This Purchase and Sale Agreement involves
Title: SECURITIES PURCHASE AGREEMENT
Governing Law: New York Date: 10/31/2006
Industry: Biotechnology and Drugs Law Firm: Ropes Gray LLP;Cohen Gresser LLP Sector: Healthcare
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (the “ Agreement ”), dated as of October 30, 2006 by and among Antigenics Inc., a Delaware corporation (the “ Company ”), and the investors listed on the Schedule of Buyers attached hereto (individually, a “ Buyer ” and collectively, the “ Buyers ”).
A. The Company and each Buyer is executing and delivering this Agreement in reliance upon the exemption from registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the “ 1933 Act ”), and Rule 506 of Regulation D (“ Regulation D ”) as promulgated by the United States Securities and Exchange Commission (the “ SEC ”) under the 1933 Act.
B. The Company has authorized the issuance and sale of (i) $25,000,000 in principal amount of senior secured convertible notes of the Company in the form attached hereto as Exhibit A (together with any senior secured convertible notes issued in replacement or exchange thereof in accordance with the terms thereof and any senior secured convertible notes issued to pay interest in the form attached hereto as Exhibit B (“ PIK Notes ”), the “ Notes ”), which Notes shall be, in accordance with the terms of the Notes, convertible into shares (as converted, the “ Conversion Shares ”) of the Company’s common stock, par value $.01 per share (“ Company Common Stock ”) or into Antigenics MA Shares (as defined below).
C. The Notes bear interest, which at the option of the Company, subject to certain conditions, may be paid in kind through the issuance of additional Notes.
D. Each Buyer wishes to purchase, severally but not jointly, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, that aggregate principal amount of Notes set forth opposite such Buyer’s name in the Schedule of Buyers (which aggregate principal amount for all Buyers shall be $25,000,000).
E. The Company is agreeing to pledge all its shares (“ Antigenics MA Shares ”) in Antigenics Inc., a Massachusetts corporation (“ Antigenics MA ”), to secure its obligations to pay interest on and principal of the Notes and, as evidenced by the Pledge and Security Agreement, dated as of the date hereof, by and among the company and the Buyers, substantially in the form attached thereto as Exhibit C (the “ Pledge and Security Agreement ”) and in connection therewith the Company shall deliver the number of Antigenics MA Shares.
F. The Notes and the Conversion Shares collectively are referred to herein as the “ Securities. ”
1. PURCHASE AND SALE OF NOTES .
(a) Amount . Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below, the Company shall issue and sell to each Buyer, and each Buyer severally, but not jointly, shall purchase from the Company on the Closing Date (as defined below), the principal amount of Notes set forth opposite such Buyer’s name in the Schedule of Buyers.
(b) Closing . The closing (the “ Closing ”) of the purchase of the Notes by the Buyers shall occur at the offices of Ropes & Gray, LLP, One International Place, Boston, Massachusetts 02110. The date and time of the Closing (the “ Closing Date ”) shall be 9:00 a.m., Boston City Time, on October 30, 2006, subject to notification of satisfaction (or waiver) of the conditions to the Closing set forth in Sections 6 and 7 below (or such later date as is mutually agreed to by the Company and each Buyer).
(c) Purchase Price . The purchase price for each Buyer (the “ Purchase Price ”) of the Notes at the Closing shall be equal to the principal amount set forth opposite such Buyer’s name on the Schedule of Buyers.
(d) Form of Payment . On the Closing Date, (i) each Buyer shall pay its aggregate applicable Purchase Price to the Company for the Notes to be issued and sold to such Buyer at the Closing, by wire transfer of immediately available funds in accordance with the Company’s written wire instructions, and (ii) the Company shall deliver to each Buyer the Notes which such Buyer is then purchasing, duly executed on behalf of the Company and registered in the name of such Buyer or its designee.
2. BUYER’S REPRESENTATIONS AND WARRANTIES .
Each Buyer represents and warrants with respect to only itself that:
(a) No Public Sale or Distribution . Such Buyer is acquiring the Notes, and, upon conversion of the Notes, will acquire the Conversion Shares, for its own account and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the 1933 Act; provided, however, that by making the representations herein, such Buyer does not agree to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an exemption under the 1933 Act. Such Buyer is acquiring the Securities hereunder in the ordinary course of its business. Such Buyer does not presently have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Securities.
(b) Accredited Investor Status . Such Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D.
(c) Reliance on Exemptions . Such Buyer understands that the Securities are being offered and sold to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and such Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of such Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of such Buyer to acquire the Securities.
(d) Information . Such Buyer and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities which have been requested by such Buyer. Such Buyer and its advisors, if any, have been afforded the opportunity to ask questions of the Company.
(e) Experience of Such Buyer . Such Buyer understands that its investment in the Securities involves a high degree of risk. Such Buyer, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment. Such Buyer is able to bear the economic risk of an investment in the Securities and is able to afford a complete loss of such investment.
(f) No Governmental Review . Such Buyer understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.
(g) Transfer or Resale . Such Buyer will not sell, offer to sell, assign, pledge, hypothecate or otherwise transfer any of the Securities unless (i) pursuant to an effective registration statement under the 1933 Act, (ii) such Buyer provides the Company with reasonable assurances and customary representations, that such Securities can be sold pursuant to Rule 144 under the 1933 Act. Notwithstanding anything to the contrary contained in the Agreement, such Buyer may transfer (without restriction) the Securities to its affiliates provided that such affiliate is an “accredited investor” under Regulation D and such affiliate agrees to be bound by the terms and conditions of the Agreement.
(h) Legends . Such Buyer understands that the certificates or other instruments representing the Notes and, until such time as the resale of the Conversion Shares have been registered under the 1933 Act, the stock certificates representing the Conversion Shares, except as set forth below, shall bear any legend as required by the “blue sky” laws of any state and a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of such certificates and instruments):
NEITHER THIS NOTE NOR THE SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS, OR (B) THE TRANSFEROR PROVIDES THE COMPANY WITH REASONABLE ASSURANCES AND CUSTOMARY REPRESENTATIONS THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS.
The legend set forth above shall be removed and the Company shall issue a certificate or instrument without such legend to the holder of the Securities upon which it is stamped, if, unless otherwise required by state securities laws, (i) such Securities are registered for resale under the 1933 Act; provided, that each Buyer has complied with or covenants and agrees that it will comply with the prospectus delivery requirements of the 1933 Act as applicable to it in connection with sales of such Securities pursuant to a registration statement or (ii) in connection with a sale, assignment or other transfer, such holder provides the Company with reasonable assurances and customary representations to the effect that such legend is not required under applicable requirements of the 1933 Act.
(i) Validity; Enforcement . This Agreement and Pledge and Security Agreement have been duly and validly authorized, executed and delivered on behalf of such Buyer and shall constitute the legal, valid and binding obligations of such Buyer, enforceable against such Buyer in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.
(j) No Conflicts . The execution, delivery and performance by such Buyer of this Agreement and the Pledge and Security Agreement to which such Buyer is a party and the consummation by such Buyer of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of such Buyer or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such Buyer is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to such Buyer, except in the case of clauses (ii) and (iii), for such conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Buyer to perform its obligations hereunder.
(k) Residency . Such Buyer is a resident of that jurisdiction specified in its address on the Schedule of Buyers.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY .
The Company represents and warrants to each of the Buyers that:
(a) Organization and Qualification . Each of the Company and each Subsidiary is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized and has all requisite corporate power and authority to carry on its business as now conducted. Each of the Company and each Subsidiary is duly qualified to transact business and is in good standing in each jurisdiction in which the failure so to qualify would have a Material Adverse Effect. As used in this Agreement, “ Material Adverse Effect ” means any material adverse effect on the business, properties, assets, operations, results of operations, or financial condition of the Company and its subsidiaries taken as a whole.
(b) Authorization; Enforcement; Validity . The Company has the requisite power and authority to enter into and perform its obligations under this Agreement, the Notes, the Pledge and Security Agreements and the Guaranty Agreement (collectively, the “ Transaction Documents ”) and to issue the Securities in accordance with the terms hereof and thereof. The execution and delivery of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby, including, without limitation, the issuance of the Notes, the reservation for issuance and the issuance of the Conversion Shares issuable upon conversion of the Notes, and the pledging of the Antigenics MA Shares have been duly authorized by the Company’s Board of Directors and no further corporate action is required by the Company. This Agreement and the other Transaction Documents have been duly executed and delivered by the Company, and constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.
(c) Issuance of Securities . The issuance of the Notes and the pledging of the Antigenics MA Shares have been duly authorized by the Company. As of the Closing, a number of shares of Company Common Stock shall have been duly authorized and reserved for issuance which equals the sum of 100% of the maximum number of shares of Company Common Stock issuable upon conversion of the Notes on the Closing Date. Upon issuance or conversion in accordance with the Notes, the Conversion Shares will be validly issued, fully paid and nonassessable. Assuming the accuracy of the Buyers’ representations and warranties contained herein, the offer and issuance by the Company of the Notes will be exempt from registration under the 1933 Act.
(d) No Conflicts . The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Notes, the pledging of the Antigenics MA Shares and reservation for issuance and issuance of the Conversion Shares) will not (i) result in a violation of the Certificate of Incorporation (as defined in Section 3(o)) or Bylaws (as defined in Section 3(o)) or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and the rules and regulations of the Nasdaq Stock Market (the “ Principal Market ”)) applicable to the Company or by which any property or asset of the Company is bound or affected, except in the case of clauses (ii) and (iii), for such conflicts, defaults, rights or violations which would have a Material Adverse Effect.
(e) Consents . Except as disclosed in Schedule 3(e) and except for those failure of which to obtain or make would not have a Material Adverse Effect, and any filings required pursuant to Section 4(b) hereof, the Company is not required to obtain any consent, authorization
or order of, or make any filing or registration with, any court, governmental agency or any regulatory or any other Person in order for it to execute, deliver or perform any of its obligations under or contemplated by the Transaction Documents, in each case in accordance with the terms hereof or thereof. All consents, authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the Closing Date.
(f) Acknowledgment Regarding Buyer’s Purchase of Securities . The Company acknowledges that no Buyer is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby, and any advice given by a Buyer or any of its representatives or agents in connection with the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to such Buyer’s purchase of the Securities. The Company further represents to each Buyer that the Company’s decision to enter into the Transaction Documents has been based solely on the independent evaluation by the Company and its representatives.
(g) No General Solicitation; Placement Agent’s Fees . Neither the Company, nor any Person acting on its behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Notes. No broker has acted on behalf of the Company in connection with this Agreement, and there are no brokerage commissions, finders’ fees or similar fees or commissions payable in connection therewith based on any agreement, arrangement or understanding with the Company or any action taken by the Company.
(h) No Integrated Offering . Neither the Company, nor any Person acting on its behalf, has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would require registration of the Notes to the Buyers under the 1933 Act or cause this offering of the Notes to be integrated with prior offerings by the Company for purposes of the 1933 Act.
(i) SEC Documents; Financial Statements . Since December 31, 2005, the Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934 (the “ 1934 Act ”) (all of the foregoing and all exhibits included therein and financial statements, notes and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the “ SEC Documents ”). As of their respective dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder and applicable thereto, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles, consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).
(j) Absence of Certain Changes . Except as disclosed in the SEC Documents since December 31, 2005, there has been no material adverse change and no material adverse development in the business, properties, assets, operations, results of operations, or financial condition of the Company or any Subsidiary.
(k) Regulatory Permits . Each of the Company and each Subsidiary possesses all certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct its business, except where the failure to possess such certificates, authorizations or permits would not have a Material Adverse Effect. Each of the Company and each Subsidiary is not in violation of any judgment, decree or order or any statute, ordinance, rule or regulation applicable to it, except for violations which would not have a Material Adverse Effect.
(l) Foreign Corrupt Practices . Neither the Company or Subsidiary, nor any director, officer, agent, employee or other Person acting on behalf of the Company or Subsidiary has, in the course of its actions for, or on behalf of, the Company or the Subsidiary (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.
(m) Sarbanes-Oxley Act . The Company is in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the SEC thereunder that are effective as of the date hereof, except where such noncompliance would not have a Material Adverse Effect.
(n) Transactions With Affiliates . Except as disclosed in Schedule 3(n) and except as set forth in the SEC Documents, and other than the grant of stock options and restricted and non-restricted stock grants disclosed that are required to be publicly disclosed, none of the officers, directors or employees of the Company is presently a party to any transaction with the Company (other than for ordinary course services as employees, officers or directors) required to be disclosed pursuant to Regulation S-K Item 404, including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any such officer, director or employee or, to the knowledge of the Company, any corporation, partnership, trust or other entity in which any such officer, director, or employee has a substantial interest or is an officer, director, trustee or partner, which such transaction would be required to be disclosed.
(o) Equity Capitalization . The capitalization of the Company as of September 30, 2006 is as set forth on Schedule 3(o) hereto. All the outstanding shares of Company capital stock have been validly issued and are fully paid and nonassessable. Except as disclosed in Schedule 3(o): (i) none of the Company’s share capital is subject to preemptive rights that would be triggered upon issuance of the Securities; (ii) except as disclosed in the Form 10-K of the Company filed in March 2006 with the SEC or subsequently filed Forms 10-Q or Forms 8-K, there are no outstanding options, warrants, scrip, rights to subscribe for, calls or other rights convertible into, or exercisable or exchangeable for, any share capital of the Company by which the Company is bound to issue additional share capital of the Company, and (iii) there are no outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments evidencing Indebtedness (as defined in Section 3(p)) by which the Company is bound. The Company has made available to each Buyer true, correct and complete copies of the Company’s Certificate of Incorporation, as amended and as in effect on the date hereof (the “ Certificate of Incorporation ”), and the Company’s Bylaws, as amended and as in effect on the date hereof (the “ Bylaws ”).
(p) Indebtedness and Other Contracts . Except as disclosed in Schedule 3(p) or in the SEC Documents, each of the Company and each Subsidiary (i) has no outstanding Indebtedness (as defined below) other than Permitted Indebtedness (as defined in the Note), including Indebtedness secured by Permitted Liens, and (ii) is not in violation of any term of or in default under any contract, agreement or instrument relating to any Indebtedness, except where such violations and defaults would not result in a Material Adverse Effect. For purposes of this Agreement: (x) “ Indebtedness ” of any Person means, without duplication (A) all indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (including, without limitation, “capital leases” in accordance with generally accepted accounting principals) (other than trade payables entered into in the ordinary course of business), (C) all reimbursement or payment obligations with respect to letters of credit, and surety bonds, (D) all obligations evidenced by notes, bonds, or debentures, (E) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property), (F) all monetary obligations under any leasing or similar arrangement which, in connection with generally accepted accounting principles, consistently applied for the periods covered thereby, is classified as a capital lease, (G) all indebtedness referred to in clauses (A) through (F) above secured by any mortgage, lien, pledge, charge, or security interest upon or in any property or assets (including accounts and contract rights) owned by any Person, even though the Person which owns such assets or property has not assumed or become liable for the payment of such indebtedness, and (H) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (A) through (G) above; (y) “ Contingent Obligation ” means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any indebtedness, lease, or other monetary obligation of another Person if the primary purpose or intent of the Person incurring such liability is to provide assurance to the obligee of such liability that such liability will be paid or discharged; and (z) “ Person ” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof.
(q) Litigation . Except as set forth in Schedule 3(q) or in the SEC Reports, there is no action, suit, proceeding, inquiry or investigation before any court, public board, government agency, self-regulatory organization or body pending other than those which would not have a Material Adverse Effect. Each of the Company and Antigenics MA, has, in all material respects, complied with all laws, regulations and orders applicable to its business, including Pharmaceutical Laws (as defined below), and has all material permits and licenses required thereby. For purposes of this Agreement, “ Pharmaceutical Law ” shall mean any federal, state, local or foreign law, statute, rule or regulation relating to the development, commercialization and sale of pharmaceutical and biotechnology products and devices, including all applicable regulations of the U.S. Food and Drug Administration and comparable applicable foreign regulatory authorities.
(r) Insurance . Each of the Company and each Subsidiary is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which either the Company or Subsidiary is engaged.
(s) Employee Relations . The Company is not a party to any collective bargaining agreement. The Company is in compliance with all federal, state, local and foreign laws and regulations respecting labor, employment and employment practices and benefits, terms and conditions of employment and wages and hours, except where failure to be in compliance would not reasonably be expected to result in a Material Adverse Effect.
(t) Intellectual Property Rights . Except as disclosed with the Securities and Exchange Commissions or as set forth on Schedule 3(t): (a) the Company and each of its subsidiaries owns or possesses adequate rights or licenses to use all trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, trade secrets and other intellectual property rights (“ Intellectual Property Rights ”) necessary to conduct their respective businesses as now conducted; (b) the Company does not have any knowledge of any infringement by the Company of Intellectual Property Rights of others, nor does the Company have reason to believe that the Company has, or would infringe on the Intellectual Property Rights of others, the enforcement of which would result in a Materially Adverse Effect on financial conditions; (c) there is no claim, action or proceeding against the Company regarding its Intellectual Property Rights; (d) the Company has no knowledge of any infringement or improper use by any third party of any of the Company’s Intellectual Property Rights; (e) the Company has taken reasonable security measures to protect the secrecy, confidentiality and value of all of its Intellectual Property Rights; (f) the Company shall own, or shall cause Antigenics MA to at all times own all right, title and interest in all Intellectual Property Rights, which the Company or Antigenics MA, respectively own as of the Issuance Date and which may exist in the future, relating to QS-21 and AG-707. Such rights held by Antigenics MA shall include without limitation all rights, royalties or licensing revenues from the sale thereof relating to QS-21 and AG-707. Notwithstanding anything in this Section 3(t) to the contrary, the Company may consummate a Spin-off (as such term is defined the Pledge and Security Agreement), enter into partnership, license and collaboration agreements and other similar arrangements.
(u) Environmental Laws . Each of the Company and each Subsidiary (i) is in compliance with any and all Environmental Laws (as hereinafter defined), (ii) has received all
permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) is in compliance with all terms and conditions of any such permit, license or approval where, in each of the foregoing clauses (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect. The term “ Environmental Laws ” means all federal, state, local or foreign laws relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “ Hazardous Materials ”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licens