Document:

Exhibit 10.1

 

SUSPENSION, SETTLEMENT AND TERMINATION AGREEMENT

 

This Suspension, Settlement and Termination Agreement (this “Agreement”) is entered into as of, and shall be deemed effective as of, October 31, 2018 (“Effective Date”), by and between on the one hand Napo Pharmaceuticals, Inc., a Delaware corporation, together with its affiliates, successors and assigns (collectively, “Napo”) and Jaguar Health, Inc., a Delaware corporation (“Jaguar”) as Guarantor and, on the other hand, SmartPharma, LLC., a new Jersey limited liability company and its affiliates (“SP”).  Each of Napo and SP may be referred to as a “Party” and, collectively, the “Parties”.  Jaguar may hereinafter also be referred to as the “Guarantor.”

 

RECITALS

 

WHEREAS, Napo is engaged in the business of generating, developing and selling pharmaceutical products, drugs and other related products;

 

WHEREAS, SP is in the business of providing marketing, advertising, commercialization, and sales solutions to pharmaceutical companies; and

 

WHEREAS, Napo and SP entered into that certain Strategic Marketing Alliance Agreement dated April 4th, 2016 (the “Alliance Agreement”) to combine SP’s marketing and commercialization capabilities, including planning and execution of promotional strategies and tactics with Napo’s supply of raw plant material, API and drug product, including coordination and logistics; and,

 

WHEREAS, Napo and SP have mutually decided they wish to suspend, and then terminate, the Alliance Agreement on the terms set forth herein; time is of the essence.

 

All capitalized words used herein, but not defined herein, will have the meanings ascribed to them in the Alliance Agreement, a copy of which is appended hereto as Exhibit A, for reference purposes only.

 

AGREEMENT

 

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

 

1.              Suspension of the Alliance Agreement.  SP and Napo hereby agree upon SP’s receipt of the payment due to SP for October, 2018 sales as set forth in Article IV of the Alliance Agreement (the “October Payment”) (i) the Alliance Agreement shall be suspended by the Parties, such suspension retroactive to the Effective Date, (ii) the Alliance Agreement shall remain in suspension from the Effective Date to the earlier of (A) January 8, 2019 or (B) the date SP receives the Buyout Fee, in full (iii) after the Effective Date, SP will not be obligated to perform any of the SP Services and (iv) after Napo makes the October Payment and the Buyout Fee (as set forth below), and SP’s receipt of the aforementioned, Napo will not be obligated to pay SP any additional remuneration as set forth in Article IV of the Alliance Agreement.

 

 

2.              The Buyout Fee.  Napo hereby unconditionally agrees to pay to SP, on or prior to January 8, 2019, time is of the essence, the Buyout Fee (the “Buyout Fee Payment”):

 

(a)         in lieu of the remuneration set forth in Article IV of the Alliance Agreement for the remainder of the Initial Term after the October Payment, payable by Napo to SP, Napo shall make a one-time, lump sum payment to SP, in the amount of two hundred fifty thousand dollars ($250,000) (the “Buyout Fee”) on or before January 8, 2019, time is of the essence;

 

(b)         the amount of the Buyout Fee has been calculated to also include any and all Tail Payments that might otherwise be payable upon termination of the Alliance Agreement;

 

(c)          as of the Effective Date, there are no expenses for which Napo is obligated, under Section 4.2 of the Alliance Agreement, to reimburse SP; and, SP will not incur any such reimbursable expenses through the Termination Date;

 

(d)         the Buyout Fee Payment shall be paid by Napo via wire or ACH payment to an account designated by SP and payment shall not be deemed made until such monies have cleared SP’s account; and

 

(e)          all payment obligations hereunder, including but not limited to, the October Payment, expense reimbursement and the Buyout Fee Payment are guaranteed by Jaguar.

 

3.              Subsequent Termination of the Alliance Agreement.  In reliance upon the respective covenants, obligations and agreements of the Parties contained herein, SP and Napo agree that, on the date upon which the Buyout Fee Payment is received by SP (the “Termination Date”), the Alliance Agreement will automatically terminate and shall, subject to the terms and conditions contained herein and the survival provisions of the Alliance Agreement, be of no further force or effect.  Termination shall be self-executing, and neither Party need take any action to effect such termination.

 

4.              Failure to Make the Buyout Fee Payment.

 

(a)         In the event the Buyout Fee Payment is not made on or before January 8, 2019, time is of the essence, the Alliance Agreement shall be reinstated and shall remain in full force and effect and Section 4(b) of this Agreement shall be an amendment to the Alliance Agreement;

 

(b)         First Amendment to the Strategic Marketing Alliance Agreement.  Due to Napo’s failure to make the Buyout Payment as agreed upon, the Strategic Marketing Alliance Agreement by and between Napo Pharmaceuticals, Inc., a Delaware corporation, and SmartPharma, LLC, a New Jersey limited liability company dated April 1, 2016 is amended as follows:

 

1.              Article II is deleted in its entirety;

 

2.              Section 3.2 shall be deleted in its entirety and replaced with:

 

“This Agreement may only be terminated by SP, and may be terminated by SP for any reason, in its sole discretion.”

 

3.              Section 3.3(a) shall be deleted in its entirety;

 

4.              Section 3.3(b) shall be deleted in its entirety and shall be merged into the first line of Section 3.3 and replaced with:

 

“In the event of the termination of this Agreement, Napo shall pay SP in accordance with Section 4.1 for the remainder of the Initial Term and any

 

 

Renewal Term, including, but not limited to, the monthly payments due in November, 2018, December, 2018 and each month thereafter, as set forth in Article IV of the Alliance Agreement, and the Tail Payments;

 

5.              Section 4.1, the title of the Section line, shall be amended and read as follows:

 

“4.1 Remuneration.  In consideration for prior services rendered, SP shall receive the following remuneration and such payments are hereby guaranteed by Jaguar Health, Inc. a Delaware corporation:”

 

6.              Section 4.1(c)(3) shall be deleted in its entirety; and

 

7.              Article IX shall be deleted in its entirety.

 

5.              Treatment of Certain Terms Upon Termination of the Alliance Agreement.  The Parties hereby agree that upon termination of the Alliance Agreement:

 

(a)         Section 11.9 of the Alliance Agreement, which sets forth those provisions of the Alliance Agreement that the Parties originally intended to survive the termination of the Alliance Agreement which currently reads:

 

“Survival. The provisions of Sections 1, 3.3, 3.4, 4, 5, 6, 7, 10 and 11 (excluding 11.5 and 11.8) and contained herein shall survive the termination of this Agreement”

 

is hereby amended to read as follows:

 

“Survival. The provisions of Sections 1, 5, 6, 7, 10, 11.2, 11.3 (as amended), 11.9 (as amended), 11.14 and 11.15 contained herein shall survive the termination of this Agreement”

 

6.              General Release.  On the Termination Date, the following mutual general release shall become effective and irrevocable:

 

(a)         Each Party hereby fully and forever releases, waives, and discharges any claim or claims it may have (i) against the other Party, (ii) against any of such other Party’s affiliates, (iii) against the other Party’s Board of Directors, its directors, officers, managers, agents, shareholders, members, attorneys, and representatives, and of any affiliate of such other Party and (iv) against the successors and assigns of each of the foregoing (each individually, a “Released Party” and, collectively, the “Released Parties”) except those arising from or caused by the other Party’s gross negligence, fraud or misrepresentation, and willful misconduct (“Permitted Claims”). Such released claims include, without limitation, any demand, cause of action, charge, obligation or claim of every kind and nature whatsoever, related to or in connection with the Alliance Agreement, whether asserted or unasserted, whether known or unknown, and whether anticipated or unanticipated (“Claims”);

 

(b)         Each Party covenants not to sue or otherwise institute or participate or voluntarily assist in the prosecution of any legal or administrative proceedings against any of the Released Parties with respect to any Claim or Claims; provided, however, in the event a Party is required by court order, subpoena or otherwise as requested by law to participate or assist in the prosecution of any legal or administrative proceedings against any of the Released Parties, unless otherwise required by law or circumstance, the Party required to participate or assist shall give notice to the Released Parties of such order, subpoena or request and shall cooperate fully with the Released Parties to lawfully resist disclosure, participation or providing assistance, at the sole cost and expense of the Released Parties.  The Parties intend that this general release extend to all matters other than Permitted Claims with no exceptions;

 

 

(c)          Each Party acknowledges and agrees that this general release extends to any Claim, even though such Claim may be unknown to such Party at the Effective Date. Each Party acknowledges and waives the protection of any law or decision limiting the scope of a general release to known claims, including without limitation, the provision of Section 1542 of the California Civil Code, if applicable, which provides as follows:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR; and

 

(d)         Each Party acknowledges that it is represented by legal counsel and that it has had the opportunity to consult its own legal counsel with respect to this general release.  Accordingly, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party will not be employed in the interpretation of this general release.

 

7.              Miscellaneous.

 

(a)         Binding Effect. This Agreement will be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns and as to Jaguar as Guarantor.

 

(b)         Entire Agreement.  This Agreement constitutes the entire understanding and agreement of the Parties hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements or understandings, inducements or conditions, express or implied, written or oral, between the Parties with respect hereto except as expressly set forth herein.  The express terms hereof control and supersede any course of performance or usage of the trade inconsistent with any of the terms hereof.

 

(c)          Governing Law.  This Agreement, its interpretation, performance and enforcement, and the rights and remedies of the Parties and Jaguar as Guarantor hereto, shall be governed and construed according to the laws of the State of New Jersey, without regard to the principles of conflict of laws.  The Parties and Jaguar as Guarantor consent to the personal jurisdiction of the federal or state courts in the State of New Jersey.  The Parties and Jaguar as Guarantor mutually acknowledge and agree that they shall not raise in connection therewith, and hereby waive, any defense based upon venue, inconvenience of forum or lack of personal jurisdiction in any action or suit brought in accordance with the foregoing.

 

(d)         Further Assurances. The Parties hereto shall enter into such further agreements and perform and cause to be performed such further acts and things as may be necessary, desirable or required by law in order to give full effect to this Agreement.

 

(e)          Fees and Expenses.  Each Party hereto (and Jaguar as Guarantor) shall be responsible for all fees, costs and expenses incurred by that Party in connection with the preparation of this Agreement.

 

(f)           Counterparts and Facsimile Signatures.  This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, and all of which, taken together, shall constitute one and the same instrument.  Delivery of an executed counterpart of a signature page of this Agreement (and each amendment, modification and waiver in respect of it) by facsimile or other electronic transmission, if identified, will be regarded as an original signature and shall be as effective as delivery of a manually executed original counterpart of each such instrument.

 

 

(g)          Severability.  The invalidity or unenforceability of any particular provision of this Agreement shall not affect the other provisions hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable provisions were omitted.

 

(h)         Notices.  All notices, consents, waivers, and other communications required or permitted by this Agreement shall be in writing and shall be deemed given to a Party or Jaguar as Guarantor when (a) delivered to the appropriate address by hand or by nationally recognized courier service (cost prepaid); or (b) received or rejected by the addressee, if sent by certified mail, return receipt requested; in each case to the following addresses designated below (or to such other address or person as a Party may designate in writing to the other Party):

 

If to SP:         SmartPharma, LLC

19 Old Town Square

Suite 238

Fort Collins, Colorado  80524

 

Attention:  Brian K. Zorn

 

If to Napo:           Napo Pharmaceuticals, Inc.

201 Mission Street, Suite 2375

San Francisco, California  94105

 

Attention:  Lisa A. Conte

 

Each of the undersigned entities represents and warrants to the other that this Agreement has been duly authorized and executed and delivered by the authorized representative(s) of such undersigned entity.

 

IN WITNESS WHEREOF, Napo and Jaguar, as Guarantor, and SP have duly executed this Agreement as of the Effective Date.

 

	
SMARTPHARMA, LLC
    	
 
    	
Jaguar Health, Inc. as   Guarantor
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Kathryn L.   MacFarlane
    	
 
    	
By:
    	
/s/ Lisa A. Conte
    
	
 
    	
Kathryn L. MacFarlane,   PharmD
    	
 
    	
 
    	
Lisa A. Conte
    
	
 
    	
Managing Partner
    	
 
    	
 
    	
Chief Executive Officer
    
	
 
    	
 
    	
 
    
	
Dated:  December 4, 2018
    	
 
    	
Dated:  December 4, 2018
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Brian K. Zorn
    	
 
    	
 
    
	
 
    	
Brian K. Zorn, PharmD
    	
 
    	
 
    
	
 
    	
Managing Partner
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Dated:  December 4, 2018
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
NAPO PHARMACEUTICALS, INC
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Lisa A. Conte
    	
 
    	
 
    
	
 
    	
Lisa A. Conte
    	
 
    	
 
    
	
 
    	
Chief Executive Officer
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Dated:  December 4, 2018
    	
 
    	
 
    

 

 

EXHIBIT A

 

STRATEGIC MARKETING ALLIANCE AGREEMENTEX-10.1

 Exhibit 10.1 

SEVENTH AMENDMENT 

TO 

RECEIVABLES PURCHASE AGREEMENT 

THIS SEVENTH AMENDMENT TO RECEIVABLES PURCHASE
AGREEMENT, dated as of December 7, 2018 (this “Amendment”), to the Receivables Purchase Agreement, dated as of January 10, 2013, as amended by the First Amendment to Receivables Purchase Agreement, dated as
of August 20, 2013, the Second Amendment to Receivables Purchase Agreement, dated as of December 13, 2013, the Third Amendment to Receivables Purchase Agreement, dated as of December 12, 2014, the Fourth Amendment to Receivables
Purchase Agreement, dated as of December 11, 2015, the Fifth Amendment to Receivables Purchase Agreement, dated as of December 9, 2016 and the Sixth Amendment to Receivables Purchase Agreement, dated as of December 8, 2017 (as so
amended, and as otherwise modified, supplemented, amended or amended and restated from time to time, the “Agreement”), each by and among TARGA RECEIVABLES LLC, as seller (the “Seller”),
TARGA RESOURCES PARTNERS LP (“Targa”), as servicer (in such capacity, together with its successors and permitted assigns in such capacity and any successor servicer
designated in accordance with the terms of the Agreement, the “Servicer”), the various CONDUIT PURCHASERS party thereto from time to time, the various COMMITTED PURCHASERS
party thereto from time to time, the various PURCHASER AGENTS party thereto from time to time, the various LC Participants party thereto from time to time, and PNC BANK, NATIONAL
ASSOCIATION, as administrator (in such capacity, together with its successors and assigns in such capacity, the “Administrator”) and as LC BANK, is by and among the parties listed above. Unless
otherwise defined in this Amendment, capitalized terms shall have the meanings assigned to such terms in the Agreement. 

RECITALS 

WHEREAS, subject to the terms hereof, the parties to the Agreement wish to make certain amendments to the Agreement as provided
herein. 
 NOW THEREFORE, in consideration of the premises and mutual covenants contained herein, and for good
and sufficient consideration, the receipt of which is hereby acknowledged, the parties hereto, intending to be legally bound, do hereby agree as follows: 

Section 1.    Amendments to the Agreement. 

1.1.    The defined term “Facility Termination Date” appearing in Exhibit I to the
Agreement is hereby amended by deleting the date “December 7, 2018” therein and replacing it with “December 6, 2019”. 

1.2.    The defined term “Purchase Limit” appearing in Exhibit I to the Agreement is
hereby amended and restated in its entirety and as so amended and restated shall read as follows: 

 “Purchase Limit” means $400,000,000, as such amount may be
reduced pursuant to Section 1.1(c) or in connection with any Exiting Purchaser pursuant to Section 1.22, or increased pursuant to Section 1.2(e) or (f). References
to the unused portion of the Purchase Limit shall mean, at any time, the Purchase Limit minus the sum of the then outstanding Aggregate Capital plus the LC Participation Amount. 

1.3.    The reference to “$100,000,000” appearing on the signature page of Wells Fargo
Bank, National Association to the Agreement is deleted and replaced with “$150,000,000”. 

1.4.    The LC Sublimit Commitments of each LC Bank and LC Participant set forth on the signature pages to
the Agreement are amended and restated in their entirety to be the LC Sublimit Commitments set forth on the signatures pages of such LC Bank and LC Participant to this Amendment. 

Section 2.    Representations and Warranties of the Seller and Targa. (i) The Seller
makes the representations and warranties contained in Sections 1 and 3 of Exhibit III to the Agreement, and (ii) Targa makes the representations and warranties in Section 2 of Exhibit III to the Agreement, in each case, as of the Effective
Date (as defined below) (unless any such representation or warranty expressly indicates it is being made as of another specific date), both before and immediately after giving effect to this Amendment. 

Section 3.    Agreement in Full Force and Effect, as Amended. All of the terms and
conditions of the Agreement shall remain in full force and effect, as amended by this Amendment. All references to the Agreement in the Agreement or any other document or instrument shall be deemed to mean the Agreement, as amended by this
Amendment. This Amendment shall not constitute a novation of the Agreement, but shall constitute an amendment with respect thereto. The parties hereto agree to be bound by the terms and obligations of the Agreement, as amended by this Amendment, as
though the terms and obligations of the Agreement were set forth herein. 

Section 4.    Effectiveness. This Amendment shall become effective in accordance with its
terms as of the date hereof (the “Effective Date”) upon receipt by the Administrator of: 

(i)    counterparts of this Amendment executed by the Seller, the Servicer, the Administrator, each
Purchaser Agent, each LC Bank, each LC Participant and each Purchaser; and 
 (ii)    a duly executed
copy of the Sixth Amended and Restated Fee Letter dated as of the date hereof, together with payment of the fees required by the terms thereof to be paid on the date hereof. 

Section 5.    Counterparts. This Amendment may be executed in any number of counterparts
and by separate parties hereto on separate counterparts (including by way of facsimile or electronic transmission), each of which when executed shall be deemed an original, but all such counterparts taken together shall constitute one and the same
instrument. 

  
 2 

 Section 6.    Governing Law. THIS
AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY OTHERWISE APPLICABLE CONFLICTS OF LAW PRINCIPLES (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, WHICH SHALL APPLY HERETO). 
 [SIGNATURE
PAGES FOLLOW] 

  
 3 

 IN WITNESS WHEREOF, the parties hereto have
caused this Amendment to be executed and delivered by their duly authorized officers as of the date hereof. 
  

			
	TARGA RECEIVABLES LLC, as Seller
		
	By:	 	/s/ Chris McEwan
		 	Chris McEwan
		 	Vice President and Treasurer

  
 [Signature Page to
Seventh Amendment to 
 Targa Receivables LLC Receivables Purchase Agreement] 

 
			
	TARGA RESOURCES PARTNERS LP, as Servicer
		
	By:	 	Targa Resources GP LLC, its general partner
		
	By:	 	/s/ Chris McEwan
		 	Chris McEwan
		 	Vice President and Treasurer

  
 [Signature Page to
Seventh Amendment to 
 Targa Receivables LLC Receivables Purchase Agreement] 

 
					
	 PNC BANK, NATIONAL ASSOCIATION,
 as
Administrator

		
	By:	 	/s/ Michael Brown
		 	Name:	 	Michael Brown
		 	Title:	 	Senior Vice President

  
 [Signature Page to
Seventh Amendment to 
 Targa Receivables LLC Receivables Purchase Agreement] 

 
					
	THE PURCHASER GROUPS:
	
	 PNC BANK, NATIONAL ASSOCIATION, as Purchaser Agent for the PNC Purchaser Group and as
a Committed Purchaser

		
	By:	 	/s/ Michael Brown
		 	Name:	 	Michael Brown
		 	Title:	 	Senior Vice President

  

					
	 PNC BANK, NATIONAL ASSOCIATION, as an LC Bank

		
	By:	 	/s/ Michael Brown
		 	Name:	 	Michael Brown
		 	Title:	 	Senior Vice President
	
	LC Sublimit Commitment: $62,500,000.00

  
 [Signature Page to
Seventh Amendment to 
 Targa Receivables LLC Receivables Purchase Agreement] 

 
					
	 WELLS FARGO BANK, NATIONAL ASSOCIATION, as Purchaser Agent for the Wells Fargo
Purchaser Group and as a Committed Purchaser

		
	By:	 	/s/ Dale Abernathy
		 	Name:	 	Dale Abernathy
		 	Title:	 	Vice President

  

					
	 WELLS FARGO BANK, NATIONAL ASSOCIATION, as an LC Participant

		
	By:	 	/s/ Dale Abernathy
		 	Name:	 	Dale Abernathy
		 	Title:	 	Vice President
	
	LC Sublimit Commitment: $37,500,000.00

  
 [Signature Page to
Seventh Amendment to 
 Targa Receivables LLC Receivables Purchase Agreement]

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