FIRST AMENDMENT TO REVENUE INTEREST PURCHASE AND SALE AGREEMENT

Revenue Interest Purchase and Sale Agreement

dated as of May 14, 2021

 

 

This Revenue Interest Purchase and Sale Agreement (as amended by the First Amendment, as defined below, this “Agreement”) is entered into as of May 14, 2021 (the “Effective Date”) by and among (a) Dermavant Sciences GmbH, a limited liability company (Gesellschaft mit beschränkter Haftung) organized under the laws of Switzerland (“Dermavant”), and, (b) solely for purposes of Section 5.21 and Article VIII, Dermavant Sciences Ltd., an exempted company organized under the laws of Bermuda (“Parent”), and (c) severally and not jointly, the other entities named on the signature pages hereto (together with such entities’ successors and assigns, collectively, the “Purchasers” and, each, a “Purchaser”), and, (d) solely for purposes of Article IX, U.S. Bank Trust Company, National Association, as collateral agent on behalf of the Purchasers (the “Collateral Agent”). Each of the Purchasers and Dermavant is referred to herein individually as a “Party” and collectively as the “Parties”.

 

NOW, THEREFORE, in consideration of the premises and mutual covenants, representations and warranties herein below, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

ARTICLE I

 

“10 Non-Bank Rule” means the rule that the aggregate number of parties to this Agreement (other than Dermavant) that are not Qualifying Banks must not at any time exceed ten (10), all in accordance with the meaning of the Guidelines or legislation or explanatory notes addressing the same issues that are in force at such time.

 

“20 Non-Bank Rule” means the rule that the aggregate number of creditors (including the Purchasers), other than Qualifying Banks, of the Swiss Seller Party under all of the Swiss Seller Party’s outstanding debts relevant for classification as debenture (Kassenobligation) must not at any time exceed twenty (20), all in accordance with the meaning of the Guidelines or legislation or explanatory notes addressing the same issues that are in force at such time.

 

“AAA” means the American Arbitration Association. “AAA Rules” has the meaning set forth in Section 8.3(a).

“Additional Amounts” means any additional amounts payable to the Purchasers pursuant to Section 5.6(a).

 

“Affiliate” means, with respect to a Person, any other Person, directly or indirectly, controlling, controlled by or under common control with such first Person, but only so long as such control exists. For the purposes of this definition, “controlling”, “controlled” and “control”

mean the possession, directly (or indirectly through one or more intermediaries), of the power to direct the management or policies of a Person, including through ownership of fifty percent (50%) or more of the Voting Securities of such Person, by contract or otherwise.

 

“Agreement” has the meaning set forth in the preamble hereto.

 

“Applicable Law” means any applicable law, rule, regulation, judgment, order, writ, decree, permit or license of any Governmental Authority of competent jurisdiction. For purposes of Section 5.6, the term “Applicable Law” includes FATCA.

 

“Applicable Percentage” means, with respect to a given Fiscal Quarter and determined as of the earlier of (a) the last day of such Fiscal Quarter and (b) the Termination Date, an amount, expressed as a percentage, equal to the quotient of (i) the sum of (x) with respect to the first $[***] of Net Sales invoiced in the Fiscal Year in which such Fiscal Quarter occurs, an amount equal to the product of (A) [***]% multiplied by (B) each such dollar of such $[***] that is invoiced in such Fiscal Quarter, (y) with respect to the next $[***] of Net Sales invoiced in the Fiscal Year in which such Fiscal Quarter occurs, an amount equal to the product of (A) [***]% multiplied by (B) each such dollar of such $[***] that is invoiced in such Fiscal Quarter and (z) with respect to any Net Sales above $[***] invoiced in the Fiscal Year in which such Fiscal Quarter occurs, an amount equal to the product of (A) [***]% multiplied by (B) each such dollar above such $[***] that is invoiced in such Fiscal Quarter, divided by (ii) the aggregate Net Sales invoiced in such Fiscal Quarter; provided, however, that, notwithstanding the foregoing, if (X) a Base Case Forecast Shortfall exists as of the earlier of (I) the last day of such Fiscal Quarter and (II) the Termination Date and (Y) such Fiscal Quarter or the Fiscal Quarter in which the Termination Date occurs, as applicable, ends on or after [***] then the Applicable Percentage shall be [***]% (it being understood that such [***]% shall apply to all Net Sales invoiced in such Fiscal Quarter); provided, further, however, that in each case any such amount shall apply to Net Sales whether or not paid or received.

 

“Arbitration” has the meaning set forth in Section 8.3(a).

“Arbitration Notice” has the meaning set forth in Section 8.3(a).

“Arbitrator” has the meaning set forth in Section 8.3(b).

“Auditor” has the meaning set forth in Section 5.5(c).

“Bankruptcy Event of Default” means any of (i) the liquidation or dissolution of Dermavant, (ii) a Voluntary Bankruptcy or (iii) an Involuntary Bankruptcy.

 

“Bankruptcy Law” means Title 11, United States Code, or any similar U.S. federal or state law for the relief of debtors (or their non-U.S. equivalents).

 

“Base Case Forecast Shortfall” means that both (i) cumulative Quarterly Revenue Amounts paid pursuant to this Agreement with respect to all Fiscal Quarters on and prior to [***] were less than the amount set forth opposite the last day of the Fiscal Quarter ending [***] in Exhibit C attached hereto and (ii) cumulative Quarterly Revenue

Amounts paid pursuant to this Agreement with respect to all Fiscal Quarters on and prior to the Fiscal Quarter with respect to which the Applicable Percentage is being determined were less than the amount set forth opposite the last day of such Fiscal Quarter in Exhibit C attached hereto.

 

“Base Currency” has the meaning set forth in Section 8.20(b)(i).

 

“Bill of Sale” means that certain bill of sale to be dated as of the Funding Date executed by ▇▇▇▇▇▇▇▇▇ and the Purchasers substantially in the form of Exhibit B attached hereto.

 

“Business Day” means any day other than a Saturday, a Sunday or any other day on which banking institutions located in New York, New York or Basel, Switzerland are generally closed or are obligated by Applicable Law to close.

 

“Capital Securities” means, with respect to any Person, all shares, interests, participations or other equivalents (however designated, whether voting or non-voting) of such Person’s capital, whether now outstanding or issued after the Effective Date, including common shares, ordinary shares, preferred shares, participation rights, profit sharing certificates, membership interests or share capital in a limited liability company or other Person, limited or general partnership interests in a partnership, beneficial interests in trusts or any other equivalent of such ownership interest or any options, warrants, subscription rights and other rights to acquire such shares or interests, including rights to allocations and distributions, dividends, redemption payments and liquidation payments (other than convertible Indebtedness).

 

 

 

  (ii)  at any time prior to the consummation of a Qualified IPO or an Ultimate Parent Spinout, Ultimate Parent ceasing to beneficially own, directly or indirectly, including through one or more intermediaries, at least [***] of the total voting power of the issued and outstanding Voting Securities of Parent;

 

  (iii)  at any time following the consummation of a Qualified IPO or an Ultimate Parent Spinout, Parent becomes aware (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) of the acquisition of the beneficial ownership by any “person” or “group” (as such terms are used within Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act, or any successor provision), but excluding Ultimate Parent and its Affiliates, in a single transaction or in a related series of transactions, by way of merger, amalgamation, consolidation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), of (x) [***] or more of the total voting power of the issued and outstanding Voting Securities of Parent and (y) total voting power of the issued and outstanding Voting

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Securities of Parent that is greater than the total voting power of the issued and outstanding Voting Securities of Parent beneficially owned by Ultimate Parent; provided, that, for the purposes of determining beneficial ownership in this clause

 

 (iii), a beneficial owner shall have the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition; (iv) Parent ceasing to beneficially own, directly or indirectly, including through one or more intermediaries, at least [***] of the total voting and economic power of Dermavant; or

 

  (v) the merger, amalgamation or consolidation of Dermavant with or into a Third Party, other than in the case of this clause (v) a merger, amalgamation or consolidation of Dermavant in which holders of a majority of the total voting power of the issued and outstanding Voting Securities of Dermavant, directly or indirectly, including through one or more intermediaries, immediately prior to such merger, amalgamation or consolidation will hold, directly or indirectly, including through one or more intermediaries, a majority of the total voting power of the issued and outstanding Voting Securities of such Third Party or the surviving Person in such merger, amalgamation or consolidation, as the case may be, immediately after such merger, amalgamation or consolidation; provided, however, that, with respect to a transaction described in clause (i) above, clause (iii) above or clause (v) above, if (x) the acquiring Person in such transaction is a Qualified Party, (y) to the extent Dermavant is party to such transaction but is not the surviving Person in such transaction, such surviving Person expressly agrees to assume ▇▇▇▇▇▇▇▇▇’s obligations under the Deal Documents, and (z) there shall not have occurred and been continuing upon the consummation of such transaction a Default or an Event of Default, then such transaction shall not constitute a Change of Control..

 

 

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“Claim” has the meaning set forth in Section 7.1(a).

 

“Code” means the U.S. Internal Revenue Code of 1986, as amended.

“Collateral Agent” has the meaning set forth in the preamble hereto.

“Collateral Agreement” means that certain RIPSA Collateral Agreement dated as of the Effective Date between Dermavant and the Collateral Agent (and all documentation required pursuant thereto, including any joinder agreement for any Controlling Affiliate).

 

“Collateral Assignment” means that certain Collateral Assignment dated as of the Effective Date between Dermavant and the Collateral Agent.

 

“Combination Product” means a Product that is comprised of or contains the compound set forth in Schedule 1 attached hereto in addition to one or more additional active ingredients (whether co-formulated or co-packaged) that are neither the compound set forth in Schedule 1 attached hereto nor generic or other non-proprietary compositions of matter.

 

“Commercialization”, “Commercialize” or “Commercializing” means any and all activities directed to marketing, promoting, making, manufacturing, distributing, importing, exporting, offering to sell or selling the Product, including manufacturing and activities directed to obtaining any pricing and reimbursement approvals that must be obtained from a Regulatory Authority before placing the Product on the market for sale and including any licensing activities.

 

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

 

“Competing Product” means [***].

“Confidential Information” has the meaning set forth in Section 4.1.

 

“Controlling Affiliate” means, with respect to Dermavant, Parent or an Affiliate that is, directly or indirectly, under the control of Parent.

 

“Cover” means that the use, manufacture, sale, offer for sale, development, commercialization or importation of the subject matter in question by an unlicensed Person would infringe a claim of a Patent.

 

“CRE Considerations” means [***].

“Custodian” means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law.

 

“Deal Documents” means the Transaction Documents to which Dermavant is or will be party.

 

“Default” means any event that, with the giving of notice or passage of time, or both,

could result in an Event of Default.

 

“Dermavant Indemnitees” has the meaning set forth in Section 7.1(b).

 

“Develop”, “Developing” or “Development” means engaging in manufacturing, preclinical, clinical or other research and development activities directed towards obtaining Marketing Approval of the Product.

 

“Disclosing Party” has the meaning set forth in Section 4.1.

 

“Disclosure Letter” means that certain confidential disclosure letter dated as of the Effective Date delivered by ▇▇▇▇▇▇▇▇▇ to the Purchasers.

 

“Disposition” or “Dispose” means, with respect to any Person, directly or indirectly, the

sale, assignment, conveyance, transfer, license, sublicense or other disposition (whether in a single transaction or a series of related transactions) (including by way of a sale and leaseback transaction) of property or assets by any Person.

 

“Dispute” has the meaning set forth in Section 8.3(a).

“Dispute Notice” has the meaning set forth in Section 8.3(a).

“Distributor” means (i) a Third Party distributor of any Product that has no royalty or other payment obligations to Dermavant or any of its Affiliates that are calculated based on amounts invoiced or received by such Third Party for sales of the Product or (ii) a Third Party distributor of any Product that (a) does not take title to the Product, (b) does not invoice sales of the Product to Third Party customers and (c) is responsible only for inventory management and distribution with respect to such Product on behalf of Dermavant or any of its Affiliates.

 

“Effective Date” has the meaning set forth in the preamble hereto.

 

 

“Event of Default” means any of (i) any Bankruptcy Event of Default, (ii) the breach by Dermavant of (x) any payment obligations under Section 5.11, which failure to pay continues for more than 10 Business Days, or (y) any non-payment obligations under Section 5.11, (iii) the breach by Dermavant of any of its other payment obligations under this Agreement, which failure to pay continues for more than 10 Business Days after receipt of written notice from any of the Purchasers, (iv) except as set forth in clause (ii) above or clause (iii) above or clause (viii) below, the breach by Dermavant of any of its obligations under any Deal Document, where the Required Purchasers have provided notice of such breach to Dermavant in writing and Dermavant has not cured such breach within 45 days following receipt of such notice and where such breach, if not cured, would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (v) the failure to make any payment in respect of any indebtedness of Dermavant or Parent within any applicable grace period after such payment is due and payable (including at final maturity) or the acceleration of any indebtedness of Dermavant by the holders thereof occurs, in each case if the total principal amount of such indebtedness exceeds $5,000,000 (but excluding any failure or default under the Senior Credit AgreementSecured Debt that has been waived by the lender or lenders thereunder), and in each case where such failure to pay continues for more than 10 Business Days, (vi) a breach by Dermavant of any of its obligations under the NovaQuest Funding Agreement resulting in the exercise of remedies under the security agreements related to the NovaQuest Funding Agreement or, (vii) a default or event of default under the Senior Credit AgreementSecured Debt that results in an acceleration of the

obligations thereunder, which acceleration is not rescinded, or the obligations thereunder are not paid in full [***].

“Event of Default Closing Date” has the meaning set forth in Section 2.7(a).

 

“Event of Default Fee” means $160,000,000 less the amount of any Revenue Interests previously paid to the Purchasers pursuant to this Agreement (but in no event less than zero).

 

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Purchaser or required to be withheld or deducted from a payment to a Purchaser: (i) Taxes imposed on or measured by net income (however denominated), franchise Taxes and branch profits Taxes, in each case (x) imposed as a result of such Purchaser being organized under the laws of, or having its principal office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (y) that are Other Connection Taxes; (ii) Taxes attributable to such Purchaser’s failure to comply with Section 5.6(b) (or Section 5.6(c), as applicable); (iii) withholding Taxes imposed under FATCA; and (iv) Swiss Withholding Tax imposed as a result of such Purchaser (x) making an incorrect declaration of its status as to whether or not it is a Qualifying Bank and as to how many lenders it counts under the Non-Bank Rules or (y) failing to comply with its obligations under Section 8.7. For the avoidance of doubt, for the purposes of this definition, any reference to a Purchaser includes any successor or assignee of such Purchaser in accordance with Section 8.7.

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the Effective Date (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or

convention among Governmental Authorities and implementing such sections of the Code.

“FDA” means the U.S. Food and Drug Administration, or any successor agency thereto.

 

“Fiscal Quarter” means each three-month period commencing January 1, April 1, July 1 or October 1 during the Term, beginning with the January 1, April 1, July 1 or October 1 of the three-month period in which the Funding Date occurs.

 

“Fiscal Year” means each twelve (12)-month period from April 1 through March 31. “Funding” means the payment by the Purchasers (severally in accordance with their

 

Percentage Interests) to Dermavant of the Purchase Price on the Funding Date.

 

“Funding Condition” means both (a) the Purchasers have obtained Tax Rulings confirming that they count, in the aggregate, as not more than ten lenders under the Non-Bank Rules that are not Qualifying Banks, and (b) the FDA has granted Marketing Approval of the Product (i) on or prior to June 30, 2023 and (ii) unless waived in writing by the Required Purchasers, prior to the occurrence of any Default or Event of Default.

 

“Funding Condition Satisfaction Notice” means a written notice from Dermavant to the Purchasers certifying that the Funding Condition has occurred, identifying the Funding Date, and providing the wire transfer instructions of ▇▇▇▇▇▇▇▇▇ in respect of the Funding.

 

“Funding Date” means a Business Day, identified in the Funding Condition Satisfaction Notice, that is no earlier than ten (10) calendar days, and no later than thirty (30) calendar days, after the date that Dermavant provides the Funding Condition Satisfaction Notice to the Purchasers; provided, that failure by Dermavant to provide such Funding Condition Satisfaction Notice shall not be an excuse for the Funding not to occur if the Required Purchasers waive such condition in writing. For the avoidance of doubt, there shall be no Funding Date if the Funding Condition has not occurred (except to the extent that clause (b)(ii) thereof is waived in writing by the Required Purchasers in their sole discretion).

 

“GAAP” means generally accepted accounting principles in effect in the United States, as in effect on the date or for the period with respect to which such principles are applied.

 

“Governmental Authority” means the government of any nation or any political subdivision thereof or any multi-national, national, federal, state, local or foreign court or governmental agency, authority (including supranational authority), commission, instrumentality, regulatory body or central bank.

 

“Guidelines” means, together, guideline S-02.123 in relation to interbank loans of 22

 

“IFRS” means international accounting standards, as in effect on the date or for the period with respect to which such standards are applied, as established by the International Financial Reporting Standards.

 

 

“Indemnified Party” has the meaning set forth in Section 7.2(a).

 

“Indemnified Taxes” means any deductions, withholdings or Taxes (other than Excluded Taxes) in respect of which Dermavant is required to pay additional amounts pursuant to Section 5.6(a).

 

“Indemnifying Party” has the meaning set forth in Section 7.2(a).

 

“Intercreditor Agreements” means each of (i) the Senior Lender Intercreditor Agreement and (ii) that certain amended and restated parity intercreditor agreement dated as of the Effective DateMay 24, 2024, between the Collateral Agent and NovaQuest Co-Investment Fund VIII, L.P., each as amended, restated, supplemented or otherwise modified from time to time (or any

 

“Involuntary Bankruptcy” means a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (i) is for relief against Dermavant, Parent or Parent’s other Subsidiaries (other than Immaterial Subsidiaries) in an involuntary case; (ii) appoints a Custodian of Dermavant, Parent or Parent’s other Subsidiaries (other than Immaterial Subsidiaries) or for any substantial part of itstheir property; or (iii) orders the winding up or liquidation of Dermavant, Parent or Parent’s other Subsidiaries (other than Immaterial Subsidiaries); or any similar relief is granted under any non-U.S. lawsBankruptcy Law and, in each case, the order or decree remains unstayed and in effect for 60 consecutive days.

 

“Judgment Currency” has the meaning set forth in Section 8.20(b)(i).

 

“Key Patents” means the Patents listed on Schedule 3 to the Disclosure Letter.

“Liabilities” means any and all indebtedness, liabilities and obligations, whether accrued, fixed or contingent, mature or inchoate, known or unknown, reflected on a balance sheet or otherwise, including those arising under any law or judgment of any court of any kind or any award of any arbitrator of any kind, and those arising under any contract, commitment or undertaking.

 

“License Agreement” means (i) any license of Product Rights granted by Dermavant or its Affiliates to a Third Party, (ii) any sublicense of Product Rights granted under a license described in clause (i) above or (iii) any anotherother arrangement that transfers, assigns or otherwise conveys or grants any access or rights in or to any Product Right (collectively, “Out-Licenses”); provided, however, that the following shall not be deemed to be a “License Agreement”: (a) any agreement that does not include any rights to Develop or Commercialize the Product in all or part of the United States; (b) any licenses solely for research purposes; (c) any licenses to Distributors solely in their capacities as such; or (d) any agreements granting non-exclusive rights to Product IP Rights entered into in the ordinary course of business for the benefit of Dermavant or any of its Controlling Affiliates, including manufacturing agreements, material transfer agreements and consulting agreements, that, in all cases in this clause (d), do not grant any rights to market, distribute or sell the Product [***].

“Licensee” means a Third Party that is granted any Product Rights under a License Agreement.

 

“Lien” means any mortgage, lien (statutory or otherwise), pledge, deed of trust, hypothecation, title defect, charge, security interest, encumbrance, assignment, deposit arrangement, 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 performance of an obligation, including any conditional sale or any sale with recourse.

 

“Losses” has the meaning set forth in Section 7.1(a).

 

“Marketing Approval” means, for the Product, any and all approvals (including

supplements, amendments, pre-approvals and post-approvals), licenses, registrations or authorizations of any national, supra-national, regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity, that are necessary for the manufacture, distribution, use, sale and marketing of the Product.

 

“Material Adverse Effect” means a material adverse effect, in any respect, on (i) the legality, validity or enforceability of any Transaction Document, (ii) the ability of Dermavant to perform any of its material obligations under any Transaction Document (including Dermavant being unable or failing to make payment of the Revenue Interests in accordance with the terms of this Agreement) or to consummate the transactions contemplated hereunder or thereunder, (iii) the rights or remedies of a Purchaser under any Transaction Document or (iv) the Product, the Product IP Rights or the Development or Commercialization of the Product.

 

“Material Contract” means (i) any material agreement to which Dermavant or any other Responsible Party (other than a Licensee) is a party (x) related to the Development or Commercialization of the Product within the United States, (y) that creates a Lien on, affects or otherwise relates to the Product, the Revenue Interests or any of the Product IP Rights or other Product Assets or (z) that is a License Agreement or (ii) any other agreement to which Dermavant or any other Responsible Party (other than a Licensee) is a party for which breach, non-performance, termination, cancellation or failure to renew by a party thereto would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; provided, however, that, in the case of each of clause (i) above and clause (ii) above, Out-Licenses that are not License Agreements shall not be deemed to be Material Contracts.

 

“Maximum Amount” means, with respect to each Purchaser, an amount equal to the product of [***] multiplied by the Purchase Price paid by such Purchaser.

 

“Net Sales” means [***].

“Non-Bank Rules” means, together, the 10 Non-Bank Rule and the 20 Non-Bank Rule.

“Non-Compliant Purchaser” has the meaning set forth in Section 2.8(b).

“NovaQuest Funding Agreement” means that certain funding agreement dated as of July 10, 2018 between Dermavant and NovaQuest Co-Investment Fund VIII, L.P., as amended, restated, supplemented or otherwise modified from time to time (or any extension, replacement or refinancing thereof).

 

“Other Connection Taxes” means, with respect to any Purchaser, Taxes imposed as a result of a present or former connection between such Purchaser and the jurisdiction imposing such Tax (other than connections arising solely from such Purchaser having (i) executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any of the Transaction Documents, the Revenue Interests or the Senior Credit AgreementSecured Debt (or the loans thereunder) or (ii) sold or assigned an interest in any of the Transaction Documents, the Revenue Interests or the Senior Credit AgreementSecured Debt (or the loans thereunder)).

 

“Other Taxes” means all present or future stamp, court, documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security

interest under, or otherwise with respect to, the Revenue Interests or any Transaction Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made at the request of Dermavant).

 

“Out-Licenses” has the meaning set forth in the definition of License Agreement.

“Paragraph IV Certification” means the certification submitted by a generic application alleging that a Patent Covering the Product is invalid, unenforceable, or not infringed.

 

“Parent” means Dermavant Sciences Ltd., an exempted company organized under the  has the meaning set forth in the preamble hereto.

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“Parties” has the meaning set forth in the preamble hereto.

“Party” has the meaning set forth in the preamble hereto.

“Patents” means all patents (including all reissues, extensions, substitutions, confirmations, re-registrations, re-examinations, revalidations, supplementary protection certificates and patents of addition) and patent applications (including all provisional applications, requests for continuation, continuations, continuations-in-part and divisionals) and all equivalents of the foregoing in any country in the world.

 

“Percentage Interest” of a Purchaser means the quotient, expressed as a percentage, of (i) the amount set forth opposite such Purchaser’s name on Exhibit A attached hereto paid on the Funding Date divided by (ii) the Purchase Price paid on the Funding Date.

 

“Permitted Disposition” means: (i) a Disposition of inventory (as defined in the Uniform Commercial Code) or goods held for sale in the ordinary course of business; (ii) a Disposition of surplus, obsolete, damaged or worn-out assets, property or equipment in the ordinary course of business (including the abandonment or other Disposition of Product IP Rights, whether in whole and on a country-by-country basis, that is, in the reasonable judgment of Dermavant, no longer economically practicable or commercially reasonable to maintain or useful in any material respect in the conduct of the business of Dermavant); (iii) a Disposition of equipment as part of a trade-in for replacement equipment; (iv) any License Agreement to the extent permitted by Section 5.14 and any Out-License that is not a License Agreement; (v) any surrender or waiver of contract rights or the settlement of, release of, recovery on or surrender of contract, tort or other claims of any kind (except where such surrender, waiver, settlement, release or recovery could reasonably be expected to have a Material Adverse Effect); (vi) the incurrence of any Permitted Liens; (vii) Dispositions of receivables in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar proceedings and exclusive of factoring or similar arrangements; and (viii) Disposition of Regulatory Approvals or Marketing Approvals for any jurisdiction to a Controlling Affiliate or, in the case of a Licensee, to such Licensee or an affiliate thereof, in each case organized in such jurisdiction for the purposes of Commercialization of the Product in such jurisdiction  [***].

 

“Permitted Liens” means: (i) Liens securing the obligations of Dermavant under the Deal Documents; (ii) Liens securing Permitted Secured Debt or obligations under the NovaQuest Funding Agreement; (iii) Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens, in each case for sums not yet overdue or being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against Dermavant

with respect to which ▇▇▇▇▇▇▇▇▇ shall then be proceeding with an appeal or other proceedings for review; (iv) Liens for taxes, assessments or other governmental charges not yet due or payable or subject to penalties for nonpayment or that are being contested in good faith by appropriate proceedings if adequate reserves with respect thereto are maintained on the books of Dermavant in accordance with GAAP; (v) Liens upon specific items of inventory or other goods and proceeds of Dermavant securing Dermavant’s obligation in respect of banker’s acceptances issued or created for the account of Dermavant to facilitate the purchase, shipment or storage of such inventory or other goods; (vi) License Agreements to the extent permitted by this Agreement and Out-Licenses that are not License Agreements; (vii) Liens on goods purchased in the ordinary course of business, the purchase price of which is financed by a documentary letter of credit issued for the account of Dermavant or any of its Controlling Affiliates; (viii) judgment and attachment Liens not giving rise to an Event of Default; (ix) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of inventory entered into in the ordinary course of business; (x) Liens arising from Uniform Commercial Code financing statement filings that name Dermavant as debtor regarding operating leases entered into by Dermavant in the ordinary course of business; (xi) Liens on assets or property at the time Dermavant acquired the assets or property, including any acquisition by means of a merger, amalgamation or consolidation with or into Dermavant; provided, however, that such Liens are not created or incurred in connection with, or in contemplation of, such acquisition; provided, further, however, that such Liens may not extend to any other Product Assets owned by Dermavant; (xii) Liens on the identifiable proceeds of any property or asset subject to a Lien otherwise constituting a Permitted Lien; (xiii) Liens to secure the financing of insurance premiums for insurance policies and the proceeds thereof; and (xiv) Liens existing on the Effective Date and set forth on Schedule 5.9 to the Disclosure Letter.

 

“Permitted Secured Debt” means: (i) Senior Secured Debt in a principal amount not to exceed $40,000,000 outstanding at any one time; (ii) Indebtedness consisting of the financing of insurance premiums secured solely by the applicable insurance policies and the proceeds thereof; (iii) equipment financing and capital leases; provided, that such indebtedness is secured solely by the equipment financed and the proceeds thereof; and (iv) other secured indebtedness incurred in the ordinary course of business not to exceed $1,250,000 at any one time outstanding, in each case subject to customary terms.

 

“Person” means any natural person, corporation, trust, joint venture, association, unincorporated organization, cooperative, company, partnership, limited liability company, Governmental Authority or other entity recognized by law.

 

“Pre-Funding Change of Control” means a Change of Control (without giving effect to the proviso in the definition thereof) that occurs prior to the Funding Date.

 

“Pre-Funding Change of Control Option” has the meaning set forth in Section 2.7(b). “Pre-Funding Change of Control Option Closing Date” has the meaning set forth in Section 2.7(b).

 

“Pre-Funding Change of Control Option Price” means [***].

“Prepayment Amount” has the meaning set forth in Section 5.19.

 

“Product” means that certain topical, non-steroidal and non-immunosuppressant pharmaceutical product for the treatment of dermatologic indications, known as Tapinarof (and as may be marketed under any other name) and more particularly described in Schedule 1 attached hereto, and including any and all future iterations, improvements or modifications of such Product made, developed, licensed or sublicensed by Dermavant or any other Responsible Party for the treatment of dermatologic indications.

 

“Product Assets” means (i) all assets primarily related to the Product and that are owned by, licensed to or otherwise controlled by Dermavant or any other Controlling Affiliate, including Product IP Rights, any contract pursuant to which Dermavant or any other Controlling Affiliate has been or will be granted, assigned or otherwise conveyed any right, title or interest in or to any Product IP Rights, regulatory filings, product packaging, product inserts, product labels, regulatory approval applications, regulatory approvals, regulatory exclusivity, copies of correspondence with regulatory authorities, copies of pre-clinical and clinical data, copies of pharmacology and biology data, Material Contracts and inventory, and (ii) any other assets that are owned by, licensed to or otherwise controlled by Dermavant or any other Controlling Affiliate that are reasonably necessary for the Development, Commercialization, formulation or use of the Product, the absence of which would be reasonably expected to cause, individually or in the aggregate, a Material Adverse Effect; provided, however, that, in the case of each of clause

(i) above and clause (ii) above, any License Agreement or Out-License that does not include any rights to Develop or Commercialize the Product in all or part of the United States shall not be deemed a Product Asset. In no event shall the Product Assets include deposit or securities accounts, accounts receivable, chattel paper, negotiable instruments, Capital Securities or any other security.

 

“Product IP Rights” means all intellectual property relating to the Product owned or licensed by Dermavant or any other Responsible Party, including (i) Product Know-How, (ii) all Patents Covering the Product (including its composition, formulation, delivery, manufacture or use) and (iii) all works protectable under copyright laws, trademarks, service marks and trade names that relate to the Product.

 

“Product Know-How” means, as related to the Product, all technical, scientific and other know-how and information, trade secrets, knowledge, technology, means, methods, processes, practices, formulae, instructions, skills, techniques, procedures, experiences, ideas, technical assistance, designs, drawings, assembly procedures, computer programs, apparatus, specifications, data, results and other material, including pre-clinical and clinical trial results, manufacturing procedures, test procedures and purification and isolation techniques (whether or not confidential, proprietary, patented or patentable), in written, electronic or any other form, now known or hereafter developed, and all other discoveries, developments, information and

inventions (whether or not confidential, proprietary, patented or patentable), and tangible embodiments of any of the foregoing, including any discoveries, developments, information or inventions relating to the stability, safety, efficacy, operation, manufacture, ingredients, preparation, indications, presentation, formulation, means of delivery, or dosage of any pharmaceutical composition or preparation.

 

“Product Rights” means licenses or rights to the Product or Product IP Rights, for or relating to Developing, Commercializing or otherwise exploiting the Product.

 

“Purchase Price” has the meaning set forth in Section 2.2, reflecting the funding amounts provided by the Purchasers.

 

“Purchaser” has the meaning set forth in the preamble hereto. “Purchaser Indemnitees” has the meaning set forth in Section 7.1(a).

“Purchasers” has the meaning set forth in the preamble hereto.

“Qualified IPO” means (i) the consummation of an underwritten initial public offering pursuant to an effective registration statement under the Securities Act for the Capital Securities of Parent and pursuant to which such Capital Securities will be listed on a United States national exchange or an international exchange, (ii) an initial direct listing of such Capital Securities on any such exchange by Parent (whether or not Parent issues and sells such Capital Securities in connection with such direct listing) or (iii) the merger, acquisition or similar transaction involving Parent and another Person (including a special purpose acquisition company, but excluding any Affiliate of Parent) after which (a) Parent’s Capital Securities are listed on such exchange, (b) a successor to Parent’s Capital Securities are listed on such exchange or (c) the Capital Securities of the surviving parent company of Parent after the consummation of such transaction are listed on such exchange.

 

“Qualified Licensee” means a Qualified Party or any controlled Affiliate of a Qualified Party.

 

“Qualified Party” means: [***].  

“Qualifying Bank” means (i) any bank as defined in the Swiss Federal Code for Banks and Savings Banks dated 8 November 1934 (Bundesgesetz über die Banken und Sparkassen) or (ii) a Person that effectively conducts banking activities with its own infrastructure and staff as its principal purpose and that has a banking license in full force and effect issued in accordance with the banking laws in force in its jurisdiction of incorporation or, if acting through a branch, issued in accordance with the banking laws in the jurisdiction of such branch, all and in each case within the meaning of the Guidelines.

 

“Quarterly Deadline” has the meaning set forth in Section 5.1(a).

 

“Quarterly Report” means, with respect to the relevant Fiscal Quarter, a report detailing (i) aggregate gross sales of the Product by each of Dermavant, its Affiliates and any Licensee in such Fiscal Quarter, (ii) Net Sales for such Fiscal Quarter, including the adjustments and other reconciliations used to arrive at Net Sales invoiced for such Fiscal Quarter and the currency exchange rates used (which shall be rates of exchange determined in a manner consistent with Dermavant’s method for calculating rates of exchange in the preparation of Dermavant’s annual financial statements in accordance with GAAP or IFRS, as the case may be), (iii) the corresponding Quarterly Revenue Amount payable to the Purchasers with respect to such Fiscal Quarter, (iv) the amount of any Taxes withheld from the payment of such Quarterly Revenue Amount to the Purchasers, (v) the aggregate amount of payments previously made by Dermavant to the Purchasers in respect of the Revenue Interests and the aggregate amount of any Taxes withheld from such payments and (vi) the number of units or vials of Product sold in the United States during such Fiscal Quarter; provided, that for any such information to be provided by a Licensee for which Dermavant receives such information fewer than 10 Business Days prior to the Quarterly Deadline, such information may instead be included in the following Fiscal Quarter’s Quarterly Report.

 

“Quarterly Revenue Amount” means, with respect to a given Fiscal Quarter, an amount, determined as of the earlier of (i) the last day of such Fiscal Quarter and (ii) the Termination Date, equal to the product of (a) the Applicable Percentage for such Fiscal Quarter multiplied by (b) the Net Sales invoiced for such Fiscal Quarter [***]. For the avoidance of doubt, if the Termination Date occurs prior to the end of any given Fiscal Quarter, then such Quarterly Revenue Amount shall be determined for such Fiscal Quarter in a manner consistent with this definition through and including the Termination Date.

“Receiving Party” has the meaning set forth in Section 4.1.

“Recordkeeping Period” has the meaning set forth in Section 5.4(a).

“Regulatory Approvals” means, collectively, all regulatory approvals, registrations, certificates, authorizations, permits and supplements thereto, as well as associated materials (including the product dossier), pursuant to which the Product may be marketed, sold and distributed.

 

“Regulatory Authority” means any Governmental Authority that is responsible for issuing approvals, licenses, registrations or authorizations necessary for the manufacture, import, sale and use of the Product for human therapeutic use in any applicable regulatory jurisdiction, including the FDA.

 

“Required Purchasers” means Purchasers whose Percentage Interests taken together equal at least 66-2/3%; provided, however, that in the event that a Bankruptcy Event of Default has occurred, “Required Purchasers” means Purchasers whose Percentage Interests taken together equal at least 50.1%.

 

“Responsible Party” means (i) Dermavant, (ii) each Controlling Affiliate, (iii) each other Affiliate of Dermavant materially engaged in the Development or Commercialization of the Product within the United States and (iv) each Licensee to the extent that such Licensee has rights or obligations under the terms of the applicable License Agreement to Develop or Commercialize the Product within the United States.

 

“Revenue Interests” means, with respect to each Purchaser, all right, title and interest in, to and under an amount equal to the sum of each Quarterly Revenue Amount multiplied by such Purchaser’s Percentage Interest, up to such Purchaser’s Maximum Amount; provided, that, in the event that a Purchaser receives its portion of the Event of Default Fee in accordance with Section 2.7(a), then such portion of the Event of Default Fee shall count towards such Purchaser’s Maximum Amount.

 

“Securities Act” means the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Securities Agency” means the U.S. Securities and Exchange Commission and any other Governmental Authority regulating the issuance, sale or trading of securities.

 

“Security Agreements” means the security agreements, mortgages, collateral assignments and related agreements, as amended, supplemented, restated, renewed, refunded, replaced, restructured, repaid, refinanced or otherwise modified from time to time, creating, perfecting or otherwise evidencing (or purporting to create, evidence or otherwise perfect) the security interests or other Liens granted by Dermavant or any Controlling Affiliate in favor of the Collateral Agent in the Product Assets as contemplated by this Agreement, including the Collateral Agreement (and all documentation required pursuant thereto, including any joinder agreement for any Controlling Affiliate), the Collateral Assignment and the Swiss Security Document.

“Senior Credit Agreement” means that certain credit agreement dated as of the Effective Date among Dermavant, certain Affiliates of Dermavant, XYQ Luxco S.à ▇.▇., in its capacity as a lender thereunder, and the Senior Lender Collateral Agent, as amended, restated, supplemented or otherwise modified from time to time (or any extension, replacement or refinancing thereof).

 

“Senior Lender Collateral Agent” means U.S. Bank Trust Company, National Association, as collateral agent on behalf of the lender under the Senior Credit Agreement (together with any successor or replacement collateral agent and any agent or other representative for any other Senior Secured Debt that replaces or refinances all or any portion of the indebtedness under the Senior Credit Agreement).

 

“Senior Lender Intercreditor Agreement” means that certain senior lender intercreditor agreement dated as of the Effective Date among the Collateral Agent, XYQ Luxco S.à ▇.▇., in its capacity as a lender under the Senior Credit Agreement, NovaQuest Co-Investment Fund VIII, L.P., as a lender under the NovaQuest Funding Agreement, and the Senior Lender Collateral Agent, as amended, restated, supplemented or otherwise modified from time to time (including any replacement thereof in connection with any refinancing or replacement of the Senior Credit Agreement or the NovaQuest Funding Agreement).

 

“Senior Secured Debt” means (i) indebtedness  (including indebtedness outstanding under the Senior Credit Agreement) in an aggregate principal amount not to exceed $40,000,000 outstanding at any one time and (ii) any other secured indebtedness to refinance, in whole or in part, thesuch indebtedness under the Senior Credit Agreement in accordance with the terms of the Senior Lender Intercreditor Agreement,  (or other intercreditor arrangement described below) that, taken together with outstanding indebtedness described in clause (i), is in an aggregate principal amount not to exceed $40,000,000 outstanding at any one time; provided that, in each case, the lenders thereof (or the agent or representative for such lenders ) have become party, as senior creditors, to the Senior Lender Intercreditor Agreement or other intercreditor arrangement reasonably satisfactory to the Purchasers (it being agreed that such intercreditor arrangement shall be satisfactory to the Purchasers if it provides for substantially similar intercreditor terms as the Senior Lender Intercreditor Agreement).

 

 

“Swiss Federal Tax Administration” means the tax authorities referred to in article 34 of the Swiss Withholding Tax Act.

 

“Swiss Security Document” means that certain IP Pledge Agreement between Dermavant as pledgor and the Collateral Agent as pledgee, regarding the pledgor’s intellectual property rights registered in Switzerland.

 

“Swiss Seller Party” means Dermavant or any other party to this Agreement (other than any Purchaser) that is incorporated in Switzerland or, if different, is considered to be tax resident in Switzerland for Swiss Withholding Tax purposes.

 

“Swiss Withholding Tax” means taxes imposed under the Swiss Withholding Tax Act.

“Swiss Withholding Tax Act” means the Swiss Federal Act on the Withholding Tax of 13 October 1965 (Bundesgesetz über die Verrechnungssteuer).

 

“Tax” means all federal, provincial, territorial, state, municipal, local, foreign or other taxes, imposts, rates, levies, deductions, tariffs, assessments and other charges in the nature of a tax, including all income, excise, franchise, gains, capital, corporation, business, real property, goods and services, transfer, value added, gross receipts, windfall profits, severance, ad valorem, personal property, production, sales, use, license, stamp, documentary stamp, mortgage recording, employment, payroll, social security, unemployment, disability, estimated or withholding taxes, and all customs and import duties, together with all interest, penalties and additions thereto imposed with respect to such amounts.

 

“Tax Ruling” means the confirmation of the Swiss Federal Tax Administration as to how many lenders a Purchaser is counted for the purposes of the Non-Bank Rules.

 

“Term” has the meaning set forth in Section 6.1.

 

“Term Sheet” means the document entitled “Proposed Terms for Revenue Interest Financing for Dermavant Sciences GmbH” dated February 5, 2021 among Dermavant, Dermavant Sciences Ltd., XYQ Luxco S.à ▇.▇., NovaQuest Capital Management, LLC and Marathon Asset Management, L.P.

 

“Termination Date” has the meaning set forth in Section 6.1.

 

“Third Party” means any Person, including a Governmental Authority, other than Dermavant or any of its Affiliates.

 

“Third Party Claim” has the meaning set forth in Section 7.1(a).

 

“Transaction Documents” means this Agreement, the Security Agreements, the Intercreditor Agreements, the Bill of Sale and any other documents, instruments or financing statements required to be delivered hereunder or thereunder or in connection herewith or

therewith.

 

“Ultimate Parent” means Roivant Sciences Ltd., an exempted limited company organized under the laws of Bermuda.

“Ultimate Parent Spinout” means the distribution by Ultimate Parent to its shareholders of the Capital Securities of Parent.

 

“United States” or “U.S.” means the United States of America, including its 50 states, the District of Columbia and its other territories and possessions.

 

“U.S. Person” means any Person that is a “United States person” as defined in Section 7701(a)(30) of the Code.

 

“Voluntary Bankruptcy” means that Dermavant, Parent or any of Parent’s Subsidiaries, pursuant to or within the meaning of any Bankruptcy Law: (i) commences a voluntary case under any Bankruptcy Law; (ii) consents to the entry of an order for relief against it in an involuntary case under any Bankruptcy Law; (iii) consents to the appointment of a Custodian of it or for any substantial part of its property; or (iv) makes a general assignment for the benefit of its creditors or takes any comparable action under any non-U.S. laws relating to insolvencyBankruptcy Law.

 

“Voting Securities” means, with respect to any Person, Capital Securities of any class or kind ordinarily having the power to vote for the election of directors, managers or other voting members of the governing body of such Person.

 

“Withholding Payment” has the meaning set forth in Section 5.6(a).

 

ARTICLE II

 

PURCHASE AND SALE; PURCHASE PRICE; NO ASSUMED OBLIGATIONS; DELIVERABLES; PAYMENTS IN RESPECT OF REVENUE INTERESTS; EVENT OF DEFAULT AND PRE-FUNDING CHANGE OF CONTROL

 

 

(a)       Subject to the terms and conditions of this Agreement, on the Funding Date, Dermavant shall irrevocably sell, contribute, assign, transfer, convey and grant to the Purchasers, and the Purchasers, severally but not jointly, shall purchase, acquire and accept from Dermavant, in accordance with their respective Percentage Interests, all of Dermavant’s right, title and interest in, to and under the Revenue Interests, free and clear of any and all Liens, other than those Liens created in favor of the Purchasers (through the Collateral Agent or otherwise) by the Transaction Documents.

(b)          Each of Dermavant and the Purchasers intends and agrees that the sale, contribution, assignment, transfer, conveyance and granting of the Revenue Interests under this Agreement on the Funding Date shall be a true, complete, absolute and irrevocable sale and assignment by Dermavant to the Purchasers of the Revenue Interests and that such sale and assignment shall provide the Purchasers, subject to the terms of the Transaction Documents, with the full benefits of ownership of the Revenue Interests. Following the Funding Date, Dermavant disclaims any beneficial ownership interest in the Revenue Interests. Dermavant irrevocably waives any right to contest or otherwise assert that this Agreement does not constitute a true, complete, absolute and irrevocable sale and assignment by Dermavant to the Purchasers of the Revenue Interests on the Funding Date under Applicable Law, which waiver shall be enforceable against Dermavant in any Voluntary Bankruptcy or Involuntary Bankruptcy, and Dermavant acknowledges and agrees that the Purchasers are relying on such waiver in entering into this Agreement. The sale, contribution, assignment, transfer, conveyance and granting of the Revenue Interests on the Funding Date shall be reflected on Dermavant’s financial statements and other records as a sale of assets to the Purchasers (except to the extent GAAP or IFRS, as the case may be, require otherwise with respect to Dermavant’s financial statements).

 

2.2          Purchase Price. In full consideration for the sale, contribution, assignment, transfer, conveyance and granting of the Revenue Interests on the Funding Date, and subject to the terms and conditions set forth herein, each of the Purchasers shall severally but not jointly pay (or cause to be paid) to Dermavant, or Dermavant’s designee, on the Funding Date, the sum set forth opposite such Purchaser’s name on Exhibit A attached hereto, in immediately available funds by wire transfer to the account specified in the Funding Condition Satisfaction Notice (the aggregate of such amounts being the “Purchase Price”). Any funds released or caused to be released by a Purchaser on the Funding Date that are received within one Business Day following the Funding Date shall be deemed paid on the Funding Date regardless of whether Dermavant actually receives such funds on the Funding Date.

 

2.3          No Assumed Obligations. Notwithstanding any provision in any Transaction Document to the contrary, the Purchasers are not assuming any liability or obligation of Dermavant or any other Person of whatever nature, whether presently in existence or arising or asserted hereafter, whether under any Transaction Document or otherwise. All such liabilities and obligations shall be retained by and remain liabilities and obligations of Dermavant or such other Persons, and Dermavant or such other Persons shall remain liable with respect to all liabilities and obligations created in connection with the Revenue Interests and shall continue to perform such obligations, if any.

 

 

(a)          Dermavant shall deliver or cause to be delivered to the Purchasers and the Collateral Agent (i) an opinion of ▇▇▇▇▇▇ LLP, special U.S. counsel to ▇▇▇▇▇▇▇▇▇, and (ii) an opinion of ▇▇▇▇▇▇▇ ▇▇, special Swiss counsel to Dermavant, in each case in form and substance satisfactory to the Purchasers and their counsel;

 

(b)          Dermavant shall deliver or cause to be delivered to the Purchasers a certificate of an executive officer (or equivalent) of Dermavant: (i) attaching copies, certified by such officer (or equivalent) as true and complete, of (x) a certified excerpt from the commercial register, the

certified up-to-date articles of association and, if applicable, the organizational regulations of Dermavant and (y) resolutions of the managing directors of Dermavant authorizing and approving the execution and delivery of and performance of obligations by Dermavant under the Deal Documents and the transactions contemplated herein and therein; and (ii) setting forth the incumbency of the officer or officers (or equivalent) of Dermavant who have executed and delivered the Deal Documents, including therein a signature specimen of each such officer or officers (or equivalent);

 

(c)          Dermavant shall deliver or cause to be delivered to the Purchasers the Disclosure Letter; and

 

(d)          each of the Security Agreements and the Intercreditor Agreements shall be duly executed and delivered by the parties thereto.

 

 

(a)          each of the Parties shall deliver or cause to be delivered to the other Parties the Bill of Sale duly executed by such Party;

 

(b)          Dermavant shall deliver or cause to be delivered to the Purchasers a certificate of an executive officer (or equivalent) of Dermavant, certifying, as of the Funding Date, (i) that the representations and warranties of Dermavant set forth in the Deal Documents are true and correct in all material respects (except to the extent that such representations and warranties relate solely to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date, and except with respect to representations and warranties qualified by the term “material” or Material Adverse Effect, which representations and warranties shall be true and correct in all respects), (ii) to the effect of the certificate described in Section 2.4(b) and (iii) that no Default or Event of Default has occurred and is continuing;

 

(c)          each of the Purchasers shall severally but not jointly pay (or cause to be paid) to Dermavant, or Dermavant’s designee, the portion of the Purchase Price set forth opposite such Purchaser’s name on Exhibit A attached hereto, in accordance with Section 2.2; and

 

(d)          each of the Purchasers shall have received (on or prior to the Funding Date) a favorable ruling from the Swiss Federal Tax Administration with respect to compliance with the Non-Bank Rules.

 

The Purchasers, upon the election of the Required Purchasers, may waive any condition in this Section 2.5, other than the occurrence of clause (b)(i) of the definition of Funding Condition, and the funding of the Purchase Price to Dermavant will otherwise occur pursuant to the terms herein as long as the Purchasers satisfy the condition set forth in Section 2.5(c).

 

2.6          Payments in Respect of Revenue Interests. In connection with the sale, contribution, assignment, transfer, conveyance and granting of the Revenue Interests on the Funding Date, the Purchasers shall be entitled to receive (in accordance with their Percentage Interests) the Revenue Interests in respect of the Net Sales, as and when such payments are due under Section 5.1. Any payments to be made by Dermavant or any other Responsible Party under this Agreement, including the payment of the Quarterly Revenue Amounts pursuant to Section

5.1, shall be made by wire transfer of immediately available funds to each of the Purchasers in accordance with their respective Percentage Interests to the bank accounts specified in Schedule 2 attached hereto (as may be amended pursuant to Section 8.14). For Swiss tax purposes, payments in respect of Revenue Interests shall be deemed to (a) reflect the interest component until the difference between the Maximum Amount and the Purchase Price has been paid and (b) to the extent in excess of such difference, as the deemed repayment of the Purchase Price. Upon payment of the Maximum Amount for each Purchaser, all Revenue Interests due to such Purchaser, including any deemed repayment of such Purchaser’s portion of the Purchase Price, upon termination of this Agreement shall be deemed to be paid in full.

 

 

(a)          Dermavant shall notify the Purchasers and the Collateral Agent in writing as soon as possible and in any event within two Business Days following the occurrence of any Default or Event of Default during the Term, identifying the nature of such Default or Event of Default and whether or not such Default or Event of Default is in respect of, or is, a Bankruptcy Event of Default. If an Event of Default occurs after the Funding Date, the Event of Default Fee shall automatically (without any action or notice by any of the Purchasers) be due and payable on the Event of Default Closing Date, the payment of which shall be made by wire transfer of immediately available funds to the bank accounts specified in Schedule 2 attached hereto (as may be amended pursuant to Section 8.14). The Event of Default Fee shall be fully earned on the Effective Date. Payment of the Event of Default Fee shall occur (i) in respect of a Bankruptcy Event of Default, immediately upon the occurrence of such Bankruptcy Event of Default, and (ii) in respect of any other Event of Default, on a Business Day specified in writing by Dermavant to the Purchasers, which date shall be within 15 Business Days, but no sooner than 10 Business Days, from the date that the notice described in the first sentence of this Section 2.7(a) is delivered to the Purchasers or, if not so delivered as required pursuant to this Section 2.7(a), from the date that the notice described in the first sentence of this Section 2.7(a) was required to be delivered to the Purchasers (the date of such payment pursuant to clause (i) above or clause (ii) above being referred to herein as the “Event of Default Closing Date”).

 

(b)          Dermavant shall notify the Purchasers in writing at least ten Business Days prior to the occurrence of any Pre-Funding Change of Control during the Term. If a Pre-Funding Change of Control occurs during the Term, Dermavant shall have the right, but not the obligation (the “Pre-Funding Change of Control Option”), to terminate this Agreement by paying the Pre-Funding Change of Control Option Price on the Pre-Funding Change of Control Option Closing Date to all the Purchasers (in accordance with their Percentage Interests) in cash, the payment of which shall be made by wire transfer of immediately available funds to the bank accounts specified in Schedule 2 attached hereto (as may be amended pursuant to Section 8.14); provided, that no Purchaser that is a Non-Compliant Purchaser at the time of Dermavant’s exercise of the Pre-Funding Change of Control Option shall be entitled to receive, and Dermavant shall not be required to pay, such Non-Compliant Purchaser’s Percentage Interest of the Pre-Funding Change of Control Option Price. If Dermavant exercises the Pre-Funding Change of Control Option, Dermavant shall deliver written notice to the Purchasers specifying a Business Day within 10 Business Days from such notice date (such specified Business Day being referred to herein as the “Pre-Funding Change of Control Option Closing Date”), which notice must be given within 60 days following the date that notice is provided pursuant to the first

sentence of this Section 2.7(b); provided, that such notice may, at ▇▇▇▇▇▇▇▇▇’s discretion, be given subject to one or more conditions precedent, including completion of such Pre-Funding Change of Control.

 

(c)          ▇▇▇▇▇▇▇▇▇ agrees that the Event of Default Fee and the Pre-Funding Change of Control Option Price shall be presumed to be the liquidated damages sustained by each Purchaser (in the case of an Event of Default Fee in respect of a Bankruptcy Event of Default or in the case of the Pre-Funding Change of Control Option Price, as the result of the early termination of this Agreement), and ▇▇▇▇▇▇▇▇▇ agrees that such presumption is reasonable under the circumstances currently existing. The Event of Default Fee and the Pre-Funding Change of Control Option Price shall also be payable in the event that this Agreement is satisfied or released by foreclosure (whether or not by power of judicial proceeding), deed in lieu of foreclosure or any other means. Dermavant expressly waives (to the fullest extent it may lawfully do so) the provisions of any present or future Applicable Law that prohibits or may prohibit the collection of the foregoing Event of Default Fee or Pre-Funding Change of Control Option Price in connection with any such event. Dermavant agrees (to the fullest extent that it may lawfully do so) that (i) each of the Event of Default Fee and the Pre-Funding Change of Control Option Price is reasonable and is the product of an arm’s length transaction between sophisticated business people, ably represented by counsel, (ii) each of the Event of Default Fee and the Pre-Funding Change of Control Option Price shall be payable notwithstanding the then-prevailing market rates at the time payment is made, (iii) there has been a course of conduct between the Purchasers and Dermavant giving specific consideration in the transactions contemplated hereby for such agreement to pay the Event of Default Fee as a charge (and not interest) in the event of an Event of Default and the Pre-Funding Change of Control Option Price as a charge (and not interest) in the event of a Pre-Funding Change of Control and (iv) Dermavant shall be estopped from claiming differently than as agreed to in this Section 2.7(c). Dermavant expressly acknowledges that its agreement to pay each of the Event of Default Fee and the Pre-Funding Change of Control Option Price to the Purchasers as herein described is on the Effective Date and will continue to be a material inducement to the Purchasers to provide the Funding.

 

 

(a)          Each Purchaser shall notify Dermavant in writing as soon as possible and in any event within two Business Days following such Purchaser’s receipt of a Tax Ruling.

 

(b)          In the event any Purchaser does not receive a favorable ruling from the Swiss Federal Tax Administration with respect to its compliance with the Non-Bank Rules or if such Purchaser receives a Tax Ruling that would result in the Purchasers’ non-compliance with respect to the Non-Bank Rules, then (i) such Purchaser (a “Non-Compliant Purchaser”) shall work in good faith and use commercially reasonable efforts to resolve such non-favorable ruling or non-compliance with the Non-Bank Rules and obtain a favorable Tax Ruling within 60 Business Days of the notice of the original Tax Ruling and (ii) the other Purchasers and Dermavant shall cooperate with such Non-Compliant Purchaser in good faith and use commercially reasonable efforts to resolve such non-favorable ruling or non-compliance. If, after 60 Business Days, such Non-Compliant Purchaser is not able to obtain a Tax Ruling that would result in the Purchasers’ compliance with respect to the Non-Bank Rules, Dermavant or such Non-Compliant Purchaser may terminate this Agreement with respect to the Non-Compliant

Purchaser (but not with respect to Dermavant and the other Purchasers), in which case Dermavant and the other Purchasers shall work in good faith to amend the dollar figures and percentages in this Agreement that were based upon a Purchase Price of $160,000,000 to reflect the corresponding dollar figures and percentages in respect of any lower resulting Purchase Price.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

 

(a)          Dermavant is a company duly organized and validly existing under the laws of Switzerland. Dermavant is duly qualified to transact business and is in good standing in every jurisdiction in which such qualification or good standing is required by Applicable Law for the business it is now conducting (except where the failure to be so qualified or in good standing would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect).

 

(b)          No consent, approval, license, order, authorization, registration, declaration or filing with, notice to, action or registration by or filing with any Governmental Authority or other Person is required by Dermavant in connection with the execution and delivery by ▇▇▇▇▇▇▇▇▇ of the Deal Documents, the performance by Dermavant of its obligations under the Deal Documents or the consummation of any of the transactions contemplated by the Transaction Documents (including the sale, contribution, assignment, transfer, conveyance and granting of the Revenue Interests to the Purchasers), other than (i) Marketing Approval required with respect to the Product, (ii) customary filings needed to perfect the Purchasers’ liens under the Security Agreements, (iii) such exemptions, notices, registrations, filings, declarations, consents, approvals and authorizations as shall have been taken, given, made or obtained and are in full force and effect as of the Effective Date and (iv) such filings required to be made after the Effective Date under applicable federal, state and foreign securities Applicable Laws.

 

(c)          Dermavant has all necessary corporate power and authority to (i) carry on its business as it is presently carried on by ▇▇▇▇▇▇▇▇▇, (ii) enter into, execute and deliver the Deal Documents and (iii) perform all of the covenants, agreements and obligations to be performed by Dermavant hereunder and thereunder. Each of the Deal Documents has been duly authorized by Dermavant. Each of the Deal Documents has been (or, in the case of the Bill of Sale, will be on or prior to the Funding Date) duly executed and delivered by Dermavant and constitutes (or, in the case of the Bill of Sale, will constitute as of the Funding Date) Dermavant’s legal, valid and binding obligation, enforceable against Dermavant in accordance with the terms of each respective Deal Document, subject to bankruptcy, insolvency, reorganization or similar Applicable Laws affecting the rights of creditors generally and equitable principles.

 

(d)         The execution and delivery of the Deal Documents by ▇▇▇▇▇▇▇▇▇, the performance by ▇▇▇▇▇▇▇▇▇ of its obligations hereunder and thereunder and the consummation of

the transactions contemplated by the Transaction Documents do not and will not (i) violate any provision of the organizational documents of Dermavant, (ii) conflict with or violate any Applicable Law that applies to Dermavant, any of its Controlling Affiliates or their respective assets or properties, (iii) violate, conflict with, result in a breach of or constitute (with or without notice or lapse of time or both) a default under or an event that would give rise to any right of notice, modification, acceleration, payment, cancellation or termination under or in any manner release any party thereto from any obligation under any contract to which Dermavant or any of its Controlling Affiliates is a party or by which any of their respective properties or assets are bound (including the NovaQuest Funding Agreement) or (iv) except as provided in any of the Transaction Documents, result in the creation or imposition of any Lien on any part of the Revenue Interests, the Product Assets or the other properties or assets of Dermavant, except, in the case of each of clause (ii) above, clause (iii) above or clause (iv) above, as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

(e)          Except as set forth in Part 2 to Schedule 3.1(e) to the Disclosure Letter (which Part 2 to Schedule 3.1(e) shall be updated by Dermavant as of the Funding Date) and except for Permitted Dispositions after the Effective Date, Dermavant owns, licenses or controls all right, title and interest in and to (i) the Product and the Product Assets, (ii) all Patents that Cover the Product, all of which, as of the Effective Date, are listed in Part 1 to Schedule 3.1(e) to the Disclosure Letter, which Part 1 to Schedule 3.1(e) shall be updated by Dermavant as of the Funding Date, and (iii) to the knowledge of Dermavant, all material data, trade secrets, Product IP Rights, Regulatory Approvals and other intellectual property rights used by Dermavant in the Development of the Product, in each case free and clear of all Liens (other than Permitted Liens). Part 1 to Schedule 3.1(e) to the Disclosure Letter specifies as to each listed Patent (x) the respective patent or patent application numbers, (y) any Person other than Dermavant owning or having an interest in such Patent, including the nature of such interest, and (z) the scheduled expiration date or anticipated scheduled expiration date of any such issued Patent or of any Patent issuing from any such pending patent application once issued. All of the Key Patents are in full force and effect and have not lapsed, expired or otherwise terminated. To the knowledge of Dermavant, each claim that has been issued or granted by a governmental patent office included in the Key Patents is valid and enforceable. Except as set forth in Part 3 to Schedule 3.1(e) to the Disclosure Letter, as of the Effective Date, there are no licensees of any of the Patents that Cover the Product or any other Licensees or License Agreements. Except as set forth in Part 3 to Schedule 3.1(e) to the Disclosure Letter and except for Permitted Dispositions after the Effective Date, Dermavant has not sold, contributed, assigned, transferred, conveyed, granted, pledged or licensed any rights to any of the Patents that Cover the Product to any other Person. Part 3 to Schedule 3.1(e) to the Disclosure Letter shall be updated by Dermavant as of the Funding Date solely with respect to any relevant non-Permitted Dispositions that have been approved by the Purchasers. None of Dermavant or any of its Controlling Affiliates has received a written notice that any other Person that is not obligated to assign his, her or its interests to Dermavant alleges any ownership interest in any such Patent. There are no unpaid maintenance or renewal fees payable by Dermavant or any of its Controlling Affiliates to any Governmental Authority that currently are overdue for any of such Patents. No Key Patent has lapsed or been abandoned, cancelled or expired. Subsequent to the issuance of the Key Patents, none of Dermavant or any other owner of any Key Patent has filed any disclaimer (other than a terminal disclaimer) or made or permitted any other voluntary reduction in the scope of such Key Patent. There is no pending or, to the knowledge of ▇▇▇▇▇▇▇▇▇, threatened opposition, interference,

re-examination, reissue, post-grant review, inter partes review, derivation or other post-grant proceeding, injunction, claim, suit, action, citation, summon, subpoena, hearing, inquiry, investigation (by the International Trade Commission or otherwise), complaint, arbitration, mediation, demand, decree or other dispute, disagreement, proceeding or claim (1) challenging the legality, validity, enforceability or ownership of any of the Key Patents (other than standard patent prosecution of pending applications before patent offices), (2) by or with any Third Party against Dermavant or any of its Controlling Affiliates involving the Product or (3) to which any of the Key Patents or the Product is subject (other than standard patent prosecution of pending applications before patent offices). Except as set forth in Part 4 to Schedule 3.1(e) to the Disclosure Letter, which Part 4 to Schedule 3.1(e) shall be updated by Dermavant as of the Funding Date, there is no product or product candidate currently owned, licensed or under development by Dermavant or any of its Controlling Affiliates that is a branded topical product, other than the Product.

 

(f)          Except for the Transaction Documents, there are no contracts, agreements or understandings (whether written or oral) to which Dermavant, any of its Controlling Affiliates or Ultimate Parent is party pursuant to which any Third Party has been granted any rights, entitlements or privileges to or in respect of the Revenue Interests, in whole or in part. The Revenue Interests to be sold, contributed, assigned, transferred, conveyed and granted to the Purchasers on the Funding Date have not been and shall not be pledged, sold, contributed, assigned, transferred, conveyed or granted by Dermavant, any of its Controlling Affiliates or Ultimate Parent to any other Person. Dermavant has full right to sell, contribute, assign, transfer, convey and grant the Revenue Interests to the Purchasers, free and clear of all Liens, other than Liens in favor of the Purchasers. Upon the sale, contribution, assignment, transfer, conveyance and granting by Dermavant of the Revenue Interests to the Purchasers, the Purchasers shall acquire good and marketable title to the Revenue Interests free and clear of all Liens, other than Liens in favor of the Purchasers, and shall be the exclusive owners of the Revenue Interests.

 

(g)          There is no action, suit, claim, demand, citation, summons, subpoena, interference, reexamination, opposition, investigation or other proceeding (whether civil, criminal, administrative, regulatory or investigative), at law or in equity, in arbitration or before any Governmental Authority pending or, to the knowledge of Dermavant, threatened against Dermavant or any of its Controlling Affiliates that would (i) question or defeat the validity or enforceability of, or Dermavant’s rights to, any Patent Covering the Product or Product IP Rights (other than standard patent prosecution of pending applications before patent offices), (ii) challenge or seek to prevent or delay the consummation of the transactions contemplated by the Transaction Documents or (iii) reasonably be expected to have, individually on in the aggregate, a Material Adverse Effect.

 

(h)          To the knowledge of Dermavant, the making, use, sale, offer for sale, and import of the Product by Dermavant and any other Responsible Party authorized by Dermavant to do so does not, and, if the Product was being sold as of the Effective Date or the Funding Date, would not, as of the Effective Date or the Funding Date, as the case may be, infringe any issued patent claim of any Third Party or misappropriate or make any unauthorized use of any issued patent or intellectual property rights of any Third Party. To the knowledge of Dermavant, no Third Party is infringing, misappropriating or making any unauthorized use of a Patent Covering the Product or Product Know-How, and Dermavant has not received any written notice of any such

infringement or any misappropriation of unauthorized use of any Product IP Rights, other than as would not reasonably be expected to have a Material Adverse Effect. None of the Patents Covering the Product or Product IP Rights is subject to any outstanding decree, order, judgment or stipulation restricting in any manner the use or licensing thereof by Dermavant, other than as would not reasonably be expected to have a Material Adverse Effect. To the knowledge of Dermavant, there is no pending or threatened, and no event has occurred or circumstance exists that (with or without notice or lapse of time or both) could reasonably be expected to give rise to or serve as a basis for any, action, suit, proceeding, investigation or claim, and ▇▇▇▇▇▇▇▇▇ has not received any written notice of the foregoing, that claims that the manufacture, use, marketing, sale, offer for sale, importation or distribution of the Product does or could infringe on any patent or other intellectual property rights of any other Person or constitute misappropriation of any other Person’s trade secrets or other intellectual property rights; provided, that, in respect of such representation and warranty made on the Funding Date, none of the foregoing would reasonably be expected to have a Material Adverse Effect.

 

(i)          All Material Contracts to which Dermavant or any of its Controlling Affiliates is a party as of the Effective Date are listed in Schedule 3.1(i) to the Disclosure Letter, which Schedule 3.1(i) shall be updated by Dermavant as of the Funding Date. All Material Contracts to which Dermavant or any of its Controlling Affiliates is a party are in full force and effect and are the legal, valid and binding obligations of Dermavant or such Controlling Affiliates, as the case may be, and, to the knowledge of Dermavant, the other parties thereto, enforceable against each such party thereto in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization or similar Applicable Laws affecting the rights of creditors generally and equitable principles, except in each case as would not reasonably be expected to have a Material Adverse Effect. Subject to any applicable confidentiality obligations, Dermavant has provided to the Purchasers complete copies of all Material Contracts to which Dermavant or any of its Controlling Affiliates is a party. Dermavant is in compliance with and has not materially breached, violated or defaulted under, or received written notice that it has materially breached, violated or defaulted under, any of the terms or conditions of any such Material Contract to which it is a party, except as would not reasonably be expected to have a Material Adverse Effect. Dermavant is not aware of any event that has occurred or circumstance or condition that exists that would or would reasonably be expected to constitute such a material breach, violation or default with the lapse of time or giving of notice or both. Other than Material Contracts disclosed to and provided to the Purchasers (subject to any applicable confidentiality obligations), there are no contracts, agreements, commitments or undertakings pursuant to which Dermavant in-licenses or otherwise has rights under any Patent or intellectual property rights of any Third Party that are material to the Development or Commercialization of the Product within the United States.

 

(j)          Dermavant currently holds or has the right to acquire all applicable approvals and authorizations from Governmental Authorities necessary for Dermavant to conduct its business in the manner in which such business is being conducted with respect to the Product, including the Development and testing of the Product, and all such approvals and authorizations affecting Commercialization in the United States are in good standing and in full force and effect. None of Dermavant or any of its Controlling Affiliates have received any written notice or any other communication from any Governmental Authority regarding any actual or possible revocation, withdrawal, suspension, cancellation, termination or material modification of any such approvals

or authorizations affecting Commercialization in the United States. None of Dermavant or any of its Controlling Affiliates have knowingly made any untrue statement of a material fact or fraudulent statement to any Regulatory Authority or any other Governmental Authority, failed to disclose a material fact required to be disclosed to any Regulatory Authority or other Governmental Authority, or committed an act, made a statement or failed to make a statement that provides or would reasonably be expected to provide a basis for the FDA or other Governmental Authority to invoke the FDA’s policy respecting “Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities” set forth in 56 Fed. Reg. 46191 (September 10, 1991) or any similar policy of any other Governmental Authority affecting Commercialization in the United States. Dermavant is not and has never been, and, to the knowledge of Dermavant, none of the Controlling Affiliates have or have ever been, (i) debarred by a Governmental Authority, (ii) a party to a settlement, consent or similar agreement with a Governmental Authority regarding the Product or (iii) charged with, or convicted of, violating Applicable Law regarding the Product. The Product is being, and, to the knowledge of Dermavant, at all times has been, Developed, tested, labeled and stored in compliance in all material respects with, and Dermavant and its Controlling Affiliates and their respective agents are in material compliance with, all Applicable Laws, including with respect to investigational use, premarket clearance, good clinical practices, good laboratory practices, good manufacturing practices, labeling, advertising, record keeping, security and filing of reports (including reporting of adverse events). The Product has never been the subject of or subject to (as applicable) any recall, suspension, market withdrawal, seizure, warning letter, other written communication asserting lack of compliance with any Applicable Law in any material respect, or serious adverse event. None of Dermavant or any of its Controlling Affiliates has received from any Governmental Authority any Forms 483, notices of adverse findings or warning letters or other correspondence in which such Governmental Authority asserted that the operations of any of Dermavant or any of its Controlling Affiliates may not be in material compliance with Applicable Laws in connection with their respective activities relating to the Product. No clinical trial of the Product has been suspended, put on hold or terminated prior to completion as a result of any action by any Regulatory Authority or other Governmental Authority or voluntarily. To the knowledge of Dermavant, no event has occurred or circumstance exists that is reasonably likely to give rise to or serve as a basis for any of the foregoing events. Dermavant has, with respect to the Product and its Development, made available to the Purchasers true and complete copies of all material pre-clinical and clinical data, reports and analyses, all material correspondence with the FDA, all material interim analyses from ongoing trials, all material tables from recently completed clinical trials where no clinical study report is available, and any other information that is material to the Development or Commercialization of the Product within the United States. Dermavant has made available to the Purchasers true, correct and complete copies of all written reports or other written communications received from any Governmental Authority that would indicate that any Regulatory Authority (x) is not likely to approve the Product, (y) is likely to revise or revoke any current Regulatory Approval with respect to the Product or (z) is likely to pursue any material compliance actions against Dermavant or any of its Controlling Affiliates, in each case, that would affect Commercialization in the United States.

 

(k)          As of the Effective Date, Dermavant does not own any Capital Securities. As of the Effective Date, Ultimate Parent directly owns a majority of the outstanding Capital Securities of Parent, and Parent indirectly owns all of the outstanding Capital Securities of Dermavant.

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4.1        Definition of Confidential Information. For purposes of this Agreement, the term “Confidential Information” of a Party means any confidential or proprietary information furnished by or on behalf of such Party or its Affiliates (the “Disclosing Party”) to another Party or its Affiliates (the “Receiving Party”) pursuant to and relating to this Agreement or anti-money laundering or know-your-customer requirements of a Party. Notwithstanding the foregoing, Confidential Information shall not include information that, in each case as demonstrated by written documentation or other competent evidence:

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4.3          Permitted Disclosures.

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4.4         Terms of Agreement. The Parties agree that they will each treat the existence, contents and terms of this Agreement and the Term Sheet as confidential, and no Party shall make any press release or other public disclosure that discloses or otherwise concerns this Agreement or the Term Sheet or any terms hereof or thereof, without the prior written consent of the other Parties, except to the extent allowed under Section 4.3 or as otherwise permitted in accordance with this Section 4.4. Consistent with Section 4.3(b), the Parties agree to use reasonable efforts to provide the other Parties with a copy of that portion of any filing required by a securities agency or any stock exchange on which its securities are traded (or to which an application for listing has been submitted) regarding this Agreement or the Term Sheet or its respective terms to review prior to filing and to consider any comments of the other Parties in good faith, and, to the extent any Party is required to file or disclose this Agreement or the Term Sheet with a securities agency or stock exchange, such Party shall consider in good faith the other Parties’ comments with respect to confidential treatment of the terms of this Agreement or the Term Sheet and shall redact this Agreement or the Term Sheet in a manner allowed by the securities agency or stock exchange to protect sensitive terms, and shall be permitted to file this Agreement or the Term Sheet, as so redacted, with the securities agency or stock exchange. For purposes of clarity, each Party is free to discuss with any other Person the information regarding this Agreement or the Term Sheet and the Parties’ relationship disclosed in such securities filings and any other authorized public announcements, and no review or consent of a Party shall be required with respect to disclosure by any Party to the extent such disclosure is consistent with disclosure otherwise previously approved or publicly filed or disclosed pursuant to this Section 4.4.

 

4.5         Use of Names. No Party shall mention or otherwise use the name, insignia, symbol, trademark, trade name or logotype of any other Party or any Affiliate of any other Party (or any abbreviation or adaptation thereof) in any publication, press release, promotional material or other form of publicity without the prior written approval of such other Party in each instance. Notwithstanding the foregoing, the restrictions imposed by this Section 4.5 shall not prohibit the Receiving Party from making any disclosure identifying any Person, with prior written notice to such Person, to the extent required by Applicable Law or the rules of a stock exchange on which the securities of the Disclosing Party are listed (or to which an application for listing has been submitted) or as permitted pursuant to Section 4.4.

 

4.6         No Effect on Confidentiality Provisions under NovaQuest Funding Agreement. For purposes of this Article IV, NovaQuest Co-Investment Fund VIII shall not be deemed to be an Affiliate of NovaQuest Co-Investment Fund XVII, L.P. Any exercise by NovaQuest Co-Investment Fund VIII of its rights to use and disclose the Confidential Information (as defined for this purpose in the NovaQuest Funding Agreement) with respect to which it is deemed to be a Receiving Party under the NovaQuest Funding Agreement shall not constitute a breach of this Article IV by NovaQuest Co-Investment Fund XVII, L.P. or any other Affiliate of NovaQuest Co-Investment Fund XVII, L.P.

5.1          Quarterly Reports; Payments on Account of the Revenue Interests.

5.2          Payments. All payments under this Agreement to the Purchasers shall be made in U.S. dollars by wire transfer in immediately available funds to the respective bank accounts of each such Purchaser specified in Schedule 2 attached hereto (as may be amended pursuant to Section 8.14). With respect to Net Sales invoiced in a currency other than U.S. dollars, such Net Sales shall be converted into the U.S. dollar equivalent using the exchange rate existing in the United States (as reported in The Wall Street Journal, New York edition) for the applicable currency on the last Business Day of the applicable Fiscal Quarter. If The Wall Street Journal ceases to publish such exchange rate, then the rate of exchange to be used shall be that reported

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5.4         Recordkeeping and Notifications.

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5.5        Audit Rights.

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5.6        Taxes.

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5.12        Intellectual Property Matters.

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5.14       License Agreements.

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5.21        Equity Commitment Letter.

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7.1         General Obligations.

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7.2        Procedures.

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8.1          Governing Law. This Agreement shall be governed by, and construed, interpreted and enforced in accordance with, the laws of the State of New York, as applied to agreements executed and performed entirely in the State of New York, without giving effect to the principles of conflicts of law thereof other than Section 5-1401 of the General Obligations Law of the State of New York.

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8.3          Dispute Resolution.

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8.20        Currency of Account; Conversion of Currency; Currency Exchange Restrictions.

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9.1        Appointment and Duties.

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9.3         Use of Discretion.

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9.5        Reliance and Liability.

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9.8         Expenses and Indemnities.

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9.9          Resignation or Removal of Collateral Agent.

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9.12       Erroneous Payments.

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