株探米国株
英語
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2025
OR
o   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-39184
i17387001_v1a04.jpg
SWK Holdings Corporation
(Exact Name of Registrant as Specified in its Charter)
Delaware 77-0435679
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.)
5956 Sherry Lane, Suite 650
Dallas, TX
75225
(Address of Principal Executive Offices) (Zip Code)

(Registrant’s Telephone Number, Including Area Code): (972) 687-7250
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Trading Symbol(s) Name of Each Exchange on Which Registered
Common Stock, par value $0.001 per share SWKH The Nasdaq Stock Market LLC
9.00% Senior Notes due 2027 SWKHL The Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x   Yes      o No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). x   Yes     o   No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large Accelerated Filer   o
Accelerated Filer   o
Non-Accelerated Filer   x
 Smaller Reporting Company  x
 Emerging Growth Company   o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   o   Yes     x   No
As of May 7, 2025, there were 12,269,614 shares of the registrant’s Common Stock, $0.001 par value per share, outstanding.



SWK Holdings Corporation
Form 10-Q
Quarter Ended March 31, 2025
Table of Contents
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.




FORWARD-LOOKING STATEMENTS
In addition to historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. From time to time, we may also provide oral or written forward-looking statements in other materials we release to the public. Such forward-looking statements are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. The forward-looking statements are not historical facts but rather are based on current expectations, estimates and projections about our business and industry, and our beliefs and assumptions, and include, but are not limited to, statements under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Words such as “anticipate,” “believe,” “could,” “estimate,” “expects,” “intend,” “may,” “plan,” “should,” “will” and variations of these words and similar expressions identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, many of which are beyond our control, are difficult to predict and could cause actual results to differ materially (both favorably and unfavorably) from those expressed or forecasted in the forward-looking statements.
These risks and uncertainties include, but are not limited to, those described in Item 1A, “Risk Factors,” those described in Item 1A. "Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2024, and elsewhere in this report. Forward-looking statements that were believed to be true at the time made may ultimately prove to be incorrect or false. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.



PART I. FINANCIAL INFORMATION
ITEM 1.      FINANCIAL STATEMENTS
SWK HOLDINGS CORPORATION
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par value and share data)

March 31,
2025
December 31,
2024
Assets:
Current assets:
Cash and cash equivalents $ 29,809  $ 5,927 
Interest, accounts receivable and other receivables, net 4,676  5,788 
Assets held for sale, net (Note 4) 6,409  6,398 
Finance receivables and related interest receivable held for sale (Note 4) 33,990  — 
Other current assets 1,054  2,141 
Total current assets 75,938  20,254 
Finance receivables, net of allowance for credit losses of $8,785 and $11,249 as of March 31, 2025 and December 31, 2024, respectively
223,076  277,760 
Collateral on foreign currency forward contract 2,750  2,750 
Marketable investments 455  580 
Deferred tax assets, net 22,219  23,484 
Warrant assets 4,245  4,366 
Property and equipment, net 28  48 
Other non-current assets 2,553  2,993 
Total assets $ 331,264  $ 332,235 
Liabilities and Stockholders' Equity:
Current liabilities:
Accounts payable and accrued liabilities $ 2,045  $ 2,810 
Liabilities held for sale (Note 4) 1,325  1,255 
Deferred income 3,349  1,500 
Total current liabilities 6,719  5,565 
Unsecured senior notes, net 31,567  31,412 
Revolving credit facility —  6,233 
Other non-current liabilities 309  335 
Total liabilities 38,595  43,545 
Commitments and contingencies (Note 7)
Stockholders’ equity:
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding
—  — 
Common stock, $0.001 par value; 250,000,000 shares authorized; 12,222,522 and 12,213,599 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively
12  12 
Additional paid-in capital 4,419,431  4,419,991 
Accumulated deficit (4,126,774) (4,131,313)
Total stockholders' equity 292,669  288,690 
Total liabilities and stockholders' equity $ 331,264  $ 332,235 
 See accompanying notes to the unaudited condensed consolidated financial statements.
1


SWK HOLDINGS CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
 
Three Months Ended
March 31,
2025 2024
Revenues:
Finance receivable interest income, including fees $ 10,712  $ 11,035 
Pharmaceutical development 963  279 
Other 157  46 
Total revenues 11,832  11,360 
Costs and expenses:
Provision (benefit) for credit losses (1,465) 5,297 
Interest expense 1,130  1,256 
Pharmaceutical manufacturing, research and development expense 758  530 
Depreciation and amortization expense 19  514 
General and administrative expense 3,277  2,684 
Income from operations 8,113  1,079 
Other income (expense), net
Unrealized net loss on warrants (424) (95)
Net loss on exercise and cancellation of warrants —  (143)
Loss on sale of assets (82) — 
Net loss on marketable investments (105) (231)
Realized gain on early payment of finance receivable 1,729  — 
Loss on revaluation of finance receivables held for sale (3,727) — 
Realized and unrealized foreign currency transaction gains 313  87 
Income before income tax expense 5,817  697 
Income tax expense 1,278  229 
Net income $ 4,539  $ 468 
Net income per share
Basic $ 0.37  $ 0.04 
Diluted $ 0.37  $ 0.04 
Weighted average shares outstanding
Basic 12,229  12,475 
Diluted 12,240  12,496 
 
See accompanying notes to the unaudited condensed consolidated financial statements.
2


SWK HOLDINGS CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(in thousands, except share data)

Three Months Ended March 31, 2025
Common Stock Additional Paid-In Capital Accumulated Deficit Total Stockholders' Equity
Shares Amount
Balances at December 31, 2024
12,213,599  $ 12  $ 4,419,991  $ (4,131,313) $ 288,690 
Stock-based compensation —  —  307  —  307 
Issuance of restricted common stock 61,260  —  —  —  — 
Repurchases of common stock in open market (52,337) —  (867) —  (867)
Net income —  —  —  4,539  4,539 
Balances at March 31, 2025 12,222,522  12  4,419,431  (4,126,774) 292,669 

Three Months Ended March 31, 2024
Common Stock Additional Paid-In Capital Accumulated Deficit Total Stockholders' Equity
Shares Amount
Balances at December 31, 2023
12,497,770  $ 12  $ 4,425,104  $ (4,144,801) $ 280,315 
Stock-based compensation —  —  111  —  111 
Issuance of restricted common stock 48,918  —  —  —  — 
Forfeiture of unvested restricted stock (6,446) —  —  —  — 
Repurchases of common stock in open market (58,298) —  (999) —  (999)
Net income —  —  —  468  468 
Balances at March 31, 2024
12,481,944 12 4,424,216 (4,144,333) 279,895

See accompanying notes to the unaudited condensed consolidated financial statements.
3


SWK HOLDINGS CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Three Months Ended
March 31,
2025 2024
Cash flows from operating activities:
Net income $ 4,539  $ 468 
Adjustments to reconcile net income to net cash provided by operating activities:
Provision (benefit) for credit losses (1,465) 5,297 
Right-of-use amortization and cease use costs 80  91 
Amortization of debt issuance costs 262  248 
Deferred income taxes, net 1,265  229 
Unrealized net loss on warrants 424  95 
Net loss from exercise and cancellation of warrants —  143 
Loss from sale of assets 82  — 
Loss on revaluation of finance receivables held for sale 3,727  — 
Foreign currency transaction (gain) loss (558) 783 
Loss on marketable investments 105  231 
Loan discount amortization and fee accretion (1,487) (837)
Interest paid-in-kind (186) (478)
Stock-based compensation 307  111 
Depreciation and amortization expense 19  514 
Changes in operating assets and liabilities:
Interest, accounts receivable and other receivables (1,200) (1,623)
Foreign currency forward contract 409  (870)
Other assets 980  (283)
Accounts payable, accrued expenses, and other non-current liabilities (872) (1,189)
Deferred income 1,849  1,500 
Net cash provided by operating activities 8,280  4,430 
Cash flows from investing activities:
Proceeds from sale of property and equipment 110  — 
Sale of marketable investments —  258 
Investment in finance receivables (10,000) (446)
Repayment of finance receivables 32,684  9,362 
Corporate debt securities principal payments
Purchases of property and equipment (100) — 
Net cash provided by investing activities 22,702  9,181 
Cash flows from financing activities:
Net payments on credit facility (6,233) (12,350)
Repurchases of common stock, including fees and expenses (867) (999)
Net cash used in financing activities (7,100) (13,349)
Net increase in cash and cash equivalents 23,882  262 
Cash and cash equivalents at beginning of period 5,927  5,236 
Cash and cash equivalents at end of period $ 29,809  $ 5,498 
Supplemental non-cash investing and financing activities:
Transfer of finance receivables and related interest receivable to held for sale $ 33,990  $ — 
Cash paid for interest $ 775  $ 173 
Fair value of warrants received with investment in finance receivables $ 253  $ — 


See accompanying notes to the unaudited condensed consolidated financial statements.
4


SWK HOLDINGS CORPORATION
 
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. SWK Holdings Corporation and Summary of Significant Accounting Policies
Nature of Operations
SWK Holdings Corporation (the “Company,” “we,” or “us”) was incorporated in July 1996 in California and reincorporated in Delaware in September 1999. In July 2012, we commenced a strategy of building a specialty finance and asset management business. In August 2019, we commenced a complementary strategy of building a pharmaceutical development, manufacturing and intellectual property licensing business. Our operations comprise two reportable segments: “Finance Receivables” and “Pharmaceutical Development.” We evaluate and invest in a broad range of healthcare related companies and products with innovative intellectual property, including the biotechnology, medical device, medical diagnostics and related tools, animal health and pharmaceutical industries (collectively, “life sciences”). We allocate capital to each segment in order to generate income through the sales of life science products by third parties and related earned income sources. The Company is headquartered in Dallas, Texas, and as of March 31, 2025, the Company had 26 full-time employees.
The Company has net operating loss carryforwards (“NOLs”) and believes that the ability to utilize these NOLs is an important and substantial asset.
As of May 7, 2025, the Company and its partners have executed transactions with 58 different parties under its specialty finance strategy, funding an aggregate of $853.1 million in various financial products across the life science sector. The Company’s portfolio includes senior and subordinated debt backed by royalties and synthetic royalties paid by companies in the life science sector, and purchased royalties generated by sales of life science products and related intellectual property.
During 2019, we commenced our Pharmaceutical Development segment with the acquisition of Enteris BioPharma, Inc. (“Enteris”). As of March 13, 2025 the Company changed the name of Enteris to MOD3 Pharma ("MOD3"). MOD3 is a clinical development and manufacturing organization providing development services to pharmaceutical partners. MOD3 seeks to generate income by providing customers pharmaceutical development, formulation and manufacturing services.
With an effective date of April 21, 2023, we entered into a collaboration agreement with a strategic partner under which we would be the exclusive provider of certain contract development and manufacturing organization ("CDMO") services to its customers. Fee revenue generated as a result of this agreement is presented as pharmaceutical development revenue on the unaudited condensed consolidated statements of income and is accounted for in accordance with our revenue recognition policy as described under Revenue Recognition below.
Basis of Presentation and Principles of Consolidation 
The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The consolidated financial statements include the accounts of all subsidiaries and affiliates in which the Company holds a controlling financial interest as of the financial statement date. Normally a controlling financial interest reflects ownership of a majority of the voting interests. The Company consolidates a variable interest entity (“VIE”) when it possesses both the power to direct the activities of the VIE that most significantly impact its economic performance and the Company is either obligated to absorb the losses that could potentially be significant to the VIE or the Company holds the right to receive benefits from the VIE that could potentially be significant to the VIE, after elimination of intercompany accounts and transactions.
The Company owns interests in various partnerships and limited liability companies, or LLCs. The Company consolidates its investments in these partnerships or LLCs where the Company, as the general partner or managing member, exercises effective control. Even though the Company’s ownership may be less than 50%, the related governing agreements provide the Company with broad powers, and the other parties do not participate in the management of the entities and do not effectively have the ability to remove the Company. The Company has reviewed each of the underlying agreements to determine if it has effective control. If circumstances change and it is determined this control does not exist, any such investment would be recorded using the equity method of accounting. Although this would change individual line items within the Company’s consolidated financial statements, it would have no effect on its operations and/or total stockholders’ equity attributable to the Company.
Reclassification of Prior Period Amounts
Certain prior period financial information has been reclassified to conform to current period presentation.

5


Unaudited Interim Financial Information 
The unaudited condensed consolidated financial statements have been prepared by the Company and reflect all normal, recurring adjustments that, in the opinion of management, are necessary for a fair presentation of the interim financial information. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for any subsequent quarter or for the year ending December 31, 2025. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted under the rules and regulations of the Securities and Exchange Commission (“SEC”). These unaudited condensed consolidated financial statements and notes included herein should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 20, 2025.
Use of Estimates 
The preparation of the Company’s consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions are required in the determination of revenue recognition; stock-based compensation; valuation of interest and accounts receivable; allowance for credit losses; valuation or impairment of long-lived assets; property and equipment; intangible assets; valuation of warrants and other investments; income taxes; and contingencies and litigation, among others. Some of these judgments can be subjective and complex, and consequently, actual results may differ from these estimates. The Company’s estimates often are based on complex judgments, probabilities and assumptions that it believes to be reasonable but that are inherently uncertain and unpredictable. For any given individual estimate or assumption made by the Company, there may also be other estimates or assumptions that are reasonable.
The Company regularly evaluates its estimates and assumptions using historical experience and other factors, including the economic environment. As future events and their effects cannot be determined with precision, the Company’s estimates and assumptions may prove to be incomplete or inaccurate, or unanticipated events and circumstances may occur that might cause changes to those estimates and assumptions. Market conditions, such as illiquid credit markets, health crises such as the COVID-19 global pandemic, volatile equity markets, and economic downturns, can increase the uncertainty already inherent in the Company’s estimates and assumptions. The Company adjusts its estimates and assumptions when facts and circumstances indicate the need for change. Those changes generally will be reflected in our consolidated financial statements on a prospective basis unless they are required to be treated retrospectively under the relevant accounting standard. It is possible that other professionals, applying reasonable judgment to the same facts and circumstances, could develop and support a range of alternative estimated amounts.
Segment Information
The Company earns revenues from its two U.S.-based business segments: its specialty finance and asset management business offering customized financing solutions to a broad range of life-sciences companies, and its business offering clinical development and manufacturing services to pharmaceutical partners.
Revenue Recognition
The Company’s Pharmaceutical Development segment enters into collaboration and licensing agreements with strategic partners, under which it may exclusively license rights to research, develop, manufacture and commercialize its product candidates to third parties. The terms of these arrangements typically include payment to the Company of one or more of the following: non-refundable, upfront license fees; reimbursement of certain costs; customer option exercise fees; development, regulatory and commercial milestone payments; and royalties on net sales of licensed products.
Amounts received prior to satisfying the revenue recognition criteria are recorded as deferred income in the Company’s consolidated balance sheets. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as current deferred income. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred income, net of current portion.
Intangible Assets
As of March 31, 2025 and December 31, 2024, net book value of intangible assets of $0.2 million is included in assets held for sale. There was no amortization expense related to intangible assets during the three months ended March 31, 2025. Amortization expense related to intangible assets was $0.3 million for the three months ended March 31, 2024.
Research and Development
Research and development expenses include the costs associated with internal research and development and research and development conducted for the Company by third parties. These costs primarily consist of salaries, pre-clinical and clinical trials, outside consultants, and supplies. All research and development costs discussed above are expensed as incurred. Third-party expenses reimbursed under research and development contracts, which are not refundable, are recorded as a reduction to pharmaceutical manufacturing research and development expense in the unaudited condensed consolidated statements of income.
6


Recent Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update ("ASU") 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures." The standard is intended to provide greater transparency in various income tax components that affect the rate reconciliation based on the applicable taxing jurisdictions, as well as the qualitative and quantitative aspects of those components. The ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures.
In November 2024, the FASB issued ASU 2024-03, "Disaggregation of Income Statement Expenses." The ASU enhances disclosures related to income statement expenses to further disaggregate expenses in the footnotes to the consolidated financial statements. The standard requires disaggregation of any relevant expense caption presented on the face of the income statement that contains the following expense categories: purchases of inventory, employee compensation, depreciation (including amortization of leasehold improvements), intangible asset amortization, and depletion expense. Further, the standard requires disclosure of the total amount and the entity's definition of selling expenses. The ASU is effective for fiscal years beginning with its annual financial statements for the year ended December 31, 2027. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures.
7


Note 2. Net Income Per Share
Basic net income per share is computed using the weighted-average number of outstanding shares of common stock. Diluted net income per share is computed using the weighted-average number of outstanding shares of common stock, and when dilutive, shares of common stock issuable upon exercise of options and warrants deemed outstanding using the treasury stock method.
The following table shows the computation of basic and diluted net income per share for the following periods (in thousands, except per share amounts):
Three Months Ended
March 31,
2025 2024
Numerator:
Net income $ 4,539  $ 468 
Denominator:
Weighted-average shares outstanding 12,229  12,475 
Effect of dilutive securities 11  21 
Weighted-average diluted shares 12,240  12,496 
Basic net income per share $ 0.37  $ 0.04 
Diluted net income per share $ 0.37  $ 0.04 
For the three months ended March 31, 2025 and 2024, outstanding options to purchase shares of common stock in an aggregate of approximately 38,000 and 47,000, respectively, have been excluded from the calculation of diluted net income per share, as such securities were anti-dilutive.
8


Note 3. Finance Receivables
Finance receivables
Finance receivables exclusive of finance receivables held for sale ("Finance Receivables"), are reported at their determined principal balances net of any unearned income, cumulative write offs charged against the allowance for credit losses, and unamortized deferred fees and costs. Unearned income and deferred fees and costs are amortized to interest income based on all cash flows expected using the effective interest method. For details on Finance receivables held for sale see Note 4.
The carrying values of finance receivables were as follows (in thousands):
March 31, 2025 December 31, 2024
Term loans
$ 219,042  $ 224,073 
Royalty purchases
12,819  64,936 
Total before allowance for credit losses
231,861  289,009 
Allowance for credit losses
(8,785) (11,249)
Total carrying value
$ 223,076  $ 277,760 
Allowance for Credit Losses
The allowance for credit losses ("ACL") is management's estimate of the amount of expected credit losses over the life of the loan portfolio, or the amount of amortized cost basis not expected to be collected, at the balance sheet date. This estimate encompasses information about historical events, current conditions and reasonable and supportable economic forecasts. Determining the amount of the ACL is complex and requires extensive judgment by management about matters that are inherently uncertain. Given the current level of economic uncertainty, the complexity of the ACL estimate and level of management judgment required, we believe it is possible that the ACL estimate could change, potentially materially, in future periods. Changes in the ACL may result from changes in current economic conditions, our economic forecast, and circumstances not currently known to us that may impact the financial condition and operations of our borrowers, among other factors.
Expected credit losses are estimated on a collective basis for groups of loans that share similar risk characteristics. For finance receivables that do not share similar risk characteristics with other finance receivables, expected credit losses are estimated on an individual basis. Expected credit losses are estimated over the contractual terms of the finance receivables, adjusted for expected prepayments and unfunded commitments, generally excluding extensions and modifications. The loan portfolio segment is defined as the level at which an entity develops and documents a systematic method for determining its allowance for credit losses.
The reserve for unfunded commitments is estimated using the same reserve or coverage rates calculated on collectively evaluated loans following the application of a funding rate to the amount of the unfunded commitment. The funding rate represents management's estimate of the amount of the current unfunded commitment that will be funded over the remaining contractual life of the commitment and is based on historical data. As of March 31, 2025 and December 31, 2024, the Company had a $0.1 million liability for credit losses on off-balance sheet exposures related to unfunded commitments with this liability included in accounts payable and accrued liabilities on the condensed consolidated balance sheets. Please refer to Note 7 for further information on the Company's unfunded commitments.
Allowance for Credit Losses
During the three months ended June 30, 2024, the Company revised its methodology for calculating the allowance for credit losses to be more directly tied to the individual risk ratings, as determined by management, of finance receivables. This resulted in a re-allocation of the existing allowance and did not have a material impact on the total allowance for credit losses amount. Previously, the Company's quarterly assessment of the allowance included two portfolio pools: Term Loans and Royalties. After the change in methodology these pools are further broken down into individual risk ratings applied to each investment to allow for a more precise method for calculating the allowance for credit losses.
The following table details the changes in the allowance for credit losses by Term Loans and Royalties (in thousands):

9


Three Months Ended March 31, 2025 Three Months Ended March 31, 2024
Term Loans Royalties Total Term Loans Royalties Total
Allowance at beginning of period $ 7,158  $ 4,091  $ 11,249  $ 9,731  $ 4,170  $ 13,901 
Provision (benefit) for credit losses (296) (1,169) (1,465) 5,547  (250) 5,297 
Write offs —  (999) (999) (6,000) —  (6,000)
Allowance at end of period $ 6,862  $ 1,923  $ 8,785  $ 9,278  $ 3,920  $ 13,198 
Non-Accrual Finance Receivables
The Company originates finance receivables to companies primarily in the life sciences sector. This concentration of credit exposes the Company to a higher degree of risk associated with this sector.
On a quarterly basis, the Company evaluates the carrying value of its finance receivables. Recognition of income is suspended, and the finance receivable is placed on non-accrual status when management determines that collection of future income is not probable. This evaluation is generally based on delinquency information, an assessment of the borrower’s financial condition and the adequacy of collateral, if any. The Company would generally place term loans on nonaccrual status when the full and timely collection of interest or principal becomes uncertain and they are 90 days past due for interest or principal, unless the term loan is both well-secured and in the process of collection. When placed on nonaccrual, the Company would reverse any accrued unpaid interest receivable against interest income and amortization of any net deferred fees is suspended. Generally, the Company would return a term loan to accrual status when all delinquent interest and principal become current under the terms of the credit agreement.
The following table presents nonaccrual and performing finance receivables by portfolio pool, net of allowance for credit losses (in thousands) as of:
March 31, 2025 December 31, 2024
Nonaccrual Performing Total Nonaccrual Performing Total
Term loans $ —  $ 219,042  $ 219,042  $ 1,000  $ 223,073  $ 224,073 
Royalty purchases 12,819  —  12,819  13,830  51,106  64,936 
Total before allowance for credit losses $ 12,819  $ 219,042  $ 231,861  $ 14,830  $ 274,179  $ 289,009 
Allowance for credit losses (1,923) (6,862) (8,785) (2,075) (9,174) (11,249)
Total carrying value $ 10,896  $ 212,180  $ 223,076  $ 12,755  $ 265,005  $ 277,760 
As of March 31, 2025, the Company had three finance receivables in nonaccrual status: (1) the Flowonix Medical, Inc. (“Flowonix”) royalty, with a carrying value of $7.4 million; (2) the Best ABT, Inc. (“Best”) royalty, with a carrying value of $2.3 million; and (3) the Ideal Implant, Inc. (“Ideal”) royalty, with a carrying value of $3.0 million. The Company collected $2.2 million and $0.7 million on its nonaccrual finance receivables for the three months ended March 31, 2025 and 2024, respectively.
Loan Modifications Made to Borrowers Experiencing Financial Difficulty
The Company evaluates the carrying value of each finance receivable for impairment. A term loan is considered to be impaired when, based on current information and events, it is determined that the Company will not be able to collect the amounts due according to the loan contract, including scheduled interest payments. This evaluation is generally based on delinquency information, an assessment of the borrower’s financial condition and the adequacy of collateral, if any. In certain circumstances, the Company may place a finance receivable on nonaccrual status but conclude it is not impaired. The Company may retain independent third-party valuations on such nonaccrual positions to support impairment decisions. On an ongoing basis, the Company monitors the performance of modified loans to their restructured terms.
10


Credit Quality of Finance Receivables
The Company evaluates all finance receivables on a quarterly basis and assigns a risk rating based upon management’s assessment of the borrower’s ability and likelihood of repayment. The assessment is subjective and based on multiple factors, including but not limited to, financial strength of borrowers and operating results of the underlying business. The credit risk analysis and rating assignment is performed quarterly in conjunction with the Company's assessment of its allowance for credit losses. The Company uses the following definitions for its risk ratings for Term Loans:
1: Borrower performing well below Company expectations, and the borrower's ability to raise sufficient capital to operate its business or repay debt is highly in question. Finance receivables rated a 1 are on non-accrual and are at an elevated risk for principal impairment.
2: Borrower performing below plan, and the loan-to-value is generally worse than at the time of underwriting. Borrower has limited access to additional capital to operate its business. Finance receivables rated a 2 are generally on non-accrual, and while no loss of impairment is anticipated, there is potential for future principal impairment.
3: Borrower performing in-line-to-modestly below Company expectations, and loan-to-value is similar to slightly worse than at the time of underwriting. Borrower has demonstrated access to capital markets.
4: Borrower performing in-line-to-modestly above Company expectations and loan-to-value similar or modestly better than underwriting case. Borrower has demonstrated access to capital markets.
5: Borrower performing in excess of Company expectations, and loan-to-value is better than at time of origination.
The Company uses an internal credit rating system which rates each Royalty on a color scale of Green to Red, with Green typically indicative of a Royalty that is exceeding base underwritten case, Yellow indicates a royalty is performing in-line with underwritten plan, and Red reflective of underperformance relative to plan. Royalties rated as Red are generally classified as non-accrual.
The following table summarizes the gross carrying value of Finance Receivables by origination year, grouped by risk rating (in thousands):
March 31, 2025
2025 2024 2023 2022 2021 Prior Total
Term Loans
5 $ —  $ —  $ —  $ 8,674  $ 16,385  $ 29,148  $ 54,207 
4 9,675  7,967  36,627  22,825  —  —  77,094 
3 —  —  19,777  24,351  —  23,238  67,366 
2 —  —  5,499  —  14,876  —  20,375 
Subtotal - Term Loans $ 9,675  $ 7,967  $ 61,903  $ 55,850  $ 31,261  $ 52,386  $ 219,042 
Royalties
Red —  —  —  —  3,039  9,780  12,819 
Subtotal - Royalties $ —  $ —  $ —  $ —  $ 3,039  $ 9,780  $ 12,819 
Total Finance Receivables, gross $ 9,675  $ 7,967  $ 61,903  $ 55,850  $ 34,300  $ 62,166  $ 231,861 
11


December 31, 2024
2024 2023 2022 2021 2020 Prior Total
Term Loans
5 $ —  $ —  $ —  $ 16,378  $ —  $ 28,926  $ 45,304 
4 7,929  36,406  55,353  —  —  —  99,688 
3 —  24,920  —  11,930  —  26,482  63,332 
2 —  —  —  14,749  —  —  14,749 
1 —  —  —  —  —  1,000  1,000 
Subtotal - Term Loans $ 7,929  $ 61,326  $ 55,353  $ 43,057  $ —  $ 56,408  $ 224,073 
Royalties
Green $ 8,005  $ 11,685  $ 11,231  $ —  $ 15,865  $ 1,267  $ 48,053 
Yellow —  —  —  —  3,053  —  3,053 
Red —  —  —  3,050  8,433  2,347  13,830 
Subtotal - Royalties $ 8,005  $ 11,685  $ 11,231  $ 3,050  $ 27,351  $ 3,614  $ 64,936 
Total Finance Receivables, gross $ 15,934  $ 73,011  $ 66,584  $ 46,107  $ 27,351  $ 60,022  $ 289,009 


12


Note 4. Assets Held For Sale
Finance receivables held for sale
The Company generally holds its finance receivables as long-term investments, however, the Company occasionally classifies some of its finance receivables as held for sale. Finance receivables held for sale are recorded at the lower of fair value or amortized cost. On the date of transfer into the held for sale category, any previously recorded allowance for credit losses is reversed in earnings and the finance receivables are recorded at amortized cost. If the amortized cost basis exceeds the finance receivables’ carrying value on the date of transfer, a valuation allowance is established equal to the difference between amortized cost basis and fair value. Deferred fees and costs related to finance receivables held for sale are deferred upon transfer to the held for sale category and are included in the carrying value of finance receivables held for sale on the consolidated balance sheets. The Company recognizes the full amount of deferred fees and costs at the time of sale as a component of the gain or loss on sale.
On March 19, 2025, the Company entered into a definitive agreement with Soleus Capital (“Soleus”) for the sale of the majority of its finance receivables segment royalty portfolio for approximately $34.0 million in cash ("the Transaction"), which approximated the fair value of the finance receivables held for sale as of March 31, 2025. At that time, the amortized cost basis of the royalty portfolio was $37.7 million, inclusive of interest receivables of $2.3 million. As a result of the Transaction, the Company performed a lower-of-cost-or-market analysis in the aggregate resulting in a loss of $3.7 million which is included in the "Loss on revaluation of finance receivables" caption on the Company's unaudited condensed consolidated statements of income for the three months ended March 31, 2025. The transaction closed subsequent to March 31, 2025 on April 10, 2025. In conjunction with the closing, the Company's Board of Directors declared a special cash dividend of $4.00 per share, payable to all holders of record of the Company’s common stock as of April 24, 2025, with a payment date of May 8, 2025.
During neither the three months ended March 31, 2025, there was not a strategic shift for the Company, and accordingly, the finance receivable segment does not meet the criteria to be classified as a discontinued operation. The following table shows the net income before taxes for finance receivables and related interest receivable held for sale (in thousands):
Three Months Ended March 31,
2025 2024
Net income before taxes $ 2,022  $ 1,804 

MOD3 Exclusive Option and Asset Purchase Agreement
With an effective date of January 1, 2024, the Company entered into an Option and Asset Purchase Agreement with a strategic partner on March 14, 2024, which granted the strategic partner an exclusive option to acquire certain of MOD3 assets related to its business of providing CDMO services to third parties, subject to certain exclusions. The strategic partner must exercise the Option by or before January 1, 2026. In exchange for the exclusive purchase option the partner is to provide consideration in the form of an "option fee" and "guaranteed revenue payments."
The option fee is broken into two components: A low-single digit million fee due within 30 business days of executing the agreement; and should the option not be exercised by the first anniversary of the effective date, an additional low-single digit million fee will be due at that time. The first option fee was paid in April 2024 and the second option fee was paid in February 2025. Option fee payments will be included in deferred income until the earlier of term expiration or exercise of the purchase option. Should the partner exercise the purchase option, any option fee payments made will be applied towards the purchase price.
The guaranteed revenue payments include two components: A mid-single digit million guaranteed revenue payment in 2024 and a mid-single digit million guaranteed revenue payment in 2025. The revenue is to be derived by the partner under an existing collaboration agreement, and the partner is to pay the difference should the minimum amount not be met each year. Each year's guaranteed revenue amount is to be paid in two installments semi-annually each year. Should revenue exceed the 2024 or 2025 guaranteed revenue amounts after receiving a difference payment in the first half of the year, we must repay the partner the amount of such overpayment. There was no guaranteed revenue recognized during the three months ended March 31, 2025 and 2024.
13


As the Company expects the strategic partner to exercise the Option within 12 months from December 31, 2024, certain assets and liabilities of the MOD3 business were classified as held for sale as of December 31, 2024. The assets and liabilities held for sale represent the major operating assets and liabilities of the MOD3 business (i.e. the majority of the Pharmaceutical Development segment) and as such, when the Option is exercised, this segment of the business will no longer exist and only the specialty finance business will remain. The decision to enter into the Option and Asset Purchase Agreement was made to align with the overall strategy to focus on the specialty finance business.
The following table summarizes the assets and liabilities held for sale:

March 31, 2025 December 31, 2024
Assets:
Inventory $ 354  $ 354 
Property & equipment, net 4,696  4,635 
Intangible assets, net 209  209 
Other non-current assets 1,150  1,200 
Total assets held for sale, net $ 6,409  $ 6,398 
Liabilities:
Accounts payable & accrued liabilities $ 298  $ 268 
Other non-current liabilities 1,027  987 
Total liabilities held for sale $ 1,325  $ 1,255 
During neither the three months ended March 31, 2025 nor the year ended December 31, 2024, there was not a strategic shift for the Company, and accordingly, the Pharmaceutical Development segment does not meet the criteria to be classified as a discontinued operation. As a result, we will continue to report our operational results for the Pharmaceutical Development segment until the sale. The following table shows the net loss before taxes for MOD3 (in thousands):
Three Months Ended March 31,
2025 2024
Net loss before taxes $ (536) $ (1,453)


Note 5. Marketable Investments
Investments in corporate debt and equity securities consist of the following (in thousands):
March 31, 2025 December 31, 2024
Corporate debt securities $ 13  $ 21 
Equity securities 442  559 
Total marketable investments $ 455  $ 580 
 
The amortized cost basis amounts, gross unrealized holding gains, gross unrealized holding losses and fair values of available-for-sale debt securities are as follows (in thousands):
Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value
March 31, 2025 $ 13  $ —  $ —  $ 13 
December 31, 2024 $ 21  $ —  $ —  $ 21 
14


Equity Securities
On June 30, 2024, the Company exercised its right to purchase AOTI, Inc ("AOTI") restricted stock. Upon exercise, the Company received 402,634 shares of AOTI restricted stock with a fair value of $0.7 million, or $1.68 per share. The restricted stock can be converted into publicly traded common shares one year after the exercise date.
The following table presents gains and losses on equity securities as prescribed by ASC 321, Investments - Equity Securities (in thousands):
Three Months Ended March 31,
2025
Unrealized loss on equity securities held at the end of the period $ (105)
Note 6. Debt
Revolving Credit Facility
On June 28, 2023, the Company entered into a new credit agreement (the “Credit Agreement”) by and among SWK Funding LLC, the Company’s wholly-owned subsidiary (together with the Company, the “Borrower”), the lenders party thereto (“Lenders”), and First Horizon Bank as a Lender and Agent (the “Agent”). The Credit Agreement provides for a revolving credit facility with an initial maximum principal amount of $45.0 million. The Credit Agreement provides that the Company may request one or more incremental increases in an aggregate amount not to exceed $80.0 million, subject to the consent of the Agent and each Lender, at any time prior to the termination of the revolving credit period on June 28, 2026 (the “Commitment Termination Date”). The revolving credit period will be followed by a one-year amortization period, with the final maturity date of the Credit Agreement occurring on June 28, 2027.
The outstanding principal balance of the Credit Agreement will bear interest at a rate per annum equal to the sum of (i) Term Secured Overnight Financing Rate, or SOFR (as defined in the Credit Agreement) plus (ii) 3.75% at all times prior to the Commitment Termination Date. The outstanding principal balance of the revolving credit facility will bear interest at a rate per annum equal to the sum of (i) Term SOFR (as defined in the Credit Agreement) plus (ii) 4.25% at all times on and after the Commitment Termination Date. Under the terms of the Credit Agreement, all accrued and unpaid interest shall be due and payable, in arrears, on the first business day of each calendar month.
The Credit Agreement contains customary affirmative and negative covenants, in addition to financial covenants specifying that, as of the end of each calendar month, (i) the consolidated leverage ratio of Borrower will not exceed 1.00 to 1.00, (ii) the consolidated interest coverage ratio of Borrower will not be less than 4.00 to 1.00, (iii) the cash collection rate in relation to Borrower’s portfolio of loan assets will not be less than 4.50% for such calendar month, (iv) the net charge-off percentage in relation to Borrower’s portfolio of loan assets will not exceed 3.00% for such calendar month, (v) the weighted average risk rating in relation to Borrower portfolio of loan assets will not be less than 3.00, and (vi) the Company's cumulative share repurchases will not exceed $5 million in value in any 12-month period. In addition, the Credit Agreement provides that at no time shall the Company permit its consolidated tangible net worth to be less than $145.0 million, or its liquidity (as defined in the Credit Agreement) to be less than $5.0 million. The Credit Agreement also contains events of default customary for such financings, the occurrence of which would permit the Agent and Lenders to accelerate the aggregate principal amount due thereunder.
On October 10, 2023, the Company entered into an amendment to the Credit Agreement pursuant to which Woodforest National Bank was added as a lender under the Credit Agreement for an aggregate commitment of $15.0 million, thereby increasing the aggregate commitments under the Credit Agreement from $45.0 million to $60.0 million.
On August 29, 2024, the Company entered into an amendment to the Credit Agreement pursuant to which the consolidated interest coverage ratio of Borrower will not be less than 2.00 to 1:00, the net charge-off percentage in relation to Borrower's portfolio of loan assets will not be less than 8% for such calendar month, and cumulative share repurchases will not exceed $7.0 million in value in any 12-month period.
As of March 31, 2025 there were no amounts outstanding under the Credit Agreement. As of December 31, 2024 there was $6.2 million outstanding under the Credit Agreement. During the three months ended March 31, 2025 and 2024, the Company recognized $0.2 million and $0.3 million, respectively, of interest expense in connection with the Credit Agreement.
15


Senior Notes Due 2027
On October 3, 2023, the Company issued a $30.0 million aggregate principal amount of 9.00% Senior Notes due 2027 ("2027 Senior Notes" or "Notes”) in a registered underwritten public offering. On October 27, 2023, the underwriter exercised, in full, its over-allotment option by purchasing an additional approximately $3.0 million aggregate principal amount of the 2027 Senior Notes. The interest rates are fixed at 9.00% per annum and are payable quarterly in arrears on March 31, June 30, September 30, and December 31 of each year, commencing on December 31, 2023, and until maturity. The Notes will mature on January 31, 2027. The total net proceeds from the debt offering, after deducting initial purchase discounts and debt issuance costs, were approximately $30.6 million. The Company intends to use the net proceeds from the offering for general corporate purposes, including funding future acquisitions and investments, repaying indebtedness, making capital expenditures, and funding working capital.

The following table summarizes the outstanding balance of the Notes, net of debt issuance costs (in thousands):
March 31, 2025 December 31, 2024
2027 Senior Notes $ 32,969  $ 32,969 
Debt issuance costs (1,402) (1,557)
Total unsecured senior notes, net $ 31,567  $ 31,412 
The Company’s future principal obligations for the Notes were as follows (in thousands):
March 31, 2025
Remainder of 2025 $ — 
2026 — 
2027 32,969 
Total unsecured senior notes principal $ 32,969 
The Company may redeem the Notes for cash in whole or in part at any time (i) on or after September 30, 2025 (the “First Call Date”) and prior to September 30, 2026, at a price equal to the sum of 102% of their principal amount, and (ii) on or after September 30, 2026 at a price equal to the sum of 100% of their principal amount, plus (in each case noted above) accrued and unpaid interest to, but excluding, the date of redemption. At any time prior to the First Call Date, the Company may, at its option, redeem the Notes for cash, in whole at any time or in part from time to time at a redemption price equal to (i) 100% of the principal amount of Notes redeemed, plus (ii) a Make-Whole Amount (as defined in the Indenture), plus (iii) accrued and unpaid interest, if any, to, but excluding, the date of redemption. On and after any redemption date, interest will cease to accrue on the redeemed Notes. Additionally, upon the occurrence of a Triggering Event (as defined in the Indenture), holders of the Notes will have the right to require the Company to make an offer to repurchase all or any portion of their Notes for cash at a purchase price equal to 100% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the date of purchase.
The Notes are senior unsecured obligations of the Company and rank equal in right of payment with the Company’s existing and future senior unsecured indebtedness.
The Company evaluated the 2027 Senior Notes for derivatives pursuant to Accounting Standard Codification ("ASC") 815, "Derivatives and Hedging," and identified an embedded derivative that required bifurcation as the feature is not clearly and closely related to the host instrument. The embedded derivative was a default provision, which could require additional interest payments. The Company reassesses the feature quarterly to determine if it requires separate accounting. There have been no changes to the Company’s assessment that the fair value of the embedded derivative is immaterial through March 31, 2025.

16


Note 7. Commitments and Contingencies
Lease Obligations
All the Company’s material leases are operating leases. Right-of-use ("ROU") assets related to operating leases are included on the unaudited condensed consolidated balance sheets in other non-current assets. Operating lease cost is recognized over the lease term on a straight-line basis and is recorded within general and administrative expenses on the unaudited condensed consolidated statements of income. In March of 2023, the Company entered into a new lease for office space in Dallas, Texas on Sherry Lane. The Company’s corporate office space in Dallas, Texas totals approximately 4,450 square feet.
The MOD3 headquarters is located in Boonton, New Jersey, where MOD3 leases approximately 32,000 square feet of space. The office lease expires in December 2029 with an option to renew for an additional five years.
The components of lease cost were as follows (in thousands):
Three Months Ended
March 31,
2025 2024
Operating lease cost $ 108  $ 125 
Variable lease cost 10  15 
Total lease cost $ 118  $ 140 
Future minimum rent on the Company's operating leases was as follows as of March 31, 2025 (in thousands):
Remainder of 2025 $ 135 
2026 183 
2027 188 
2028 128 
2029 — 
Thereafter — 
Total future lease payments $ 634 
(1) As of March 31, 2025, total future lease payments exclude $1.3 million of lease payments related to held for sale leases, of which $0.2 million are due in the remainder of 2025.
Unfunded Commitments
Per the terms of the royalty purchase or credit agreements, unfunded commitments are contingent upon reaching an established revenue threshold or other performance metrics on or before a specified date or period of time, and in the case of loan transactions, are subject to being advanced as long as an event of default does not exist. As of March 31, 2025, the Company had $7.5 million of unfunded commitments.
Litigation
The Company is involved in, or has been involved in, arbitrations or various other legal proceedings that arise from the normal course of its business. The ultimate outcome of any litigation is uncertain, and either unfavorable or favorable outcomes could have a material impact on the Company’s results of operations, balance sheets and cash flows due to defense costs, and divert management resources. The Company cannot predict the timing or outcome of these claims and other proceedings. As of March 31, 2025, the Company is not involved in any arbitration and/or other legal proceeding that it expects to have a material effect on its business, financial condition, results of operations and cash flows.
Indemnification
As permitted by Delaware law, the Company has agreements whereby it indemnifies its officers and directors for certain events or occurrences while the officer or director is, or was, serving in such capacity, or in other capacities at the Company’s request. The term of the indemnification period is for the officer’s or director’s lifetime. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company has a director and officer insurance policy that limits its exposure and enables the Company to recover a portion of any such amounts. As a result of the Company’s insurance policy coverage, the Company believes the estimated fair value of these indemnification agreements is insignificant. Accordingly, the Company had no liabilities recorded for these agreements as of March 31, 2025 and December 31, 2024.

17


Note 8. Fair Value Measurements
The Company measures and reports certain financial and non-financial assets and liabilities on a fair value basis. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). GAAP specifies a three-level hierarchy that is used when measuring and disclosing fair value. The fair value hierarchy gives the highest priority to quoted prices available in active markets (i.e., observable inputs) and the lowest priority to data lacking transparency (i.e., unobservable inputs). An instrument’s categorization within the fair value hierarchy is based on the lowest level of significant input to its valuation. The following is a description of the three hierarchy levels.
Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Active markets are considered to be those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in inactive markets.
Level 3: Unobservable inputs are not corroborated by market data. This category is comprised of financial and non-financial assets and liabilities whose fair value is estimated based on internally developed models or methodologies using significant inputs that are generally less readily observable from objective sources.
Transfers into or out of any hierarchy level are recognized at the end of the reporting period in which the transfers occurred. There were no transfers between any levels for recurring fair value measurements during the three months ended March 31, 2025 and 2024.
The following information is provided to help readers gain an understanding of the relationship between amounts reported in the accompanying consolidated financial statements and the related market or fair value. The disclosures include financial instruments and derivative financial instruments, other than investment in affiliates.
Following are descriptions of the valuation methodologies used to measure material assets and liabilities at fair value and details of the valuation models, key inputs to those models and significant assumptions utilized.
Cash and cash equivalents
The carrying amounts reported in the balance sheet for cash and cash equivalents approximate those assets’ fair values.
Finance Receivables
Finance receivables are measured at amortized cost, which approximates fair value. The fair value of finance receivables is estimated using discounted cash flow analyses, using market rates at the balance sheet date that reflect the credit and interest rate-risk inherent in the finance receivables. Projected future cash flows are calculated based upon contractual maturity or call dates, projected repayments and prepayments of principal. These receivables are classified as Level 3. Finance receivables are not measured at fair value on a recurring basis, but estimates of fair value are reflected below.
Finance Receivables held for sale
Finance receivable held for sale are measured at fair value on a nonrecurring basis and evaluated using executed purchase agreements or letters of intent. The fair value is determined using a lower-of-cost-or-market analysis of finance receivables held for sale in the aggregate. These receivables are classified as Level 3 and estimates of fair value are reflected below.
Marketable Investments
If active market prices are available, fair value measurement is based on quoted active market prices and, accordingly, these securities are classified as Level 1. If active market prices are not available, fair value measurement is based on observable inputs other than quoted prices included within Level 1, such as prices for similar assets or broker quotes utilizing observable inputs, and accordingly these securities are classified as Level 2. If market prices are not available and there are no observable inputs, then fair value would be estimated by using valuation models including discounted cash flow methodologies, commonly used option-pricing models and broker quotes. Such securities are classified as Level 3, if the valuation models and broker quotes are based on inputs that are unobservable in the market. If fair value is based on broker quotes, the Company checks the validity of received prices based on comparison to prices of other similar assets and market data such as relevant benchmark indices. Available-for-sale securities are measured at fair value on a recurring basis, while securities with no readily available fair market value are not, but estimates of fair value are reflected below.
Derivative Instruments
For exchange-traded derivatives, fair value is based on quoted market prices, and accordingly, would be classified as Level 1. For non-exchange traded derivatives, fair value is based on option pricing models and are classified as Level 3.
18


The Company uses a foreign currency forward contract to manage the impact of fluctuations in foreign currency denominated cash flows expected to be received from one of its royalty finance receivables denominated in a foreign currency. The foreign currency forward contract is not designated as a hedging instrument, and changes in fair value are recognized in earnings. The foreign currency forward contract was recorded in other non-current assets in the condensed consolidated balance sheets as of March 31, 2025 and December 31, 2024 and totaled to $2.1 million and $2.5 million, respectively. The Company recognized a loss of $0.4 million and a gain of $0.9 million due to changes in fair value related to its foreign currency forward contract during the three months ended March 31, 2025 and 2024, respectively.
The following table presents financial assets measured at fair value on a recurring basis as of March 31, 2025 (in thousands):
Total
Carrying
Value in
Consolidated
Balance
Sheets
Quoted Prices
in Active
Markets for
Identical
Assets
or Liabilities
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Financial Assets
Warrant assets $ 4,245  $ —  $ —  $ 4,245 
Marketable investments 455  442  —  13 
Foreign currency forward contract 2,066  —  —  2,066 
The following table presents financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2024 (in thousands):
Total
Carrying
Value in
Consolidated
Balance
Sheets
Quoted Prices
in Active
Markets for
Identical
Assets
or Liabilities
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Financial Assets
Warrant assets $ 4,366  $ —  $ —  $ 4,366 
Marketable investments 580  559  —  21 
Foreign currency forward contract 2,475  —  —  2,475 

Three Months Ended March 31, 2025 Three Months Ended March 31, 2024
Fair value - December 31, 2024 $ 4,366 
Fair value - December 31, 2023
$ 1,759 
Issued 253  Issued — 
Exercised —  Exercised (984)
Change in fair value (424) Change in fair value (95)
Gain on foreign currency transactions 50  Loss on foreign currency transactions (70)
Fair value - March 31, 2025
$ 4,245 
Fair value - March 31, 2024
$ 610 
19


The Company holds warrants issued to the Company in conjunction with certain term loan investments. These warrants meet the definition of a derivative and are included in the unaudited condensed consolidated balance sheets. The fair values for warrants outstanding, which do not have a readily determinable value, are measured using the Black-Scholes option pricing model. The following ranges of assumptions were used in the models to determine fair value:

March 31, 2025 December 31, 2024
Dividend rate range —  — 
Risk-free rate range
3.9% to 4.4%
4.2% to 4.5%
Expected life (years) range
1.6 to 6.9
1.9 to 6.9
Expected volatility range
53.0% to 162.4%
56.0% to 177.7%
The warrant assets are valued using a market approach and include significant unobservable inputs such as risk-free rate, expected life, and expected volatility. As of March 31, 2025 the risk-free rate range weighted average was 4.1%, and had a median of 4.0%. As of December 31, 2024, the risk-free rate range weighted average was 4.4%, and had a median of 4.4%. As of March 31, 2025 the expected life range weighted average was 5.7 years, and had a median of 4.4 years. As of December 31, 2024 the expected life range weighted average was 5.8 years, and had a median of 4.3 years. As of March 31, 2025 the expected volatility range weighted average was 67%, and had a median of 88.0%. As of December 31, 2024 the expected volatility range weighted average was 65.6%, and median of 104.3%.
As of March 31, 2025 and December 31, 2024, the Company had three royalties, Best, Ideal, and Flowonix that were deemed to be impaired based on reductions in carrying value. During the three months ended March 31, 2025, the Company recognized impairment based on a reduction in carrying value of one royalty, Flowonix. As of December 31, 2024, the Company had one loan, BIOLASE, that was deemed to be impaired based on reduction in carrying value in prior periods. The following table presents the royalties and the loan measured at amortized cost using the effective interest method, which approximates fair value, on a nonrecurring basis as of March 31, 2025 and December 31, 2024 (in thousands):
Total
Carrying
Value in
Consolidated
Balance
Sheets
Quoted Prices
in Active
Markets for
Identical
Assets
or Liabilities
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
March 31, 2025
$ 12,819  $ —  $ —  $ 12,819 
December 31, 2024
$ 14,830  $ —  $ —  $ 14,830 
    

There were no liabilities measured at fair value on a nonrecurring basis as of March 31, 2025 and December 31, 2024.
The following information is provided to help readers gain an understanding of the relationship between amounts reported in the accompanying unaudited condensed consolidated financial statements and the related market or fair value. The disclosures include financial instruments and derivative financial instruments measured at fair value on a recurring and non-recurring basis.

The following table presents the fair value of financial assets as of March 31, 2025 (in thousands):
Carrying Value Fair Value Level 1 Level 2 Level 3
Financial Assets
Finance receivables, net $ 223,076  $ 223,076  $ —  $ —  $ 223,076 
Finance receivables and related interest receivable held for sale (1)
33,990  33,990  —  —  33,990 
Marketable investments 455  455  442  —  13 
Warrant assets 4,245  4,245  —  —  4,245 
Foreign currency forward contract 2,066  2,066  —  —  2,066 
(1) Non-recurring valuation as of March 19, 2025
20


The following table presents the fair value of financial assets and liabilities as of year ended December 31, 2024 (in thousands):
Carrying Value Fair Value Level 1 Level 2 Level 3
Financial Assets
Finance receivables, net $ 277,760  $ 277,760  $ —  $ —  $ 277,760 
Marketable investments 580  580  559  —  21 
Warrant assets 4,366  4,366  —  —  4,366 
Foreign currency forward contract 2,475  2,475  —  —  2,475 

Note 9. Revenue Recognition
The Company's Pharmaceutical Development segment recognizes revenues received from contracts with its customers by revenue source, as we believe it best depicts the nature, amount, timing and uncertainty of our revenue and cash flow. The Company's Finance Receivables segment does not have any revenues received from contracts with customers.
The following table provides the contract revenue recognized by revenue source (in thousands):

Three Months Ended
March 31,
2025 2024
Pharmaceutical Development Segment
Pharmaceutical Development 963  279 
Total contract revenue $ 963  $ 279 
The Company's contract liabilities represent advance consideration received from customers and are recognized as revenue when the related performance obligation is satisfied.
The Company’s contract liabilities are presented as deferred income and are included in accounts payable and accrued liabilities in the consolidated balance sheets (in thousands):
March 31, 2025 December 31, 2024
Pharmaceutical Development Segment
Beginning balance $ 1,500  $
Income recognized —  (9)
Additions to deferred income 1,849  1,500 
Ending balance $ 3,349  $ 1,500 
Note 10. Segment Information
Selected financial and descriptive information is required to be provided about reportable operating segments, considering a “management approach” concept as the basis for identifying reportable segments. The management approach is based on the way that management organizes the segments within the Company for making operating decisions, allocating resources, and assessing performance. Consequently, the segments are evident from the structure of the Company’s internal organization, focusing on financial information that the Company’s CEO uses to make decisions about the Company’s operating matters.
As described in Note 1, SWK Holdings Corporation and Summary of Significant Accounting Policies, the Company has determined it has two reportable segments: Finance Receivables and Pharmaceutical Development, and each are individually managed and provide separate services. Revenues by segment represent revenues earned on the services offered within each segment. The Company does not report assets by reportable segment, nor does the Company report results by geographic region, as these metrics are not used by the Company’s chief executive officer in assessing performance or allocating resources to the segments.
Segment performance is evaluated based on several factors, including income (loss) from continuing operations before income taxes. Management uses this measure of profit (loss) to evaluate segment performance because the Company believes this measure is indicative of performance trends and the overall earnings potential of each segment. The Company does not report assets by reportable segment, as this metric is not used by the Company's CEO in assessing performance or allocating resources to the segments.
21


The following tables present financial information for the Company's reportable segments for the periods indicated (in thousands):
Three Months Ended March 31, 2025
Finance Receivables Pharmaceutical Development and Other Holding Company and Other Consolidated
Revenue $ 10,712  $ 963  $ —  $ 11,675 
Other revenue 110  47  —  157 
Benefit from credit losses (1,465) —  —  (1,465)
Interest expense 232  896  1,130 
Pharmaceutical manufacturing, research and development expense —  758  —  758 
Depreciation and amortization expense —  —  19  19 
General and administrative expense 55  704  2,518  3,277 
Other expense, net (2,214) (82) —  (2,296)
Income tax expense —  —  1,278  1,278 
Net income (loss) 9,786  (536) (4,711) 4,539 
Three Months Ended March 31, 2024
Finance Receivables Pharmaceutical Development and Other Holding Company and Other Consolidated
Revenue $ 11,035  $ 279  $ —  $ 11,314 
Other revenue 46  —  —  46 
Provision for credit losses 5,297  —  —  5,297 
Interest expense 1,256  —  —  1,256 
Pharmaceutical manufacturing, research and development expense —  530  —  530 
Depreciation and amortization expense —  492  22  514 
General and administrative expense 78  710  1,896  2,684 
Other expense, net (382) —  —  (382)
Income tax benefit —  —  229  229 
Net income (loss) 4,068  (1,453) (2,147) 468 
The following table presents total assets for the Company's reportable segments for the periods indicated (in thousands):
March 31, 2025 December 31, 2024
Total Assets
Finance receivables $ 297,961  $ 299,248 
Pharmaceutical development and other 9,013  7,786 
Holdings Company and other 24,290  25,201 
Total $ 331,264  $ 332,235 
22


ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is provided as a supplement to, and should be read in conjunction with, our audited consolidated financial statements, and the MD&A included in our Annual Report on Form 10-K for the year ended December 31, 2024 (“Annual Report”), as well as our unaudited condensed consolidated financial statements and the accompanying notes included in this report.
Overview
We have organized our operations into two segments: Finance Receivables and Pharmaceutical Development. These segments reflect the way the Company evaluates its business performance and manages its operations. Please refer to Item 1. Financial Statements, Note 9 of the notes to the unaudited condensed consolidated financial statements for further information regarding segment information.
23


Finance Receivables Portfolio Overview
The table below provides an overview of our outstanding finance receivables transactions as of and for the three months ended March 31, 2025 (in thousands, except rate, share and per share data):
Revenue Recognized
Royalty Purchases Licensed Technology Funded Amount GAAP Balance Year-to-Date
Besivance® (1)
Ophthalmic antibiotic $ 6,000  $ —  $
Forfivo XL® (7)
Depressive disorder treatment 6,000  1,110  506 
Coflex®/Kybella® (7)
Spinal stenosis/submental fullness 4,350  2,702  48 
Cambia® (4) (7)
NSAID migraine treatment 8,500  —  98 
Duo Royalty (7)
Japanese Women's health/cystic fibrosis 15,353  10,083  591 
Immune Globulin (7)
Immune Globulin Therapeutics 14,100  10,452  443 
Relief (7)
Rare Disease Portfolio 7,701  7,331  336 
Best ABT, Inc.(2), (3)
Oncology diagnosis 5,784  2,347  — 
Flowonix Medical, Inc.(2), (3), (5)
Drug delivery device
12,455  7,433  — 
Ideal Implant, Inc.(2), (3)
Aesthetics 4,025  3,039  — 
Iluvien® (8)
Diabetic macular edema 16,501  —  519 
Revenue Recognized
Term Loans Type Maturity Date Principal GAAP Balance Rate Year-to-Date
4Web, Inc. First lien 06/30/25 $ 20,336  $ 23,238  12.8% $ 944 
AOTI, Inc. First lien 03/21/27 8,478  8,674  11.2% 342 
Elutia, Inc. First lien 08/10/27 21,045  24,351  12.0% 891 
Biotricity, Inc. First lien 02/15/27 14,446  14,876  11.5% 675 
CDMO Manufacturer First lien 09/13/27 5,000  5,368  13.3% 195 
eTon Pharmaceuticals, Inc. First lien 12/17/27 30,000  29,148  12.1% 1,102 
Journey Medical Corporation First lien 12/27/27 25,000  25,068  12.8% 901 
MedMinder Systems, Inc. First lien 08/18/28 22,500  22,825  12.3% 774 
MolecuLight, Inc.(8)
First lien 12/29/27 —  —  12.8% 27 
Nicoya Lifesciences, Inc. First lien 11/30/26 6,000  6,191  12.8% 248 
NeoLight, LLC First lien 02/15/26 5,186  5,499  13.5% 243 
Shield Therapeutics, Plc First lien 09/28/28 20,000  19,777  14.3% 820 
SKNV First lien 11/15/28 15,997  16,385  12.0% 494 
Triple Ring First lien 12/06/28 8,000  7,967  12.0% 278 
ImpediMed First lien 02/05/30 10,000  9,675  13.8% 235 

24


Loss Recognized
Marketable Investments Number of Shares Funded Amount GAAP Balance Year-to-Date
Secured Royalty Financing (Marketable Investment) (2), (3)
N/A $ 3,000  $ 13  $ — 
AOTI Common Stock (6)
402,634  N/A $ 442  $ (105)
Change in Fair Value
Warrants to Purchase Stock Number of Shares Exercise Price per Share ($) GAAP Balance Year-to-Date
4Web, Inc.  TBD $ —  $ —  $ — 
ImpediMed 12,491,870  0.05 169  (134)
Aziyo Biologics, Inc. Tranche 1 157,895  6.65 196  (157)
Aziyo Biologics, Inc. Tranche 2 30,075  6.65 37  (30)
Biotricity, Inc. Tranche 1 57,356  37.56 — 
Biotricity, Inc. Tranche 2 600,000  0.50 196  33 
CDMO Manufacturer 211,442  1.42 —  — 
DxTerity Diagnostics, Inc. 2,019,231  —  —  — 
Epica International, Inc.  TBD —  —  — 
Eton Pharmaceuticals, Inc. Tranche 1 51,239  5.86  403  (21)
Eton Pharmaceuticals, Inc. Tranche 2 18,141  6.62  141  (7)
Eton Pharmaceuticals, Inc. Tranche 3 289,736  5.32  2,922  (86)
Shield Warrant 8,910,540  0.14  179  (22)
MedMinder, System, Inc. Tranche 1 57,859  10.37  —  — 
MedMinder Systems, Inc. Tranche 2 14,465  10.37  —  — 
Neolight, LLC 52,524  7.62  —  — 
MolecuLight, Inc.  TBD —  —  — 
Revenue Recognized
Assets Year-to-Date
Total finance receivables, gross $ 231,861  $ 8,688 
Total finance receivables and related interest receivable held for sale 33,990  2,024 
Total marketable investments 455  — 
Total fair value of warrant assets 4,245  — 
Total $ 270,551  $ 10,712 
 
(1) US royalty was paid off continues to receive insignificant royalties on international sales.
(2) Investment considered partially impaired.
(3) Investment on non-accrual.
(4) Investment was paid off and SWK continues to receive royalties on actual sales.
(5) Flowonix Medical assets were sold to a medical device company in a prior period. In exchange for releasing its lien, SWK received cash at close and is expected to receive royalties on sales of two products.
(6) AOTI warrants exercised and converted to shares.
(7)
As of March 31, 2025 these royalties are included in finance receivables held for sale
(8)
Investment was paid off during the three months ended March 31, 2025
Unless otherwise specified, our senior secured debt assets generally are repaid by a revenue interest that is charged on a company’s quarterly net sales and royalties.
25


Critical Accounting Policies and Estimates
Our critical accounting policies and estimates are described in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report. We believe there have been no new critical accounting policies or material changes to our existing critical accounting policies and estimates during the three months ended March 31, 2025, compared to those discussed in our Annual Report.

Recent Accounting Pronouncements
Refer to Part I. Financial Information, Item 1. Financial Statements, Note 1 of the notes to the unaudited condensed consolidated financial statements for a listing of recent accounting pronouncements and their potential impact to our consolidated financial statements.

Comparison of the three months ended March 31, 2025 and 2024 (in millions)

Three Months Ended
March 31,
2025 2024 Change $
Revenues $ 11.8  $ 11.4  $ 0.4 
Provision (benefit) for credit losses (1.5) 5.3  (6.8)
Interest expense 1.1  1.3  (0.2)
Pharmaceutical manufacturing, research and development expense 0.8  0.5  0.3 
Depreciation and amortization expense —  0.5  (0.5)
General and administrative expense 3.3  2.7  0.6 
Other income (expense), net (2.3) (0.4) (1.9)
Income tax expense 1.3  0.2  1.1 
Net income 4.5  0.5  4.0 

Revenues
Revenues increased to $11.8 million for the three months ended March 31, 2025 from $11.4 million for the three months ended March 31, 2024. The $0.4 million increase in revenue for the three months ended March 31, 2025 was primarily due to a $0.3 million decrease in Finance Receivables segment revenue and a $0.7 million increase in Pharmaceutical Development segment revenue. The increase in Pharmaceutical development revenues was due to the collaboration agreement with a strategic partner.
Provision (benefit) for Credit Losses
Our provision for credit losses is established through charges or credits to income in the form of the provision in order to bring our allowance for credit losses for loans and unfunded commitments to a level deemed appropriate by management. We recognized a net benefit for credit losses of $1.5 million during the three months ended March 31, 2025 and a net provision of $5.3 million during three months ended March 31, 2024. The benefit was primarily due to a release of the allowance for credit losses associated with finance receivables held for sale, compared to the same period in the prior year in which there was additional provision recognized on certain receivables.
Interest Expense
Interest expense consists mostly of interest accrued on our revolving line of credit, 9.00% Senior Notes due 2027, unused line of credit and maintenance fees, as well as amortization of debt issuance costs. Interest expense remained flat compared for for the three months ended March 31, 2025 as compared to the same period in the previous period.
Pharmaceutical Manufacturing, Research and Development Expense
Pharmaceutical manufacturing, research and development expense remained consistent for the three months ended March 31, 2025 as compared to the same period in the previous year resulting in an immaterial change in total expense.
Depreciation and Amortization Expense
    The $0.5 million decrease in depreciation and amortization expense for the three months ended March 31, 2025 primarily consisted of a decrease in amortization expense related to no longer amortizing intangible assets related to the Cara license as the intangible assets were fully impaired.
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General and Administrative Expense
General and administrative expenses consist primarily of compensation; stock-based compensation and related costs for management, staff and Board; legal and audit expenses; and corporate governance expenses. General and administrative expenses increased by $0.6 million for the three months ended March 31, 2025 as compared to 2024. The increase is primarily due to increased compensation costs as well as legal costs associated with the Company's royalty sale.
Other Income (Expense), Net
Other income (expense), net decreased to an expense of $2.3 million for the three months ended March 31, 2025 from other expense, net of $0.4 million for the three months ended March 31, 2024. The $1.9 million decrease primarily relates to the loss on revaluation of finance receivables and related interest receivable held for sale, offset by a gain on the early payoff of the Iluvien royalty.
Income Tax Expense
During the three months ended March 31, 2025 we recognized $1.3 million of income tax expense, for the three months ended March 31, 2024 we recognized an income tax expense of $0.2 million. Income tax expense increased period over period due to an increase in net income compared to the previous period.
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Liquidity and Capital Resources 
As of March 31, 2025, we had $29.8 million in cash and cash equivalents, compared to $5.9 million as of December 31, 2024. The primary driver of the $23.9 million increase in our cash balance was primarily related to interest fees and principal and royalty payments received on finance receivables. The increase in cash and cash equivalents was partially offset by investment funding, net of deferred fees and origination expenses, net payments of our credit facility, payments for payroll and benefits expense, payments on accounts payable, and share repurchases.
We entered into a $45.0 million revolving credit facility in June 2023 with First Horizon Bank. The Credit Agreement provides for one or more incremental increases not to exceed $80.0 million, subject to the consent of the Agent and each Lender, at any time prior to the Commitment Termination Date. On October 10, 2023, the Company entered into a First Amendment to Credit Agreement pursuant to which Woodforest National Bank was added as a lender under the Credit Agreement for an aggregate commitment of $15.0 million, thereby increasing the aggregate commitments under the Credit Agreement from $45.0 million to $60.0 million. As of March 31, 2025, there was no outstanding amount under the new Credit Agreement, and $55.0 million was available for borrowing. The $60.0 million Credit Agreement contains a $5.0 million liquidity covenant, bringing the total amount available for borrowing to $55.0 million.

Driver of Cash Flow
Our ability to generate cash in the future depends primarily upon our success in implementing our Finance Receivables business model of generating income by providing capital to a broad range of life science companies, institutions and inventors, as well as the success of our Pharmaceutical Development segment. We generate income primarily from four sources:

1.Primarily owning or financing through debt investments, royalties generated by the sales of life science products and related intellectual property;

2.Receiving interest and other income by advancing capital in the form of secured debt to companies in the life science sector;

3.Pharmaceutical development, manufacturing, and licensing activities; and

4.To a lesser extent, realizing capital appreciation from equity-related investments in the life science sector.

As of March 31, 2025, our finance receivables portfolio contains $223.1 million of net finance receivables and $0.5 million of marketable investments. We expect these assets to generate positive cash flows in 2025. We continuously monitor the short and long-term financial position of our finance receivables portfolio. In addition, the majority of our finance receivables portfolio are debt instruments that carry floating interest rates. Changes in interest rates, including the levels of the underlying reference rates may affect the interest income for debt instruments with floating rates. We believe we are well positioned to benefit should market interest rates rise in the future.

We continue to evaluate multiple attractive opportunities that, if consummated, we believe would similarly generate additional income. Since the timing of any investment is difficult to predict, our Finance Receivables segment may not be able to generate positive cash flow above what our existing assets are expected to produce in 2025. We do not assume any near-term repayments from borrowers, and as a result, no assurances can be given that actual results would not differ materially from the statement above.

Off-Balance Sheet Arrangements

In the normal course of operations, we engage in a variety of financial transactions that, in accordance with GAAP, are not recorded in our consolidated financial statements. These transactions involve, to varying degrees, elements of credit, interest rate, and liquidity risk. Such transactions are used primarily to manage partner companies’ requests for funding and take the form of loan commitments and lines of credit.

The contractual amounts of commitments to extend credit represent the amounts of potential accounting loss should the contract be fully drawn upon, the partner company defaults, and the value of any existing collateral becomes worthless. We use the same credit policies in making commitments and conditional obligations as we do for on-balance sheet instruments.

As of March 31, 2025, we had $7.5 million in unfunded commitments. Please refer to Item 1., Financial Statements, Note 7 of the notes to the unaudited condensed consolidated financial statements for further information regarding the Company’s commitments and contingencies.
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ITEM 3.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. 
During the three months ended March 31, 2025, our cash and cash equivalents were deposited in accounts at well capitalized financial institutions. The fair value of our cash and cash equivalents at March 31, 2025 approximated its carrying value.

Investment and Interest Rate Risk 
We are subject to financial market risks, including changes in interest rates. Interest rate risk is defined as the sensitivity of our current and future earnings to interest rate volatility, variability of spread relationships, the difference in re-pricing intervals between our assets and liabilities and the effect that interest rates may have on our cash flow.
As we seek to provide capital to a broad range of life science companies, institutions and investors with the majority of our finance receivables portfolio paying interest based on floating interest rates with a reference rate floor, our net investment income is dependent, in part, upon the difference between the rate at which we earn on our cash and cash equivalents and the rate at which we lend those funds to third parties. As a result, we are subject to risks relating to changes in market interest rates. We may use interest rate risk management techniques in an effort to limit our exposure to interest rate fluctuations by providing capital at variable interest rates. We do not currently engage in any interest rate hedging activities. We constantly monitor our portfolio and position our portfolio to respond appropriately to a reduction in credit rating of any of our investments.
We entered into a revolving credit facility. As we borrow funds to make additional investments, our income will depend, in part, upon the difference between the rate at which we borrow funds and the rate at which we invest those funds. As a result, we are subject to risks relating to changes in market interest rates. In periods of rising interest rates when we have debt outstanding, our cost of funds would increase, which could reduce our income, especially to the extent we continue to hold fixed rate investments. We generally seek to mitigate this risk by pricing our debt investments with floating interest rates to maintain the spread of our portfolio over the cost of leverage. If deemed prudent, we may use interest rate risk management techniques in an effort to minimize our exposure to interest rate fluctuations, which we have not done. Adverse developments resulting from changes in interest rates or hedging transactions could have a materially adverse effect on our business, financial condition and results of operations. Accordingly, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our investment income, net of borrowing expenses.
Inflation

Certain of our partner companies may be impacted by inflation. If such partner companies are unable to pass any increases in their costs along to their customers, it could adversely affect their results and impact their ability to pay interest and principal on our loans. In addition, any projected future decreases in our partner companies’ operating results due to inflation could adversely impact the fair value of those investments. Any decreases in the fair value of our investments could result in future unrealized losses and therefore reduce carrying value of our net assets.

ITEM 4.      CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.
In connection with the preparation of this report, our management, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting 
There have been no changes during the three months ended March 31, 2025 in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

30


PART II. OTHER INFORMATION

ITEM 1.      LEGAL PROCEEDINGS 
We are involved in, or have been involved in, arbitrations or various other legal proceedings that arise from the normal course of our business. We cannot predict the timing or outcome of these claims and other proceedings. The ultimate outcome of any litigation is uncertain, and either unfavorable or favorable outcomes could have a material negative impact on our results of operations, balance sheets and cash flows due to defense costs, and divert management resources. Currently, we are not involved in any arbitration and/or other legal proceeding that we expect to have a material effect on our business, financial condition, results of operations and cash flows.

ITEM 1A.    RISK FACTORS
Information regarding the Company’s risk factors appears in “Part I. – Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on March 20, 2025. There are no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
On May 31, 2022, the Board authorized a share repurchase program under which the Company was authorized to repurchase up to $10.0 million of the Company’s outstanding shares of common stock. The previous repurchase periods under this program were July 1, 2022 through May 15, 2023 and May 16, 2023 through May 15, 2024 (the "Prior Repurchase Programs").
On May 16, 2024, the Company announced that the Board had authorized the Company to repurchase up to $10.0 million of the Company’s outstanding shares of common stock from time-to-time until May 16, 2025, through a trading plan established in compliance with Rule 10b5-1 and Rule 10b-18 of the Exchange Act (the “Current Repurchase Program”). The actual timing, number and value of shares repurchased under the Current Repurchase Program will depend on several factors, including the constraints specified in the Rule 10b5-1 trading plan, price, and general market conditions. There is no guarantee as to the exact number of shares that will be repurchased under the Current Repurchase Program. Our Board may also suspend or discontinue the Current Repurchase Program at any time, in its sole discretion. The purchase period for the Current Repurchase Program is May 16, 2024 through May 16, 2025.
The table below summarizes information about our purchases of common stock during the three months ended March 31, 2025 (dollar amounts in thousands, except per share data):

Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plan Maximum Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plan
January 1, 2025 - January 31, 2025
17,010  $ 16.28  17,010  $ 5,103 
February 1, 2025 - February 28, 2025
16,095  16.91 16,095  $ 4,831 
March 1, 2025 - March 31, 2025
19,232  16.55 19,232  $ 4,512 
52,337  $ 16.57  52,337 

As of March 31, 2025, the Company has repurchased an aggregate of 845,748 shares under the Prior Repurchase Programs and Current Repurchase Program at a total cost of $14.3 million, or $16.96 per share. As of March 31, 2025, the maximum dollar value of shares that may yet be purchased under the Current Repurchase Program was approximately $4.5 million shares of common stock.

ITEM 3.      DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4.      MINE SAFETY DISCLOSURES.

Not Applicable.

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ITEM 5.      OTHER INFORMATION.
On May 12, 2025, each member of our Board of Directors and each of our officers, including Mr. Jody Staggs and Mr. Adam Rice, entered into amended and restated indemnification agreements with the Company (the “indemnification agreements”). The indemnification agreements provide the Company’s officers and directors with contractual rights to indemnification and, in some cases, expense advancement in any action or proceeding arising out of their respective services as one of the Company's officers or directors, or as a director or officer of any other company or enterprise to which they may provide services at the Company's request.
The foregoing summary of the indemnification agreements does not purport to be complete and is qualified in its entirety by reference to the full text of the indemnification agreements, which are filed with this Quarterly Report on Form 10-Q as Exhibits 10.2 and 10.3 and are incorporated herein by reference.
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ITEM 6.       EXHIBITS
Number Exhibit Description Filing Filed
Form Exhibit Date Herewith
3.01 8-K 3.1 8/15/22
3.02 8-K 3.02 8/15/22
10.01 X
10.02 X
10.03 X
31.01 X
31.02 X
32.01 X
32.02 X
101.INS+ XBRL Instance X
101.SCH+ XBRL Taxonomy Extension Schema X
101.CAL+ XBRL Taxonomy Extension Calculation X
101.DEF+ XBRL Taxonomy Extension Definition X
101.LAB+ XBRL Taxonomy Extension Labels X
101.PRE+ XBRL Taxonomy Extension Presentation X
* These certifications accompany this Quarterly Report on Form 10-Q. They are not deemed “filed” with the Securities and Exchange Commission and are not to be incorporated by reference in any filing of SWK Holdings Corporation under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

+ XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

33


# Exhibits and/or schedules to this exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant agrees to furnish supplemental copies of any omitted exhibits or schedules to the SEC upon request; provided, however, that the registrant may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act for any exhibits or schedules so furnished.
34


SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on May 15, 2025.
SWK Holdings Corporation
By:
/s/ Joe D. Staggs
Joe D. Staggs
Chief Executive Officer
(Principal Executive Officer)
By:
/s/ Adam Rice
Adam Rice
Chief Financial Officer
(Principal Financial and Accounting Officer)

35
EX-10.1 2 swkh-soleuspurchaseandsale.htm EX-10.1 Document
CERTAIN INFORMATION IN THIS DOCUMENT, MARKED BY [***], HAS BEEN EXCLUDED PURSUANT TO REGULATION S-K, ITEM 601(b)(10)(iv). SUCH EXCLUDED INFORMATION IS NOT MATERIAL AND IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.
PURCHASE AND SALE AGREEMENT
dated as of March 19, 2025
between
SWK Holdings Corporation,
SWK Funding LLC,
Soleus Credit GP I, LLC
and
SCOF SPV I, LP
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Table of Contents
Page
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ii
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Exhibits
Exhibit A        Assigned Royalty Contracts
iii
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PURCHASE AND SALE AGREEMENT
Exhibit B Form of Assignment and Assumption Agreement This PURCHASE AND SALE AGREEMENT (this “Purchase and Sale Agreement”) dated as of March 19, 2025 is between SWK Holdings Corporation, a Delaware corporation (the “Seller Parent”), SWK Funding LLC, a Delaware limited liability company (the “Seller Subsidiary”, and together with Seller Parent, the “Seller Parties”), SCOF SPV I, LP, a Delaware limited partnership (the “Purchaser”) and Soleus Credit GP I, LLC, a Delaware limited liability company, as Guarantor.
W I T N E S E T H :
WHEREAS, the Seller Parties have the right to receive royalties and other amounts under the Assigned Royalty Contracts (as defined below); and
WHEREAS, the Seller Parties desire to sell, contribute, assign, transfer, convey and grant to the Purchaser, and the Purchaser desires to purchase, acquire and accept from the Seller Parties, all of the Seller Parties’ rights, title and interest in and to the Purchased Assets (as defined below) and assume the Assumed Liabilities (as defined below), upon and subject to the terms and conditions set forth in this Purchase and Sale Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual agreements, representations and warranties set forth herein and of other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto covenant and agree as follows:
Article I
DEFINED TERMS AND RULES OF CONSTRUCTION
Section 1.1Defined Terms. The following terms, as used herein, shall have the following respective meanings:
“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person. For purposes of this definition, “control” of a Person means the possession, directly or indirectly, of 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.
“Applicable Law” means, with respect to any Person, all laws, rules, regulations and orders of Governmental Authorities applicable to such Person or any of its properties or assets.
“Assigned Royalty Contracts” means those contracts listed in Exhibit A attached hereto, together with all UCC-1 financing statements, bills of sale, notices, consents and other transaction documents delivered in connection therewith.
“Assignment and Assumption Agreement” means that certain assignment and assumption agreement, substantially in the form of Exhibit B attached hereto.
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“Assumed Liabilities” means all liabilities arising under the Assigned Royalty Contracts to the extent that such liabilities (i) arise or are to be performed or completed by on or behalf of Purchaser or any of its Affiliates after the Closing and (ii) do not arise from any breach, default, or violation of any such Assigned Royalty Contracts by the Seller Parties or any of their Subsidiaries on or prior to the Closing.
“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by Applicable Law to remain closed.
“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 Closing Date, including common shares, ordinary shares, preferred shares, 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 and other rights to acquire such shares or interests, including rights to allocations and distributions, dividends, redemption payments and liquidation payments.
“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, and the regulations thereunder.
“Confidential Information” means all information (whether written or oral, or in electronic or other form) involving or relating in any way, directly or indirectly, to the Purchased Assets, including (a) any license, sublicense, assignment, product development, royalty, sale, supply, escrow or other agreements (including the Assigned Royalty Contracts) involving or relating in any way, directly or indirectly, to the Purchased Assets, the Receivables or the intellectual property, compounds or products giving rise to the Purchased Assets, and including all terms and conditions thereof and the identities of the parties thereto, (b) any reports, data, materials or other documents of any kind concerning or relating in any way, directly or indirectly, to the Assigned Royalty Contracts, the Purchased Assets, the Receivables or the intellectual property, compounds or products giving rise to the Purchased Assets, and including reports, data, materials or other documents of any kind delivered pursuant to or under any of the agreements referred to in clause (a) above or based on or derived from any such reports, data, materials or other documents of any kind, and (c) any inventions, devices, improvements, formulations, discoveries, compositions, ingredients, patents, patent applications, know-how, processes, trial results, research, developments or any other intellectual property, trade secrets or information involving or relating in any way, directly or indirectly, to the Purchased Assets or the compounds or products giving rise to the Purchased Assets; provided, however, that Confidential Information shall not include information that is (i) already in the public domain at the time the information is disclosed other than as a result of disclosure in violation of the confidentiality undertakings in this Purchase and Sale Agreement, (ii) lawfully obtainable from other sources, (iii) required to be disclosed in any document to be filed with any Governmental Authority, or (iv) required to be disclosed by court or administrative order or under Applicable Laws or is necessary or appropriate to disclose in connection with any legal or regulatory proceedings with respect to the Seller Parties or the Purchaser or their respective Affiliates (including Applicable Laws relating to securities matters), as the case may be, or pursuant to the rules and regulations of any stock exchange or stock market on which securities of the Seller Parent or the Purchaser or their respective Affiliates may be listed for trading.
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“Dollar” or the sign “$” means United States dollars.
“Excluded Obligation” means (i) any obligation of the Seller Parties under the Assigned Royalty Contracts that arose, accrued or is otherwise attributable to periods prior to the Closing Date, (ii) any liability of, or claim against, the Seller Parties for any breach prior to the Closing Date by the Seller Parties of the Assigned Royalty Contracts, (iii) any liability of, or claim against, the Seller Parties for any breach after the Closing Date by Seller of any surviving confidentiality obligations of the Seller Parties owed under the Assigned Royalty Contracts and (iv) any other liability of the Seller Parties unrelated to the Purchased Assets.
“Excluded Assets” means all of the rights, title and interests of the Seller Parties in, to and under all payments or receivables paid, owed, accrued or otherwise required to be paid to the Seller Parties pursuant to the Assigned Royalty Contracts, attributable to the period prior to the Closing Date.
“FDA” means the U.S. Food and Drug Administration and any successor agency thereto.
“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 the United States Patent and Trademark Office, the FDA and any other government authority in any jurisdiction.
“Guarantor” means Soleus Credit GP I, LLC.
“Guaranty” has the meaning set forth in Section 8.2.
“Lien” means any security interest, mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or otherwise), charge against or interest in property or other priority or preferential arrangement of any kind or nature whatsoever, in each case to secure payment of a debt or performance of an obligation, including any conditional sale or any sale with recourse.
3
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“Loss” means any loss, assessment, award, cause of action, claim, charge, cost, expense (including expenses of investigation and attorneys’ fees), fine, judgment, liability, obligation, penalty or Set-off.
“Material Adverse Change” means any event, circumstance or change that results in a material adverse effect on (a) the legality, validity or enforceability of any of the Transaction Documents or the Assigned Royalty Contracts, (b) the right or ability of the Seller Parties (or any permitted assignee) or the Purchaser to perform any of its obligations under any of the Transaction Documents or the Assigned Royalty Contracts, in each case to which it is a party, or to consummate the transactions contemplated hereunder or thereunder, (c) the rights or remedies of the Purchaser under any of the Transaction Documents or the Assigned Royalty Contracts or (d) the timing, amount or duration of the Receivables.
“Person” means any natural person, firm, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, Governmental Authority or any other legal entity, including public bodies, whether acting in an individual, fiduciary or other capacity.
“Purchase and Sale Agreement” has the meaning set forth in the preamble.
“Purchase Price” has the meaning set forth in Section 2.2.
“Purchased Assets” means all rights, title and interests in, to and under:
(a)all of the Assigned Royalty Contracts and the Receivables, other than the Excluded Assets and the Excluded Obligations;
(b)all claims or causes of action that the Seller Parties may have against any Person relating to the Assigned Royalty Contracts or the Underlying Royalty Contracts, other than those relating solely to the Excluded Assets or the Excluded Obligations; and
(c)all files, books and records, invoices, royalty reports, notices, correspondence with Royalty Sellers and Royalty Payors, and other documents relating to, and original copies of, the Assigned Royalty Contracts.
“Purchaser” has the meaning set forth in the preamble.
“Purchaser Account” has the meaning set forth in Section 5.4(c).
“Purchaser Indemnified Party” has the meaning set forth in Section 7.1.
“Receivables” means the royalty payments, milestone payments, fees and other amounts paid, owed, accrued or otherwise required to be paid to the Seller Parties pursuant to the Assigned Royalty Contracts, attributable to the period commencing on the Closing Date, (b) all accounts (as defined under the UCC) evidencing the rights to the payments and amounts described herein, and (c) all proceeds (as defined under the UCC) of any of the foregoing.
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ACTIVE/137471368.2


“Royalty Payor” means any counterparty of a Royalty Seller under an Underlying Royalty Contract.
“Royalty Seller” means any counterparty of the Seller Parties under an Assigned Royalty Contract.
“Seller Account” has the meaning set forth in Section 5.4(d).
“Seller Indemnified Party” has the meaning set forth in Section 7.2.
“Seller Parent” has the meaning set forth in the preamble.
“Seller Parties” has the meaning set forth in the preamble.
“Seller Subsidiary” has the meaning set forth in the preamble.
“Set-off” means any set-off, off-set, rescission, counterclaim, reduction, deduction or defense.
“Subsidiary” means, with respect to any Person, any other Person of which more than 50% of the outstanding Voting Securities of such other Person (irrespective of whether at the time Capital Securities of any other class or classes of such other Person shall or might have voting power upon the occurrence of any contingency) is at the time directly or indirectly owned or controlled by such Person, by such Person and one or more other Subsidiaries of such Person or by one or more other Subsidiaries of such Person.
“Tax” or “Taxes” means any U.S. federal, state, local or non-U.S. income, gross receipts, license, payroll, employment, excise, severance, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, escheat or unclaimed property, sales, use, value added, alternative or add-on minimum, estimated or other tax of any kind whatsoever, including, in each case, (a) any interest, penalty or addition thereto and (b) whether disputed or not.
“Transaction Documents” means this Purchase and Sale Agreement, the Assignment and Assumption Agreement and any other documents, certificates, instruments entered into in connection the transactions contemplated by this Purchase and Sale Agreement, if any.
“Transfer Taxes” has the meaning set forth in Section 5.5(a).
“UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided, that, if, with respect to any financing statement or by reason of any provisions of Applicable Law, the perfection or the effect of perfection or non-perfection of the back-up security interest or any portion thereof granted is governed by the Uniform Commercial Code as in effect in a jurisdiction of the United States other than State of New York, then “UCC” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions of this Purchase and Sale Agreement and any financing statement relating to such perfection or effect of perfection or non-perfection.
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“Underlying Royalty Contract” means any “Product Agreement” or “Counterparty Agreement” as defined in the Assigned Royalty Contracts.
“U.S.” or “United States” means the United States of America, its 50 states, each territory thereof and the District of Columbia.
“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.
Section 1.2Rules of Construction. Unless the context otherwise requires, in this Purchase and Sale Agreement:
(a)A term has the meaning assigned to it and an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP.
(b)Unless otherwise defined, all terms that are defined in the UCC shall have the meanings stated in the UCC.
(c)Words of the masculine, feminine or neuter gender shall mean and include the correlative words of other genders.
(d)The definitions of terms shall apply equally to the singular and plural forms of the terms defined.
(e)The terms “include”, “including” and similar terms shall be construed as if followed by the phrase “without limitation”.
(f)The word “or” is not exclusive.
(g)Unless otherwise specified, references to an agreement or other document include references to such agreement or document as from time to time amended, restated, reformed, supplemented or otherwise modified in accordance with the terms thereof (subject to any restrictions on such amendments, restatements, reformations, supplements or modifications set forth herein) and include any annexes, exhibits and schedules attached thereto.
(h)References to any Applicable Law shall include such Applicable Law as from time to time in effect, including any amendment, modification, codification, replacement or reenactment thereof or any substitution therefor.
(i)references to an Assigned Royalty Contract mean such contract as from time to time amended, amended and restated, supplemented or otherwise modified, in each case to the extent not prohibited by such contract or this Purchase and Sale Agreement
(j)References to any Person shall be construed to include such Person’s successors and permitted assigns (subject to any restrictions on assignment, transfer or delegation set forth herein or in any of the other Transaction Documents), and any reference to a Person in a particular capacity excludes such Person in other capacities.
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(k)The word “will” shall be construed to have the same meaning and effect as the word “shall”.
(l)The words “hereof”, “herein”, “hereunder” and similar terms when used in this Purchase and Sale Agreement or in any of the other Transaction Documents shall refer to this Purchase and Sale Agreement or such Transaction Document as a whole and not to any particular provision hereof, and Article, Section and Exhibit references herein and therein are references to Articles and Sections of, and Exhibits to, this Purchase and Sale Agreement and the relevant Transaction Document unless otherwise specified.
(m)In the computation of a period of time from a specified date to a later specified date, the word “from” means “from and including” and each of the words “to” and “until” means “to but excluding”.
(n)Where any payment is to be made, any funds are to be applied or any calculation is to be made under this Purchase and Sale Agreement on a day that is not a Business Day, unless this Purchase and Sale Agreement otherwise provides, such payment shall be made, such funds shall be applied and such calculation shall be made on the succeeding Business Day, and payments shall be adjusted accordingly.
(o)The parties agree that this Purchase and Sale Agreement shall be deemed to have been jointly and equally drafted by them, and that the provisions of this Purchase and Sale Agreement therefore should not be construed against a party or parties on the grounds that such party or parties drafted or was more responsible for the drafting of any such provision(s).
Article II
PURCHASE AND SALE OF THE PURCHASED ASSETS
Section 2.1Purchase and Sale.
(a)Subject to the terms and conditions of this Purchase and Sale Agreement, on the Closing Date, the Seller Parties shall sell, contribute, assign, transfer, convey and grant to the Purchaser, and the Purchaser shall purchase, acquire and accept from the Seller Parties, all of the Seller Parties’ rights, title and interest in and to the Purchased Assets, free and clear of any and all Liens, other than those Liens created in favor of the Purchaser by the Transaction Documents.
(b)The Seller Parties and the Purchaser intend and agree that the sale, contribution, assignment, transfer, conveyance and granting of the Purchased Assets under this Purchase and Sale Agreement shall be, and are, a true, complete, absolute and irrevocable assignment and sale by the Seller Parties to the Purchaser of the Purchased Assets and that such assignment and sale shall provide the Purchaser with the full benefits of ownership of the Purchased Assets.
(c)The Seller Parties hereby authorize the Purchaser or its designee to execute, record and file, and consents to the Purchaser or its designee executing, recording and filing, at the Purchaser’s sole cost and expense, financing statements in the appropriate filing offices under the UCC (and continuation statements with respect to such financing statements when applicable), and amendments thereto or assignments thereof, in such manner and in such jurisdictions as are necessary or appropriate to evidence or perfect the sale, contribution, assignment, transfer, conveyance and grant by the Seller Parties to the Purchaser, and the purchase, acquisition and acceptance by the Purchaser from the Seller Parties, of the Purchased Assets and to perfect the security interest in the Purchased Assets granted by the Seller Parties to the Purchaser.
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(d)The Seller Parties’ authorizations in Section 2.1(c) include authorization for the Purchaser or its designee to file amendments to financing statements filed against a Royalty Seller and covering an Assigned Royalty Contract or any payments relating thereto, assigning such financing statements to the Purchaser or its designee such that the Purchaser or its designee becomes the secured party of record on such financing statements.
Section 2.2Purchase Price. In full consideration for the sale, contribution, assignment, transfer, conveyance and granting of the Purchased Assets, and subject to the terms and conditions set forth herein, on the Closing Date, the Purchaser shall pay (or cause to be paid) to the Seller Parties by wire transfer of immediately available funds, the amount of $33,990,000 to the Seller Account (the “Purchase Price”).
Section 2.3Assumed Liabilities. Effective as of the Closing Date, (i) the Purchaser assumes, and agrees to perform and discharge all Assumed Liabilities and (ii) the Seller Parties are hereby released from all of their respective obligations and liabilities under each of the Assigned Royalty Contracts other than the Excluded Obligations.
Section 2.4Excluded Assets. The Purchaser does not, by purchase, acquisition or acceptance of the rights, title or interest granted hereunder or otherwise pursuant to any of the Transaction Documents, purchase, acquire or accept any assets of the Seller Parties other than the Purchased Assets.
Section 2.5Nonassignable Assets. Prior to the Closing, the Seller Parties shall use commercially reasonable efforts to obtain all consents and approvals and to deliver all notices necessary to transfer or assign the Purchased Assets to the Purchaser at the Closing. To the extent that the Seller Parties’ rights under any Purchased Asset may not be assigned to Purchaser without the consent of another Person, which consent has not been obtained, this Purchase and Sale Agreement shall not constitute an agreement to assign the same if any attempted assignment would be ineffective or would impair Purchaser’s rights under the Purchased Asset in question so that Purchaser would not in effect acquire the benefit of all such rights, and the Seller Parties, at their expense, shall use commercially reasonable efforts to obtain such consents after the Closing, and until such consents are obtained, shall act after the Closing as the Purchaser’s agent in order for the Seller Parties to obtain for the benefits of the Purchased Assets and shall cooperate with Purchaser in any other reasonable arrangement designed to provide such benefits to Purchaser.
Article III
REPRESENTATIONS AND WARRANTIES OF THE SELLER PARTIES
The Seller Parties, jointly and severally, hereby represent and warrant to the Purchaser as of the date hereof and as of the Closing Date as follows:
Section 3.1Organization. The Seller Parent is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware and has all powers and authority, and all licenses, permits, franchises, authorizations, consents and approvals of all Governmental Authorities, required to own its property and conduct its business as now conducted and to exercise its rights and to perform its obligations under the Assigned Royalty Contracts to which it is party. The Seller Subsidiary is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and has all powers and authority, and all licenses, permits, franchises, authorizations, consents and approvals of all Governmental Authorities, required to own its property and conduct its business as now conducted and to exercise its rights and to perform its obligations under the Assigned Royalty Contracts to which it is party.
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Section 3.2No Conflicts.
(a)None of the execution and delivery by the Seller Parties of any of the Transaction Documents to which they are a party, the performance by the Seller Parties of the obligations contemplated hereby or thereby or the consummation of the transactions contemplated hereby or thereby will: (i) contravene, conflict with, result in a breach, violation, cancellation or termination of, constitute a default (with or without notice or lapse of time, or both) under, require prepayment under, give any Person the right to exercise any remedy or obtain any additional rights under, or accelerate the maturity or performance of or payment under, in any respect, (A) any Applicable Law or any judgment, order, writ, decree, permit or license of any Governmental Authority, to which the Seller Parties or any of their Subsidiaries or any of their respective assets or properties may be subject or bound, (B) any term or provision of the Assigned Royalty Contracts or (C) any term or provision of any of the organizational documents of the Seller Parties; (ii) give rise to any additional right of termination, cancellation or acceleration of any right or obligation of the Seller Parties; or (iii) except as provided in any of the Transaction Documents to which it is party, result in or require the creation or imposition of any Lien on the Assigned Royalty Contracts or the Purchased Assets.
(b)Except for any Lien created or existing under an Assigned Royalty Contract, the Seller Parties have not granted, nor does there exist, any Lien on the Transaction Documents, the Assigned Royalty Contracts or the Purchased Assets.
Section 3.3Authorization. The Seller Parties have all powers and authority to execute and deliver, and perform its obligations under, each of the Transaction Documents to which it is party and to consummate the transactions contemplated hereby and thereby. The execution and delivery of each of the Transaction Documents to which the Seller Parties are a party and the performance by the Seller Parties of their obligations hereunder and thereunder have been duly authorized by the Seller Parties. Each of the Transaction Documents to which the Seller Parties are a party has been duly executed and delivered by the Seller Parties and constitutes the legal, valid and binding obligation of the Seller Parties, enforceable against the Seller Parties in accordance with its respective terms, except as may be limited by general principles of equity (regardless of whether considered in a proceeding at law or in equity) and by applicable bankruptcy, insolvency, moratorium and other similar Laws of general application relating to or affecting creditors’ rights generally.
Section 3.4Ownership. The Seller Parties are the exclusive owner of the entire right, title (legal and equitable) and interest in, to and under the Purchased Assets and has good and valid title thereto, free and clear of all Liens. The Purchased Assets sold, contributed, assigned, transferred, conveyed and granted to the Purchaser on the Closing Date have not been pledged, sold, contributed, assigned, transferred, conveyed or granted by the Seller Parties to any other Person. The Seller Parties have full right to sell, contribute, assign, transfer, convey and grant the Purchased Assets to the Purchaser. Upon the sale, contribution, assignment, transfer, conveyance and granting by the Seller Parties of the Purchased Assets to the Purchaser, the Purchaser shall acquire good and marketable title to the Purchased Assets free and clear of all Liens, other than Liens in favor of the Purchaser, and shall be the exclusive owner of the Purchased Assets. The Purchaser shall have the same rights as the Seller Parties would have with respect to the Purchased Assets (if the Seller Parties were still the owner of such Purchased Assets) against any other Person.
Section 3.5Governmental and Third Party Authorizations. Except as set forth on Schedule 3.5, the execution and delivery by the Seller Parties of the Transaction Documents to which they are a party, the performance by the Seller Parties of their respective obligations hereunder and thereunder and the consummation of any of the transactions contemplated hereunder and thereunder (including the sale, contribution, assignment, transfer, conveyance and granting of the Purchased Assets to the Purchaser) do not require any consent, approval, license, order, authorization or declaration from, notice to, action or registration by or filing with any Governmental Authority or any other Person.
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Section 3.6No Litigation. There is no (a) action, suit, arbitration proceeding, claim, demand, citation, summons, subpoena, investigation or other proceeding (whether civil, criminal, administrative, regulatory, investigative or informal) pending or, to the knowledge of the Seller Parties, threatened in respect of the Purchased Assets (including the Assigned Royalty Contracts), at law or in equity, or (b) inquiry or investigation (whether civil, criminal, administrative, regulatory, investigative or informal) by or before a Governmental Authority pending or, to the knowledge of the Seller Parties, threatened against the Seller Parties in respect of the Purchased Assets (including the Assigned Royalty Contracts), that, in each case, (i) could be a Material Adverse Change or (ii) challenges or seeks to prevent or delay the consummation of any of the transactions contemplated by any of the Transaction Documents.
Section 3.7Compliance with Laws. Neither Seller Party nor any of their Subsidiaries (a) has violated or is in violation of, or, to the knowledge of the Seller Parties, is under investigation with respect to or has been threatened to be charged with or been given notice of any violation of, any Applicable Law or any judgment, order, writ, decree, injunction, stipulation, consent order, permit or license granted, issued or entered by any Governmental Authority or (b) is subject to any judgment, order, writ, decree, injunction, stipulation, consent order, permit or license granted, issued or entered by any Governmental Authority, in each case, that would be a Material Adverse Change.
Section 3.8Assigned Royalty Contracts; Underlying Royalty Contracts.
(a)Other than the Transaction Documents and the Assigned Royalty Contracts, there is no contract, agreement or other arrangement (whether written or oral) to which the Seller Parties or any of their Subsidiaries is a party or by which any of their respective assets or properties is bound or committed (i) that creates a Lien on, affects or otherwise relates to the Purchased Assets or the Assigned Royalty Contracts or (ii) for which breach, nonperformance, cancellation or failure to renew would be a Material Adverse Change.
(b)The Seller Parties have provided to the Purchaser at least one (1) Business Day prior to the date hereof true, correct and complete copies of the Assigned Royalty Contracts and Underlying Royalty Contracts.
(c)Each Assigned Royalty Contract is in full force and effect and is the legal, valid and binding obligation of the Seller Parties and, to the knowledge of the Seller Parties, the Royalty Sellers party thereto, enforceable against the Seller Parties and, to the knowledge of the Seller Parties, the Royalty Sellers party thereto in accordance with its respective terms. The execution and delivery of, and performance of obligations under, the Assigned Royalty Contracts were and are within the powers of the Seller Parties and, to the knowledge of the Seller Parties, the Royalty Sellers party thereto. Each Assigned Royalty Contract was duly authorized by all necessary action on the part of, and validly executed and delivered by, the Seller Parties and, to the knowledge of the Seller Parties, the Royalty Sellers party thereto. The Seller Parties are not in breach or violation of or in default under any Assigned Royalty Contract. There is no event or circumstance that, upon notice or the passage of time, or both, could constitute or give rise to any breach or default in the performance of an Assigned Royalty Contract by the Seller Parties or, to the knowledge of the Seller Parties, any Royalty Seller party thereto.
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(d)To the knowledge of the Seller Parties, no event has occurred that would (i) give the Seller Parties or any Royalty Seller the right to terminate an Assigned Royalty Contract, (ii) give any Royalty Seller the right to terminate the Underlying Royalty Contracts to which it is a party or (iii) give any Royalty Payor the right to terminate the Underlying Royalty Contracts to which it is a party or to cease paying the Receivables thereunder. The Seller Parties have not received any notice of an intention by any Royalty Seller or any other Person to terminate or breach an Assigned Royalty Contract, in whole or in part, or challenging the validity or enforceability of an Assigned Royalty Contract or the obligation to pay the Receivables under such Assigned Royalty Contract, or that the Seller Parties or the other counterparties thereto are in default of their obligations under the such Assigned Royalty Contract. The Seller Parties have not received any notice of an intention by any Royalty Payor or any other Person to terminate or breach an Underlying Royalty Contract, in whole or in part, or challenging the validity or enforceability of an Underlying Royalty Contract or the obligation to pay the Receivables under such Underlying Royalty Contract, or that the Seller Parties or the Royalty Seller or any other counterparty thereto is in default of its obligations under the such Underlying Royalty Contract. The Seller Parties have not given any Royalty Seller any notice of termination of an Assigned Royalty Contract, in whole or in part.
(e)The Seller Parties have not consented to an assignment by any Royalty Seller of any of such Royalty Seller’s rights or obligations under an Assigned Royalty Contract, and the Seller Parties do not have knowledge of any such assignment by any Royalty Seller. Except as contemplated by Section 2.1, the Seller Parties have not assigned, in whole or in part, and have not granted, incurred or suffered to exist any Liens (other than Liens created or existing under the Assigned Royalty Contracts) on the Assigned Royalty Contracts.
(f)The Seller Parties have not (i) received any written notice of any dispute from any Royalty Seller or Royalty Payor or (ii) given any notice of any dispute to any Royalty Seller or Royalty Payor.
(g)To the knowledge of the Seller Parties, no event has occurred that would reasonably be expected to have a Material Adverse Change.
Section 3.9Set-off and Other Sources of Royalty Reduction.
(a)Except as provided in the Assigned Royalty Contracts and the Underlying Royalty Contracts, the Royalty Sellers and the Royalty Payors have no right of Set-off under any contract or other agreement against the Receivables or any other amounts payable to the Seller Parties under the Assigned Royalty Contracts and the Underlying Royalty Contracts. To the knowledge of the Seller Parties, no Royalty Seller or Royalty Payor has exercised any Set-off against the Receivables or any other amounts payable to the Seller Parties under any Assigned Royalty Contract or Underlying Royalty Contract.
(b)The Seller Parties have not granted any material waiver under any Assigned Royalty Contracts or any Underlying Royalty Contract. The Seller Parties have not released (i) any Royalty Seller, in whole or in part, from any of its material obligations under the Assigned Royalty Contracts or (ii) any Royalty Payor, in whole or in part, from any of its material obligations under the Underlying Royalty Contracts. The Seller Parties have not received from any Royalty Seller or any Royalty Payor any written proposal, and has not made any proposal to any Royalty Seller or any Royalty Payor, to amend or waive any provision of the Assigned Royalty Contracts or the Underlying Royalty Contracts.
Section 3.10Brokers’ Fees. There is no investment banker, broker, finder, financial advisor or other Person who has been retained by or is authorized to act on behalf of the Seller Parties who is entitled to any fee or commission from the Purchaser in connection with the transactions contemplated by this Purchase and Sale Agreement.
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Section 3.11Tax Matters. Except as set forth on Schedule 3.11, no deduction or withholding for or on account of any Tax has been made from any payment to the Seller Parties or any of their Affiliates with respect to the Purchased Assets. No applicable withholding agent with respect to the Purchase Assets and no taxing authority has ever notified the Seller Parties that any such withholding was required or would have been required absent the Seller Parties’ qualification for benefits under an applicable income Tax treaty.
Section 3.12UCC Matters. The exact legal name, jurisdiction of formation and principal place of business for each Seller Party is set forth on Schedule 3.12.

Article IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Seller Parties as of the date hereof and as of the Closing Date as follows:
Section 4.1Organization. The Purchaser is a limited partnership duly organized, validly existing and in good standing under the laws of the State of Delaware and has all powers and authority, and all licenses, permits, franchises, authorizations, consents and approvals of all Governmental Authorities, required to own its property and conduct its business as now conducted.
Section 4.2No Conflicts. None of the execution and delivery by the Purchaser of any of the Transaction Documents to which the Purchaser is party, the performance by the Purchaser of the obligations contemplated hereby or thereby or the consummation of the transactions contemplated hereby or thereby will contravene, conflict with, result in a breach, violation, cancellation or termination of, constitute a default (with or without notice or lapse of time, or both) under, require prepayment under, give any Person the right to exercise any remedy or obtain any additional rights under, or accelerate the maturity or performance of or payment under, in any respect, (i) any Applicable Law or any judgment, order, writ, decree, permit or license of any Governmental Authority to which the Purchaser or any of its assets or properties may be subject or bound, (ii) any term or provision of any contract, agreement, indenture, lease, license, deed, commitment, obligation or instrument to which the Purchaser is a party or by which the Purchaser or any of its assets or properties is bound or committed or (iii) any term or provision of any of the organizational documents of the Purchaser.
Section 4.3Authorization. The Purchaser has all powers and authority to execute and deliver, and perform its obligations under, the Transaction Documents to which it is party and to consummate the transactions contemplated hereby and thereby. The execution and delivery of each of the Transaction Documents to which the Purchaser is party and the performance by the Purchaser of its obligations hereunder and thereunder have been duly authorized by the Purchaser. Each of the Transaction Documents to which the Purchaser is party has been duly executed and delivered by the Purchaser. Each of the Transaction Documents to which the Purchaser is party constitutes the legal, valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its respective terms.
Section 4.4Governmental and Third Party Authorizations. The execution and delivery by the Purchaser of the Transaction Documents to which the Purchaser is party, the performance by the Purchaser of its obligations hereunder and thereunder and the consummation of any of the transactions contemplated hereunder and thereunder do not require any consent, approval, license, order, authorization or declaration from, notice to, action or registration by or filing with any Governmental Authority or any other Person, except as described in Section 3.5.
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Section 4.5No Litigation. There is no (a) action, suit, arbitration proceeding, claim, demand, citation, summons, subpoena, investigation or other proceeding (whether civil, criminal, administrative, regulatory, investigative or informal) pending or, to the knowledge of the Purchaser, threatened by or against the Purchaser, at law or in equity, or (b) inquiry or investigation (whether civil, criminal, administrative, regulatory, investigative or informal) by or before a Governmental Authority pending or, to the knowledge of the Purchaser, threatened against the Purchaser, that, in each case, challenges or seeks to prevent or delay the consummation of any of the transactions contemplated by any of the Transaction Documents to which the Purchaser is party.
Section 4.6Access to Information. The Purchaser acknowledges that it has (a) reviewed the Assigned Royalty Contracts and such other documents and information relating to such Assigned Royalty Contracts and (b) had the opportunity to ask such questions of, and to receive answers from, representatives of the Seller Parties concerning the Assigned Royalty Contracts, as it deemed necessary to make an informed decision to purchase, acquire and accept the Purchased Assets and assume the Assumed Liabilities in accordance with the terms of this Purchase and Sale Agreement. The Purchaser has such knowledge, sophistication and experience in financial and business matters that it is capable of evaluating the risks and merits of purchasing, acquiring and accepting the Purchased Assets and assuming the Assumed Liabilities in accordance with the terms of this Purchase and Sale Agreement.
Section 4.7Brokers’ Fees. There is no investment banker, broker, finder, financial advisor or other Person who has been retained by or is authorized to act on behalf of the Purchaser who is entitled to any fee or commission from the Seller Parties in connection with the transactions contemplated by this Purchase and Sale Agreement.
Section 4.8Financing. The Purchaser has sufficient cash on hand or binding and enforceable commitments to provide it with funds sufficient to satisfy its obligations to pay the Purchase Price. The Purchaser acknowledges that its obligations under the Transaction Documents are not contingent on obtaining financing.

Article V
COVENANTS
The parties hereto covenant and agree as follows:
Section 5.1Books and Records; Notices; Information Access.
(a)Promptly after receipt by the Seller Parties of notice of any action, suit, claim, demand, dispute, investigation, arbitration or other proceeding (commenced or threatened) relating to the transactions contemplated by any Transaction Document, the Purchased Assets or any Assigned Royalty Contract or any default or termination by any Person under any Assigned Royalty Contract, the Seller Parties shall inform the Purchaser in writing of the receipt of such notice and the substance thereof, and shall provide the Purchaser with a copy of such notice.
(b)Promptly following receipt by the Seller Parties of any written notice, certificate, offer, proposal, correspondence, report or other communication relating to an Assigned Royalty Contract, the Receivables, an Underlying Royalty Contract, or the Purchased Assets, the Seller Parties shall (i) inform the Purchaser in writing of such receipt and (ii) furnish the Purchaser with a copy of such notice, certificate, offer, proposal, correspondence, report or other communication.
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(c)The Seller Parties shall provide the Purchaser with written notice as promptly as practicable (and in any event within five Business Days) after becoming aware of any change, effect, event, occurrence, state of facts, development or condition that would be a Material Adverse Change.
(d)Subject to applicable confidentiality restrictions and Applicable Laws relating to securities matters and prior to the Closing, the Seller Parties shall make available such other information as the Purchaser may, from time to time, reasonably request with respect to (i) the Purchased Assets (including the Assigned Royalty Contracts and the Receivables) or (ii) the condition or operations, financial or otherwise, of the Seller that is reasonably likely to impact or affect the performance of the Seller’s obligations hereunder or the Seller’s compliance with the terms, provisions and conditions of this Purchase and Sale Agreement.
Section 5.2Confidentiality; Public Announcement.
(a)From and after the Closing, except as otherwise required by Applicable Law, by the rules and regulations of any securities exchange or trading system or by the FDA or any other Governmental Authority with similar regulatory authority and except as otherwise set forth in this Section 5.2, the Seller Parties shall not disclose any Confidential Information to any Person. Notwithstanding the foregoing, the Seller Parties may disclose such information to its Affiliates and its and its Affiliates respective actual and potential partners, directors, employees, managers, officers, agents, investors (including any holder of debt securities of the Seller Parties or its Affiliates and such holder’s advisors, agents and representatives), co-investors, insurers and insurance brokers, underwriters, financing parties, equity holders, brokers, advisors, lawyers, bankers, trustees and representatives, in each case (i) as it relates to periods prior to the Closing or the Excluded Assets or (ii) in order to assist or advise the Seller Parties with respect to (i) the transactions contemplated by this Purchase and Sale Agreement and (ii) the ownership and operation of the Seller Parties’ assets and businesses other than the Purchased Assets.
(b)The parties agree that the initial joint or separate press release(s) to be issued by the Seller Parties and the Purchaser with respect to the execution and delivery of this Purchase and Sale Agreement shall be in the form(s) mutually agreed upon by the Seller Parties and the Purchaser. Neither party shall, and each party hereto shall instruct its Affiliates and its and its Affiliates’ Representatives not to, issue a press release or other public announcement or otherwise make any public disclosure with respect to this Purchase and Sale Agreement or the subject matter hereof without the prior written consent of the other party (which consent shall not be unreasonably withheld or delayed), except as may be required by Applicable Law or the rules of any relevant securities exchange (in which case the party required by Applicable Law to issue or make the press release, public announcement or other public disclosure shall allow the other party reasonable time to comment on such press release, public announcement or other public disclosure in advance of the issuance or making thereof, and the disclosing party shall (x) consider in good faith any reasonable comments or changes proposed by the other party and (y) with respect to the filing of this Purchase Agreement with the Securities and Exchange Commission, redact from public disclosure such terms and conditions as reasonably requested by the other party). Notwithstanding the foregoing, any party may, without the consent of the other party, make public disclosures of any information with respect to this Purchase and Sale Agreement or the subject matter hereof which is the same as the information that has already been publicly disclosed by such party, or the other party, in compliance with the foregoing provisions of this Section 5.2(b).
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Section 5.3Interim Operations; Further Assurances.
(a)Prior to the Closing Date, the Seller Parties shall carry on and operate their business in the ordinary course consistent with past practice and, without limiting the foregoing, (i) use best efforts to preserve intact the Purchased Assets and to preserve the goodwill and relationships of the Seller Parties with the Royalty Sellers and Royalty Payors, and (ii) not amend, modify, terminate, or accelerate or delay payment or delivery under, or grant any waiver or concession under or otherwise modify, any Assigned Royalty Contract or Underlying Royalty Contract.
(b)Subject to the terms and conditions of this Purchase and Sale Agreement, each party hereto will use its commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary under Applicable Laws to consummate the transactions contemplated by the Transaction Documents to which the Seller Parties or the Purchaser, as applicable, is party, including to (i) perfect the sale, contribution, assignment, transfer, conveyance and granting of the Purchased Assets to the Purchaser pursuant to this Purchase and Sale Agreement, (ii) execute and deliver such other documents, certificates, instruments, agreements and other writings and to take such other actions as may be necessary or desirable, or reasonably requested by the other party hereto, in order to consummate or implement expeditiously the transactions contemplated by any Transaction Document to which the Seller Parties or the Purchaser, as applicable, is party, (iii) perfect, protect, more fully evidence, vest and maintain in the Purchaser good, valid and marketable rights and interests in and to the Purchased Assets free and clear of all Liens (other than those permitted by the Transaction Documents) and (iv) enable the Purchaser to exercise or enforce any of the Purchaser’s rights under any Transaction Document to which the Purchaser is party and under any Assigned Royalty Contract following the Closing Date.
(c)The Seller Parties and the Purchaser shall cooperate and provide assistance as reasonably requested by the other party hereto, at the expense of such other party hereto (except as otherwise set forth herein), in connection with any litigation, arbitration, investigation or other proceeding (whether threatened, existing, initiated or contemplated prior to, on or after the date hereof) to which the other party hereto, any of its Affiliates or controlling persons or any of their respective officers, directors, equityholders, controlling persons, managers, agents or employees is or may become a party or is or may become otherwise directly or indirectly affected or as to which any such Persons have a direct or indirect interest, in each case relating to any Transaction Document, the Purchased Assets or the transactions described herein or therein but in all cases excluding any litigation brought by the Seller Parties (for themselves or on behalf of any Seller Indemnified Party) against the Purchaser or brought by the Purchaser (for itself or on behalf of any Purchaser Indemnified Party) against the Seller Parties.
(d)Each of the Seller Parties and the Purchaser shall comply with all Applicable Laws with respect to the Transaction Documents to which it is party, the Assigned Royalty Contracts to which it is party, the Purchased Assets and all ancillary agreements related thereto, the violation of which would be a Material Adverse Change with respect to the Seller Parties or the Purchaser, as applicable.
(e)The Seller Parties shall not enter into any contract, agreement or other legally binding arrangement (whether written or oral), or grant any right to any other Person, in any case that would reasonably be expected to conflict with the Transaction Documents or serve or operate to limit or circumscribe any of the Purchaser’s rights under the Transaction Documents (or the Purchaser’s ability to exercise any such rights).
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Section 5.4Payments on Account of the Purchased Assets; Misdirected Payments.
(a)Upon receipt by the Seller Parties (or any of their Subsidiaries) of any payment in respect of the Purchased Assets made by Royalty Seller or Royalty Payor on account of the Purchased Assets, then the Seller Parties shall promptly (and in any event no later than five Business Days) following the date on which such misdirected payment is received by the Seller Parties, remit such payment to the Purchaser Account pursuant to Section 5.4(c) in the exact form received with all necessary endorsements. While any such payment is held by the Seller Parties, the Seller Parties shall have no right, title or interest whatsoever in the portion of such payment to be remitted to the Purchaser, and the Seller Parties shall not create or suffer to exist any Lien thereon.
(b)Upon receipt by the Purchaser (or any of its Subsidiaries) of any payment in respect of the Excluded Assets made by a counterparty to an Assigned Royalty Contract on account of the Excluded Assets, then the Purchaser shall promptly (and in any event no later than five Business Days) following the date on which such misdirected payment is received by the Purchaser, remit such payment to the Seller Account pursuant to Section 5.4(d) in the exact form received with all necessary endorsements. While any such payment is held by the Purchaser, the Purchaser shall have no right, title or interest whatsoever in the portion of such payment to be remitted to the Seller, and the Purchaser shall not create or suffer to exist any Lien thereon.
(c)The Seller Parties shall make all payments required to be made by them to the Purchaser pursuant to this Purchase and Sale Agreement by wire transfer of immediately available funds, without Set-off, to such account as the Purchaser shall notify the Seller Parties in writing from time to time (the “Purchaser Account”).
(d)The Purchaser shall make all payments required to be made by it to the Seller Parties pursuant to this Purchase and Sale Agreement by wire transfer of immediately available funds, without Set-off to such other account as the Seller Parties shall notify the Purchaser in writing from time to time (the “Seller Account”).
Section 5.5Tax Matters.
(a)All payments by the Purchaser to the Seller Parties under this Purchase and Sale Agreement shall be made without any deduction or withholding for or on account of any Tax, except to the extent required under applicable law. Any amount required to be deducted or withheld under applicable law shall be treated for purposes of this Purchase and Sale Agreement as having been paid by the Purchaser to the Seller Parties. The Seller Parties have provided the Purchaser with a duly executed IRS Form W-9 confirming their status as a U.S. person and the absence of any backup withholding obligation.
(b)All payments to the Purchaser under this Purchase and Sale Agreement shall be made without any deduction or withholding for or on account of any tax. The Purchase Price is exclusive of any sales, use, value added, goods and services, transfers, conveyance, recordation, documentary, stamp, stamp duty and similar Taxes and fees, including any interest and penalties thereon, imposed in respect of the assignment of the Purchased Assets pursuant to this Purchase and Sale Agreement (collectively, “Transfer Taxes”). The Purchaser, on the one hand, and the Seller Parties, on the other hand, shall be responsible for, and timely pay when due, 50% of all Transfer Taxes and shall timely file any tax returns required to be filed in respect of such Transfer Taxes.
(c)For U.S. federal and applicable state and local and other income Tax purposes, the Seller Parties and the Purchaser intend and agree that the sale, contribution, assignment, transfer, conveyance and granting of the Purchased Assets under this Purchase and
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Sale Agreement shall be, and are, a true, complete, absolute and irrevocable assignment and sale by the Seller Parties to the Purchaser of the Purchased Assets and that such assignment and sale shall provide the Purchaser with the full benefits of ownership of the Purchased Assets. Neither the Seller Parties nor the Purchaser intend the transactions contemplated hereby to be, or for any U.S. federal or applicable state or local or other income Tax purposes characterized as, a loan from the Purchaser to the Seller Parties or a pledge or assignment or a security agreement. The parties hereto agree not to take any position that is inconsistent with the provisions of this Section 5.5 on any tax return or in any audit or other administrative or judicial proceeding unless the other party hereto has consented to such actions. If there is an inquiry by any Governmental Authority of the Seller Parties or the Purchaser related to this Section 5.5, the parties hereto shall cooperate with each other in responding to such inquiry in a reasonable manner consistent with this Section 5.5.
Article VI
THE CLOSING
Section 6.1Closing. The closing of the transactions contemplated hereby (the “Closing”) shall take place remotely via the exchange of documents and signatures on the date that is the later of (a) the first Business Day on which the conditions set forth in Sections 6.2 and 6.3 (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the fulfillment or waiver of those conditions) have been satisfied or waived, and (b) April 3, 2025 (the “Closing Date”), or such other place as the parties hereto mutually agree.
Section 6.2Conditions to the Purchaser’s Obligations. The obligations of the Purchaser to consummate the transactions contemplated hereunder and under the other Transaction Documents on the Closing Date are subject to the satisfaction or waiver, at or prior to the Closing Date, of each of the following conditions:
(a)The Seller Parties shall have performed and complied in all material respects with all covenants, agreements and conditions required by this Purchase and Sale Agreement to be performed or complied with by the Seller Parties prior to the Closing Date.
(b)(i) The representations set forth in Sections 3.1, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8(a), 3.8(c), 3.8(d) and 3.10 of this Purchase and Sale Agreement (the “Fundamental Representations”) shall be true and correct in all respects as of the date when made and at and as of the Closing Date as though such representations and warranties were made at and as of such date (except for those representations and warranties that speak only as of a specific date or time, which need only be true and correct on and as of such specified date and time) and (ii) all other representations and warranties of the Seller Parties contained in Article III of this Purchase and Sale Agreement shall be true and correct as of the date when made and at and as of the Closing Date as though such representations and warranties were made at and as of such date (except for those representations and warranties that speak only as of a specific date or time, which need only be true and correct on and as of such specified date and time), except where the failure of such representations and warranties to be so true and correct has not, individually or in the aggregate, had and would not reasonably be expected to have a Material Adverse Change.
(c)The Purchaser shall have received a certificate dated the Closing Date signed by the Seller Parties to the effect that the conditions set forth in Section 6.2(a) and Section 6.2(b) have been satisfied.
(d)The Seller Parties shall have delivered or caused to be delivered to the Purchaser the following:
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(i)the Assignment and Assumption Agreement executed by the Seller Parties;
(ii)consents from the Royalty Payors set forth on Schedule 6.2(d)(ii);
(iii)a customary lien release letter executed by First Horizon Bank (“First Horizon”) releasing all of First Horizon’s interests, properties and rights in and to the Purchased Assets, in form and substance reasonably satisfactory to the Purchaser;
(iv)copies of all financing statements filed by the Seller Parties covering the Receivables;
(v)payment instructions, in form and substance reasonably satisfactory to the Purchaser, delivered by the Seller Parties to each of the Royalty Payors; and
(vi)such other certificates, documents and financing statements as the Purchaser may reasonably request, including a financing statement reasonably satisfactory to the Purchaser to create, evidence and perfect the sale, contribution, assignment, transfer, conveyance and grant of the Purchased Assets pursuant to Section 2.1.
Section 6.3Conditions to the Seller Parties’ Obligations. The obligations of the Seller Parties to consummate the transactions contemplated hereunder and under the other Transaction Documents on the Closing Date are subject to the satisfaction or waiver, at or prior to the Closing Date, of each of the following conditions:
(a)The Purchaser shall have performed and complied in all material respects with all covenants, agreements and conditions required by this Purchase and Sale Agreement to be performed or complied with by the Purchaser prior to the Closing Date.
(b)The representations and warranties of the Purchaser contained in Article IV of this Purchase and Sale Agreement shall be true and correct as of the date when made and at and as of the Closing Date as though such representations and warranties were made at and as of such date (except for those representations and warranties that speak only as of a specific date or time, which need only be true and correct on and as of such specified date and time), except where the failure of such representations and warranties to be so true and correct has not, individually or in the aggregate, had and would not reasonably be expected to have a material adverse effect on the ability of Purchaser to consummate the transactions contemplated hereby.
(c)The Seller Parties shall have received a certificate dated the Closing Date signed by a duly authorized officer of the Purchaser to the effect that the conditions set forth in Section 6.3(a) and Section 6.3(b) have been satisfied.
(d)The Purchaser shall have delivered or caused to be delivered to the Seller Parties the following:
(i)the Assignment and Assumption Agreement executed by the Purchaser;
(ii)payment of the Purchase Price in accordance with Section 2.2.
Section 6.4Termination.
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(a)This Purchase and Sale Agreement may be terminated at any time prior to the Closing:
(i)by mutual written consent of the Purchaser and the Seller Parties;
(ii)by the Purchaser if there has been a breach by the Seller Parties of any representation, warranty, covenant or agreement contained in this Purchase and Sale Agreement or if any representation or warranty of the Seller Parties shall have become untrue, in either case such that the conditions set forth in Section 6.2(a) or Section 6.2(b) would not be satisfied and, in either case, such breach is not curable, or, if curable, is not cured within thirty (30) days after written notice of such breach is given to the Seller Parties by the Purchaser; provided, that the right to terminate this Purchase and Sale Agreement pursuant to this Section 6.4(a)(ii) shall not be available to the Purchaser if the Purchaser is then in material breach of this Purchase and Sale Agreement;
(iii)by the Seller Parties if there has been a breach by the Purchaser of any representation, warranty, covenant or agreement contained in this Purchase and Sale Agreement or if any representation or warranty of the Purchaser shall have become untrue, in either case such that the conditions set forth in Section 6.3(a) or Section 6.3(b) would not be satisfied and, in either case, such breach is not curable, or, if curable, is not cured within thirty (30) days after written notice of such breach is given to the Purchaser by the Seller Parties; provided, that the right to terminate this Purchase and Sale Agreement pursuant to this Section 6.4(a)(iii) shall not be available to the Seller Parties if the Seller Parties are then in material breach of this Purchase and Sale Agreement; or
(iv)by the Purchaser or the Seller Parties in the event that the Closing has not occurred within sixty (60) days of the date hereof; provided, that no termination may be made pursuant to this Section 6.4(a)(iv) if the failure to close or the failure of any condition to closing to be satisfied shall be caused by the breach by the terminating party of any representation, warranty, covenant or agreement contained in this Purchase and Sale Agreement.
(b)The party desiring to terminate this Purchase and Sale Agreement pursuant to clause (ii), (iii) or (iv) shall give written notice of such termination to the other parties hereto.
(c) In the event of termination of this Purchase and Sale Agreement as provided in Section 6.4, this Purchase and Sale Agreement shall immediately become null and void and there shall be no liability or obligation on the part of any party hereto or their respective officers, directors, stockholders or affiliates; provided, however, the provisions of Section 5.2 and Article VIII of this Purchase and Sale Agreement shall remain in full force and effect and survive any termination of this Purchase and Sale Agreement and provided, further, that any party terminating this Purchase and Sale Agreement shall have the right to recover Losses incurred or suffered by such party as a result of any breach by the other party of any representation, warranty, covenant or agreement contained in this Purchase and Sale Agreement or fraud by such other party as provided in Article VII.
Article VII
INDEMNIFICATION
Section 7.1Indemnification by the Seller Parties. The Seller Parties, jointly and severally, agree to indemnify, defend and hold each of the Purchaser and its Affiliates and any and all of their respective partners, directors, managers, members, officers, employees, agents and controlling persons (each, a “Purchaser Indemnified Party”) harmless from and against, and to pay to each Purchaser Indemnified Party the amount of, any and all Losses awarded against or incurred or suffered by such Purchaser Indemnified Party, whether or not involving a third party claim, demand, action or proceeding, arising out of:
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(a)any breach of (i) any Fundamental Representation or (ii) any other representation or warranty made by the Seller Parties in this Purchase and Sale Agreement or in any certificate delivered hereunder;
(b)any breach of or default under any covenant or agreement of the Seller Parties contained in any of the Transaction Documents;
(c)any Excluded Obligations or any Excluded Assets; and
(d) claims arising on or after the Closing Date and asserted against a Purchaser Indemnified Party relating to the transactions contemplated in any Transaction Document or the Assigned Royalty Contract.
Section 7.2Indemnification by the Purchaser. The Purchaser agrees to indemnify and hold each of the Seller Parties and their Affiliates and any and all of their respective partners, directors, managers, members, officers, employees, agents and controlling Persons (each, a “Seller Indemnified Party”) harmless from and against, and will pay to each Seller Indemnified Party the amount of, any and all Losses (including attorneys’ fees) awarded against or incurred or suffered by such Seller Indemnified Party, whether or not involving a third party claim, demand, action or proceeding, arising out of:
(a)any breach of any representation or warranty made by the Purchaser in this Purchase and Sale Agreement or in any certificate delivered hereunder;
(b)any breach of or default under any covenant or agreement of the Purchaser contained in any of the Transaction Documents;
(c)any fees, expenses, costs, liabilities or other amounts incurred or owed by the Purchaser to any brokers, financial advisors or comparable other Persons retained or employed by it in connection with the transactions contemplated by this Purchase and Sale Agreement; and
(d)any Assumed Liabilities.
Section 7.3Procedures Relating to Indemnification for Third Party Claims.
(a) Notice of Third Party Claim. In order for the Seller Parties or the Purchaser (an “Indemnified Party”) to be entitled to any indemnification under this Article VII in respect of Losses arising out of or involving a claim or demand made by any Person other than the Purchaser (or its Affiliates) or the Seller Parties (or their Affiliates) against a Purchaser Indemnified Party or a Seller Indemnified Party, as applicable (a “Third Party Claim”), the Indemnified Party must, promptly after its receipt of notice of the commencement of such Third Party Claim, notify the party from whom indemnification is sought under this Article VII (the “Indemnifying Party”) in writing (including in such notice a brief description of such Third Party Claim, including damages sought or estimated, to the extent actually known or reasonably capable of estimation by the Indemnified Party); provided, however, that the failure to promptly provide such notice shall not affect the indemnification provided under this Article VII except to the extent that the Indemnifying Party has been actually prejudiced as a result of such failure. Thereafter, the Indemnified Party shall deliver to the Indemnifying Party, promptly after the Indemnified Party’s receipt thereof, copies of all documents (including court papers) received by the Indemnified Party relating to such Third Party Claim.
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(b)Defense of Third Party Claims. The Indemnifying Party shall be entitled to participate in the defense of any Third Party Claim to the extent related to periods prior to the Closing Date and, if it so chooses, to assume the defense thereof, at its own expense, with counsel selected by the Indemnifying Party; provided, that such counsel is not reasonably objected to by the Indemnified Party; and provided, further, that the Indemnifying Party may not assume the defense of any Third Party Claim that (x) seeks injunctive or other equitable relief against the Indemnified Party or (y) the Third Party Claim, if adversely determined, would have an adverse effect on the business or operations of the Indemnified Party. If the Indemnifying Party elects to assume the defense of any Third Party Claim, the Indemnifying Party shall not be liable to the Indemnified Party for legal expenses subsequently incurred by the Indemnified Party in connection with the defense thereof, except that, if the Indemnifying Party and the Indemnified Party have conflicting interests or different defenses available with respect to such Third Party Claim, the Indemnified Party may hire its own separate counsel (provided that such counsel is not reasonably objected to by the Indemnifying Party) with respect to such Third Party Claim and the related action or suit, and the reasonable fees and expenses of such counsel shall be considered Losses for purposes of this Purchase and Sale Agreement. If the Indemnifying Party elects to assume the defense of any Third Party Claim, the Indemnifying Party shall permit the Indemnified Party to participate in, but not control, the defense of such Third Party Claim through counsel chosen by the Indemnified Party, provided that such counsel is not reasonably objected to by the Indemnifying Party and, except in the circumstances described in the immediately preceding sentence, the fees and expenses of such counsel shall be borne by the Indemnified Party. The Indemnifying Party shall be liable for the reasonable fees and expenses of counsel employed by the Indemnified Party in the defense of a Third Party Claim (which shall all be considered Losses for purposes of this Purchase and Sale Agreement) for any period during which the Indemnifying Party has not assumed the defense thereof (other than during the period prior to the time the Indemnified Party shall have notified the Indemnifying Party of such Third Party Claim).
(c)Cooperation. The Parties shall cooperate in the defense or prosecution of any Third Party Claim, with such cooperation to include (i) the retention of and the provision to the Indemnifying Party of records and information that are reasonably relevant to such Third Party Claim and (ii) the making available of employees on a mutually convenient basis for providing additional information and explanation of any material provided hereunder. If the Indemnifying Party shall have assumed the defense of a Third Party Claim, the Indemnified Party shall agree to any settlement, compromise or discharge of such Third Party Claim that the Indemnifying Party may recommend and that by its terms obligates the Indemnifying Party to pay the full amount of the liability (if any) in connection with such Third Party Claim and which does not involve any non-monetary penalties and releases the Indemnified Party completely and unconditionally in connection with such Third Party Claim. Regardless of whether the Indemnifying Party shall have assumed the defense of a Third Party Claim, the Indemnified Party shall not be entitled to be indemnified or held harmless pursuant to this Article VII if the Indemnified Party shall settle such Third Party Claim without the prior written consent of the Indemnifying Party (such consent not to be unreasonably withheld or delayed).
Section 7.4Procedures Relating to Indemnification for Other Claims. In order for an Indemnified Party to be entitled to any indemnification under this Article VII in respect of Losses that do not arise out of or involve a Third Party Claim, the Indemnified Party must notify the Indemnifying Party promptly in writing (including in such notice a brief description of the claim for indemnification and the Loss, including damages sought or estimated, to the extent actually known or reasonably capable of estimation by the Indemnified Party); provided, however, that the failure to promptly provide such notice of a Loss shall not affect the indemnification provided under this Article VII except to the extent that the indemnifying party has been actually prejudiced as a result of such failure.
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Section 7.5Exclusive Remedy. Except pursuant to Section 8.1 or in the case of fraud or intentional breach, following the Closing, the indemnification afforded by this Article VII shall be the sole and exclusive remedy for any and all Losses awarded against or incurred or suffered by a party hereto in connection with the transactions contemplated by the Transaction Documents, including with respect to any breach of any representation, warranty or certification made by a party hereto in any of the Transaction Documents or certificates given by a party hereto in writing pursuant hereto or thereto or any breach of or default under any covenant or agreement by a party hereto pursuant to any Transaction Document. Notwithstanding anything in this Purchase and Sale Agreement to the contrary, in the event of any breach or failure in performance of any covenant or agreement contained in any Transaction Document, the non-breaching party shall be entitled to specific performance, injunctive or other equitable relief pursuant to Section 8.1.
Section 7.6No Implied Representations and Warranties. The Purchaser acknowledges and agrees that, other than the representations and warranties of the Seller specifically contained in Article III, there are no representations or warranties of the Seller or any other Person either expressed or implied with respect to the Purchased Assets, the Receivables, the Assigned Royalty Contracts or the transactions contemplated by the Transaction Documents and that it does not rely on, and shall have no remedies against the Seller in respect of, any representation or warranty not specifically set forth in Article III. Without limiting the foregoing, the Purchaser acknowledges and agrees that (a) the Purchaser, together with its Affiliates and its and its Affiliates’ representatives, have made their own investigation of the Purchased Assets, the Receivables, the Assigned Royalty Contracts and the transactions contemplated by the Transaction Documents and are not relying on, and shall have no remedies in respect of, (i) any implied warranties or (ii) any representation or warranty whatsoever as to the future amount or potential amount of the Purchased Assets and the Receivables or as to the creditworthiness of any counterparties to the Assigned Royalty Contracts and (b) except as expressly set forth in any representation or warranty in Article III, the Purchaser shall have no claim or right regarding losses or damages pursuant to this Article VII (or otherwise) with respect to any information, documents or materials furnished or made available to the Purchaser or any of its Affiliates or its or its Affiliates’ representatives in any data room, presentation, interview or in any other form or manner relating to the transactions contemplated by the Transaction Documents. The Purchaser further acknowledges and agrees that (x) as between the parties, the Purchaser is assuming all market risk associated with such products that are the subject of the Assigned Royalty Contracts and, as such, shall have no recourse against the Seller or any of the Seller’s Affiliates based on the failure of the sales of any product to meet its or any other Person’s projections, and (y) neither the Seller nor any of the Seller’s Affiliates guarantees any obligations owed to the Purchaser under the Assigned Royalty Contracts.
Section 7.7Limitations on Indemnification.
(a)Seller. Notwithstanding anything in this Purchase and Sale Agreement to the contrary, the Seller Parties shall not have any liability under Section 7.1(a)(ii):
(i)unless the aggregate liability for all Losses suffered by the Purchaser Indemnified Parties thereunder exceeds ***% of the Purchase Price, and then only to the extent of such excess; or
(ii)in excess of ***% of the Purchase Price.
Except in the case of fraud or willful and intentional breach and subject to the other limitations set forth in this Article VII, the Seller Parties will not have any liability under Section 7.1 in excess of the Purchase Price.
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(b)Purchaser. Notwithstanding anything in this Purchase and Sale Agreement to the contrary, the Purchaser shall not have any liability under Section 7.2(a):
(i)unless the aggregate liability for all Losses suffered by the Seller Indemnified Parties thereunder exceeds ***% of the Purchase Price, and then only to the extent of such excess; or
(ii)in excess of ***% of the Purchase Price.
Except in the case of fraud or willful and intentional breach and subject to the other limitations set forth in this Article VII, the Purchaser will not have any liability under Section 7.2 in excess of the Purchase Price.
Section 7.8Limitations on Damages. Notwithstanding anything to the contrary in this Purchase and Sale Agreement or any of the other Transaction Documents, except in the case of fraud or intentional breach, in no event shall either the Seller Parties or the Purchaser be liable (including under this Article VII) for any (i) special, indirect, incidental, exemplary, punitive, multiple or consequential damages, or (ii) loss of use, business interruption, loss of any contract or other business opportunity or good will, in each case of clauses (i) and (ii), of the other party, whether or not caused by or resulting from the actions of such party or the breach of its covenants, agreements, representations or warranties under any of the Transaction Documents and whether in contract, tort or breach of statutory duty or otherwise, even if such party has been advised of the possibility of such damages.
Section 7.9Survival. The representations and warranties set forth in Article III and Article IV shall survive for twelve (12) months after the Closing Date (other than the Fundamental Representations, which shall survive for a period of three years after the Closing Date). The covenants and agreements made by the parties hereto shall survive until fully performed, except as otherwise specifically provided in this Purchase and Sale Agreement.

Article VIII
MISCELLANEOUS
Section 8.1Specific Performance. Each of the parties hereto acknowledges that the other party hereto will have no adequate remedy at law if it fails to perform any of its obligations under any of the Transaction Documents. In such event, each of the parties hereto agrees that the other party hereto shall have the right, in addition to any other rights it may have (whether at law or in equity), to specific performance of this Purchase and Sale Agreement as well as injunctive or other equitable relief, as applicable.
Section 8.2Guaranty. Guarantor (i) hereby unconditionally guarantees the due and punctual payment and full and timely performance of the Purchaser’s obligations to pay the Purchase Price pursuant to Section 2.2 and (ii) without limiting the foregoing or being limited thereby, hereby further covenants to procure and cause the Purchaser to take such actions that may be necessary or useful to support and duly complete the performance of the Purchaser’s obligations to pay the Purchase Price pursuant to Section 2.2 (collectively, (i) and (ii) the “Guaranty”). This Guaranty is an irrevocable guaranty of payment and performance (and not just of collection) and shall continue in effect notwithstanding any extension or modification of the terms of this Purchase and Sale Agreement, any assumption of any such guaranteed obligations by any other party or any other act or event that might otherwise operate as a legal or equitable discharge of Guarantor. Guarantor hereby waives all its rights to subrogation arising out of any payment or performance by Guarantor under this Guaranty.
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The obligations of Guarantor hereunder shall be absolute and unconditional, and shall not be affected by or contingent upon (a) the liquidation or dissolution of, or the merger or consolidation of the Purchaser with or into any corporation, or any sale or transfer by the Purchaser or all or any part of its property or assets, (b) the bankruptcy, receivership, insolvency, reorganization or similar proceedings involving or affecting the Purchaser, or (c) any modification, alteration, amendment or addition of or to this Purchase and Sale Agreement. Guarantor hereby waives all suretyship defenses and protest, notice of protest, demand for performance, diligence, notice of any other action at any time taken or omitted by the Seller Parties and, generally, all demands and notices of every kind in connection with this Guaranty, and the Purchaser’s obligations hereby guaranteed, and which Guarantor may otherwise assert against the Seller Parties. This Guaranty shall continue to be effective until the payment by Purchaser of the Purchase Price at Closing, at which time this Guaranty shall terminate. Guarantor acknowledges that each of the waivers set forth in this Guaranty is made with full knowledge of its significance and consequences and under the circumstances the waivers are reasonable and not contrary to public policy. If any of said waivers is determined to be contrary to any applicable law or public policy, such waivers shall be effective only to the extent permitted by law.
Section 8.3Notices. All notices, consents, waivers and other communications hereunder shall be in writing and shall be effective (a) upon receipt when sent through the mails, registered or certified mail, return receipt requested, postage prepaid, with such receipt to be effective the date of delivery indicated on the return receipt, (b) upon receipt when sent by an overnight courier, (c) on the date personally delivered to an authorized officer of the party to which sent or (d) on the date transmitted by facsimile or other electronic transmission, with a copy emailed to the recipient at the applicable address, addressed to the recipient as follows:
if to the Seller Parties, to:
c/o SWK Holdings Corporation
***
***
Attention: ***
Email: ***

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

Goodwin Procter LLP
***
***
Attention: ***
Email: ***

if to the Purchaser or Guarantor, to:
c/o Soleus Capital Management LP Morgan, Lewis & Bockius LLP
***
***
Attention: ***
Email: ***
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with a copy (which shall not constitute notice) to:

***
***
Attention: ***
Email: ***

Each party hereto may, by notice given in accordance herewith to the other party hereto, designate any further or different address to which subsequent notices, consents, waivers and other communications shall be sent.
Section 8.4Successors and Assigns. The provisions of this Purchase and Sale Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. The Seller Parties shall not be entitled to assign any of its obligations and rights under this Purchase and Sale Agreement without the prior written consent of the Purchaser; provided, however, that the Seller Parties may, without the consent of the Purchaser, assign any of its obligations or rights under this Purchase and Sale Agreement to an Affiliate.
Section 8.5Independent Nature of Relationship. The relationship between the Seller Parties and the Purchaser is solely that of seller and purchaser, and neither the Seller Parties nor the Purchaser has any fiduciary or other special relationship with the other party hereto or any of its Affiliates. Nothing contained herein or in any other Transaction Document shall be deemed to constitute the Seller Parties and the Purchaser as a partnership, an association, a joint venture or any other kind of entity or legal form.
Section 8.6Entire Agreement. This Purchase and Sale Agreement, the other Transaction Documents constitute the entire agreement between the parties hereto with respect to the subject matter hereof and supersede all prior agreements, understandings and negotiations, both written and oral, between the parties hereto with respect to the subject matter of this Purchase and Sale Agreement. No representation, inducement, promise, understanding, condition or warranty not set forth herein (or the other Transaction Documents) has been made or relied upon by either party hereto. Neither this Purchase and Sale Agreement nor any provision hereof is intended to confer upon any Person other than the parties hereto and the other Persons referenced in Article VII any rights or remedies hereunder.
Section 8.7Governing Law; Jurisdiction; Venue; Service of Process.
(a)THIS PURCHASE AND SALE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL SUBSTANTIVE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO THE RULES THEREOF RELATING TO CONFLICTS OF LAW, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
(b)Each party irrevocably submits to the exclusive jurisdiction of the Supreme Court of the State of New York for the County of New York, the United States District Court for the Southern District of New York and any appellate court from either of them (such courts, collectively, the “New York Courts”) for the purposes of any action, suit or other
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proceeding arising out of, relating to or in connection with this Purchase and Sale Agreement or any transaction contemplated hereby. Each party agrees to commence any action, suit or other proceeding arising out of, relating to or in connection with this Purchase and Sale Agreement or any transaction contemplated hereby in the New York Courts. Each party further agrees that service of any process, summons, notice or document by courier or personal delivery in accordance with Section 8.3 shall be effective service of process for any action, suit or other proceeding in the New York Courts with respect to any matters to which it has submitted to jurisdiction in this Section 8.7. Each Party irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or other proceeding arising out of, relating to or in connection with this Purchase and Sale Agreement or any transaction contemplated hereby in the New York Courts, and hereby further irrevocably and unconditionally waives, and shall not assert by way of motion, defense, or otherwise, in any such action, suit or other proceeding, any claim that it is not subject personally to the jurisdiction of the New York Courts, that its property is exempt or immune from attachment or execution, that such action, suit or other proceeding is brought in an inconvenient forum, that the venue of such action, suit or other proceeding is improper, or that this Purchase and Sale Agreement or the transactions contemplated hereby may not be enforced in or by any of the New York Courts.
Section 8.8Waivers. EACH PARTY HERETO WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY PROCEEDING OR CLAIM ARISING OUT OF OR RELATING TO THIS PURCHASE AND SALE AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 8.9Severability. If one or more provisions of this Purchase and Sale Agreement are held to be invalid, illegal or unenforceable by a court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision of this Purchase and Sale Agreement, which shall remain in full force and effect, and the parties hereto shall replace such invalid, illegal or unenforceable provision with a new provision permitted by Applicable Law and having an economic effect as close as possible to the invalid, illegal or unenforceable provision. Any provision of this Purchase and Sale Agreement held invalid, illegal or unenforceable only in part or degree by a court of competent jurisdiction shall remain in full force and effect to the extent not held invalid, illegal or unenforceable.
Section 8.10Counterparts. This Purchase and Sale Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Purchase and Sale Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other party hereto. Any counterpart may be executed by facsimile or other electronic transmission, and such facsimile or other electronic transmission shall be deemed an original.
Section 8.11Amendments; No Waivers. Neither this Purchase and Sale Agreement nor any term or provision hereof may be amended, supplemented, restated, waived, changed or modified except with the written consent of the parties hereto. No failure or delay by either party hereto in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. No notice to or demand on either party hereto in any case shall entitle it to any notice or demand in similar or other circumstances. No waiver or approval hereunder shall, except as may otherwise be stated in such waiver or approval, be applicable to subsequent transactions. No waiver or approval hereunder shall require any similar or dissimilar waiver or approval thereafter to be granted hereunder. Except as expressly provided herein, the rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by Applicable Law.
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Section 8.12Table of Contents and Headings. The Table of Contents and headings of the Articles and Sections of this Purchase and Sale Agreement have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms or provisions hereof.
{SIGNATURE PAGE FOLLOWS}
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IN WITNESS WHEREOF, the parties hereto have executed this Purchase and Sale Agreement as of the day and year first written above.
SWK HOLDINGS CORPORATION


By:/s/ Joe D. Staggs    
Name: Joe D. Staggs
Title: President and Chief Executive Officer

SWK FUNDING LLC By:/s/ Joe D. Staggs Name: Joe D. Staggs Title: President and Chief Executive Officer By: Soleus Credit GP I, LLC, its general partner


(Signature Page to Purchase and Sale Agreement)
ACTIVE/137471368.2


IN WITNESS WHEREOF, the parties hereto have executed this Purchase and Sale Agreement as of the day and year first written above.
SCOF SPV I, LP

By: Soleus COF GP I, LLC, its managing member By:/s/ Steven Musumeci Name: Steven Musumeci By: Soleus COF GP I, LLC, its managing member By: /s/ Steven Musumeci Name: Steven Musumeci Title: Authorized Person
Title: Authorized Person

(Signature Page to Purchase and Sale Agreement)
ACTIVE/137471368.2



(Signature Page to Purchase and Sale Agreement)
ACTIVE/137471368.2


IN WITNESS WHEREOF, the parties hereto have executed this Purchase and Sale Agreement as of the day and year first written above.
SOLEUS CREDIT GP I, LLC



(Signature Page to Purchase and Sale Agreement)
ACTIVE/137471368.2


Exhibit A
Assigned Royalty Contracts
***
ACTIVE/137471368.2


Exhibit B
Form of Assignment and Assumption Agreement
***

ACTIVE/137471368.2
EX-10.2 3 swkh-indemnificationagreem.htm EX-10.2 Document


INDEMNIFICATION AGREEMENT
(For Directors of a Delaware Corporation)
This Indemnification Agreement (“Agreement”) is made as of [________________] by and between SWK Holdings Corporation, a Delaware corporation (the “Company”), and [____________] (“Indemnitee”).

RECITALS

WHEREAS, the Company desires to attract and retain the services of highly qualified individuals, such as Indemnitee, to serve the Company;

WHEREAS, in order to induce Indemnitee to continue to provide services to the Company, the Company wishes to provide for the indemnification of, and advancement of expenses to, Indemnitee to the maximum extent permitted by law;
WHEREAS, the Certificate of Incorporation (the “Charter”) and the Bylaws (the “Bylaws”) of the Company require indemnification of the officers and directors of the Company, and Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (the “DGCL”);
WHEREAS, the Charter, the Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the board of directors, officers and other persons with respect to indemnification;
WHEREAS, the Board of Directors of the Company (the “Board”) has determined that the increased difficulty in attracting and retaining highly qualified persons such as Indemnitee is detrimental to the best interests of the Company’s stockholders;
WHEREAS, it is reasonable and prudent for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law, regardless of any amendment or revocation of the Charter or the Bylaws, so that they will continue to serve the Company free from undue concern that they will not be so indemnified; and
WHEREAS, this Agreement is a supplement to and in furtherance of the indemnification provided in the Charter, the Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

Section 1.Services to the Company. Indemnitee agrees to serve as a director of the Company. Indemnitee may at any time and for any reason resign from such position (subject to
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any other contractual obligation or any obligation imposed by law), in which event the Company shall have no obligation under this Agreement to continue Indemnitee in such position. This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any Enterprise) and Indemnitee.

Section 2.Definitions.

As used in this Agreement:

(a)“Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as in effect on the date of this Agreement; provided, however, that no Person who is a director or officer of the Company shall be deemed an Affiliate or an Associate of any other director or officer of the Company solely as a result of his or her position as director or officer of the Company.
(b)A Person shall be deemed the “Beneficial Owner” of, and shall be deemed to “Beneficially Own” and have “Beneficial Ownership” of, any securities:
(i)which such Person or any of such Person’s Affiliates or Associates, directly or indirectly, Beneficially Owns (as determined pursuant to Rule 13d-3 of the Rules under the Exchange Act, as in effect on the date of this Agreement);
(ii)which such Person or any of such Person’s Affiliates or Associates, directly or indirectly, has: (A) the legal, equitable or contractual right or obligation to acquire (whether directly or indirectly and whether exercisable immediately or only after the passage of time, compliance with regulatory requirements, satisfaction of one or more conditions (whether or not within the control of such Person) or otherwise) upon the exercise of any conversion rights, exchange rights, rights, warrants or options, or otherwise; (B) the right to vote pursuant to any agreement, arrangement or understanding (whether or not in writing); or (C) the right to dispose of pursuant to any agreement, arrangement or understanding (whether or not in writing) (other than customary arrangements with and between underwriters and selling group members with respect to a bona fide public offering of securities);
(iii)which are Beneficially Owned, directly or indirectly, by any other Person (or any Affiliate or Associate thereof) with which such Person or any of such Person’s Affiliates or Associates has any agreement, arrangement or understanding (whether or not in writing) (other than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities) for the purpose of acquiring, holding, voting or disposing of any securities of the Company; or
(iv)that are the subject of a derivative transaction entered into by such Person or any of such Person’s Affiliates or Associates, including, for these purposes, any derivative security acquired by such Person or any of such Person’s Affiliates or Associates that gives such Person or any of such Person’s Affiliates or Associates the economic equivalent of ownership of an amount of securities due to the fact that the value of the derivative security is explicitly determined by reference to the price or value of such securities, or that provides such Person or any of such Person’s Affiliates or Associates an opportunity, directly or indirectly, to profit or to share in any profit derived from any change in the value of such securities, in any case without regard to whether (A) such derivative security conveys any voting rights in such securities to such Person or any of such Person’s Affiliates or Associates; (B) the derivative security is
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required to be, or capable of being, settled through delivery of such securities; or (C) such Person or any of such Person’s Affiliates or Associates may have entered into other transactions that hedge the economic effect of such derivative security;
    Notwithstanding the foregoing, no Person engaged in business as an underwriter of securities shall be deemed the Beneficial Owner of any securities acquired through such Person’s participation as an underwriter in good faith in a firm commitment underwriting.

(c)A “Change in Control” shall be deemed to occur upon the earliest to occur after the date of this Agreement of any of the following events:
(i)Acquisition of Stock by Third Party. Any Person becomes the Beneficial Owner (as defined above), directly or indirectly, of securities of the Company representing twenty percent (20%) or more of the combined voting power of the Company’s then outstanding securities unless the change in relative Beneficial Ownership of the Company’s securities by any Person results solely from a reduction in the aggregate number of outstanding shares of securities entitled to vote generally in the election of directors, provided that a Change of Control shall be deemed to have occurred if subsequent to such reduction such Person becomes the Beneficial Owner, directly or indirectly, of any additional securities of the Company conferring upon such Person any additional voting power;
(ii)Change in Board of Directors. During any period of two (2) consecutive years (not including any period prior to the execution of this Agreement), individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a Person who has entered into an agreement with the Company to effect a transaction described in Sections 2(c)(i), 2(c)(iii) or 2(c)(iv)) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority of the members of the Board;
(iii)Corporate Transactions. The effective date of a merger or consolidation of the Company with any other entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving or successor entity) more than 50% of the combined voting power of the voting securities of the surviving or successor entity outstanding immediately after such merger or consolidation and with the power to elect at least a majority of the board of directors or other governing body of such surviving or successor entity;
(iv)Liquidation. The approval by the stockholders of the Company of a complete liquidation of the Company or an agreement for the sale, lease, exchange or other transfer by the Company, in one or a series of related transactions, of all or substantially all of the Company’s assets; and
(v)Other Events. There occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any similar item on any similar schedule or form) promulgated under the Exchange Act whether or not the Company is then subject to such reporting requirement.
(d) “Corporate Status” describes the status of a person as a current or former director of the Company or current or former director, manager, partner, officer, employee, agent
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or trustee of any other Enterprise which such person is or was serving at the request of the Company.
(e)“Enforcement Expenses” shall include all reasonable attorneys’ fees, court costs, transcript costs, fees of experts, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other out-of-pocket disbursements or expenses of the types customarily incurred in connection with an action to enforce indemnification or advancement rights, or an appeal from such action. Expenses, however, shall not include fees, salaries, wages or benefits owed to Indemnitee.
(f)“Enterprise” shall mean any corporation (other than the Company), partnership, joint venture, trust, employee benefit plan, limited liability company or other legal entity of which Indemnitee is or was serving at the request of the Company as a director, manager, partner, officer, employee, agent or trustee.
(g)“Expenses” shall include all reasonable attorneys’ fees, court costs, transcript costs, fees of experts, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other out-of-pocket disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding or an appeal resulting from a Proceeding. Expenses, however, shall not include amounts paid in settlement by Indemnitee, the amount of judgments or fines against Indemnitee or fees, salaries, wages or benefits owed to Indemnitee.
(h)“Independent Counsel” means a law firm, or a partner (or, if applicable, member or shareholder) of such a law firm, that is experienced in matters of Delaware corporation law and neither presently is, nor in the past five (5) years has been, retained to represent: (i) the Company, any subsidiary of the Company, any Enterprise or Indemnitee in any matter material to any such party; or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any Person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.
(i)“Person” shall mean (i) an individual, a corporation, a partnership, a limited liability company, an association, a joint stock company, a trust, a business trust, a government or political subdivision, any unincorporated organization or any other association or entity including any successor (by merger or otherwise) thereof or thereto, and (ii) a “group” as that term is used for purposes of Section 13(d)(3) of the Exchange Act.
(j)The term “Proceeding” shall include any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative, regulatory or investigative nature, and whether formal or informal, in which Indemnitee was, is or will be involved as a party or otherwise by reason of the fact that Indemnitee is or was a director of the Company or is or was serving at the request of the Company as a director, manager, partner, officer, employee, agent or trustee of any Enterprise or by reason of any action taken by Indemnitee or of any action taken on his or her part while acting as a director of the Company or while serving at the request of the Company as a director, manager, partner, officer, employee, agent or trustee of any Enterprise, in each case whether or not serving in such capacity
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at the time any liability or expense is incurred for which indemnification, reimbursement or advancement of expenses can be provided under this Agreement; provided, however, that the term “Proceeding” shall not include any action, suit or arbitration, or part thereof, initiated by Indemnitee to enforce Indemnitee’s rights under this Agreement as provided for in Section 12(a) of this Agreement.
Section 3.Indemnity in Third-Party Proceedings. The Company shall indemnify Indemnitee to the extent set forth in this Section 3 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 3, Indemnitee shall be indemnified against all Expenses, judgments, fines, penalties, excise taxes and amounts paid in settlement actually and reasonably incurred by Indemnitee or on his or her behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal proceeding, had no reasonable cause to believe that his or her conduct was unlawful.
Section 4.Indemnity in Proceedings by or in the Right of the Company. The Company shall indemnify Indemnitee to the extent set forth in this Section 4 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 4, Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by Indemnitee or on his or her behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company. No indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware Court of Chancery (the “Delaware Court”) shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification for such expenses as the Delaware Court shall deem proper.
Section 5.Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provisions of this Agreement and except as provided in Section 7, to the extent that Indemnitee is a party to or a participant in any Proceeding and is successful in such Proceeding or in defense of any claim, issue or matter therein, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or her in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee or on his or her behalf in connection with each successfully resolved claim, issue or matter. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
Section 6.Reimbursement for Expenses of a Witness or in Response to a Subpoena. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee, by reason of his or her Corporate Status, (i) is a witness in any Proceeding to which Indemnitee is not a party and is not threatened to be made a party or (ii) receives a subpoena with respect to any Proceeding to which Indemnitee is not a party and is not threatened to be made a party, the Company shall reimburse Indemnitee for all Expenses actually and reasonably incurred by him or her or on his or her behalf in connection therewith.
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Section 7.Exclusions. Notwithstanding any provision in this Agreement to the contrary, the Company shall not be obligated under this Agreement:
(a)to indemnify for amounts otherwise indemnifiable hereunder (or for which advancement is provided hereunder) if and to the extent that Indemnitee has otherwise actually received such amounts under any insurance policy, contract, agreement or otherwise; provided that the foregoing shall not apply to any personal or umbrella liability insurance maintained by Indemnitee;
(b)to indemnify for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act or similar provisions of state statutory law or common law;
(c)to indemnify with respect to any Proceeding, or part thereof, brought by Indemnitee against the Company, any legal entity which it controls, any director or officer thereof or any third party, unless (i) the Board has consented to the initiation of such Proceeding or part thereof and (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law; provided, however, that this Section 7(c) shall not apply to (A) counterclaims or affirmative defenses asserted by Indemnitee in an action brought against Indemnitee or (B) any action brought by Indemnitee for indemnification or advancement from the Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company in the suit for which indemnification or advancement is being sought as described in Section 12; or
(d)to provide any indemnification or advancement of expenses that is prohibited by applicable law (as such law exists at the time payment would otherwise be required pursuant to this Agreement).
Section 8.Advancement of Expenses. Subject to Section 9(b), the Company shall advance the Expenses incurred by Indemnitee in connection with any Proceeding, and such advancement shall be made within thirty (30) days after the receipt by the Company of a statement or statements requesting such advances (including any invoices received by Indemnitee, which such invoices may be redacted as necessary to avoid the waiver of any privilege accorded by applicable law) from time to time, whether prior to or after final disposition of any Proceeding. Advances shall be unsecured and interest free. Advances shall be made without regard to Indemnitee’s (i) ability to repay the expenses, (ii) ultimate entitlement to indemnification under the other provisions of this Agreement and (iii) entitlement to and availability of insurance coverage, including advancement, payment or reimbursement of defense costs, expenses or covered loss under the provisions of any applicable insurance policy (including, without limitation, whether such advancement, payment or reimbursement is withheld, conditioned or delayed by the insurer(s)). Indemnitee shall qualify for advances upon the execution and delivery to the Company of this Agreement which shall constitute an undertaking providing that Indemnitee undertakes to the fullest extent required by law to repay the advance if and to the extent that it is ultimately determined by a court of competent jurisdiction in a final judgment, not subject to appeal, that Indemnitee is not entitled to be indemnified by the Company. No other form of undertaking shall be required. The right to advances under this paragraph shall in all events continue until final disposition of any Proceeding, including any appeal therein. Nothing in this Section 8 shall limit Indemnitee’s right to advancement pursuant to Section 12(e) of this Agreement.
Section 9.Procedure for Notification and Defense of Claim.
(a)To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request therefor specifying the basis for the claim, the amounts for
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which Indemnitee is seeking payment under this Agreement, and all documentation related thereto as reasonably requested by the Company.
(b)In the event that the Company shall be obligated hereunder to provide indemnification for or make any advancement of Expenses with respect to any Proceeding, the Company shall be entitled to assume the defense of such Proceeding, or any claim, issue or matter therein, with counsel approved by Indemnitee (which approval shall not be unreasonably withheld or delayed) upon the delivery to Indemnitee of written notice of the Company’s election to do so. After delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees or expenses of separate counsel subsequently employed by or on behalf of Indemnitee with respect to the same Proceeding; provided that (i) Indemnitee shall have the right to employ separate counsel in any such Proceeding at Indemnitee’s expense and (ii) if (A) the employment of separate counsel by Indemnitee has been previously authorized by the Company, (B) Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Company and Indemnitee in the conduct of such defense, (C) the Company shall not continue to retain such counsel to defend such Proceeding or (D) a Change in Control shall have occurred, then the fees and expenses actually and reasonably incurred by Indemnitee with respect to his or her separate counsel shall be Expenses hereunder.
(c)In the event that the Company does not assume the defense in a Proceeding pursuant to paragraph (b) above, then the Company will be entitled to participate in the Proceeding at its own expense.
(d)The Company shall not be liable to indemnify Indemnitee under this Agreement for any amounts paid in settlement of any Proceeding effected without its prior written consent (which consent shall not be unreasonably withheld or delayed). Without limiting the generality of the foregoing, the fact that an insurer under an applicable insurance policy delays or is unwilling to consent to such settlement or is or may be in breach of its obligations under such policy, or the fact that directors’ and officers’ liability insurance is otherwise unavailable or not maintained by the Company, may not be taken into account by the Company in determining whether to provide its consent. The Company shall not, without the prior written consent of Indemnitee (which consent shall not be unreasonably withheld or delayed), enter into any settlement which (i) includes an admission of fault of Indemnitee, any non-monetary remedy imposed on Indemnitee or any monetary damages for which Indemnitee is not wholly and actually indemnified hereunder or (ii) with respect to any Proceeding with respect to which Indemnitee may be or is made a party or may be otherwise entitled to seek indemnification hereunder, does not include the full release of Indemnitee from all liability in respect of such Proceeding.
Section 10.Procedure Upon Application for Indemnification.
(a)Upon written request by Indemnitee for indemnification pursuant to Section 9(a), a determination, if such determination is required by applicable law, with respect to Indemnitee’s entitlement to indemnification hereunder shall be made in the specific case by one of the following methods: (x) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board; or (y) if a Change in Control shall not have occurred: (i) by a majority vote of the disinterested directors, even though less than a quorum; (ii) by a committee of disinterested directors designated by a majority vote of the disinterested directors, even though less than a quorum; or (iii) if there are no disinterested directors or if the disinterested directors so direct, by Independent Counsel in a written opinion to the Board. For purposes hereof, disinterested directors are those members of the Board who are not parties to the action, suit or proceeding in respect of which indemnification is sought. In the case that such determination is made by Independent Counsel, a copy of Independent Counsel’s written opinion
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shall be delivered to Indemnitee and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within forty-five (45) days after such determination. Indemnitee shall cooperate with the Independent Counsel or the Company, as applicable, in making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such counsel or the Company, upon reasonable advance request, any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. The Company shall likewise cooperate with Indemnitee and Independent Counsel, if applicable, in making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such counsel and Indemnitee, upon reasonable advance request, any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to the Company and reasonably necessary to such determination. Any out-of-pocket costs or expenses (including reasonable attorneys’ fees and disbursements) actually and reasonably incurred by Indemnitee in so cooperating with the Independent Counsel or the Company shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
(b)If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 10(a), the Independent Counsel shall be selected by the Board if a Change in Control shall not have occurred or, if a Change in Control shall have occurred, by Indemnitee. Indemnitee or the Company, as the case may be, may, within ten (10) days after written notice of such selection, deliver to the Company or Indemnitee, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 2 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the Person so selected shall act as Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or the Delaware Court has determined that such objection is without merit. If, within twenty (20) days after the later of (i) submission by Indemnitee of a written request for indemnification pursuant to Section 9(a) and (ii) the final disposition of the Proceeding, including any appeal therein, no Independent Counsel shall have been selected without objection, either Indemnitee or the Company may petition the Delaware Court for resolution of any objection which shall have been made by Indemnitee or the Company to the selection of Independent Counsel and/or for the appointment as Independent Counsel of a Person selected by the court or by such other Person as the court shall designate. The Person with respect to whom all objections are so resolved or the Person so appointed shall act as Independent Counsel under Section 10(a) hereof. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 12(a) of this Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).
(c)Notwithstanding anything to the contrary contained in this Agreement, the determination of entitlement to indemnification under this Agreement shall be made without regard to the Indemnitee’s entitlement to and availability of insurance coverage, including advancement, payment or reimbursement of defense costs, expenses or covered loss under the provisions of any applicable insurance policy (including, without limitation, whether such advancement, payment or reimbursement is withheld, conditioned or delayed by the insurer(s)).
Section 11.Presumptions and Effect of Certain Proceedings.
(a)To the extent permitted by applicable law, in making a determination with respect to entitlement to indemnification hereunder, it shall be presumed that Indemnitee is
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entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 9(a) of this Agreement, and the Company shall have the burden of proof and the burden of persuasion by clear and convincing evidence to overcome that presumption in connection with the making of any determination contrary to that presumption.
(b)The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of guilty, nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his or her conduct was unlawful.
(c)Indemnitee shall be deemed to have acted in good faith if Indemnitee’s actions based on the records or books of account of the Company or any other Enterprise, including financial statements, or on information supplied to Indemnitee by the directors, officers, agents or employees of the Company or any other Enterprise in the course of their duties, or on the advice of legal counsel for the Company or any other Enterprise or on information or records given or reports made to the Company or any other Enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Company or any other Enterprise. The provisions of this Section 11(c) shall not be deemed to be exclusive or to limit in any way the other circumstances in which Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement. In addition, the knowledge and/or actions, or failure to act, of any director, manager, partner, officer, employee, agent or trustee of the Company, any subsidiary of the Company, or any Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement. Whether or not the foregoing provisions of this Section 11(c) are satisfied, it shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.
Section 12.Remedies of Indemnitee.
(a)Subject to Section 12(f), in the event that (i) a determination is made pursuant to Section 10 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 8 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 10(a) of this Agreement within sixty (60) days after receipt by the Company of the request for indemnification for which a determination is to be made other than by Independent Counsel, (iv) payment of indemnification or reimbursement of expenses is not made pursuant to Section 5 or 6 or the last sentence of Section 10(a) of this Agreement within forty-five (45) days after receipt by the Company of a written request therefor (including any invoices received by Indemnitee, which such invoices may be redacted as necessary to avoid the waiver of any privilege accorded by applicable law) or (v) payment of indemnification pursuant to Section 3 or 4 of this Agreement is not made within forty-five (45) days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication by the Delaware Court of his or her entitlement to such indemnification or advancement. Alternatively, Indemnitee, at his or her option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 12(a); provided,
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however, that the foregoing time limitation shall not apply in respect of a proceeding brought by Indemnitee to enforce his or her rights under Section 5 of this Agreement. The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.
(b)In the event that a determination shall have been made pursuant to Section 10(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 12 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 12, the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement, as the case may be.
(c)If a determination shall have been made pursuant to Section 10(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 12, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification or (ii) a prohibition of such indemnification under applicable law.
(d)The Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 12 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement.
(e)The Company shall indemnify Indemnitee to the fullest extent permitted by law against any and all Enforcement Expenses and, if requested by Indemnitee, shall (within forty-five (45) days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by law, such Enforcement Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advancement from the Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company in the suit for which indemnification or advancement is being sought. Such written request for advancement shall include invoices received by Indemnitee in connection with such Enforcement Expenses but, in the case of invoices in connection with legal services, any references to legal work performed or to expenditures made that would cause Indemnitee to waive any privilege accorded by applicable law need not be included with the invoice.
(f)Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding, including any appeal therein.
Section 13.Non-exclusivity; Survival of Rights; Insurance; Subrogation.
(a)The rights of indemnification and to receive advancement as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Charter, the Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his or her Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement than would be afforded currently under the Charter, Bylaws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be
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exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
(b)To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, managers, partners, officers, employees, agents or trustees of the Company or of any other Enterprise, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, manager, partner, officer, employee, agent or trustee under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such claim to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies. Upon request of Indemnitee, the Company shall also promptly provide to Indemnitee: (i) copies of all of the Company’s potentially applicable directors’ and officers’ liability insurance policies, (ii) copies of such notices delivered to the applicable insurers and (iii) copies of all subsequent communications and correspondence between the Company and such insurers regarding the Proceeding.
(c)In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.
(d)The Company’s obligation to provide indemnification or advancement hereunder to Indemnitee who is or was serving at the request of the Company as a director, manager, partner, officer, employee, agent or trustee of any other Enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement from such other Enterprise.
Section 14.Duration of Agreement. This Agreement shall continue until and terminate upon the later of: (a) ten (10) years after the date that Indemnitee shall have ceased to serve as a director of the Company or (b) one (1) year after the final termination of any Proceeding, including any appeal, then pending in respect of which Indemnitee is granted rights of indemnification or advancement hereunder and of any proceeding commenced by Indemnitee pursuant to Section 12 of this Agreement relating thereto. This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of Indemnitee and his or her heirs, executors and administrators. The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.
Section 15.Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to
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conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.
Section 16.Enforcement.
(a)The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to continue to serve as a director of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director of the Company.
(b)This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Charter, the Bylaws and applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.
Section 17.Modification and Waiver. No supplement, modification or amendment, or waiver of any provision, of this Agreement shall be binding unless executed in writing by the parties thereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver. No supplement, modification or amendment of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee prior to such supplement, modification or amendment.
Section 18.Notice by Indemnitee. Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification, reimbursement or advancement as provided hereunder. The failure of Indemnitee to so notify the Company or any delay in notification shall not relieve the Company of any obligation which it may have to Indemnitee under this Agreement or otherwise, unless, and then only to the extent that, the Company did not otherwise learn of the Proceeding and such delay is materially prejudicial to the Company’s ability to defend such Proceeding or matter; and, provided, further, that notice will be deemed to have been given without any action on the part of Indemnitee in the event the Company is a party to the same Proceeding.
Section 19.Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (iii) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed or (iv) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received:
(a)If to Indemnitee, at such address as Indemnitee shall provide to the Company.
(b)If to the Company to:
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SWK Holdings Corporation
5956 Sherry Lane, Suite 650
Dallas, Texas 75225
Attention: Adam Rice
or to any other address as may have been furnished to Indemnitee by the Company.

Section 20.Contribution. To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any Proceeding in such proportion as is deemed fair and reasonable in light of all of the circumstances in order to reflect (i) the relative benefits received by the Company and Indemnitee in connection with the event(s) and/or transaction(s) giving rise to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transactions.
Section 21.Internal Revenue Code Section 409A. The Company intends for this Agreement to comply with the Indemnification exception under Section 1.409A-1(b)(10) of the regulations promulgated under the Internal Revenue Code of 1986, as amended (the “Code”), which provides that indemnification of, or the purchase of an insurance policy providing for payments of, all or part of the expenses incurred or damages paid or payable by Indemnitee with respect to a bona fide claim against Indemnitee or the Company do not provide for a deferral of compensation, subject to Section 409A of the Code, where such claim is based on actions or failures to act by Indemnitee in his or her capacity as a service provider of the Company. The parties intend that this Agreement be interpreted and construed with such intent.
Section 22.Applicable Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 12(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Delaware Court, and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) consent to service of process at the address set forth in Section 19 of this Agreement with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.
Section 23.Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
Section 24.Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which
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together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.
Section 25.Monetary Damages Insufficient/Specific Enforcement. The Company and Indemnitee agree that a monetary remedy for breach of this Agreement may be inadequate, impracticable and difficult of proof, and further agree that such breach may cause Indemnitee irreparable harm. Accordingly, the parties hereto agree that Indemnitee may enforce this Agreement by seeking injunctive relief and/or specific performance hereof, without any necessity of showing actual damage or irreparable harm (having agreed that actual and irreparable harm will result in not forcing the Company to specifically perform its obligations pursuant to this Agreement) and that by seeking injunctive relief and/or specific performance, Indemnitee shall not be precluded from seeking or obtaining any other relief to which he may be entitled. The Company and Indemnitee further agree that Indemnitee shall be entitled to such specific performance and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, without the necessity of posting bonds or other undertakings in connection therewith. The Company acknowledges that in the absence of a waiver, a bond or undertaking may be required of Indemnitee by the Court, and the Company hereby waives any such requirement of a bond or undertaking.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.

                        SWK HOLDINGS CORPORATION
                          



                        By:                        
                             Name:                                                     Title:



                                                 
                            [Name of Indemnitee]
                        





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EX-10.3 4 swkh-formindemnificationag.htm EX-10.3 Document


INDEMNIFICATION AGREEMENT
(For Officers of a Delaware Corporation)


This Indemnification Agreement (“Agreement”) is made as of ________________ by and between SWK Holdings Corporation, a Delaware corporation (the “Company”), and ____________ (“Indemnitee”).

RECITALS

WHEREAS, the Company desires to attract and retain the services of highly qualified individuals, such as Indemnitee, to serve the Company;

WHEREAS, in order to induce Indemnitee to continue to provide services to the Company, the Company wishes to provide for the indemnification of, and advancement of expenses to, Indemnitee to the maximum extent permitted by law;
WHEREAS, the Certificate of Incorporation (the “Charter”) and the Bylaws (the “Bylaws”) of the Company require indemnification of the officers and directors of the Company, and Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (the “DGCL”);
WHEREAS, the Charter, the Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the board of directors, officers and other persons with respect to indemnification;
WHEREAS, the Board of Directors of the Company (the “Board”) has determined that the increased difficulty in attracting and retaining highly qualified persons such as Indemnitee is detrimental to the best interests of the Company’s stockholders;
WHEREAS, it is reasonable and prudent for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law, regardless of any amendment or revocation of the Charter or the Bylaws, so that they will continue to serve the Company free from undue concern that they will not be so indemnified; and
WHEREAS, this Agreement is a supplement to and in furtherance of the indemnification provided in the Charter, the Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:
Section 1.Services to the Company. Indemnitee agrees to serve as an officer of the Company. Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by law), in which event the Company
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shall have no obligation under this Agreement to continue Indemnitee in such position. This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any Enterprise) and Indemnitee.
Section 2.Definitions.
As used in this Agreement:

(a)“Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as in effect on the date of this Agreement; provided, however, that no Person who is a director or officer of the Company shall be deemed an Affiliate or an Associate of any other director or officer of the Company solely as a result of his or her position as director or officer of the Company.
(b)A Person shall be deemed the “Beneficial Owner” of, and shall be deemed to “Beneficially Own” and have “Beneficial Ownership” of, any securities:
(i)which such Person or any of such Person’s Affiliates or Associates, directly or indirectly, Beneficially Owns (as determined pursuant to Rule 13d-3 of the Rules under the Exchange Act, as in effect on the date of this Agreement);
(ii)which such Person or any of such Person’s Affiliates or Associates, directly or indirectly, has: (A) the legal, equitable or contractual right or obligation to acquire (whether directly or indirectly and whether exercisable immediately or only after the passage of time, compliance with regulatory requirements, satisfaction of one or more conditions (whether or not within the control of such Person) or otherwise) upon the exercise of any conversion rights, exchange rights, rights, warrants or options, or otherwise; (B) the right to vote pursuant to any agreement, arrangement or understanding (whether or not in writing); or (C) the right to dispose of pursuant to any agreement, arrangement or understanding (whether or not in writing) (other than customary arrangements with and between underwriters and selling group members with respect to a bona fide public offering of securities);
(iii)which are Beneficially Owned, directly or indirectly, by any other Person (or any Affiliate or Associate thereof) with which such Person or any of such Person’s Affiliates or Associates has any agreement, arrangement or understanding (whether or not in writing) (other than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities) for the purpose of acquiring, holding, voting or disposing of any securities of the Company; or
(iv)that are the subject of a derivative transaction entered into by such Person or any of such Person’s Affiliates or Associates, including, for these purposes, any derivative security acquired by such Person or any of such Person’s Affiliates or Associates that gives such Person or any of such Person’s Affiliates or Associates the economic equivalent of ownership of an amount of securities due to the fact that the value of the derivative security is explicitly determined by reference to the price or value of such securities, or that provides such Person or any of such Person’s Affiliates or Associates an opportunity, directly or indirectly, to profit or to share in any profit derived from any change in the value of such securities, in any case without regard to whether (A) such derivative security conveys any voting rights in such securities to such Person or any of such Person’s Affiliates or Associates; (B) the derivative security is required to be, or capable of being, settled through delivery of such securities; or (C) such Person or any of such Person’s Affiliates or Associates may have entered into other transactions that hedge the economic effect of such derivative security.
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Notwithstanding the foregoing, no Person engaged in business as an underwriter of securities shall be deemed the Beneficial Owner of any securities acquired through such Person’s participation as an underwriter in good faith in a firm commitment underwriting.

(c)A “Change in Control” shall be deemed to occur upon the earliest to occur after the date of this Agreement of any of the following events:
(i)Acquisition of Stock by Third Party. Any Person becomes the Beneficial Owner (as defined above), directly or indirectly, of securities of the Company representing twenty percent (20%) or more of the combined voting power of the Company’s then outstanding securities unless the change in relative Beneficial Ownership of the Company’s securities by any Person results solely from a reduction in the aggregate number of outstanding shares of securities entitled to vote generally in the election of directors, provided that a Change of Control shall be deemed to have occurred if subsequent to such reduction such Person becomes the Beneficial Owner, directly or indirectly, of any additional securities of the Company conferring upon such Person any additional voting power;
(ii)Change in Board of Directors. During any period of two (2) consecutive years (not including any period prior to the execution of this Agreement), individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a Person who has entered into an agreement with the Company to effect a transaction described in Sections 2(c)(i), 2(c)(iii) or 2(c)(iv)) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority of the members of the Board;
(iii)Corporate Transactions. The effective date of a merger or consolidation of the Company with any other entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving or successor entity) more than 50% of the combined voting power of the voting securities of the surviving or successor entity outstanding immediately after such merger or consolidation and with the power to elect at least a majority of the board of directors or other governing body of such surviving or successor entity;
(iv)Liquidation. The approval by the stockholders of the Company of a complete liquidation of the Company or an agreement for the sale, lease, exchange or other transfer by the Company, in one or a series of related transactions, of all or substantially all of the Company’s assets; and
(v)Other Events. There occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any similar item on any similar schedule or form) promulgated under the Exchange Act whether or not the Company is then subject to such reporting requirement.
(d)“Corporate Status” describes the status of a person as a current or former officer of the Company or current or former director, manager, partner, officer, employee, agent or trustee of any other Enterprise which such person is or was serving at the request of the Company.
(e)“Enforcement Expenses” shall include all reasonable attorneys’ fees, court costs, transcript costs, fees of experts, travel expenses, duplicating costs, printing and binding
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costs, telephone charges, postage, delivery service fees and all other out-of-pocket disbursements or expenses of the types customarily incurred in connection with an action to enforce indemnification or advancement rights, or an appeal from such action. Expenses, however, shall not include fees, salaries, wages or benefits owed to Indemnitee.
(f)“Enterprise” shall mean any corporation (other than the Company), partnership, joint venture, trust, employee benefit plan, limited liability company or other legal entity of which Indemnitee is or was serving at the request of the Company as a director, manager, partner, officer, employee, agent or trustee.
(g)“Expenses” shall include all reasonable attorneys’ fees, court costs, transcript costs, fees of experts, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other out-of-pocket disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding or an appeal resulting from a Proceeding. Expenses, however, shall not include amounts paid in settlement by Indemnitee, the amount of judgments or fines against Indemnitee or fees, salaries, wages or benefits owed to Indemnitee.
(h)“Independent Counsel” means a law firm, or a partner (or, if applicable, member or shareholder) of such a law firm, that is experienced in matters of Delaware corporation law and neither presently is, nor in the past five (5) years has been, retained to represent: (i) the Company, any subsidiary of the Company, any Enterprise or Indemnitee in any matter material to any such party; or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any Person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.
(i)“Person” shall mean (i) an individual, a corporation, a partnership, a limited liability company, an association, a joint stock company, a trust, a business trust, a government or political subdivision, any unincorporated organization or any other association or entity including any successor (by merger or otherwise) thereof or thereto, and (ii) a “group” as that term is used for purposes of Section 13(d)(3) of the Exchange Act.
(j)The term “Proceeding” shall include any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative, regulatory or investigative nature, and whether formal or informal, in which Indemnitee was, is or will be involved as a party or otherwise by reason of the fact that Indemnitee is or was an officer of the Company or is or was serving at the request of the Company as a director, manager, partner, officer, employee, agent or trustee of any Enterprise or by reason of any action taken by Indemnitee or of any action taken on his or her part while acting as an officer of the Company or while serving at the request of the Company as a director, manager, partner, officer, employee, agent or trustee of any Enterprise, in each case whether or not serving in such capacity at the time any liability or expense is incurred for which indemnification, reimbursement or advancement of expenses can be provided under this Agreement; provided, however, that the term “Proceeding” shall not include any action, suit or arbitration, or part thereof, initiated by Indemnitee to enforce Indemnitee’s rights under this Agreement as provided for in Section 12(a) of this Agreement.
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Section 3.Indemnity in Third-Party Proceedings. The Company shall indemnify Indemnitee to the extent set forth in this Section 3 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 3, Indemnitee shall be indemnified against all Expenses, judgments, fines, penalties, excise taxes and amounts paid in settlement actually and reasonably incurred by Indemnitee or on his or her behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal proceeding, had no reasonable cause to believe that his or her conduct was unlawful.
Section 4.Indemnity in Proceedings by or in the Right of the Company. The Company shall indemnify Indemnitee to the extent set forth in this Section 4 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 4, Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by Indemnitee or on his or her behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company. No indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware Court of Chancery (the “Delaware Court”) shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification for such expenses as the Delaware Court shall deem proper.
Section 5.Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provisions of this Agreement and except as provided in Section 7, to the extent that Indemnitee is a party to or a participant in any Proceeding and is successful in such Proceeding or in defense of any claim, issue or matter therein, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or her in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee or on his or her behalf in connection with each successfully resolved claim, issue or matter. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
Section 6.Reimbursement for Expenses of a Witness or in Response to a Subpoena. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee, by reason of his or her Corporate Status, (i) is a witness in any Proceeding to which Indemnitee is not a party and is not threatened to be made a party or (ii) receives a subpoena with respect to any Proceeding to which Indemnitee is not a party and is not threatened to be made a party, the Company shall reimburse Indemnitee for all Expenses actually and reasonably incurred by him or her or on his or her behalf in connection therewith.
Section 7.Exclusions. Notwithstanding any provision in this Agreement to the contrary, the Company shall not be obligated under this Agreement:
(a)to indemnify for amounts otherwise indemnifiable hereunder (or for which advancement is provided hereunder) if and to the extent that Indemnitee has otherwise actually received such amounts under any insurance policy, contract, agreement or otherwise; provided
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that the foregoing shall not apply to any personal or umbrella liability insurance maintained by Indemnitee;
(b)to indemnify for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act or similar provisions of state statutory law or common law;
(c)to indemnify for any reimbursement of, or repayment to, the Company by Indemnitee of (i) any bonus or other incentive-based or equity-based compensation or of any profits realized by Indemnitee from the sale of securities of the Company pursuant to the terms of (A) Section 304 of SOX, (B) Exchange Act Rule 10D-1 or (C) any formal policy of the Company adopted by the Board (or a committee thereof) or (ii) any other remuneration paid to Indemnitee if it shall be determined by a final judgment or other final adjudication that payment of such remuneration was or would have been in violation of law;
(d)to indemnify with respect to any Proceeding, or part thereof, brought by Indemnitee against the Company, any legal entity which it controls, any director or officer thereof or any third party, unless (i) the Board has consented to the initiation of such Proceeding or part thereof and (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law; provided, however, that this Section 7(d) shall not apply to (A) counterclaims or affirmative defenses asserted by Indemnitee in an action brought against Indemnitee or (B) any action brought by Indemnitee for indemnification or advancement from the Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company in the suit for which indemnification or advancement is being sought as described in Section 12; or
(e)to provide any indemnification or advancement of expenses that is prohibited by applicable law (as such law exists at the time payment would otherwise be required pursuant to this Agreement).
Section 8.Advancement of Expenses. Subject to Section 9(b), the Company shall advance the Expenses incurred by Indemnitee in connection with any Proceeding, and such advancement shall be made within thirty (30) days after the receipt by the Company of a statement or statements requesting such advances (including any invoices received by Indemnitee, which such invoices may be redacted as necessary to avoid the waiver of any privilege accorded by applicable law) from time to time, whether prior to or after final disposition of any Proceeding. Advances shall be unsecured and interest free. Advances shall be made without regard to Indemnitee’s (i) ability to repay the expenses, (ii) ultimate entitlement to indemnification under the other provisions of this Agreement and (iii) entitlement to and availability of insurance coverage, including advancement, payment or reimbursement of defense costs, expenses or covered loss under the provisions of any applicable insurance policy (including, without limitation, whether such advancement, payment or reimbursement is withheld, conditioned or delayed by the insurer(s)). Indemnitee shall qualify for advances upon the execution and delivery to the Company of this Agreement which shall constitute an undertaking providing that Indemnitee undertakes to the fullest extent required by law to repay the advance if and to the extent that it is ultimately determined by a court of competent jurisdiction in a final judgment, not subject to appeal, that Indemnitee is not entitled to be indemnified by the Company. No other form of undertaking shall be required. The right to advances under this paragraph shall in all events continue until final disposition of any Proceeding, including any appeal therein. Nothing in this Section 8 shall limit Indemnitee’s right to advancement pursuant to Section 12(e) of this Agreement.
Section 9.Procedure for Notification and Defense of Claim.
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(a)To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request therefor specifying the basis for the claim, the amounts for which Indemnitee is seeking payment under this Agreement and all documentation related thereto as reasonably requested by the Company.
(b)In the event that the Company shall be obligated hereunder to provide indemnification for or make any advancement of Expenses with respect to any Proceeding, the Company shall be entitled to assume the defense of such Proceeding, or any claim, issue or matter therein, with counsel approved by Indemnitee (which approval shall not be unreasonably withheld or delayed) upon the delivery to Indemnitee of written notice of the Company’s election to do so. After delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees or expenses of separate counsel subsequently employed by or on behalf of Indemnitee with respect to the same Proceeding; provided that (i) Indemnitee shall have the right to employ separate counsel in any such Proceeding at Indemnitee’s expense and (ii) if (A) the employment of separate counsel by Indemnitee has been previously authorized by the Company, (B) Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Company and Indemnitee in the conduct of such defense, (C) the Company shall not continue to retain such counsel to defend such Proceeding or (D) a Change in Control shall have occurred, then the fees and expenses actually and reasonably incurred by Indemnitee with respect to his or her separate counsel shall be Expenses hereunder.
(c)In the event that the Company does not assume the defense in a Proceeding pursuant to paragraph (b) above, then the Company will be entitled to participate in the Proceeding at its own expense.
(d)The Company shall not be liable to indemnify Indemnitee under this Agreement for any amounts paid in settlement of any Proceeding effected without its prior written consent (which consent shall not be unreasonably withheld or delayed). Without limiting the generality of the foregoing, the fact that an insurer under an applicable insurance policy delays or is unwilling to consent to such settlement or is or may be in breach of its obligations under such policy, or the fact that directors’ and officers’ liability insurance is otherwise unavailable or not maintained by the Company, may not be taken into account by the Company in determining whether to provide its consent. The Company shall not, without the prior written consent of Indemnitee (which consent shall not be unreasonably withheld or delayed), enter into any settlement which (i) includes an admission of fault of Indemnitee, any non-monetary remedy imposed on Indemnitee or any monetary damages for which Indemnitee is not wholly and actually indemnified hereunder or (ii) with respect to any Proceeding with respect to which Indemnitee may be or is made a party or may be otherwise entitled to seek indemnification hereunder, does not include the full release of Indemnitee from all liability in respect of such Proceeding.
Section 10.Procedure Upon Application for Indemnification.
(a)Upon written request by Indemnitee for indemnification pursuant to Section 9(a), a determination, if such determination is required by applicable law, with respect to Indemnitee’s entitlement to indemnification hereunder shall be made in the specific case by one of the following methods: (i) by a majority vote of the disinterested directors, even though less than a quorum; (ii) by a committee of disinterested directors designated by a majority vote of the disinterested directors, even though less than a quorum; or (iii) if there are no disinterested directors or if the disinterested directors so direct, by Independent Counsel in a written opinion to the Board. For purposes hereof, disinterested directors are those members of the Board who are not parties to the action, suit or proceeding in respect of which indemnification is sought. In the case that such determination is made by Independent Counsel, a copy of Independent Counsel’s
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written opinion shall be delivered to Indemnitee and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within forty-five (45) days after such determination. Indemnitee shall cooperate with the Independent Counsel or the Company, as applicable, in making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such counsel or the Company, upon reasonable advance request, any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. The Company shall likewise cooperate with Indemnitee and Independent Counsel, if applicable, in making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such counsel and Indemnitee, upon reasonable advance request, any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to the Company and reasonably necessary to such determination. Any out-of-pocket costs or expenses (including reasonable attorneys’ fees and disbursements) actually and reasonably incurred by Indemnitee in so cooperating with the Independent Counsel or the Company shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
(b)If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 10(a), the Independent Counsel shall be selected by the Board. Indemnitee may, within ten (10) days after written notice of such selection, deliver to the Company a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 2 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the Person so selected shall act as Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or the Delaware Court has determined that such objection is without merit. If, within twenty (20) days after the later of (i) submission by Indemnitee of a written request for indemnification pursuant to Section 9(a) and (ii) the final disposition of the Proceeding, including any appeal therein, no Independent Counsel shall have been selected without objection, either Indemnitee or the Company may petition the Delaware Court for resolution of any objection which shall have been made by Indemnitee or the Company to the selection of Independent Counsel and/or for the appointment as Independent Counsel of a Person selected by the court or by such other Person as the court shall designate. The Person with respect to whom all objections are so resolved or the Person so appointed shall act as Independent Counsel under Section 10(a) hereof. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 12(a) of this Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).
(c)Notwithstanding anything to the contrary contained in this Agreement, the determination of entitlement to indemnification under this Agreement shall be made without regard to the Indemnitee’s entitlement to and availability of insurance coverage, including advancement, payment or reimbursement of defense costs, expenses or covered loss under the provisions of any applicable insurance policy (including, without limitation, whether such advancement, payment or reimbursement is withheld, conditioned or delayed by the insurer(s)).
Section 11.Presumptions and Effect of Certain Proceedings.
(a)To the extent permitted by applicable law, in making a determination with respect to entitlement to indemnification hereunder, it shall be presumed that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 9(a) of this Agreement, and the Company shall have
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the burden of proof and the burden of persuasion by clear and convincing evidence to overcome that presumption in connection with the making of any determination contrary to that presumption.
(b)The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of guilty, nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his or her conduct was unlawful.
(c)Indemnitee shall be deemed to have acted in good faith if Indemnitee’s actions based on the records or books of account of the Company or any other Enterprise, including financial statements, or on information supplied to Indemnitee by the directors, officers, agents or employees of the Company or any other Enterprise in the course of their duties, or on the advice of legal counsel for the Company or any other Enterprise or on information or records given or reports made to the Company or any other Enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Company or any other Enterprise. The provisions of this Section 11(c) shall not be deemed to be exclusive or to limit in any way the other circumstances in which Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement. In addition, the knowledge and/or actions, or failure to act, of any director, manager, partner, officer, employee, agent or trustee of the Company, any subsidiary of the Company, or any Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement. Whether or not the foregoing provisions of this Section 11(c) are satisfied, it shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.
Section 12.Remedies of Indemnitee.
(a)Subject to Section 12(f), in the event that (i) a determination is made pursuant to Section 10 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 8 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 10(a) of this Agreement within sixty (60) days after receipt by the Company of the request for indemnification for which a determination is to be made other than by Independent Counsel, (iv) payment of indemnification or reimbursement of expenses is not made pursuant to Section 5 or 6 or the last sentence of Section 10(a) of this Agreement within forty-five (45) days after receipt by the Company of a written request therefor (including any invoices received by Indemnitee, which such invoices may be redacted as necessary to avoid the waiver of any privilege accorded by applicable law) or (v) payment of indemnification pursuant to Section 3 or 4 of this Agreement is not made within forty-five (45) days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication by the Delaware Court of his or her entitlement to such indemnification or advancement. Alternatively, Indemnitee, at his or her option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 12(a); provided, however, that the foregoing time limitation shall not apply in respect of a proceeding brought by
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Indemnitee to enforce his or her rights under Section 5 of this Agreement. The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.
(b)In the event that a determination shall have been made pursuant to Section 10(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 12 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 12, the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement, as the case may be.
(c)If a determination shall have been made pursuant to Section 10(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 12, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification or (ii) a prohibition of such indemnification under applicable law.
(d)The Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 12 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement.
(e)The Company shall indemnify Indemnitee to the fullest extent permitted by law against any and all Enforcement Expenses and, if requested by Indemnitee, shall (within forty-five (45) days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by law, such Enforcement Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advancement from the Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company in the suit for which indemnification or advancement is being sought. Such written request for advancement shall include invoices received by Indemnitee in connection with such Enforcement Expenses but, in the case of invoices in connection with legal services, any references to legal work performed or to expenditures made that would cause Indemnitee to waive any privilege accorded by applicable law need not be included with the invoice.
(f)Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding, including any appeal therein.
Section 13.Non-exclusivity; Survival of Rights; Insurance; Subrogation.
(a)The rights of indemnification and to receive advancement as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Charter, the Bylaws, any agreement, a vote of stockholders or a resolution of directors or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his or her Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement than would be afforded currently under the Charter, Bylaws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other
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right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
(b)To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, managers, partners, officers, employees, agents or trustees of the Company or of any other Enterprise, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, manager, partner, officer, employee, agent or trustee under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such claim to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies. Upon request of Indemnitee, the Company shall also promptly provide to Indemnitee: (i) copies of all of the Company’s potentially applicable directors’ and officers’ liability insurance policies, (ii) copies of such notices delivered to the applicable insurers and (iii) copies of all subsequent communications and correspondence between the Company and such insurers regarding the Proceeding.
(c)In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.
(d)The Company’s obligation to provide indemnification or advancement hereunder to Indemnitee who is or was serving at the request of the Company as a director, manager, partner, officer, employee, agent or trustee of any other Enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement from such other Enterprise.
Section 14.Duration of Agreement. This Agreement shall continue until and terminate upon the later of: (a) ten (10) years after the date that Indemnitee shall have ceased to serve as an officer of the Company or (b) one (1) year after the final termination of any Proceeding, including any appeal, then pending in respect of which Indemnitee is granted rights of indemnification or advancement hereunder and of any proceeding commenced by Indemnitee pursuant to Section 12 of this Agreement relating thereto. This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of Indemnitee and his or her heirs, executors and administrators. The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.
Section 15.Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and
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(c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.
Section 16.Enforcement.
(a)The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee continue to serve as an officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as an officer of the Company.
(b)This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Charter, the Bylaws and applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.
Section 17.Modification and Waiver. No supplement, modification or amendment, or waiver of any provision, of this Agreement shall be binding unless executed in writing by the parties thereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver. No supplement, modification or amendment of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee prior to such supplement, modification or amendment.
Section 18.Notice by Indemnitee. Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification, reimbursement or advancement as provided hereunder. The failure of Indemnitee to so notify the Company or any delay in notification shall not relieve the Company of any obligation which it may have to Indemnitee under this Agreement or otherwise, unless, and then only to the extent that, the Company did not otherwise learn of the Proceeding and such delay is materially prejudicial to the Company’s ability to defend such Proceeding or matter; and, provided, further, that notice will be deemed to have been given without any action on the part of Indemnitee in the event the Company is a party to the same Proceeding.
Section 19.Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (iii) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed or (iv) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received:
(a)If to Indemnitee, at such address as Indemnitee shall provide to the Company.
(b)If to the Company to:
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SWK Holdings Corporation
5956 Sherry Lane, Suite 650
Dallas, Texas 75225
Attention: Adam Rice
or to any other address as may have been furnished to Indemnitee by the Company.

Section 20.Contribution. To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any Proceeding in such proportion as is deemed fair and reasonable in light of all of the circumstances in order to reflect (i) the relative benefits received by the Company and Indemnitee in connection with the event(s) and/or transaction(s) giving rise to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transactions.
Section 21.Internal Revenue Code Section 409A. The Company intends for this Agreement to comply with the Indemnification exception under Section 1.409A-1(b)(10) of the regulations promulgated under the Internal Revenue Code of 1986, as amended (the “Code”), which provides that indemnification of, or the purchase of an insurance policy providing for payments of, all or part of the expenses incurred or damages paid or payable by Indemnitee with respect to a bona fide claim against Indemnitee or the Company do not provide for a deferral of compensation, subject to Section 409A of the Code, where such claim is based on actions or failures to act by Indemnitee in his or her capacity as a service provider of the Company. The parties intend that this Agreement be interpreted and construed with such intent.
Section 22.Applicable Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 12(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Delaware Court, and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) consent to service of process at the address set forth in Section 19 of this Agreement with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.
Section 23.Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
Section 24.Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which
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together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.
Section 25.Monetary Damages Insufficient/Specific Enforcement. The Company and Indemnitee agree that a monetary remedy for breach of this Agreement may be inadequate, impracticable and difficult of proof, and further agree that such breach may cause Indemnitee irreparable harm. Accordingly, the parties hereto agree that Indemnitee may enforce this Agreement by seeking injunctive relief and/or specific performance hereof, without any necessity of showing actual damage or irreparable harm (having agreed that actual and irreparable harm will result in not forcing the Company to specifically perform its obligations pursuant to this Agreement) and that by seeking injunctive relief and/or specific performance, Indemnitee shall not be precluded from seeking or obtaining any other relief to which he may be entitled. The Company and Indemnitee further agree that Indemnitee shall be entitled to such specific performance and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, without the necessity of posting bonds or other undertakings in connection therewith. The Company acknowledges that in the absence of a waiver, a bond or undertaking may be required of Indemnitee by the Court, and the Company hereby waives any such requirement of a bond or undertaking.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.

                        SWK HOLDINGS CORPORATION
                          



                        By:                        
                             Name:                                                     Title:



                                                 
                             [Name of Indemnitee]
                        





ACTIVE/137137939.4
EX-31.1 5 q125ex311ceocertification.htm EX-31.1 Document

EXHIBIT 31.1
CERTIFICATION

I, Joe D. Staggs, Principal Executive Officer and of the registrant, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of SWK Holdings Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.




5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 15, 2025 /s/ Joe D. Staggs
Joe D. Staggs
Principal Executive Officer


EX-31.2 6 q125ex312cfocertification.htm EX-31.2 Document

EXHIBIT 31.2
CERTIFICATION

I, Adam Rice, Principal Financial & Accounting Officer and of the registrant, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of SWK Holdings Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.




5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 15, 2025 /s/ Adam Rice
Adam Rice
Principal Financial and Accounting Officer


EX-32.1 7 q125ex321ceocertification.htm EX-32.1 Document

EXHIBIT 32.1
CERTIFICATION PURSUANT TO
RULE 13a-14(b) OF THE SECURITIES EXCHANGE ACT OF 1934
AND 18 U.S.C. SECTION 1350

In connection with the Quarterly Report of SWK Holdings Corporation (the “Registrant”) on Form 10-Q for the quarterly period ended March 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joe D. Staggs, Principal Executive Officer of the Registrant, certify, in accordance with Rule 13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, that to the best of my knowledge:

(1) The Report, to which this certification is attached as Exhibit 32.01, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date: May 15, 2025 /s/ Joe D. Staggs
Joe D. Staggs
Principal Executive Officer


EX-32.2 8 q125ex322cfocertification.htm EX-32.2 Document

EXHIBIT 32.2
CERTIFICATION PURSUANT TO
RULE 13a-14(b) OF THE SECURITIES EXCHANGE ACT OF 1934
AND 18 U.S.C. SECTION 1350

In connection with the Quarterly Report of SWK Holdings Corporation (the “Registrant”) on Form 10-Q for the quarterly period ended March 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Adam Rice, Principal Financial and Accounting Officer of the Registrant, certify, in accordance with Rule 13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, that to the best of my knowledge:

(1) The Report, to which this certification is attached as Exhibit 32.01, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date: May 15, 2025 /s/ Adam Rice
Adam Rice
Principal Financial and Accounting Officer