Document:

atnx-ex102_237.htm

Exhibit 10.2

 

SECURITY AGREEMENT

by and between

ATHENEX, INC.,

a Delaware corporation

and

SAGARD HEALTHCARE ROYALTY PARTNERS, LP,

a Cayman Islands exempted limited partnership

 

Dated as of August 4, 2020

 

 

 

 

TABLE OF CONTENTS

Page

	
Section 1
	
 
	
Definitions; Interpretation
	
3

	
Section 2
	
 
	
Security Interest
	
4

	
Section 3
	
 
	
Perfection and Priority
	
5

	
Section 4
	
 
	
Representations and Warranties
	
6

	
Section 5
	
 
	
Covenants
	
7

	
Section 6
	
 
	
Authorization; Appointment of Attorney-in-Fact
	
10

	
Section 7
	
 
	
Secured Party Performance of Grantor Obligations
	
11

	
Section 8
	
 
	
Secured Party’s Duties
	
11

	
Section 9
	
 
	
Remedies
	
12

	
Section 10
	
 
	
Certain Waivers
	
14

	
Section 11
	
 
	
Notices
	
15

	
Section 12
	
 
	
No Waiver; Cumulative Remedies
	
15

	
Section 13
	
 
	
Binding Effect
	
16

	
Section 14
	
 
	
Governing Law; Jurisdiction; Waiver of Jury Trial
	
16

	
Section 15
	
 
	
Entire Agreement; Amendment
	
16

	
Section 16
	
 
	
Severability
	
16

	
Section 17
	
 
	
Counterparts; Effectiveness
	
16

	
Section 18
	
 
	
Incorporation of Provisions of the RIFA
	
16

	
Section 19
	
 
	
No Inconsistent Requirements
	
16

	
Section 20
	
 
	
Termination
	
16

	
Section 21
	
 
	
Right of Set-Off
	
17

	
Section 22
	
 
	
Intercreditor Agreement
	
17

 

 

 

SECURITY AGREEMENT

THIS SECURITY AGREEMENT (this “Agreement”), dated as of August 4, 2020, is made by and between Athenex, Inc., a Delaware corporation (the “Grantor”) and Sagard Healthcare Royalty Partners, LP, a Cayman Islands exempted limited partnership (“Purchaser”).

WHEREAS, the Grantor and Purchaser are parties to that certain Revenue Interest Financing Agreement, dated as of August 4, 2020 (as amended, restated, supplemented or otherwise modified from time to time, the “RIFA”); 

WHEREAS, the RIFA provides that Grantor has agreed to assign to Purchaser, and Purchaser has agreed to acquire from Grantor, the Assigned Interests (as defined in the RIFA); and

WHEREAS, Grantor has agreed pursuant to the terms of the RIFA to enter into this Agreement, under which the Grantor grants to Purchaser a valid continuing, perfected lien on, and security interest in, the Collateral (as defined below) as security for the due performance and payment of all of Grantor’s obligations to Purchaser under the RIFA; 

NOW, THEREFORE, the parties hereto agree as follows:

Section 1Definitions; Interpretation.

(a)Terms Defined in RIFA. All capitalized terms used in this Agreement (including in the recitals hereof) and not otherwise defined herein shall have the meanings assigned to them in the RIFA.

(b)Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings:

“Books” means all books, records and other written, electronic or other documentation in whatever form maintained now or hereafter by or for Grantor, in each case solely to the extent such material evidences or contains information relating to the Collateral.

“Collateral” has the meaning set forth in Section 2.

“Existing Intercreditor Agreement” means that certain Intercreditor Agreement, dated as of the date hereof, between the Purchaser and Oaktree and acknowledged by the Grantor.

 “Intellectual Property Security Agreement” means each Copyright Security Agreement in substantially the form of Exhibit A, each Trademark Security Agreement in substantially the form of Exhibit B, each Patent Security Agreement in substantially the form of Exhibit C or any amendment thereto and prepared for purposes of recordation with the U.S. Copyright Office or the U.S. Patent and Trademark Office, as applicable.

“Intercreditor Agreement” means the Existing Intercreditor Agreement and any other intercreditor agreement entered into by the Purchaser pursuant to Section 22.

“NY UCC” means the UCC as from time to time in effect in the State of New York.

 

 

“Oaktree” means Oaktree Fund Administration, LLC in its capacity as administrative agent under the Oaktree Term Loan Facility.

“Product Intellectual Property Collateral” means all Intellectual Property that is claiming or covering (i) the Product itself or (ii) any method of using, making or manufacturing the Product; provided, however that the Product Intellectual Property Collateral shall not include any Platform Intellectual Property, except to the extent that such Platform Intellectual Property is directed solely to the Product or the use or manufacture thereof and does not have applications or uses covering products that are not the Product. Notwithstanding the foregoing, Product Intellectual Property Collateral excludes any intent-to-use trademark application solely to the extent that and solely during the period in which the grant of such security interest would impair the validity or enforceability, or result in the cancellation, of such intent-to-use trademark application under federal law.

 

“Purchaser Priority Collateral” means, at any date of determination, the portion of Rights to Payment equal to the Applicable Percentage.

“Rights to Payment” means any and all of Grantor’s Accounts that constitute Collateral and any and all of Grantor’s rights and claims to the payment or receipt of money or other forms of consideration of any kind in, to and under or with respect to such Accounts. 

“Secured Obligations” means all Obligations (as defined in the RIFA) other than inchoate indemnification and expense reimbursement obligations for which no claim has been made.

(c)Terms Defined in the NY UCC. Where applicable and except as otherwise defined herein or in the RIFA, terms used in this Agreement shall have the meanings assigned to them in the NY UCC; provided that to the extent that the NY UCC is used to define any term herein and such term is defined differently in different Articles of the NY UCC, the definition of such term contained in (and ascribed thereto in) Article 9 shall govern.

(d)Interpretation. The rules of interpretation set forth in Section 7.11 of the RIFA shall be applicable to this Agreement and are incorporated herein by this reference.

Section 2Security Interest.

(a)Grant of Security Interest. As security for the payment or performance, as the case may be, in full in cash of the Secured Obligations, Grantor hereby grants to Purchaser a security interest (the “Security Interest”) in and lien on all of Grantor’s right, title and interest in, to and under the following property (collectively, the “Collateral”): (i) any and all Accounts arising from Net Sales of the Product and (ii) all Product Intellectual Property Collateral.  

(b)Grantor Remains Liable. The Security Interest is granted as security only and shall not subject Purchaser to, or in any way alter or modify, any obligation or liability of Grantor with respect to or arising out of the Collateral. Anything herein to the contrary notwithstanding, (i) Grantor shall remain liable under any contracts included in the Collateral, to the extent set forth therein, to perform all of its duties and obligations thereunder to the same extent as if this Agreement had not been executed, (ii) the exercise by Purchaser of any of the rights 

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granted to Purchaser hereunder shall not release Grantor from any of its duties or obligations under any such contracts included in the Collateral, and (iii) Purchaser shall not have any obligation or liability under any such contracts included in the Collateral by reason of this Agreement, nor shall Purchaser be obligated to perform any of the obligations or duties of Grantor thereunder or to take any action to collect or enforce any such Contract included in the Collateral.

(c)Continuing Security Interest. Grantor agrees that this Agreement shall create a continuing security interest in the Collateral in favor of Purchaser which shall remain in effect until terminated in accordance with Section 20.

Section 3Perfection and Priority.

(a)Financing Statements, Etc. Grantor hereby authorizes Purchaser to file at any time and from time to time in any relevant jurisdiction in the United States (including any jurisdiction within or of the United States) any financing statements with respect to the Collateral or any part thereof and amendments thereto that contain the information required by Article 9 of the UCC of each applicable jurisdiction for the filing of any financing statement or amendment, including whether Grantor is an organization, the type of organization and any organizational identification number issued to Grantor. Grantor agrees to provide such information to Purchaser promptly (and in any case within five (5) Business Days) upon its reasonable request. Purchaser is further authorized to file with the United States Patent and Trademark Office or United States Copyright Office (or any successor office) such documents as may be necessary or advisable for the purpose of perfecting, confirming, continuing, enforcing or protecting the Security Interest granted by Grantor, without the signature of Grantor, and naming Grantor as debtor and Purchaser as secured party. Grantor shall execute and deliver to Purchaser, and Grantor hereby authorizes Purchaser to file, at any time and from time to time, all amendments to financing statements, continuation financing statements, termination statements, Intellectual Property Security Agreements, assignments, affidavits, reports, notices and all other documents and instruments, in form reasonably satisfactory to Purchaser, as Purchaser may reasonably request, to perfect and continue perfected, maintain the priority of or provide notice of Purchaser’s security interest in the Collateral and to accomplish the purposes of this Agreement. Without limiting the generality of the foregoing, Grantor shall from time to time take the actions specified in subsections Error! Reference source not found. through (e) below.

(b)Product Intellectual Property Collateral. (i) Grantor shall execute and deliver to Purchaser, concurrently with the execution of this Agreement, such Intellectual Property Security Agreements as Purchaser may reasonably request, and record such Intellectual Property Security Agreements with the U.S. Copyright Office or the U.S. Patent and Trademark Office, as applicable, and take such other action as may be necessary, or as Purchaser may reasonably request, to perfect Purchaser’s security interest in the Product Intellectual Property Collateral. Notwithstanding anything herein or in the RIFA to the contrary, for the avoidance of doubt, no Grantor shall be required to take any action to perfect Purchaser’s security interest in Product Intellectual Property Collateral in any jurisdiction except the U.S.

(ii)Following the creation or other acquisition of any Product Intellectual Property Collateral by Grantor after the date hereof which is registered or becomes registered or the subject of an application for registration with the U.S. Copyright Office or the 

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U.S. Patent and Trademark Office, as applicable, Grantor shall include details of such newly created or acquired Product Intellectual Property Collateral on the next Quarterly Report provided under Section 5.01(f) of the RIFA, and take actions as Purchaser may reasonably request to ensure perfection of Purchaser’s security interest in such U.S. Product Intellectual Property Collateral.

(c)Rights to Payment. At the request of the Purchaser, Grantor shall deliver to Purchaser, or an agent designated by it, appropriately endorsed or accompanied by appropriate instruments of transfer or assignment, all Rights to Payment representing amounts in excess of $1,000,000 at any time evidenced by promissory notes, trade acceptances or other instruments, not already delivered hereunder pursuant to this Section 3.

(d)Further Assurances. Grantor agrees that, at its own expense, it will promptly execute, acknowledge, deliver and cause to be filed all further instruments and documents and take all other actions as Purchaser may from time to time reasonably request in order to assure, obtain, perfect, preserve and protect any security interest granted or purported to be granted under this Agreement or enable Purchaser to exercise and enforce its rights and remedies hereunder with respect to any Collateral, including the payment of any fees and Taxes required in connection with the execution and delivery of this Agreement, the granting of the Security Interest and the filing of any financing or continuation statements or other documents in connection herewith or therewith.

(e)Taxes. At its option, Purchaser may discharge past due Taxes, assessments, charges, fees, Liens, security interests or other encumbrances at any time levied or placed on the Collateral and not expressly permitted pursuant to the RIFA, and may pay for the maintenance and preservation of the Collateral to the extent Grantor fails to do so to the extent required by the RIFA or this Agreement, and Grantor jointly and severally agrees to reimburse Purchaser on demand for any reasonable payment made or any reasonable expense incurred by Purchaser pursuant to the foregoing authorization; provided, however, that nothing in this paragraph shall be interpreted as excusing Grantor from the performance of, or imposing any obligation on Purchaser to cure or perform, any covenants or other promises of Grantor with respect to Taxes, assessments, charges, fees, Liens, security interests or other encumbrances and maintenance as set forth herein or in the other Transaction Documents.

Section 4Representations and Warranties. Grantor represents and warrants to Purchaser as of the date of this Agreement that:

(a)Location of Chief Executive Office and Collateral. Grantor’s chief executive office and principal place of business (as of the date of this Agreement) is located at the address set forth in Error! Reference source not found., and all other locations (as of the date of this Agreement) where Grantor conducts business or Collateral is kept are set forth in Error! Reference source not found..

(b)Locations of Books.  All Books are kept at Grantor’s chief executive office, principal place of business or other place where Grantor conducts business.

(c)Jurisdiction of Organization and Names. Grantor’s jurisdiction of organization is set forth in Error! Reference source not found.; and Grantor’s exact legal name is 

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as set forth in the signature pages of this Agreement. All trade names and trade styles under which Grantor presently conducts its business operations are set forth in Error! Reference source not found., and, except as set forth in Error! Reference source not found., Grantor has not, at any time in the past: (i) been known as or used any other corporate, trade or fictitious name or (ii) changed its name; (iii) been the surviving or resulting corporation in a merger or consolidation; or (iv) acquired through asset purchase or otherwise any business of any Person.

(d)Collateral. Grantor has rights in or the power to transfer the Collateral, and Grantor has legal title to the Collateral (or, in the case of after-acquired Collateral, at the time Grantor acquires rights in such Collateral, will have good and valid title therein), free from any Lien other than Permitted Liens.

(e)Enforceability; Priority of Security Interest. (i) This Agreement creates a valid security interest in the Collateral which is enforceable against the Collateral in which Grantor now has rights and will create a valid security interest which is enforceable against the Collateral in which Grantor hereafter acquires rights at the time Grantor acquires any such rights; and (ii) upon the completion of the filing of the UCC Financing Statements, the Purchaser will have a perfected security interest in the Collateral in which Grantor now has rights, and will have a perfected security interest in the Collateral in which Grantor hereafter acquires rights at the time Grantor acquires any such rights, in each case, subject to Permitted Liens and securing the payment and performance of the Secured Obligations.

(f)Other Financing Statements. Other than (i) financing statements disclosed to Purchaser, (ii) financing statements in favor of Purchaser or (iii) financing statements in respect of Permitted Liens, no effective financing statement naming Grantor as debtor, assignor, grantor, mortgagor, pledgor or the like and covering all or any part of the Collateral is on file in any filing or recording office in any jurisdiction.

(g)Rights to Payment. Except for Permitted Liens, Grantor has not assigned any of its rights under any of its Rights to Payment except to Oaktree in accordance with the Intercreditor Agreement, as provided in this Agreement or as set forth in the other Transaction Documents.

(h)Control Agreements. No deposit account control agreements or securities account control agreements exist with respect to any Collateral held or received by Grantor from time to time other than any control agreements in favor of Oaktree.

Section 5Covenants. So long as any of the Secured Obligations remain unsatisfied, Grantor agrees that:

(a)Defense of Collateral. Grantor will appear in and defend any action, suit or proceeding which may to a material extent affect its title to, or right or interest in, or Purchaser’s right or interest in, the Collateral, including any action, suit or proceeding with respect to any Liens on the Collateral (other than any Lien not prohibited by the Transaction Documents).

(b)Preservation of Collateral. Grantor will do and perform all commercially reasonable acts that may be necessary and appropriate to maintain, preserve and protect the Collateral.

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(c)Compliance with Laws, Etc. Grantor will comply, in all material respects, with all applicable laws, and all policies of insurance, relating to the possession, operation, maintenance and control of the Collateral. 

(d)Location of Books and Chief Executive Office. Grantor will: (i) keep all Books at Grantor’s chief executive office, principal place of business or other place where Grantor conducts business that is set forth in Schedule 1 (or specified in writing by the Grantor to the Purchaser after the date of this Agreement) and (ii) promptly notify Purchaser of any changes in the location of Grantor’s chief executive office or principal place of business.

(e)Change in Name, Identity or Structure. Grantor will give five (5) Business Days prior written notice to Purchaser of (i) any change in name, (ii) any change in its jurisdiction of organization, (iii) any change in its registration as an organization (or any new registration); and (iv) any changes in its identity or structure in any manner which might make any financing statement filed hereunder incorrect or misleading; provided that such changes are otherwise permitted by the Transaction Documents and that Grantor shall not change its jurisdiction of organization to a jurisdiction outside of the United States.

(f)Maintenance of Records. Grantor will keep, at its own cost and expense, separate, accurate and complete Books as is consistent with its practices as of the date hereof in all material respects with respect to the Collateral held by Grantor. 

(g)Disposition of Collateral. Grantor will not surrender or lose possession of, sell, lease, rent, or otherwise dispose of or transfer any of the Collateral held by Grantor or any right or interest therein, except in connection with Permitted Liens or otherwise in compliance with the RIFA and the Intercreditor Agreement.

(h)Rights to Payment. Grantor will:

(i)until the Purchaser exercises its rights hereunder to collect any Rights to Payment, endeavor in the first instance diligently to collect all amounts due or to become due on or with respect to the Rights to Payment; 

(ii)with such frequency as Purchaser may reasonably require or as may be required under the RIFA, furnish to Purchaser full and complete reports, in form and substance reasonably satisfactory to Purchaser, with respect to Accounts of Grantor constituting Collateral; 

(iii)if any Accounts of Grantor constituting Collateral in an aggregate amount in excess of $1,000,000 per fiscal year arise from contracts with the United States or any department, agency or instrumentality thereof, promptly notify Purchaser thereof and execute any documents and instruments and take any other steps reasonably requested by Purchaser in order that all monies due and to become due thereunder shall be assigned to Purchaser upon the occurrence and continuance of a Put Option Event;

(iv)upon the occurrence and during the continuation of a Put Option Event and upon the request of the Purchaser (A) notify all or any designated portion of the account debtors and other obligors on the Rights to Payment of the security interest hereunder, (B) notify the account debtors and other obligors on the Rights to Payment or any designated portion thereof 

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that payment shall be made directly to the Purchaser or to such other Person or location as the Purchaser shall specify, and (C) hold all remittances received by Grantor in connection with the Rights to Payment in trust for the Purchaser and, in accordance with the Purchaser’s instructions, remit such amounts to the Purchaser or deposit them to an account with the Purchaser in the form received (with any necessary endorsements or instruments of assignment or transfer); and

(v)upon the occurrence and during the continuation of a Put Option Event, establish such lockbox or similar arrangements for the payment of the Rights to Payment as the Purchaser shall require.

(i)Product Intellectual Property Collateral. Grantor will:

(i)not allow or suffer any Product Intellectual Property Collateral held by Grantor to become abandoned, nor any registration thereof to be abandoned, terminated, forfeited, expired or dedicated to the public, except as shall be reasonable and appropriate in accordance with prudent business practice;

(ii)notify Purchaser promptly if it knows or has reason to know (A) that any Product Intellectual Property Collateral may become abandoned, terminated, forfeited, expired or dedicated to the public, except to the extent permitted by the RIFA or (B) of any materially adverse determination or development (including the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office, United States Copyright Office or any court or similar office of any other jurisdiction) regarding Grantor’s ownership or control of any Product Intellectual Property Collateral, its right to register the same, or its right to keep and maintain the same. 

(iii)use commercially reasonable efforts to prosecute all applications for patents, copyrights and trademarks, and file and prosecute any and all continuations, continuations-in-part, divisionals, applications for reissue, applications for certificate of correction, re-examinations, re-issues, other post-grant review procedures and like matters as shall be reasonable and appropriate in accordance with prudent business practice, and promptly and timely pay any and all maintenance, license, registration and other fees, taxes and expenses incurred in connection with any Product Intellectual Property Collateral, except as shall be reasonable and appropriate in accordance with prudent business practice; and 

(iv)in the event that Grantor knows or has reason to believe that any Product Intellectual Property Collateral has been or will imminently be infringed, misappropriated or otherwise violated by a third person in any manner that would reasonably be expected to result in a Material Adverse Effect, Grantor shall promptly (and in any case within five Business Days after obtaining knowledge thereof) notify Purchaser and shall, if consistent with good business judgment, promptly take such commercially reasonable measures with respect to such infringement, misappropriation or other violation and, if appropriate, to recover damages therefor.

(j)Notices, Reports and Information. Grantor will, upon the reasonable request of Purchaser, make such demands and requests for information and reports as Grantor is entitled to make in respect of the Collateral. 

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Section 6Authorization; Appointment of Attorney-in-Fact. In addition to (and not in limitation of) any other right or remedy provided to Purchaser hereunder, Purchaser shall have the right to, in the name of Grantor, or in the name of Purchaser or otherwise, without notice to or assent by Grantor, and Grantor hereby constitutes and appoints Purchaser (and any of Purchaser’s officers or employees or agents designated by Purchaser) as Grantor’s true and lawful attorney-in-fact, with full power and authority to:

(a)file any of the financing statements which must be filed to perfect or continue perfected, maintain the priority of, or provide notice of, Purchaser’s Lien in the Collateral;

(b)take possession of and endorse any notes, acceptances, checks, drafts, money orders or other forms of payment or security and collect any Proceeds, in each case solely to the extent constituting Collateral;

(c)sign and endorse any invoice or other document relating to any of the Collateral;

(d)notify the U.S. Postal Service and other postal authorities to change the address for delivery of mail addressed to Grantor to such address as the Purchaser may designate; and, without limiting the generality of the foregoing, establish with any Person lockbox or similar arrangements for the payment of the Rights to Payment;

(e)receive, open and dispose of all mail addressed to Grantor relating to the Collateral;

(f)send requests for verification of Rights to Payment to the applicable customers or other obligors of Grantor;

(g)contact, or direct Grantor to contact, all account debtors and other obligors on the Rights to Payment and instruct such account debtors and other obligors to make all payments directly to the Purchaser;

(h)assert, adjust, sue for, compromise or release any claims under any policies of insurance in respect of the Collateral;

(i)notify each Person maintaining lockbox or similar arrangements for the payment of the Rights to Payment of Grantor to remit all amounts representing collections on such Rights to Payment directly to the Purchaser;

(j)ask, demand, collect, receive and give acquittances and receipts for any and all Rights to Payment, enforce payment or any other rights in respect of Collateral, grant consents, agree to any amendments, modifications or waivers of the agreements and documents governing such Collateral, and otherwise file any claims, take any action or institute, defend, settle or adjust any actions, suits or proceedings with respect to the Collateral, as Purchaser may deem necessary or desirable to maintain, preserve and protect the Collateral, to collect the Collateral or to enforce the rights of Purchaser with respect to the Collateral;

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(k)execute any and all applications, documents, papers and instruments necessary for Purchaser to use the Product Intellectual Property Collateral and grant or issue any exclusive or non-exclusive license with respect to any Product Intellectual Property Collateral;

(l)execute any and all endorsements, assignments or other documents and instruments necessary to sell, lease, assign, convey or otherwise transfer title in or dispose of the Collateral;

(m)commence and prosecute any and all suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect or otherwise realize on all or any of the Collateral or to enforce any rights in respect of any Collateral;

(n)settle, compromise, compound, adjust or defend any actions, suits or proceedings relating to all or any of the Collateral; and

(o)use, sell, assign, transfer, pledge, make any agreement with respect to or otherwise deal with all or any of the Collateral, and execute any and all such other documents and instruments, and do any and all acts and things for and on behalf of Grantor, which Purchaser may deem necessary or advisable to maintain, protect, realize upon and preserve the Collateral and Purchaser’s security interest therein and to accomplish the purposes of this Agreement.

Purchaser agrees that, except upon the occurrence and during the continuation of a Put Option Event, it shall not exercise the power of attorney, or any rights granted to Purchaser, pursuant to clauses (b) through (o). The foregoing power of attorney is coupled with an interest and irrevocable so long as the Secured Obligations have not been paid and performed in full. Grantor hereby ratifies, to the extent permitted by applicable law, all that Purchaser shall lawfully and in good faith do or cause to be done by virtue of and in compliance with this Section 6.

Section 7Secured Party Performance of Grantor Obligations. Upon the occurrence and continuation of a Put Option Event, Purchaser shall have the right (but not any obligation) to perform or pay any obligation which Grantor has agreed to perform or pay under or in connection with this Agreement, and Grantor shall reimburse Purchaser on demand for all documented out of pocket costs and expenses by Purchaser pursuant to this Section 7.

Section 8Secured Party’s Duties. Notwithstanding any provision contained in this Agreement, Purchaser shall have no duty to exercise any of the rights, privileges or powers afforded to it and shall not be responsible to Grantor or any other Person for any failure to do so or delay in doing so. Without limiting the generality of the foregoing, nothing herein contained shall be construed as requiring or obligating Purchaser to make any commitment or to make any inquiry as to the nature of sufficiency of any payment received by Purchaser, or to present or file any claim or notice, or to take any action with respect to the Collateral or any part thereof or the moneys due or to become due in respect thereof or any property covered thereby. With the exception of the exercise of reasonable care to assure the safe custody of Collateral in Purchaser’s possession and the accounting for moneys actually received by Purchaser hereunder, Purchaser and its officers, directors, employees, agents or sub-agents shall have no duty or liability to exercise or preserve any rights, privileges or powers pertaining to the Collateral. 

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Section 9Remedies.

(a)Remedies. Solely upon the occurrence and during the continuation of a Put Option Event, Grantor agrees to deliver each item of Collateral to Purchaser on demand, and Purchaser shall have, in addition to all other rights and remedies granted to it in this Agreement, the RIFA, or any other Transaction Document, all rights and remedies of a secured party under the NY UCC and other applicable law. Without limiting the generality of the foregoing, Grantor agrees that:

(i)Purchaser may peaceably, with or without legal process and with or without notice, without liability for trespass enter any premises of Grantor, take possession of any Collateral, remove or dispose of all or part of the Collateral on any premises of Grantor or elsewhere, and otherwise collect, receive, appropriate and realize upon all or any part of the Collateral, and demand, give receipt for, settle, renew, extend, exchange, compromise, adjust, or sue for all or any part of the Collateral, as Purchaser may determine, and, generally, exercise any and all rights afforded to a secured party under the UCC or other applicable law.

(ii)Purchaser may require Grantor to assemble all or any part of the Collateral and make it available to Purchaser, at any place and time designated by Purchaser.

(iii)Purchaser may use or transfer any of Grantor’s rights and interests in any Product Intellectual Property Collateral, by license, by sublicense (solely to the extent permitted by such applicable license) or otherwise, on such conditions and in such manner as Purchaser may determine.

(iv)Purchaser may secure the appointment of a receiver of the Collateral or any part thereof (to the extent and in the manner provided by applicable law).

(v)Purchaser may sell, resell, lease, use, assign, transfer or otherwise dispose of any or all of the Collateral in its then condition or following any commercially reasonable preparation or processing (utilizing in connection therewith any of Grantor’s assets, without charge or liability to Purchaser therefor) at public or private sale or at any broker’s board or any securities exchange, by one or more contracts, in one or more parcels, at the same or different times, for cash or credit or for future delivery without assumption of any credit risk, all as Purchaser deems advisable; provided that Grantor shall be credited with the net proceeds of a sale only when such proceeds are finally collected by Purchaser. Purchaser shall have the right upon any such public sale, and, to the extent permitted by applicable law, upon any such private sale, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption, which right or equity of redemption Grantor hereby releases, to the extent permitted by applicable law. Purchaser shall give Grantor such notice of any public or private sale as may be required by the NY UCC or other applicable law. 

Purchaser shall give each applicable Grantor not less than 10 days’ written notice (which Grantor agrees is reasonable notice within the meaning of Section 9-611 of the NY UCC or its equivalent in other jurisdictions) of its intention to make any sale of Collateral. Such notice, in the case of a public sale, shall state the time and place for such sale and, in the case of a sale at a broker’s board or on a securities exchange, shall state the board or exchange at which such sale is to be made and 

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the day on which the Collateral, or portion thereof, will first be offered for sale at such board or exchange. Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as Purchaser may fix and state in the notice (if any) of such sale. At any such sale, the Collateral, or portion thereof, to be sold may be sold in one lot as an entirety or in separate parcels, and by Purchaser in its own right or by one or more agents or contractors, upon any premises owned, leased or occupied by Grantor, Purchaser or any such agent or contractor, and any such sale may include any other property, in each case, as Purchaser may (in its sole and absolute discretion) determine. Purchaser shall not be obligated to make any sale of any Collateral if it shall determine not to do so, regardless of the fact that notice of sale of such Collateral shall have been given. Purchaser may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for sale, and such sale may, without further notice, be made at the time and place to which the same was so adjourned. In case any sale of all or any part of the Collateral is made on credit or for future delivery, the Collateral so sold may be retained by Purchaser until the sale price is paid by the purchaser or purchasers thereof, but Purchaser shall not incur any liability in case any such purchaser or purchasers shall fail to take up and pay for the Collateral so sold and, in case of any such failure, such Collateral may be sold again upon like notice. At any public (or, to the extent permitted by law, private) sale made pursuant to this Agreement, the Purchaser may bid for or purchase, free (to the extent permitted by applicable law) from any right of redemption, stay, valuation or appraisal on the part of Grantor (all said rights being also hereby waived and released to the extent permitted by applicable law), the Collateral or any part thereof offered for sale and may make payment on account thereof by using any claim then due and payable to Purchaser from Grantor as a credit against the purchase price, and Purchaser may, upon compliance with the terms of sale, hold, retain and dispose of such property without further accountability to Grantor therefor. For purposes hereof, a written agreement to purchase the Collateral or any portion thereof shall be treated as a sale thereof; Purchaser shall be free to carry out such sale pursuant to such agreement and Grantor shall not be entitled to the return of the Collateral or any portion thereof subject thereto, notwithstanding the fact that after Purchaser shall have entered into such an agreement all Events of Default shall have been remedied and the Obligations shall have been indefeasibly paid in full in cash. As an alternative to exercising the power of sale herein conferred upon it, Purchaser may proceed by a suit or suits at law or in equity to foreclose this Agreement and to sell the Collateral or any portion thereof pursuant to a judgment or decree of a court or courts having competent jurisdiction or pursuant to a proceeding by a court-appointed receiver. Any sale pursuant to the provisions of this Section 9(a) shall be deemed to conform to the commercially reasonable standards as provided in Section 9-610(b) of the NY UCC or its equivalent in other jurisdictions. Purchaser shall not be required to marshal any present or future Collateral or to resort to such Collateral in any particular order.

 

(vi)Purchaser shall not have any obligation to clean up or otherwise prepare the Collateral for sale. Purchaser has no obligation to attempt to satisfy the Secured Obligations by collecting them from any other Person liable for them and Purchaser may release, modify or waive any Collateral provided by any other Person to secure any of the Secured Obligations, all without affecting Purchaser’s rights against Grantor. Grantor waives any right it may have to require Purchaser to pursue any third Person for any of the Secured Obligations. Purchaser may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral and compliance will not be considered to adversely affect the 

13

 

 

commercial reasonableness of any sale of the Collateral. Purchaser may sell the Collateral without giving any warranties as to the Collateral. Purchaser may specifically disclaim any warranties of title or the like. This procedure will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral. If Purchaser sells any of the Collateral upon credit, Grantor will be credited only with payments actually made by the purchaser, received by Purchaser and applied to the indebtedness of the purchaser. In the event the purchaser fails to pay for the Collateral, Purchaser may resell the Collateral and the Grantor shall be credited with the proceeds of the sale.

(b)License. For the purpose of enabling Purchaser to exercise its rights and remedies under this Section 9 or otherwise in connection with this Agreement, and solely during the continuance of a Put Option Event, Grantor hereby grants to Purchaser: (a) an irrevocable, non-exclusive license (exercisable without payment or royalty or other compensation to Grantor) to use, license or sublicense any Product Intellectual Property Collateral and (b) a non-exclusive license (exercisable without payment or royalty or other compensation to Grantor) to use, license or sublicense the Platform Intellectual Property to extent reasonably necessary to permit the use, manufacture, sell, offer for sale, import, and other exploitation of the Product or the exploitation of the Product Intellectual Property Collateral, including, in each case of (a)-(b), all access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof for the purpose of practicing the foregoing licenses; provided, however, that nothing in this Section 9(b) shall require Grantor to grant any license that (i) violates the express terms of any agreement between Grantor and a third party governing Grantor’s use of such Product Intellectual Property Collateral or Platform Intellectual Property, or gives such third party any right of acceleration, modification or cancellation therein, or (ii) is prohibited by any applicable law; provided, further, that such licenses to be granted hereunder with respect to Trademarks shall be subject to maintenance of quality standards with respect to the goods and services on which such Trademarks are used sufficient to preserve the validity of such Trademarks.

(c)Application of Proceeds. Except as expressly provided elsewhere in this Agreement, all cash proceeds actually received from the sale or other disposition or collection of Collateral, and any other amounts received in respect of Collateral the application of which is not otherwise provided for herein, shall be applied in good faith to satisfy (to the extent of the net proceeds received by Purchaser) such item or part of the Secured Obligations as Purchaser may designate. Any surplus thereof which exists after payment and performance in full of the Secured Obligations shall be promptly paid over to Grantor or otherwise disposed of in accordance with the NY UCC or other applicable law. Grantor shall remain liable to Purchaser for any deficiency which exists after any sale or other disposition or collection of Collateral.

Section 10Certain Waivers. Grantor waives, to the fullest extent permitted by applicable law, (i) any right of redemption with respect to the Collateral, whether before or after sale hereunder, and all rights, if any, of marshalling of the Collateral or other collateral or security for the Secured Obligations; (ii) any right to require Purchaser (w) to proceed against any Person, (x) to exhaust any other collateral or security for any of the Secured Obligations, (y) to pursue any remedy in Purchaser’s power, or (z) to make or give any presentments, demands for performance, notices of nonperformance, protests, notices of protests or notices of dishonor in connection with 

14

 

 

any of the Collateral; and (iii) all claims, damages, and demands against Purchaser arising out of the repossession, retention, sale or application of the proceeds of any sale of the Collateral.

Section 11Notices. All notices, requests, instructions, directions and other communications provided for herein (including any modifications of, or waivers, requests or consents under, this Agreement) shall be given or made in writing (including by telecopy or email) delivered, if to any of the parties hereto, as specified in the RIFA. Except as otherwise provided in this Agreement or therein, all such communications shall be deemed to have been duly given upon receipt of a legible copy thereof, in each case given or addressed as aforesaid. All such communications provided for herein by telecopy shall be confirmed in writing promptly after the delivery of such communication (it being understood that non-receipt of written confirmation of such communication shall not invalidate such communication).

Section 12No Waiver; Cumulative Remedies. 

(a)No failure on the part of Purchaser to exercise and no delay in exercising, and no course of dealing with respect to, any right, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege under this Agreement preclude any other or further exercise thereof or the exercise of any other right, power or privilege. Any waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice or demand on Grantor in any case shall entitle Grantor to any other or further notice or demand in similar or other circumstances. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. 

(b)Grantor waives any and all other defenses, set-offs or counterclaims (other than a defense of payment or performance in full hereunder) which may at any time be available to or be asserted by it or any other Person against Purchaser, including, without limitation, failure of consideration, breach of warranty, statute of frauds, statute of limitations, accord and satisfaction and usury.

(c)Grantor waives diligence, presentment, protest, marshaling, demand for payment, notice of dishonor, notice of default and notice of nonpayment to or upon Grantor with respect to the Secured Obligations. Except for notices provided for herein, Grantor hereby waives notice (to the extent permitted by applicable law) of any kind in connection with this Agreement or any collateral securing the Secured Obligations, including, without limitation, the Collateral. When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against Grantor, Purchaser may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may have against any other Person or against any collateral security or guarantee for the Secured Obligations or any right of offset with respect thereto, and any failure by Purchaser to make any such demand, to pursue such other rights or remedies or to collect any payments from the Grantor or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of Grantor or any other Person or any such collateral security, guarantee or right of offset, shall not relieve Grantor of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of Purchaser against any Grantor. For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings.

15

 

 

Section 13Binding Effect. This Agreement shall be binding upon, inure to the benefit of and be enforceable by Grantor, Purchaser and their respective successors and assigns. Grantor shall not assign or delegate this Agreement, any of its rights or obligations hereunder or any interest herein or in the Collateral (in each case, except as expressly contemplated by this Agreement or the RIFA) without the prior written consent of Purchaser, and any attempted assignment without such consent shall be null and void.

Section 14Governing Law; Jurisdiction; Waiver of Jury Trial. Sections 7.16 and 7.17 of the RIFA are incorporated herein by reference, mutandis mutandis.

Section 15 Entire Agreement; Amendment. This Agreement and the other Transaction Documents constitute the entire agreement between the parties with respect to the subject matter hereof and supersede all prior agreements (including the Term Sheet), understandings and negotiations, both written and oral, between the parties with respect to the subject matter of this Agreement. No representation, inducement, promise, understanding, condition or warranty not set forth herein (or in other Transaction Documents) has been made or relied upon by either party hereto. None of this Agreement, nor any provision hereof, is intended to confer upon any Person other than the parties hereto any rights or remedies hereunder. 

Section 16Severability. If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall nevertheless be given full force and effect. 

Section 17Counterparts; Effectiveness. This Agreement may be executed in two or more counterparts, each of which shall be an original, but all of which together shall constitute one and the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other parties hereto. Any counterpart may be executed by facsimile or pdf signature and such facsimile or pdf signature shall be deemed an original.

Section 18Incorporation of Provisions of the RIFA. To the extent the RIFA contains provisions of general applicability to the Transaction Documents, such provisions are incorporated herein by this reference.

Section 19No Inconsistent Requirements. Grantor acknowledges that this Agreement and the other Transaction Documents may contain covenants and other terms and provisions variously stated regarding the same or similar matters, and agrees that all such covenants, terms and provisions are cumulative and all shall be performed and satisfied in accordance with their respective terms.

Section 20Termination. Upon the termination of the RIFA and payment and performance in full of all Secured Obligations, the security interests created by this Agreement shall automatically terminate and Purchaser shall promptly execute and deliver to Grantor such documents and instruments reasonably requested by Grantor as shall be necessary to evidence the termination of all security interests given by Grantor to Purchaser hereunder.  Any execution and delivery of such documents pursuant to this Section 20 shall be without recourse to or representation or warranty by Purchaser. The Grantor shall reimburse Purchaser upon demand for all reasonable and documented costs and out of pocket expenses, including the reasonable fees, 

16

 

 

charges and expenses of counsel, incurred by it in connection with any action contemplated by this Section 20.

Upon any sale, lease, transfer or other disposition by Grantor of any Collateral that is permitted under the RIFA, the security interest in such Collateral shall be automatically released.

In addition, in connection with the entry into any license by the Grantor concerning any Collateral, Purchaser shall, at the request of Grantor, negotiate and enter into a non-disturbance agreement and other similar agreements in form and substance reasonably satisfactory to Purchaser and the Grantor.

Section 21Right of Set-Off. If a Put Option Event shall have occurred and is continuing, Purchaser is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all Collateral (including any deposits (general or special, time or demand, provisional or final)) at any time held and other obligations at any time owing by Purchaser to or for the credit or the account of Grantor against any and all of the obligations of Grantor now or hereafter existing under this Agreement and the other Transaction Documents, irrespective of whether or not Purchaser shall have made any demand under this Agreement or any other Transaction Document and although such obligations may be unmatured. The rights of Purchaser under this Section 21 are in additional to any other rights and remedies (including other rights of setoff) which Purchaser may have.

Section 22Intercreditor Agreement. 

(a)Concurrently herewith, the Purchaser shall enter into the Existing Intercreditor Agreement. In connection with any Permitted Refinancing of the Oaktree Term Loan Facility or other incurrence of any Permitted Indebtedness, the Purchaser shall enter into an Intercreditor Agreement on terms and conditions consistent with the Existing Intercreditor Agreement or otherwise reasonably satisfactory to the Purchaser providing for the subordination of the Liens of the Purchaser on the Collateral (other than Purchaser Priority Collateral) to the Liens of the lender(s) (or agent(s) for such lender(s)) of such Permitted Indebtedness.

(b)Notwithstanding anything herein to the contrary, the priority of the lien and security interest granted to the Purchaser pursuant to this Agreement and the exercise of any right or remedy by the Purchaser hereunder are subject to the provisions of the Intercreditor Agreement. In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement with respect to the priority of any liens or the exercise of any rights or remedies, the terms of the Intercreditor Agreement shall govern. The requirement under this Agreement to deliver Collateral to the Purchaser (or any representation or warranty having the effect of requiring the same) shall be deemed satisfied (or any such representation or warranty shall be deemed true) by delivery of such Collateral to Oaktree (or other senior creditor under the Intercreditor Agreement from time to time) as bailee of, and behalf of, the Purchaser pursuant to the Intercreditor Agreement).

(c)Notwithstanding anything herein to the contrary, to the extent the Grantor is required hereunder to deliver Collateral to, or the possession or control by, the Purchaser for purposes of possession and/or “control” (as such term is used herein) and is unable to do so as a result of having previously delivered such Collateral to Oaktree (or other authorized representative 

17

 

 

in accordance with the terms of any then applicable Intercreditor Agreement), such Grantor’s obligations hereunder with respect to such delivery shall be deemed complied with and satisfied by the delivery to such representative, as gratuitous bailee and/or gratuitous agent for the benefit of the Purchaser.

(d)Any reference in this Agreement to a “first priority security interest” or words of similar effect in describing the security interests created hereunder shall be understood to refer to such priority subject to the terms of the Intercreditor Agreement.

[Remainder of page intentionally left blank; signature pages follow]

18

 

 

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

 

	
GRANTOR:

ATHENEX, INC.

	
 
	
 
	
 
	
 

	
By:
	
 
	
/s/ Johnson Y.N. Lau

	
 
	
 
	
Name:
	
Johnson Y.N. Lau

	
 
	
 
	
Title:
	
Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Security Agreement]

 

 

 

	
SAGARD HEALTHCARE ROYALTY

PARTNERS, LP, by its general partner,

SAGARD HEALTHCARE ROYALTY

PARTNERS GP LLC

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
By:
	
 
	
/s/ Adam Vigna

	
 
	
 
	
Name:
	
Adam Vigna

	
 
	
 
	
Title:
	
Chief Investment Officer

 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
By:
	
 
	
/s/ Andrew Dean

	
 
	
 
	
Name:
	
Andrew Dean

	
 
	
 
	
Title:
	
Manager

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Security Agreement]

 

 

Schedule 1*

Grantor Information 

* Schedule 1 has been omitted pursuant to Item 601(a)(5) of Regulation S-K.  The registrant will provide a copy of any omitted exhibit or schedule to the Securities and Exchange Commission or its staff upon request.

 

 

Exhibit A

TO THE SECURITY AGREEMENT

FORM OF COPYRIGHT SECURITY AGREEMENT

This COPYRIGHT SECURITY AGREEMENT, dated as of [__________], 20[__] (“Copyright Security Agreement”), made by Athenex, Inc. (the “Grantor”), is in favor of Sagard Healthcare Royalty Partners, LP (“Purchaser”).

W I T N E S S E T H:

WHEREAS, the Grantor is party to a Security Agreement dated as of [●], 2020 (the “Security Agreement”) in favor of Purchaser, pursuant to which the Grantor is required to execute and deliver this Copyright Security Agreement (capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Security Agreement);

WHEREAS, pursuant to the terms of the Security Agreement, the Grantor has created in favor of Purchaser a security interest in, and Purchaser has become a secured creditor with respect to, the Copyright Collateral (as defined below);

NOW, THEREFORE, in consideration of the premises and to induce Purchaser to enter into the RIFA and extend credit to Grantor thereunder, Grantor hereby grants to Purchaser a security interest in all of the following property now owned or at any time hereafter acquired by Grantor or in which Grantor now has or at any time in the future may acquire any right, title or interest (collectively, the “Copyright Collateral”), as collateral security for the complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of all Secured Obligations:

(a)all Copyrights of such Grantor listed on Schedule 1 attached hereto;

(b)to the extent not covered by clause (a), all Proceeds of any of the foregoing; and

(c)to the extent not covered by clause (a), all causes of action arising prior to or after the date hereof for infringement of any of the Copyrights included in the Copyright Collateral.

The security interest granted pursuant to this Copyright Security Agreement is granted in conjunction with the security interest granted to Purchaser pursuant to the Security Agreement, and the Grantor hereby acknowledges and affirms that the rights and remedies of Purchaser with respect to the security interest in the Copyright Collateral made and granted hereby are more fully set forth in the Security Agreement. In the event that any provision of this Copyright Security Agreement is deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall govern.

Grantor hereby authorizes and requests that the Register of Copyrights record this Copyright Security Agreement.

 

 

THIS COPYRIGHT SECURITY AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS COPYRIGHT SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

This Copyright Security Agreement may be executed by one or more of the parties to this Copyright Security Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Copyright Security Agreement by facsimile transmission or electronic transmission (in PDF format) shall be effective as delivery of a manually executed counterpart hereof.

[Remainder of This Page Intentionally Left Blank.]

 

 

IN WITNESS WHEREOF, the Grantor has caused this COPYRIGHT SECURITY AGREEMENT to be executed and delivered by its duly authorized officer as of the date first above written.

 

	
ATHENEX, INC.

 

	
 
	
 
	
 
	
 

	
By:
	
 
	
 

	
 
	
 
	
Name:
	
 

	
 
	
 
	
Title:
	
 

 

	
Address:
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

 

Accepted and Agreed:
SAGARD HEALTHCARE ROYALTY PARTNERS, LP

 

	
By
	
 
	
 

	
Name:
	
 
	
 
	
 

	
Title:
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
Address:
	
 
	
 
	
 

 

 

 

Schedule 1

COPYRIGHTS

Copyright Registrations

	
Title of Work
	
Reg. No.
	
Reg. Date
	
Owner

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

 

 

 

 

Exhibit B

TO THE SECURITY AGREEMENT

FORM OF TRADEMARK SECURITY AGREEMENT

This TRADEMARK SECURITY AGREEMENT, dated as of [_________], 20[__] (“Trademark Security Agreement”), made by Athenex, Inc. (the “Grantor”), is in favor of Sagard Healthcare Royalty Partners, LP (“Purchaser”).

W I T N E S S E T H:

WHEREAS, the Grantor is party to a Security Agreement, dated as [●], 2020 (the “Security Agreement”) in favor of Purchaser, pursuant to which the Grantor is required to execute and deliver this Trademark Security Agreement (capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Security Agreement);

WHEREAS, pursuant to the terms of the Security Agreement, the Grantor has created in favor of Purchaser a security interest in, and Purchaser has become a secured creditor with respect to, the Trademark Collateral (as defined below);

NOW, THEREFORE, in consideration of the premises and to induce Purchaser to enter into the RIFA and extend credit to the Grantor thereunder, Grantor hereby grants to Purchaser a security interest in all of the following property now owned or at any time hereafter acquired by Grantor or in which Grantor now has or at any time in the future may acquire any right, title or interest (collectively, the “Trademark Collateral”), as collateral security for the complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of all Secured Obligations:

(a)all registered and applied-for Trademarks of Grantor listed on Schedule 1 attached hereto;

(b)to the extent not covered by clause (a), all Proceeds of any of the foregoing;

(c)to the extent not covered by clause (a), the goodwill of the businesses with which the Trademarks included in the Trademark Collateral are associated; and

(d)to the extent not covered by clause (a), all causes of action arising prior to or after the date hereof for infringement of any of the Trademarks included in the Trademark Collateral or unfair competition regarding the same.

The security interest granted pursuant to this Trademark Security Agreement is granted in conjunction with the security interest granted to Purchaser pursuant to the Security Agreement, and the Grantor hereby acknowledges and affirms that the rights and remedies of Purchaser with respect to the security interest in the Trademarks made and granted hereby are more fully set forth in the Security Agreement. In the event that any provision of this Trademark Security Agreement is deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall govern.

 

 

Grantor hereby authorizes and requests that the Commissioner of Trademarks record this Trademark Security Agreement.

THIS TRADEMARK SECURITY AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS TRADEMARK SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

This Trademark Security Agreement may be executed by one or more of the parties to this Trademark Security Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Trademark Security Agreement by facsimile transmission or electronic transmission (in PDF format) shall be effective as delivery of a manually executed counterpart hereof.

[Remainder of This Page Intentionally Left Blank.]

 

 

IN WITNESS WHEREOF, the Grantor has caused this TRADEMARK SECURITY AGREEMENT to be executed and delivered by its duly authorized officer as of the date first above written.

 

	
ATHENEX, INC.

 

	
 
	
 
	
 
	
 

	
By:
	
 
	
 

	
 
	
 
	
Name:
	
 

	
 
	
 
	
Title:
	
 

 

	
Address:
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

 

Accepted and Agreed:
SAGARD HEALTHCARE ROYALTY PARTNERS, LP

 

	
By
	
 
	
 

	
Name:
	
 
	
 
	
 

	
Title:
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
Address:
	
 
	
 
	
 

 

 

 

Schedule 1

TRADEMARKS

Trademark Registrations and Applications

	
Trademark
	
Reg. No.

(App. No.)
	
Reg. Date

(App. Date)
	
Owner

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

 

 

 

 

Exhibit C

TO THE SECURITY AGREEMENT 

FORM OF PATENT SECURITY AGREEMENT

This PATENT SECURITY AGREEMENT, dated as of [__________], 20[ ] (“Patent Security Agreement”), made by Athenex, Inc. (the “Grantor”), is in favor of Sagard Healthcare Royalty Partners, LP (“Purchaser”).

W I T N E S S E T H:

WHEREAS, the Grantor is party to a Security Agreement dated as of [●], 2020 (the “Security Agreement”) in favor of Purchaser, pursuant to which the Grantor is required to execute and deliver this Patent Security Agreement (capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Security Agreement);

WHEREAS, pursuant to the terms of the Security Agreement, the Grantor has created in favor of Purchaser a security interest in, and Purchaser has become a secured creditor with respect to, the Patent Collateral (as defined below);

NOW, THEREFORE, in consideration of the premises and to induce Purchaser to enter into the RIFA and extend credit to the Grantor thereunder, the Grantor hereby grants to Purchaser a security interest in all of the following property now owned or at any time hereafter acquired by Grantor or in which Grantor now has or at any time in the future may acquire any right, title or interest (collectively, the “Patent Collateral”), as collateral security for the complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of all Secured Obligations:

(a)all registered and applied-for Patents of Grantor listed on Schedule 1 attached hereto;

(b)to the extent not covered by clause (a), all Proceeds of any of the foregoing; and

(c)to the extent not covered by clause (a), all causes of action arising prior to or after the date hereof for infringement of any of the Patents included in the Patent Collateral.

The security interest granted pursuant to this Patent Security Agreement is granted in conjunction with the security interest granted to Purchaser pursuant to the Security Agreement, and the Grantor hereby acknowledges and affirms that the rights and remedies of Purchaser with respect to the security interest in the Patents made and granted hereby are more fully set forth in the Security Agreement. In the event that any provision of this Patent Security Agreement is deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall govern.

The Grantor hereby authorizes and requests that the Commissioner of Patents record this Patent Security Agreement.

 

 

THIS PATENT SECURITY AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS PATENT SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

This Patent Security Agreement may be executed by one or more of the parties to this Patent Security Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Patent Security Agreement by facsimile transmission or electronic transmission (in PDF format) shall be effective as delivery of a manually executed counterpart hereof.

[Remainder of This Page Intentionally Left Blank.]

 

 

IN WITNESS WHEREOF, the Grantor has caused this PATENT SECURITY AGREEMENT to be executed and delivered by its duly authorized officer as of the date first above written.

 

	
ATHENEX, INC.

 

	
 
	
 
	
 
	
 

	
By:
	
 
	
 

	
 
	
 
	
Name:
	
 

	
 
	
 
	
Title:
	
 

 

	
Address:
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

 

Accepted and Agreed:
SAGARD HEALTHCARE ROYALTY PARTNERS, LP

 

	
By
	
 
	
 

	
Name:
	
 
	
 
	
 

	
Title:
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
Address:
	
 
	
 
	
 

 

 

 

Schedule 1

PATENTS

Patents and Patent Applications

	
Patent
	
Reg. No.

(App. No.)
	
Reg. Date

(App. Date)
	
Owneratnx-ex103_238.htm

Exhibit 10.3

 

INTERCREDITOR AGREEMENT

THIS INTERCREDITOR AGREEMENT is made as of August 4, 2020 (this “Agreement”), by and among oaktree fund administration, LLC, in its capacity as administrative agent for the holders of the First Lien Obligations (as defined herein) (in such capacity, the “First Lien Agent”), and Sagard Healthcare Royalty Partners, LP (“SHRP”), and as acknowledged by ATHENEX, INC., a Delaware corporation (the “Borrower”). 

RECITALS

WHEREAS, the Borrower, the Subsidiary Guarantors, the First Lien Agent and certain lenders have entered into the First Lien Credit Agreement, dated as of June 19, 2020, providing for term loans;

WHEREAS, the Borrower and SHRP have entered into the Revenue Interest Financing Agreement, dated as of the date hereof, providing for revenue interest financing;

WHEREAS, the First Lien Obligations are secured by Liens on substantially all the assets of the Grantors, and the Second Lien Obligations are secured by Liens on the Collateral (as such term is defined in this Agreement); and

WHEREAS, as an inducement to the consummation of the transactions contemplated by the First Lien Debt Documents and the Second Lien Debt Documents, in order to set forth the relative rights and priorities of the First Lien Claimholders and the Second Lien Claimholders with respect to the Collateral securing the First Lien Obligations and the Second Lien Obligations, the parties hereto desire to enter into this Agreement.

NOW, THEREFORE, in consideration of the above recitals and the provisions set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

SECTION 1DEFINITIONS AND INTERPRETATION

Section 1.1Definitions. For purpose of this Agreement, the following terms used herein shall have the following meanings:

“Accounts” as defined in Article 9 of the UCC.

“Affiliate” as defined in the First Lien Credit Agreement.

“Agreement” as defined in the preamble hereto.

“Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy,” as now and hereafter in effect, or any successor statute.

“Bankruptcy Law” means the Bankruptcy Code and any similar federal, state, or foreign bankruptcy, insolvency, receivership, or similar law affecting creditors’ rights generally.

“Borrower” as defined in the preamble hereto.

“Business Day” as defined in the First Lien Credit Agreement.

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“Catch-Up Payments” means the payments required pursuant to Section 2.02(c) of the Revenue Interest Financing Agreement, provided that the aggregate amount of all Catch-Up Payments and Revenue Interest Payments shall not exceed the Hard Cap.

“Collateral” means (i) any and all Accounts arising from Net Sales of the Secured Product and (ii) all Product Intellectual Property Collateral.  

“DIP Financing” means the obtaining of credit or incurring of debt by any Grantor secured by a Lien on the Collateral pursuant to section 364 of the Bankruptcy Code (or similar Bankruptcy Law).

“Discharge of First Lien Obligations” means, except to the extent otherwise expressly provided in Section 6.7:

(a)(i) payment in full in cash of the principal of, and interest (including any Prepayment Fee, Exit Fee, interest, fees, expenses and costs accruing in accordance with the First Lien Debt Documents on or after the commencement of an Insolvency Proceeding, regardless of whether such interest and/or fees, expenses and costs would be allowed or allowable in such Insolvency Proceeding) on, all outstanding Indebtedness constituting First Lien Obligations and (ii) payment in full in cash or other consideration as consented to by each of the First Lien Claimholders of all other First Lien Obligations that are due and payable or otherwise accrued and owing at or prior to the time such principal and interest are paid (other than contingent indemnification for which no claim or demand has been made); and

(b)termination or expiration of all commitments, if any, to extend credit that would constitute First Lien Obligations.

“Discharge of Second Lien Obligations” means:

(a)payment in full in cash of all Revenue Interest Payments, all Catch-Up Payments and any Put/Call Price (including interest, fees, expenses and costs accruing in accordance with the Second Lien Debt Documents on or after the commencement of an Insolvency Proceeding, regardless of whether such interest and/or fees, expenses and costs would be allowed or allowable in such Insolvency Proceeding), constituting Obligations under the Second Lien Obligations; and

(b)payment in full in cash or other consideration as consented to by each of the Second Lien Claimholders of all other Second Lien Obligations that are due and payable or otherwise accrued and owing at or prior to the time such amounts in clause (a) are paid (other than contingent indemnification obligations for which no claim or demand has been made).

“Enforcement Action” means any action to, directly or indirectly:

(a)foreclose, execute, levy, or collect on, take possession or control of, sell or otherwise realize upon (judicially or non-judicially), or lease, license, or otherwise dispose of (whether publicly or privately), Collateral, or exercise of cash dominion or a cash sweep under any deposit account control agreement or securities account control agreement covering any Collateral or otherwise exercise or enforce remedial rights with respect to Collateral under the First Lien Debt Documents or the Second Lien Debt Documents (including by way of set-off, recoupment, notification of a public or private sale or other disposition pursuant to the UCC or other applicable law or notification to account debtors, if applicable);

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(b)receive a transfer of Collateral in satisfaction of Indebtedness or any other Obligation secured thereby; provided that this clause (b) shall not be construed to apply to payment of the Second Lien Obligations in accordance with the Second Lien Debt Documents and this Agreement;

(c)compel or commence an Insolvency Proceeding of any Grantor; or

(d)otherwise enforce a security interest or exercise another right or remedy, as a secured creditor (including the solicitation of bids from third persons to conduct the liquidation or disposition of Collateral), in each case pertaining to the Collateral at law, in equity, or pursuant to the First Lien Debt Documents or Second Lien Debt Documents (including the commencement of an involuntary Insolvency Proceeding or any other legal proceedings or other actions with respect to all or any portion of the Collateral to facilitate the actions described in the preceding clauses); provided, that the Second Lien Claimholders may exercise any monitoring or inspection rights that they may have under the Second Lien Debt Documents not otherwise in contravention of this Agreement.

“Exit Fees” as defined in the First Lien Credit Agreement.

“First Lien Agent” as defined in the preamble hereto.

“First Lien Claimholder” means the First Lien Agent and all holders of the First Lien Obligations at any given time.

“First Lien Credit Agreement” means that certain Credit Agreement and Guaranty, dated as of June 19, 2020 (as replaced or refinanced from time to time), among the Borrower, the Subsidiary Guarantors, certain lenders party thereto and the First Lien Agent, as the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time in accordance herewith.

“First Lien Debt Documents” means the First Lien Credit Agreement and the Loan Documents (as defined in the First Lien Credit Agreement), the First Lien Security Documents and each of the other agreements, documents and instruments providing for or evidencing any other First Lien Obligation, and any other document or instrument executed or delivered at any time in connection with any First Lien Obligations, including any intercreditor or joinder agreement among holders of First Lien Obligations, to the extent such are effective at the relevant time, as each may be renewed, extended, amended, restated, amended and restated, supplemented or otherwise modified from time to time in accordance with the provisions hereof.  

“First Lien Obligations” means all Obligations outstanding under the First Lien Debt Documents, including all interest, fees, costs and expenses accrued or accruing (or which would, absent commencement of an Insolvency Proceeding, accrue) after commencement of an Insolvency Proceeding in accordance with any rate specified in the relevant First Lien Debt Document regardless of whether the claim for such interest, fees, costs and expenses is allowed or allowable as a claim in such Insolvency Proceeding and shall include all “Obligations,” as such term is defined in the First Lien Credit Agreement.

“First Lien Recovery” as defined in Section 6.7(a).

“First Lien Refinancing” as defined in Section 5.1(a).

“First Lien Security Agreement” means that certain Security Agreement, dated as of June 19, 2020, among the Borrower, the Subsidiary Guarantors, and the First Lien Agent, as the same may be 

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amended, restated, amended and restated, supplemented or otherwise modified from time to time in accordance herewith.

“First Lien Security Documents” means the First Lien Security Agreement and the other Security Documents (as defined in the First Lien Credit Agreement) and any other agreement, document, or instrument pursuant to which a Lien is granted securing First Lien Obligations or under which rights or remedies with respect to such Liens are governed, in each case to the extent relating to Collateral.

“Grantor” means the Borrower, each of the Subsidiary Guarantors and each other person that has executed and delivered or may from time to time hereafter execute and deliver a First Lien Debt Document or a Second Lien Debt Document as a “grantor” or “pledgor” or the equivalent thereof.

“Hard Cap” as defined in the Revenue Interest Financing Agreement as in effect on the date hereof.

“Indebtedness” as defined in the First Lien Credit Agreement as in effect on the date hereof, or the Revenue Interest Financing Agreement, as in effect on the date hereof, as applicable.

“Insolvency Proceeding” means:

(a)a voluntary or involuntary case or proceeding under the Bankruptcy Code or similar Bankruptcy Law with respect to a Grantor;

(b)any other voluntary or involuntary insolvency, reorganization, or bankruptcy case or proceeding, or any receivership, liquidation, reorganization, or other similar case or proceeding with respect to a Grantor or a material portion of its property;

(c)a liquidation, dissolution, reorganization, or winding up of a Grantor, whether voluntary or involuntary and regardless of whether involving insolvency or bankruptcy; or

(d)an assignment for the benefit of creditors or other marshaling of assets and liabilities of a Grantor.

“Intellectual Property” as defined in the First Lien Credit Agreement as in effect on the date hereof.

“Intellectual Property Collateral” as defined in the First Lien Security Agreement as in effect on the date hereof.

“Intercreditor Agreement Joinder” means an agreement substantially in the form of Exhibit A (subject to changes approved as expressly contemplated hereby).

“Lien” as defined in the First Lien Credit Agreement as in effect on the date hereof.

“Net Sales” as defined in the Revenue Interest Financing Agreement as in effect on the date hereof.

“New First Lien Representative” as defined in Section 5.1(c).

“Obligations” means all obligations of every nature owed to any obligee under an agreement whether for principal, interest (including interest, fees, costs and expenses accruing after the commencement of an Insolvency Proceeding, regardless of whether any claim therefor is allowed or 

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allowable as a claim in such Insolvency Proceeding), or payments for early termination, fees, costs and expenses, indemnification, or otherwise, and all guaranties of any of the foregoing, whether absolute or contingent, due or to become due, now existing or hereafter arising.

“Original Grantors” as defined in Section 8.21.

“person” as defined in the First Lien Credit Agreement.

“Pledged Collateral” as defined in Section 8.9(a).

“Prepayment Fees” as defined in the First Lien Credit Agreement.

“Proceeds” means:

(a)all “proceeds,” as defined in Article 9 of the UCC, of the Collateral; and

(b)whatever is recovered when Collateral is sold, exchanged, collected, or disposed of, whether voluntarily or involuntarily, including any additional or replacement Collateral provided during an Insolvency Proceeding and any payment or property received in an Insolvency Proceeding on account of any “secured claim” (within the meaning of section 506(b) of the Bankruptcy Code or similar Bankruptcy Law).

“Product Intellectual Property Collateral” as defined in the Second Lien Security Agreement as in effect on the date hereof.

“Put/Call Price” as defined in the Revenue Interest Financing Agreement as in effect on the date hereof.

“Refinanced First Lien Obligations” as defined in Section 5.1(b).

“Revenue Interest Financing Agreement” means that certain Revenue Interest Financing Agreement, dated as of the date hereof, between the Borrower and SHRP, as the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time in accordance herewith.

“Revenue Interest Payments” means five percent (5.0%) of the Secured Product Revenues, provided that the aggregate amount of all Revenue Interest Payments and Catch-Up Payments shall not exceed the Hard Cap.

“Revenue Interest Period” as defined in the Revenue Interest Financing Agreement as in effect on the date hereof.

“SHRP” as defined in the preamble hereto.

“Second Lien Claimholder” means SHRP and all other holders of the Second Lien Obligations at any given time.

“Second Lien Debt Documents” means the Revenue Interest Financing Agreement and the Transaction Documents (as defined in the Revenue Interest Financing Agreement), the Second Lien Security Documents, each of the other agreements, documents and instruments providing for or evidencing any other Second Lien Obligation and any other document or instrument executed or delivered at any time in connection with any Second Lien Obligations, including any intercreditor or joinder agreement among 

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holders of Second Lien Obligations to the extent such are effective at the relevant time, as each may be renewed, extended, amended, restated, amended and restated, supplemented or otherwise modified from time to time in accordance with the provisions hereof.

“Second Lien Obligations” means all Obligations outstanding under the Second Lien Debt Documents, including all interest, fees, costs and expenses accrued or accruing (or which would, absent commencement of an Insolvency Proceeding, accrue) after commencement of an Insolvency Proceeding in accordance with any rate specified in the relevant Second Lien Debt Document regardless of whether the claim for such interest, fees, costs and expenses is allowed or allowable as a claim in such Insolvency Proceeding and shall include all “Obligations,” as such term is defined in the Revenue Interest Financing Agreement.

“Second Lien Priority Collateral” means, at any date of determination, the Grantors’ rights, title and interest in, to and under, five percent (5.0%) of all Net Sales. 

“Second Lien Recovery” as defined in Section 6.7(b).

“Second Lien Security Agreement” means Security Agreement as such term is defined in the Revenue Interest Financing Agreement as in effect on the date hereof.

“Second Lien Security Documents” means the Second Lien Security Agreement and any other agreement, document, or instrument pursuant to which a Lien is granted securing Second Lien Obligations or under which rights or remedies with respect to such Liens are governed, in each case to the extent related to the Collateral.

“Secured Product” means Product as such term is defined in the Revenue Interest Financing Agreement as in effect on the date hereof.

“Secured Product Revenues” means Net Sales during the Revenue Interest Period.

“Standstill Period” means the period commencing on the date of the occurrence of a Put Option Event (as defined in the Revenue Interest Financing Agreement as of the date hereof) and terminating on the date 120 days after the First Lien Agent has received written notice from the Second Lien Claimholders that a Put Option Event has occurred and is continuing in accordance with the terms of the Second Lien Debt Documents; provided that (i) the Standstill Period shall be tolled during the pendency of any Insolvency Proceeding of any Grantor or if the First Lien Agent is stayed by any court order pursuant to which the First Lien Agent is effectively stayed from enforcing its rights and remedies with respect to the Collateral and (ii) the Standstill Period shall not terminate if the First Lien Agent or any other First Lien Claimholder shall have commenced prior to the expiration of the Standstill Period (or thereafter but prior to the commencement of any Enforcement Action by the Second Lien Claimholders with respect to all or any material portion of the Collateral) and are diligently pursuing in good faith an Enforcement Action with respect to all or any material portion of the Collateral.

“Subsidiary” as defined in the First Lien Credit Agreement.

“Subsidiary Guarantor” as defined in the First Lien Credit Agreement.

“UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided, if by reason of mandatory provisions of law, the perfection, the effect of perfection or non-perfection or the priority of the security interests of the First Lien Agent or the Second Lien Claimholders in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction 

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other than New York, the term “UCC” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

Section 1.2Interpretation. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “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, restated, amended and restated, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), unless otherwise indicated in this Agreement, (b) any reference herein to any person shall be construed to include such person’s permitted successors and assigns, (c) 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, (d) all references herein to Sections shall be construed to refer to Sections of this Agreement, (e) any reference to any law herein shall, unless otherwise specified, refer to such law as amended, modified or supplemented from time to time, and (f) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

SECTION 2LIEN PRIORITY

Section 2.1Seniority of First Lien Obligations.

(a)The Liens on Collateral securing the First Lien Obligations will at all times be senior and prior for all purposes and in all respects to the Liens on Collateral (other than Second Lien Priority Collateral) securing the Second Lien Obligations.  

(b)The priority of the Liens securing the First Lien Obligations to the Liens securing the Second Lien Obligations and the rights and obligations of the First Lien Claimholders will, in each case, remain in full force and effect irrespective of:

(1)how a Lien was acquired (whether by grant, possession, statute, operation of law, subrogation, or otherwise);

(2)the time, manner, or order of the grant, attachment, or perfection of a Lien;

(3)any conflicting provision of the UCC or other applicable law;

(4)any defect in, or non-perfection, setting aside, or avoidance of, a Lien or a First Lien Debt Document or a Second Lien Debt Document;

(5)the amendment, modification, supplement, extension, renewal, restatement, replacement or refinancing of a First Lien Obligation or a Second Lien Obligation;

(6)the amendment, modification, supplement or restatement of a First Lien Debt Document or a Second Lien Debt Document in accordance with Section 7;

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(7)the subordination of a Lien on Collateral securing a First Lien Obligation to a Lien (i) securing another obligation of a Grantor or other person that arises by operation of law or, if voluntary, is permitted under the First Lien Debt Documents, or (ii) securing a DIP Financing contemplated by Section 6.1;

(8)the avoidance or invalidation of the Liens on Collateral securing the First Lien Obligations;

(9) the exchange of a security interest in any Collateral for a security interest in other Collateral in accordance with Section 2.2;

(10)by any other action or inaction which any First Lien Claimholder or Second Lien Claimholder, as applicable, may take or fail to take with respect to the Collateral or the Liens on Collateral securing the First Lien Obligations or the Second Lien Obligations, as applicable;

(11)the commencement of any Insolvency Proceeding; or

(12)any other circumstance whatsoever, including a circumstance that might be a defense available to, or a discharge of, a Grantor in respect of a First Lien Obligation or a Second Lien Obligation or holder of such Obligation.

Section 2.2Identification of Collateral.

(a)The parties hereto agree, subject to the other provisions of this Agreement, to cooperate in good faith (and to direct their counsel to cooperate in good faith) to determine the specific items included in the Collateral and the Second Lien Priority Collateral, the steps taken to perfect the Liens thereon, and the identity of the persons having First Lien Obligations or Second Lien Obligations.

(b)Until the Discharge of First Lien Obligations, regardless of whether an Insolvency Proceeding has commenced, the Grantors agree not to grant an additional Lien to secure the Second Lien Obligations on any asset or property from any Grantor unless the First Lien Agent shall have consented in writing to the granting of such Lien.

Notwithstanding the foregoing, if any Second Lien Claimholder shall (nonetheless and in breach hereof) acquire or hold any Lien on any assets of the Borrower or any other Grantor securing any Second Lien Obligations that are not also subject to a Lien securing the First Lien Obligations under the First Lien Debt Documents, then such Second Lien Claimholder shall, without the need for any further consent of any party and notwithstanding anything to the contrary in any other document, (i) notify the First Lien Agent promptly upon becoming aware thereof and, unless such Grantor shall promptly grant a similar Lien on such assets or property to the First Lien Agent as security for the First Lien Obligations, shall assign such Lien to the First Lien Agent as security for all First Lien Obligations for the benefit of the First Lien Claimholders (but may retain a junior lien on such assets or property subject to the terms hereof) and (ii) until such assignment to the First Lien Agent or such grant of a similar Lien to the First Lien Agent, shall be deemed to also hold and have held such Lien for the benefit of the First Lien Agent and the other First Lien Claimholders as security for the First Lien Obligations, subject to the relative priorities set forth in Section 2.1. To the extent that the provisions of the immediately preceding sentence are not complied with for any reason, without limiting any other right or remedy available to the First Lien Agent or any other First Lien Claimholder, the Second Lien Claimholders agree that any amounts received by or distributed to any Second Lien Claimholder pursuant to or as a result of any Lien granted in contravention of this Section 2.2 shall be subject to Section 4.1 and Section 4.4.

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Section 2.3Prohibition on Contesting Liens; No Marshaling.

(a)The Second Lien Claimholders will not (and hereby waive any right to), directly or indirectly, contest in any proceeding (including an Insolvency Proceeding) the validity, enforceability, perfection, or priority of any Lien securing, or the allowability of any claim asserted with respect to, a First Lien Obligation, but nothing in this Section 2.3(a) will limit or otherwise affect the rights of any Second Lien Claimholder to (i) enforce this Agreement, including the priority of the Liens securing the Second Lien Obligations or the provisions for exercise of remedies or (ii) vote on any plan of reorganization, arrangement, compromise or liquidation in accordance with Section 6.12 of this Agreement.

(b)The First Lien Claimholders will not (and hereby waive any right to), directly or indirectly, contest in any proceeding (including an Insolvency Proceeding) the validity, enforceability, perfection, or priority of any Lien securing, or the allowability of any claim asserted with respect to, a Second Lien Obligation, but nothing in this Section 2.3(b) will limit or otherwise affect the rights of any First Lien Claimholder to (i) enforce this Agreement, including the priority of the Liens securing the First Lien Obligations or the provisions for exercise of remedies or (ii) vote on any plan of reorganization, arrangement, compromise or liquidation in accordance with Section 6.12 of this Agreement.

(c)Until the Discharge of First Lien Obligations, the Second Lien Claimholders will not assert any marshaling, appraisal or other similar right that may otherwise be available to a junior secured creditor. 

Section 2.4Confirmation of Subordination in Second Lien Debt Documents. Each Grantor and Second Lien Claimholder agrees that each Second Lien Security Document will include the following clause (or a clause to similar effect approved by the First Lien Agent) and any other clause that the First Lien Agent requests to reflect the subordination of the Liens granted to the Second Lien Claimholders:

“Notwithstanding anything herein to the contrary, the Lien and security interest granted to the Second Lien Collateral Agent pursuant to this Agreement and the exercise of any right or remedy by the Second Lien Collateral Agent or any Second Lien Claimholder hereunder are subject to the provisions of the Intercreditor Agreement, dated August 4, 2020  (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Intercreditor Agreement”), among Oaktree Fund Administration, LLC, as First Lien Agent, Sagard Healthcare Royalty Partners, LP, and acknowledged by the Grantors (as defined therein) and other persons from time to time party thereto. If there is a conflict between the terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement will control.”

Section 2.5Release of Liens and Guaranties.

(a)Except as provided for in subsection (b) below, if in connection with (1) a First Lien Agent’s Enforcement Action in respect of the Collateral or (2) a sale or other disposition of Collateral not prohibited by the terms of the First Lien Debt Documents, the First Lien Agent, for itself or on behalf of any of the First Lien Claimholders that it represents, releases any of its Liens on any part of the Collateral (other than the Second Lien Priority Collateral) or releases any Grantor from its obligations under its guaranty of the First Lien Obligations in connection with the sale or other disposition of all of the stock of such Grantor or otherwise, then the Liens, if any, of the Second Lien Claimholders, on such Collateral, and the obligations of such Grantor under its guaranty of the Second Lien Obligations, shall be automatically, unconditionally and simultaneously released to the same extent as the Liens of such First Lien Agent, or the obligations of such Grantor under its guaranty of the First Lien Obligations, as applicable, are released (but shall apply, to the extent forming a part of the Collateral, to any remaining Proceeds of such sale or other disposition that are not otherwise utilized to repay the First Lien Obligations). Each Second Lien 

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Claimholder promptly shall execute and deliver to the First Lien Agent or such Grantor such termination statements, releases and other documents as the First Lien Agent or such Grantor may request to confirm such release.

(b)The Second Lien Claimholder hereby appoints the First Lien Agent and any officer or agent of the First Lien Agent, with full power of substitution, as its true and lawful attorney-in-fact with full power and authority in the place and stead of such Second Lien Claimholder or in the First Lien Agent’s own name, in the First Lien Agent’s discretion to take any action and to execute any and all documents and instruments that may be reasonable and appropriate for the limited purpose of carrying out the terms of this Section 2.5, including any endorsements or other instruments of transfer or release. This appointment is coupled with an interest and is irrevocable until the Discharge of First Lien Obligations or such time as this Agreement is terminated in accordance with its terms.

(c)Until the Discharge of First Lien Obligations, to the extent that the First Lien Agent (1) releases a Lien on Collateral or a Grantor from its First Lien Obligations under its guaranty, which Lien or guaranty is reinstated, or (2) obtains a new Lien on Collateral or additional guaranty from a Grantor, then the Second Lien Claimholder will be granted a Lien on such Collateral and an additional guaranty, as the case may be, subject to the other provisions of this Agreement, including Section 2.2, in each case, to the extent required pursuant to the terms of the Revenue Interest Financing Agreement.

Section 2.6Nature of First Lien Obligations. The Second Lien Claimholder acknowledges that (a) subject to Article 7 hereof, the terms of the First Lien Debt Documents and the First Lien Obligations may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, and the First Lien Obligations, or a portion thereof, may be refinanced from time to time, and (b) the aggregate amount of the First Lien Obligations may be increased, in each case without notice to or consent by the Second Lien Claimholders and without affecting the provisions hereof. As between the Borrower and the other Grantors and the Second Lien Claimholders, the foregoing provisions will not limit or otherwise affect the obligations of the Borrower and the Grantors contained in any Second Lien Debt Document with respect to the incurrence of additional First Lien Obligations.

SECTION 3ENFORCEMENT

Section 3.1Exercise of Remedies.

(a)The First Lien Agent or other First Lien Claimholders shall, subject to subsections (b) and (c) below, have the exclusive right to:

(1)commence and maintain an Enforcement Action (including the rights to set-off their debt), or to forbear from commencing an Enforcement Action;

(2)make determinations regarding the release or disposition of, or restrictions with respect to, the Collateral in connection with any Enforcement Action; and

(3)otherwise enforce (or not enforce) the rights and remedies of a secured creditor under the UCC, the Bankruptcy Code and any other applicable law.

(b)Notwithstanding Section 3.1(a), the Second Lien Claimholders may take the actions described in Section 3.1(a)(1) through (3) above, commence an Enforcement Action with respect to a Lien securing a Second Lien Obligation or otherwise exercise rights under applicable law, except as specifically contemplated in Section 6, if:

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(1)the Discharge of First Lien Obligations has occurred; or

(2)(i)the Standstill Period has elapsed; and

(ii)the Second Lien Claimholders shall have provided prior written notice of the taking of such actions or the exercising of such rights to the First Lien Agent

provided, any credit bid under section 363(k) of the Bankruptcy Code (or similar Bankruptcy Law) by the Second Lien Claimholders must comply with the requirements set forth in Section 3.1(c)(3), as applicable.

(c)The Second Lien Claimholders may:

(1)take action to create, perfect, preserve, or protect (but not enforce) its Lien on the Collateral, so long as such actions are not adverse to the priority status in accordance with this Agreement of Liens on the Collateral securing the First Lien Obligations or First Lien Claimholders’ rights to exercise remedies;

(2)join (but not exercise any control over) a judicial foreclosure or Lien enforcement proceeding with respect to the Collateral initiated by the First Lien Agent or other First Lien Claimholder, to the extent that such action does not interfere with the Enforcement Action by the First Lien Agent or such other First Lien Claimholder, but no Second Lien Claimholder may receive any Proceeds thereof unless expressly permitted herein;

(3)bid for or purchase Collateral at any public, private, or judicial foreclosure upon such Collateral initiated by any other person; provided, such bid may not include a credit bid, under section 363(k) of the Bankruptcy Code (or similar Bankruptcy Law), in respect of any Second Lien Obligations unless and to the extent such credit bid provides cash for the payment in full of the First Lien Obligations and otherwise complies with the lien priorities set forth in Section 2.1 and the payment priorities set forth in Section 4.1;

(4)file a claim or proof of claim or statement of interest with respect to the Second Lien Obligations and vote on any chapter 11 plan, in each case, in a manner consistent with Section 6.12; or

(5)file any necessary or appropriate pleadings in opposition to a claim objecting to or otherwise seeking the disallowance of a Second Lien Obligation or a Lien securing any Second Lien Obligation.

Section 3.2Manner of Exercise.

(a)The First Lien Agent or other First Lien Claimholder may, without any objection from or interference by any Second Lien Claimholder, take (or forbear from taking) any Enforcement Action or other action permitted by Section 3.1(a):

(1)in any manner in its sole discretion in compliance with applicable law and this Agreement;

(2)without consultation or the consent of any Second Lien Claimholder, and each Second Lien Claimholder hereby waives any and all rights it may have as a junior lien creditor (whether arising under the UCC or under any other law) to object to the manner in which the First Lien Agent or the First Lien Claimholders seek to enforce or collect the First Lien Obligations or the Liens granted in any of the Collateral;

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(3)regardless of whether an Insolvency Proceeding has been commenced;

(4)regardless of any covenant, agreement, restriction, or other provision of any Second Lien Debt Document (other than this Agreement); and

(5)regardless of whether such exercise is adverse to the interest of any Second Lien Claimholder, but consistent with this Agreement.

(b)The rights of the First Lien Agent or other First Lien Claimholder to enforce any provision of any First Lien Debt Document, including such provision permitting enforcement of this Agreement, will not be prejudiced or impaired by:

(1)any act or failure to act of, or forbearance or waiver by, any Grantor, the First Lien Agent, or other First Lien Claimholder; or

(2)noncompliance by any person other than such First Lien Claimholder with any provision of any First Lien Debt Document, regardless of any knowledge thereof that the First Lien Agent or other First Lien Claimholder may have or may otherwise be charged with.

(c)Prior to the expiration of the Standstill Period (which, for the avoidance of doubt, shall include the extension of such period for so long as (i) a First Lien Claimholder is diligently pursuing in good faith an Enforcement Action against all or a material portion of the Collateral or diligently attempting in good faith to vacate any stay or prohibition on such exercise, or (ii) any Grantor is then the subject of an Insolvency Proceeding), the Second Lien Claimholders will not (and hereby waive any right to), directly or indirectly, (x) contest in any proceeding (including an Insolvency Proceeding) and will not otherwise protest, object to, or take any action to hinder, delay, limit, or otherwise interfere with, and each waives any and all claims with respect to, the First Lien Agent or other First Lien Claimholder taking any Enforcement Action (or forbearing from taking any Enforcement Action) or other action permitted by Section 3.1(a) in compliance with this Agreement and applicable law or (y) commence or join with any person (other than First Lien Agent) in commencing, or filing a petition for, any Insolvency Proceeding against any Grantor.

Section 3.3Specific Performance.  The First Lien Agent and other First Lien Claimholders may demand specific performance of this Agreement, and each Second Lien Claimholder waives any defense based on the adequacy of a remedy at law and any other defense that might be asserted to bar the remedy of specific performance.

SECTION 4PAYMENTS

Section 4.1Application of Payments. 

(a)Subject to Section 6.8, until the Discharge of First Lien Obligations and the Discharge of Second Lien Obligations, and regardless of whether an Insolvency Proceeding has been commenced, the Collateral (other than the Second Lien Priority Collateral), Proceeds or other distributions with respect to the Collateral (other than the Second Lien Priority Collateral) received in connection with an Enforcement Action or an Insolvency Proceeding, will be applied:

(1)first, to the First Lien Obligations;

(2)second, upon the Discharge of First Lien Obligations, to the Second Lien Obligations; and

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(3)third, upon the Discharge of First Lien Obligations and the Discharge of Second Lien Obligations, to the applicable Grantor or as otherwise required by applicable law.

(b)Subject to Section 6.8, until the Discharge of First Lien Obligations and the Discharge of Second Lien Obligations, and regardless of whether an Insolvency Proceeding has been commenced, the Second Lien Priority Collateral, Proceeds or other distributions with respect to the Second Lien Priority Collateral received in connection with an Enforcement Action or an Insolvency Proceeding, will be applied:

(1)first, to the Second Lien Obligations;

(2)second, upon the Discharge of Second Lien Obligations, to the First Lien Obligations; and

(3)third, upon the Discharge of First Lien Obligations and the Discharge of Second Lien Obligations, to the applicable Grantor or as otherwise required by applicable law.

(c)Notwithstanding the foregoing, if any Enforcement Action with respect to the Collateral (other than any non-cash proceeds received on account of any Second Lien Priority Collateral) produces non-cash proceeds, then such non-cash proceeds shall be held by the First Lien Agent as additional collateral and, at such time as such non-cash proceeds are monetized, shall be applied or distributed as set forth above. First Lien Agent shall have no duty or obligation to dispose of such non-cash proceeds and may dispose of such non-cash proceeds or continue to hold such non-cash proceeds, in each case, in its sole discretion; provided, that any non-cash proceeds received by First Lien Agent (other than any non-cash proceeds received on account of any Second Lien Priority Collateral) may be distributed by First Lien Agent to the First Lien Claimholders in full or partial satisfaction of First Lien Obligations in an amount equal to the fair market value of such non-cash proceeds or as a court of competent jurisdiction may direct, including an order confirming a plan of reorganization in an Insolvency Proceeding.  

Section 4.2Manner of Payment. Payments with respect to the First Lien Obligations and the Second Lien Obligations shall be made in the manner and in such order as specified in the First Lien Debt Documents or the Second Lien Debt Documents, as applicable.

Section 4.3Insurance.

(a)Until the Discharge of First Lien Obligations, subject to the rights of the Grantors under the First Lien Debt Documents, the First Lien Agent may, and will have the exclusive right, to adjust settlement for any losses covered by an insurance policy covering the Collateral, and to approve an award granted in a condemnation or similar proceeding (or a deed in lieu of condemnation) affecting the Collateral, as the case may be; and

(b)all Proceeds of such policy, award, or deed will be applied as set forth in Section 4.1.

Section 4.4Payment Turnover. 

(a)Subject to Section 6.8, until the Discharge of First Lien Obligations, regardless of whether an Insolvency Proceeding has commenced, Collateral or Proceeds thereof (including insurance proceeds or property or Proceeds subject to Liens securing the First Lien Obligations or the Second Lien Obligations but other than any non-cash proceeds received on account of any Second Lien Priority 

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Collateral) that are received by a Second Lien Claimholder in connection with an Enforcement Action, otherwise in contravention of this Agreement, or in connection with an Insolvency Proceeding, will be: 

(1)segregated and held in trust; and

(2)promptly paid over to the First Lien Agent in the form received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct. The First Lien Agent is authorized to make such endorsements as agent for any such Second Lien Claimholder. This authorization is coupled with an interest and is irrevocable until the Discharge of First Lien Obligations.

(b)Collateral or Proceeds thereof that are paid over to the First Lien Agent pursuant to Section 4.4(a) will be applied as set forth in Section 4.1.

Section 4.5Payment Subordination. 

(a)Each Second Lien Claimholder agrees that all payments in respect of the Second Lien Obligations shall be subordinate and junior in right to payment and all other respects to the First Lien Obligations, and that it shall not accept any payment in respect of the Second Lien Obligations (whether optional, voluntary, mandatory, or otherwise or by set-off, redemption, defeasance, or other payment or distribution) prior to the Discharge of First Lien Obligations; provided, however, that the Second Lien Claimholders may receive (x) payments constituting Revenue Interest Payments, (y) so long as no default or event of default under any First Lien Debt Document has occurred and is continuing or would result therefrom, payments constituting (A) the Put/Call Price, any Catch-Up Payments and any indemnification amount payable pursuant to the Revenue Interest Financing Agreement and (B) expense reimbursement to the extent required pursuant to the Revenue Interest Financing Agreement, in each case, to the extent such payments are otherwise permitted pursuant to the terms of the First Lien Debt Documents, and (z) debt or equity securities that are issued by a reorganized debtor pursuant to a plan of reorganization or similar dispositive restructuring plan in connection with an Insolvency Proceeding to any Second Lien Claimholder on account of the Second Lien Obligations that are subordinated at least to the same extent as the Second Lien Obligations are subordinated to the First Lien Obligations pursuant to the terms of this Agreement. If any payments are received in contravention of the foregoing at any time before the Discharge of First Lien Obligations by one or more of the Second Lien Claimholders, they shall be held in trust for the benefit of the First Lien Claimholders and forthwith paid over to First Lien Agent for the benefit of the First Lien Claimholders.

(b)Subject to Section 4.1(b), the subordination of Liens on Second Lien Priority Collateral securing First Lien Obligations to Liens on Second Lien Priority Collateral securing Second Lien Obligations set forth in this Agreement affects only the relative priority of those Liens as set forth in this Agreement and does not otherwise subordinate the First Lien Obligations in right of payment to the Second Lien Obligations. Nothing in this Agreement will affect the obligation of each Grantor to make and the entitlement of any First Lien Claimholder to demand, receive and retain payments of interest, principal, and other amounts due pursuant to the First Lien Debt Documents and constituting First Lien Obligations.

SECTION 5OTHER RIGHTS

Section 5.1First Lien Refinancing.

(a)The Grantors may commence a refinancing of any First Lien Obligations without prior notice to, or the consent of the Second Lien Claimholders, all without affecting the lien subordination or the other provisions of this Agreement (“First Lien Refinancing”).

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(b)The Obligations resulting from the First Lien Refinancing (the “Refinanced First Lien Obligations”) will automatically be treated as First Lien Obligations for all purposes of this Agreement, including for purposes of the Lien priorities and rights in respect of Collateral set forth herein.

(c)The Second Lien Claimholders will promptly enter into such documents and agreements (including amendments or supplements to this Agreement) as the First Lien Agent and the new agent with respect to the Refinanced First Lien Obligations (the “New First Lien Representative”) reasonably request to document the New First Lien Representative’s rights contemplated hereby, in each case consistent in all material respects with the terms of this Agreement.

SECTION 6INSOLVENCY PROCEEDINGS

Section 6.1DIP Financing.

(a)Until the Discharge of First Lien Obligations, if the Borrower or any other Grantor shall be subject to an Insolvency Proceeding, the Second Lien Claimholders will not contest, protest, or object to, and each Second Lien Claimholder will be deemed to have consented to, the Borrower or any other Grantor obtaining DIP Financing consented to by the First Lien Agent in its sole discretion on behalf of the First Lien Claimholders.

(b)No Second Lien Claimholder may provide or offer to provide any DIP Financing without the consent of the First Lien Agent on behalf of the First Lien Claimholders.

Section 6.2Use of Cash Collateral. Until the Discharge of First Lien Obligations, if the Borrower or any other Grantor shall be subject to an Insolvency Proceeding, the Second Lien Claimholders will not, directly or indirectly, contest, protest, or object to, and each Second Lien Claimholder will be deemed to have consented to any use of “cash collateral” (as such term is defined in section 363(a) of the Bankruptcy Code) consented to by the First Lien Agent in its sole discretion on behalf of the First Lien Claimholders.

Section 6.3Sale of Collateral. The Second Lien Claimholders will not, directly or indirectly, contest, protest, or object, and will be deemed to have consented pursuant to section 363(f) of the Bankruptcy Code (or similar Bankruptcy Law), to a disposition of Collateral free and clear of its Liens or other interests under section 363 of the Bankruptcy Code (or similar Bankruptcy Law) in connection with such disposition if the First Lien Agent consents in its sole discretion in writing to the disposition.

Section 6.4Relief from the Automatic Stay. Until the Discharge of First Lien Obligations, each Second Lien Claimholder agrees that it shall not, directly or indirectly, (1) seek relief from the automatic stay set forth in section 362 of the Bankruptcy Code or any other stay in an Insolvency Proceeding in respect of the Collateral, without the prior written consent of the First Lien Agent in its sole discretion on behalf of the First Lien Claimholders that it represents, or (2) object to any motion by the First Lien Agent seeking relief from the automatic stay set forth in section 362 of the Bankruptcy Code or any other stay in an Insolvency Proceeding in respect of the Collateral. Each of the Second Lien Claimholders waives any claim it may now or hereafter have against any First Lien Claimholder arising out of the election of any First Lien Claimholder of the application of Section 1111(b)(2) of the Bankruptcy Code or out of any cash collateral or financing arrangement or out of any grant of a security interest in connection with the Collateral in any Insolvency Proceeding. Each Second Lien Claimholder further agrees that it will not seek to participate on any creditor’s committee without the prior written consent of the First Lien Agent.

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Section 6.5Adequate Protection.

(a)Except as provided in Section 6.5(b), each Second Lien Claimholder agrees that it shall not, directly or indirectly, contest:

(1)any request by the First Lien Agent or the First Lien Claimholders for adequate protection under any Bankruptcy Law in any form; or

(2)any objection by the First Lien Agent or the First Lien Claimholders to any motion, relief, action or proceeding based on such First Lien Agent or the First Lien Claimholders claiming a lack of adequate protection.

(b)Second Lien Claimholders, without the consent of First Lien Agent, shall not seek any adequate protection with respect to their rights in the Collateral.

Section 6.6First Lien Claimholders Retains Right to Object. Nothing contained herein shall prohibit or in any way limit the First Lien Agent or any other First Lien Claimholder from objecting in an Insolvency Proceeding or otherwise to any action taken by a Second Lien Claimholder, including the seeking by a Second Lien Claimholder of adequate protection or the assertion by a Second Lien Claimholder of any of its rights and remedies under the Second Lien Debt Documents or otherwise.

Section 6.7Avoidance Issues. 

(a)If any First Lien Claimholder is required in an Insolvency Proceeding or otherwise to turn over or otherwise pay to the estate of the Borrower or any other Grantor any amount paid in respect of First Lien Obligations (a “First Lien Recovery”), then such First Lien Claimholders shall be entitled to a reinstatement of First Lien Obligations with respect to all such recovered amounts. If this Agreement shall have been terminated prior to such First Lien Recovery, this Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto from such date of reinstatement. Upon any such reinstatement of any First Lien Obligations (unless, after giving effect to such First Lien Recovery, there has been a Discharge of First Lien Obligations), each Second Lien Claimholder will deliver to the First Lien Agent any Collateral (other than Second Lien Priority Collateral) or net Proceeds thereof received between the Discharge of First Lien Obligations and their reinstatement in accordance with Section 4.4. 

(b)If any Second Lien Claimholder is required in an Insolvency Proceeding or otherwise to turn over or otherwise pay to the estate of the Borrower or any other Grantor any amount paid in respect of Second Lien Obligations secured by Second Lien Priority Collateral (a “Second Lien Recovery”), then such Second Lien Claimholders shall be entitled to a reinstatement of Second Lien Obligations with respect to all such recovered amounts. If this Agreement shall have been terminated prior to such Second Lien Recovery, this Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto from such date of reinstatement. Upon any such reinstatement of any Second Lien Obligations (unless, after giving effect to such Second Lien Recovery, there has been a Discharge of Second Lien Obligations), each First Lien Claimholder will deliver to the Second Lien Claimholders any Collateral constituting Second Lien Priority Collateral or net Proceeds thereof received between the Discharge of Second Lien Obligations and their reinstatement in accordance with Section 4.4.

 Section 6.8Reorganization Securities. If, in an Insolvency Proceeding, debt Obligations of the reorganized debtor secured by Liens upon any property of the reorganized debtor are distributed pursuant to a plan of reorganization or similar dispositive restructuring plan, both on account of First Lien 

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Obligations and on account of Second Lien Obligations, then, to the extent the debt Obligations distributed on account of the First Lien Obligations and on account of the Second Lien Obligations are secured by Liens upon the same property, the provisions of this Agreement will survive the distribution of such debt Obligations pursuant to such plan and will apply with like effect to the Liens securing such debt Obligations.

Section 6.9Post-Petition Claims.  No Second Lien Claimholder shall, directly or indirectly, oppose or seek to challenge any claim by the First Lien Agent or other First Lien Claimholder for allowance in an Insolvency Proceeding of First Lien Obligations consisting of post-petition interest, fees or expenses to the extent of the value of any First Lien Claimholder’s Lien, without regard to the existence of the Lien of the Second Lien Claimholders on the Collateral.

Section 6.10Waiver of Claims. Each Second Lien Claimholder waives:

(a)any claim it may hereafter have against any First Lien Claimholder arising out of any cash collateral usage and/or DIP Financing or out of any grant of a security interest in connection with the Collateral in an Insolvency Proceeding, so long as such actions are not in contravention of the terms of this Agreement;

(b)any right to assert or enforce any claim under section 506(c) or 552 of the Bankruptcy Code (or similar Bankruptcy Law) as against any First Lien Claimholders or any of the Collateral to the extent securing the First Lien Obligations;

(c)any claim it may have against any First Lien Claimholder arising out of the election by such First Lien Claimholder of the application of section 1111(b)(2) of the Bankruptcy Code (or similar Bankruptcy Law) with respect to the Collateral; and

(d)any claim it may have against any First Lien Claimholder arising out of the non-payment in full of the Second Lien Obligations.

Section 6.11Separate Grants of Security and Separate Classification. The grants of Liens pursuant to the First Lien Debt Documents and the Second Lien Debt Documents constitute two separate and distinct grants. Because of, among other things, their differing rights in the Collateral, the Second Lien Obligations are fundamentally different from the First Lien Obligations and must be separately classified in any chapter 11 plan in an Insolvency Proceeding. Second Lien Claimholders will not, directly or indirectly, seek in an Insolvency Proceeding to be treated as part of the same class of creditors as First Lien Claimholders and will not, directly or indirectly, oppose or contest any pleading by First Lien Claimholders seeking separate classification of their respective secured claims. To further effectuate the intent of the parties as provided in the immediately preceding sentence, if it is held that the claims of the First Lien Claimholders and the Second Lien Claimholders in respect of the Collateral constitute only one secured claim or a single class of claims (rather than separate classes of senior and junior secured claims), then each of the parties hereto hereby acknowledges and agrees that all distributions shall be made as if there were separate classes of senior and junior secured claims against the Grantors in respect of the Collateral (with the effect being that, to the extent that the aggregate value of the Collateral is sufficient (for this purpose ignoring all claims held by the Second Lien Claimholders), the First Lien Claimholders shall be entitled to receive, in addition to amounts distributed to them in respect of principal, pre-petition interest and other claims, all amounts owing in respect of post-petition interest, fees, and expenses (whether or not allowed or allowable) before any distribution is made from the Collateral in respect of the Second Lien Obligations, with each Second Lien Claimholder hereby acknowledging and agreeing to turn over to the First Lien Agent amounts otherwise received or receivable by them from the Collateral to the extent necessary to effectuate the intent of this sentence, even if such turnover has the effect of reducing the claim or recovery of the Second Lien Claimholders.

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Section 6.12Plan Proposal and Voting.  The Second Lien Claimholders shall vote in favor of any debt restructuring, restructuring, chapter 11 plan or Enforcement Action or agreement supported by the First Lien Agent.

Section 6.13Proof of Claim; Statements of Interest. Each Second Lien Claimholder is expressly permitted to file a claim or proof of claim or statements of interest in an Insolvency Proceeding with respect to the Second Lien Obligations and to comply with any applicable notice requirements, in a manner otherwise consistent with this Agreement, and agree to execute, verify, deliver and file any proofs of claim in respect of Second Lien Obligations requested by any First Lien Agent in connection with any Insolvency Proceeding. Each Second Lien Claimholder hereby grants to the First Lien Agent the right to file claim or proofs of claim on account of the Second Lien Obligations in any Insolvency Proceedings in the event that such Second Lien Claimholder fails to do so within five days of any claims bar date pertaining thereto, provided, however, that neither the First Lien Agent nor any First Lien Claimholder shall have any obligation to execute, verify, deliver, and/or file any such claim. In the event that the First Lien Agent votes any claim in accordance with the authority granted hereby, no Second Lien Claimholder shall be entitled to change or withdraw such vote.

 

Section 6.14Second Lien Claimholders’ Rights. Notwithstanding any provision of this Agreement, Second Lien Claimholders may exercise any rights and remedies that could be exercised by an unsecured creditor against a Borrower or any other Grantor in accordance with the terms of the Second Lien Loan Documents and applicable law, provided that any judgment Lien obtained by a Second Lien Claimholder as a result such exercise of rights will be included in the Second Lien Collateral and be subject to this Agreement for all purposes (including in relation to the First Lien Obligations).

Section 6.15Effectiveness in Insolvency Proceedings. The parties hereto acknowledge that this Agreement is a “subordination agreement” under section 510(a) of the Bankruptcy Code, which will be effective before, during, and after the commencement of an Insolvency Proceeding. All references in this Agreement to any Grantor will include such person as a debtor-in-possession and any receiver or trustee for such person in an Insolvency Proceeding. In the event that this Agreement is deemed inapplicable to any extent with respect to the confirmation of a proposed chapter 11 plan in an Insolvency Proceeding, this Agreement will remain effective in all other respects, including with respect to the application of distributions received in connection with such plan of reorganization as set forth in Section 4.1.

SECTION 7MODIFICATION OF OBLIGATIONS

Section 7.1Modification of First Lien Debt Documents. The First Lien Debt Documents may be amended, restated, amended and restated, replaced, supplemented, waived or otherwise modified from time to time in accordance with their terms without prior notice to, or the consent of the Second Lien Claimholders, all without affecting the lien subordination or the other provisions of this Agreement; provided, any such amendment, restatement, amendment and restatement, replacement, supplement, waiver or other modification shall not, without the consent of the Second Lien Claimholders (acting in accordance with the Second Lien Debt Documents) amend the First Lien Debt Documents (i) in a manner that is in violation of this Agreement, or (ii) to make any modification of the First Lien Debt Documents that restricts the Borrower’s ability to make mandatory payments under the Second Lien Debt Documents as in effect on the date hereof.

Section 7.2Modification of Second Lien Debt Documents. The Second Lien Debt Documents may be amended, restated, amended and restated, replaced, supplemented, waived or otherwise modified in accordance with their terms without prior notice to, or the consent of the First Lien Claimholders, all without affecting the lien subordination or the other provisions of this Agreement; provided, any such amendment, restatement, amendment and restatement, replacement, supplement, waiver 

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or other modification shall not, without the consent of the First Lien Agent (acting in accordance with the First Lien Debt Documents) amend the Second Lien Debt Documents (i) in a manner that is in violation of this Agreement or (ii) (A) to make any modification of the Revenue Interest Financing Agreement as in effect on the date hereof that restricts the Borrower’s ability to make required or voluntary payments in respect of the First Lien Obligations; (B) to shorten the Term (as defined in the Revenue Interest Financing Agreement as of the date hereof), require that any payment on the Second Lien Obligations be made earlier than the date originally scheduled for such payment (in each case, other than as a result of a Put Option Event as defined in the Revenue Interest Financing Agreement as of the date hereof) or add or make more restrictive any mandatory payment or similar requirement except for periods beyond the latest Maturity Date (as defined in the First Lien Credit Agreement); or (C) to increase the amount of the Hard Cap, Revenue Interest Payments, the Put/Call Price, the Catch-up Payments or other fees or amounts owed to the Second Lien Claimholders pursuant to the terms of the Second Lien Debt Documents.

Section 7.3Modifications to Security Documents. So long as the Discharge of First Lien Obligations has not occurred, in the event that the First Lien Agent or the First Lien Claimholders enter into any amendment, waiver or consent in respect of or replace any of the First Lien Security Documents for the purpose of adding to, or deleting from, or waiving or consenting to any departures from any provisions of, any First Lien Security Document or changing in any manner the rights of the First Lien Agent, the First Lien Claimholders, the Borrower or any other Grantor thereunder (including the release of any Liens on Collateral in accordance with Section 2.5), in each case to the extent relating to or affecting the Collateral (excluding the Second Lien Priority Collateral), then such amendment, waiver or consent shall apply automatically to any comparable provision of each comparable Second Lien Security Document without the consent of the Second Lien Agent or any Second Lien Claimholder and without any action by the Second Lien Agent, the Borrower or any other Grantor. The First Lien Agent or the Borrower shall give written notice of such amendment, waiver or consent (along with a copy thereof) to the Second Lien Agent no later than ten Business Days following the effective date of such amendment, waiver or consent; provided that the failure to give such notice shall not affect the effectiveness of such amendment with respect to the provisions of any Second Lien Security Document as set forth in this Section 7.3.

SECTION 8MISCELLANEOUS PROVISIONS

Section 8.1Conflicts. If this Agreement conflicts with any First Lien Debt Document or Second Lien Debt Document, this Agreement will control.

Section 8.2No Waivers; Remedies Cumulative. No failure or delay on the part of the First Lien Agent or the Second Lien Claimholders in the exercise of any power, right or privilege hereunder shall impair such power, right or privilege or be construed to be a waiver of any default or acquiescence therein, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other power, right or privilege. The rights, powers and remedies given to the First Lien Agent hereby are cumulative and shall be in addition to and independent of all rights, powers and remedies existing by virtue of any statute or rule of law or in any of the other First Lien Debt Documents. Any forbearance or failure to exercise, and any delay in exercising, any right, power or remedy hereunder shall not impair any such right, power or remedy or be construed to be a waiver thereof, nor shall it preclude the further exercise of any such right, power or remedy.

Section 8.3Integration; Severability. This Agreement constitutes the entire agreement between the parties hereto with respect to the relative priorities of the Liens securing the First Lien Obligations and Second Lien Obligations and supersedes all prior agreements, oral or written, relating to its subject matter. In case any provision in or obligation hereunder shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

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Section 8.4Effectiveness. This Agreement will become effective when executed and delivered by the parties hereto. Each First Lien Claimholder and each Second Lien Claimholder waives any right it may have under applicable law to revoke this Agreement or any provision thereunder. This Agreement will survive, and continue in full force and effect, in any Insolvency Proceeding.

Section 8.5Termination. This Agreement shall terminate and be of no further force and effect:

(a)with respect to the First Lien Agent, the First Lien Claimholders and the First Lien Obligations, on the date of Discharge of First Lien Obligations with respect to the applicable First Lien Obligations, subject to the rights of the First Lien Claimholders under Section 6.7; and

(b)with respect to the Second Lien Agent, the Second Lien Claimholders and the Second Lien Obligations, (i) on the date of Discharge of Second Lien Obligations with respect to the applicable Second Lien Obligations and/or (ii) on the date of Discharge of First Lien Obligations, subject to the rights of the First Lien Claimholders under Section 6.7.

Section 8.6Information Concerning Financial Condition of Borrower. The First Lien Claimholders and Second Lien Claimholders will each be responsible for keeping themselves informed of (a) the financial condition of the Grantors, and (b) all other circumstances bearing upon the risk of nonpayment of the First Lien Obligations and Second Lien Obligations. No First Lien Claimholder will have any duty to advise any Second Lien Claimholder, and no Second Lien Claimholder will have any duty to advise any First Lien Claimholder, of information known to it regarding any such condition or circumstances or otherwise.

Section 8.7No Reliance.

(a)The First Lien Agent acknowledges that it and each other First Lien Claimholder has, independently and without reliance on any Second Lien Claimholder, and based on documents and information the First Lien Claimholder deemed appropriate, made its own credit analysis and decision to enter into the First Lien Debt Documents and this Agreement, and will continue to make its own credit decisions in taking or not taking any action under the First Lien Debt Documents or this Agreement.

(b)The Second Lien Claimholders acknowledge that it has, independently and without reliance on any First Lien Claimholder, and based on documents and information the Second Lien Claimholder deemed appropriate, made its own credit analysis and decision to enter into the Second Lien Debt Documents and this Agreement, and will continue to make its own credit decisions in taking or not taking any action under the Second Lien Debt Documents or this Agreement.

Section 8.8No Warranties; Independent Action.

(a)Except as otherwise expressly provided herein:

(1)no Second Lien Claimholder has made any express or implied representation or warranty to any First Lien Claimholder, including with respect to the execution, validity, legality, completeness, collectability, or enforceability of any Second Lien Debt Document, the ownership of any Collateral, or the perfection or priority of any Liens thereon; and

(2)each Second Lien Claimholder may manage and supervise its loans and extensions of credit under the Second Lien Debt Documents in accordance with applicable law and as it may otherwise, in its sole discretion, deem appropriate.

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(b)Except as otherwise expressly provided herein:

(1)no First Lien Claimholder has made any express or implied representation or warranty to any Second Lien Claimholder, including with respect to the execution, validity, legality, completeness, collectability, or enforceability of any First Lien Debt Document, the ownership of any Collateral, or the perfection or priority of any Liens thereon; and

(2)each First Lien Claimholder may manage and supervise its loans and extensions of credit under the First Lien Debt Documents in accordance with applicable law and as it may otherwise, in its sole discretion, deem appropriate.

(c)No Second Lien Claimholder will have any duty to any First Lien Claimholder, and no First Lien Claimholder will have any duty to any Second Lien Claimholder, to act or refrain from acting in a manner that allows, or results in, the occurrence or continuance of an event of default or default under any agreements with the Borrower or any other Grantor (including the First Lien Debt Documents and the Second Lien Debt Documents), regardless of any knowledge thereof that it may have or be charged with.

Section 8.9Pledged Collateral.

(a)Except as otherwise specifically provided herein, until the Discharge of First Lien Obligations has occurred, the First Lien Agent shall be entitled to manage, administer, or otherwise deal with that part of the Collateral that is in its possession or control (or in the possession or control of its agents or bailees) to the extent that possession or control thereof is taken to perfect a Lien thereon under the UCC (the “Pledged Collateral”) in accordance with the terms of the First Lien Debt Documents as if the Liens under the Second Lien Debt Documents did not exist. The rights of the Second Lien Claimholders with respect to such Pledged Collateral shall at all times be subject to the terms of this Agreement.

(b)The First Lien Agent shall not have any obligation whatsoever to the First Lien Claimholders or any Second Lien Claimholder to ensure that the Pledged Collateral is genuine or owned by any of the Grantors or to preserve rights or benefits of any person. The duties or responsibilities of the First Lien Agent under this Section 8.9 shall be limited solely to holding the Pledged Collateral as collateral agent and taking such other action with respect to such Pledged Collateral as permitted by the First Lien Debt Documents and this Agreement.

(c)The First Lien Agent shall not have by reason of the Second Lien Debt Documents or this Agreement or any other document a fiduciary relationship in respect of any Second Lien Claimholder, and each Second Lien Claimholder hereby waives and releases the First Lien Agent from all claims and liabilities with respect to the Collateral.

(d)Upon the Discharge of First Lien Obligations, the First Lien Agent shall deliver the remaining Pledged Collateral (if any) together with any necessary endorsements to the Second Lien Claimholders to the extent Second Lien Obligations remain outstanding as confirmed in writing by the Second Lien Agent. 

Section 8.10Subrogation. If a Second Lien Claimholder pays or distributes cash, property, or other assets to a First Lien Claimholder under this Agreement, the Second Lien Claimholder will be subrogated to the rights of the First Lien Claimholder with respect to the value of the payment or distribution; provided, the Second Lien Claimholder agrees not to assert such right of subrogation until the Discharge of First Lien Obligations. Such payment or distribution by the Second Lien Claimholder will not reduce the Second Lien Obligations. If a First Lien Claimholder pays or distributes cash, property, or other 

21

 

assets to a Second Lien Claimholder under this Agreement, the First Lien Claimholder will be subrogated to the rights of the Second Lien Claimholder with respect to the value of the payment or distribution. Such payment or distribution by the First Lien Claimholder will not reduce the First Lien Obligations.

Section 8.11Applicable Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. 

Section 8.12Consent to Jurisdiction.

Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in the Borough of Manhattan in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that (except as permitted below) all claims in respect of any such action or proceeding shall be heard and determined in such New York State or, to the extent permitted by law, in such Federal court.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner permitted by applicable law.

Section 8.13WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.13.

Section 8.14Notices. Any notice to a First Lien Claimholder or a Second Lien Claimholder under this Agreement shall be given to the First Lien Agent and Second Lien Agent, respectively. Unless otherwise expressly provided herein, notices and consents must be in writing and will be deemed to have been given (1) when delivered in person or by courier service and signed for against receipt thereof, (2) upon receipt of pdf document via electronic mail, or (3) five Business Days after deposit in the United States mail with first-class postage prepaid and properly addressed. For the purposes hereof, the address of each party hereto on the date hereof will be as set forth below and the address of each party that becomes a party hereto after the date hereof shall be as set forth in the applicable Intercreditor Agreement Joinder or, in each case, as otherwise designated to the other parties hereto in writing:

If to First Lien Agent:

Oaktree Fund Administration, LLC

333 S. Grand Avenue, 28th Fl.

Los Angeles, CA 90071
Attn: Oaktree Agency

Email: [***]

22

 

With a copy to (which copy shall not constitute notice):

Oaktree Capital Management, L.P.

333 S. Grand Avenue, 28th Fl.

Los Angeles, CA 90071

Attn: Aman Kumar

Email: [***]

 

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

 

Sullivan & Cromwell LLP

125 Broad Street

New York, NY 10004

Attn: Ari B. Blaut, Esq.

Facsimile: [***]

Email: [***]

 

If to Second Lien Claimholder: 

Maples Corporate Services Limited

PO Box 309

Ugland House, Grand Cayman

KY1-1104, Cayman Islands

[***]

 

with a copy to:

 

Sagard Holdings Manager LP

161 Bay Street, 

Suite 5000,

Toronto, Ontario

M5J 2S1

Canada

Attention: Sacha Haque, General Counsel, Chief Compliance Officer & Secretary

[***]

[***]

 

If to any Grantor:

Athenex, Inc.

1001 Main Street
Suite 600
Buffalo, NY 14203
Attention: Teresa Bair
Email: [***]

 

With a copy to (which shall not constitute notice):

Cooley LLP

55 Hudson Yards

New York, New York 10001

23

 

Attention: Mischi a Marca

Phone No. [***]

Email: [***]

 

Section 8.15Further Assurances. The First Lien Agent, the Second Lien Claimholders and the Grantors will each take such further action and will execute and deliver such additional documents and instruments (in recordable form, if requested) as the First Lien Agent or the Second Lien Claimholders may reasonably request to effectuate the terms of and the Lien priorities contemplated by this Agreement.

Section 8.16Successors and Assigns.

(a)The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby.

(b)This Agreement shall survive any sale, assignment, disposal or other transfer of all or any portion of any First Lien Obligations or any Second Lien Obligations to any transferee thereof, and the terms of this Agreement shall be binding upon the permitted successors and assigns of the First Lien Claimholders and the Second Lien Claimholders as provided in Section 8.16(a).

Section 8.17Authorization. By its signature hereto, each person signing this Agreement on behalf of each party hereto represents and warrants to the other parties hereto that such person is duly authorized to execute this Agreement.

Section 8.18Third-Party Beneficiaries.

(a)Each First Lien Claimholder and Second Lien Claimholder constitutes a third-party beneficiary of this Agreement.

(b)Except as provided in subsection (a) above or subsection (c) below, no person is a third-party beneficiary of this Agreement and no trustee in bankruptcy for, or bankruptcy estate of, or unsecured creditor of, any Grantor will have or acquire or be entitled to exercise any right of a First Lien Claimholder or Second Lien Claimholder under this Agreement, whether upon an avoidance or equitable subordination of a Lien of a First Lien Claimholder or a Second Lien Claimholder, or otherwise.

(c)None of the Borrower, any other Grantor, or any other creditor thereof has any rights hereunder, and neither the Borrower nor any Grantor may rely on the terms hereof; provided, that (A) no waiver, amendment or modification of this Agreement, without the prior written consent of the Borrower, shall have the effect of increasing the obligations of, reducing the rights of, imposing duties on, or otherwise adversely affecting the Borrower or any other Grantor and (B) the Borrower and each other Grantor shall be a third-party beneficiary to this Agreement to the extent necessary to enforce this proviso. For the avoidance of any doubt, no waiver, amendment or modification of this Agreement shall alter this Section 8.18(c) without the prior written consent of the Borrower.

(d)Nothing in this Agreement impairs the Obligations of the Borrower and the other Grantors to pay principal, interest, fees, and other amounts as provided in the First Lien Debt Documents and the Second Lien Debt Documents.

Section 8.19No Indirect Actions. Unless otherwise expressly stated, if a party hereto may not take an action under this Agreement, then it may not take that action indirectly, or assist or support any other person in taking that action directly or indirectly. “Taking an action indirectly” includes taking an 

24

 

action that is not expressly prohibited for the party hereto but is intended to have substantially the same effects as the prohibited action.

Section 8.20Counterparts. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original but all of which when taken together shall constitute a single contract.  Delivery of an executed counterpart of a signature page of this Agreement by facsimile or in electronic (i.e., “pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Agreement.  The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to any document to be signed in connection with this Agreement and the transactions contemplated hereby shall be deemed to include electronic signatures, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act; provided that nothing herein shall require the Administrative Agent to accept electronic signatures in any form or format without its prior written consent.

Section 8.21Original Grantors; Subsidiary Guarantors. The Borrower and each other Grantor, on the date of this Agreement, will constitute the original Grantors party hereto (the “Original Grantors”). The Original Grantors will cause each Subsidiary Guarantor that becomes a Grantor after the date hereof to acknowledge the terms of this Agreement by executing and delivering an Intercreditor Agreement Joinder substantially in the form of Exhibit A (with such changes as may be reasonably approved by the First Lien Agent).

Section 8.22Waivers; Amendments.  Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the First Lien Agent (acting in accordance with the First Lien Debt Documents) and the Second Lien Claimholders (acting in accordance with the Second Lien Debt Documents), and, if required by Section 8.18(c), the Borrower.

Section 8.23Expenses.  Pursuant to Section 14.03(a) of the First Lien Credit Agreement, each Grantor, jointly and severally, agrees to pay or reimburse the First Lien Agent, the other First Lien Claimholders and their Affiliates for all of their reasonable and documented out of pockets costs and expenses (including the reasonable and documented out of pocket fees, expenses, charges and disbursements of Sullivan & Cromwell LLP) incurred in connection with the negotiation, preparation, execution and delivery of this Agreement and all other post-closing matters in connection with the First Lien Credit Agreement.

Section 8.24First Lien Collateral.  Each Second Lien Claimholder acknowledges and agrees that the (x) First Lien Obligations are secured by a first priority (except as otherwise provided for in the First Lien Debt Documents and the Second Lien Priority Collateral) perfected security interest in all of the now existing and hereafter acquired real and personal property of any Grantor pledged or purported to be pledged to secure the First Lien Obligations pursuant to the First Lien Security Documents and (y) Liens granted to the Second Lien Claimholders to secure the Second Lien Obligations do not extend to any now existing or hereafter acquired real or personal property of any Grantor other than the Collateral.  Except as otherwise expressly set forth herein, nothing in this Agreement is intended to alter the priority or seniority of any Liens granted by the Grantors to secure the First Lien Obligations.

[remainder of page intentionally left blank]

25

 

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

 

	
 
	
 
	
Oaktree fund administration, llc,

as First Lien Agent

	
 
	
 
	
 
	
 

	
 
	
 
	
By: Oaktree Capital Management, L.P.

Its: Managing Member

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
/s/ Jessica Dombroff

	
 
	
 
	
 
	
Name:
	
Jessica Dombroff

	
 
	
 
	
 
	
Title:
	
Vice President

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
/s/ Brian Price

	
 
	
 
	
 
	
Name:
	
Brian Price

	
 
	
 
	
 
	
Title:
	
Senior Vice President

	
 
	
 
	
 
	
 
	
 

 

[SIGNATURE PAGE TO INTERCREDITOR AGREEMENT]

 

 

	
 
	
 
	
sagard HEALTHCARE ROYALTY PARTNERS, LP,

as Second Lien Claimholder

	
 
	
 
	
 
	
 

	
 
	
 
	
By: SAGARD HEALTHCARE ROYALTY PARTNERS GP LLC, its general partner

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
/s/ Adam Vigna

	
 
	
 
	
 
	
Name:
	
Adam Vigna

	
 
	
 
	
 
	
Title:
	
Chief Investment Officer

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
/s/ Andrew Dean

	
 
	
 
	
 
	
Name:
	
Andrew Dean

	
 
	
 
	
 
	
Title:
	
Manager

	
 
	
 
	
 
	
 
	
 

 

[SIGNATURE PAGE TO INTERCREDITOR AGREEMENT]

 

 

	
 
	
 
	
ACKNOWLEDGED BY:

	
 
	
 
	
 
	
 

	
 
	
 
	
ATHENEX, INC.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
/s/ Johnson Y.N. Lau

	
 
	
 
	
 
	
Name:
	
Johnson Y.N. Lau

	
 
	
 
	
 
	
Title:
	
Chief Executive Officer

 

 

[Subsidiary Guarantors]

 

 

[SIGNATURE PAGE TO INTERCREDITOR AGREEMENT]

 

EXHIBIT A*

Joinder Agreement 

INTERCREDITOR AGREEMENT JOINDER

* Exhibit A has been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant will provide a copy of any omitted exhibit or schedule to the Securities and Exchange Commission or its staff upon request.

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