Full Press Release Details
PURCHASE AND SALE AGREEMENT
dated as of December 27, 2023
SAGARD HEALTHCARE PARTNERS FUNDING BORROWER SPE 2, LP
| Page | ||||||||
| ARTICLE I DEFINED TERMS AND RULES OF CONSTRUCTION | 1 | |||||||
| Section 1.1 | Defined Terms | 1 | ||||||
| Section 1.2 | Rules of Construction | 11 | ||||||
| ARTICLE II PURCHASE AND SALE OF THE PURCHASED ASSETS | 12 | |||||||
| Section 2.1 | Purchase and Sale; Purchase Price | 12 | ||||||
| Section 2.2 | No Assumed Obligations | 14 | ||||||
| Section 2.3 | Excluded Assets | 14 | ||||||
| Section 2.4 | Other Sale Transactions | 15 | ||||||
| Section 2.5 | Adjustment of Purchaser Applicable Percentage | 15 | ||||||
| ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER | 15 | |||||||
| Section 3.1 | Existence; Organization | 15 | ||||||
| Section 3.2 | No Conflicts | 15 | ||||||
| Section 3.3 | Authorization; Enforceability | 16 | ||||||
| Section 3.4 | Ownership | 16 | ||||||
| Section 3.5 | Governmental and Third Party Authorizations | 16 | ||||||
| Section 3.6 | No Litigation | 16 | ||||||
| Section 3.7 | No Brokers Fees | 16 | ||||||
| Section 3.8 | Compliance with Laws | 16 | ||||||
| Section 3.9 | Intellectual Property Matters | 17 | ||||||
| Section 3.10 | License Agreement | 17 | ||||||
| Section 3.11 | UCC Matters | 19 | ||||||
| Section 3.12 | Non-Permitted Set-Off | 19 | ||||||
| Section 3.13 | Regulatory, Commercialization and Manufacture | 19 | ||||||
| Section 3.14 | Solvency | 20 | ||||||
| Section 3.15 | Tax Matters | 20 | ||||||
| Section 3.16 | Disclosure | 20 | ||||||
| ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER | 20 | |||||||
| Section 4.1 | Organization | 20 | ||||||
| Section 4.2 | No Conflicts | 20 | ||||||
| Section 4.3 | Authorization | 21 | ||||||
| Section 4.4 | Governmental and Third Party Authorizations | 21 | ||||||
| Section 4.5 | No Litigation | 21 | ||||||
| Section 4.6 | Funds Available | 21 | ||||||
| Section 4.7 | No Implied Representations and Warranties | 21 | ||||||
| Section 4.8 | Access to Information | 22 | ||||||
| Section 4.9 | Tax Matters | 22 | ||||||
| ARTICLE V COVENANTS | 22 | |||||||
| Section 5.1 | Public Announcement | 22 | ||||||
| Section 5.2 | Further Assurances | 23 | ||||||
| Section 5.3 | Royalty Reports | 23 | ||||||
| Section 5.4 | Misdirected Payments | 23 |
| Section 5.5 | Maintenance of Material Agreements | 24 | ||||||
| Section 5.6 | Enforcement of Material Agreements | 26 | ||||||
| Section 5.7 | No Liens | 29 | ||||||
| Section 5.8 | Audits | 29 | ||||||
| Section 5.9 | SEC Filings | 31 | ||||||
| Section 5.10 | Instruction Letter and UT Consent | 31 | ||||||
| Section 5.11 | Tax Matters | 32 | ||||||
| Section 5.12 | Seller s Commercially Reasonable Efforts and Judgment | 34 | ||||||
| Section 5.13 | Change in Name or Organization | 34 | ||||||
| Section 5.14 | Royalty Control Shift Representative | 34 | ||||||
| Section 5.15 | Other Matters | 35 | ||||||
| ARTICLE VI THE CLOSING | 36 | |||||||
| Section 6.1 | Closing | 36 | ||||||
| Section 6.2 | Payment of Upfront Payment | 36 | ||||||
| Section 6.3 | Closing Deliverables | 36 | ||||||
| ARTICLE VII INDEMNIFICATION | 37 | |||||||
| Section 7.1 | Indemnification by Seller | 37 | ||||||
| Section 7.2 | Indemnification by Purchaser | 37 | ||||||
| Section 7.3 | Procedures for Third Party Claims | 38 | ||||||
| Section 7.4 | Other Claims | 39 | ||||||
| Section 7.5 | Time Limitations | 40 | ||||||
| Section 7.6 | Limitations on Liability | 40 | ||||||
| Section 7.7 | Exclusive Remedy | 41 | ||||||
| ARTICLE VIII CONFIDENTIALITY | 41 | |||||||
| Section 8.1 | Confidentiality | 41 | ||||||
| Section 8.2 | Disclosures to Certain Affiliates | 42 | ||||||
| Section 8.3 | Termination of Confidentiality Agreement | 42 | ||||||
| Section 8.4 | Permitted Disclosure | 42 | ||||||
| Section 8.5 | Use of Name | 45 | ||||||
| Section 8.6 | Seller Certificates | 45 | ||||||
| ARTICLE IX TERMINATION | 45 | |||||||
| Section 9.1 | Termination of Agreement | 45 | ||||||
| Section 9.2 | Effect of Termination | 45 | ||||||
| ARTICLE X MISCELLANEOUS | 46 | |||||||
| Section 10.1 | Specific Performance | 46 | ||||||
| Section 10.2 | Notices | 46 | ||||||
| Section 10.3 | Successors and Assigns | 48 | ||||||
| Section 10.4 | Independent Nature of Relationship | 49 | ||||||
| Section 10.5 | No Personal Liability | 49 | ||||||
| Section 10.6 | Entire Agreement | 49 | ||||||
| Section 10.7 | No Third Party Beneficiaries | 50 | ||||||
| Section 10.8 | Governing Law; Jurisdiction; Venue; Consent to Service | 50 | ||||||
| Section 10.9 | Waiver of Jury Trial | 51 | ||||||
| Section 10.10 | Severability | 51 |
| Section 10.11 | Counterparts | 51 | ||||||
| Section 10.12 | Amendments; No Waivers | 51 | ||||||
| Section 10.13 | Cumulative Remedies | 52 | ||||||
| Section 10.14 | Table of Contents and Headings | 52 |
| Exhibit A | Form of Bill of Sale | |
| Exhibit B | Form of Instruction Letter | |
| Exhibit C | Escrow Agreement | |
| Exhibit D | Purchaser Account | |
| Exhibit E | Seller Account | |
| Exhibit F | Disclosure Schedules | |
| Exhibit G | License Agreement and Royalty Reports | |
| Exhibit H | Supply Agreement | |
| Exhibit I | Press Release | |
| Exhibit J | UT Consent | |
| Schedule 1.1 | Knowledge Parties |
PURCHASE AND SALE AGREEMENT
This PURCHASE AND SALE AGREEMENT (this Agreement ) dated as of December 27, 2023 is between MannKind Corporation, a
Delaware corporation (the Seller ), and Sagard Healthcare Partners Funding Borrower SPE 2, LP, a Delaware limited partnership (the Purchaser ) (each of Seller and Purchaser a Party and
collectively, the Parties ).
W I T N E S S E T H :
WHEREAS, Seller has the right to receive royalties based on Net Sales (as defined below) of the Royalty Product (as defined below) under
the License Agreement (as defined below); and
WHEREAS, Seller desires to sell, assign, transfer, convey and grant to Purchaser, and
Purchaser desires to purchase, acquire and accept from Seller, the Purchased Assets (as defined below), upon and subject to the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual agreements, representations and warranties set forth herein and of other good
and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties covenant and agree as follows:
DEFINED TERMS AND RULES OF CONSTRUCTION
Section 1.1 Defined Terms. The following terms, as used herein, shall have the following respective meanings:
Action means any claim, action, cause of action, suit, litigation, charge, summons, arbitration, mediation, investigation,
opposition, interference, hearing, complaint, or other legal proceeding (whether sounding in statute, contract, tort or otherwise, whether administrative, civil or criminal, and whether brought at law or in equity).
Affiliate means, with respect to any designated Person, any other Person that, directly or indirectly, controls, is
controlled by or is under common control with such designated Person. For purposes of this definition, control of a Person means the possession, directly or indirectly, of greater than fifty percent (50%) of the outstanding voting
securities of such Person, on an as converted basis, or otherwise the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise, and the terms
controlled and controlling have meanings correlative to the foregoing.
Amount has the meaning set forth in Section 7.4.
Agreement has the meaning set
forth in the preamble.
Ancillary Agreements means, collectively, the Supply Agreement, the Pharmacovigilance
Agreement, the Quality Agreement and the Letter Agreements.
API has the meaning set forth in Section 1.4 of the License
Applicable Percentage means on any date, with respect to any Royalty Party, such Royalty Party s
percentage interest in the aggregate Royalty Interests on such date. For the avoidance of doubt, Purchaser s Applicable Percentage in the aggregate Royalty Interests, on any date, equals the Purchaser Applicable Percentage on such date.
Article V Knowledge means the actual knowledge of any of the officers of Seller identified on Schedule 1.1(b) or
their direct reports, including, in each case the successors of such individuals.
Bill of Sale means that certain bill
of sale, dated as of the Closing Date, executed by Seller and Purchaser, substantially in the form attached hereto as Exhibit A.
Business Day means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City or
Toronto, Ontario are authorized or required by applicable Law to remain closed. For the avoidance of doubt, solely with respect to any notice or other communication required to be given or delivered hereunder, limitations on the operations of
commercial banks due to the outbreak of a contagious disease, epidemic or pandemic (including COVID-19), or any quarantine,
shelter-in-place or similar or related directive, shall not prevent a day that would otherwise be a Business Day hereunder from so being a Business Day.
Calendar Year means each twelve (12) month period ending on December 31; provided that the first Calendar Year under
this Agreement shall begin on the Closing Date and end on December 31, 2023 and the last Calendar Year under this Agreement shall end on the date of expiration or termination of this Agreement.
Claim Amount has the meaning set forth in Section 7.4.
Claim Notice has the meaning set forth in Section 7.4.
Closing has the meaning set forth in Section 6.1.
Closing Date has the meaning set forth in Section 6.1.
Code means the U.S. Internal Revenue Code of 1986, as amended.
Competing Product has the meaning set forth in Section 1.19 of the License Agreement.
Confidential Information has the meaning set forth in Section 8.1.
Confidentiality Agreement has the meaning set forth in Section 8.3.
Confidentiality Restriction has the meaning set forth in Section 8.6.
Disclosing Party has the meaning set forth in Section 8.1.
Disclosure Schedules means the disclosure schedules of the Seller
attached hereto as Exhibit F.
Escrow Account means the segregated account established pursuant to the Escrow
Agreement, into which payments of the Purchased Assets are to be remitted, including payments of amounts payable by UT pursuant to the Instruction Letter.
Escrow Agent means Wilmington Trust, National Association, as escrow agent.
Escrow Agreement means that certain escrow agreement, dated as of the Closing Date, executed by Seller, Purchaser and the
Escrow Agent, substantially in the form attached hereto as Exhibit C.
Evaluation Period has the meaning set
forth in Section 2.1(b)(i).
Excluded Assets has the meaning set forth in
Excluded Liabilities and Obligations has the meaning set forth in
Executive Officer has the meaning set forth in
FDA means the U.S. Food and Drug Administration and any successor agency
Fee Reimbursement has the meaning set forth in Section 2.1(b).
Field has the meaning set forth in Section 1.38 of the License Agreement.
Formulation has the meaning set forth in Section 1.41 of the License Agreement.
GAAP means generally accepted accounting principles in effect in the United States from time to time.
Governmental Authority means the government of the United States, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority (including supranational authority), commission, instrumentality, regulatory body, court, central bank or other Person exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government, including each Patent Office, the FDA and any other government authority in any jurisdiction.
Instruction Letter means the direction letter to UT in the form attached hereto as Exhibit B.
IRS has the meaning set forth in Section 5.11(a).
IRS Withholding Form has the meaning set forth in Section 5.11(e).
Joint Patents has the meaning set forth in Section 1.60 of the License Agreement.
Judgment means any judgment, order, writ, assessment, ruling, verdict,
injunction, stipulation, citation, award, or decree of any nature.
Knowledge of Purchaser means the actual knowledge
after due and diligent inquiry (including, if applicable, an inquiry of direct reports), as of the date of this Agreement, of any of the officers of Purchaser identified on Schedule 1.1(a); provided, however, that, for purposes of clarity,
due and diligent inquiry may not require any specific inquiry of other individuals, their direct reports or outside counsel, and will be assessed on a
case-by-case basis, and shall not require an inquiry of public records or other experts.
Knowledge of Seller means the actual knowledge after due and diligent inquiry (including, if applicable, an inquiry of
direct reports), as of the date of this Agreement, of any of the officers of Seller identified on Schedule 1.1(b); provided, however, that, for purposes of clarity, due and diligent inquiry may not require any specific inquiry of
other individuals, their direct reports or outside counsel, and will be assessed on a case-by-case basis, and shall not require an inquiry of UT, public records or other
Law means, with respect to any Person, all laws (including common law), statutes, rules, regulations and
orders of Governmental Authorities applicable to such Person or any of its properties or assets.
means, collectively, the letter agreements by and between Seller and UT dated September 3, 2018, May 6, 2019, December 21, 2020, May 14, 2021, June 16, 2021, April 7, 2022 and December 22, 2022.
License Agreement means the License and Collaboration Agreement dated as of September 3, 2018, by and between Seller
and UT, as and to the extent amended by any of the Letter Agreements, and as may be further amended, amended and restated or otherwise modified from time to time prior to the Closing Date, and following the Closing Date, as and to the extent
amended, amended and restated or otherwise modified in compliance with this Agreement (including Section 5.5).
License Agreement Termination Date means the earliest to occur of (i) the effective date of the termination of the
entire License Agreement following delivery of written notice to Seller by UT pursuant to Section 12.3(a) of the License Agreement or (ii) the effective date of the termination of the License Agreement solely as to the Royalty Product
following delivery of written notice to Seller by UT pursuant to Section 12.3(a) of the License Agreement.
means any security interest, mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or otherwise), option, right of first offer or first refusal, charge against or interest in property or other priority or
preferential arrangement of any kind or nature whatsoever, in each case to secure payment of a debt or performance of an obligation, including any conditional sale or any sale with recourse; provided that Seller s recoupment rights pursuant to
Section 2.1(b), Section 5.6(b), Section 5.6(c), Section 5.6(d), Section 5.8(b) and
Section 5.8(c) are expressly excluded from this definition and shall not be deemed to be a Lien for purposes of this Agreement.