product under a terminated Program is comprised of [...***...], Takeda shall grant, and hereby grants effective as of the effective date of such termination, to Poseida (A) a non-exclusive, royalty-bearing, worldwide, sublicensable, transferrable license under (I) [...***...] and (II) [...***...] (collectively, the “Reversion IP”) to use, develop, manufacture, commercialize and otherwise fully exploit any Selected Candidate, Licensed Product or other product arising under any terminated Programs (“Reversion Products”) in the Field in the Territory and (B) a right of reference to any Regulatory Approvals, regulatory documentation and data related to any Reversion Products. In consideration of the foregoing license under the Reversion IP, Poseida shall pay to Takeda [...***...]. 

(2)Takeda shall reasonably cooperate with Poseida (or its designee(s)), at Poseida’s cost, to facilitate a smooth, orderly and prompt transition of the activities related to the Reversion Products to Poseida or such designee, including making introductions to any Third Party providers, contract research organizations, CMOs or subcontractors engaged by Takeda prior to the applicable termination, including with respect to the control and completion of any ongoing clinical trials and the transition of any manufacturing activities to Poseida or its designee.

(3)Takeda shall assign, and hereby does assign effective upon such termination, to Poseida (A) [...***...], and (B) [...***...].  Notwithstanding anything herein to the contrary, all such [...***...] shall be deemed the Confidential Information of Poseida. Takeda shall, as soon as practicable, transfer the foregoing [...***...] reasonable assistance in the use and understanding thereof at [...***...] cost and expense.

(4)Notwithstanding anything to the contrary herein, if a Licensed Product is terminated under this Agreement but [...***...], there shall be no Reversion IP or Reversion Product.

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(ii)With respect to Licensed Products that are not Reversion Products, upon Poseida’s request within [...***...] following the effective date of termination, the Parties shall discuss [...***...]. For clarity, [...***...].

(iii)Takeda shall duly execute and deliver, or cause to be duly executed and delivered, such instruments and shall do and cause to be done such acts and things, including the filing of such assignments, agreements, documents, and instruments, as may be necessary under, [...***...] this Section 10.5(b).

(c)Other Effects of Expiration or Termination. Except as otherwise set forth in this Agreement, termination or expiration of this Agreement shall not relieve the Parties of any liability or obligation which accrued hereunder prior to the effective date of such termination or expiration, nor prejudice either Party’s right to obtain performance of any obligation; provided, however, that Takeda shall have no obligation to make any milestone payment pursuant to ARTICLE VI with respect to any milestone achieved after the date on which a Party provides notice of termination pursuant to this Agreement but prior to the effective date of such termination. The following provisions shall survive any expiration or termination of this Agreement: ARTICLE I, Section 3.4(a) (solely with respect to any Research Costs incurred prior to termination), Section 3.5, Section 5.2(g) (solely with respect to any surviving recordkeeping and reporting obligations [...***...]), Section 5.6, ARTICLE VI (solely with respect to amounts accrued or owing as of the effective date of termination and, in connection with any milestone payment pursuant to ARTICLE VI, subject to this Section 10.5(c)), Section 7.2, Section 7.5 (solely with respect to expenses incurred prior to termination), Section 7.7, Section 8.1, Section 8.2 (solely with respect to any paper proposed for publication by Poseida or any of its Related Parties [...***...] or [...***...]), Section 8.3, Section 9.3, Section 10.1 (last sentence only and only upon expiration), this Section 10.5, ARTICLE XI (solely with respect to claims for indemnification, if any, made prior to the effective date of termination) and ARTICLE XII. Except as set forth in this Section 10.5(c), upon termination or expiration of this Agreement all other rights and obligations of the Parties under this Agreement cease.  

(d)Remedies. Each Party shall be free to seek, in accordance with Section 12.1 and Section 12.2, without restriction as to the number of times it may seek, damages, expenses and remedies that may be available to it under applicable Law or in equity and shall be entitled, at such Party’s option and its sole discretion, to offset the amount of any damages and expenses obtained against the other Party in a final determination obtained in accordance with Section 12.1 and Section 12.2 against any amounts otherwise due to such other Party under this Agreement. 

10.6[...***...]

*** Certain Confidential Information Omitted

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[...***...].

ARTICLE XI

INDEMNIFICATION; LIMITATION OF LIABILITY; INSURANCE

11.1Indemnification by Poseida.

 Poseida shall indemnify, defend and hold harmless Takeda and its Affiliates and its and their directors, officers, employees, and agents (each, a “Takeda Indemnitee”) from and against any and all Losses of any Takeda Indemnitee as a result of any Third Party Claim to the extent such Losses arise out of: (a) the performance of the Research Activities by Poseida or its Related Parties, (b) the gross negligence or willful misconduct of any Poseida Indemnitee, (c) the breach by Poseida of any warranty, representation or covenant of Poseida in this Agreement, or (d) any Exploitation of the Licensed Products or Reversion Products by Poseida after the termination of this Agreement in part or in its entirety, if a license is granted to Poseida; except, in each case, to the extent such Losses arise out of any activities for which Takeda is obligated to indemnify any Poseida Indemnitee under Section 11.2.

11.2Indemnification by Takeda.

 Takeda shall indemnify, defend and hold harmless Poseida and its Affiliates and its and their directors, officers, employees, and agents (each, a “Poseida Indemnitee”) from and against any and all Losses of any Poseida Indemnitee as a result of any Third Party Claim to the extent such Losses arise out of: (a) the performance of the Research Activities by Takeda or its Related Parties, (b) the Exploitation of the Licensed Products by Takeda or its Related Parties, (c) the gross negligence or willful misconduct of any Takeda Indemnitee, or (d) the breach by Takeda of any warranty, representation or covenant of Takeda in this Agreement; except, in each case, to the extent such Losses arise out of any activities for which Poseida is obligated to indemnify any Takeda Indemnitee under Section 11.1.

11.3Certain Losses.

 Any Losses, other than those Losses covered in ARTICLE VII, or which result from the breach of a Party’s obligation under this Agreement or the unlawful conduct of a Party, or for which indemnification is otherwise provided in Section 11.1 or Section 11.2, in connection with any Third Party Claim brought against either Party resulting directly or indirectly from the performance of Research Activities (including from the Manufacture of any Licensed Product for use in such Research Activities) in accordance with the Research Plans shall be included as a Research Cost.  If either Party learns of any Third Party Claim with respect to Losses covered by this Section 11.3, such Party shall provide the other Party with prompt written notice thereof.  The Parties shall confer with respect to how to respond to such Third Party Claim and how to handle such Third Party Claim in an efficient manner. In the absence of such an agreement, each Party shall have the right to take such action as it deems appropriate.

11.4Procedure.

 The Party claiming indemnity under Section 11.1 or Section 11.2 (the “Indemnified Party”) shall give written notice to the other Party (the “Indemnifying Party”) promptly after learning of the applicable Third Party Claim. The Indemnified Party shall provide the Indemnifying Party with reasonable assistance, at the Indemnifying Party’s expense, in connection with the defense of such Third Party Claim. The Indemnified Party may participate in and monitor such defense with counsel of its own choice at its own expense; provided, however, that the Indemnifying Party shall have the right to assume and conduct the defense of such Third

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Party Claim with counsel of its choice. The Indemnifying Party shall not settle such Third Party Claim without the prior written consent of the Indemnified Party, not to be unreasonably withheld, conditioned, or delayed, unless the settlement involves only the payment of money and no admission of wrong-doing or fault by the Indemnified Party. So long as the Indemnifying Party is actively defending the Third Party Claim in good faith, the Indemnified Party shall not settle such Third Party Claim without the prior written consent of the Indemnifying Party. If the Indemnifying Party does not assume and conduct the defense of such Third Party Claim, (a) the Indemnified Party may defend against and consent to the entry of any judgment, or enter into any settlement with respect to, such Third Party Claim in any manner the Indemnified Party may deem reasonably appropriate, and (b) the Indemnifying Party will remain responsible to indemnify the Indemnified Party as provided in this ARTICLE XI.

11.5General Limitation of Liability.

 NEITHER PARTY WILL BE LIABLE FOR SPECIAL, INCIDENTAL, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES ARISING OUT OF THIS AGREEMENT OR THE EXERCISE OF ITS RIGHTS HEREUNDER, INCLUDING LOST PROFITS OR BUSINESS INTERRUPTION ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF SUCH DAMAGES, EXCEPT AS A RESULT OF (A) A PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, (B) A MATERIAL BREACH OF THE CONFIDENTIALITY AND NON-USE OBLIGATIONS IN ARTICLE VIII, OR (C) AMOUNTS PAID TO THIRD PARTIES IN CONNECTION WITH CLAIMS SUBJECT TO INDEMNIFICATION UNDER SECTION 11.1 or SECTION 11.2.

11.6Insurance.

 Each Party shall maintain insurance during the Term and for a period of at least [...***...] after the last commercial sale of any Licensed Product under this Agreement by such Party or its Related Parties, with a reputable, solvent insurer in an amount [...***...]. Upon reasonable request, each Party shall provide the other Party with evidence of the existence and maintenance of such insurance coverage. Notwithstanding the foregoing, Takeda will be permitted to satisfy any and all of its obligations under this Section 11.6 through a program of self-insurance, in whole or in part. The Parties acknowledge that such insurance shall not be construed to create any limit of either Party’s obligations or liabilities with respect to its indemnification obligations under this Agreement.

ARTICLE XII

MISCELLANEOUS

12.1Governing Law.

 This Agreement shall be construed and the respective rights of the Parties determined according to the Laws of the State of New York, excluding any of its conflicts of laws principles to the contrary.

12.2Jurisdiction.

  The Parties hereby (a) irrevocably submit to the jurisdiction of the state and federal courts in the State of New York and agree that all claims shall be heard and determined in any such court, (b) waive any defense of inconvenient forum to the maintenance of any such claims and further agree not to bring any such claims in any other court, and (c) irrevocably consent to service of process by certified mailing, postage prepaid, or delivering such service to the Party at its respective notice address set forth in Section 12.6. Notwithstanding anything to the contrary in this Section 12.2, either Party may seek injunctive relief in any court in any jurisdiction where appropriate.

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12.3Patent and Trademark Disputes.

 Notwithstanding any provision to the contrary set forth in this Agreement, any and all issues regarding the scope, construction, validity, and enforceability of any Patent Rights or trademark rights relating to a Licensed Product will be determined in a court or other tribunal, as the case may be, of competent jurisdiction under the applicable patent or trademark Laws of the country in which such Patent Right or trademark was granted or arose.

12.4Assignment.

 Except as provided in this Section 12.4, this Agreement may not be assigned or otherwise transferred, nor may any right or obligation hereunder be assigned or transferred, by either Party without the prior written consent of the other Party. Notwithstanding the foregoing, either Party may, without the other Party’s written consent, assign or otherwise transfer this Agreement and its rights and obligations hereunder in whole or in part to (a) an Affiliate of such Party, or (b) a to a successor in interest by way of merger, consolidation, sale of stock or sale of all or substantially all of the assets of such Party to which this Agreement relates. All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.  Any assignment not in compliance with this Section 12.4 shall be void.

12.5Entire Agreement; Amendments.

 This Agreement contains the entire understanding of the Parties with respect to the subject matter hereof, and supersede all previous arrangements with respect to the subject matter hereof, whether written or oral, including the Confidentiality Agreement. This Agreement (including the Exhibits hereto) may be amended, or any term hereof modified, only by a written instrument duly executed by authorized representatives of both Parties.

12.6Notices.

 All notices which are required or permitted hereunder shall be in writing and shall be deemed to have been duly delivered and received hereunder (a) three (3) Business Days after being sent by registered or certified mail, return receipt requested, postage prepaid, (b) two (2) Business Days after being sent for next Business Day delivery, fees prepaid, via a reputable international overnight courier service, or (c) immediately upon delivery by email, by hand or by facsimile, in each case to the intended recipient as set forth below (or to such other address as the Party to whom notice is to be given may have furnished to the other Party in writing in accordance herewith):

Notices to Poseida shall be addressed to:

Poseida Therapeutics, Inc.

9390 Towne Center Drive

San Diego, CA 92121

Attention:  CEO & General Counsel

Email: [...***...]

With a copy to:

Cooley LLP

Reston Town Center

11951 Freedom Drive

14th Floor

Reston, VA 20190-5640

Attention:  Kenneth Krisko

Email: [...***...]

*** Certain Confidential Information Omitted

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Notices to Takeda shall be addressed to:

Takeda Pharmaceuticals USA, Inc.

95 Hayden Avenue

Lexington, MA 02421

Attention: Head of R&D Legal

Email: [...***...]

12.7Force Majeure.

 Neither Party shall be held liable to the other Party nor be deemed to have defaulted under or breached this Agreement for failure or delay in performing any obligation under this Agreement to the extent that such failure or delay is caused by or results from unforeseeable epidemics, embargoes, war, acts of war (whether war be declared or not), insurrections, riots, civil commotions, strikes, lockouts, fire, floods, or acts, omissions or delays in acting by any Governmental Authority or the other Party. For the avoidance of doubt, the Parties agree that the effects of the COVID-19 pandemic that is ongoing as of the Effective Date shall not be deemed unforeseeable or invoked as a force majeure hereunder. The affected Party shall notify the other Party of such force majeure circumstances as soon as reasonably practical and shall promptly undertake all reasonable efforts necessary to cure such force majeure circumstances.

12.8No Strict Construction.

 This Agreement has been prepared jointly and shall not be strictly construed against any Party.

12.9Headings.

 The captions or headings of the Sections or other subdivisions hereof are inserted only as a matter of convenience or for reference and shall have no effect on the meaning of the provisions hereof.

12.10No Implied Waivers; Rights Cumulative.

 No failure on the part of Poseida or Takeda to exercise, and no delay in exercising, any right, power, remedy or privilege under this Agreement, or provided by statute or at Law or in equity or otherwise, shall impair, prejudice or constitute a waiver of any such right, power, remedy or privilege or be construed as a waiver of any breach of this Agreement or as an acquiescence therein, nor shall any single or partial exercise of any such right, power, remedy or privilege preclude any other or further exercise thereof or the exercise of any other right, power, remedy or privilege.

12.11Severability.

 If any provision hereof should be held invalid, illegal or unenforceable in any respect in any jurisdiction, the Parties shall substitute, by mutual consent, valid provisions for such invalid, illegal or unenforceable provisions, which valid provisions best reflect the original intent of the Parties and in their economic effect are sufficiently similar to the invalid, illegal or unenforceable provisions that it can be reasonably assumed that the Parties would have entered into this Agreement with such valid provisions. In case such valid provisions cannot be agreed upon, the invalid, illegal or unenforceable of one or several provisions of this Agreement shall not affect the validity of this Agreement as a whole, unless the invalid, illegal or unenforceable provisions are of such essential importance to this Agreement that it is to be reasonably assumed that the Parties would not have entered into this Agreement without the invalid, illegal or unenforceable provisions.

12.12Interpretation.

 Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and

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“including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or therein), (b) any reference to any Laws herein shall be construed as referring to such Laws as they from time to time may be enacted, repealed or amended, (c) any reference herein to any Person shall be construed to include the Person’s successors and assigns, (d) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (e) any reference herein to the words “mutually agree” or “mutual written agreement” shall not impose any obligation on either Party to agree to any terms relating thereto or to engage in discussions relating to such terms except as such Party may determine in such Party’s sole discretion, (f) all references herein to Articles, Sections, or Exhibits shall be construed to refer to Articles, Sections and Exhibits of this Agreement, (g) the word “or” shall be construed to have the same meaning and effect as “and/or” unless the context dictates otherwise because the subjects of the conjunction are mutually exclusive, (h) a term not defined herein but reflecting a different part of speech than a term which is defined herein shall be interpreted in a correlative manner, (i) any reference in this Agreement to a “day” or a number of “days” (without explicit reference to “Business Days”) shall be interpreted as a reference to a calendar day or number of calendar days, and (j) if the last day for the exercise of any privilege or the discharge of any duty under this Agreement falls upon a day which is not a Business Day, then the Party having such privilege or duty will have until the end of the next succeeding regular Business Day to exercise such privilege or to discharge such duty. This Agreement shall be written and executed in, and all other communications under or in connection with this Agreement shall be in, the English language.  Any translation into any other language shall not be an official version thereof, and in the event of any conflict in interpretation between the English version and such translation, the English version shall control. [...***...] shall not constitute an active ingredient for the purposes of Section 1.1.20, Section 1.1.33 and Section 1.1.99.

12.13Relationship of the Parties.

 It is expressly agreed that Poseida and Takeda are independent contractors and that the relationship between the two Parties will not constitute a partnership, joint venture, or agency, including for Tax purposes. Neither Poseida nor Takeda will have the authority to make any statements, representations, or commitments of any kind, or to take any action, which will be binding on the other Party, without the prior written consent of the other Party. Nothing contained in this Agreement shall be deemed to make any member of the JSC or any subcommittee or project team a partner, agent, or legal representative of the other Party, or to create any fiduciary relationship for any purpose whatsoever. Except as may be explicitly provided in this Agreement, no member of the JSC or any subcommittee or project team will have any authority to act for, or to assume any obligation or responsibility on behalf of, any other member of the JSC, subcommittee or project team (as applicable) of the other Party.

12.14Binding Effect; No Third Party Beneficiaries.

 As of the Effective Date, this Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. Except as expressly set forth in this Agreement, no Person other than the Parties and their respective Affiliates and permitted assigns shall be deemed an intended Third Party beneficiary hereunder or have any right to enforce any obligation of this Agreement. 

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12.15Further Assurances.

 Each Party agrees to duly execute and deliver, or cause to be duly executed and delivered, such further instruments and do and cause to be done such further acts and things, including the filing of such additional assignments, agreements, documents and instruments, as the other Party may at any time and from time to time reasonably request in connection with this Agreement or to carry out more effectively the provisions and purposes of, or to better assure of and confirm unto such other Party its rights and remedies under, this Agreement.

12.16Counterparts; Electronic Signatures.

 The Parties agree that each may execute this Agreement using electronic signatures. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Facsimile signatures and signatures transmitted via PDF or electronic signatures shall be treated as original signatures.

[Remainder of This Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, Poseida and Takeda have caused this Agreement to be duly executed by their authorized representatives, as of the Effective Date.

 

	
 
	
POSEIDA THERAPEUTICS, INC.

	
 
	
 
	
 
	
By:
	
/s/ Eric M. Ostertag
	
 

	
 
	
 
	
 
	
Name: Eric M. Ostertag, M.D., Ph.D.
	
 

	
 
	
 
	
 
	
Title: Chief Executive Officer
	
 

 

 

 

[Signature Page to Collaboration and License Agreement]

 

 
 

 

 

IN WITNESS WHEREOF, Poseida and Takeda have caused this Agreement to be duly executed by their authorized representatives, as of the Effective Date.

 

	
 
	
TAKEDA PHARMACEUTICALS USA, INC.

	
 
	
 
	
 
	
By:
	
/s/ Nenad Grmusa
	
 

	
 
	
 
	
 
	
Name: Nenad Grmusa
	
 

	
 
	
 
	
 
	
Title: Head of Center for External Innovation
	
 

 

 

 

[Signature Page to Collaboration and License Agreement]

 

 
 

 

 

Exhibit 1.1.53

 

Excluded In-License Agreements

 

[...***...]

 

*** Certain Confidential Information Omitted

 

 

Exhibit 1.1.59

 

Final Data Package

 

[...***...]

 

*** Certain Confidential Information Omitted

 

 

Exhibit 1.1.72

 

In-License Agreements

[...***...]

 

*** Certain Confidential Information Omitted

 

 

Exhibit 1.1.114

Platform Evaluation Work Plan

[...***...] 

 

*** Certain Confidential Information Omitted

 

 

Exhibit 1.1.124

Poseida Platform Trademarks

[...***...]

 

 

*** Certain Confidential Information Omitted

 

 

Exhibit 1.1.125

Poseida Technology Platforms (as of the Effective Date)

[...***...]

 

 

*** Certain Confidential Information Omitted

 

 

Exhibit 1.1.141A

Hemophilia A Research Plan

[...***...]

 

 

*** Certain Confidential Information Omitted

 

 

Exhibit 1.1.141B

Phenylketonuria Research Plan

See attached.

 

*** Certain Confidential Information Omitted

 

[...***...]

 

 

 

*** Certain Confidential Information Omitted

 

 

Exhibit 1.1.165

[...***...] Indications

[...***...]

 

 

*** Certain Confidential Information Omitted

 

 

Exhibit 1.1.166

[...***...] Indications

[...***...]

 

 

*** Certain Confidential Information Omitted

 

 

Exhibit 5.2(g)(i)

Relevant Terms of In-License Agreements

 

[...***...]

 

 

*** Certain Confidential Information Omitted

 

 

Exhibit 5.2(g)(iii)

Relevant Terms of Excluded In-Licenses

[...***...]

 

 

*** Certain Confidential Information Omitted

 

 

Exhibit 8.2(b)

Form of Press Release

 

Poseida Therapeutics Announces Research Collaboration with Takeda for Novel Non-Viral In Vivo Gene Therapies

Collaboration to leverage Poseida’s non-viral piggyBac® DNA Modification System, Cas-CLOVERTM Site-Specific Gene Editing System, biodegradable DNA and RNA nanoparticle delivery technology and other proprietary genetic engineering platforms

Collaboration to initially include up to six liver- and hematopoietic stem cell (HSC)- directed indications with an option to add two additional programs

In addition to an upfront payment, Poseida is eligible to receive preclinical, development and commercial milestone payments plus tiered royalties into the double digits 

Poseida to host conference call today at 8:00am ET

SAN DIEGO Oct. 12, 2021– Poseida Therapeutics, Inc. (Nasdaq: PSTX), a clinical-stage biopharmaceutical company utilizing proprietary genetic engineering platform technologies to create cell and gene therapeutics with the capacity to cure, today announced that it has entered into a research collaboration and exclusive license agreement with Takeda Pharmaceutical Company Limited (“Takeda”) to utilize Poseida’s piggyBac, Cas-CLOVER, biodegradable DNA and RNA nanoparticle delivery technology and other proprietary genetic engineering platforms for the research and development of up to eight gene therapies. The collaboration will focus on developing non-viral in vivo gene therapy programs, including Poseida’s Hemophilia A program.

“We are excited to partner with Takeda, a global biopharmaceutical leader whose commitment to the development of novel therapies for rare diseases complements our innovative platform technologies and robust gene therapy pipeline,” said Eric Ostertag, M.D., Ph.D., Chief Executive Officer of Poseida. “Our technologies offer highly efficient gene delivery, fully integrated non-viral genome insertion and ultra-precise site-specific gene editing. Together with Takeda, we look forward to developing potential cures for a number of genetic diseases with high unmet need.” 

Under the terms of the agreement, the parties will collaborate to initially develop up to six in vivo gene therapy programs utilizing Poseida’s novel technology platforms including piggyBac, Cas-CLOVER and biodegradable nanoparticle technology, as well as certain emerging technologies.  Takeda also has an option to add two additional programs to the collaboration and is obligated to provide funding for all collaboration program R&D costs. 

Poseida will receive an upfront payment of $45 million and preclinical milestones  that together could potentially exceed $125 million in the aggregate, if milestones for six programs are achieved. Poseida is also eligible to receive future clinical development, regulatory, and commercial milestone payments with a total potential value over the course of the partnership of up to $2.7 billion if milestones for all six programs are achieved, and up to $3.6 billion if the milestones related to the two optional programs are also achieved. Poseida will lead research activities up to candidate 

 

 

selection, after which Takeda will assume responsibility for further development and commercialization. 

“Poseida’s differentiated platform technologies show great promise in developing non-viral in vivo gene therapies using their novel genetic engineering and delivery technologies that complement our existing collaborations,” said Takeda Rare Diseases Drug Discovery Unit Head, Madhu Natarajan. “This partnership reinforces Takeda’s commitment to investing in next-generation gene therapy approaches that have the potential to deliver functional cures to patients with rare genetic and hematologic diseases. We look forward to partnering with Poseida where we can apply our broad development capabilities to help progress several early stage preclinical programs.”

Poseida Therapeutics Conference Call and Webcast Information

Poseida’s management team will host a conference call and webcast at 8:00am ET today, October 12, 2021 to discuss the collaboration. The dial-in numbers for domestic and international callers are (866) 939-3921 and (678) 302-3550, respectively. The conference ID number for the call is 50242119. 

Participants may access the live webcast on the Investors & Media Section of the Poseida website, www.poseida.com. An archived replay of the webcast will be available for approximately 30 days following the event. 

About Poseida Therapeutics, Inc.

Poseida Therapeutics is a clinical-stage biopharmaceutical company dedicated to utilizing our proprietary genetic engineering platform technologies to create next generation cell and gene therapeutics with the capacity to cure. We have discovered and are developing a broad portfolio of product candidates in a variety of indications based on our core proprietary platforms, including our non-viral piggyBac DNA Modification System, Cas-CLOVER Site-Specific Gene Editing System and biodegradable nanoparticle- and AAV-based gene delivery technologies. Our core platform technologies have utility, either alone or in combination, across many cell and gene therapeutic modalities and enable us to engineer our portfolio of product candidates that are designed to overcome the primary limitations of current generation cell and gene therapeutics. To learn more, visit www.poseida.com and connect with us on Twitter and LinkedIn.

Forward-Looking Statement

Statements contained in this press release regarding matters that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include statements regarding potential payments and activities under the collaboration agreement with Takeda, the potential benefits of Poseida's technology platforms and product candidates and Poseida's plans and strategy with respect to developing its technologies and product candidates. Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements are based upon Poseida's current expectations and involve assumptions that may never materialize or may prove to be incorrect. Actual results could differ materially from those anticipated in such forward-looking statements as a result of various risks and uncertainties, which include, without limitation, the fact that the collaboration agreement with Takeda may be terminated early, the fact that Poseida will have limited control over the efforts and resources that Takeda devotes to advancing development programs 

 

 

under the collaboration agreement, risks and uncertainties associated with development and regulatory approval of novel product candidates in the biopharmaceutical industry, the fact that future preclinical and clinical results could be inconsistent with results observed to date and the other risks described in Poseida's filings with the Securities and Exchange Commission. All forward-looking statements contained in this press release speak only as of the date on which they were made. Poseida undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made, except as required by law.

###

 

Poseida Therapeutics Contacts:

Marcy Graham
VP, Corporate Affairs
Poseida Therapeutics, Inc.
858-779-3108
mgraham@poseida.com  

Sarah Thailing
Director, Corporate Communications and IR

Poseida Therapeutics
858-605-3717
sthailing@poseida.compstx-ex1023_772.htm

Exhibit 10.23

 

LOAN AND SECURITY AGREEMENT

THIS LOAN AND SECURITY AGREEMENT (as the same may from time to time be amended, modified, supplemented or restated, this “Agreement”) dated as of February 22, 2022 (the “Effective Date”) among OXFORD FINANCE LLC, a Delaware limited liability company with an office located at 115 South Union Street, Suite 300, Alexandria, VA 22314 (“Oxford”), as collateral agent (in such capacity, “Collateral Agent”), the Lenders listed on Schedule 1.1 hereof or otherwise a party hereto from time to time including Oxford in its capacity as a Lender (each a “Lender” and collectively, the “Lenders”), and POSEIDA THERAPEUTICS, INC., a Delaware corporation with offices located at 9390 Towne Centre Drive, Suite 200, San Diego, California 92121 (“Parent”), VINDICO NANOBIOTECHNOLOGY, LLC, a Delaware limited liability company and a wholly owned subsidiary of Parent with offices located at 9390 Towne Centre Drive, Suite 200, San Diego, California 92121 (“US Sub”) (Parent and the US Sub, individually and collectively, jointly and severally, “Borrower”), provides the terms on which the Lenders shall lend to Borrower and Borrower shall repay the Lenders.  The parties agree as follows:

1.ACCOUNTING AND OTHER TERMS

1.1Accounting terms not defined in this Agreement shall be construed in accordance with GAAP.  Calculations and determinations must be made in accordance with GAAP.  Capitalized terms not otherwise defined in this Agreement shall have the meanings set forth in Section 13.  All other terms contained in this Agreement, unless otherwise indicated, shall have the meaning provided by the Code to the extent such terms are defined therein.  All references to “Dollars” or “$” are United States Dollars, unless otherwise noted.

2.LOANS AND TERMS OF PAYMENT

2.1Promise to Pay.  Borrower hereby unconditionally promises to pay each Lender, the outstanding principal amount of all Term Loans advanced to Borrower by such Lender and accrued and unpaid interest thereon and any other amounts due hereunder as and when due in accordance with this Agreement.

2.2Term Loans.

(a)Availability.  Subject to the terms and conditions of this Agreement, the Lenders agree, severally and not jointly, to make term loans to Borrower on the Effective Date in an aggregate amount of Sixty Million Dollars ($60,000,000.00) according to each Lender’s Term  Loan Commitment as set forth on Schedule 1.1 hereto (such term loans are hereinafter referred to singly as a “Term Loan”, and collectively as the “Term  Loans”).  After repayment, no Term Loan may be re‐borrowed.

(b)Repayment.  Borrower shall make monthly payments of interest only commencing on the first (1st) Payment Date following the Funding Date of each Term Loan, and continuing on the Payment Date of each successive month thereafter through and including the Payment Date immediately preceding the Amortization Date.  Borrower agrees to pay, on the Funding Date of each Term Loan, any initial partial monthly interest payment otherwise due for the period between the Funding Date of such Term Loan and the first Payment Date thereof.  Commencing on the Amortization Date, and continuing on the Payment Date of each month thereafter, Borrower shall make consecutive equal monthly payments of principal, together with applicable interest, in arrears, to each Lender, as calculated by Collateral Agent (which calculations shall be deemed correct absent manifest error) based upon: (1) the amount of such Lender’s Term Loan, (2) the effective rate of interest, as determined in Section 2.3(a), and (3) a repayment schedule equal to (i) twenty-three (23) months, if the Equity Event does not occur and (ii) eleven (11) months, if the Equity Event occurs.  All unpaid principal and accrued and unpaid interest with respect to each Term Loan is due and payable in full on the Maturity Date.  Each Term Loan may only be prepaid in accordance with Sections 2.2(c) and 2.2(d).

(c)Mandatory Prepayments.  If the Term Loans are accelerated following the occurrence of an Event of Default, Borrower shall immediately pay to Lenders, payable to each Lender in accordance with its respective Pro Rata Share, an amount equal to the sum of: (i) all outstanding principal of the Term Loans plus accrued and unpaid interest thereon through the prepayment date, (ii) the Final Payment, (iii) the Prepayment Fee, plus (iv) all other Obligations that are due and payable, including Lenders’ Expenses and interest at the Default Rate with respect 

 

 

 
 

 

to any past due amounts. Notwithstanding (but without duplication with) the foregoing, on the Maturity Date, if the Final Payment had not previously been paid in full in connection with the prepayment of the Term Loans in full, Borrower shall pay to Collateral Agent, for payment to each Lender in accordance with its respective Pro Rata Share, the Final Payment in respect of the Term Loan(s).

(d)Permitted Prepayment of Term Loans.

(i)Borrower shall have the option to prepay all, but not less than all, of the Term Loans advanced by the Lenders under this Agreement, provided Borrower (i) provides written notice to Collateral Agent of its election to prepay the Term Loans at least ten (10) days prior to such prepayment, and (ii) pays to the Lenders on the date of such prepayment, payable to each Lender in accordance with its respective Pro Rata Share, an amount equal to the sum of (A) all outstanding principal of the Term Loans plus accrued and unpaid interest thereon through the prepayment date, (B) the Final Payment, (C) the Prepayment Fee, plus (D) all other Obligations that are due and payable, including Lenders’ Expenses and interest at the Default Rate with respect to any past due amounts.

(ii)Notwithstanding anything herein to the contrary, Borrower shall also have the option to prepay part of Term Loans advanced by the Lenders under this Agreement, provided Borrower (i) provides written notice to Collateral Agent of its election to prepay the Term Loans at least ten (10) days prior to such prepayment, (ii) prepays such part of the Term Loans in a denomination that is a whole number multiple of Five Million Dollars ($5,000,000.00), and (iii) pays to the Lenders on the date of such prepayment, payable to each Lender in accordance with its respective Pro Rata Share, an amount equal to the sum of (A) the portion of outstanding principal of such Term Loans plus all accrued and unpaid interest thereon through the prepayment date, (B) the applicable Final Payment, and (C) all other Obligations that are then due and payable, including Lenders’ Expenses and interest at the Default Rate with respect to any past due amounts, and (D) the applicable Prepayment Fee with respect to the portion of such Term Loans being prepaid. For the purposes of clarity, any partial prepayment shall be applied pro-rata to all outstanding amounts under each Term Loan, and shall be applied pro-rata within each Term Loan tranche to reduce amortization payments under Section 2.2(b) on a pro-rata basis.

2.3Payment of Interest on the Credit Extensions.

(a)Interest Rate.  Subject to Section 2.3(b), the principal amount outstanding under the Term Loans shall accrue interest at a floating per annum rate equal to the Basic Rate, determined by Collateral Agent on the Funding Date of the Term Loans and then monthly thereafter, which interest shall be payable monthly in arrears in accordance with Sections 2.2(b) and 2.3(e). Interest shall accrue on each Term Loan commencing on, and including, the Funding Date of such Term Loan, and shall accrue on the principal amount outstanding under such Term Loan through and including the day on which such Term Loan is paid in full.

(b)Default Rate. Immediately upon the occurrence and during the continuance of an Event of Default, Obligations shall accrue interest at a floating per annum rate equal to the rate that is otherwise applicable thereto plus five percentage points (5.00%) (the “Default Rate”).  Payment or acceptance of the increased interest rate provided in this Section 2.3(b) is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Collateral Agent.

(c)360‐Day Year.  Interest shall be computed on the basis of a three hundred sixty (360) day year, and the actual number of days elapsed.

(d)Debit of Accounts.  Collateral Agent and each Lender may debit (or ACH) any deposit accounts, maintained by Borrower or any of its Subsidiaries, including the Designated Deposit Account, for principal and interest payments or any other amounts Borrower owes the Lenders under the Loan Documents when due.  Any such debits (or ACH activity) shall not constitute a set‐off.

(e)Payments.  Except as otherwise expressly provided herein, all payments by Borrower under the Loan Documents shall be made to the respective Lender to which such payments are owed, at such Lender’s office in immediately available funds on the date specified herein. Unless otherwise provided, interest is payable monthly on the Payment Date of each month.  Payments of principal and/or interest received after 12:00 noon Eastern time are 

2

 

 
 

 

considered received at the opening of business on the next Business Day.  When a payment is due on a day that is not a Business Day, the payment is due the next Business Day and additional fees or interest, as applicable, shall continue to accrue until paid. All payments to be made by Borrower hereunder or under any other Loan Document, including payments of principal and interest, and all fees, expenses, indemnities and reimbursements, shall be made without set‐off, recoupment or counterclaim, in lawful money of the United States and in immediately available funds.

2.4Secured Promissory Notes.  The Term Loans shall be evidenced by a Secured Promissory Note or Notes in the form attached as Exhibit D hereto (each a “Secured Promissory Note”), and shall be repayable as set forth in this Agreement.  Borrower irrevocably authorizes each Lender to make or cause to be made, on or about the Funding Date of any Term Loan or at the time of receipt of any payment of principal on such Lender’s Secured Promissory Note, an appropriate notation on such Lender’s Secured Promissory Note Record reflecting the making of such Term Loan or (as the case may be) the receipt of such payment.  The outstanding amount of each Term Loan set forth on such Lender’s Secured Promissory Note Record shall be prima facie evidence of the principal amount thereof owing and unpaid to such Lender, but the failure to record, or any error in so recording, any such amount on such Lender’s Secured Promissory Note Record shall not limit or otherwise affect the obligations of Borrower under any Secured Promissory Note or any other Loan Document to make payments of principal of or interest on any Secured Promissory Note when due.  Upon receipt of an affidavit of an officer of a Lender as to the loss, theft, destruction, or mutilation of its Secured Promissory Note, Borrower shall issue, in lieu thereof, a replacement Secured Promissory Note in the same principal amount thereof and of like tenor.

2.5Fees.  Borrower shall pay to Collateral Agent:

(a)Final Payment.  The Final Payment, when due hereunder, to be shared between the Lenders in accordance with their respective Pro Rata Shares;

(b)Prepayment Fee.  The Prepayment Fee, when due hereunder, to be shared between the Lenders in accordance with their respective Pro Rata Shares; and

(c)Lenders’ Expenses.  All Lenders’ Expenses (including reasonable attorneys’ fees and expenses for documentation and negotiation of this Agreement) incurred through and after the Effective Date, when due.

2.6Withholding.  Payments received by the Lenders from Borrower hereunder will be made free and clear of and without deduction for any and all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any governmental authority (including any interest, additions to tax or penalties applicable thereto).  Specifically, however, if at any time any Governmental Authority, applicable law, regulation or international agreement requires Borrower to make any withholding or deduction from any such payment or other sum payable hereunder to the Lenders, Borrower hereby covenants and agrees that the amount due from Borrower with respect to such payment or other sum payable hereunder will be increased to the extent necessary to ensure that, after the making of such required withholding or deduction, each Lender receives a net sum equal to the sum which it would have received had no withholding or deduction been required and Borrower shall pay the full amount withheld or deducted to the relevant Governmental Authority.  Borrower will, upon request, furnish the Lenders with proof reasonably satisfactory to the Lenders indicating that Borrower has made such withholding payment; provided, however, that Borrower need not make any withholding payment if the amount or validity of such withholding payment is contested in good faith by appropriate and timely proceedings and as to which payment in full is bonded or reserved against by Borrower.  The agreements and obligations of Borrower contained in this Section 2.6 shall survive the termination of this Agreement.

3.CONDITIONS OF LOANS

3.1Conditions Precedent to Initial Credit Extension.  Each Lender’s obligation to make the initial Credit Extension is subject to the condition precedent that Collateral Agent and each Lender shall consent to or shall have received, in form and substance satisfactory to Collateral Agent and each Lender, such documents, and completion of such other matters, as Collateral Agent and each Lender may reasonably deem necessary or appropriate, including, without limitation:

3

 

 
 

 

(a)original Loan Documents, each duly executed by Borrower and each Subsidiary, as applicable;

(b)subject to the terms of the Post Closing Letter, duly executed original Control Agreements with respect to any Collateral Accounts maintained by Borrower or any of its Subsidiaries; 

(c)duly executed original Secured Promissory Notes in favor of each Lender according to its Term  Loan Commitment Percentage;

(d)the certificate(s) for the Shares, together with Assignment(s) Separate from Certificate; 

(e)the Operating Documents and good standing certificates of Borrower and its Subsidiaries certified by the Secretary of State (or equivalent agency or registered office, as applicable) of Borrower’s and such Subsidiaries’ jurisdiction of organization or formation and each jurisdiction in which Borrower and each Subsidiary is qualified to conduct business, each as of a date no earlier than thirty (30) days prior to the Effective Date;

(f)a completed Perfection Certificate for Borrower and each of its Subsidiaries;

(g)the Annual Projections, for the current calendar year;

(h)duly executed original officer’s certificate for Borrower and each Subsidiary that is a party to the Loan Documents, in a form acceptable to Collateral Agent and the Lenders;

(i)certified copies, dated as of date no earlier than thirty (30) days prior to the Effective Date, of financing statement searches, as Collateral Agent shall request, accompanied by written evidence (including any UCC termination statements) that the Liens indicated in any such financing statements either constitute Permitted Liens or have been or, in connection with the initial Credit Extension, will be terminated or released;

(j)subject to the terms of the Post Closing Letter, a landlord’s consent executed in favor of Collateral Agent in respect of all of Borrower’s San Diego headquarters;

(k)a duly executed legal opinion of counsel to Borrower dated as of the Effective Date; 

(l)evidence satisfactory to Collateral Agent and the Lenders that the insurance policies required by Section 6.5 hereof are in full force and effect, together with appropriate evidence showing loss payable and/or additional insured clauses or endorsements in favor of Collateral Agent, for the ratable benefit of the Lenders; 

(m)a copy of any applicable Registration Rights Agreement or Investors’ Rights Agreement and any amendments thereto;

(n)a payoff letter from Oxford in respect of the Existing Indebtedness; and 

(o)payment of the fees and Lenders’ Expenses then due as specified in Section 2.5 hereof.

3.2Conditions Precedent to all Credit Extensions.  The obligation of each Lender to make each Credit Extension, including the initial Credit Extension, is subject to the following conditions precedent:

(a)receipt by Collateral Agent of an executed Disbursement Letter in the form of Exhibit B attached hereto;

(b)the representations and warranties in Section 5 hereof shall be true, accurate and complete in all material respects on the date of the Disbursement Letter and on the Funding Date of each Credit Extension; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, and no Event of Default shall have occurred and be continuing or result from the Credit Extension.  Each Credit Extension is Borrower’s representation and warranty on that date that the representations and warranties in Section 5 hereof are true, accurate and complete in all material respects; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of 

4

 

 
 

 

such date;

(c)in such Lender’s sole and reasonable discretion, there has not been any Material Adverse Change; 

(d)to the extent not delivered at the Effective Date, duly executed original Secured Promissory Notes, in number, form and content acceptable to each Lender, and in favor of each Lender according to its Commitment Percentage, with respect to each Credit Extension made by such Lender after the Effective Date; and

(e)payment of the fees and Lenders’ Expenses then due as specified in Section 2.5 hereof.

3.3Covenant to Deliver.  Borrower agrees to deliver to Collateral Agent and the Lenders each item required to be delivered to Collateral Agent under this Agreement as a condition precedent to any Credit Extension.  Borrower expressly agrees that a Credit Extension made prior to the receipt by Collateral Agent or any Lender of any such item shall not constitute a waiver by Collateral Agent or any Lender of Borrower’s obligation to deliver such item, and any such Credit Extension in the absence of a required item shall be made in each Lender’s sole discretion.

3.4Procedures for Borrowing.  Subject to the prior satisfaction of all other applicable conditions to the making of a Term Loan set forth in this Agreement, to obtain a Term Loan, Borrower shall notify the Lenders (which notice shall be irrevocable) by electronic mail, facsimile, or telephone by 12:00 noon Eastern time three (3) Business Days prior to the date the Term Loan is to be made.  Together with any such electronic, facsimile or telephonic notification, Borrower shall deliver to the Lenders by electronic mail or facsimile a completed Disbursement Letter executed by a Responsible Officer or his or her designee.  The Lenders may rely on any telephone notice given by a person whom a Lender reasonably believes is a Responsible Officer or designee.  On the Funding Date, each Lender shall credit and/or transfer (as applicable) to the Designated Deposit Account, an amount equal to its Term Loan Commitment.

4.CREATION OF SECURITY INTEREST

4.1Grant of Security Interest.  Borrower hereby grants Collateral Agent, for the ratable benefit of the Lenders, to secure the payment and performance in full of all of the Obligations, a continuing security interest in, and pledges to Collateral Agent, for the ratable benefit of the Lenders, the Collateral, wherever located, whether now owned or hereafter acquired or arising, and all proceeds and products thereof.  Borrower represents, warrants, and covenants that the security interest granted herein is and shall at all times continue to be a first priority perfected security interest in the Collateral, subject only to Permitted Liens that are permitted by the terms of this Agreement to have priority to Collateral Agent’s Lien.  If Borrower shall acquire a commercial tort claim (as defined in the Code) with a value in excess of $100,000, Borrower, shall promptly notify Collateral Agent in a writing signed by Borrower, after Borrower becomes aware of such tort claim, as the case may be, of the general details thereof (and further details as may be required by Collateral Agent) and grant to Collateral Agent, for the ratable benefit of the Lenders, in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance reasonably satisfactory to Collateral Agent.

If this Agreement is terminated, Collateral Agent’s Lien in the Collateral shall continue until the Obligations (other than inchoate indemnity obligations) are repaid in full in cash.  Upon payment in full in cash of the Obligations (other than inchoate indemnity obligations) and at such time as the Lenders’ obligation to make Credit Extensions has terminated, Collateral Agent shall, at the sole cost and expense of Borrower, release its Liens in the Collateral and all rights therein shall revert to Borrower.

4.2Authorization to File Financing Statements.  Borrower hereby authorizes Collateral Agent to file financing statements or take any other action required to perfect Collateral Agent’s security interests in the Collateral, 

5

 

 
 

 

without notice to Borrower, with all appropriate jurisdictions to perfect or protect Collateral Agent’s interest or rights under the Loan Documents, including a notice that any disposition of the Collateral, except to the extent permitted by the terms of this Agreement, by Borrower, or any other Person, shall be deemed to violate the rights of Collateral Agent under the Code.

4.3Pledge of Collateral.  Borrower hereby pledges, assigns and grants to Collateral Agent, for the ratable benefit of the Lenders, a security interest in all the Shares, together with all proceeds and substitutions thereof, all cash, stock and other moneys and property paid thereon, all rights to subscribe for securities declared or granted in connection therewith, and all other cash and noncash proceeds of the foregoing, as security for the performance of the Obligations.  On the Effective Date, or, to the extent not certificated as of the Effective Date, within ten (10) days of the certification of any Shares, the certificate or certificates for the Shares (if any) will be delivered to Collateral Agent, accompanied by an instrument of assignment or share transfer form duly executed in blank by Borrower.  To the extent required by the terms and conditions governing the Shares, Borrower shall cause the books (or register of members, as applicable) of each entity whose Shares are part of the Collateral and any transfer agent to reflect the pledge of the Shares.  Upon the occurrence and during the continuance of an Event of Default hereunder, Collateral Agent may effect the transfer of any securities included in the Collateral (including but not limited to the Shares) into the name of Collateral Agent and cause new (as applicable) certificates representing such securities to be issued in the name of Collateral Agent or its transferee.  Borrower will execute and deliver such documents, and take or cause to be taken such actions, as Collateral Agent may reasonably request to perfect or continue the perfection of Collateral Agent’s security interest in the Shares.  Unless an Event of Default shall have occurred and be continuing, Borrower shall be entitled to exercise any voting rights with respect to the Shares and to give consents, waivers and ratifications in respect thereof, provided that no vote shall be cast or consent, waiver or ratification given or action taken which would be inconsistent with any of the terms of this Agreement or which would constitute or create any violation of any of such terms.  All such rights to vote and give consents, waivers and ratifications shall terminate upon the occurrence and continuance of an Event of Default.

5.REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants to Collateral Agent and the Lenders as follows:

5.1Due Organization, Authorization: Power and Authority.  Borrower and each of its Subsidiaries is duly existing and in good standing as a Registered Organization in its jurisdictions of organization, incorporation or formation and Borrower and each of its Subsidiaries is qualified and licensed to do business and is in good standing in any jurisdiction in which the conduct of its businesses or its ownership of property requires that it be qualified except where the failure to do so could not reasonably be expected to have a Material Adverse Change.  In connection with this Agreement, Borrower and each of its Subsidiaries has delivered to Collateral Agent a completed perfection certificate signed by an officer of Borrower or such Subsidiary (each as updated from time to time, as permitted hereunder, a “Perfection Certificate” and collectively, the “Perfection Certificates”).  Borrower represents and warrants that (a) Borrower and each of its Subsidiaries’ exact legal name is that which is indicated on its respective Perfection Certificate and on the signature page of each Loan Document to which it is a party; (b) Borrower and each of its Subsidiaries is an organization of the type and is organized in the jurisdiction set forth on its respective Perfection Certificate; (c) each Perfection Certificate accurately sets forth each of Borrower’s and its Subsidiaries’ organizational identification number or accurately states that Borrower or such Subsidiary has none; (d) each Perfection Certificate accurately sets forth Borrower’s and each of its Subsidiaries’ place of business, or, if more than one, its chief executive office as well as Borrower’s and each of its Subsidiaries’ mailing address (if different than its chief executive office); (e) Borrower and each of its Subsidiaries (and each of its respective predecessors) have not, in the past five (5) years, changed its jurisdiction of organization, organizational structure or type, or any organizational or registration number assigned by its jurisdiction; and (f) all other information set forth on the Perfection Certificates pertaining to Borrower and each of its Subsidiaries, is accurate and complete (it being understood and agreed that Borrower and each of its Subsidiaries may from time to time update certain information in the Perfection Certificates (including the information set forth in clause (d) above) after the Effective Date to the extent permitted by one or more specific provisions in this Agreement); such updated Perfection Certificates subject to the review and approval of Collateral Agent.  If Borrower or any of its Subsidiaries is not now a Registered Organization but later becomes one, Borrower shall notify Collateral Agent of such occurrence and provide Collateral Agent with such Person’s organizational identification number within five (5) Business Days of receiving such organizational identification number.

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The execution, delivery and performance by Borrower and each of its Subsidiaries of the Loan Documents to which it is a party have been duly authorized, and do not (i) conflict with any of Borrower’s or such Subsidiaries’ organizational documents, including its respective Operating Documents, (ii) contravene, conflict with, constitute a default under or violate any material Requirement of Law applicable thereto, (iii) contravene, conflict or violate any applicable order, writ, judgment, injunction, decree, determination or award of any Governmental Authority by which Borrower or such Subsidiary, or any of their property or assets may be bound or affected, (iv) require any action by, filing, registration, or qualification with, or Governmental Approval from, any Governmental Authority (except such Governmental Approvals which have already been obtained and are in full force and effect) or are being obtained pursuant to Section 6.1(b), or (v) constitute an event of default under any material agreement by which Borrower or any of such Subsidiaries, or their respective properties, is bound.  Neither Borrower nor any of its Subsidiaries is in default under any agreement to which it is a party or by which it or any of its assets is bound in which such default could reasonably be expected to have a Material Adverse Change.

5.2Collateral.

(a)Borrower and each its Subsidiaries have good title to, have rights in, and the power to transfer each item of the Collateral upon which it purports to grant a Lien under the Loan Documents, free and clear of any and all Liens except Permitted Liens, and neither Borrower nor any of its Subsidiaries have any Deposit Accounts, Securities Accounts, Commodity Accounts or other investment accounts other than the Collateral Accounts or the other investment accounts, if any, described in the Perfection Certificates delivered to Collateral Agent in connection herewith (as the same may be updated from time to time, provided that any such updates shall be in form and substance acceptable to Collateral Agent and each Lender, in its sole discretion) with respect of which Borrower or such Subsidiary has given Collateral Agent notice and taken such actions as are necessary to give Collateral Agent a perfected security interest therein to the extent required by Section 6.6. The Accounts are bona fide, existing obligations of the Account Debtors.

(b)On the Effective Date, except as disclosed on the Perfection Certificate on the Effective Date, (i) the Collateral is not in the possession of any third party bailee (such as a warehouse), and (ii)  no such third party bailee possesses components of the Collateral in excess of Five Hundred Thousand Dollars ($500,000).  None of the components of the Collateral with a value in excess of Five Hundred Thousand Dollars ($500,000) shall be maintained at locations other than (i) as disclosed in the Perfection Certificates on the Effective Date, (ii) with  contract manufacturers or at clinical sites, for so long as such Collateral constitutes of non-commercial clinical compounds, or as permitted pursuant to Section 6.11.

(c)All Inventory is in all material respects of good and marketable quality, free from material defects.

(d)Borrower and each of its Subsidiaries is the sole owner of the Intellectual Property each respectively purports to own, free and clear of all Liens other than Permitted Liens.  Except as noted on the Perfection Certificates, neither Borrower nor any of its Subsidiaries is a party to, nor is bound by, any material license or other material agreement with respect to which Borrower or such Subsidiary is the licensee that (i) prohibits or otherwise restricts Borrower or its Subsidiaries from granting a security interest in Borrower’s or such Subsidiaries’ interest in such material license or material agreement or any other property, or (ii) for which a default under or termination of could interfere with Collateral Agent’s or any Lender’s right to sell any Collateral.  Borrower shall provide written notice to Collateral Agent and each Lender within ten (10) days of Borrower or any of its Subsidiaries entering into or becoming bound by any license or agreement with respect to which Borrower or any Subsidiary is the licensee (other than over‐the‐counter software that is commercially available to the public).

5.3Litigation.  Except as disclosed (i) on the Perfection Certificates, or (ii) in accordance with Section 6.9 hereof, there are no actions, suits, investigations, or proceedings pending or, to the knowledge of the Responsible Officers, threatened in writing by or against Borrower or any of its Subsidiaries involving more than Five Hundred Thousand Dollars ($500,000.00).

5.4No Material Deterioration in Financial Condition; Financial Statements.  All consolidated financial statements for Borrower and its Subsidiaries, delivered to Collateral Agent fairly present, in conformity with GAAP, in all material respects the consolidated financial condition of Borrower and its Subsidiaries, and the 

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consolidated results of operations of Borrower and its Subsidiaries as of the dates and for the periods presented.  Lender understands that interim financial statements may not be audited and may be subject to normal year-end adjustments and the absence of footnotes.  There has not been any material deterioration in the consolidated financial condition of Borrower and its Subsidiaries since the date of the most recent financial statements submitted to any Lender.

5.5Solvency.  (i) Parent is Solvent and (ii) Borrower and its Subsidiaries are Solvent, on a consolidated basis.  

5.6Regulatory Compliance.  Neither Borrower nor any of its Subsidiaries is an “investment company” or a company “controlled” by an “investment company” under the Investment Company Act of 1940, as amended.  Neither Borrower nor any of its Subsidiaries is engaged as one of its important activities in extending credit for margin stock (under Regulations X, T and U of the Federal Reserve Board of Governors).  Borrower and each of its Subsidiaries has complied in all material respects with the Federal Fair Labor Standards Act.  Neither Borrower nor any of its Subsidiaries is a “holding company” or an “affiliate” of a “holding company” or a “subsidiary company” of a “holding company” as each term is defined and used in the Public Utility Holding Company Act of 2005.  Neither Borrower nor any of its Subsidiaries has violated any laws, ordinances or rules, the violation of which could reasonably be expected to have a Material Adverse Change.  Neither Borrower’s nor any of its Subsidiaries’ properties or assets has been used by Borrower or such Subsidiary or, to Borrower’s knowledge, by previous Persons, in disposing, producing, storing, treating, or transporting any hazardous substance other than in material compliance with applicable laws.  Borrower and each of its Subsidiaries has obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all Governmental Authorities that are necessary to continue their respective businesses as currently conducted.

None of Borrower, any of its Subsidiaries, or any of Borrower’s or its Subsidiaries’ Affiliates or any of their respective agents acting or benefiting in any capacity in connection with the transactions contemplated by this Agreement is (i) in violation of any Anti‐Terrorism Law, (ii) engaging in or conspiring to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding or attempts to violate, any of the prohibitions set forth in any Anti‐Terrorism Law, or (iii) is a Blocked Person.  None of Borrower, any of its Subsidiaries, or to the knowledge of Borrower and any of their Affiliates or agents, acting or benefiting in any capacity in connection with the transactions contemplated by this Agreement, (x) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person, or (y) deals in, or otherwise engages in any transaction relating to, any property or interest in property blocked pursuant to Executive Order No. 13224, any similar executive order or other Anti‐Terrorism Law.

5.7Investments.  Neither Borrower nor any of its Subsidiaries owns any stock, shares, partnership interests or other equity securities except for Permitted Investments.

5.8Tax Returns and Payments; Pension Contributions.  Borrower and each of its Subsidiaries has timely filed all required tax returns and reports, and Borrower and each of its Subsidiaries, has timely paid all foreign, federal, state, and material local taxes, assessments, deposits and contributions (i.e. local taxes, assessments, deposits and contributions in an aggregate amount of $100,000 or more) owed by Borrower and such Subsidiaries, in all jurisdictions in which Borrower or any such Subsidiary is subject to taxes, including the United States, unless such taxes are being contested in accordance with the following sentence.  Borrower and each of its Subsidiaries, may defer payment of any contested taxes, provided that Borrower or such Subsidiary, (a) in good faith contests its obligation to pay the taxes by appropriate proceedings promptly and diligently instituted and conducted, (b) notifies Collateral Agent in writing of the commencement of, and any material development in, the proceedings, and (c) posts bonds or takes any other steps required to prevent the Governmental Authority levying such contested taxes from obtaining a Lien upon any of the Collateral that is other than a “Permitted Lien.”  Neither Borrower nor any of its Subsidiaries is aware of any claims or adjustments proposed for any of Borrower’s or such Subsidiaries’, prior tax years which could result in additional taxes becoming due and payable by Borrower or its Subsidiaries.  Borrower and each of its Subsidiaries have paid all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms, and neither Borrower nor any of its Subsidiaries have, withdrawn from participation in, and have not permitted partial or complete termination of, or permitted the occurrence of any other event with respect to, any such plan which could reasonably be expected to result in any liability of Borrower or its Subsidiaries, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other Governmental Authority.

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5.9Use of Proceeds.  Borrower shall use the proceeds of the Credit Extensions solely as working capital and to fund its general business requirements in accordance with the provisions of this Agreement, and not for personal, family, household or agricultural purposes.

5.10Shares.  Borrower has full power and authority to create a first lien on the Shares and no disability or contractual obligation exists that would prohibit Borrower from pledging the Shares pursuant to this Agreement or any other applicable Loan Document.  To Borrower’s knowledge, there are no subscriptions, warrants, rights of first refusal or other restrictions on transfer relative to, or options exercisable with respect to the Shares.  The Shares have been and will be duly authorized and validly issued, and are fully paid and non-assessable.  To Borrower’s knowledge, the Shares are not the subject of any present or threatened suit, action, arbitration, administrative or other proceeding, and Borrower knows of no reasonable grounds for the institution of any such proceedings.

5.11Full Disclosure.  No written representation, warranty or other statement of Borrower or any of its Subsidiaries in any certificate or written statement given to Collateral Agent or any Lender, as of the date such representation, warranty, or other statement was made, taken together with all such written certificates and written statements given to Collateral Agent or any Lender, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained in the certificates or statements not misleading (it being recognized that the projections and forecasts provided by Borrower in good faith and based upon reasonable assumptions are not viewed as facts and that actual results during the period or periods covered by such projections and forecasts may differ from the projected or forecasted results). 

5.12Definition of “Knowledge.”  For purposes of the Loan Documents, whenever a representation or warranty is made to Borrower’s knowledge or awareness, to the “best of” Borrower’s knowledge, or with a similar qualification, knowledge or awareness means the actual knowledge, after reasonable investigation, of the Responsible Officers.

6.AFFIRMATIVE COVENANTS

Borrower shall, and shall cause each of its Subsidiaries to, do all of the following:

6.1Government Compliance.

(a)Maintain its and all its Subsidiaries’ legal existence and good standing in their respective jurisdictions of organization and maintain qualification in each jurisdiction in which the failure to so qualify could reasonably be expected to have a Material Adverse Change.  Comply with all laws, ordinances and regulations to which Borrower or any of its Subsidiaries is subject, the noncompliance with which could reasonably be expected to have a Material Adverse Change.

(b)Obtain and keep in full force and effect, all of the material Governmental Approvals necessary for the performance by Borrower and its Subsidiaries of their respective businesses and obligations under the Loan Documents and the grant of a security interest to Collateral Agent for the ratable benefit of the Lenders, in all of the Collateral.  Borrower shall promptly provide copies to Collateral Agent of any material Governmental Approvals obtained by Borrower or any of its Subsidiaries.

6.2Financial Statements, Reports, Certificates.

(a)Deliver to each Lender: 

(i)no later than thirty (30) days after the last day of each month, a company prepared consolidated balance sheet, income statement and cash flow statement covering the consolidated operations of Parent and its Subsidiaries for such month certified by a Responsible Officer and in a form reasonably acceptable to Collateral Agent; 

(ii)no later than ninety (90) days after the last day of Parent’s fiscal year or within five (5) days of filing with the SEC, audited consolidated financial statements prepared under GAAP, consistently 

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applied, together with an unqualified opinion on the financial statements from an independent certified public accounting firm acceptable to Collateral Agent in its reasonable discretion (other than any “going concern” solely in connection with the need to raise equity and negative profits); 

(iii)no later than sixty (60) days after the last day of Parent’s fiscal years, Parent’s annual financial projections for the entire current fiscal year as approved by Parent’s Board of Directors, which such annual financial projections shall be set forth in a quarter-by-quarter format (such annual financial projections as originally delivered to Collateral Agent and the Lenders are referred to herein as the “Annual Projections”; provided that, any revisions of the Annual Projections approved by Parent’s Board of Directors shall be delivered to Collateral Agent and the Lenders no later than seven (7) days after such approval); 

(iv)within five (5) days of delivery, copies of all statements, reports and notices made available to Borrower’s security holders or holders of Subordinated Debt; 

(v)within five (5) days of filing, all reports on Form 10‐K, 10‐Q and 8‐K filed with the Securities and Exchange Commission; 

(vi)prompt notice of any changes to the Operating Documents of Borrower or any of its Subsidiaries, together with any copies reflecting such amendments or changes with respect thereto;

(vii)prompt notice of any event that could reasonably be expected to materially and adversely affect the value of the Intellectual Property; 

(viii)as soon as available, but no later than thirty (30) days after the last day of each month, copies of the month‐end account statements for each Collateral Account maintained by Borrower, which statements may be provided to Collateral Agent and each Lender by Borrower or directly from the applicable institution(s); and

(ix)other information as reasonably requested by Collateral Agent or any Lender.  

Notwithstanding the foregoing, documents required to be delivered pursuant to the terms hereof (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which Borrower posts such documents, or provides a link thereto, on Borrower’s website on the internet at Borrower’s website address.

(b)Concurrently with the delivery of the financial statements specified in Section 6.2(a)(i) above but no later than thirty (30) days after the last day of each month, deliver to each Lender, a duly completed Compliance Certificate signed by a Responsible Officer.

(c)Keep proper books of record and account in accordance with GAAP in all material respects, in which full, true and correct entries shall be made of all dealings and transactions in relation to its business and activities.  Borrower shall, and shall cause each of its Subsidiaries to, allow, at the sole cost of Borrower, Collateral Agent or any Lender, during regular business hours upon reasonable prior notice (provided that no notice shall be required when an Event of Default has occurred and is continuing), to visit and inspect any of its properties, to examine and make abstracts or copies from any of its books and records, and to conduct a collateral audit and analysis of its operations and the Collateral.  Such audits shall be conducted no more often than once every year unless (and more frequently if) an Event of Default has occurred and is continuing.

(d)Deliver to Collateral Agent and Alexandria Real Estate, no later than thirty (30) days after the last day of each month in which Borrower has delivered in excess of One Hundred Thousand Dollars ($100,000) worth of new Collateral to the property located at 4242 Campus Point Court, San Diego, California, an updated, fully comprehensive, Exhibit A to the landlord lien waiver among Alexandria Real Estate, Heron Therapeutics, Inc., Borrower and Collateral Agent (the “ARE Waiver”).

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6.3Inventory; Returns.  Keep all Inventory in good and marketable condition, free from material defects.  Returns and allowances between Borrower, or any of its Subsidiaries, and their respective Account Debtors shall follow Borrower’s, or such Subsidiary’s, customary practices as they exist at the Effective Date.  Borrower must promptly notify Collateral Agent and the Lenders of all returns, recoveries, disputes and claims that involve more than Five Hundred Thousand Dollars ($500,000.00) individually or in the aggregate in any calendar year.

6.4Taxes; Pensions.  Timely file and require each of its Subsidiaries to timely file, all required tax returns and reports or extensions therefor (which are timely filed and accepted and approved by the applicable Governmental Authority) and timely pay, and require each of its Subsidiaries to timely file, all foreign, federal, state, and material local taxes, assessments, deposits and contributions (i.e. local taxes, assessments, deposits and contributions in an aggregate amount of $100,000 or more) owed by Borrower or its Subsidiaries, except for deferred payment of any taxes contested pursuant to the terms of Section 5.8 hereof, and shall deliver to Lenders, on demand, appropriate certificates attesting to such payments, and pay all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with the terms of such plans.

6.5Insurance.  Keep Borrower’s and its Subsidiaries’ business and the Collateral insured for risks and in amounts standard for companies in Borrower’s and its Subsidiaries’ industry and location and as Collateral Agent may reasonably request.  Insurance policies shall be in a form, with companies, and in amounts that are reasonably satisfactory to Collateral Agent and Lenders.  All property policies shall have a lender’s loss payable endorsement showing Collateral Agent as lender loss payee and waive subrogation against Collateral Agent, and all liability policies shall show, or have endorsements showing, Collateral Agent, as additional insured.  The Collateral Agent shall be named as lender loss payee and/or additional insured with respect to any such insurance providing coverage in respect of any Collateral, and each provider of any such insurance shall agree, by endorsement upon the policy or policies issued by it or by independent instruments furnished to the Collateral Agent, that it will give the Collateral Agent thirty (30) days prior written notice before any such policy or policies shall be materially altered or canceled.  At Collateral Agent’s request, Borrower shall deliver certified copies of policies and evidence of all premium payments.  Proceeds payable under any policy shall, at Collateral Agent’s option, be payable to Collateral Agent, for the ratable benefit of the Lenders, on account of the Obligations.  Notwithstanding the foregoing, (a) so long as no Event of Default has occurred and is continuing, Borrower shall have the option of applying the proceeds of any casualty policy up to Five Hundred Thousand Dollars ($500,000.00) with respect to any loss, but not exceeding Five Hundred Thousand Dollars ($500,000.00), in the aggregate for all losses under all casualty policies in any one year, toward the replacement or repair of destroyed or damaged property; provided that any such replaced or repaired property (i) shall be of equal or like value as the replaced or repaired Collateral and (ii) shall be deemed Collateral in which Collateral Agent has been granted a first priority security interest, and (b) after the occurrence and during the continuance of an Event of Default, all proceeds payable under such casualty policy shall, at the option of Collateral Agent, be payable to Collateral Agent, for the ratable benefit of the Lenders, on account of the Obligations.  If Borrower or any of its Subsidiaries fails to obtain insurance as required under this Section 6.5 or to pay any amount or furnish any required proof of payment to third persons, Collateral Agent and/or any Lender may make, at Borrower’s expense, all or part of such payment or obtain such insurance policies required in this Section 6.5, and take any action under the policies Collateral Agent or such Lender deems prudent.

6.6Operating Accounts.

(a)Maintain all of Borrower’s Collateral Accounts in accounts which are subject to a Control Agreement in favor of Collateral Agent, which Control Agreement must be in such form and substances as is reasonably acceptable to Collateral Agent.

(b)Borrower shall provide Collateral Agent five (5) days’ prior written notice before Borrower or any of its Subsidiaries establishes any Collateral Account.  In addition, for each Collateral Account that Borrower at any time maintains, Borrower shall cause the applicable bank or financial institution at or with which such Collateral Account is maintained to execute and deliver a Control Agreement or other appropriate instrument with respect to such Collateral Account to perfect Collateral Agent’s Lien in such Collateral Account in accordance with the terms hereunder prior to the establishment of such Collateral Account, which Control Agreement must be in such form and substance as is reasonably satisfactory to Collateral Agent and may not be terminated without prior written consent of Collateral Agent.  The provisions of the previous sentence and subsection (a) above shall not apply to (i) deposit accounts exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit 

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of Borrower’s employees and identified to Collateral Agent by Borrower as such in the Perfection Certificates and (ii) BofA Credit Card Account so long as such account is maintained exclusively for the purpose of securitizing Borrower’s Indebtedness described in clause (g) of the definition of Permitted Indebtedness and the balance in such account does not exceed Three Hundred One Thousand Dollars ($301,000.00).

(c)Neither Borrower nor any of its Subsidiaries shall maintain any Collateral Accounts except Collateral Accounts maintained in accordance with Sections 6.6(a) and (b).

6.7Protection of Intellectual Property Rights.  Borrower and each of its Subsidiaries shall: (a) use commercially reasonable efforts to protect, defend and maintain the validity and enforceability of its Intellectual Property that is material to Borrower’s business; (b) promptly advise Collateral Agent in writing of material infringement by a third party of its Intellectual Property; and (c) not allow any Intellectual Property material to Borrower’s business to be abandoned, forfeited or dedicated to the public without Collateral Agent’s prior written consent.

6.8Litigation Cooperation.  Commencing on the Effective Date and continuing through the termination of this Agreement, make available to Collateral Agent and the Lenders, without expense to Collateral Agent or the Lenders, Borrower and each of Borrower’s officers, employees and agents and Borrower’s Books, to the extent that Collateral Agent or any Lender may reasonably deem them necessary to prosecute or defend any third‐party suit or proceeding instituted by or against Collateral Agent or any Lender with respect to any Collateral or relating to Borrower.

6.9Notices of Litigation and Default.  Borrower will give prompt written notice to Collateral Agent and the Lenders of any litigation or governmental proceedings pending or threatened (in writing) against Borrower or any of its Subsidiaries, which could reasonably be expected to result in damages or costs to Borrower or any of its Subsidiaries of Five Hundred Thousand Dollars ($500,000.00) or more or which could reasonably be expected to have a Material Adverse Change.  Without limiting or contradicting any other more specific provision of this Agreement, promptly (and in any event within three (3) Business Days) upon Borrower becoming aware of the existence of any Event of Default or event which, with the giving of notice or passage of time, or both, would constitute an Event of Default, Borrower shall give written notice to Collateral Agent and the Lenders of such occurrence, which such notice shall include a reasonably detailed description of such Event of Default or event which, with the giving of notice or passage of time, or both, would constitute an Event of Default.

6.10Landlord Waivers; Bailee Waivers.  In the event that Borrower or any of its Subsidiaries that are Loan Parties, after the Effective Date, intends to add any new offices or business locations, including warehouses, or otherwise store any portion of the Collateral constituting of the books and records of the Borrower or any of its Subsidiaries or having an aggregate book value in excess of Five Hundred Thousand Dollars ($500,000.00) (other than with contract manufacturers or at clinical sites, in which case the Collateral must comprise only of non-commercial clinical compounds), or deliver any portion of the Collateral to, a bailee, in each case pursuant to Section 7.2, then Borrower or such Loan Party will first notify Collateral Agent in advance and, in the event that the new location is the chief executive office of the Borrower or such Loan Party or the Collateral at any such new location is valued in excess of exceed Five Hundred Thousand Dollars ($500,000.00) in the aggregate or constituting of the books and records of the Borrower or any Loan Party, such bailee or landlord, as applicable, must execute and deliver a bailee waiver or landlord waiver, as applicable, in form and substance reasonably satisfactory to Collateral Agent prior to the addition of any new officers or business locations, or any such storage with or delivery to any such bailee, as the case may be.  Notwithstanding the foregoing, the ARE Waiver shall still be required. 

6.11Creation/Acquisition of Subsidiaries.  In the event Borrower, or any of its Subsidiaries creates or acquires any Subsidiary, Borrower shall provide prior written notice to Collateral Agent and each Lender of the creation or acquisition of such new Subsidiary and take all such action as may be reasonably required by Collateral Agent or any Lender to cause each such Subsidiary to become a co‐Borrower hereunder or to guarantee the Obligations of Borrower under the Loan Documents and, in each case, grant a continuing pledge and security interest in and to the assets of such Subsidiary (substantially as described on Exhibit A hereto); and Borrower (or its Subsidiary, as applicable) shall grant and pledge to Collateral Agent, for the ratable benefit of the Lenders, a perfected security interest in the Shares; provided, however, that solely in the circumstance in which Borrower or any Subsidiary creates or acquires a Foreign Subsidiary in an acquisition permitted by Section 7.7 hereof or otherwise approved by the 

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Required Lenders, (i) such Foreign Subsidiary shall not be required to guarantee the Obligations of Borrower under the Loan Documents and grant a continuing pledge and security interest in and to the assets of such Foreign Subsidiary, and (ii) Borrower shall not be required to grant and pledge to Collateral Agent, for the ratable benefit of Lenders, a perfected security interest in more than sixty‐five percent (65%) of the Shares of such Foreign Subsidiary, if Borrower demonstrates to the reasonable satisfaction of Collateral Agent that such Foreign Subsidiary providing such guarantee or pledge and security interest or Borrower providing a perfected security interest in more than sixty‐five percent (65%) of the Shares would create a present and existing adverse tax consequence to Borrower under the U.S. Internal Revenue Code.

6.12Further Assurances.

(a)Execute any further instruments and take further action as Collateral Agent or any Lender reasonably requests to perfect or continue Collateral Agent’s Lien in the Collateral or to effect the purposes of this Agreement.

(b)Deliver to Collateral Agent and Lenders, within five (5) days after the same are sent or received, copies of all material correspondence, reports, documents and other filings with any Governmental Authority that could reasonably be expected to have a material adverse effect on any of the Governmental Approvals material to Borrower’s business or otherwise could reasonably be expected to have a Material Adverse Change.

7.NEGATIVE COVENANTS

Borrower shall not, and shall not permit any of its Subsidiaries to, do any of the following without the prior written consent of the Required Lenders:

7.1Dispositions.  Convey, sell, lease, transfer, assign, or otherwise dispose of (collectively, “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its business or property, except for Transfers (a) of Inventory in the ordinary course of business; (b) of worn out, surplus or obsolete Equipment; and (c) in connection with Permitted Liens, Permitted Investments and Permitted Licenses; (d) from any Subsidiary of Borrower to Borrower or between Borrowers; (e) of cash and Cash Equivalents in connection with transactions not prohibited hereunder, in the ordinary course of business and approved by the Borrower’s Board of Directors or consistent with the then applicable Annual Projections; and (f) other Transfers of property having a book value not exceeding exceed Five Hundred Thousand Dollars ($500,000.00) in the aggregate during any fiscal year.

7.2Changes in Business, Management, Ownership, or Business Locations.  (a) Engage in or permit any of its Subsidiaries to engage in any business other than the businesses engaged in by Borrower as of the Effective Date or reasonably related thereto; (b) liquidate, wind-up or dissolve; provided that any Subsidiary of the Borrower may liquidate, wind-up or dissolve itself as long as all of its assets are transferred to the Borrower or a secured Guarantor; or (c) (i) any Key Person shall cease to be employed by, or actively engaged in the management of, Borrower unless written notice thereof is provided to Collateral Agent within five (5) days of such change, or (ii) enter into any transaction or series of related transactions in which the stockholders of Borrower who were not stockholders immediately prior to the first such transaction own more than forty nine percent (49%) of the voting stock of Borrower immediately after giving effect to such transaction or related series of such transactions (other than by the sale of Borrower’s equity securities in a public offering, a private placement of public equity or to venture capital investors so long as Borrower identifies to Collateral Agent the venture capital investors prior to the closing of the transaction) (“Change of Control”).  Borrower shall not, without at least thirty (30) days’ prior written notice to Collateral Agent: (A) add any new offices or business locations, including warehouses (unless such new offices or business locations (i) contain less than Five Hundred Thousand Dollars ($500,000.00) in assets or property of Borrower or its Subsidiaries, (ii) do not contain any books or records of Borrower or its Subsidiaries, (iii) are not Borrower’s or its Subsidiaries’ chief executive office and (iv) such new locations contain only non-commercial clinical compounds); (B) change its jurisdiction of organization, (C) change its organizational structure or type, (D) change its legal name, or (E) change any organizational number (if any) assigned by its jurisdiction of organization.

7.3Mergers or Acquisitions.  Merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with any other Person, or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock, shares or property of another Person other than pursuant to a Permitted Investment. A Subsidiary 

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may merge or consolidate into another Subsidiary (provided such surviving Subsidiary is a “co‐Borrower” hereunder or has provided a secured Guaranty of Borrower’s Obligations hereunder) or with (or into) Borrower provided Borrower is the surviving legal entity, and as long as no Event of Default is occurring prior thereto or arises as a result therefrom.

7.4Indebtedness.  Create, incur, assume, or be liable for any Indebtedness, or permit any Subsidiary to do so, other than Permitted Indebtedness.

7.5Encumbrance.  Create, incur, allow, or suffer any Lien on any of its property, or assign or convey any right to receive income, including the sale of any Accounts, or permit any of its Subsidiaries to do so, except for Permitted Liens, or permit any Collateral not to be subject to the first priority security interest granted herein (except for Permitted Liens that are permitted by the terms of this Agreement to have priority over Collateral Agent’s Lien), or enter into any agreement, document, instrument or other arrangement (except with or in favor of Collateral Agent, for the ratable benefit of the Lenders) with any Person which directly or indirectly prohibits or has the effect of prohibiting Borrower, or any of its Subsidiaries, from assigning, mortgaging, pledging, granting a security interest in or upon, or encumbering any of Borrower’s or such Subsidiary’s Intellectual Property, except as is otherwise permitted in Section 7.1 hereof and the definition of “Permitted Liens” herein.

7.6Maintenance of Collateral Accounts.  Maintain any Collateral Account except pursuant to the terms of Section 6.6 hereof.

7.7Distributions; Investments. (a) Pay any dividends (other than dividends payable solely in capital stock) or make any distribution or payment in respect of or redeem, retire or purchase any capital stock or share capital except that Borrower or any Subsidiary may (i) repurchase the stock of current or former employees, officers, directors or consultants so long as such repurchases do not exceed Two Hundred Fifty Thousand Dollars ($250,000.00) in the aggregate per fiscal year (ii) repurchase stock pursuant to the right of first refusal pursuant to Parent’s bylaws, so long as such repurchases do not exceed Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate per fiscal year, (iii) repurchase the stock of current or former employees, officers, directors or consultants pursuant to stock repurchase agreements by the cancellation of indebtedness owed by such former employees provided that the aggregate amount of indebtedness cancelled pursuant to this clause (iii) does not exceed Two Hundred Fifty Thousand Dollars ($250,000) per fiscal year, (iv) make cash payments in lieu of the issuance of fractional shares upon conversion of convertible securities so long as the aggregate amount of such cash payments does not exceed Ten Thousand Dollars ($10,000.00) in any given fiscal year or (v) convert or exchange any of its convertible securities into or for other securities pursuant to the terms of such convertible securities or otherwise in exchange thereof; or (b) directly or indirectly make any Investment other than Permitted Investments, or permit any of its Subsidiaries to do so.  For the sake of clarity, Parent’s payments to its Subsidiaries for services performed by such Subsidiaries for Borrower in accordance with Section 7.8 are not prohibited under this Agreement because they are not deemed Investments.

7.8Transactions with Affiliates.  Directly or indirectly enter into or permit to exist any material transaction with any Affiliate of Borrower or any of its Subsidiaries, except for (a) transactions that are in the ordinary course of Borrower’s or such Subsidiary’s business, upon fair and reasonable terms that are no less favorable to Borrower or such Subsidiary than would be obtained in an arm’s length transaction with a non‐affiliated Person, (b) Subordinated Debt or equity investments by Borrower’s investors in Borrower or its Subsidiaries, (c) any transaction expressly allowed under Section 7.1, (d) compensation and indemnification of, and other employment arrangements with, directors, officers and employees of Borrower or any Subsidiary, in each case, entered into in the ordinary course of business in accordance with Borrower’s Annual Projections and corporate governance practices, (e) loans and advances otherwise explicitly permitted hereunder to be made to the applicable Affiliate and (f) transactions disclosed in the Borrower’s Perfection Certificates on the Effective Date (and without any amendments to the terms of such transactions which amendments would constitute such incremental or new transactions as would require consent of the Required Lenders or Collateral Agent hereunder).

7.9Subordinated Debt.  (a) Make or permit any payment on any Subordinated Debt, except under the terms of the subordination, intercreditor, or other similar agreement to which such Subordinated Debt is subject, or (b) amend any provision in any document relating to the Subordinated Debt which would increase the amount thereof or adversely affect the subordination thereof to Obligations owed to the Lenders.

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7.10Compliance.  Become an “investment company” or a company controlled by an “investment company”, under the Investment Company Act of 1940, as amended, or undertake as one of its important activities extending credit to purchase or carry margin stock (as defined in Regulation U of the Board of Governors of the Federal Reserve System), or use the proceeds of any Credit Extension for that purpose; fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or Prohibited Transaction, as defined in ERISA, to occur; fail to comply with the Federal Fair Labor Standards Act or violate any other law or regulation, if the violation could reasonably be expected to have a Material Adverse Change, or permit any of its Subsidiaries to do so; withdraw or permit any Subsidiary to withdraw from participation in, permit partial or complete termination of, or permit the occurrence of any other event with respect to, any present pension, profit sharing and deferred compensation plan which could reasonably be expected to result in any liability of Borrower or any of its Subsidiaries, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other Governmental Authority.

7.11Compliance with Anti‐Terrorism Laws.  Collateral Agent hereby notifies Borrower and each of its Subsidiaries that pursuant to the requirements of Anti‐Terrorism Laws, and Collateral Agent’s policies and practices, Collateral Agent is required to obtain, verify and record certain information and documentation that identifies Borrower and each of its Subsidiaries and their principals, which information includes the name and address of Borrower and each of its Subsidiaries and their principals and such other information that will allow Collateral Agent to identify such party in accordance with Anti‐Terrorism Laws.  Neither Borrower nor any of its Subsidiaries shall, nor shall Borrower or any of its Subsidiaries permit any Affiliate to, directly or indirectly, knowingly enter into any documents, instruments, agreements or contracts with any Person listed on the OFAC Lists.  Borrower and each of its Subsidiaries shall immediately notify Collateral Agent if Borrower or such Subsidiary has knowledge that Borrower, or any Subsidiary or Affiliate of Borrower, is listed on the OFAC Lists or (a) is convicted on, (b) pleads nolo contendere to, (c) is indicted on, or (d) is arraigned and held over on charges involving money laundering or predicate crimes to money laundering.  Neither Borrower nor any of its Subsidiaries shall, nor shall Borrower or any of its Subsidiaries, permit any Affiliate to, directly or indirectly, (i) conduct any business or engage in any transaction or dealing with any Blocked Person, including, without limitation, the making or receiving of any contribution of funds, goods or services to or for the benefit of any Blocked Person, (ii) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to Executive Order No. 13224 or any similar executive order or other Anti‐Terrorism Law, or (iii) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in Executive Order No. 13224 or other Anti‐Terrorism Law.

8.EVENTS OF DEFAULT

Any one of the following shall constitute an event of default (an “Event of Default”) under this Agreement:

8.1Payment Default.  Borrower fails to (a) make any payment of principal or interest on any Credit Extension on its due date, or (b) pay any other Obligations within three (3) Business Days after such Obligations are due and payable (which three (3) Business Day grace period shall not apply to payments due on the Maturity Date or the date of acceleration pursuant to Section 9.1 (a) hereof).  During the cure period, the failure to cure the payment default is not an Event of Default (but no Credit Extension will be made during the cure period);

8.2Covenant Default.

(a)Borrower or any of its Subsidiaries fails or neglects to perform any obligation in Sections 6.2 (Financial Statements, Reports, Certificates), 6.4 (Taxes), 6.5 (Insurance), 6.6 (Operating Accounts), 6.7 (Protection of Intellectual Property Rights), 6.9 (Notice of Litigation and Default), 6.11 (Landlord Waivers; Bailee Waivers), 6.12 (Creation/Acquisition of Subsidiaries) or 6.13 (Further Assurances) or Borrower violates any covenant in Section 7; or

(b)Borrower, or any of its Subsidiaries, fails or neglects to perform, keep, or observe any other term, provision, condition, covenant or agreement contained in this Agreement or any Loan Documents, and as to any default (other than those specified in this Section 8) under such other term, provision, condition, covenant or agreement that can be cured, has failed to cure the default within ten (10) days after the occurrence thereof; provided, however, that if the default cannot by its nature be cured within the ten (10) day period or cannot after diligent attempts by Borrower be cured within such ten (10) day period, and such default is likely to be cured within a reasonable time, 

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then Borrower shall have an additional period (which shall not in any case exceed thirty (30) days) to attempt to cure such default, and within such reasonable time period the failure to cure the default shall not be deemed an Event of Default (but no Credit Extensions shall be made during such cure period).  Grace periods provided under this Section shall not apply, among other things, to financial covenants or any other covenants set forth in subsection (a) above;

8.3Material Adverse Change.  A Material Adverse Change occurs;

8.4Attachment; Levy; Restraint on Business.

(a)(i) The service of process seeking to attach, by trustee or similar process, any funds of Borrower or any of its Subsidiaries or of any entity under control of Borrower or its Subsidiaries on deposit with any Lender or any Lender’s Affiliate or any bank or other institution at which Borrower or any of its Subsidiaries maintains a Collateral Account, or (ii) a notice of lien, levy, or assessment is filed against Borrower or any of its Subsidiaries or their respective assets by any government agency, and the same under subclauses (i) and (ii) hereof are not, within ten (10) days after the occurrence thereof, discharged or stayed (whether through the posting of a bond or otherwise); provided, however, no Credit Extensions shall be made during any ten (10) day cure period; and

(b)(i) any material portion of Borrower’s or any of its Subsidiaries’ assets is attached, seized, levied on, or comes into possession of a trustee or receiver, or (ii) any court order enjoins, restrains, or prevents Borrower or any of its Subsidiaries from conducting any part of its business;

8.5Insolvency.  (a) Borrower or, Borrower and its Subsidiaries on a consolidated basis, is or becomes Insolvent; (b) Borrower or any of its Subsidiaries begins an Insolvency Proceeding; or (c) an Insolvency Proceeding is begun against Borrower or any of its Subsidiaries and not dismissed or stayed within forty‐five (45) days (but no Credit Extensions shall be made while Borrower or any Subsidiary is Insolvent and/or until any Insolvency Proceeding is dismissed);

8.6Other Agreements.  There is a default in any agreement to which Borrower or any of its Subsidiaries is a party with a third party or parties resulting in a right by such third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount in excess of Five Hundred Thousand Dollars ($500,000.00) or that could reasonably be expected to have a Material Adverse Change; provided, however, that the Event of Default under this Section 8.6 caused by the occurrence of a breach or default under such other agreement shall be cured or waived for purposes of this Agreement upon Collateral Agent receiving written notice from the party asserting such breach or default of such cure or waiver of the breach or default under such other agreement, if at the time of such cure or waiver under such other agreement (x) Collateral Agent or any Lender has not declared an Event of Default under this Agreement and/or exercised any rights with respect thereto; (y) any such cure or waiver does not result in an Event of Default under any other provision of this Agreement or any Loan Document; and (z) in connection with any such cure or waiver under such other agreement, the terms of any agreement with such third party are not modified or amended in any manner which could in the good faith business judgment of Collateral Agent be materially less advantageous to Borrower;

8.7Judgments.  One or more judgments, orders, or decrees for the payment of money in an amount, individually or in the aggregate, of at least Five Hundred Thousand Dollars ($500,000.00) (not covered by independent third‐party insurance as to which liability has been accepted by such insurance carrier) shall be rendered against Borrower or any of its Subsidiaries and shall remain unsatisfied, unvacated, or unstayed for a period of ten (10) days after the entry thereof (provided that no Credit Extensions will be made prior to the satisfaction, vacation, or stay of such judgment, order or decree);

8.8Misrepresentations.  Borrower or any of its Subsidiaries or any Person acting for Borrower or any of its Subsidiaries makes any representation, warranty, or other statement now or later in this Agreement, any Loan Document or in any writing delivered to Collateral Agent and/or Lenders or to induce Collateral Agent and/or the Lenders to enter this Agreement or any Loan Document, and such representation, warranty, or other statement is incorrect in any material respect when made;

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8.9Subordinated Debt.  A default or breach occurs under any agreement between Borrower or any of its Subsidiaries and any creditor of Borrower or any of its Subsidiaries that signed a subordination, intercreditor, or other similar agreement with Collateral Agent or the Lenders, or any creditor that has signed such an agreement with Collateral Agent or the Lenders breaches any terms of such agreement; 

8.10Guaranty.  (a) Any Guaranty terminates or ceases for any reason to be in full force and effect; (b) any Guarantor does not perform any obligation or covenant under any Guaranty; (c) any circumstance described in Sections 8.3, 8.4, 8.5, 8.7, or 8.8 occurs with respect to any Guarantor, or (d) the death of a Guarantor who is a natural person, or the liquidation, winding up, or termination of existence of any Guarantor that is an entity;

8.11Governmental Approvals.  Any Governmental Approval issued shall have been revoked, rescinded, suspended, modified in an adverse manner, or not renewed in the ordinary course for a full term and such revocation, rescission, suspension, modification or non‐renewal has resulted in or could reasonably be expected to result in a Material Adverse Change; or

8.12Lien Priority.  Any Lien created hereunder or by any other Loan Document shall at any time fail to constitute a valid and perfected Lien on any of the Collateral purported to be secured thereby, subject to no prior or equal Lien, other than Permitted Liens which are permitted to have priority in accordance with the terms of this Agreement.

8.13Delisting.  The shares of common stock of Borrower are delisted from the Nasdaq Global Select Market because of failure to comply with continued listing standards thereof or due to a voluntary delisting (other than pursuant to a Change of Control) which results in such shares not being contemporaneously listed on any other nationally recognized stock exchange in the United States having listing standards at least as restrictive as the Nasdaq Global Select Market.

 

9.RIGHTS AND REMEDIES

9.1Rights and Remedies.

(a)Upon the occurrence and during the continuance of an Event of Default, Collateral Agent may, and at the written direction of Required Lenders shall, without notice or demand, do any or all of the following: (i) deliver notice of the Event of Default to Borrower, (ii) by notice to Borrower declare all Obligations immediately due and payable (but if an Event of Default described in Section 8.5 occurs all Obligations shall be immediately due and payable without any action by Collateral Agent or the Lenders) or (iii) by notice to Borrower suspend or terminate the obligations, if any, of the Lenders to advance money or extend credit for Borrower’s benefit under this Agreement or under any other agreement between Borrower and Collateral Agent and/or the Lenders (but if an Event of Default described in Section 8.5 occurs all obligations, if any, of the Lenders to advance money or extend credit for Borrower’s benefit under this Agreement or under any other agreement between Borrower and Collateral Agent and/or the Lenders shall be immediately terminated without any action by Collateral Agent or the Lenders).

(b)Without limiting the rights of Collateral Agent and the Lenders set forth in Section 9.1(a) above, upon the occurrence and during the continuance of an Event of Default, Collateral Agent shall have the right, without notice or demand, to do any or all of the following:

(i)foreclose upon and/or sell or otherwise liquidate, the Collateral;

(ii)apply to the Obligations any (a) balances and deposits of Borrower that Collateral Agent or any Lender holds or controls, or (b) any amount held or controlled by Collateral Agent or any Lender owing to or for the credit or the account of Borrower; and/or

(iii)commence and prosecute an Insolvency Proceeding or consent to Borrower commencing any Insolvency Proceeding.

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(c)Without limiting the rights of Collateral Agent and the Lenders set forth in Sections 9.1(a) and (b) above, upon the occurrence and during the continuance of an Event of Default, Collateral Agent shall have the right, without notice or demand, to do any or all of the following:

(i)settle or adjust disputes and claims directly with Account Debtors for amounts on terms and in any order that Collateral Agent considers advisable, notify any Person owing Borrower money of Collateral Agent’s security interest in such funds, and verify the amount of such account;

(ii)make any payments and do any acts it considers necessary or reasonable to protect the Collateral and/or its security interest in the Collateral.  Borrower shall assemble the Collateral if Collateral Agent requests and make it available in a location as Collateral Agent reasonably designates.  Collateral Agent may enter premises where the Collateral is located, take and maintain possession of any part of the Collateral, and pay, purchase, contest, or compromise any Lien which appears to be prior or superior to its security interest and pay all expenses incurred. Borrower grants Collateral Agent a license to enter and occupy any of its premises, without charge, to exercise any of Collateral Agent’s rights or remedies;

(iii)ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, and/or advertise for sale, the Collateral.  Collateral Agent is hereby granted a non‐exclusive, royalty‐free license or other right to use, without charge, Borrower’s and each of its Subsidiaries’ labels, patents, copyrights, mask works, rights of use of any name, trade secrets, trade names, trademarks, service marks, and advertising matter, or any similar property as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral and, in connection with Collateral Agent’s exercise of its rights under this Section 9.1, Borrower’s and each of its Subsidiaries’ rights under all licenses and all franchise agreements inure to Collateral Agent, for the benefit of the Lenders;

(iv)place a “hold” on any account maintained with Collateral Agent or the Lenders and/or deliver a notice of exclusive control, any entitlement order, or other directions or instructions pursuant to any Control Agreement or similar agreements providing control of any Collateral;

(v)demand and receive possession of Borrower’s Books;

(vi)appoint a receiver to seize, manage and realize any of the Collateral, and such receiver shall have any right and authority as any competent court will grant or authorize in accordance with any applicable law, including any power or authority to manage the business of Borrower or any of its Subsidiaries; and

(vii)subject to clauses 9.1(a) and (b), exercise all rights and remedies available to Collateral Agent and each Lender under the Loan Documents or at law or equity, including all remedies provided under the Code (including disposal of the Collateral pursuant to the terms thereof).

Notwithstanding any provision of this Section 9.1 to the contrary, upon the occurrence of any Event of Default, Collateral Agent shall have the right to exercise any and all remedies referenced in this Section 9.1 without the written consent of Required Lenders following the occurrence of an Exigent Circumstance.  As used in the immediately preceding sentence, “Exigent Circumstance” means any event or circumstance that, in the reasonable judgment of Collateral Agent, imminently threatens the ability of Collateral Agent to realize upon all or any material portion of the Collateral, such as, without limitation, fraudulent removal, concealment, or abscondment thereof, destruction or material waste thereof, or failure of Borrower or any of its Subsidiaries after reasonable demand to maintain or reinstate adequate casualty insurance coverage, or which, in the judgment of Collateral Agent, could reasonably be expected to result in a material diminution in value of the Collateral.

9.2Power of Attorney.  Borrower hereby irrevocably appoints Collateral Agent as its lawful attorney‐in‐fact, exercisable upon the occurrence and during the continuance of an Event of Default, to: (a) endorse Borrower’s or any of its Subsidiaries’ name on any checks or other forms of payment or security; (b) sign Borrower’s or any of its Subsidiaries’ name on any invoice or bill of lading for any Account or drafts against Account Debtors; (c) settle and adjust disputes and claims about the Accounts directly with Account Debtors, for amounts and on terms Collateral Agent determines reasonable; (d) make, settle, and adjust all claims under Borrower’s insurance policies; 

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(e) pay, contest or settle any Lien, charge, encumbrance, security interest, and adverse claim in or to the Collateral, or any judgment based thereon, or otherwise take any action to terminate or discharge the same; and (f) transfer the Collateral into the name of Collateral Agent or a third party as the Code or any applicable law permits.  Borrower hereby appoints Collateral Agent as its lawful attorney‐in‐fact to sign Borrower’s or any of its Subsidiaries’ name on any documents necessary to perfect or continue the perfection of Collateral Agent’s security interest in the Collateral regardless of whether an Event of Default has occurred until all Obligations (other than inchoate indemnity obligations) have been satisfied in full and Collateral Agent and the Lenders are under no further obligation to make Credit Extensions hereunder.  Collateral Agent’s foregoing appointment as Borrower’s or any of its Subsidiaries’ attorney in fact, and all of Collateral Agent’s rights and powers, coupled with an interest, are irrevocable until all Obligations (other than inchoate indemnity obligations) have been fully repaid and performed and Collateral Agent’s and the Lenders’ obligation to provide Credit Extensions terminates.

9.3Protective Payments.  If Borrower or any of its Subsidiaries fail to obtain the insurance called for by Section 6.5 or fails to pay any premium thereon or fails to pay any other amount which Borrower or any of its Subsidiaries is obligated to pay under this Agreement or any other Loan Document, Collateral Agent may obtain such insurance or make such payment, and all amounts so paid by Collateral Agent are Lenders’ Expenses and immediately due and payable, bearing interest at the Default Rate, and secured by the Collateral.  Collateral Agent will make reasonable efforts to provide Borrower with notice of Collateral Agent obtaining such insurance or making such payment at the time it is obtained or paid or within a reasonable time thereafter.  No such payments by Collateral Agent are deemed an agreement to make similar payments in the future or Collateral Agent’s waiver of any Event of Default.

9.4Application of Payments and Proceeds.  Notwithstanding anything to the contrary contained in this Agreement, upon the occurrence and during the continuance of an Event of Default, (a) Borrower irrevocably waives the right to direct the application of any and all payments at any time or times thereafter received by Collateral Agent from or on behalf of Borrower or any of its Subsidiaries of all or any part of the Obligations, and, as between Borrower on the one hand and Collateral Agent and Lenders on the other, Collateral Agent shall have the continuing and exclusive right to apply and to reapply any and all payments received against the Obligations in such manner as Collateral Agent may deem advisable notwithstanding any previous application by Collateral Agent, and (b) the proceeds of any sale of, or other realization upon all or any part of the Collateral shall be applied: first, to the Lenders’ Expenses; second, to accrued and unpaid interest on the Obligations (including any interest which, but for the provisions of the United States Bankruptcy Code, would have accrued on such amounts); third, to the principal amount of the Obligations outstanding; and fourth, to any other indebtedness or obligations of Borrower owing to Collateral Agent or any Lender under the Loan Documents.  Any balance remaining shall be delivered to Borrower or to whoever may be lawfully entitled to receive such balance or as a court of competent jurisdiction may direct.  In carrying out the foregoing, (x) amounts received shall be applied in the numerical order provided until exhausted prior to the application to the next succeeding category, and (y) each of the Persons entitled to receive a payment in any particular category shall receive an amount equal to its pro rata share of amounts available to be applied pursuant thereto for such category.  Any reference in this Agreement to an allocation between or sharing by the Lenders of any right, interest or obligation “ratably,” “proportionally” or in similar terms shall refer to Pro Rata Share unless expressly provided otherwise.  Collateral Agent, or if applicable, each Lender, shall promptly remit to the other Lenders such sums as may be necessary to ensure the ratable repayment of each Lender’s portion of any Term Loan and the ratable distribution of interest, fees and reimbursements paid or made by Borrower.  Notwithstanding the foregoing, a Lender receiving a scheduled payment shall not be responsible for determining whether the other Lenders also received their scheduled payment on such date; provided, however, if it is later determined that a Lender received more than its ratable share of scheduled payments made on any date or dates, then such Lender shall remit to Collateral Agent or other Lenders such sums as may be necessary to ensure the ratable payment of such scheduled payments, as instructed by Collateral Agent.  If any payment or distribution of any kind or character, whether in cash, properties or securities, shall be received by a Lender in excess of its ratable share, then the portion of such payment or distribution in excess of such Lender’s ratable share shall be received by such Lender in trust for and shall be promptly paid over to the other Lender for application to the payments of amounts due on the other Lenders’ claims.  To the extent any payment for the account of Borrower is required to be returned as a voidable transfer or otherwise, the Lenders shall contribute to one another as is necessary to ensure that such return of payment is on a pro rata basis.  If any Lender shall obtain possession of any Collateral, it shall hold such Collateral for itself and as agent and bailee for Collateral Agent and other Lenders for purposes of perfecting Collateral Agent’s security interest therein.

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9.5Liability for Collateral.  So long as Collateral Agent and the Lenders comply with reasonable banking practices regarding the safekeeping of the Collateral in the possession or under the control of Collateral Agent and the Lenders, Collateral Agent and the Lenders shall not be liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage to the Collateral; (c) any diminution in the value of the Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or other Person.  Borrower bears all risk of loss, damage or destruction of the Collateral.

9.6No Waiver; Remedies Cumulative.  Failure by Collateral Agent or any Lender, at any time or times, to require strict performance by Borrower of any provision of this Agreement or any other Loan Document shall not waive, affect, or diminish any right of Collateral Agent or any Lender thereafter to demand strict performance and compliance herewith or therewith.  No waiver hereunder shall be effective unless signed by Collateral Agent and the Required Lenders and then is only effective for the specific instance and purpose for which it is given.  The rights and remedies of Collateral Agent and the Lenders under this Agreement and the other Loan Documents are cumulative.  Collateral Agent and the Lenders have all rights and remedies provided under the Code, any applicable law, by law, or in equity.  The exercise by Collateral Agent or any Lender of one right or remedy is not an election, and Collateral Agent’s or any Lender’s waiver of any Event of Default is not a continuing waiver.  Collateral Agent’s or any Lender’s delay in exercising any remedy is not a waiver, election, or acquiescence.

9.7Demand Waiver.  Borrower waives, to the fullest extent permitted by law, demand, notice of default or dishonor, notice of payment and nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees held by Collateral Agent or any Lender on which Borrower or any Subsidiary is liable.

10.NOTICES

All notices, consents, requests, approvals, demands, or other communication (collectively, “Communication”) by any party to this Agreement or any other Loan Document must be in writing and shall be deemed to have been validly served, given, or delivered: (a) upon the earlier of actual receipt and three (3) Business Days after deposit in the U.S. mail, first class, registered or certified mail return receipt requested, with proper postage prepaid; (b) upon transmission, when sent by facsimile or electronic mail transmission; (c) one (1) Business Day after deposit with a reputable overnight courier with all charges prepaid; or (d) when delivered, if hand delivered by messenger, all of which shall be addressed to the party to be notified and sent to the address, facsimile number, or email address indicated below.  Any of Collateral Agent, Lender or Borrower may change its mailing address, facsimile number, or email address by giving the other party written notice thereof in accordance with the terms of this Section 10.

		
	
If to Borrower:
	
POSEIDA THERAPEUTICS, INC.

VINDICO NANOBIOTECHNOLOGY, LLC

9390 Towne Centre Drive, Suite 200, San Diego, California 92121

Attn: Johanna Mylet

Fax:  (619) 780-2667

Email: jmylet@poseida.com

	
 
	
 

	
with a copy (which shall not constitute notice) to:
	
Cooley LLP

3 Embarcadero Center

20th Floor

San Francisco, CA 94111-4004

Attn: Maricel Mojares-Moore

Fax:  (415) 693 2222

Email: mmoore@cooley.com

	
 
	
 

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If to Collateral Agent:
	
OXFORD FINANCE LLC

115 South Union Street 

Suite 300 

Alexandria, VA  22314

Fax: (703) 519‐5225

Email: LegalDepartment@oxfordfinance.com

	
 
	
 

	
with a copy (which shall not constitute notice) to:
	
Greenberg Traurig, LLP 

One International Place 

Boston, MA 02110 

Attn: Abdullah Malik 

Fax: (617) 897-0983 

Email: malikab@gtlaw.com

	
 
	
 

 

11.CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER, AND JUDICIAL REFERENCE

California law governs the Loan Documents without regard to principles of conflicts of law.  Borrower, Collateral Agent and each Lender each submit to the exclusive jurisdiction of the State and Federal courts in Santa Clara County, California; provided, however, that nothing in this Agreement shall be deemed to operate to preclude Collateral Agent or any Lender from bringing suit or taking other legal action in any other jurisdiction to realize on the Collateral or any other security for the Obligations, or to enforce a judgment or other court order in favor of Collateral Agent or any Lender.  Borrower expressly submits and consents in advance to such jurisdiction in any action or suit commenced in any such court, and Borrower hereby waives any objection that it may have based upon lack of personal jurisdiction, improper venue, or forum non conveniens and hereby consents to the granting of such legal or equitable relief as is deemed appropriate by such court.  Borrower hereby waives personal service of the summons, complaints, and other process issued in such action or suit and agrees that service of such summons, complaints, and other process may be made by registered or certified mail addressed to Borrower  at the address set forth in, or subsequently provided by Borrower in accordance with, Section 10 of this Agreement and that service so made shall be deemed completed upon the earlier to occur of Borrower’s actual receipt thereof or three (3) days after deposit in the U.S. mails, proper postage prepaid.

TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWER, COLLATERAL AGENT AND EACH LENDER EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR EACH PARTY TO ENTER INTO THIS AGREEMENT.  EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY, if the above waiver of the right to a trial by jury is not enforceable, the parties hereto agree that any and all disputes or controversies of any nature between them arising at any time shall be decided by a reference to a private judge, mutually selected by the parties (or, if they cannot agree, by the Presiding Judge of the Santa Clara County, California Superior Court) appointed in accordance with California Code of Civil Procedure Section 638 (or pursuant to comparable provisions of federal law if the dispute falls within the exclusive jurisdiction of the federal courts), sitting without a jury, in Santa Clara County, California; and the parties hereby submit to the jurisdiction of such court.  The reference proceedings shall be conducted pursuant to and in accordance with the provisions of California Code of Civil Procedure §§ 638 through 645.1, inclusive.  The private judge shall have the power, among others, to grant provisional relief, including without limitation, entering temporary restraining orders, issuing preliminary and permanent injunctions and appointing receivers.  All such proceedings shall be closed to the public and confidential and all records relating thereto shall be permanently sealed.  If during the course of any dispute, a party desires to seek provisional relief, but a judge has not been appointed at that point pursuant to the judicial reference procedures, then such party may apply to the Santa Clara County, California Superior Court for such 

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relief.  The proceeding before the private judge shall be conducted in the same manner as it would be before a court under the rules of evidence applicable to judicial proceedings.  The parties shall be entitled to discovery which shall be conducted in the same manner as it would be before a court under the rules of discovery applicable to judicial proceedings.  The private judge shall oversee discovery and may enforce all discovery rules and orders applicable to judicial proceedings in the same manner as a trial court judge.  The parties agree that the selected or appointed private judge shall have the power to decide all issues in the action or proceeding, whether of fact or of law, and shall report a statement of decision thereon pursuant to California Code of Civil Procedure § 644(a).  Nothing in this paragraph shall limit the right of any party at any time to exercise self‐help remedies, foreclose against collateral, or obtain provisional remedies.  The private judge shall also determine all issues relating to the applicability, interpretation, and enforceability of this paragraph.

12.GENERAL PROVISIONS

12.1Successors and Assigns. This Agreement binds and is for the benefit of the successors and permitted assigns of each party.  Borrower may not transfer, pledge or assign this Agreement or any rights or obligations under it without Collateral Agent’s and each Lender’s prior written consent (which may be granted or withheld in Collateral Agent’s and each Lender’s discretion, subject to Section 12.6).  The Lenders have the right, without the consent of or notice to Borrower, to sell, transfer, assign, pledge, negotiate, or grant participation in (any such sale, transfer, assignment, negotiation, or grant of a participation, a “Lender Transfer”) all or any part of, or any interest in, the Lenders’ obligations, rights, and benefits under this Agreement and the other Loan Documents; provided, however, that any such Lender Transfer (other than a transfer, pledge, sale or assignment to an Eligible Assignee) of its obligations, rights, and benefits under this Agreement and the other Loan Documents shall require the prior written consent of the Required Lenders (such approved assignee, an “Approved Lender”).  Borrower and Collateral Agent shall be entitled to continue to deal solely and directly with such Lender in connection with the interests so assigned until Collateral Agent shall have received and accepted an effective assignment agreement in form satisfactory to Collateral Agent executed, delivered and fully completed by the applicable parties thereto, and shall have received such other information regarding such Eligible Assignee or Approved Lender as Collateral Agent reasonably shall require.  Notwithstanding anything to the contrary contained herein, so long as no Event of Default has occurred and is continuing, no Lender Transfer (other than a Lender Transfer in connection with (x) assignments by a Lender due to a forced divestiture at the request of any regulatory agency; or (y) upon the occurrence of a default, event of default or similar occurrence with respect to a Lender’s own financing or securitization transactions) shall be permitted, without Borrower’s consent, to any Person which is an Affiliate or Subsidiary of Borrower, a direct competitor of Borrower or a vulture hedge fund, each as determined by Collateral Agent.

12.2Indemnification.  Borrower agrees to indemnify, defend and hold Collateral Agent and the Lenders and their respective directors, officers, employees, agents, attorneys, or any other Person affiliated with or representing Collateral Agent or the Lenders (each, an “Indemnified Person”) harmless against:  (a) all obligations, demands, claims, and liabilities (collectively, “Claims”) asserted by any other party in connection with; related to; following; or arising from, out of or under, the transactions contemplated by the Loan Documents; and (b) all losses or Lenders’ Expenses incurred, or paid by Indemnified Person in connection with; related to; following; or arising from, out of or under, the transactions contemplated by the Loan Documents between Collateral Agent, and/or the Lenders and Borrower (including reasonable attorneys’ fees and expenses), except for Claims and/or losses directly caused by such Indemnified Person’s  gross negligence or willful misconduct.  Borrower hereby further indemnifies, defends and holds each Indemnified Person harmless from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature whatsoever (including the fees and disbursements of counsel for such Indemnified Person) in connection with any investigative, response, remedial, administrative or judicial matter or proceeding, whether or not such Indemnified Person shall be designated a party thereto and including any such proceeding initiated by or on behalf of Borrower, and the reasonable expenses of investigation by engineers, environmental consultants and similar technical personnel and any commission, fee or compensation claimed by any broker (other than any broker retained by Collateral Agent or Lenders) asserting any right to payment for the transactions contemplated hereby which may be imposed on, incurred by or asserted against such Indemnified Person as a result of or in connection with the transactions contemplated hereby and the use or intended use of the proceeds of the loan proceeds except for liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements directly caused by such Indemnified Person’s gross negligence or willful misconduct.

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12.3Time of Essence.  Time is of the essence for the performance of all Obligations in this Agreement.

12.4Severability of Provisions.  Each provision of this Agreement is severable from every other provision in determining the enforceability of any provision.

12.5Correction of Loan Documents.  Collateral Agent and the Lenders may correct patent errors and fill in any blanks in this Agreement and the other Loan Documents consistent with the agreement of the parties.

12.6Amendments in Writing; Integration.  (a) No amendment, modification, termination or waiver of any provision of this Agreement or any other Loan Document, no approval or consent thereunder, or any consent to any departure by Borrower or any of its Subsidiaries therefrom, shall in any event be effective unless the same shall be in writing and signed by Borrower, Collateral Agent and the Required Lenders provided that:

(i)no such amendment, waiver or other modification that would have the effect of increasing or reducing a Lender’s Term Loan Commitment or Commitment Percentage shall be effective as to such Lender without such Lender’s written consent;

(ii)no such amendment, waiver or modification that would affect the rights and duties of Collateral Agent shall be effective without Collateral Agent’s written consent or signature;

(iii)no such amendment, waiver or other modification shall, unless signed by all the Lenders directly affected thereby, (A) reduce the principal of, rate of interest on or any fees with respect to any Term Loan or forgive any principal, interest (other than default interest) or fees (other than late charges) with respect to any Term Loan (B) postpone the date fixed for, or waive, any payment of principal of any Term Loan or of interest on any Term Loan (other than default interest) or any fees provided for hereunder (other than late charges or for any termination of any commitment); (C) change the definition of the term “Required Lenders” or the percentage of Lenders which shall be required for the Lenders to take any action hereunder; (D) release all or substantially all of any material portion of the Collateral, authorize Borrower to sell or otherwise dispose of all or substantially all or any material portion of the Collateral or release any Guarantor of all or any portion of the Obligations or its guaranty obligations with respect thereto, except, in each case with respect to this clause (D), as otherwise may be expressly permitted under this Agreement or the other Loan Documents (including in connection with any disposition permitted hereunder); (E) amend, waive or otherwise modify this Section 12.6 or the definitions of the terms used in this Section 12.6 insofar as the definitions affect the substance of this Section 12.6; (F) consent to the assignment, delegation or other transfer by Borrower of any of its rights and obligations under any Loan Document or release Borrower of its payment obligations under any Loan Document, except, in each case with respect to this clause (F), pursuant to a merger or consolidation permitted pursuant to this Agreement; (G) amend any of the provisions of Section 9.4 or amend any of the definitions of Pro Rata Share, Term Loan Commitment, Commitment Percentage or that provide for the Lenders to receive their Pro Rata Shares of any fees, payments, setoffs or proceeds of Collateral hereunder; (H) subordinate the Liens granted in favor of Collateral Agent securing the Obligations; or (I) amend any of the provisions of Section 12.10.  It is hereby understood and agreed that all Lenders shall be deemed directly affected by an amendment, waiver or other modification of the type described in the preceding clauses (C), (D), (E), (F), (G) and (H) of the preceding sentence;

(iv)the provisions of the foregoing clauses (i), (ii) and (iii) are subject to the provisions of any interlender or agency agreement among the Lenders and Collateral Agent pursuant to which any Lender may agree to give its consent in connection with any amendment, waiver or modification of the Loan Documents only in the event of the unanimous agreement of all Lenders.

(b)Other than as expressly provided for in Section 12.6(a)(i)‐(iii), Collateral Agent may, if requested by the Required Lenders, from time to time designate covenants in this Agreement less restrictive by notification to a representative of Borrower.

(c)This Agreement and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements.  All prior agreements, understandings, representations, 

23

 

 
 

 

warranties, and negotiations between the parties about the subject matter of this Agreement and the Loan Documents merge into this Agreement and the Loan Documents.

12.7Counterparts.  This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, is an original, and all taken together, constitute one Agreement.

12.8Survival.  All covenants, representations and warranties made in this Agreement continue in full force and effect until this Agreement has terminated pursuant to its terms and all Obligations (other than inchoate indemnity obligations and any other obligations which, by their terms, are to survive the termination of this Agreement) have been satisfied.  The obligation of Borrower in Section 12.2 to indemnify each Lender and Collateral Agent, as well as the confidentiality provisions in Section 12.9 below, shall survive until the statute of limitations with respect to such claim or cause of action shall have run.

12.9Confidentiality.  In handling any confidential information of Borrower, the Lenders and Collateral Agent shall exercise the same degree of care that it exercises for their own proprietary information, but disclosure of information may be made: (a) subject to the terms and conditions of this Agreement, to the Lenders’ and Collateral Agent’s Subsidiaries or Affiliates, or in connection with a Lender’s own financing or securitization transactions and upon the occurrence of a default, event of default or similar occurrence with respect to such financing or securitization transaction; (b) to prospective transferees (other than those identified in (a) above) or purchasers of any interest in the Credit Extensions (provided, however, the Lenders and Collateral Agent shall, except upon the occurrence and during the continuance of an Event of Default, obtain such prospective transferee’s or purchaser’s agreement to the terms of this provision or to similar confidentiality terms); (c) as required by law, regulation, subpoena, or other order; (d) to Lenders’ or Collateral Agent’s regulators or as otherwise required in connection with an examination or audit; (e) as Collateral Agent reasonably considers appropriate in exercising remedies under the Loan Documents; and (f) to third party service providers of the Lenders and/or Collateral Agent so long as such service providers have executed a confidentiality agreement with the Lenders and Collateral Agent with terms no less restrictive than those contained herein. Confidential information does not include information that either: (i) is in the public domain or in the Lenders’ and/or Collateral Agent’s possession when disclosed to the Lenders and/or Collateral Agent, or becomes part of the public domain after disclosure to the Lenders and/or Collateral Agent; or (ii) is disclosed to the Lenders and/or Collateral Agent by a third party, if the Lenders and/or Collateral Agent does not know that the third party is prohibited from disclosing the information.  Collateral Agent and the Lenders may use confidential information for any purpose, including, without limitation, for the development of client databases, reporting purposes, and market analysis.  The provisions of the immediately preceding sentence shall survive the termination of this Agreement.  The agreements provided under this Section 12.9 supersede all prior agreements, understanding, representations, warranties, and negotiations between the parties about the subject matter of this Section 12.9.

12.10Right of Set Off.  Borrower hereby grants to Collateral Agent and to each Lender, a lien, security interest and right of set off as security for all Obligations to Collateral Agent and each Lender hereunder, whether now existing or hereafter arising upon and against all deposits, credits, collateral and property, now or hereafter in the possession, custody, safekeeping or control of Collateral Agent or the Lenders or any entity under the control of Collateral Agent or the Lenders (including a Collateral Agent affiliate) or in transit to any of them.  At any time after the occurrence and during the continuance of an Event of Default, without demand or notice, Collateral Agent or the Lenders may set off the same or any part thereof and apply the same to any liability or obligation of Borrower even though unmatured and regardless of the adequacy of any other collateral securing the Obligations.  ANY AND ALL RIGHTS TO REQUIRE COLLATERAL AGENT TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

12.11Cooperation of Borrower.  If necessary, Borrower agrees to (i) execute any documents (including new Secured Promissory Notes) reasonably required to effectuate and acknowledge each assignment of a Term Loan Commitment or Loan to an assignee in accordance with Section 12.1, (ii) make Borrower’s management available to meet with Collateral Agent and prospective participants and assignees of Term Loan Commitments or Credit Extensions (which meetings shall be conducted no more often than twice every twelve months unless an Event of Default has occurred and is continuing), and (iii) assist Collateral Agent or the Lenders in the preparation of 

24

 

 
 

 

information relating to the financial affairs of Borrower as any prospective participant or assignee of a Term Loan Commitment or Term Loan reasonably may request. Subject to the provisions of Section 12.9, Borrower authorizes each Lender to disclose to any prospective participant or assignee of a Term Loan Commitment, any and all information in such Lender’s possession concerning Borrower and its financial affairs which has been delivered to such Lender by or on behalf of Borrower pursuant to this Agreement, or which has been delivered to such Lender by or on behalf of Borrower in connection with such Lender’s credit evaluation of Borrower prior to entering into this Agreement.

12.12Borrower Liability.  Either Borrower may, acting singly, request Credit Extensions hereunder.  Each Borrower hereby appoints the other as agent for the other for all purposes hereunder, including with respect to requesting Credit Extensions hereunder.  Each Borrower hereunder shall be jointly and severally obligated to repay all Credit Extensions made hereunder, regardless of which Borrower actually receives said Credit Extension, as if each Borrower hereunder directly received all Credit Extensions.  Each Borrower waives (a) any suretyship defenses available to it under the Code or any other applicable law, including, without limitation, the benefit of California Civil Code Section 2815 permitting revocation as to future transactions and the benefit of California Civil Code Sections 1432, 2809, 2810, 2819, 2839, 2845, 2847, 2848, 2849, 2850, and 2899 and 3433, and (b) any right to require Collateral Agent or any Lender to: (i) proceed against any Borrower or any other person; (ii) proceed against or exhaust any security; or (iii) pursue any other remedy.  Collateral Agent and or any Lender may exercise or not exercise any right or remedy it has against any Borrower or any security it holds (including the right to foreclose by judicial or non‐judicial sale) without affecting any Borrower’s liability.  Notwithstanding any other provision of this Agreement or other related document, each Borrower irrevocably waives all rights that it may have at law or in equity (including, without limitation, any law subrogating Borrower to the rights of Collateral Agent and the Lenders under this Agreement) to seek contribution, indemnification or any other form of reimbursement from any other Borrower, or any other Person now or hereafter primarily or secondarily liable for any of the Obligations, for any payment made by Borrower with respect to the Obligations in connection with this Agreement or otherwise and all rights that it might have to benefit from, or to participate in, any security for the Obligations as a result of any payment made by Borrower with respect to the Obligations in connection with this Agreement or otherwise.  Any agreement providing for indemnification, reimbursement or any other arrangement prohibited under this Section shall be null and void.  If any payment is made to a Borrower in contravention of this Section, such Borrower shall hold such payment in trust for Collateral Agent and the Lenders and such payment shall be promptly delivered to Collateral Agent for application to the Obligations, whether matured or unmatured.

13.DEFINITIONS

13.1Definitions.  As used in this Agreement, the following terms have the following meanings:

“Account” is any “account” as defined in the Code with such additions to such term as may hereafter be made, and includes, without limitation, all accounts receivable and other sums owing to Borrower.

“Account Debtor” is any “account debtor” as defined in the Code with such additions to such term as may hereafter be made.

“Affiliate” of any Person is a Person that owns or controls directly or indirectly the Person, any Person that controls or is controlled by or is under common control with the Person, and each of that Person’s senior executive officers, directors, partners and, for any Person that is a limited liability company, that Person’s managers and members.

“Agreement” is defined in the preamble hereof.

“Alexandria Real Estate” means ARE-SD REGION NO. 61, LLC,  a Delaware limited liability company.

 “Amortization Date” is, (i) April 1, 2025, if the Equity Event does not occur, and (ii) April 1, 2026, if the Equity Event occurs.

“Annual Projections” is defined in Section 6.2(a).

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“Anti‐Terrorism Laws” are any laws relating to terrorism or money laundering, including Executive Order No. 13224 (effective September 24, 2001), the USA PATRIOT Act, the laws comprising or implementing the Bank Secrecy Act, and the laws administered by OFAC.

“Approved Fund” is any (a) Person, investment company, fund, securitization vehicle or conduit that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (i) a Lender, (ii) an Affiliate of a Lender, or (iii) a Person (other than a natural person) or an Affiliate of a Person (other than a natural person) that administers or manages a Lender, or (b) any Person (other than a natural person) which temporarily warehouses loans, or provides financing or securitizations, in each case, for any Lender or any entity described in the preceding clause (a).

“Approved Lender” is defined in Section 12.1.

“Basic Rate” is, with respect to a Term Loan, the per annum rate of interest (based on a year of three hundred sixty (360) days) equal to the greater of (i) seven and ninety-four hundredths percent (7.94%) and (ii) the sum of (a) the thirty (30) day U.S. LIBOR rate reported in The Wall Street Journal on the last Business Day of the month that immediately precedes the month in which the interest will accrue, plus (b) seven and eighty-three hundredths percent (7.83%).  Notwithstanding the foregoing, the Basic Rate for the Term Loan for the period from the Effective Date through and including February 28, 2022 shall be seven and ninety-four hundredths percent (7.94%).  Notwithstanding anything to the contrary herein or in any other Loan Document, upon the occurrence of a LIBOR Transition Event, Collateral Agent may amend this Agreement to replace the Basic Rate with a LIBOR Replacement Rate. Any such amendment with respect to a LIBOR Transition Event will become effective at 5:00 p.m. (Eastern Standard Time) on the third Business Day after Collateral Agent has notified Borrower of such amendment.  Any determination, decision or election that may be made by Collateral Agent pursuant hereto will be conclusive and binding absent manifest error and may be made in Collateral Agent’s sole discretion and without consent from any other party.

“Blocked Person” is any Person:  (a) listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224, (b) a Person owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224, (c) a Person with which any Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti‐Terrorism Law, (d) a Person that commits, threatens or conspires to commit or supports “terrorism” as defined in Executive Order No. 13224, or (e) a Person that is named a “specially designated national” or “blocked person” on the most current list published by OFAC or other similar list.

“BofA Credit Card Account” is Borrower’s account numbered ******2921 maintained with Bank of America exclusively for the purposes of securitizing the Borrower’s Indebtedness described in clause (g) of the definition of Permitted Indebtedness.

“Borrower” is defined in the preamble hereof.

“Borrower’s Books” are Borrower’s or any of its Subsidiaries’ books and records including ledgers, federal, and state tax returns, records regarding Borrower’s or its Subsidiaries’ assets or liabilities, the Collateral, business operations or financial condition, and all computer programs or storage or any equipment containing such information.

“Business Day” is any day that is not a Saturday, Sunday or a day on which Collateral Agent is closed.

“Cash Equivalents” are (a) marketable direct obligations issued or unconditionally guaranteed by the United States or any agency or any State thereof having maturities of not more than one (1) year from the date of acquisition; (b) commercial paper maturing no more than one (1) year after its creation and having the highest rating from either Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc., and (c) certificates of deposit maturing no more than one (1) year after issue provided that the account in which any such certificate of deposit is maintained is subject to a Control Agreement in favor of Collateral Agent.  For the avoidance of doubt, the direct purchase by Borrower or any of its Subsidiaries of any Auction Rate Securities, or purchasing participations in, or entering into any type of swap or other derivative transaction, or otherwise holding or engaging in any ownership interest in any type of Auction 

26

 

 
 

 

Rate Security by Borrower or any of its Subsidiaries shall be conclusively determined by the Lenders as an ineligible Cash Equivalent, and any such transaction shall expressly violate each other provision of this Agreement governing Permitted Investments.  Notwithstanding the foregoing, Cash Equivalents does not include and Borrower, and each of its Subsidiaries, are prohibited from purchasing, purchasing participations in, entering into any type of swap or other equivalent derivative transaction, or otherwise holding or engaging in any ownership interest in any type of debt instrument, including, without limitation, any corporate or municipal bonds with a long‐term nominal maturity for which the interest rate is reset through a dutch auction and more commonly referred to as an auction rate security (each, an “Auction Rate Security”).

“Claims” are defined in Section 12.2.

“Code” is the Uniform Commercial Code, as the same may, from time to time, be enacted and in effect in the State of California; provided, that, to the extent that the Code is used to define any term herein or in any Loan Document and such term is defined differently in different Articles or Divisions of the Code, the definition of such term contained in Article or Division 9 shall govern; provided further, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, or priority of, or remedies with respect to, Collateral Agent’s Lien on any Collateral is governed by the Uniform Commercial Code in effect in a jurisdiction other than the State of California, the term “Code” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority, or remedies and for purposes of definitions relating to such provisions.

“Collateral” is any and all properties, rights and assets of Borrower described on Exhibit A. 

“Collateral Account” is any Deposit Account, Securities Account, or Commodity Account, or any other bank account maintained by Borrower or any Subsidiary at any time.

“Collateral Agent” is, Oxford, not in its individual capacity, but solely in its capacity as agent on behalf of and for the benefit of the Lenders.

“Commitment Percentage” is set forth in Schedule 1.1, as amended from time to time.

“Commodity Account” is any “commodity account” as defined in the Code with such additions to such term as may hereafter be made.

“Communication” is defined in Section 10.

“Compliance Certificate” is that certain certificate in the form attached hereto as Exhibit C.

“Contingent Obligation” is, for any Person, any direct or indirect liability, contingent or not, of that Person for (a) any indebtedness, lease, dividend, letter of credit or other obligation of another such as an obligation directly or indirectly guaranteed, endorsed, co‐made, discounted or sold with recourse by that Person, or for which that Person is directly or indirectly liable; (b) any obligations for undrawn letters of credit for the account of that Person; and (c) all obligations from any interest rate, currency or commodity swap agreement, interest rate cap or collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices; but “Contingent Obligation” does not include endorsements in the ordinary course of business.  The amount of a Contingent Obligation is the stated or determined amount of the primary obligation for which the Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated liability for it determined by the Person in good faith; but the amount may not exceed the maximum of the obligations under any guarantee or other support arrangement.

“Control Agreement” is any control agreement entered into among the depository institution at which Borrower or any of its Subsidiaries maintains a Deposit Account or the securities intermediary or commodity intermediary at which Borrower or any of its Subsidiaries maintains a Securities Account or a Commodity Account, Borrower and such Subsidiary, and Collateral Agent pursuant to which Collateral Agent obtains control (within the 

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meaning of the Code) for the benefit of the Lenders over such Deposit Account, Securities Account, or Commodity Account.

“Copyrights” are any and all copyright rights, copyright applications, copyright registrations and like protections in each work or authorship and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret.

“Credit Extension” is any Term Loan or any other extension of credit by Collateral Agent or Lenders for Borrower’s benefit.

“Default Rate” is defined in Section 2.3(b).

“Deposit Account” is any “deposit account” as defined in the Code with such additions to such term as may hereafter be made.

“Designated Deposit Account” is Borrower’s deposit account, account number x-5888, maintained with Bank of America.

“Disbursement Letter” is that certain form attached hereto as Exhibit B.

“Dollars,” “dollars” and “$” each mean lawful money of the United States.

“Effective Date” is defined in the preamble of this Agreement.

“Eligible Assignee” is (i) a Lender, (ii) an Affiliate of a Lender, (iii) an Approved Fund and (iv) any commercial bank, savings and loan association or savings bank or any other entity which is an “accredited investor” (as defined in Regulation D under the Securities Act of 1933, as amended) and which extends credit or buys loans as one of its businesses, including insurance companies, mutual funds, lease financing companies and commercial finance companies, in each case, which either (A) has a rating of BBB or higher from Standard & Poor’s Rating Group and a rating of Baa2 or higher from Moody’s Investors Service, Inc. at the date that it becomes a Lender or (B) has total assets in excess of Five Billion Dollars ($5,000,000,000.00), and in each case of clauses (i) through (iv), which, through its applicable lending office, is capable of lending to Borrower without the imposition of any withholding or similar taxes; provided that notwithstanding the foregoing, “Eligible Assignee” shall not include, unless an Event of Default has occurred and is continuing, (i) Borrower or any of Borrower’s Affiliates or Subsidiaries or (ii) a direct competitor of Borrower or a vulture hedge fund, each as determined by Collateral Agent.  Notwithstanding the foregoing, (x) in connection with assignments by a Lender due to a forced divestiture at the request of any regulatory agency, the restrictions set forth herein shall not apply and Eligible Assignee shall mean any Person or party and (y) in connection with a Lender’s own financing or securitization transactions, the restrictions set forth herein shall not apply and Eligible Assignee shall mean any Person or party providing such financing or formed to undertake such securitization transaction and any transferee of such Person or party upon the occurrence of a default, event of default or similar occurrence with respect to such financing or securitization transaction; provided that no such sale, transfer, pledge or assignment under this clause (y) shall release such Lender from any of its obligations hereunder or substitute any such Person or party for such Lender as a party hereto until Collateral Agent shall have received and accepted an effective assignment agreement from such Person or party in form satisfactory to Collateral Agent executed, delivered and fully completed by the applicable parties thereto, and shall have received such other information regarding such Eligible Assignee as Collateral Agent reasonably shall require.

“Equipment” is all “equipment” as defined in the Code with such additions to such term as may hereafter be made, and includes without limitation all machinery, fixtures, goods, vehicles (including motor vehicles and trailers), and any interest in any of the foregoing.

“Equity Event” is the receipt by Borrower on or after the Effective Date and on or before March 31, 2025, of unrestricted net cash proceeds of not less than One Hundred Fifty Million Dollars ($150,000,000.00) from (i) the issuance and sale by Borrower of its equity securities and/or (ii) “up front” or milestone payments in connection with a joint venture, collaboration or other partnering transaction.

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“ERISA” is the Employee Retirement Income Security Act of 1974, as amended, and its regulations.

“Event of Default” is defined in Section 8.

“Existing Indebtedness” is the indebtedness of Borrower to Oxford in the aggregate principal outstanding amount as of the Effective Date of approximately Thirty Million Dollars ($30,000,000.00) pursuant to that certain Loan and Security Agreement, dated July 25, 2017, entered into by and between Oxford, other lenders party thereto from time to time and Borrower.

“Federal Reserve Bank of New York’s Website” means the website of the Federal Reserve Bank of New York at http://www.newyorkfed.org, or any successor source.

“Final Payment” is a payment (in addition to and not a substitution for the regular monthly payments of principal plus accrued interest) due on the earliest to occur of (a) the Maturity Date, or (b) the acceleration of any Term Loan, or (c) the prepayment of a Term Loan pursuant to Section 2.2(c) or (d), equal to the original principal amount of such Term Loan funded multiplied by the Final Payment Percentage, payable to Lenders in accordance with their respective Pro Rata Shares.  For the avoidance of doubt, the calculation of any Final Payment shall not include the principal amount prepaid in accordance with Section 2.2(d)(ii) if a Final Payment based on such principal amount was made at the time of such prepayment.

“Final Payment Percentage” is seven and fifty hundredths percent (7.50%).

“Foreign Subsidiary” is a Subsidiary that is not an entity organized under the laws of the United States or any territory thereof.

“Funding Date” is any date on which a Credit Extension is made to or on account of Borrower which shall be a Business Day.

“GAAP” is generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other Person as may be approved by a significant segment of the accounting profession in the United States, which are applicable to the circumstances as of the date of determination.

“General Intangibles” are all “general intangibles” as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made, and includes without limitation, all copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative work, whether published or unpublished, any patents, trademarks, service marks and, to the extent permitted under applicable law, any applications therefor, whether registered or not, any trade secret rights, including any rights to unpatented inventions, payment intangibles, royalties, contract rights, goodwill, franchise agreements, purchase orders, customer lists, route lists, telephone numbers, domain names, claims, income and other tax refunds, security and other deposits, options to purchase or sell real or personal property, rights in all litigation presently or hereafter pending (whether in contract, tort or otherwise), insurance policies (including without limitation key man, property damage, and business interruption insurance), payments of insurance and rights to payment of any kind.

“Governmental Approval” is any consent, authorization, approval, order, license, franchise, permit, certificate, accreditation, registration, filing or notice, of, issued by, from or to, or other act by or in respect of, any Governmental Authority.

“Governmental Authority” is any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any self‐regulatory organization.

“Guarantor” is any Person providing a Guaranty in favor of Collateral Agent.

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“Guaranty” is any guarantee of all or any part of the Obligations, as the same may from time to time be amended, restated, modified or otherwise supplemented.

“Indebtedness” is (a) indebtedness for borrowed money or the deferred price of property or services, such as reimbursement and other obligations for surety bonds and letters of credit, (b) obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital lease obligations (excluding real property operating leases), and (d) Contingent Obligations.

“Indemnified Person” is defined in Section 12.2.

“Insolvency Proceeding” is any proceeding by or against any Person under the United States Bankruptcy Code, or any other bankruptcy or insolvency law, including assignments for the benefit of creditors, compositions, extensions generally with its creditors, or proceedings seeking reorganization, arrangement, or other relief.

“Insolvent” means not Solvent.

“Intellectual Property” means all of Borrower’s or any Subsidiary’s right, title and interest in and to the following:

(a)its Copyrights, Trademarks and Patents;

(b)any and all trade secrets and trade secret rights, including, without limitation, any rights to unpatented inventions, know‐how, operating manuals;

(c)any and all source code;

(d)any and all design rights which may be available to Borrower;

(e)any and all claims for damages by way of past, present and future infringement of any of the foregoing, with the right, but not the obligation, to sue for and collect such damages for said use or infringement of the Intellectual Property rights identified above; and

(f)all amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents.

“Inventory” is all “inventory” as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made, and includes without limitation all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products, including without limitation such inventory as is temporarily out of any Person’s custody or possession or in transit and including any returned goods and any documents of title representing any of the above.

“Investment” is any beneficial ownership interest in any Person (including stock, partnership interest or other securities), and any loan, advance, payment or capital contribution to any Person.

“Key Person” is each of Borrower’s (i) Chief Executive Officer, who is Mark J. Gergen as the Effective Date and (ii) Chief Financial Officer, who is Johanna Mylet as of the Effective Date.

“Lender” is any one of the Lenders.

“Lenders” are the Persons identified on Schedule 1.1 hereto and each assignee that becomes a party to this Agreement pursuant to Section 12.1.

“Lenders’ Expenses” are all audit fees and expenses, costs, and expenses (including reasonable attorneys’ fees and expenses, as well as appraisal fees, fees incurred on account of lien searches, inspection fees, and filing fees) for preparing, amending, negotiating, administering, defending and enforcing the Loan Documents (including, without 

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limitation, those incurred in connection with appeals or Insolvency Proceedings) or otherwise incurred by Collateral Agent and/or the Lenders in connection with the Loan Documents.

“LIBOR Replacement Rate” means the sum of: (a) the alternate benchmark rate (which may include SOFR) that has been selected by Collateral Agent giving due consideration to (i) any selection or recommendation of a replacement rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a rate of interest as a replacement to the LIBOR rate for U.S. dollar-denominated syndicated credit facilities and (b) the LIBOR Replacement Spread; provided that, if the LIBOR Replacement Rate as so determined would be less than zero, the LIBOR Replacement Rate will be deemed to be zero for the purposes of this Agreement.

“LIBOR Replacement Spread” means, with respect to any replacement of the Basic Rate, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by Collateral Agent giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of the LIBOR rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of the LIBOR rate for U.S. dollar-denominated syndicated credit facilities at such time.

“LIBOR Transition Event” means the occurrence of one or more of the following events with respect to the LIBOR rate: 

(1)    a public statement or publication of information by or on behalf of the administrator of the LIBOR rate announcing that such administrator has ceased or will cease to provide the LIBOR rate, permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the LIBOR rate; 

(2)   a public statement or publication of information by the regulatory supervisor for the administrator of the LIBOR rate, the U.S. Federal Reserve System, an insolvency official with jurisdiction over the administrator for the LIBOR rate, a resolution authority with jurisdiction over the administrator for the LIBOR rate or a court or an entity with similar insolvency or resolution authority over the administrator for the LIBOR rate, which states that the administrator of the LIBOR rate has ceased or will cease to provide the LIBOR rate permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the LIBOR rate; or

(3)   a public statement or publication of information by the regulatory supervisor for the administrator of the LIBOR rate announcing that the LIBOR rate is no longer representative.

“Lien” is a claim, mortgage, deed of trust, levy, charge, pledge, security interest, or other encumbrance of any kind, whether voluntarily incurred or arising by operation of law or otherwise against any property.

“Loan Documents” are, collectively, this Agreement, the Perfection Certificates, each Compliance Certificate, each Disbursement Letter, the Post Closing Letter, any subordination agreements, any note, or notes or guaranties executed by Borrower or any other Person, and any other present or future agreement entered into by Borrower, any Guarantor or any other Person for the benefit of the Lenders and Collateral Agent in connection with this Agreement; all as amended, restated, or otherwise modified.

“Loan Party” means Borrower and each Subsidiary that becomes a Guarantor.

“Material Adverse Change” is (a) a material impairment in the perfection or priority of Collateral Agent’s Lien in the Collateral or in the value of such Collateral; (b) a material adverse change in the business, operations or condition (financial or otherwise) of Borrower or Borrower and its Subsidiaries on a consolidated basis; or (c) a material impairment of the prospect of repayment of any portion of the Obligations.

“Maturity Date” is, for each Term Loan, February 1, 2027.

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“Obligations” are all of Borrower’s obligations to pay when due any debts, principal, interest, Lenders’ Expenses, the Prepayment Fee, the Final Payment, and other amounts Borrower owes the Lenders now or later, in connection with, related to, following, or arising from, out of or under, this Agreement or, the other Loan Documents (other than the Warrants), or otherwise, and including interest accruing after Insolvency Proceedings begin (whether or not allowed) and debts, liabilities, or obligations of Borrower assigned to the Lenders and/or Collateral Agent, and the performance of Borrower’s duties under the Loan Documents (other than the Warrants).

“OFAC” is the U.S. Department of Treasury Office of Foreign Assets Control.

“OFAC Lists” are, collectively, the Specially Designated Nationals and Blocked Persons List maintained by OFAC pursuant to Executive Order No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001) and/or any other list of terrorists or other restricted Persons maintained pursuant to any of the rules and regulations of OFAC or pursuant to any other applicable Executive Orders.

“Operating Documents” are, for any Person, such Person’s formation documents, as certified by the Secretary of State (or equivalent agency) of such Person’s jurisdiction of organization on a date that is no earlier than thirty (30) days prior to the Effective Date, and, (a) if such Person is a corporation, its bylaws in current form, (b) if such Person is a limited liability company, its limited liability company agreement (or similar agreement), (c) if such Person is a partnership, its partnership agreement (or similar agreement), each of the foregoing with all current amendments or modifications thereto and (d) if such Person is an exempted company, its certificate of incorporation, statutory registers, and memorandum and articles of association.

“Patents” means all patents, patent applications and like protections including without limitation improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same.

“Payment Date” is the first (1st) calendar day of each calendar month, commencing on April 1, 2022.

“Perfection Certificate” and “Perfection Certificates” is defined in Section 5.1.

“Permitted Indebtedness” is:

(a)Borrower’s Indebtedness to the Lenders and Collateral Agent under this Agreement and the other Loan Documents;

(b)Indebtedness existing on the Effective Date and disclosed on the Perfection Certificate(s);

(c)Subordinated Debt;

(d)unsecured Indebtedness to trade creditors incurred in the ordinary course of business;

(e)Indebtedness consisting of capitalized lease obligations and purchase money Indebtedness, in each case incurred by Borrower or any of its Subsidiaries to finance the acquisition, repair, improvement or construction of fixed or capital assets of such person, provided that (i) the aggregate outstanding principal amount of all such Indebtedness does not exceed Five Hundred Thousand Dollars ($500,000.00) at any time and (ii) the principal amount of such Indebtedness does not exceed the lower of the cost or fair market value of the property so acquired or built or of such repairs or improvements financed with such Indebtedness (each measured at the time of such acquisition, repair, improvement or construction is made);

(f)Indebtedness incurred as a result of endorsing negotiable instruments received in the ordinary course of Borrower’s business; 

(g)Indebtedness with respect to corporate credit cards issued Bank of America (for the Borrower or any Subsidiary) in an aggregate amount outstanding at any time not to exceed Three Hundred Thousand Dollars ($300,000.00);

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(h)all obligations arising under any interest rate, currency or commodity swap agreement, interest rate cap agreement, interest rate collar agreement, or other agreement or arrangement designated to protect Borrower or a Subsidiary against fluctuation in interest rates, currency exchange rates or commodity prices; provided the aggregate amount of Indebtedness under this clause (h) may not exceed Two Hundred Fifty Thousand Dollars ($250,000.00) at any given time;

(i)Indebtedness in respect of letters of credit, bank guarantees and similar instruments issued for the account of the Borrower or any Subsidiary in the ordinary course of business supporting obligations under (A) workers’ compensation, unemployment insurance and other social security laws and (B) bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and obligations of a like nature; provided the aggregate amount of Indebtedness under this clause (i) may not exceed Two Hundred Fifty Thousand Dollars ($250,000.00) at any given time

(j)Indebtedness  constituting or consisting of Investments under clause (f) of the definition of “Permitted Investments” but without duplication;

(k)Other unsecured Indebtedness not to exceed Five Hundred Thousand Dollars ($500,000.00) in the aggregate at any time; and

(l)extensions, refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness (a) through (k) above, provided that the principal amount thereof is not increased or the terms thereof are not modified to impose materially more burdensome terms upon Borrower, or its Subsidiary, as the case may be.

“Permitted Investments” are:

(a)Investments disclosed on the Perfection Certificate(s) and existing on the Effective Date; 

(b)(i) Investments consisting of cash and Cash Equivalents, and (ii) any other Investments permitted by Borrower’s investment policy, as amended from time to time, provided that such investment policy (and any such amendment thereto) has been approved in writing by Collateral Agent (and Collateral Agent acknowledges the investment policy delivered on or prior to the Effective Date is hereby approved);

(c)Investments consisting of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of Borrower;

(d)Investments consisting of deposit, securities and/or commodities accounts in which Collateral Agent has a perfected security interest (and which, in case of the securities and commodities accounts are maintained in accordance with Borrower’s Investment Policy);

(e)Investments in connection with Transfers permitted by Section 7.1;

(f)Investments (i) by Borrower or any Subsidiary in Subsidiaries that are not Loan Parties, provide that the aggregate amount of all such Investments does not exceed Two Hundred Fifty Thousand Dollars ($250,000.00) in the aggregate in any fiscal year; and (ii) by Borrower or any Subsidiary in or to any Loan Party;

(g)Investments consisting of (i) travel advances and employee relocation loans and other employee loans and advances in the ordinary course of business, and (ii) loans to employees, officers or directors relating to the purchase of equity securities of Borrower or its Subsidiaries pursuant to employee stock purchase plans or agreements approved by Borrower’s Board of Directors; not to exceed Two Hundred Fifty Thousand Dollars ($250,000.00) in the aggregate for (i) and (ii) in any fiscal year;

(h)Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of business;

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(i)Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business; provided that this paragraph (h) shall not apply to Investments of Borrower in any Subsidiary; 

(j)non-cash Investments in joint ventures or strategic alliances in the ordinary course of Borrower’s business consisting of the non‐exclusive licensing of technology, the development of technology or the providing of technical support

(k)Investments constituting interest rate, currency or commodity swap agreement, interest rate cap agreement, interest rate collar agreement, or other agreement or arrangement designated to protect Borrower or a Subsidiary against fluctuation in interest rates, currency exchange rates or commodity prices; provided, that the aggregate amount of Investments allowed under this clause (k) shall not exceed Two Hundred Fifty Thousand Dollars ($250,000.00) in any given fiscal year; 

(l)Investments in joint ventures or strategic alliances in the ordinary course of Borrower’s business, provided that any cash investments by Borrower do not exceed Two Hundred Thousand Dollars ($250,000) in the aggregate in any fiscal year; and

(m)other Investments not otherwise permitted herein provided that the aggregate amount of all such Investments in any year shall not exceed Five Hundred Thousand Dollars ($500,000.00).

 “Permitted Licenses” are (A) licenses of over-the-counter software that is commercially available to the public, and (B) non‐exclusive and exclusive licenses for the use of the Intellectual Property of Borrower or any of its Subsidiaries entered into in the ordinary course of business, provided, that, with respect to each such license described in clause (B), (i) no Event of Default has occurred or is continuing at the time of such license; (ii) the license constitutes an arms‐length transaction, the terms of which, on their face, do not provide for a sale or assignment of any Intellectual Property and do not restrict the ability of Borrower or any of its Subsidiaries, as applicable, to pledge, grant a security interest in or lien on, or assign or otherwise Transfer any Intellectual Property; (iii) in the case of any exclusive license, (x) Borrower delivers ten (10) days’ prior written notice and a brief summary of the terms of the proposed license to Collateral Agent and the Lenders and delivers to Collateral Agent and the Lenders copies of the final executed licensing documents in connection with the exclusive license promptly upon consummation thereof, and (y) any such license could not result in a legal transfer of title of the licensed property but may be exclusive in respects other than territory and may be exclusive as to territory only as to discrete geographical areas outside of the United States; and (iv) all upfront payments, royalties, milestone payments or other proceeds arising from the licensing agreement that are payable to Borrower or any of its Subsidiaries are paid to a Deposit Account that is governed by a Control Agreement. 

“Permitted Liens” are:

(a)Liens existing on the Effective Date and disclosed on the Perfection Certificates or  arising under this Agreement and the other Loan Documents;

(b)Liens for taxes, fees, assessments or other government charges or levies, either (i) not due and payable or (ii) being contested in good faith and for which Borrower maintains adequate reserves on its Books, provided that no notice of any such Lien has been filed or recorded under the Internal Revenue Code of 1986, as amended, and the Treasury Regulations adopted thereunder;

(c)Liens securing Indebtedness permitted under clause (e) of the definition of “Permitted Indebtedness,” provided that (i) such liens exist prior to the acquisition of, or attach substantially simultaneous with, or within ninety (90) days after the, acquisition, lease, repair, improvement or construction of, such property financed or leased by such Indebtedness and (ii) such liens do not extend to any property of Borrower other than the property (and proceeds thereof) acquired, leased or built, or the improvements or repairs, financed by such Indebtedness;

(d)Liens of carriers, warehousemen, suppliers, or other Persons that are possessory in nature arising in the ordinary course of business so long as such Liens attach only to Inventory, securing liabilities in the 

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aggregate amount not to exceed Five Hundred Thousand Dollars ($500,000.00), and which are not delinquent or remain payable without penalty or which are being contested in good faith and by appropriate proceedings which proceedings have the effect of preventing the forfeiture or sale of the property subject thereto;

(e)Liens to secure payment of workers’ compensation, employment insurance, old‐age pensions, social security and other like obligations incurred in the ordinary course of business (other than Liens imposed by ERISA);

(f)leases or subleases of real property granted in the ordinary course of Borrower’s business (or, if referring to another Person, in the ordinary course of such Person’s business), and leases, subleases, non‐exclusive licenses or sublicenses of personal property (other than Intellectual Property) granted in the ordinary course of Borrower’s business (or, if referring to another Person, in the ordinary course of such Person’s business), if the leases, subleases, licenses and sublicenses do not prohibit granting Collateral Agent or any Lender a security interest therein;

(g)banker’s liens, rights of setoff and Liens in favor of financial institutions incurred in the ordinary course of business arising in connection with Borrower’s deposit accounts or securities accounts held at such institutions solely to secure payment of fees and similar costs and expenses and provided such accounts are maintained in compliance with Section 6.6(b) hereof;

(h)Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Section 8.4 or 8.7; 

(i)Liens consisting of Permitted Licenses;

(j)easements, reservations, rights-of-way, restrictions, minor defects or irregularities in title and other similar Liens affecting real property not interfering in any material respect with the ordinary course of the business of Borrower;

(k)deposits to secure the performance of bids, trade contracts (other than for borrowed money), contracts for the purchase of property permitted hereunder, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case, incurred in the ordinary course of business not representing an obligation for borrowed money; provided, however, the aggregate amount of such deposits at any given time may not exceed Two Million Five Hundred Thousand Dollars ($2,500,000.00);

(l)Liens in favor of customs and revenue authorities arising as a matter of law, in the ordinary course of  Borrower's business, to secure payment of customs duties in connection with the importation of goods; provided, however, the aggregate amount of Indebtedness secured by such Liens may not exceed Two Hundred Fifty Thousand Dollars ($250,000.00) at any given time;

(m)(i) Liens on the BofA Credit Card Account to secure the Permitted Indebtedness described in clause (g) of the definition of Permitted Indebtedness and (ii) Liens on cash collateral securing letters of credit (maintained in a segregated bank account identified to the Collateral Agent in the Perfection Certificate)  permitted by clause (i) of the definition of Permitted Indebtedness; 

(n)Liens or deposits to secure the performance of leases incurred in the ordinary course of business and not representing an obligation for borrowed money and Liens to secure tenant improvements, provided the lessor thereof has executed a landlord consent in favor of, and in form and content reasonably acceptable to, Collateral Agent; provided, however, the sum of the aggregate amount of the Indebtedness secured by such Liens and the aggregate amount of such deposits at any given time may not exceed Two Hundred Fifty Thousand Dollars ($250,000.00); and

(o)Liens incurred in the extension, renewal or refinancing of the indebtedness secured by Liens described in (a) through (m), but any extension, renewal or replacement Lien must be limited to the property encumbered by the existing Lien.

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“Person” is any individual, sole proprietorship, partnership, limited liability company, exempted company, joint venture, company, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or government agency.

“Post Closing Letter” is that certain Post Closing Letter dated as of the Effective Date by and between Collateral Agent and Borrower.

“Prepayment Fee” is, with respect to any Term Loan subject to prepayment prior to the Maturity Date, whether by mandatory or voluntary prepayment, acceleration or otherwise, an additional fee payable to the Lenders in amount equal to:

(i)for a prepayment made on or after the Funding Date of such Term Loan through and including the first anniversary of the Funding Date of such Term Loan, one percent (1.00%) of the principal amount of such Term Loan prepaid;

(ii)for a prepayment made after the date which is after the first anniversary of the Funding Date of such Term Loan through and including the second anniversary of the Funding Date of such Term Loan, one percent (1.00%) of the principal amount of the Term Loans prepaid; and

(iii)for a prepayment made after the date which is after the second anniversary of the Funding Date of such Term Loan no Prepayment Fee shall be due.

“Pro Rata Share” is, as of any date of determination, with respect to each Lender, a percentage (expressed as a decimal, rounded to the ninth decimal place) determined by dividing the outstanding principal amount of Term Loans held by such Lender by the aggregate outstanding principal amount of all Term Loans.

“Registered Organization” with respect to the Parent and the US Sub, is any “registered organization” as defined in the Code with such additions to such term as may hereafter be made.

“Relevant Governmental Body” means the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto.

“Required Lenders” means (i) for so long as all of the Persons that are Lenders on the Effective Date (each an “Original Lender”) have not assigned or transferred any of their interests in their Term Loan, Lenders holding one hundred percent (100%) of the aggregate outstanding principal balance of the Term Loan, or (ii) at any time from and after any Original Lender has assigned or transferred any interest in its Term Loan, Lenders holding at least sixty six percent (66%) of the aggregate outstanding principal balance of the Term Loan and, in respect of this clause (ii), (A) each Original Lender that has not assigned or transferred any portion of its Term Loan, (B) each assignee or transferee of an Original Lender’s interest in the Term Loan, but only to the extent that such assignee or transferee is an Affiliate or Approved Fund of such Original Lender, and (C) any Person providing financing to any Person described in clauses (A) and (B) above; provided, however, that this clause (C) shall only apply upon the occurrence of a default, event of default or similar occurrence with respect to such financing.

“Requirement of Law” is as to any Person, the organizational or governing documents of such Person, and any law (statutory or common), treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

“Responsible Officer” is any of the President, Chief Executive Officer, or Chief Financial Officer of Borrower acting alone, to the extent such Borrower has such officers.

“Secured Promissory Note” is defined in Section 2.4.

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“Secured Promissory Note Record” is a record maintained by each Lender with respect to the outstanding Obligations owed by Borrower to Lender and credits made thereto.

“Securities Account” is any “securities account” as defined in the Code with such additions to such term as may hereafter be made.

“Shares” is one hundred percent (100%) of the issued and outstanding capital stock, membership units or other securities owned or held of record by Borrower or Borrower’s Subsidiary, in any Subsidiary; provided that, in the event Borrower, demonstrates to Collateral Agent’s reasonable satisfaction, that a pledge of more than sixty five percent (65%) of the Shares of such Subsidiary which is a Foreign Subsidiary, creates a present and existing adverse tax consequence to Borrower under the U.S. Internal Revenue Code, “Shares” shall mean sixty‐five percent (65%) of the issued and outstanding capital stock, membership units or other securities owned or held of record by Borrower or its Subsidiary in such Foreign Subsidiary. 

“Solvent” is, with respect to any Person: the fair salable value of such Person’s consolidated assets (including goodwill minus disposition costs) exceeds the fair value of such Person’s liabilities (excluding any amounts booked as a liability related to the CIRM grants not to exceed $23,700,000 in the aggregate); such Person is not left with unreasonably small capital after the transactions in this Agreement; and such Person is able to pay its debts (including trade debts) as they mature.

“SOFR” with respect to any day means the secured overnight financing rate published for such day by the Federal Reserve Bank of New York, as the administrator of the benchmark, (or a successor administrator) on the Federal Reserve Bank of New York’s Website.

“Subordinated Debt” is indebtedness incurred by Borrower or any of its Subsidiaries subordinated to all Indebtedness of Borrower and/or its Subsidiaries to the Lenders (pursuant to a subordination, intercreditor, or other similar agreement in form and substance satisfactory to Collateral Agent and the Lenders entered into between Collateral Agent, Borrower, and/or any of its Subsidiaries, and the other creditor), on terms acceptable to Collateral Agent and the Lenders.

“Subsidiary” is, with respect to any Person, any Person of which more than fifty percent (50%) of the voting stock or other equity interests (in the case of Persons other than corporations) is owned or controlled, directly or indirectly, by such Person or through one or more intermediaries.

“Term Loan” is defined in Section 2.2(a) hereof.

“Term Loan Commitment” is, for any Lender, the obligation of such Lender to make a Term Loan, up to the principal amount shown on Schedule 1.1.  “Term Loan Commitments” means the aggregate amount of such commitments of all Lenders.

“Trademarks” means any trademark and servicemark rights, whether registered or not, applications to register and registrations of the same and like protections, and the entire goodwill of the business of Borrower connected with and symbolized by such trademarks.

“Transfer” is defined in Section 7.1.

“Warrants” are those certain Warrants to Purchase Stock dated as of the July 25, 2017, or any date thereafter, issued by Borrower in favor of each Lender or such Lender’s Affiliates.

[Balance of Page Intentionally Left Blank]

 

37

 

 
 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the Effective Date.

			
	
BORROWER:
	
 
	
 

	
 
	
 
	
 

	
POSEIDA THERAPEUTICS, INC.

 

 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
By /s/ Johanna Mylet
	
 
	
 

	
Name: Johanna Mylet
	
 
	
 

	
Title: Chief Financial Officer 
	
 
	
 

	
 
	
 
	
 

	
VINDICO NANOBIOTECHNOLOGY, LLC
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
By /s/ Johanna Mylet
	
 
	
 

	
Name: Johanna Mylet
	
 
	
 

	
Title: Chief Financial Officer
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
COLLATERAL AGENT AND LENDER:
	
 
	
 

	
 
	
 
	
 

	
OXFORD FINANCE LLC

	
 
	
 
	
 

	
 
	
 
	
 

	
By /s/ Colette H. Featherly
	
 
	
 

	
Name: Colette H. Featherly
	
 
	
 

	
Title: Senior Vice President
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

 

[Signature Page to Loan and Security Agreement]

 

 
 

 

 

SCHEDULE 1.1

Lenders and Commitments

			
	
 
	
 
	
 

	
Lender
	
Term Loan Commitment
	
Commitment Percentage

	
OXFORD FINANCE LLC
	
$60,000,000.00
	
100.00%

	
TOTAL
	
$60,000,000.00
	
100.00%

 

 

 

 
 

 

 

EXHIBIT A

Description of Collateral

The Collateral consists of all of Borrower’s right, title and interest in and to the following personal property:

All goods, Accounts (including health‐care receivables), Equipment, Inventory, contract rights or rights to payment of money, leases, license agreements, franchise agreements, General Intangibles (except as noted below), commercial tort claims, documents, instruments (including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts and other Collateral Accounts, all certificates of deposit, fixtures, letters of credit rights (whether or not the letter of credit is evidenced by a writing), securities, and all other investment property, supporting obligations, and financial assets, whether now owned or hereafter acquired, wherever located; and

All Borrower’s Books relating to the foregoing, and any and all claims, rights and interests in any of the above and all substitutions for, additions, attachments, accessories, accessions and improvements to and replacements, products, proceeds and insurance proceeds of any or all of the foregoing.

Notwithstanding the foregoing, the Collateral does not include (i) any Intellectual Property; provided, however, the Collateral shall include all Accounts and all proceeds of Intellectual Property.  If a judicial authority (including a U.S. Bankruptcy Court) would hold that a security interest in the underlying Intellectual Property is necessary to have a security interest in such Accounts and such property that are proceeds of Intellectual Property, then the Collateral shall automatically, and effective as of the Effective Date, include the Intellectual Property to the extent necessary to permit perfection of Collateral Agent’s security interest in such Accounts and such other property of Borrower that are proceeds of the Intellectual Property; (ii) more than 65% of the total combined voting power of all classes of stock entitled to vote the shares of capital stock (the “Shares”) of any Foreign Subsidiary, if Borrower demonstrates to Collateral Agent’s reasonable satisfaction that a pledge of more than sixty five percent (65%) of the Shares of such Subsidiary creates a present and existing adverse tax consequence to Borrower under the U.S. Internal Revenue Code; the (iii) BofA Credit Card Account and (iv) any license or contract, in each case if the granting of a Lien in such license or contract is prohibited by or would constitute a default under the agreement governing such license or contract (but (A) only to the extent such prohibition is enforceable under applicable law and (B) other than to the extent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-408 or 9-409 (or any other Section) of Division 9 of the Code); provided that upon the termination, lapsing or expiration of any such prohibition, such license or contract, as applicable, shall automatically be subject to the security interest granted in favor of Collateral Agent hereunder and become part of the “Collateral.”

Pursuant to the terms of a certain negative pledge arrangement with Collateral Agent and the Lenders, Borrower has agreed not to encumber any of its Intellectual Property except as otherwise permitted by the Loan Agreement.

 

 

 

 
 

 

 

EXHIBIT B

Form of Disbursement Letter

[see attached]

 

 
 

 

 

DISBURSEMENT LETTER

[DATE]

The undersigned, being the duly elected and acting  of POSEIDA THERAPEUTICS, INC., a Delaware corporation with offices located at 9390 Towne Centre Drive, Suite 200, San Diego, California 92121 on behalf of itself and each other Borrower under the Loan Agreement (as defined below) (individually and collectively, jointly and severally, “Borrower”), does hereby certify to OXFORD FINANCE LLC (“Oxford” and “Lender”), as collateral agent (the “Collateral Agent”) and in connection with that certain Loan and Security Agreement dated as of February 22, 2022, by and among Borrower, Collateral Agent and the Lenders from time to time party thereto (the “Loan Agreement”; with other capitalized terms used below having the meanings ascribed thereto in the Loan Agreement) that:

	
1.
	
The representations and warranties made by Borrower in Section 5 of the Loan Agreement and in the other Loan Documents are true and correct in all material respects as of the date hereof.

	
2.
	
No event or condition has occurred that would constitute an Event of Default under the Loan Agreement or any other Loan Document.

	
3.
	
Borrower is in compliance with the covenants and requirements contained in Sections 4, 6 and 7 of the Loan Agreement.

	
4.
	
All conditions referred to in Section 3 of the Loan Agreement to the making of the Loan to be made on or about the date hereof have been satisfied or waived by Collateral Agent.

	
5.
	
No Material Adverse Change has occurred.

	
6.
	
The undersigned is a Responsible Officer.

 

 

[Balance of Page Intentionally Left Blank]

 

 

 
 

 

 

	
7.
	
The proceeds of the Term Loan shall be disbursed as follows:

		
	
Disbursement from Oxford:
	
 

	
Loan Amount
	
$_______________

	
 
	
 

	
Less:
	
 

	
‐‐Facility Fee
	
($_________)

	
‐‐Existing Debt Payoff to be remitted to Oxford Finance LLC per the Payoff Letter dated February [_], 2022
	
($_________)

	
[‐‐Interim Interest
	
($_________)]

	
‐‐Lender’s Legal Fees
	
($_________)*

	
 
	
 

	
Net Proceeds due from Oxford:
	
$_______________ 

	
 
	
 

	
 
	
 

	
TOTAL TERM LOAN NET PROCEEDS FROM LENDERS
	
$_______________ 

	
	 

	
* Legal fees and costs are through the Effective Date.  Postclosing legal fees and costs, payable after the Effective Date, to be invoiced and paid postclosing.
	

 

 
 

 

 

 

	
8.
	
The Term Loan shall amortize in accordance with the Amortization Table attached hereto.

	
9.
	
The aggregate net proceeds of the Term Loans shall be transferred to the Designated Deposit Account as follows:

		
	
Account Name:
	
[BORROWER]

	
Bank Name:
	
[____________]

	
Bank Address:
	
[____________]

	
Account Number:
	
____________________________________

	
ABA Number:
	
[____________]

 

 

 

[Balance of Page Intentionally Left Blank]

 

Dated as of the date first set forth above.

			
	
BORROWER:
	
 
	
 

	
 
	
 
	
 

	
POSEIDA THERAPEUTICS, INC., on behalf of itself and all other Borrowers
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
By
	
 
	
 

	
Name:
	
 
	
 

	
Title:
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
COLLATERAL AGENT AND LENDER:
	
 
	
 

	
 
	
 
	
 

	
OXFORD FINANCE LLC
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
By
	
 
	
 

	
Name:
	
 
	
 

	
Title:
	
 
	
 

	
 
	
 
	
 

 

 

 
 

 

 

AMORTIZATION TABLE
(Term Loan)

[see attached]

 

 

 
 

 

 

EXHIBIT C

Exhibit C

Compliance Certificate

		
	
TO:
	
OXFORD FINANCE LLC, as Collateral Agent and Lender

	
FROM:
	
POSEIDA THERAPEUTICS, INC., on behalf of itself and all other Borrowers

 

The undersigned authorized officer (“Officer”) of POSEIDA THERAPEUTICS, INC., on behalf of itself and all other Borrowers under and as defined in the Loan Agreement (as defined herein below) (individually and collectively, jointly and severally, “Borrower”), hereby certifies that in accordance with the terms and conditions of the Loan and Security Agreement by and among Borrower, Collateral Agent, and the Lenders from time to time party thereto (the “Loan Agreement;” capitalized terms used but not otherwise defined herein shall have the meanings given them in the Loan Agreement),

(a)Borrower is in complete compliance for the period ending _______________ with all required covenants except as noted below;

(b)There are no Events of Default, except as noted below;

(c)Except as noted below, all representations and warranties of Borrower stated in the Loan Documents are true and correct in all material respects on this date and for the period described in (a), above; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date.

(d)Borrower, and each of Borrower’s Subsidiaries, has timely filed all required tax returns and reports, Borrower, and each of Borrower’s Subsidiaries, has timely paid all foreign, federal, state, and local taxes, assessments, deposits and contributions owed by Borrower, or Subsidiary, except as otherwise permitted pursuant to the terms of Section 5.8 of the Loan Agreement;

(e)No Liens have been levied or claims made against Borrower or any of its Subsidiaries relating to unpaid employee payroll or benefits of which Borrower has not previously provided written notification to Collateral Agent and the Lenders.

Attached are the required documents, if any, supporting our certification(s).  The Officer, on behalf of Borrower, further certifies that the attached financial statements are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are consistently applied from one period to the next except as explained in an accompanying letter or footnotes and except, in the case of unaudited financial statements, for the absence of footnotes and subject to year‐end audit adjustments as to the interim financial statements.  

Please indicate compliance status since the last Compliance Certificate by circling Yes, No, or N/A under “Complies” column.

							
	
 
	
Reporting Covenant
	
Requirement
	
Actual
	
Complies

	
1)
	
Financial statements
	
Monthly within 30 days
	
 
	
Yes
	
No
	
N/A

 

 
 

 

							
	
2)
	
Annual (CPA Audited) statements
	
Within 90 days after FYE
	
 
	
Yes
	
No
	
N/A

	
3)
	
Annual Financial Projections/Budget (prepared on a quarterly basis)
	
Annually (within 60 days of FYE), and when revised
	
 
	
Yes
	
No
	
N/A

	
4)
	
A/R & A/P agings
	
If applicable
	
 
	
Yes
	
No
	
N/A

	
5)
	
8‐K, 10‐K and 10‐Q Filings
	
If applicable, within 5 days of filing
	
 
	
Yes
	
No
	
N/A

	
6)
	
Compliance Certificate
	
Monthly within 30 days
	
 
	
Yes
	
No
	
N/A

	
7)
	
IP Report
	
When required
	
 
	
Yes
	
No
	
N/A

	
8)
	
Total amount of Borrower’s cash and cash equivalents at the last day of the measurement period
	
 
	
$________
	
Yes
	
No
	
N/A

	
9)
	
Total amount of Borrower’s Subsidiaries’ cash and cash equivalents at the last day of the measurement period
	
 
	
$________
	
Yes
	
No
	
N/A

	
10)
	
Updated Exhibit A to Landlord Waiver
	
Within 30 days of each month during which new Collateral in excess of $100,000 was delivered to 4242 Campus Point Court, San Diego, California
	
 
	
Yes
	
No
	
N/A

 

 

Deposit and Securities Accounts

(Please list all accounts; attach separate sheet if additional space needed)

 

							
	
 
	
Institution Name
	
Account Number
	
New Account?
	
Account Control Agreement in place?

	
1)
	
 
	
 
	
Yes
	
No
	
Yes
	
No

	
2)
	
 
	
 
	
Yes
	
No
	
Yes
	
No

	
3)
	
 
	
 
	
Yes
	
No
	
Yes
	
No

	
4)
	
 
	
 
	
Yes
	
No
	
Yes
	
No

 

 

Other Matters

 

				
	
1)
	
Have there been any changes in management since the last Compliance Certificate?
	
Yes
	
No

	
 
	
 
	
 
	
 

	
2)
	
Have there been any transfers/sales/disposals/retirement of Collateral or IP prohibited by the Loan Agreement?
	
Yes
	
No

	
 
	
 
	
 
	
 

	
3)
	
Have there been any new or pending claims or causes of action against Borrower that involve more than Five Hundred Thousand Dollars ($500,000.00)?
	
Yes
	
No

	
 
	
 
	
 
	
 

 

 
 

 

				
	
4)
	
Have there been any amendments of or other changes to the Operating Documents of Borrower or any of its Subsidiaries?  If yes, provide copies of any such amendments or changes with this Compliance Certificate.
	
Yes
	
No

 

 

 
 

 

Exceptions

 

Please explain any exceptions with respect to the certification above: (If no exceptions exist, state “No exceptions.”  Attach separate sheet if additional space needed.)

 

 

 

POSEIDA THERAPEUTICS, INC., on behalf of itself and all other Borrowers

 

By  

Name:  

Title:  

 

Date:

 

		
	
LENDER USE ONLY

	
 
	
 

	
Received by: 
	
Date:  

	
 
	
 

	
Verified by:  
	
Date:  

	
 
	
 

	
Compliance Status:YesNo

 

 

 

 

 
 

 

 

EXHIBIT D

Form of Secured Promissory Note

[see attached]

 

 
 

 

 

SECURED PROMISSORY NOTE
(Term Loan)

$____________________Dated:  [DATE]

FOR VALUE RECEIVED, the undersigned, POSEIDA THERAPEUTICS, INC., a Delaware corporation with offices located at 9390 Towne Centre Drive, Suite 200, San Diego, California 92121 and VINDICO NANOBIOTECHNOLOGY, LLC, a Delaware limited liability company with offices located at 9390 Towne Centre Drive, Suite 200, San Diego, California 921214 (individually and collectively, jointly and severally, “Borrower”) HEREBY PROMISES TO PAY to the order of OXFORD FINANCE LLC (“Lender”) the principal amount of [___________] MILLION DOLLARS ($______________) or such lesser amount as shall equal the outstanding principal balance of the Term Loan made to Borrower by Lender, plus interest on the aggregate unpaid principal amount of such Term Loan, at the rates and in accordance with the terms of the Loan and Security Agreement dated February 22, 2022 by and among Borrower, Lender, Oxford Finance LLC, as Collateral Agent, and the other Lenders from time to time party thereto (as amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”).  If not sooner paid, the entire principal amount and all accrued and unpaid interest hereunder shall be due and payable on the Maturity Date as set forth in the Loan Agreement.  Any capitalized term not otherwise defined herein shall have the meaning attributed to such term in the Loan Agreement.

Principal, interest and all other amounts due with respect to the Term Loan, are payable in lawful money of the United States of America to Lender as set forth in the Loan Agreement and this Secured Promissory Note (this “Note”).  The principal amount of this Note and the interest rate applicable thereto, and all payments made with respect thereto, shall be recorded by Lender and, prior to any transfer hereof, endorsed on the grid attached hereto which is part of this Note.

The Loan Agreement, among other things, (a) provides for the making of a secured Term Loan by Lender to Borrower, and (b) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events.

This Note may not be prepaid except as set forth in Section 2.2 (c) and Section 2.2(d) of the Loan Agreement.

This Note and the obligation of Borrower to repay the unpaid principal amount of the Term Loan, interest on the Term Loan and all other amounts due Lender under the Loan Agreement is secured under the Loan Agreement.

Presentment for payment, demand, notice of protest and all other demands and notices of any kind in connection with the execution, delivery, performance and enforcement of this Note are hereby waived.

Borrower shall pay all reasonable fees and expenses, including, without limitation, reasonable attorneys’ fees and costs, incurred by Lender in the enforcement or attempt to enforce any of Borrower’s obligations hereunder not performed when due.

This Note shall be governed by, and construed and interpreted in accordance with, the internal laws of the State of California.

The ownership of an interest in this Note shall be registered on a record of ownership maintained by Lender or its agent.  Notwithstanding anything else in this Note to the contrary, the right to the principal of, and stated interest on, this Note may be transferred only if the transfer is registered on such record of ownership and the transferee is identified as the owner of an interest in the obligation.  Borrower shall be entitled to treat the registered holder of this Note (as recorded on such record of ownership) as the owner in fact thereof for all purposes and shall not be bound to recognize any equitable or other claim to or interest in this Note on the part of any other person or entity.

 

[Balance of Page Intentionally Left Blank]

 

 

 
 

 

 

IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed by one of its officers thereunto duly authorized on the date hereof.

			
	
 
	
 
	
BORROWER:

	
 
	
 
	
 

	
 
	
 
	
POSEIDA THERAPEUTICS, INC.

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
By

	
 
	
 
	
Name:

	
 
	
 
	
Title:

	
 
	
 
	
 

	
 
	
 
	
VINDICO NANOBIOTECHNOLOGY, LLC

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
By

	
 
	
 
	
Name:

	
 
	
 
	
Title:

	
 
	
 
	
 

 

 

 
 

 

 

LOAN INTEREST RATE AND PAYMENTS OF PRINCIPAL

					
	
Date
	
Principal

Amount
	
Interest Rate
	
Scheduled

Payment Amount
	
Notation By

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

 

 

 

 
 

 

 

CORPORATE BORROWING CERTIFICATE

				
	
Borrower:
	
[BORROWER]
	
Date: [DATE]

	
Lender:
	
OXFORD FINANCE LLC, as Collateral Agent and Lender
	
 

	
 
	
 
	
 

 

I hereby certify as follows, as of the date set forth above:

1.I am the Secretary, Assistant Secretary or other officer of Borrower.  My title is as set forth below.

2.Borrower’s exact legal name is set forth above.  Borrower is a [BORROWER ORGANIZATION] existing under the laws of the State of [BORROWER STATE].

3.Attached hereto as Exhibit A and Exhibit B, respectively, are true, correct and complete copies of (i) Borrower’s [Articles/Certificate of Incorporation (including amendments), as filed with the Secretary of State of the state in which Borrower is incorporated as set forth in paragraph 2 above]; and (ii) Borrower’s [Bylaws] [Memorandum and Articles of Association].  Neither such Articles/Certificate of Incorporation nor such Bylaws have been amended, annulled, rescinded, revoked or supplemented, and such Articles/Certificate of Incorporation and such Bylaws remain in full force and effect as of the date hereof.  

4.The following resolutions were duly and validly adopted by Borrower’s Board of Directors at a duly held meeting of such directors (or pursuant to a unanimous written consent or other authorized corporate action).  Such resolutions are in full force and effect as of the date hereof and have not been in any way modified, repealed, rescinded, amended or revoked, and the Lenders may rely on them until each Lender receives written notice of revocation from Borrower.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Balance of Page Intentionally Left Blank]

 

 

 

 

 

 
 

 

 

Resolved, that any one of the following officers or employees of Borrower, whose names, titles and signatures are below, may act on behalf of Borrower:

				
	
Name
	
Title
	
Signature
	
Authorized to Add or Remove Signatories

	
 
	
 
	
 
	
□

	
 
	
 
	
 
	
□

	
 
	
 
	
 
	
□

	
 
	
 
	
 
	
□

 

Resolved Further, that any one of the persons designated above with a checked box beside his or her name may, from time to time, add or remove any individuals to and from the above list of persons authorized to act on behalf of Borrower.

Resolved Further, that such individuals may, on behalf of Borrower:

Borrow Money.  Borrow money from the Lenders.

Execute Loan Documents.  Execute any loan documents any Lender requires. 

Grant Security.  Grant Collateral Agent a security interest in any of Borrower’s assets.

Negotiate Items.  Negotiate or discount all drafts, trade acceptances, promissory notes, or other indebtedness in which Borrower has an interest and receive cash or otherwise use the proceeds.

Further Acts.  Designate other individuals to request advances, pay fees and costs and execute other documents or agreements (including documents or agreement that waive Borrower’s right to a jury trial) they believe to be necessary to effectuate such resolutions.

 

Resolved Further, that all acts authorized by the above resolutions and any prior acts relating thereto are ratified.

 

 

 

 

 

 

 

 

 

[Balance of Page Intentionally Left Blank]

 

 

 
 

 

 

5.The persons listed above are Borrower’s officers or employees with their titles and signatures shown next to their names.

			
	
 
	
 
	
By:

	
 
	
 
	
Name:

	
 
	
 
	
Title:

 

*** If the Secretary, Assistant Secretary or other certifying officer executing above is designated by the resolutions set forth in paragraph 4 as one of the authorized signing officers, this Certificate must also be signed by a second authorized officer or director of Borrower.

I, the __________________________ of Borrower, hereby certify as to paragraphs 1 through 5 above, as 

          [print title]

of the date set forth above.

			
	
 
	
 
	
By:

	
 
	
 
	
Name:

	
 
	
 
	
Title:

 

[Signature Page to Corporate Borrowing Certificate]

 

 
 

 

 

EXHIBIT A

Articles/Certificate of Incorporation (including amendments)

[see attached]

 

 
 

 

 

EXHIBIT B

Bylaws

[see attached]

 

 

 

 

 
 

 

 

DEBTOR:[BORROWER]
SECURED PARTY:OXFORD FINANCE LLC, 
as Collateral Agent

EXHIBIT A TO UCC FINANCING STATEMENT

Description of Collateral

The Collateral consists of all of Debtor’s right, title and interest in and to the following personal property:

All goods, Accounts (including health‐care receivables), Equipment, Inventory, contract rights or rights to payment of money, leases, license agreements, franchise agreements, General Intangibles (except as noted below), commercial tort claims, documents, instruments (including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts and other Collateral Accounts, all certificates of deposit, fixtures, letters of credit rights (whether or not the letter of credit is evidenced by a writing), securities, and all other investment property, supporting obligations, and financial assets, whether now owned or hereafter acquired, wherever located; and

All Borrower’s Books relating to the foregoing, and any and all claims, rights and interests in any of the above and all substitutions for, additions, attachments, accessories, accessions and improvements to and replacements, products, proceeds and insurance proceeds of any or all of the foregoing.

Notwithstanding the foregoing, the Collateral does not include (i) any Intellectual Property; provided, however, the Collateral shall include all Accounts and all proceeds of Intellectual Property.  If a judicial authority (including a U.S. Bankruptcy Court) would hold that a security interest in the underlying Intellectual Property is necessary to have a security interest in such Accounts and such property that are proceeds of Intellectual Property, then the Collateral shall automatically, and effective as of the Effective Date, include the Intellectual Property to the extent necessary to permit perfection of Collateral Agent’s security interest in such Accounts and such other property of Borrower that are proceeds of the Intellectual Property; (ii) more than 65% of the total combined voting power of all classes of stock entitled to vote the shares of capital stock (the “Shares”) of any Foreign Subsidiary, if Borrower demonstrates to Collateral Agent’s reasonable satisfaction that a pledge of more than sixty five percent (65%) of the Shares of such Subsidiary creates a present and existing adverse tax consequence to Borrower under the U.S. Internal Revenue Code; and (iii) any license or contract, in each case if the granting of a Lien in such license or contract is prohibited by or would constitute a default under the agreement governing such license or contract (but (A) only to the extent such prohibition is enforceable under applicable law and (B) other than to the extent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-408 or 9-409 (or any other Section) of Division 9 of the Code); provided that upon the termination, lapsing or expiration of any such prohibition, such license or contract, as applicable, shall automatically be subject to the security interest granted in favor of Collateral Agent hereunder and become part of the “Collateral.”

Pursuant to the terms of a certain negative pledge arrangement with Collateral Agent and the Lenders, Debtor has agreed not to encumber any of its Intellectual Property except as otherwise permitted by the Loan Agreement.

Capitalized terms used but not defined herein have the meanings ascribed in the Uniform Commercial Code in effect in the State of California as in effect from time to time (the “Code”) or, if not defined in the Code, then in the Loan and Security Agreement by and between Debtor, Secured Party and the other Lenders party thereto (as modified, amended and/or restated from time to time).

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