ROYALTY PURCHASE AGREEMENT dated as of July 14, 2021 among KUROS BIOSCIENCES AG, as Swiss Parent KUROS US LLC, as US Parent KUROS ROYALTY FUND (US) LLC, as Seller, and XOMA (US) LLC, as Purchaser
Exhibit 10.2
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
ROYALTY PURCHASE AGREEMENT
dated as of July 14, 2021
among
KUROS BIOSCIENCES AG, as Swiss Parent
KUROS US LLC, as US Parent
KUROS ROYALTY FUND (US) LLC, as Seller,
and
XOMA (US) LLC, as Purchaser
i
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
TABLE OF CONTENTS
(continued)
Page
EXHIBIT LIST:
Exhibit ABill of Sale
Exhibit BExecuted Checkmate Consent
Exhibit CProtective Rights Agreement
Exhibit DProduct Patents
Exhibit ELicense Agreements
Exhibit FForm of Legal Opinion
ii
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
This ROYALTY PURCHASE AGREEMENT (this “Agreement”) dated as of July 14, 2021 (the “Effective Date”), is among KUROS BIOSCIENCES AG, a corporation organized and existing under the laws of Switzerland, located at Xxxxxxxxxxx 00 Xxxxxxxxx, 0000 Xxxxxxxxxxx (“Swiss Parent”), KUROS US LLC, a Delaware limited liability company and a wholly-owned subsidiary of Swiss Parent (“US Parent”), KUROS ROYALTY FUND (US) LLC, a Delaware limited liability company and a wholly-owned subsidiary of US Parent (“Seller”, and together with Swiss Parent and US Parent, collectively, the “Seller Parties” and, individually, each a “Seller Party”) and XOMA (US) LLC, a Delaware limited liability company with its principal place of business at 0000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxxxx 00000 (“Purchaser”).
W I T N E S E T H:
WHEREAS, pursuant to the Checkmate License Agreement, Swiss Parent has the right to receive certain milestone and royalty payments from Checkmate based on the development and sale of Checkmate Licensed Products (in each case, as defined below); and
WHEREAS, Swiss Parent desires to enter into an arrangement whereby after the date hereof it will transfer at arm’s length all right, title and interest of Swiss Parent and any of its Affiliates in, to and under the Checkmate License Agreement and the Transferred IP (as defined below) to US Parent (all of the foregoing, collectively, the “IP Transfer”) in exchange for the payment by US Parent to Swiss Parent of the book value of such assets and the right to receive the Kuros Milestone Payments (as defined below); and
WHEREAS, US Parent desires to enter into an arrangement whereby immediately after the IP Transfer it will contribute to the Seller all of its right, title and interest to the Checkmate Royalty Payments (as defined below) in exchange for one hundred percent (100%) equity interest in the Seller; and
WHEREAS, Seller desires to sell, assign, transfer, convey and grant to Purchaser, free and clear of all Liens (as defined below), and Purchaser desires to purchase, acquire and accept from Seller, the Checkmate Royalty Payments, upon the terms and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual agreements, representations and warranties set forth herein and of other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto (each a “Party,” and collectively, the “Parties”) covenant and agree as follows:
“Adverse Change” means any event, circumstance or change that could reasonably be expected to result, individually or in the aggregate, in a material adverse effect on: (a) the legality, validity
1
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
or enforceability of any of the Transaction Documents, the License Agreements or the first-priority security interest granted pursuant to Section 2.1(c); (b) the right or ability of any Seller Party to perform any of its obligations under any of the Transaction Documents or under any License Agreement; (c) the right or ability of any Seller Party to exercise any of its rights or remedies under any License Agreement; (d) the right or ability of any Seller Party or Purchaser to consummate the transactions contemplated hereunder or under any of the other Transaction Documents to which it is a party; (e) the right or ability of Purchaser to exercise any of its rights or remedies under any of the Transaction Documents; (f) the Product IP Rights; (g) the Checkmate Royalty Payments, including, without limitation, the timing, amount or duration of the Checkmate Royalty Payments or the right of Purchaser to receive the Checkmate Royalty Payments; or (h) the Checkmate Licensed Products.
“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with such Person.
“Agreement” has the meaning set forth in the preamble.
“Applicable Law” means, with respect to any Person, all laws, rules, regulations and orders of Governmental Authorities applicable to such Person or any of its properties or assets.
“Associate” means any Person’s Subsidiary or other Affiliate and the respective Representatives of such Subsidiary or other Affiliate.
“Bankruptcy Event” means the occurrence of any of the following in respect of a Person: (a) an admission in writing by such Person of its inability to pay its debts generally or a general assignment by such Person for the benefit of creditors; (b) the filing of any petition or answer by such Person seeking to adjudicate itself as bankrupt or insolvent, or seeking for itself any liquidation, winding-up, reorganization, arrangement, adjustment, protection, relief or composition of such Person or its debts under any Applicable Law relating to bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization, examination, relief of debtors or other similar Applicable Law now or hereafter in effect, or seeking, consenting to or acquiescing in the entry of an order for relief in any case under any such Applicable Law, or the appointment of or taking possession by a receiver, trustee, custodian, liquidator, examiner, assignee, sequestrator or other similar official for such Person or for any substantial part of its property; (c) corporate or other entity action taken by such Person to authorize any of the actions set forth in clause (a) or clause (b) above; or (d) without the consent or acquiescence of such Person, the entering of an order for relief or approving a petition for relief or reorganization or any other petition seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or other similar relief under any present or future bankruptcy, insolvency or similar Applicable Law, or the filing of any such petition against such Person, or, without the consent or acquiescence of such Person, the entering of an order appointing a trustee, custodian, receiver or liquidator of such Person or of all or any substantial part of the property of such Person, in each case where such petition or order shall remain unstayed or shall not have been stayed or dismissed within 90 days from entry thereof; provided that in the case of an involuntary petition, such Person has not challenged such petition within 90 days thereof.
2
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
“Xxxx of Sale” means that certain xxxx of sale dated as of the Closing Date executed by Seller and Purchaser attached hereto as Exhibit A.
“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in California are authorized or required by Applicable Law to remain closed.
“CDA” has the meaning set forth in Section 9.9.
“Checkmate” means Checkmate Pharmaceuticals, Inc., a Delaware corporation, having its registered office at Xxx Xxxxxxxx, 00xx Xxxxx, Xxxxxxxxx, XX 00000, XXX.
“Checkmate Consent” means the Consent and Acknowledgement executed by Checkmate, Purchaser and Seller, attached hereto as Exhibit B.
“Checkmate License Agreement” means (a) that certain License Agreement dated June 17, 2015, by and between Kuros Biosciences AG (formerly Cytos Biotechnology Ltd.), a company registered in Switzerland whose registered office is at Xxxxxxxxxxx 00, 0000 Xxxxxxxxx, Xxxxxxxxxxx, and Checkmate Pharmaceuticals, Inc. (formerly Checkmate Pharmaceuticals, LLC), a Delaware corporation, having its registered office at Xxx Xxxxxxxx, 00xx Xxxxx, Xxxxxxxxx, XX 00000, XXX, as amended by that certain Amendment No. 1 to License Agreement, effective as of August 15, 2017, and as further amended by the certain Amendment No. 2 to License Agreement, effective as of January 5, 2018, and (b) any New License Agreement relating to one or more of the Products licensed under the existing Checkmate License Agreement described in clause (a) (either now or in the future), as amended from time to time.
“Checkmate Licensed Patents” means “Licensor Patents” as defined in the Checkmate License Agreement as of the date hereof; provided that [*] Patent of patent families identified by Kuros References [*], which Kuros and Checkmate have decided by mutual agreement to [*] (namely, said Patents in patent family [*] and said Patents in patent families [*]).
“Checkmate Licensed Product” means (a) each “Licensed Compound” and “Licensed Product” as defined in the Checkmate License Agreement, and (b) in the case of a New License Agreement entered into by Seller in accordance with the terms hereof relating to any of the products listed directly above in subsection (a), the analogous term for “product,” “licensed product,” “compound” or any comparable concept as defined in the related New License Agreement.
“Checkmate Royalty Payments” means and includes:
3
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
“Checkmate Royalty Reports” means the quarterly written reports set forth in Section 5.3.7 of the Checkmate License Agreement as of the date hereof.
“Closing” has the meaning set forth in Section 6.1.
“Closing Date” has the meaning set forth in Section 6.1.
“Collateral” means the Collateral (as defined in the Protective Rights Agreement).
“Commercially Reasonable Efforts” means, with respect to the efforts to be expended by a Party with respect to any objective, the same reasonable, diligent, good faith efforts to accomplish such objective as a commercially reasonable Person of similar character would normally use to accomplish a similar objective under similar circumstances. It is understood and agreed that with respect to the research, development and license of a Product by any of the Seller Parties, such efforts shall be substantially equivalent to those efforts and resources commonly used by a commercially reasonable Person of similar character as the Seller Parties (including Swiss Parent) for products owned by it or to which it has rights, which product is at a
4
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
similar stage in its development or product life and is of similar market potential. Commercially Reasonable Efforts shall be determined on a market-by-market and indication-by-indication basis for a particular Product, and it is anticipated that the level of effort may be different for different markets, and may change over time, reflecting changes in the status of the Product and the market(s) involved.
“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.
“Disclosure Letter” means the letter (if any) delivered by the Seller Parties to Purchaser at the Closing, in form and substance acceptable to Purchaser.
“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale leaseback and any sale of equity interests) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.
“Depository Bank” means Bank of New York Mellon or such other bank or financial institution as may be agreed between the parties from time to time.
“Disputes” has the meaning set forth in Section 3.11(f).
“Dollar” or the sign “$” means United States dollars.
“EMA” means the European Medicines Agency.
“Excluded Liabilities and Obligations” has the meaning set forth in Section 2.3.
“FDA” means the U.S. Food and Drug Administration and any successor agency thereto.
“First Approval” means the first approval of a New Drug Application (as defined in the Checkmate License Agreement) or MMA (as defined in the Checkmate License Agreement) for a Licensed Product.
“GAAP” means generally accepted accounting principles in effect in the United States from time to time.
“Governmental Authority” means the government of the United States, any other nation or any political subdivision thereof, whether state or local, and any agency, authority (including supranational authority), commission, instrumentality, regulatory body, self-regulatory body, court, central bank or other Person exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government, including the FDA, the EMA and any other government authority in any jurisdiction.
“Intercompany Debt” has the meaning set forth in Section 3.7.
5
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
“IP Collateral” means (a) all Product IP Rights (i) owned by any of the Seller Parties or any of their respective Affiliates or (ii) to which any of the Seller Parties or any of their respective Affiliates has a license, sublicense or other similar right and has the ability to grant a security interest in and to as provided for in this Agreement or any Transaction Document without violating the terms of any agreement or other arrangement with any Third Party, and (b) all Regulatory Documentation and Regulatory Approvals (i) owned or held by or in the name of any of the Seller Parties or any of their respective Affiliates or (ii) to which any of the Seller Parties or any of their respective Affiliates has any other right, title or interest, in each of the foregoing (i) and (ii), to the extent such Seller Party or such Affiliate has the ability to grant a security interest in and to as provided for in this Agreement or any Transaction Document without violating the terms of any agreement or other arrangement with any Third Party and to the extent permitted under Applicable Law. Without limiting the foregoing, the “IP Collateral” shall automatically be deemed to include any additional Product IP Rights, Regulatory Documentation and Regulatory Approvals to which any of the Seller Parties or any of their respective Affiliates later acquires or obtains ownership or control to the extent such asset would have been included among the “IP Collateral” as defined above if such asset was owned or controlled by such Seller Party or such Affiliate as of the date of this Agreement, including any such assets that are subsequently licensed, sublicensed, transferred or assigned to any of the Seller Parties or any of their respective Affiliates pursuant to any License Agreement.
“Joint Escrow Account” means the deposit account established and maintained at the Depository Bank into which payments of 100% of all payments made under the Checkmate License Agreement (including any Purchased Royalty Payments) are to be remitted in accordance with the terms of this Agreement (and the terms of an escrow agreement to be agreed upon by Seller and Purchaser) and the account from which the Depository Bank transfers funds into the Purchaser Account and the Seller Account.
“Knowledge” means (a) with respect to the Seller Parties or Seller, the actual knowledge of [*] and any Person identified as the recipient for notices under any License Agreement and (b) with respect to Purchaser, the actual knowledge of [*] or, with respect to (a) and (b) directly above, their respective successors in such positions, or, in each case, to the extent any such person or position does not exist at any time, the knowledge of another person with equivalent responsibility, regardless of title; further in each case together with the knowledge that each such individual would have reasonably obtained after making a reasonable inquiry with respect to the particular matter in question.
“Kuros Milestone Payment” and “Kuros Milestone Payments” have the meanings set forth in Section 2.2(b).
“License Agreement” means the Checkmate License Agreement and any New License Agreement.
“Licensee” means (a) any licensee under the Checkmate License Agreement and any successor or assignee thereunder, and (b) with respect to any New License Agreement entered into by any of the Seller Parties in accordance with the terms hereof, any licensee and any successor or permitted assignee thereof.
6
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
“Lien” means any security interest, mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or otherwise), charge against or interest in property or other priority or preferential arrangement of any kind or nature whatsoever, in each case to secure payment of a debt or other liability or performance of an obligation, including any conditional sale or any sale with recourse.
“Loss” means any loss, assessment, award, cause of action, claim, charge, cost, expense (including reasonable expenses of investigation and reasonable attorneys’ fees and expenses), fine, judgment, liability, obligation, penalty or Set-off.
“Milestone Payments” means those payments payable pursuant to (x) subsections (b) and (c) of the definition of Checkmate Royalty Payments and (y) subsection (d) and (e) of the definition of Checkmate Royalty Payments to the extent related to payments payable pursuant to subsections (b) and (c) thereof. For purposes of clarity, the remaining share of milestone payments under the Checkmate License not included among the Checkmate Royalty Payments with respect to a given payment shall be referred to collectively as the “Non-Purchaser Share of Milestone Payments”.
“Net Sales” means:
“New License Agreement” has the meaning set forth in Section 5.6(b).
“Party” and “Parties” has the meaning set forth in the preamble.
“Patent Office” means the applicable patent office, including the United States Patent and Trademark Office and any comparable foreign patent office or any other comparable Governmental Authority within or outside the U.S., for any Product IP Rights that are Patents.
“Patents” means (a) all national, regional and international patents and patent applications, including provisional patent applications and rights to claim priority from any of these patents or applications, (b) all patent applications filed either from such patents, patent applications or provisional applications or from an application claiming priority from either of these, including divisionals, continuations, continuations in part, provisionals, converted provisionals and continued prosecution applications, (c) any and all patents that have issued or in the future issue from the foregoing patent applications ((a) and (b)), including utility models, xxxxx patents and design patents and certificates of invention, (d) any and all extensions or restorations by existing or future extension or restoration mechanisms, including revalidations, reissues, re-examinations,
7
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
renewals, substitutions and extensions (including any patent term extensions, supplementary protection certificates, and the like) of the foregoing patents or patent applications, and (e) any other post-grant proceedings and all foreign equivalents thereof.
“Permitted Liens” means (1) any Liens created, permitted or required by the Transaction Documents in favor of Purchaser or its Affiliates, (2) any Lien created by the Purchaser or its Affiliates, and (3) any Lien that shall be removed by Closing.
“Person” means any natural person, firm, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, Governmental Authority or any other legal entity, including public bodies, whether acting in an individual, fiduciary or other capacity.
“Price Approvals” means, in any jurisdiction where Regulatory Agencies may approve or determine pricing and/or pricing reimbursement for pharmaceutical products, such pricing and/or pricing reimbursement approval or determination.
“Product IP Rights” means, all intellectual property rights owned or controlled by any of the Seller Parties or any of their respective Affiliates relating or directed to or otherwise covering any of the Products, including all of the following and all rights of the following types, whether protected, created or arising under the laws of the United States or any other jurisdiction: (a) trade names, trademarks and service marks (registered and unregistered), domain names and other Internet addresses or identifiers, trade dress and similar rights, and applications (including intent to use applications and similar reservations of marks and all goodwill associated therewith) to register any of the foregoing (collectively, “Trademarks”); (b) Patents; (c) works of authorship and copyrights (registered and unregistered) and applications for registration (collectively, “Copyrights”); (d) trade secrets, know-how, inventions, methods, processes and processing instructions, technical data, specifications, research and development information, technology including rights and licenses, product roadmaps, customer lists and any other confidential or proprietary information and materials (collectively, “Trade Secrets”); and (e) moral rights, publicity rights, data base rights and any other proprietary or intellectual property rights of any kind or nature that do not comprise or are not protected by Trademarks, Patents, Copyrights or Trade Secrets. Without limiting the foregoing, the Product IP Rights include the Licensor Technology (as defined in the Checkmate License Agreement as of the date hereof) and all of each of the Seller Parties’ respective right, title and interest in and to any Joint Inventions (including any Intellectual Property rights therein or thereto) (as those terms are defined in the Checkmate License Agreement) as well as the Product Patents.
“Product Patent” means the Patents included in the Checkmate Licensed Patents. The Product Patents at the time of Closing are listed in Exhibit D.
“Products” means each of the Checkmate Licensed Products.
“Protective Rights Agreement” means the Protective Rights Agreement by and between US Parent, Seller and Purchaser to be executed at the Closing attached hereto as Exhibit C. For the avoidance of doubt, the Protective Rights Agreement is not intended to derogate from the validity of the true and absolute sale of the Purchased Royalty Payments, as contemplated by this
8
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
Agreement and as evidenced by the Xxxx of Sale, but rather is being executed and delivered solely to protect Purchaser’s interests to the extent such assignment becomes subject to a Recharacterization despite the Parties’ intentions.
“Purchase Price” has the meaning set forth in Section 2.2.
“Purchased Royalty Payments” means the Checkmate Royalty Payments.
“Purchaser” has the meaning set forth in the preamble.
“Purchaser Account” means a bank account to be designated by Purchaser in writing within 10 days of the date hereof, which account Purchaser may change from time to time by furnishing written notice to the Seller.
“Purchaser Indemnified Party” has the meaning set forth in Section 8.1.
“Recharacterization” means a judgment or order by a court of competent jurisdiction that Seller’s right, title and interest in, to and under the Checkmate License Agreement and the Purchased Royalty Payments were not fully sold, assigned and transferred to Purchaser pursuant to, as contemplated by, and subject to the provisions of this Agreement and the Xxxx of Sale, but instead that such transaction(s) constituted a loan and security device.
“Recoveries” has the meaning set forth in Section 5.5(h).
“Regulatory Agency” means a Governmental Authority with responsibility for the approval of the marketing and sale of pharmaceuticals or other regulation of pharmaceuticals in any jurisdiction.
“Regulatory Approvals” means, collectively, all regulatory approvals, licenses, registrations, certificates, authorizations, permits and supplements thereto, including Price Approvals, as well as associated materials (including the product dossier) pursuant to which any Products (subject to any applicable License Agreement) may be researched, developed, manufactured, used, stored, transported, marketed, imported, exported, sold, distributed and/or otherwise commercialized in a jurisdiction, issued by the appropriate Regulatory Agency.
“Regulatory Documentation” means any and all applications, registrations, licenses, authorizations and approvals (including all Regulatory Approvals), and non-clinical and clinical study authorization applications or notifications (including all supporting files, writings, data, studies and reports) prepared for submission to a Regulatory Agency or research ethics committee with a view to the granting of any Regulatory Approval, and any correspondence to or with the EMA or FDA or any other Regulatory Agency with respect to a Product (including minutes and official contact reports relating to any communications with any Regulatory Agency), and all data contained in any of the foregoing, including all regulatory authorizations, regulatory drug lists, advertising and promotion documents, adverse event files and complaint files.
“Representatives” means officers, directors, employees, agents, attorneys, accountants, advisors and representatives.
9
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
“Royalty Quarter” means the three-month period ending on the last day of each of March, June, September and December of each calendar year.
“SEC” means the U.S. Securities and Exchange Commission.
“Seller” has the meaning set forth in the preamble.
“Seller Party” and “Seller Parties” have the meanings set forth in the preamble.
“Seller Account” means a bank account to be designated by Seller in writing within 10 days of the date hereof, which account Seller may change from time to time by furnishing written notice to Purchaser.
“Seller Indemnified Party” has the meaning set forth in Section 8.2.
“Set-off” means any set-off, off-set, rescission, counterclaim, credit, reduction, or deduction, including any of the foregoing resulting from any of the Seller Parties’ breach of the Checkmate License Agreement or which a Licensee or Sublicensee may otherwise be entitled to take or claim based on any of the Seller Parties’ breach of any License Agreement.
“Solvent” means, with respect to any Person individually, or group of Persons taken together on a combined basis, as applicable, on a particular date, that on such date (a) the present fair saleable value of such Person’s property and assets will be greater than the sum of its debts, liabilities and other obligations, including contingent liabilities, (b) the present fair saleable value of such Person’s property and assets will be greater than the amount that would be required to pay its probable liabilities on its existing debts, liabilities and other obligations, including contingent liabilities, as they become absolute and matured, (c) such Person will be able to realize upon its assets and pay its debts, liabilities and other obligations, including contingent obligations, as they mature, (d) such Person will not be rendered insolvent, will not have unreasonably small capital with which to engage in its business and will not be unable to pay its debts as they mature, (e) such Person has not incurred, will not incur and does not have any present plans or intentions to incur debts, liabilities or other obligations beyond its ability to pay such debts, liabilities or other obligations as they become absolute and matured, (f) such Person will not have become subject to any Bankruptcy Event, and (g) such Person will not have been rendered insolvent within the meaning of Section 101(32) of Title 11 of the United States Code.
“Sublicensee” means any licensee of the Licensee under a Checkmate License Agreement.
“Swiss Parent” has the meaning set forth in the preamble.
“Swiss Parent Account” means Swiss Parent’s account with [*] which account Swiss Parent may change from time to time by furnishing written notice to Purchaser.
“Tax” or “Taxes” means any federal, state, local or non-U.S. income, gross receipts, license, payroll, employment, excise, severance, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, abandoned property, value added, alternative or add-
10
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
on minimum, estimated or other tax of any kind whatsoever, including any interest, penalty or addition thereto, whether disputed or not.
“Terminated Checkmate Licensed Product” means a Checkmate Licensed Product that is (a) terminated by (i) Checkmate, or (ii) any Seller Party (as permitted herein), pursuant to Article 10 of the Checkmate License Agreement such that it is no longer a “Licensed Compound” or “Licensed Product” under the Checkmate License Agreement or (b) in the case of a New License Agreement entered into by any of the Seller Parties as contemplated and permitted herein, terminated in accordance with the terms thereof such that it is no longer a Checkmate Licensed Product under such New License Agreement, in each of (a) and (b), including all such Checkmate Licensed Product(s) terminated individually or terminated as a result of termination of the corresponding License Agreement in its entirety.
“Third Party” means any Person other than the Seller Parties or Purchaser or any of their respective Affiliates.
“Third Party Confidential Information” has the meaning set forth in Section 9.9.
“Transferred IP” means (a) all Product IP Rights (i) owned by any of the Seller Parties or any of their respective Affiliates or (ii) to which any of the Seller Parties or any of their respective Affiliates has a license, sublicense or other similar right and has the ability to assign, transfer and convey its right, title and interest therein and thereto to US Parent as contemplated in this Agreement or any other Transaction Document without violating the terms of any agreement or other arrangement with any Third Party, together with (b) all rights to income, royalties, and license fees deriving from any of the foregoing, all claims for damages by reason of past, present and future infringements of any of the foregoing or injury to the goodwill associated with any of the foregoing, and the right to xxx for and collect such damages, as permitted under the applicable laws for any jurisdiction or country in which such claims may be asserted for the use and benefit of US Parent and its successors, assigns and other legal representatives, and (c) all Regulatory Documentation and Regulatory Approvals (i) owned or held by or in the name of any of the Seller Parties or any of their respective Affiliates or (ii) to which any of the Seller Parties or any of their respective Affiliates has any other right, title or interest, in each of the foregoing (i) and (ii), to the extent such Seller Party or such Affiliate has the ability to assign, transfer and convey its right, title and interest therein and thereto to US Parent as contemplated in this Agreement or any other Transaction Document without violating the terms of any agreement or other arrangement with any Third Party and to the extent permitted under Applicable Law.
“Transaction” means any transaction related, directly or indirectly to the Checkmate License or the Transferred IP.
“Transaction Documents” means this Agreement, the Xxxx of Sale, the CDA, the Protective Rights Agreement, the Disclosure Letter (if any) and the Checkmate Consent.
“UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that if with respect to any financing statement or by reason of any provisions of Applicable Law, the perfection or the effect of perfection or non-perfection of the first priority security interest or any portion thereof granted pursuant to Section 2.1(c) and Section 2.1(d) is
11
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
governed by the Uniform Commercial Code as in effect in a jurisdiction of the United States other than the State of New York, then “UCC” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions of this Agreement and any financing statement relating to such perfection or effect of perfection or non-perfection.
“U.S.” or “United States” means the United States of America, its fifty (50) states, each territory thereof and the District of Columbia.
“US Parent” has the meaning set forth in the preamble.
“Valid Claim” means a claim of any unexpired Patent that has not been withdrawn, canceled or disclaimed nor held to be invalid or unenforceable by a court or tribunal of competent jurisdiction in an unappealed or unappealable decision or, in the case of any patent application, that has not been finally rejected in an appealed or unappealable decision by the relevant Patent Office.
12
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
13
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
14
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
Annual Net Sales Threshold | Kuros Milestone Payment |
First Calendar Year in which [*] Product Annual Net Sales exceed [*] | [*] |
First Calendar Year in which [*] Product Annual Net Sales exceed [*] | [*] |
First Calendar Year in which [*] Product Annual Net Sales exceed [*] | [*] |
First Calendar Year in which [*] Product Annual Net Sales exceed [*] | [*] |
First Calendar Year in which [*] Product Annual Net Sales exceed [*] | [*] |
First Calendar Year in which [*] Product Annual Net Sales exceed [*] | [*] |
For clarity, each of the foregoing Kuros Milestone Payments shall only be paid once, provided, however, that it is expressly understood that in any given Calendar Year one or more Kuros Milestones may be achieved and paid.
Notwithstanding the foregoing, if [*] (as those terms are defined in the Checkmate License Agreement) and, as a result thereof, [*], then all future Kuros Milestone Payments described above and payable by Purchaser thereafter pursuant to this Section 2.2(b) shall automatically be reduced by [*] on a prospective basis effective as of [*]. Additionally, if [*], then all future Kuros Milestone Payments described above and payable by Purchaser thereafter pursuant to this Section 2.2(b) shall automatically be reduced by [*] on a prospective basis from and after such occurrence.
15
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
obligations of the Seller Parties or their Affiliates, as the case may be (the “Excluded Liabilities and Obligations”).
Except as set forth in the Disclosure Letter, each Seller Party hereby represents and warrants to Purchaser as of the date hereof and affirms that such will be true and accurate as of the date of Closing as follows:
16
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
17
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
18
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
Documents and the application of the proceeds therefrom, (a) the present fair saleable value of each Seller Party’s property and assets will be greater than the sum of its debts, liabilities and other obligations, including contingent liabilities, (b) the present fair saleable value of each Seller Party’s property and assets will be greater than the amount that would be required to pay its probable liabilities on its existing debts, liabilities and other obligations, including contingent liabilities, as they become absolute and matured, (c) each Seller Party will be able to realize upon its assets and pay its debts, liabilities and other obligations, including contingent obligations, as they mature, (d) each Seller Party will not be rendered insolvent, will not have unreasonably small capital with which to engage in its business and will not be unable to pay its debts as they mature. Upon consummation of the transactions contemplated by the Transaction Documents (x) each of US Parent and Seller has not incurred, will not incur and does not have any present plans or intentions to incur debts, liabilities or other obligations beyond its ability to pay such debts, liabilities or other obligations as they become absolute and matured other than the obligations owed by US Parent to Swiss Parent as a result of the transactions contemplated by Section 5.11 and including the obligations contemplated by Section 5.11(c) (the “Intercompany Debt”), (f) neither US Parent nor Seller will not have become subject to any Bankruptcy Event, and (g) neither US Parent now Seller, will not have been rendered insolvent within the meaning of Section 101(32) of Title 11 of the United States Code. No step has been taken or is intended by any Seller Party or, to the Knowledge of the Seller Parties, any other Person to make US Parent or Seller subject to a Bankruptcy Event. To the Knowledge of the Seller Parties, as of the date hereof, no event has occurred and no condition exists that could reasonably be expected to result in an Adverse Change. Between the date hereof and the Closing Date, no Seller Party has caused an Adverse Change to occur or caused any condition to exist that could reasonably be expected to result in an Adverse Change.
19
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
20
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
21
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
22
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
23
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
Purchaser hereby represents and warrants to the Seller Parties as of the date hereof as follows:
24
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
25
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
challenges or seeks to prevent, enjoin, alter, delay, make illegal or otherwise interfere with the consummation of any of the transactions contemplated by any of the Transaction Documents to which Purchaser is or will be party.
The Parties covenant and agree as follows:
26
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
27
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
28
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
29
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
30
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
31
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
32
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
33
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
34
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
35
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
36
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
37
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
38
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
39
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
40
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
41
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
42
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
43
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
44
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
(a)Each Seller Party acknowledges and agrees that during the period from the date hereof until the earlier of Closing or the termination of this Agreement in accordance with its terms, the Seller Parties will not, and will not permit any of their respective Representatives and Associates to, directly or indirectly:
(i)solicit or encourage the initiation of any inquiry, proposal or offer from any Person (other than Purchaser) relating to a possible Transaction;
45
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
(ii)participate in any discussions or negotiations or enter into any agreement with, or provide any non-public information or afford access to the properties, books or records of any Seller Party to any Person (other than Purchaser or its Affiliates relating to or in connection with a possible Transaction); or
(iii)consider, entertain or accept any proposal or offer from any Person relating to a possible Transaction.
(b)Each Seller Party shall, and shall cause each of its Representatives to, immediately discontinue any ongoing discussions or negotiations (other than any ongoing discussions with Purchaser) relating to a possible Transaction, and shall promptly provide Purchaser with an oral and a written description of any expression of interest, inquiry, proposal or offer relating to a possible Transaction that is received by any Seller Party or by any of their respective Representatives from any person or entity (other than Purchaser) during the period from the date hereof until the earlier of Closing or the termination of this Agreement in accordance with its terms. The parties acknowledge that any breach of the foregoing provisions by any Representative of any Seller Party, including without limitation, any shareholders acting as Representatives of any Seller Party, shall be deemed a breach by a Seller Party.
46
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
47
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
48
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
49
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
50
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
certificates or other written documentation delivered thereunder), (b) any breach or default by Purchaser in respect of any covenant or agreement made by Purchaser in any Transaction Document, (c) any fees, expenses, costs, liabilities or other amounts incurred or owed by Purchaser to any brokers, financial advisors or comparable other Persons retained or employed by it in connection with the transactions contemplated by the Transaction Documents, and (d) acts or omissions of any Seller Party or any of its Affiliates based upon written instructions from any Purchaser Indemnified Party (unless such Seller Party is otherwise liable for such Losses pursuant to the terms of this Agreement); provided, however, that the foregoing shall exclude any indemnification to any Seller Indemnified Party (i) that results from the gross negligence or willful misconduct of such Seller Indemnified Party, (ii) to the extent resulting from the performance by any Seller Party or any of its Affiliates or the failure of any Seller Party or any of its Affiliates to perform any of its obligations under, or any breach of any of the Seller Parties’ representations and warranties in, any of the Transaction Documents, or (iii) to the extent resulting from acts or omissions of Purchaser or any of its Affiliates based upon the written instructions from any Seller Indemnified Party (unless Purchaser is otherwise liable for such Losses pursuant to the terms of this Agreement). Any amounts due to any Seller Indemnified Party hereunder shall be payable by Purchaser to such Seller Indemnified Party upon demand.
51
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate law firm at the same time (in addition to local counsel where necessary) for all such indemnified parties. The indemnifying party shall not be liable for any settlement of any proceeding effected without its prior written consent, but, if settled with such consent or if there is a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any Loss by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement, compromise or discharge of any claim or pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement, compromise or discharge, as the case may be, (i) includes an unconditional written release of such indemnified party, in form and substance reasonably satisfactory to the indemnified party, from all liability on claims that are the subject matter of such claim or proceeding, (ii) does not include any statement as to an admission of fault, culpability or failure to act by or on behalf of any indemnified party and (iii) does not impose any continuing material obligation or restrictions on any indemnified party.
52
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
THE PURCHASED ROYALTY PAYMENTS OR THE APPLICABLE NET PRESENT VALUE RELATED THERETO ARE NOT SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OR LOST PROFITS AND CONSTITUTE A REASONABLE MEASURE OF DAMAGES IN THE EVENT ANY SELLER PARTY IS LIABLE FOR THEIR LOSS UNDER THE TERMS OF THIS AGREEMENT, INCLUDING ARTICLE VIII.
53
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
Agreement pursuant to Section 9.1 hereof. The rights hereunder to indemnification, payment of Losses or other remedies based on such representations, warranties and covenants shall not be affected by any investigation conducted with respect to, or any Knowledge of Purchaser, or knowledge with respect to any other Person, acquired (or capable of being acquired) at any time (whether before or after the execution and delivery of this Agreement or the Closing) in respect of the accuracy or inaccuracy of or compliance with, any such representation, warranty or covenant.
if to Seller, to:
c/o Kuros Biosciences X.X.
Xxxxxxxxxxx 00,
0000 Xxxxxxxxx,
Xxxxxxxxxxx
Attention: [*]
Telephone: [*]
Email: [*]
with a copy to (which shall not constitute notice):
Xxxxxx LLP
00000 Xxxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Attention: Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email: xxxxxxx@xxxxxx.xxx
if to Purchaser, to:
54
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
XOMA (US) LLC
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Legal Department
Telephone: [*]
Facsimile: [*]
Email: [*]
with a copy to (which shall not constitute notice):
Xxxx Xxxxxxxx LLP
0000 Xxxxxxxxx Xxxxx
Xxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxxx, Esq.
Telephone: (000) 000-0000
Email: xxxxx@xxxxxxxxxxxx.xxx
Each Party may, by notice given in accordance herewith to the other Party hereto, designate any further or different address to which subsequent notices, consents, waivers and other communications shall be sent. Notwithstanding the foregoing, Seller and Purchaser may deliver reports and notices required under Section 5.1 via email provided that the parties shall have agreed in writing upon mutually acceptable procedures for such delivery.
55
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
partnership, an association, a joint venture or any other kind of entity or legal form for any purposes, including any Tax purposes. The Parties agree that they shall not take any inconsistent position with respect to such treatment in any filing with any Governmental Authority.
56
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
fulfilling this Agreement, shall remain in the ownership of the originating Party, shall be considered and be maintained as Confidential Information as specified in that certain Mutual Confidentiality Agreement (“CDA”) dated [*], between the Parties, which is incorporated herein in its entirety by reference. The Parties agree that the term of the CDA shall be extended to run concurrently with the term of this Agreement and for a period of (a) [*] years thereafter with respect to all Confidential Information that is not Third Party Confidential Information, and (b) [*] years thereafter with respect to any Third Party Confidential Information, and expressly be amended to further include the obligation to use Confidential Information only for the purpose of fulfilling obligations hereunder, and shall not otherwise be used for the benefit of the Party receiving Confidential Information or for the benefit of a Third Party without prior written approval from the Party disclosing the Confidential Information. “Third Party Confidential Information” means information of Checkmate provided by any Seller Party to Purchaser pursuant to, or in contemplation of, this Agreement; provided, that “Third Party Confidential Information” shall not include such information of Checkmate that (x) is or becomes available to the public, other than as a result of disclosure by Purchaser in violation of this Agreement, or (y) is independently developed by Purchaser without use of or reference to the Checkmate’s information. With respect to the Third Party Confidential Information, (a) Purchaser shall not disclose any of the Confidential Information except in compliance with the CDA, (b) Purchaser shall protect such Third Party Confidential Information using not less than the same care with which it treats its own confidential information, but at all times shall use at least reasonable care, and (c) Purchaser may disclose the Third Party Confidential Information to the extent required by law or court order; provided, however, that Purchaser promptly provides Seller with prior written notice of such disclosure and provides reasonable assistance in obtaining an order or other remedy protecting the Third Party Confidential Information from public disclosure.
57
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
any other right, power or privilege. No notice to or demand on either Party hereto in any case shall entitle it to any notice or demand in similar or other circumstances. No waiver or approval hereunder shall, except as may otherwise be stated in such waiver or approval, be applicable to subsequent transactions. No waiver or approval hereunder shall require any similar or dissimilar waiver or approval thereafter to be granted hereunder.
[SIGNATURE PAGE FOLLOWS]
58
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year first written above.
KUROS BIOSCIENCES AG
By: _/s/ Xxxxx Xxxx de Bruijn_
Name: Xxxxx Xxxx de Bruijn
Title: Member of the Board of Directors and Chief Executive Officer
By: _/s/ Alistair Irvine_
Name: Xxxxxxxx Xxxxxx
Title: Chief Business Officer
KUROS US LLC
By: _/s/ Xxxxx Xxxx de Bruijn_
Name: Xxxxx Xxxx de Bruijn
Title: President and Chief Executive Officer
KUROS ROYALTY FUND (US) LLC
By: _/s/ Xxxxx Xxxx de Bruijn_
Name: Xxxxx Xxxx de Bruijn
Title: President and Chief Executive Officer
XOMA (US) LLC
By: _/s/ Xxxxx X. Neal___________
Name: Xxxxx X. Xxxx
Title: Chief Executive Officer
[Signature Page to Royalty Purchase Agreement]
