Exhibit 10.22

 

EXECUTION VERSION

 

 

CERTAIN MATERIAL (INDICATED BY [***]) HAS BEEN OMITTED FROM THIS DOCUMENT
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.  THE OMITTED MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

ASSET PURCHASE AGREEMENT

 

between

 

Janssen Pharmaceuticals, Inc.

 

and

 

Depomed, Inc.

 

DATED AS OF JANUARY 15, 2015

 

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

 

Page

 

ARTICLE I DEFINITIONS AND TERMS

1

 

Section 1.01

Definitions

1

Section 1.02

Other Definitional Provisions

17

 

ARTICLE II PURCHASE AND SALE

17

 

Section 2.01

Purchase and Sale of Assets

17

Section 2.02

Matters Related to Purchased Assets and Non-Assigned Assets

19

Section 2.03

Excluded Assets

19

Section 2.04

Assumption of Certain Obligations

21

Section 2.05

Retained Liabilities

22

Section 2.06

Purchase Price; Deposit

23

Section 2.07

Reserved

24

Section 2.08

Allocation of Purchase Price

24

Section 2.09

Transfer Taxes; Proration of Prepaid Expenses

24

Section 2.10

Risk of Loss; Casualty

25

Section 2.11

Certain Costs

25

 

ARTICLE III CLOSING

25

 

Section 3.01

Closing

25

Section 3.02

Pre-Closing Statements

26

 

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER

26

 

Section 4.01

Organization

26

Section 4.02

Authority; Binding Effect

27

Section 4.03

Non-Contravention

27

Section 4.04

Governmental Authorization

28

Section 4.05

No Litigation

28

Section 4.06

Compliance with Laws

28

Section 4.07

Regulatory Matters

29

Section 4.08

Contracts

30

Section 4.09

Intellectual Property

31

Section 4.10

Brokers

32

Section 4.11

Purchased Assets

33

Section 4.12

[***]

33

Section 4.13

Absence of Material Changes

33

Section 4.14

Inventories; Transferred Equipment

34

Section 4.15

Taxes

34

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

ii

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ARTICLE V REPRESENTATIONS AND WARRANTIES OF PURCHASER

35

 

Section 5.01

Organization

35

Section 5.02

Authority; Binding Effect

35

Section 5.03

Non-Contravention

35

Section 5.04

Governmental Authorization

36

Section 5.05

Brokers

36

Section 5.06

Financial Capability; Purchaser Registration Statement

36

Section 5.07

Financing

36

Section 5.08

Solvency

36

 

ARTICLE VI COVENANTS

37

 

Section 6.01

Conduct of Business

37

Section 6.02

Condition of the Purchased Assets

39

Section 6.03

Information and Documents

40

Section 6.04

Publicity; Public Disclosure

41

Section 6.05

Commercially Reasonable Efforts; Regulatory Approvals; Access

41

Section 6.06

Books and Records

42

Section 6.07

Ancillary Agreements

43

Section 6.08

Regulatory Matters

43

Section 6.09

NDC Numbers, Product Returns, Rebates and Chargebacks

44

Section 6.10

Purchaser Use of Seller Names

45

Section 6.11

Seller Use of Transferred IP Rights

46

Section 6.12

Further Assurances

46

Section 6.13

Bulk Transfer Laws

47

Section 6.14

Right of Reference

47

Section 6.15

Competition

47

Section 6.16

Insurance

47

Section 6.17

Support

47

Section 6.18

Payments from Third Parties

48

Section 6.19

Resale Exemption Certificates

48

Section 6.20

Returned Goods

48

Section 6.21

Financial Statements

48

Section 6.22

Financing

50

Section 6.23

Tax Matters

52

Section 6.24

Licenses and Additional Rights

52

Section 6.25

Notice of Certain Events

52

Section 6.26

Confidentiality

53

Section 6.27

Covenant Not to Sue

53

Section 6.28

No Negotiation

54

Section 6.29

Material Loss

54

Section 6.30

Cooperation in Litigation

54

Section 6.31

License Assignment and Consent

54

Section 6.32

[***]

55

Section 6.33

Post-Closing Transition

55

Section 6.34

Seller Affiliates

55

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

iii

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ARTICLE VII CLOSING CONDITIONS

55

 

Section 7.01

Conditions Precedent to Purchaser’s Obligations on the Closing Date

55

Section 7.02

Conditions Precedent to Seller’s Obligations on the Closing Date

57

 

ARTICLE VIII INDEMNIFICATION

58

 

Section 8.01

Indemnification by Seller

58

Section 8.02

Indemnification by Purchaser

58

Section 8.03

Notice of Claims

59

Section 8.04

Third Party Claims

59

Section 8.05

Expiration

61

Section 8.06

Certain Limitations

61

Section 8.07

Sole Remedy/Waiver

61

Section 8.08

Indemnity Payments

62

Section 8.09

Calculation of Damages

62

Section 8.10

Tax Treatment of Indemnity Payments

62

Section 8.11

No Consequential Damages

62

 

ARTICLE IX TERMINATION

63

 

 

 

Section 9.01

Termination

63

Section 9.02

Effect of Termination

64

 

ARTICLE X MISCELLANEOUS

66

 

Section 10.01

Notices

66

Section 10.02

Amendment; Waiver

68

Section 10.03

Assignment

68

Section 10.04

Entire Agreement

68

Section 10.05

Fulfillment of Obligations

69

Section 10.06

Parties in Interest

69

Section 10.07

Reserved

69

Section 10.08

Expenses

69

Section 10.09

Schedules

69

Section 10.10

Governing Law; Jurisdiction; No Jury Trial

69

Section 10.11

Dispute Resolution

70

Section 10.12

Counterparts

72

Section 10.13

Headings

72

Section 10.14

Severability

73

Section 10.15

Specific Performance

73

 

SCHEDULES

 

1(a)

 

Products

1.01(a)

 

Inventories

1.01(b)

 

Knowledge of Seller

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

iv

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1.01(d)

 

Records and Data; Pediatric Studies

1.01(f)

 

Transferred Domain Names

1.01(g)

 

Transferred Equipment

1.01(h)

 

Transferred Trademark Rights

1.01(i)

 

Transferred IP Licenses

1.01(j)

 

Permitted Liens

2.01(d)

 

Transferred Governmental Authorizations

2.01(g)

 

Transferred Contracts

2.04(g)

 

Certain Litigation

2.05(a)

 

Retained Legal Proceedings

2.09(c)

 

Prepaid Items (Allocation)

4.03

 

Non-Contravention

4.04

 

Governmental Authorizations (Seller)

4.05(a)

 

Litigation

4.05(b)

 

Product Liability Claims

4.06

 

Compliance with Laws

4.07(a)

 

Governmental Authorizations (Regulatory Matters)

4.07(g)

 

FDA Notices

4.08(a)

 

Contract Matters

4.08(b)

 

Transferred Contract Matters

4.09(a)

 

Intellectual Property Matters

4.09(b)

 

Transferred IP Rights

4.09(f)

 

[***]

4.11

 

Limitations on Purchased Assets

4.12

 

[***]

4.13

 

Absence of Material Changes

4.15

 

Taxes

5.04

 

Governmental Authorizations (Purchaser)

5.05

 

Brokers (Purchaser)

6.01(c)

 

Conduct of Business

6.14

 

Right of Reference

6.20

 

Seller Returned Goods Policy

6.32

 

[***]

7.01(f)

 

Anti-Trust Filings

 

EXHIBITS

 

Exhibit A

 

Seller Closing Deliverables

Exhibit B

 

Purchaser Closing Deliverables

Exhibit C

 

[Reserved.]

Exhibit D

 

Manufacturing Responsibilities Chart

Exhibit E

 

Johnson & Johnson Universal Calendar, 2015

Exhibit F

 

Form of Seller’s Officer’s Certificate

Exhibit G

 

Form of Seller’s Secretary’s Certificate

Exhibit H

 

Form of Purchaser’s Officer’s Certificate

Exhibit I

 

Form of Purchaser’s Secretary’s Certificate

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

v

--------------------------------------------------------------------------------

 

Exhibit J

 

Form of Bill of Sale

Exhibit K

 

Form of Assignment and Assumption

Exhibit L

 

IP Assignments

Exhibit M

 

Form of Seller FDA Transfer Letters

Exhibit N

 

Form of Purchaser FDA Transfer Letters

Exhibit O

 

Form of Long Term Collaboration Agreement

Exhibit P

 

[Reserved.]

Exhibit Q

 

[Reserved.]

Exhibit R

 

Form of API Supply Agreement

Exhibit S

 

[Reserved.]

Exhibit T

 

Form of Escrow Agreement

Exhibit U

 

Form of Financial Statements

Exhibit V

 

[***]

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

vi

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ASSET PURCHASE AGREEMENT

 

This Asset Purchase Agreement, dated as of January 15, 2015 (the “Effective
Date”), by and between Janssen Pharmaceuticals, Inc., a Pennsylvania corporation
(“Seller”) and Depomed, Inc., a California corporation (“Purchaser”).

 

W I T N E S S E T H:

 

WHEREAS, Seller, directly and indirectly through certain of its Affiliates, is
in the business of researching, developing, manufacturing or having made,
marketing, distributing and selling, as the case may be, products (including
pharmaceutical drugs) for use by professional health care providers;

 

WHEREAS, Seller has an exclusive royalty bearing license to commercialize the
products set forth on Schedule 1(a) (the “Products”) in the United States, a
non-exclusive royalty bearing license to manufacture the Products for
commercialization in the United States and a non-exclusive royalty bearing
license to conduct certain activities necessary to obtain, and to seek to
obtain, regulatory approval of the Products in the United States pursuant to
that certain License Agreement (U.S.), effective as of January 13, 2015, by and
among Grünenthal GmbH (“Grünenthal”), Seller, and Janssen Research &
Development, LLC (the “License”);

 

WHEREAS, Seller desires to sell (or to cause to be sold), and Purchaser desires
to purchase, certain rights and assets related to the Products, including
Seller’s rights under the License, and Purchaser is willing to assume certain
duties, liabilities and obligations related to the Products, including certain
duties, liabilities and obligations under the License, to allow Purchaser to
commercialize, manufacture and conduct certain activities necessary to obtain,
and to seek to obtain, regulatory approval of the Products in the United States,
upon the terms and subject to the conditions set forth herein, the License and
in the Ancillary Agreements; and

 

NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements contained herein, the Parties hereby agree
as follows:

 

ARTICLE I
DEFINITIONS AND TERMS

 

Section 1.01          Definitions.  As used in this Agreement, the following
terms shall have the meanings set forth or as referenced below:

 

“Accounts Payable” shall mean all invoices, bills, accounts payable or other
trade payables due and owed to any third party arising on or prior to the
Closing Date out of or in connection with developing, commercializing,
manufacturing (or having manufactured), packaging, importing, marketing,
distributing and/or selling the Products by Seller and the Divesting Entities
and any of their respective Affiliates on or prior to the Closing Date.

 

“Accounts Receivable” shall mean all accounts receivable, notes receivable and
other indebtedness due and owed by any third party to Seller or any of its
Affiliates arising or held in connection with the sale of the Products on or
prior to the Closing Date.

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

1

--------------------------------------------------------------------------------

 

“Additional Expenses” shall have the meaning set forth in Section 9.02(c).

 

“Affiliate” shall mean, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with, such Person
at any time during the period for which the determination of affiliation is
being made.  For purposes of this definition, “control” of a Person means the
power, direct or indirect, to direct or cause the direction of the management
and policies of such Person whether by contract or otherwise and, in any event
and, without limitation of the previous sentence, any Person owning more than
fifty percent (50%) or more of the voting securities of another Person shall be
deemed to control that Person.

 

“Agreement” shall mean this Asset Purchase Agreement, including all Schedules
and Exhibits attached hereto, as the same may be amended, modified or
supplemented from time to time in accordance with the terms hereof.

 

“Allocation” shall have the meaning set forth in Section 2.08.

 

“Ancillary Agreements” shall have the meaning set forth in Section 6.07.

 

“ANDA Litigation” shall mean the Legal Proceedings set forth on Schedule
2.04(g).

 

“Anti-Trust Filings” shall have the meaning set forth in Section 7.01(f).

 

“API” shall mean the active pharmaceutical ingredient of the Products.

 

“Assignment Agreement” shall have the meaning set forth in Section 6.31.

 

“Assignment and Assumption” shall have the meaning specified in Exhibit A.

 

“Assumed Liabilities” shall have the meaning set forth in Section 2.04.

 

“Audit Opinion” shall have the meaning set forth in Section 6.21(b).

 

“Bill of Sale” shall have the meaning specified in Exhibit A.

 

“Business” shall mean the business of researching, developing, manufacturing or
having made, packaging, importing, marketing, distributing, selling and
commercializing the Products, in each of the foregoing cases, in the United
States, as conducted by Seller, the Divesting Entities and any of their
respective Affiliates.

 

“Business Books and Records” shall have the meaning set forth in
Section 2.01(e), subject to Section 2.03(f).

 

“Business Day” shall mean any day other than a Saturday, a Sunday or a day on
which banks in New York City, New York are authorized or obligated by law or
executive order to close or any other day that Seller or any of the Divesting
Entities are closed consistent with the

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

2

--------------------------------------------------------------------------------

 

Johnson & Johnson Universal Calendar (for illustrative purposes, a copy of the
Johnson & Johnson Universal Calendar for the year 2015 is attached hereto as
Exhibit E).

 

“Cap” shall have the meaning set forth in Section 8.06.

 

“CDAPCA” shall mean the Comprehensive Drug Abuse Prevention and Control Act of
1970.

 

[***]

 

“Claim” shall have the meaning set forth in Section 8.03.

 

“Closing” shall mean the consummation of the Transactions pursuant to the terms
of this Agreement.

 

“Closing Date” shall have the meaning set forth in Section 3.01(a).

 

“Closing Legal Impediment” shall have the meaning set forth in Section 7.01(e).

 

“Code” shall mean the Internal Revenue Code of 1986, as amended.

 

[***]

 

[***]

 

“Competition Laws” shall mean Laws of any jurisdiction that are designed or
intended to prohibit, restrict or regulate actions that may have the purpose or
effect of creating a monopoly, lessening competition or restraining trade,
including the HSR Act.

 

“Competitive Activity” shall have the meaning set forth in Section 6.15(a).

 

“Compliant” shall mean, with respect to the Required Information (including the
Financial Statements), that (a) such Required Information, when taken as a
whole, does not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make such Required Information, in light
of the circumstances under which the statement contained in the Required
Information is made, not misleading and (b) Seller’s independent registered
public accounting firm has not withdrawn any audit opinion with respect to any
financial statements contained in the Required Information.

 

“Confidential Information” shall mean all confidential or proprietary
information in the possession of Seller or its Affiliates relating to Purchaser
or its Affiliates, the Business, the Products, the Purchased Assets or the
Assumed Liabilities, including (a) information and data relating to sales,
advertising, manufacturing, packaging, distribution, detailing, marketing,
strategic plans, costs, development, commercialization, technology or formulae,
(b) without limiting the generality of the foregoing, copies of any Business
Books and Records retained pursuant to Section 2.01(e) and (c) Know-How.
 “Confidential Information” shall not include any information that (i) was
publicly available prior to the date of this Agreement or hereafter becomes
publicly available not as a result of any breach of this Agreement by Seller or
any of its

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

3

--------------------------------------------------------------------------------

 

Affiliates (or their Representatives) or (ii) becomes available to Seller or its
Affiliates from a Person (other than Seller or any of its Affiliates) that is
not subject to any legally binding obligation to Purchaser or any of its
Affiliates to keep such information confidential.

 

“Confidentiality Agreement” shall mean the Confidential Disclosure Agreement,
dated as of [***] between Purchaser and Seller, as amended by the Amendment to
Confidential Disclosure Agreement, dated as of [***].

 

“Contract” shall have the meaning set forth in Section 2.01(g).

 

“Control” shall mean ownership or possession (including through control of an
Affiliate or through an agreement with an Affiliate or third party) of the right
or ability to assign or to grant a license or sublicense of specified
intellectual property rights (such as know-how) without violating the terms of
any agreement or other arrangement with any third party.

 

“Co-Pay Card Discounts” shall have the meaning set forth in Section 6.09(e).

 

“Covered Action” shall mean any suit, action or proceeding, whether at Law or in
equity, whether in contract or in tort or otherwise arising out of, or relating
to, the Transactions and (i) involving any Financing Source, (ii) brought
against a Party or an Affiliate of such Party by the other Party or an Affiliate
of the other Party, or (iii) supported by one Party or an Affiliate of such
Party, directly or indirectly, against the other Party or an Affiliate of such
other Party.

 

“CPR Mediation Procedure” shall have the meaning set forth in
Section 10.11(a)(i).

 

“CPR Rules” shall have the meaning set forth in Section 10.11(b)(i).

 

“CSA” shall mean the Controlled Substances Act.

 

“Data Room” shall mean the electronic data room containing documents and
materials relating to the Purchased Assets as of 8:00 p.m. Eastern Standard Time
on January 14, 2015.

 

“De Minimis Amount” shall have the meaning set forth in Section 8.06.

 

“DEA” shall mean the United States Drug Enforcement Agency.

 

“Definitive Financing Agreements” shall have the meaning set forth in
Section 6.22(a).

 

“Deposit” shall mean Five Hundred Million U.S. Dollars ($500,000,000).

 

“Dispute” shall have the meaning set forth in Section 10.11.

 

“Divesting Entities” shall mean, collectively, all Affiliates of Seller that
have any right, title or interest in, to or under the Purchased Assets.

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

4

--------------------------------------------------------------------------------

 

“Effective Date” shall have the meaning set forth in the heading of this
Agreement.

 

“Environmental Laws” shall mean all Laws related to the protection of the
environment or human health and safety or the release, presence of, exposure to,
or the management, manufacture, use, containment, storage, recycling,
reclamation, monitoring, reuse, treatment, generation, discharge,
transportation, processing, production, disposal, leaching, migration, emission
or remediation of any contaminant or pollutant, toxic, radioactive or hazardous
waste, chemical, substance, material or constituent.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended.

 

“ERISA Affiliate” shall mean any other person or entity under common control
with Seller within the meaning of Section 414(b), (c), (m) or (o) of the Code
and the regulations issued thereunder.

 

“Escrow Account” shall have the meaning set forth in Section 2.06(a).

 

“Escrow Agent” shall mean JPMorgan Chase Bank, N.A.

 

“Escrow Agreement” shall mean the Escrow Agreement, dated as of the Effective
Date, among Purchaser, Seller and the Escrow Agent, in the form attached hereto
as Exhibit T.

 

“Escrow Amount” means the amount of funds held in the Escrow Account at the time
such amount is required to be released in accordance with Section 2.06(a),
Section 9.02(b) or Section 9.02(c).

 

“Escrow Release” shall have the meaning set forth in Section 2.06(a).

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

“Excluded Assets” shall have the meaning set forth in Section 2.03.

 

“FDA” shall mean the United States Food and Drug Administration, and any
successor agency having substantially the same functions.

 

“Financial Statements” shall mean “special purpose combined financial
statements” meeting the requirements contained in the SEC Waiver Letter and
otherwise presented in substantially the manner set forth on Exhibit U (and all
applicable notes), consisting of the audited Statement of Revenues and Expenses
as of and for the Fiscal Years ended December 30, 2012, December 29, 2013 and
December 28, 2014, the Statement of Assets to be Acquired and Liabilities to be
Assumed as of and for the Fiscal Years ended December 29, 2013 and December 28,
2014, and the related footnotes.  The Statement of Assets to be Acquired and
Liabilities to be Assumed and the Statement of Revenues and Expenses will be
audited by Seller’s independent registered public accounting firm.  If the
Marketing Period has commenced prior to, but has not concluded on or by [***],
then from and after [***], all references in this definition to “Financial
Statements” shall additionally include the Q1 Financials (which such Q1

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

5

--------------------------------------------------------------------------------

 

Financials, for avoidance of doubt, shall not be audited by Seller’s independent
registered public accounting firm).

 

“Financing” shall mean the financing, in the form of (alone or in combination) a
customary bank loan, high yield debt financing, equity-linked financing or
equity financing, whether in the form of a registered public offering or
non-registered offering, in an aggregate amount sufficient for Purchaser to pay
the Purchase Price (less the Escrow Amount delivered to Seller pursuant to the
Escrow Release as contemplated by Section 3.01(c)) in order to consummate the
Transactions and to pay any related fees and expenses.

 

“Financing Sources” shall mean the Persons that provide or otherwise enter into
agreements to provide Financing in connection with the Transactions, together
with their Affiliates, officers, directors, employees and representatives
involved in the Financing and their successors and assigns.

 

“Fiscal Quarter” shall mean a quarterly period based on the Johnson & Johnson
Universal Calendar (a copy of which for the year 2015 is attached hereto in
Exhibit E).

 

“Fiscal Year” shall mean a year based on the Johnson & Johnson Universal
Calendar (a copy of which for the year 2015 is attached hereto in Exhibit E).

 

[***]

 

“Food and Drugs Act” shall mean Federal Food, Drug and Cosmetic Act of 1938, as
amended.

 

“Formalities” shall have the meaning set forth in Section 4.09(b).

 

“Forward-Looking Statements” shall have the meaning set forth in
Section 6.02(c).

 

“Fundamental Representations” shall mean the representations and warranties
(a) of Seller contained in Section 4.01 (Organization), Section 4.02 (Authority;
Binding Effect), Section 4.10 (Brokers) and Section 4.11 (Purchased Assets) and
(b) of Purchaser contained in Section 5.01 (Organization), Section 5.02
(Authority; Binding Effect) and Section 5.05 (Brokers).

 

“GAAP” shall mean accounting principles and practices generally accepted in the
United States of America, as in effect on the Effective Date.

 

“Governmental Authority” shall mean any supranational, national, federal,
provincial, state or local judicial (including any arbitration panel),
legislative, executive or regulatory authority, agency, commission, body or
instrumentality, including the FDA, DEA and any comparable agency in any
jurisdiction other than the United States, or quasi-governmental,
self-regulatory organization, commission, body, authority or agency.

 

“Governmental Authorizations” shall mean all licenses, permits, clearances,
variances, exemptions, Governmental Orders, registrations, certificates and
other authorizations,

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

6

--------------------------------------------------------------------------------

 

consents and approvals required to market or sell the Products in the United
States or to carry on the Business under the applicable Laws of any Governmental
Authority.

 

“Governmental Order” shall mean any order, writ, judgment, injunction, decree,
consent decree, decision, ruling, subpoena, verdict, injunction, stipulation,
determination, agreement or award entered, issued, made or rendered by or with
any Governmental Authority.

 

[***]

 

“Grünenthal” shall have the meaning set forth in the Recitals to this Agreement.

 

“Health Laws” shall mean any Law the stated purpose of which is to ensure the
safety, efficacy and quality of medicines by regulating the quality, identity,
strength, purity, safety, efficacy, testing, sale or distribution, sale, import
or export, good laboratory practices, good clinical practices, investigational
use, product marketing authorization, manufacturing compliance and approval,
good manufacturing practices, labeling, advertising, safety surveillance,
including the relevant provisions of the CDAPCA, CSA, PPACA, Food and Drugs Act,
and applicable regulations promulgated thereunder by the FDA, DEA or other
applicable Governmental Authority.

 

“Highly Confident Letters” shall mean [***] to Purchaser.

 

“HSR Act” shall mean the U.S. Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.

 

“Income Tax” or “Income Taxes” shall mean all Taxes based upon, measured by, or
calculated with respect to (a) gross or net income or gross or net receipts of
profits (including, but not limited to, any capital gains, minimum taxes and any
Taxes on items of tax preference, but not including sales, use, goods and
services, real or personal property transfer or other similar Taxes),
(b) multiple bases (including, but not limited to, corporate franchise, doing
business or occupation Taxes) if one or more of the bases upon which such Tax
may be based upon, measured by, or calculated with respect to, is described in
clause (a) above, or (c) withholding taxes measured by, or calculated with
respect to, any payments or distributions (other than wages).

 

“Indemnified Party” shall have the meaning set forth in Section 8.03.

 

“Indemnifying Party” shall have the meaning set forth in Section 8.03.

 

[***]

 

“Infringement” shall mean direct or indirect infringement, misappropriation or
other unauthorized use (including unfair trade practice or unfair competition
under applicable Law).

 

“Inventories” shall mean the finished goods inventory of the Products for sale
in the United States owned or held for use by Seller or any of its Affiliates on
the Closing, as described in general terms on Schedule 1.01(a).

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

7

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“IP Assignments” shall have the meaning specified in Exhibit A.

 

“IP Rights” shall mean all (a) utility and design patents, design registrations,
industrial designs, utility models, invention disclosures, certificates of
invention and statutory invention registrations, including any and all
applications and registrations, provisionals, divisions, continuations,
continuations in part, extensions, substitutions, renewals, registrations,
revalidations, reversions, reexaminations, reissues or additions, of or to any
of the foregoing items, and all rights and priorities afforded under any
applicable Laws with respect thereto (collectively, “Patents”); (b) Trademark,
brand features, domain names, logos, name, service marks, trade names, or
goodwill from such, and other distinctive brand features; (c) copyrights, all
applications, registrations and renewals therefor, and all code, technical or
non-technical documentation, schematics, drawings, hardware designs, diagrams,
or implementations, as well as any original works of authorship, including any
modifications, additions, or derivative works from an existing work
(collectively, “Copyrights”) (d) domain names, and all registrations and pending
applications for registrations therefor (collectively, “Domain Names”); and
(e) trade secrets, information, marketing know-how, knowledge, data, designs,
ideas, concepts, methods, techniques, inventions, discoveries, trade secrets,
formulae, compositions, expertise, experimental (whether clinical or not) data
and other results of trials, studies or investigations, and processes, whether
patented or unpatented, whether copyrighted or copyrightable, and whether or not
capable of separate or precise definition or identification, whether acquired
through trial and error, experience or other means, including regulatory
information submitted to Governmental Authorities, Product specifications, and
information relating to the testing (including quality control standards, assay
methods and stability studies), storage, manufacturing and use of the Products,
or the manufacturing, marketing or sale of the Products (collectively,
“Know-How”).

 

“Judgment” shall mean any judgment, order, writ, injunction, legally binding
agreement with a Governmental Authority, stipulation or decree.

 

“Knowledge of Seller” shall mean the actual knowledge of any of the individuals
listed on Schedule 1.01(b), in each case, after due inquiry of such named
individual’s files and records and of those employees of Seller who are such
named individuals’ direct reports.

 

“Laws” shall include any federal, state, foreign or local law, common law,
statute, ordinance, rule, regulation, code or Governmental Order.

 

“Legal Proceeding” shall mean any claim, action, suit, case, litigation,
proceeding, investigation, charge, criminal prosecution, judicial, governmental
or regulatory investigation, or arbitration, mediation or alternative dispute
resolution proceeding.

 

“Liabilities” shall mean any and all debts, liabilities, costs, guarantees,
commitments, assessments, expenses, claims, losses, damages, deficiencies and
obligations, whether accrued or fixed, known or unknown, liquidated or
unliquidated, asserted or unasserted, absolute or contingent, matured or
unmatured, determined or determinable, accrued or not accrued, due or to become
due, direct or indirect, whenever or however arising (including whether arising
out of any contract, common law or tort based on negligence or strict liability)

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

8

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and whether or not the same would be required by GAAP to be reflected in
financial statements or disclosed in the notes thereto.

 

“License” shall have the meaning set forth in the Recitals to this Agreement.

 

“Licensed Seller Know-How” shall mean, collectively, all Know-How that is owned
or controlled by Seller, its Affiliates or a Divesting Entity and that is
related to the Business, Products, the Purchased Assets or the Assumed
Liabilities and is [***].

 

“Lien” shall mean, with respect to any property or asset, any lien, security
interest, mortgage, pledge, assessment, restriction, adverse claim, levy,
charge, hypothecation, easement, restriction, title retention clause,
encumbrance or other similar claim of any kind, character or description,
whether of record or not, or any contract to give any of the foregoing, in
respect of such property or asset.

 

“Limited License Period” shall have the meaning set forth in Section 6.10(a).

 

“Long Term Collaboration Agreement” shall have the meaning set forth in
Section 6.07.

 

“Losses” shall mean losses, liabilities, claims, damages, deficiencies, costs,
expenses, penalties, assessments, fines, fees, suits, actions, causes of action,
judgments, Taxes and awards directly incurred or suffered (and, if applicable,
reasonable attorneys’ fees associated therewith).

 

“Marketing Period” shall mean the first (1st) period of [***] consecutive
Business Days (a) commencing on the first (1st) Business Day following the date
on which Purchaser has received from Seller the Financial Statements, the Audit
Opinion and the Seller Financial Statement Certification and (b) throughout
which no Seller Certification has been rescinded or revoked (or is required to
be rescinded or revoked pursuant to Section 6.21(b) or Section 6.22(b), as
applicable); provided, however, that notwithstanding the foregoing, (i) except
as set forth in the final sentence of the third (3rd) paragraph of this
definition, in no event shall the Marketing Period commence prior to [***],
(ii) the Marketing Period shall end on any earlier date that is the date on
which the Financing is consummated and (iii) at Purchaser’s option, the
Marketing Period may be extended [***] for a period of up to [***] consecutive
Business Days if at any time following the [***] Business Day of the Marketing
Period, Purchaser reasonably and in good faith requests additional or updated
Required Information that, based on the advice of counsel, is required to be
included in a prospectus, offering memorandum or other document or agreement
relating to, or otherwise disclosed in connection with, and reasonably required
for, the Financing, in order to prevent any statement in such a document, when
taken as a whole, from containing any untrue statement of a material fact or
from omitting to state any material fact necessary in order to make such
statement, in light of the circumstances under which the statement contained in
such document is made, not misleading in violation of applicable Laws [***].

 

Notwithstanding the foregoing, the “Marketing Period” shall be deemed not to
have commenced if, on or prior to the completion of such [***] Business Day
period (as extended, if applicable),

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

9

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(A) Seller shall have publicly announced any intention to restate any material
financial information included in the Financial Statements or that any such
restatement is under consideration, in which case the Marketing Period shall be
deemed not to commence unless and until (i) such restatement has been completed
and the applicable Financial Statements have been amended and delivered to
Purchaser (together with the corresponding Audit Opinion and Seller Financial
Statement Certification) or (ii) Seller has announced that it has concluded that
no restatement shall be required, and, in the case of the preceding clauses
(i) and (ii), the requirements in clauses (a) and (b) in the first paragraph of
this definition would be satisfied on the first (1st) day, throughout and on the
last day of such new [***] Business Day period (as extended, if applicable) or
(B) Seller has rescinded or revoked (or shall be required to rescind or revoke
pursuant to Section 6.21(b) or Section 6.22(b), as applicable) a Seller
Certification or the Financial Statements would not be Compliant, in each case,
at any time during such [***] Business Day period (as extended, if applicable),
and in the case of the preceding clause (B), a new [***] Business Day period
shall commence upon Purchaser receiving updated Financial Statements, an updated
Audit Opinion and/or a new Seller Certification (as applicable), and the
requirements in clauses (a) and (b) in the first paragraph of this definition
would be satisfied on the first day, throughout and on the last day of such new
[***] Business Day period.

 

Notwithstanding the foregoing, if the Marketing Period has commenced prior to,
but has not concluded on or by [***], then the Marketing Period shall be
extended by or resumed for (as applicable) an additional [***] Business Days
from the later of (1) the date on which Seller has delivered the Q1 Financials
and a corresponding Seller Financial Statement Certification to Purchaser or
(2) [***].  Notwithstanding the first (1st) sentence of first (1st) paragraph of
this definition, if Purchaser has received from Seller the Financial Statements,
the Audit Opinion and the Seller Financial Statement Certification on or before
[***], then the Marketing Period shall commence on [***].

 

“Material Adverse Effect” shall mean, with respect to Seller, any Divesting
Entity or any of their respective Affiliates, any change, effect, event,
circumstance, occurrence or state of facts that is or would reasonably be
expected to be materially adverse to (a) the results of operations, condition
(financial or otherwise) or the value of the Business, the Products, the
Purchased Assets and the Assumed Liabilities, taken as a whole, or (b) the
ability of Seller to consummate the Transactions, provided that none of the
following changes, effects, events, circumstances, occurrences or states of
facts shall be deemed, either alone or in combination, to constitute a Material
Adverse Effect, or be taken into account in determining whether there has been
or would reasonably be expected to be a Material Adverse Effect: (i) changes or
effects in the general business, economic, social, political or legal conditions
or the securities, syndicated loan, credit or financial markets; (ii) changes or
proposed changes in applicable Law or GAAP (or any applicable accounting
standards in any jurisdiction outside the United States) or the enforcement
thereof; (iii) changes to Law, that generally affect the industries in which
Seller or its Affiliates operate, or any change in governmental or private third
party payor reimbursement rules or policies; (iv) changes or effects that arise
out of or are attributable to the commencement, occurrence, continuation or
intensification of any war, sabotage, armed hostilities or acts of terrorism;
(v) earthquakes, hurricanes or other natural disasters; (vi) failure to meet
projections, estimates, plans or forecasts (it being understood that the facts
or occurrences giving rise or contributing to any such failure may be deemed to
constitute, or be taken into account in determining whether there has been a
Material Adverse Effect to the extent

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

10

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such facts or occurrences are not otherwise set forth in clauses (i) through
(xiii)); (vii) changes or effects that arise out of or are attributable to the
negotiation, execution, announcement or pendency of the Transactions or the
performance of and compliance with the terms of this Agreement, including any
litigation, any reduction in revenues or income, any loss of customers, any
disruption in supplier, distributor or similar relationships, in each case, as a
result thereof; (viii) changes in the number of competing products in the
market(s) in which the Products are sold; (ix) any labor strikes, labor
stoppages or loss of employees; (x) currency fluctuations; (xi) changes or
effects that arise out of or are attributable to actions or omissions of
Purchaser or any of its Affiliates or actions or omissions of Seller or any of
its Affiliates and consented to by Purchaser or any of its Affiliates; (xii) any
matter disclosed in the Schedules to this Agreement; or (xiii) the reduction or
lack of marketing of, field force support for or other similar functions in
relation to the Products; except in the cases of clauses (i) and (iii) above, to
the extent such change, effect, event, circumstance, occurrence or state of
facts has a disproportionate adverse effect on the Business relative to other
participants carrying on a similar business in the industry in which the
Business operates.

 

“Material Loss” shall mean any damage or destruction by fire or other casualty
of the Transferred Equipment or part thereof that would materially prevent
Seller from transferring the Transferred Equipment to Purchaser at Closing or
would have a material adverse effect on the Business.

 

“Morgan Stanley” shall have the meaning set forth in Section 5.07.

 

“NDC” shall mean National Drug Code.

 

“Non-Assigned Asset” shall have the meaning set forth in Section 2.02(a).

 

[***]

 

[***]

 

[***]

 

[***]

 

“Outside Date” shall mean [***]

 

[***]

 

[***]

 

“Party” shall mean Seller or Purchaser individually, as the context so requires,
and the term “Parties” shall mean, collectively, Seller and Purchaser.

 

“Permitted Liens” shall mean (a) all Liens set forth on Schedule 1.01(j) hereto;
(b) statutory Liens arising out of operation of Law with respect to a Liability
incurred in the ordinary course of business and which is not delinquent;
(c) Liens, other than Liens securing indebtedness for borrowed money, that,
individually and in the aggregate, do not and would not

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

11

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reasonably be expected to materially detract from the value or impair the use of
the property subject thereto or make such property unmarketable; (d) Liens for
Taxes not yet due, payable, delinquent or subject to penalties for nonpayment,
or which are being contested in good faith through proper proceedings, in each
case, with sufficient reserves maintained in accordance with GAAP; and
(e) mechanics’, materialmens’, carriers’, workmens’, warehousemens’,
repairmens’, landlords’ or other like Liens and security obligations that are
incurred in the ordinary course of business and are not delinquent.

 

“Person” shall mean an individual, a limited liability company, a joint venture,
a corporation, a partnership, an association, a trust, a division,
unincorporated organization, or an operating group of any of the foregoing or
any other entity or organization, whether governmental or otherwise.

 

“Pharmaceutical Affiliates” shall mean those Affiliates of Seller that are
engaged in the development, manufacture or commercialization of pharmaceutical
drugs.

 

“Plan” shall mean any “pension plans” (as defined under Section 3(2) of ERISA),
“welfare plans” (as defined under Section 3(1) of ERISA) or any other employee
benefit plan, program or arrangement that is currently or has previously been
sponsored, maintained or contributed to by Seller or its ERISA Affiliates.

 

“Post-Transfer Supply Agreement” shall have the meaning set forth in
Section 6.07.

 

“PPACA” shall mean the Patient Protection and Affordable Care Act of 2010, as
amended by the Health Care Education and Reconciliation Act of 2010.

 

“Preliminary Inventories Statement” shall have the meaning set forth in
Section 3.02.

 

“Products” shall have the meaning set forth in the Recitals to this Agreement.

 

“Promotional Materials” shall mean all advertising, marketing, market research,
training, trade show, sales and promotional media, materials and business plans
and reports, if any, relating exclusively to the commercialization of the
Products that are in Seller’s, its Affiliates’ or any Divesting Entities’
physical possession or under its or their control.

 

“Protocol” shall have the meaning set forth in Section 10.11(b)(vi).

 

“Purchase Price” shall have the meaning set forth in Section 2.06(b).

 

“Purchased Assets” shall have the meaning set forth in Section 2.01.

 

“Purchaser” shall have the meaning set forth in the heading of this Agreement.

 

“Purchaser FDA Transfer Letters” shall mean the letters from Purchaser to the
FDA, duly executed by Purchaser, notifying the FDA of the transfer of the rights
to the applicable Governmental Authorizations to Purchaser.

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

12

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“Purchaser Indemnitees” shall have the meaning set forth in Section 8.01.

 

“Purchaser IP Rights” shall mean all IP Rights under Purchaser’s Control as of
and at any time following the Effective Date.

 

“Purchaser Material Adverse Effect” shall have the meaning set forth in
Section 5.03.

 

[***]

 

“Purchaser’s Officer’s Certificate” shall have the meaning set forth in
Section 7.02(c).

 

“Purchaser’s Secretary’s Certificate” shall have the meaning set forth in
Section 7.02(d).

 

“Q1 Financials” shall mean “special purpose combined financial statements”
(including all applicable notes) consisting of the Statement of Revenues and
Expenses for the Fiscal Quarters ended March 30, 2014 and March 29, 2015, and
the Statement of Assets to be Acquired and Liabilities to be Assumed as of the
Fiscal Quarters ended March 30, 2014 and March 29, 2015, and the related
footnotes, relating to the Products, in each case, reviewed by Seller’s
independent registered public accounting firm, provided that no review report
thereon shall be required.  Such financial statements shall be in the form
required to be filed by Purchaser in satisfaction of the requirements of the SEC
Waiver Letter, Rule 3-05 and Rule 3-06 of Regulation S-X, in each case, as
applicable, Form 8-K of the Exchange Act and for inclusion in a registration
statement on Form S-3; provided, however, that such financial statements shall
be no greater in scope than those required by the SEC Waiver Letter.

 

[***]

 

“Registration Statement” shall have the meaning set forth in Section 5.06(b).

 

“Regulatory Information” shall mean (a) all correspondence and submissions
between Seller or any of the Divesting Entities and any United States
Governmental Authority, including the FDA and the DEA, with respect to the
Transferred Governmental Authorizations, including any reports, filings, or
notices submitted to any Governmental Authority to support, maintain or obtain
such Transferred Governmental Authorizations; and (b) records and data from all
clinical and pre-clinical studies and trials conducted or being conducted by or
on behalf of Seller or any of the Divesting Entities, which concern the Products
and are (i) described in the Governmental Authorizations, (ii) the subject of a
post-marketing requirement as imposed by the FDA or the subject of a
post-marketing commitment to the FDA, or (iii) listed on Schedule 1.01(d).

 

“Representatives” shall mean, with respect to either Party, such Party’s
Affiliates and their respective parents, directors, officers, employees,
attorneys, accountants, representatives, financial advisors, lenders,
consultants and other agents.

 

“Required Information” shall have the meaning set forth in Section 6.22(b).

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

13

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“Restrictive Covenants” shall have the meaning set forth in Section 6.15(a).

 

“Retained Liabilities” shall have the meaning set forth in Section 2.05.

 

“Reverse Termination Fee” shall have the meaning set forth in Section 9.02(c).

 

“SEC” shall have the meaning set forth in Section 6.04.

 

“SEC Waiver Letter” shall mean the letter, dated as of [***], from the SEC to
Purchaser.

 

“Seller” shall have the meaning set forth in the heading of this Agreement.

 

“Seller’s Business” shall mean all business activities of Seller and its
Affiliates required for (i) performing Seller’s obligations under this
Agreement, the Ancillary Agreements and the Post-Transfer Supply Agreement and
(ii) researching, developing, manufacturing or having made, marketing,
distributing, selling or commercializing Products or API outside the United
States.

 

“Seller Certification” shall have the meaning set forth in Section 6.22(b).

 

“Seller FDA Transfer Letters” shall mean the letters from Seller to the FDA,
duly executed by Seller (and any Affiliate of Seller, as applicable), notifying
the FDA of the transfer of the rights to the applicable Governmental
Authorizations to Purchasers.

 

“Seller Financial Statement Certification” shall have the meaning set forth in
Section 6.21(b).

 

“Seller Indemnitees” shall have the meaning set forth in Section 8.02.

 

“Seller Names” shall mean the names and logos of Seller, the Divesting Entities
and all of its and their Affiliates.

 

“Seller Required Information Certification” shall have the meaning set forth in
Section 6.22(b).

 

“Seller Responsibility Period” shall mean the period through and including the
date that is the later of (a) [***] following the Closing and (b) [***]

 

“Seller’s Officer’s Certificate” shall have the meaning set forth in
Section 7.01(c).

 

“Seller’s Secretary’s Certificate” shall have the meaning set forth in
Section 7.01(d).

 

“Solvent” shall have the meaning set forth in Section 5.08.

 

“Special Purpose Financial Statements” shall mean the financial statements
(including all applicable notes) of Seller required to be filed by Purchaser
(including the Q1 Financials and the Stub Period Financial Statements) in
satisfaction of the requirements of the

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

14

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SEC Waiver Letter, Rule 3-05 and Rule 3-06 of Regulation S-X, in each case as
applicable, Form 8-K of the Exchange Act and for inclusion in a registration
statement on Form S-3; provided, however, that such financial statements shall
be no greater in scope than those required by the SEC Waiver Letter.

 

“Statement of Assets to be Acquired and Liabilities to be Assumed” shall mean a
statement of the Purchased Assets sold to Purchaser from Seller, specifically
the Inventories and Transferred Equipment, and the Assumed Liabilities.

 

“Statement of Revenues and Expenses” means a statement setting forth all
revenues and expenses relating to the sale of the Products in the United States
for the period in question.  The Statement of Revenues and Expenses shall
include selling, general, and administrative costs associated with the Product
revenue and shall exclude corporate overhead, interest, and taxes.

 

“Stub Period Financial Statements” shall mean the financial statements of Seller
for the period beginning on the first day after the last Fiscal Quarter
immediately prior to the Closing Date and ending on the Closing Date, required
to be filed by Purchaser in satisfaction of the requirements of the SEC Waiver
Letter, Rule 3-05 and Rule 3-06 of Regulation S-X, in each case as applicable,
Form 8-K of the Exchange Act and for inclusion in a registration statement on
Form S-3; provided, however, that such financial statements shall be no greater
in scope than those required by the SEC Waiver Letter.

 

[***]

 

[***]

 

[***]

 

“Tax” or “Taxes” shall mean all taxes, including income, corporation, gross
receipts, transfer, excise, property, sales, use, value-added, goods and
services, license, payroll, withholding, social security and franchise or other
governmental taxes, imposed by any Taxing Authority (including any interest,
penalties or additional tax attributable thereto).

 

“Tax Contest” shall have the meaning set forth in Section 8.04(e).

 

“Tax Return” shall mean any return, report, declaration, information return,
statement or other document filed or required to be filed with any Taxing
Authority in connection with the determination, assessment or collection of any
Tax or the administration of any Laws relating to any Tax.

 

“Taxing Authority” shall mean any Governmental Authority, exercising any
authority to impose, regulate or administer the imposition of Taxes.

 

“Third Party Claim” shall have the meaning set forth in Section 8.03.

 

“Third Party Claim Notice” shall have the meaning set forth in Section 8.03.

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

15

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“Threshold Amount” shall have the meaning set forth in Section 8.06.

 

“Trademarks” shall mean, collectively, trademarks, service marks, trade names,
slogans, logos, trade dress or other similar source or origin identifiers
(whether statutory or common law, whether registered or unregistered), together
with all (a) registrations and applications for any of the foregoing,
(b) extensions or renewals thereof, (c) goodwill (if any) connected with use
thereof or symbolized thereby, (d) rights and privileges arising under
applicable Law with respect to any of the foregoing and (e) all rights
corresponding thereto.

 

“Transaction Documents” shall mean this Agreement, the Ancillary Agreements and
the certificates and other documents delivered pursuant hereto or thereto.

 

“Transactions” shall mean, collectively, the transactions contemplated by this
Agreement and the Ancillary Agreements, including the purchase and sale of the
Purchased Assets and the assumption of the Assumed Liabilities.

 

“Transfer Taxes” shall mean any federal, state, county, local, foreign and other
sales, use, transfer, value added, conveyance, documentary transfer, stamp duty,
recording or other similar Tax, fee or charge imposed in connection with the
Transactions or the recording of any sale, transfer or assignment of property
(or any interest therein) effected pursuant to this Agreement.

 

“Transferred Contracts” shall have the meaning set forth in Section 2.01(g).

 

“Transferred Domain Names” shall mean the domain names and addresses set forth
on Schedule 1.01(f).

 

“Transferred Equipment” shall mean the equipment set forth on Schedule 1.01(g).

 

“Transferred Governmental Authorizations” shall have the meaning set forth in
Section 2.01(d).

 

“Transferred IP Licenses” shall mean the license agreements set forth on
Schedule 1.01(i).

 

“Transferred IP Rights” shall mean the Transferred Domain Names and the
Transferred Trademark Rights and, for solely purposes of Section 4.09, the IP
Rights licensed or granted under the License.

 

“Transferred Trademark Rights” shall mean the Trademarks set forth on Schedule
1.01(h), together with all goodwill associated with the foregoing.

 

“Transition Lots” shall mean those lots of a Product for which Product was
partially sold prior to the Closing and partially sold on or after the Closing.

 

“Transition Plan” shall have the meaning set forth in Section 6.33.

 

“Transition Team” shall have the meaning set forth in Section 6.33.

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

16

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“Transitional Supply Agreement Form” shall have the meaning set forth in
Section 6.07.

 

“UPC” shall mean Universal Product Code.

 

[***]

 

[***]

 

Section 1.02                             Other Definitional Provisions.

 

(a)                                 The words “hereof”, “herein”, “hereto” and
“hereunder” and words of similar import, when used in this Agreement, shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement.

 

(b)                                 The terms defined in the singular shall have
a comparable meaning when used in the plural, and vice versa.

 

(c)                                  The terms “U.S. Dollars” and “$” shall mean
lawful currency of the United States of America.

 

(d)                                 The terms “include,” “includes” and
“including” shall mean “including, without limitation.”

 

(e)                                  When a reference is made in this Agreement
to an Article, a Section, an Exhibit or a Schedule, such reference shall be to
an Article or a Section of, or an Exhibit or a Schedule to, this Agreement
unless otherwise indicated.

 

(f)                                   Time periods based on a number of days
within or following which any payment is to be made or act is to be done shall
be calculated by excluding the day on which the period commences and including
the day on which the period ends and, if applicable, by extending the period to
the next Business Day following if the last day of the period is not a Business
Day.

 

(g)                                  The term “United States” shall refer to the
United States of America and its territories, including Puerto Rico.

 

ARTICLE II
PURCHASE AND SALE

 

Section 2.01                             Purchase and Sale of Assets.  Upon the
terms and subject to the conditions set forth herein, at the Closing, Seller
shall, and shall cause the Divesting Entities to, sell, convey, assign and
transfer to Purchaser, and Purchaser shall purchase, acquire and accept from
Seller and the Divesting Entities, free and clear of all Liens (other than
Permitted Liens), all of Seller’s and the Divesting Entities’ rights, titles and
interests in, to or under the properties, rights, interests and assets set forth
below (collectively, the “Purchased Assets”):

 

(a)                                 the Inventories held for sale;

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

17

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(b)                                 the Transferred IP Rights;

 

(c)                                  the Transferred Equipment;

 

(d)                                 the Governmental Authorizations set forth on
Schedule 2.01(d) (collectively, the “Transferred Governmental Authorizations”);

 

(e)                                  subject to Section 6.06 and Section 6.08
(and other than the items set forth in Section 2.03(f)), the following current
and historical records and files (whether in hard copy format, electronic format
or otherwise) primarily relating to the Products or the Purchased Assets and in
the possession of Seller or any of its Affiliates (but excluding records or
files not reasonably separable from documents or databases that do not relate
exclusively to the Product or the Purchased Assets) and solely to the extent
relating to the commercialization of the Products in the United States
(including, if applicable, supporting Governmental Authorizations in the United
States): (i) supplier and vendor lists, (ii) customer and physician target and
detail lists and records, (iii) a list of the distributors for the Products,
(iv) pricing lists, history, calculations and submissions for the Products,
(v) Promotional Materials, (vi) development, quality control and
pharmacovigilance records, (vii) historical sales and marketing data and
analyses, and (viii) other business records and information relating exclusively
to the Purchased Assets (the foregoing records and documents, collectively the
“Business Books and Records”); provided, however, that Seller may retain copies
of the Business Books and Records or may retain originals of the Business Books
and Records and provide Purchaser with copies in their place; provided, further
that with respect to the preceding clause (iv), the Business Books and Records
shall exclude any responsive items which are related to government programs
identified in the Long Term Collaboration Agreement and for the period of time
during which Purchaser did not own the Products (except where the terms of the
Long Term Collaboration Agreement expressly provide for the transfer of such
items);

 

(f)                                   the Regulatory Information; provided,
however, that Seller may retain copies of the Regulatory Information or may
retain originals of the Regulatory Information and provide Purchaser with copies
in their place;

 

(g)                                  contracts, agreements and commitments
(each, a “Contract”) set forth on Schedule 2.01(g) and all customer orders for
finished goods Products that are outstanding as of the Closing (collectively,
the “Transferred Contracts”);

 

(h)                                 all goodwill associated with the Transferred
Trademark Rights; and

 

(i)                                     all claims, counterclaims, defenses,
causes of action, rights under express or implied warranties, rights of
recovery, rights of set-off, rights of subrogation and all other rights of any
kind against any third party, to the extent relating to any Assumed Liabilities
or Purchased Assets, including rights to sue or recover and retain damages,
costs and attorneys’ fees for past, present and future Infringement or
misappropriation of any Transferred IP Rights.

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

18

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Section 2.02                             Matters Related to Purchased Assets and
Non-Assigned Assets.

 

(a)                                 Notwithstanding anything in this Agreement
to the contrary, this Agreement shall not constitute an agreement to assign or
transfer any Transferred Contract (other than the License) that is not
assignable or transferable without the consent of any Person, other than Seller,
Purchaser or any of their respective Affiliates, to the extent that such consent
shall not have been given prior to the Closing (each, a “Non-Assigned Asset”);
provided, however, that Seller shall use, and shall cause the Divesting Entities
to use, both prior to and for [***] after the Closing, commercially reasonable
efforts to obtain, and Purchaser shall use its commercially reasonable efforts
to assist and cooperate with Seller in connection therewith, all necessary
consents to the assignment and transfer of each Non-Assigned Asset; provided,
further, that (i) none of Seller, Purchaser or any of their respective
Affiliates shall be required to pay money to any third party, commence any
litigation or offer or grant any accommodation (financial or otherwise) to any
third party in connection with such efforts and (ii) to the extent the foregoing
shall require any action by Seller or a Divesting Entity that would, or would
continue to, affect the Business after the Closing, such action shall require
the prior written consent of Purchaser (which consent shall not be unreasonably
withheld, condition or delayed).

 

(b)                                 With respect to any Non-Assigned Asset, for
a period beginning on the Closing Date and ending on the earlier of (i) [***]
after Closing or (ii) until any requisite consent is obtained and such
Non-Assigned Asset is transferred and assigned to Purchaser, Seller shall, and
shall cause the Divesting Entities to, use commercially reasonable efforts to
provide to Purchaser substantially comparable benefits thereof and shall
enforce, at the request of and for the account and benefit of Purchaser, any
rights of Seller or the Divesting Entities arising thereunder against any
Person, including the right to seek any available remedies or to elect to
terminate in accordance with the terms thereof upon the advice of Purchaser. To
the extent that Purchaser is provided with benefits of any Non-Assigned Asset,
Purchaser shall perform, at the direction of Seller or the applicable Divesting
Entity, the obligations of Seller or the Divesting Entity thereunder. 
Notwithstanding anything to the contrary set forth herein, to the extent that
any Assumed Liability relates to any Non-Assigned Asset that Purchaser is not
receiving the benefit of pursuant to this Section 2.02(b), such Assumed
Liability shall be deemed to be a Retained Liability until such Non-Assigned
Asset is transferred and assigned to Purchaser; provided, further, that if such
Non-Assigned Asset for which Purchaser is receiving the benefit of pursuant to
Section 2.02(a) is not transferred and assigned to Purchaser at the time Seller
or the applicable Divesting Entity ceases to provide the benefit of such
Non-Assigned Asset to Purchaser (as permitted under this Section 2.02(b)) such
Assumed Liability relating to the Non-Assigned Assets shall be deemed a Retained
Liability.

 

Section 2.03                             Excluded Assets.  Purchaser
acknowledges and agrees that it is not acquiring any right, title or interest
in, to or under any of the following assets (collectively, the “Excluded
Assets”):

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

19

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(a)                                 any cash, checks, money orders, marketable
securities, short-term instruments and other cash equivalents, funds in time and
demand deposits or similar accounts, and any evidence of indebtedness issued or
guaranteed by any Governmental Authority;

 

(b)                                 any Accounts Receivable;

 

(c)                                  any Contracts of Seller or the Divesting
Entities (including all Contracts and arrangements with third party suppliers
for the supply of materials, components, processing supplies and packaging
obtained for use in the manufacture of the Products), or rights therein or
thereunder, other than the Transferred Contracts;

 

(d)                                 any licenses, permits, registrations,
certificates or other authorizations, consents, clearances or approvals of
Seller and its Affiliates, other than the Transferred Governmental
Authorizations;

 

(e)                                  any deposits or advance payments with
respect to Taxes; any claims, rights and interest in and to any refund or credit
of Taxes, in each case, relating to taxable periods ending on or prior to the
Closing Date;

 

(f)                                   (i) the corporate books and records of
Seller and its Affiliates that are not Business Books and Records, (ii) all
personnel records, (iii) any attorney work product, attorney-client
communications and other items protected by attorney-client or similar
privilege, (iv) Tax Returns, Tax information, and Tax records related to Seller
or its Affiliates and (v) any documents that were received from third parties in
connection with their proposed acquisition of the Purchased Assets or the
Products or that were prepared by Seller or any of its Affiliates in connection
therewith;

 

(g)                                  any current and prior insurance policies of
Seller and its Affiliates and all rights of any nature with respect thereto,
including all insurance recoveries thereunder and rights to assert claims with
respect to any such insurance recoveries;

 

(h)                                 any intellectual property or similar rights
of Seller or its Affiliates, including Trademarks, domain names, telephone
numbers, UPCs or similar rights or properties, other than the Transferred IP
Rights;

 

(i)                                     subject to the terms of any other
written agreement between Purchaser and Seller (or any of their respective
Affiliates), any intellectual property or similar rights used to manufacture the
API;

 

(j)                                    any real estate owned or leased by Seller
or any of its Affiliates;

 

(k)                                 any rights, claims and credits of Seller or
any of its Affiliates relating to any Excluded Asset or any Retained Liability,
including any guarantees, warranties, indemnities and similar rights in favor of
Seller or any of its Affiliates relating to any Excluded Asset or any Retained
Liability;

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

20

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(l)                                 any tools, molds and equipment used in the
manufacture or packaging of the Products and API, other than the Transferred
Equipment;

 

(m)                             any inventories related to the Products,
including finished goods inventory of the Product for sale and marketing outside
of the United States and materials, components, processing supplies and
packaging obtained for use in the manufacture of the API and the Products; in
each case other than the Inventories;

 

(n)                                 all Plans and all employees of Seller, any
Divesting Entity or any of their Affiliates;

 

(o)                                 any other assets, properties or rights of
Seller or any of its Affiliates other than the Purchased Assets; and

 

(p)                                 all claims, counterclaims, defenses, causes
of action, rights under express or implied warranties, rights of recovery,
rights of set-off, rights of subrogation and all other rights of any kind
against any third party, to the extent related to any Retained Liabilities or
Excluded Assets, including rights to sue or recover and retain damages, costs
and attorneys’ fees for past, present and future infringement or
misappropriation of any IP Rights that are not (i) Transferred IP Rights or
(ii) IP Rights licensed or granted under the License.

 

Section 2.04                             Assumption of Certain Obligations. 
Upon the terms and subject to the conditions set forth herein, Purchaser agrees,
effective at the Closing, to assume and to timely satisfy and discharge the
following Liabilities of Seller and its Affiliates relating to the Products and
the Purchased Assets, in each case other than the Retained Liabilities (all of
the foregoing Liabilities being collectively referred to hereinafter as the
“Assumed Liabilities”):

 

(a)                                 subject to Section 2.04(b), all Liabilities
arising solely out of or relating to Legal Proceedings commenced after the
Closing, irrespective of the legal theory asserted, arising from the
development, commercialization, manufacture, packaging, import, marketing,
distribution, sale or use of the Products or the use of the Purchased Assets, in
each case, solely to the extent relating to the period of time after the Closing
Date (subject to the terms and provisions of the Ancillary Agreements and the
Post-Transfer Supply Agreement);

 

(b)                                 all Liabilities arising out of or relating
to products liability claims relating to the Products sold after the Closing,
including claims alleging defects in the Products and claims involving the death
of or injury to any individual relating to the Products;

 

(c)                                  all Liabilities to third-party customers,
third-party suppliers or other third parties, solely to the extent relating to
the Products or the Purchased Assets and ordered in the ordinary course of
business (or at the express request of Purchaser) either (i) on or prior to the
Closing, but scheduled to be delivered or provided after the Closing, or
(ii) after the Closing;

 

(d)                                 all Liabilities arising out of or relating
to any Transferred Contract after the Closing, to the extent relating to the
period of time after the Closing Date;

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

21

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(e)                                  all other Liabilities (excluding
Liabilities related to Taxes described in Section 2.05(i) or apportioned to
Seller or the Divesting Entity pursuant to Section 2.09) arising out of or
relating to the Products or the Purchased Assets, to the extent relating to the
period of time after the Closing, including the use, ownership, possession,
operation, management, business integration, sale or lease of the Purchased
Assets and the sale of any of the Products by Purchaser or its Affiliates, after
the Closing Date;

 

(f)                                   all Taxes apportioned to Purchaser
pursuant to Section 2.09;

 

(g)                                  [***]

 

(h)                                 all Liabilities arising out of or relating
to the return of the Products sold by Purchaser after the Closing.

 

Section 2.05                             Retained Liabilities.  Seller and its
Affiliates shall retain responsibility for the following Liabilities (the
“Retained Liabilities”):

 

(a)                                 Subject to Section 2.05(b), all Liabilities
arising out of or relating to Legal Proceedings, except for, subject to
Section 2.04(g), Liabilities arising out of or relating to the ANDA Litigation,
regardless of when such Legal Proceeding was commenced or made, that arose from
the development, commercialization, manufacture, packaging, import, marketing,
distribution, sale or use of the Products or the use of the Purchased Assets, in
each case, by Seller or its Affiliates prior to Closing (including the Legal
Proceedings set forth on Schedule 2.05(a)), provided that, in no event shall
Seller or its Affiliates have any liability in respect of actions or omissions
of Purchaser or its Affiliates after the Closing (including Purchaser’s or its
Affiliates’ commercialization, manufacture, packaging, importation, marketing,
distribution, sale or use of the Products or Purchased Assets that were designed
or developed on or before the Closing);

 

(b)                                 all Liabilities arising out of or relating
to products liability claims relating to the Products sold prior to Closing
(including claims alleging defects in the Products and claims involving the
death of or injury to any individual relating to the Products);

 

(c)                                  all Liabilities to third-party customers,
third-party suppliers or other third parties for the Products, materials and
services, to the extent relating to the Products or the Purchased Assets, in
each case, arising prior to the Closing or relating to the period of time prior
to Closing, other than Liabilities referred to in Section 2.04(c);

 

(d)                                 all Liabilities arising out of or relating
to the return of the Products sold by Seller or its Affiliates prior to the
Closing;

 

(e)                                  all Liabilities for any credits or rebates
in respect of the Products and all Liabilities arising out of or relating to any
recall or post-sale warning in respect of the Products, in each case, sold by
Seller or its Affiliates on or prior to the Closing, regardless of whether such
Liabilities arose prior to or after the Closing;

 

(f)                                   all Liabilities to the extent related to
the Excluded Assets;

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

22

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(g)                                  all Liabilities arising out of or relating
to any Transferred Contract, to the extent relating to the period of time prior
to the Closing;

 

(h)                                 all Liabilities with respect to (i) any
current or former employee or contractor of Seller or any Divesting Entity, or
any of their Affiliates, provided such Liabilities relate to such current or
former employee or contractor’s service with Seller or any Divesting Entity or
(ii) any Plan;

 

(i)                                     all Liabilities (i) of Income Taxes of
Seller or its Affiliates for any period, (ii) of other Taxes of Seller or its
Affiliates arising from Seller’s or an Affiliate’s use of the Purchased Assets
or operation of the Business prior to the Closing, or (iii) apportioned to
Seller under Section 2.09;

 

(j)                                    all Liabilities related to any Accounts
Payable;

 

(k)                                 all Liabilities for any indebtedness of
Seller or its Affiliates;

 

(l)                                     all intragroup Liabilities of Seller or
any Divesting Entity to any of its Affiliates; and

 

(m)                             other than the Assumed Liabilities, all other
Liabilities (excluding Liabilities relating to Taxes, which shall be governed by
Section 2.05(i)) arising out of or relating to the Business, the Purchased
Assets or the Products, to the extent such Liabilities relate to the period of
time prior to the Closing.

 

Section 2.06                             Purchase Price; Deposit.

 

(a)                                 Simultaneous with the execution of this
Agreement by the Parties (or, if such time is outside of normal banking hours in
California on the Effective Date, then promptly upon the opening of banks in
California on the next Business Day thereafter), Purchaser shall deliver or
cause to be delivered the Deposit, in immediately available funds by wire
transfer, to the Escrow Agent in accordance with the Escrow Agreement.  The
Deposit shall be held in escrow by the Escrow Agent in accordance with the
Escrow Agreement in an interest-bearing account (the “Escrow Account”) until the
earlier of (i) the occurrence of the Closing, in which event Purchaser and
Seller shall deliver a joint written instruction to the Escrow Agent directing
the Escrow Agent to deliver the Escrow Amount to Seller pursuant to the terms
set forth in the Escrow Agreement, which amount shall be credited against the
Purchase Price (the “Escrow Release”), (ii) the release of the Escrow Amount to
Purchaser pursuant to Section 9.02(b) or (iii) the release of the Reverse
Termination Fee to Seller and the release of the remaining Escrow Amount to
Purchaser pursuant to Section 9.02(c).  Notwithstanding any provision of this
Agreement to the contrary, Seller shall be permitted to terminate this Agreement
without any Liability to Purchaser should Purchaser fail to deliver the Deposit
to the Escrow Agent in accordance with this Section 2.06(a) within two
(2) Business Days of the Effective Date.  Neither Party shall instruct the
Escrow Agent to release the Escrow Amount except in accordance with the terms of
this Agreement or pursuant to an express, final and non-appealable

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

23

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judgment of a Governmental Authority.  All interest or other earnings on the
Escrow Amount shall be taxed to Purchaser.

 

(b)                                 In consideration of the sale and transfer of
the Purchased Assets, Purchaser agrees to pay to Seller at the Closing One
Billion Fifty Million U.S. Dollars ($1,050,000,000) (the “Purchase Price”),
exclusive of any Transfer Taxes (which shall be apportioned in accordance with
Section 2.09), and to assume, satisfy and discharge when due all Assumed
Liabilities.  The Purchase Price (less the Escrow Amount released to Seller
pursuant to the Escrow Release) shall be paid in immediately available funds by
wire transfer, in accordance with written instructions given by Seller to
Purchaser not less than two (2) Business Days prior to the Closing Date in cash
in U.S. Dollars.  The Purchase Price shall be allocated as described in
Section 2.08.

 

Section 2.07                             Reserved.

 

Section 2.08                             Allocation of Purchase Price. 
Purchaser and Seller will allocate the purchase price (including assumed
liabilities) for Tax purposes among the Purchased Assets pursuant to this
Section 2.08.  Seller shall prepare and deliver a draft allocation of the
purchase price (including assumed liabilities) for Tax purposes among the
Purchased Assets (the “Allocation”) to Purchaser within fifteen (15) days
following the date hereof.  Seller shall promptly provide Purchaser with any
reasonably requested information requested by Purchaser for purposes of
reviewing the Allocation.  Purchaser shall be deemed to agree with such draft
Allocation unless Purchaser delivers a written dispute notice to Seller within
[***] days from the receipt thereof (setting forth in reasonable detail the
reason for any objections and any proposed adjustments to the Allocation). 
Seller and Purchaser shall, in good faith, cooperate to timely resolve any such
dispute.  [***]  Any amendments to the Allocation will be completed in a manner
consistent with the preceding sentences of this Section 2.08.  The Parties
covenant and agree (a) to report for Tax purposes the allocation of the purchase
price (including assumed liabilities) among the Purchased Assets in a manner
entirely consistent with the Allocation, as it may be amended upon any
adjustment to the calculation of the purchase price (including any assumed
liabilities), (b) that the Parties will cooperate with each other in connection
with the preparation, execution and filing of all Tax Returns related to such
allocation and will take no position inconsistent with such allocation in the
filing of any Tax Return, except upon a final determination by an applicable
Taxing Authority and (c) that the Parties will use commercially reasonable
efforts to advise each other regarding the existence of any Tax audit,
controversy or litigation related to such allocation.

 

Section 2.09                             Transfer Taxes; Proration of Prepaid
Expenses.

 

(a)                                 All Transfer Taxes payable in connection
with the transfer of the Purchased Assets to Purchaser under this Agreement and
the Transactions shall be borne and paid [***]

 

(b)                                 Purchaser and Seller shall cooperate in
making and timely filing all Tax Returns as may be required to comply with the
provisions of applicable Transfer Tax laws.

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

24

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(c)                                  The credits, accrued rebates, prepaid
expenses, deferred charges, advance payments, security deposits and prepaid
items including those set forth on Schedule 2.09(c), shall, to the extent
allocable on a pre-Closing and post-Closing basis, be apportioned to Seller
based upon the number of days occurring prior to (and including) the Closing
Date and be apportioned to Purchaser following the Closing Date during the
billing period for each such charge; provided that the foregoing shall not apply
with respect to any Tax items or payments.

 

Section 2.10                             Risk of Loss; Casualty.Prior to the
Closing, any loss or damage to the Purchased Assets from fire, casualty or
otherwise shall be the sole responsibility of Seller.  Thereafter, any such loss
or damage shall be the sole responsibility of Purchaser.

 

Section 2.11                             Certain Costs.

 

(a)                                 All out-of-pocket costs and fees payable to
a Governmental Authority associated with transferring to Purchaser or one of its
Affiliates the Transferred IP Rights and the Transferred Governmental
Authorizations for the Products conveyed to Purchaser hereunder shall be borne
and paid solely by Purchaser when due; provided, however, that if any such
amount shall be incurred by Seller, Purchaser shall, subject to receipt of
satisfactory evidence of Seller’s payment thereof, promptly reimburse Seller
such out-of-pocket costs and fees.

 

(b)                                 All out-of-pocket costs and expenses
associated with removing and moving any Purchased Asset to a location designated
by Purchaser shall be borne and paid by Purchaser when due and all Liabilities
arising in connection therewith shall be borne by Purchaser; provided, however,
that if any amount or Liability should be incurred by Seller in connection with
such removing and moving, Purchaser shall, subject to receipt of satisfactory
evidence of Seller’s incurrence thereof, promptly pay Seller its reasonable,
customary and documented out-of-pocket costs, expenses and Liabilities.

 

ARTICLE III
CLOSING

 

Section 3.01                             Closing.

 

(a)                                 The Closing shall take place no later than
three (3) Business Days after the satisfaction or waiver of the conditions
precedent to Closing specified in Article VII (other than those conditions that,
by their nature, cannot be satisfied until the Closing Date) at the offices of
Ropes & Gray LLP, 1211 Avenue of the Americas, New York, NY (including any
Persons connected by remote access to the Closing) or at such time and place as
the Parties may mutually agree in writing; provided that, notwithstanding the
satisfaction or waiver of the conditions set forth in Article VII, if the
Marketing Period has not ended at the time of the satisfaction or waiver of such
conditions (other than those conditions that by their nature are to be satisfied
at the Closing, but subject to the satisfaction or waiver of those conditions at
such time), the Closing shall occur instead on the Business Day following the
satisfaction or waiver of such conditions that is the earliest to occur of
(a) any Business Day during the Marketing Period specified by

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

25

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Purchaser to Seller on no less than three (3) Business Days’ written notice to
Seller and (b) the third (3rd) Business Day after the final day of the Marketing
Period, but subject, in each case, to the satisfaction or waiver of the
conditions set forth in Article VII at such time (other than those conditions
that by their nature are to be satisfied at the Closing, but subject to the
satisfaction or waiver of such conditions at such time).  The date on which the
Closing occurs is referred to as the “Closing Date.”  The Closing shall be
deemed to occur and be effective as of 11:59 p.m. Eastern Standard Time on the
Closing Date.

 

(b)                                 At the Closing, Seller shall deliver, or
cause to be delivered, to Purchaser the instruments and documents set forth on
Exhibit A.

 

(c)                                  At the Closing, Purchaser and Seller shall
take all actions necessary to cause the Escrow Release and Purchaser shall
(i) deliver to Seller the Purchase Price (less the Escrow Amount delivered to
Seller pursuant to the Escrow Release) by wire transfer in accordance with
Section 2.06(b) and (ii) deliver to Seller the instruments and documents set
forth on Exhibit B.

 

Section 3.02                             Pre-Closing Statements.  At least [***]
Business Days prior to the Closing, Seller shall deliver to Purchaser (a) a
statement (the “Preliminary Inventories Statement”) setting forth, as of a date
(to be no more than [***] Business Days prior to the Closing), Seller’s good
faith statement of (i) the quantities of Inventories on a SKU by SKU basis and
(ii) the expiration dates of such Inventories; and (b) a statement setting
forth, as of a date (to be no more than [***] Business Days prior to the
Closing) (i) all customer orders for finished good Products of the type
described in Section 2.01(g) that are outstanding as of such date and (ii) all
Liabilities described in Section 2.04(c)(i) as of such date; provided, however,
that nothing in this Section 3.02 or in any statement delivered pursuant to this
Section 3.02 shall be deemed to limit the rights or obligations of the Parties
under Section 2.01(g), Section 2.04(c)(i) or Section 6.01.  Prior to the
Closing, the Parties shall use commercially reasonable efforts to communicate
regularly with each other regarding the status and completion of the Marketing
Period and the completion of the conditions hereunder to the Closing.  The
obligations of Seller pursuant to the first (1st) sentence of this Section 3.02
to deliver such statements to Purchaser within the specified time frames shall
be subject to Seller receiving reasonable advance notice of the anticipated
Closing Date, provided, that Seller shall deliver such statements to Purchaser
as soon as practicable thereafter, but prior to the Closing.

 

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER

 

Seller hereby represents and warrants to Purchaser as follows:

 

Section 4.01                             Organization.  Seller is a corporation
duly organized, validly existing and in good standing under the Laws of the
State of Pennsylvania.  Each Divesting Entity is a corporation duly organized,
validly existing and, where applicable, in good standing under the Laws of the
jurisdiction of its organization.  Seller and each Divesting Entity is
authorized to do business under the Laws of all jurisdictions in which it is
required to be so authorized, except as would not, individually or in the
aggregate, have a Material Adverse Effect.

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

26

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Section 4.02                             Authority; Binding Effect.

 

(a)                                 Seller and each Divesting Entity has all
requisite corporate power and authority to own and operate its properties and
assets and to carry on its business as it is now being conducted and as it is
related to the Purchased Assets and the Business.  Seller has all requisite
corporate power and authority to execute and deliver this Agreement and the
Ancillary Agreements, and to carry out, or to cause to be carried out, the
Transactions.  The execution and delivery by Seller of this Agreement and the
Ancillary Agreements, and the performance by Seller and each Divesting Entity of
its obligations hereunder and thereunder, have been duly authorized by all
requisite corporate action on the part of Seller and such Divesting Entity.

 

(b)                                 This Agreement has been duly executed and
delivered by Seller and, assuming the valid execution and delivery by Purchaser,
constitutes a legal, valid and binding obligation of Seller, enforceable against
Seller in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
similar laws affecting creditors’ rights generally or by general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity or
law).

 

(c)                                  Each of the Ancillary Agreements has been
duly authorized by all necessary action on the part of Seller and has been, or
will be at the Closing, duly executed and delivered by Seller and, assuming the
valid execution and delivery by Purchaser, constitutes or will constitute a
legal, valid and binding obligation of Seller, enforceable against Seller in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
similar laws affecting creditors’ rights generally or by general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity or
law).

 

Section 4.03                             Non-Contravention.  The execution,
delivery and performance of this Agreement and the other Transaction Documents
by Seller, and the consummation of the Transactions, do not and will not
(a) violate any provision of the certificate of incorporation or bylaws of
Seller and the comparable organizational documents of any Divesting Entity;
(b) subject to obtaining the consents referred to in Schedule 4.03, materially
conflict with, violate, result in the breach of, constitute a default under or
result in the termination, cancellation or acceleration (whether after the
giving of notice or the lapse of time or both) of any right or obligation of
Seller or any Divesting Entity under any Transferred Contract, or to a loss of
any material benefit with respect to the Business to which Seller or any
Divesting Entity is entitled under, any Transferred Contract, or result in the
creation of any Lien (other than Permitted Liens) upon any of the Purchased
Assets; or (c) assuming compliance with the matters set forth in Section 4.04
and Section 5.03, violate or result in a breach of, or constitute a default
under any Law or other restriction of any Governmental Authority to which Seller
or any Divesting Entity is subject, except, with respect to clauses (b) and (c),
for any violations, breaches, conflicts, defaults, losses, Liens, terminations,
cancellations, accelerations or other inaccuracies that would not, individually
or in the aggregate, reasonably be expected to be materially adverse to the
Purchased Assets or to the conduct of the Business, taken as a whole.

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

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Section 4.04                             Governmental Authorization.  Except as
set forth on Schedule 4.04 or in connection with the filings required by the
Competition Laws, the execution and delivery of this Agreement and the other
Transaction Documents by Seller, and the consummation of the Transactions, do
not require any consent or approval of, or any notice to or other filing with,
any Governmental Authority, except for consents, approvals, notices and filings
the failure of which to obtain would not, individually or in the aggregate,
reasonably be expected to be materially adverse to the Purchased Assets or to
the conduct of the Business, taken as a whole.

 

Section 4.05                             No Litigation.

 

(a)                                 Except as set forth on Schedule 4.05(a), no
Legal Proceeding or Governmental Order that (i) is material to the Business, the
Purchased Assets or the Assumed Liabilities, taken as a whole, (ii) would
enjoin, restrict or prohibit the transfer of all or any part of the Purchased
Assets, or the performance by Seller or any of the Divesting Entities, as
contemplated by this Agreement or the Ancillary Agreements, or (iii) seeks to
impose any material limitation on the ability of Seller or the Divesting
Entities to operate the Business or the Purchased Assets as currently conducted
or after the Closing or would impose any material limitation on the ability of
Purchaser to operate the Business or the Purchased Assets as currently
conducted, is pending or outstanding against or, to the Knowledge of Seller,
threatened in writing against Seller or any Divesting Entity.  This Section 4.05
does not relate to Legal Proceedings relating solely to Transferred IP Rights,
which are the subject of Section 4.09.

 

(b)                                 Except as set forth on Schedule 4.05(b),
from [***] through the date hereof, no Legal Proceeding related to product
liability, product defect, fraud, misrepresentation, unjust enrichment,
conspiracy or economic loss has been initiated against Seller or any of the
Divesting Entities or their agents and, to the Knowledge of Seller, no such
Legal Proceeding has been threatened in writing or filed against Seller or any
of the Divesting Entities relating to any of the Products.

 

Section 4.06                             Compliance with Laws.  Except as to
matters set forth in Schedule 4.06:

 

(a)                                 Seller and each Divesting Entity is, and
since [***] has been, in material compliance with all Laws applicable to the
ownership of the Purchased Assets or the operation of the Business, including
applicable Health Laws and Environmental Laws.

 

(b)                                 Seller and each Divesting Entity possesses,
and is in compliance with, all Governmental Authorizations necessary for the
conduct of the Business as it is currently conducted, except where the failure
to possess or comply with any such Governmental Authorization would not,
individually or in the aggregate, be materially adverse to the operation of the
Business, and all such Governmental Authorizations are valid and in full force
and effect.  Seller and the Divesting Entities, as applicable, have completed
and filed all reports, documents, claims, permits and notices required by any
Governmental Authority in order to maintain the Governmental Authorizations,
except where failure to file such reports would not be materially adverse to the
Business.  To the Knowledge of Seller, all such reports, documents, claims,
permits and notices were complete and

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

28

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accurate in all material respects on the date filed (or were corrected in or
supplemented by a subsequent filing).  No event has occurred that, to the
Knowledge of Seller, would reasonably be expected to result in a penalty under
or the revocation, cancellation, non-renewal or adverse modification of any
Governmental Authorization, except as has not been and would not, individually
or in the aggregate, reasonably be expected to be materially adverse to the
Business.

 

(c)                                  To the Knowledge of Seller, Seller has
calculated and reported all prices reported to or used to calculate pricing or
discounts under the Medicaid Program (42 U.S.C. § 1396r-8), the 340B Drug
Discount Program (42 U.S.C. § 256b), and Section 603 of the Veterans Healthcare
Act of 1993 (Pub. L. 102-585) for the Product in compliance in all material
respects with applicable Law.

 

Section 4.07                             Regulatory Matters.

 

(a)                                 Schedule 4.07(a) sets forth, as of the
Effective Date, a list of all Governmental Authorizations granted to Seller or
any Divesting Entity by, or application therefor pending with, any Governmental
Authority to manufacture, have made, market, package, import, distribute, sell
and commercialize the Products in the United States, except for those
Governmental Authorizations that the failure to possess would not, individually
or in the aggregate, reasonably be expected to be materially adverse to the
operation of the Business.

 

(b)                                 All Products sold under the Governmental
Authorizations are manufactured, marketed, distributed and sold in accordance
with such Governmental Authorizations, including the specifications and
standards contained therein, except as has not been and would not reasonably be
expected to be materially adverse to the Business.

 

(c)                                  With respect to the Business, neither
Seller nor any of the Divesting Entities, nor, to the Knowledge of Seller, any
officer, employee, or agent of Seller or any of the Divesting Entities, (i) has
made an untrue statement of a material fact or a fraudulent statement to the
FDA, failed to disclose a material fact required to be disclosed to the FDA or
committed an act, made a statement, or failed to make a statement that, at the
time such disclosure was made, would reasonably be expected to provide a basis
for the FDA to invoke its Fraud, Untrue Statements of Material Facts, Bribery,
and Illegal Gratuities policy set forth in the FDA’s Compliance Policy Guide
Sec. 120.100 (CPG 7150.09), or (ii) has been convicted of any crime or engaged
in any conduct that would reasonably be expected to result in debarment under 21
U.S.C. 335a or any similar Law.

 

(d)                                 Since [***] neither Seller nor any of the
Divesting Entities has (i) voluntarily nor involuntarily initiated, conducted or
issued, or caused to be initiated, conducted or issued, any recall, field
alerts, market withdrawal or replacement, safety alert, “dear doctor” letter,
investigator notice, or other notice or action relating to an alleged lack of
safety, or efficacy of any Product, and to the Knowledge of Seller, there are no
facts which are reasonably likely to cause (A) the recall, market withdrawal or
replacement of any Product sold or intended to be sold by Seller or the
Divesting Entities,

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

29

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(B) a change in the marketing classification or a material change in the
labeling of any such Products or (C) a termination or suspension of the
marketing of such Products; or (ii) received any written notice that any
Governmental Authority has (A) commenced, or threatened to initiate, any action
to request the recall or to enjoin the manufacture or distribution of any
Product sold or intended to be sold by Seller or the Divesting Entity or
(B) commenced, or threatened to initiate, any action to withdraw any
Governmental Authorizations issued relating to any Product.

 

(e)                                  Except for ordinary course inquiries or as
set forth on Schedule 4.07(g), since [***] Seller has not received, with respect
to the Products marketed and sold in the United States, any written notice or
communications from any Governmental Authority alleging any material safety or
quality concerns with respect to any Product or noncompliance with any
applicable Laws or Governmental Authorizations, except as would not,
individually or in the aggregate, reasonably be expected to be materially
adverse to the operation of the Business.  Seller is not subject to any
enforcement proceedings by the FDA related to the Products and, to the Knowledge
of Seller, no such proceedings have been threatened.

 

(f)                                   All clinical trials and studies for the
Products that have been or are being conducted by or on behalf of Seller or its
Affiliates, were conducted, and are being conducted, in all material respects in
accordance with all applicable Laws, including Health Laws.  To the Knowledge of
Seller, there is no Legal Proceeding pending or threatened by any Governmental
Authority to suspend, investigate or terminate any ongoing clinical trials or
studies for any Product.

 

(g)                                  [***]

 

Section 4.08                             Contracts.

 

(a)                                 Except as disclosed on Schedule 4.08(a),
(i) each Transferred Contract is valid and binding on Seller or the Divesting
Entity that is a party thereto and, to the Knowledge of Seller, the other party
thereto, and is in full force and effect in accordance with its terms, subject
to bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
similar Laws affecting creditors’ rights generally or by general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity or
law), (ii) neither Seller nor any Divesting Entity or, to the Knowledge of
Seller, any other party thereto, is in material breach of or material default
under, or has provided notice of its intent to terminate, any Transferred
Contract, and no event has occurred that, with the giving of notice or lapse of
time or both, would constitute a material breach or material default thereunder
and (iii) no Transferred Contract limits or restricts the ability of any party
thereto to conduct any particular line of business (other than restrictions set
forth in the License) that would be binding on Purchaser following the Closing.

 

(b)                                 Except as set forth on Schedule 4.08(b),
each Transferred Contract is assignable or transferable to Purchaser without
(i) the written consent of, or prior notice to, any other party thereto and
(ii) the making of any payment or grant of any other consideration, rights or
license to any other party thereto or Person.

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

30

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(c)                                  As of the Effective Date, Grünenthal has
consented, in writing, to the assignment of the License to Purchaser in
accordance with the terms of the License and such consent has not been
rescinded, revoked, modified or conditioned in any manner.

 

Section 4.09                             Intellectual Property.

 

(a)                                 Except as set forth on Schedule 4.09(a):

 

(i)                                     To the Knowledge of Seller, the
Transferred IP Rights are enforceable, valid and subsisting and there is no
objection or claim being asserted or threatened in writing by any Person
challenging the scope, ownership, inventorship, validity or enforceability of
any Transferred IP Rights, other than the ANDA Litigation; provided that the
foregoing “Knowledge of Seller” qualifier shall not apply with respect to the
Transferred Trademark Rights and the Transferred Domain Names;

 

(ii)                                  on the Effective Date, one or more of
Seller or the Divesting Entities is, and at the Closing, Seller or one or more
of Seller or the Divesting Entities will be, (A) the sole and exclusive
beneficial and, with respect to applications and registrations, record owner of,
and hold good, saleable and sole title to the Transferred IP Rights other than
the Transferred IP Rights that are licensed to Seller or one or more of the
Divesting Entities, in which case, Seller or one or more of the Divesting
Entities is the holder of an assignable valid right or license to such licensed
Transferred IP Rights, and (B) to the Knowledge of Seller, the beneficial owner
of the Licensed Seller Know-How (other than Licensed Seller Know-How that are
licensed or granted to Seller under the License);

 

(iii)                               no license of any kind relating to any
Transferred IP Right has been granted by Seller or any Divesting Entity to any
third parties (except for immaterial, non-exclusive licenses to use Transferred
IP Rights to customers and suppliers in the ordinary course of business);

 

(iv)                              the Transferred IP Rights are, to the
Knowledge of Seller, free and clear of any Liens, other than Permitted Liens
except as would not, individually or in the aggregate, reasonably be expected to
be materially adverse to the Purchased Assets or the conduct of the Business;
provided that the foregoing “Knowledge of Seller” qualifier shall not apply with
respect to the Transferred Trademark Rights and the Transferred Domain Names;

 

(v)                                 there are no Legal Proceedings or other
claims pending or threatened by Seller or any of its Affiliates against any
Person, and none of Seller or any of its Affiliates has provided notice of any
Person’s Infringement of any Transferred IP Right or Licensed Seller Know-How,
in each case, except as would not, individually or in the aggregate, reasonably
expected to be materially adverse to the Purchased Assets or the operation of
the Business;

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

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(vi)                              there are no Legal Proceedings or other claims
pending, or to the Knowledge of Seller, threatened in writing against Seller or
any of its Affiliates by any Person, and none of Seller or, to the Knowledge of
Seller, any of its Affiliates received written notice (including in the form of
offers, invitations to obtain a license or cease-and-desist letters) from any
Person that the conduct of the Business (including the use of Licensed Seller
Know-How), including the marketing and sale of the Products in the United
States, constitutes Infringement of any IP Right of such Person, in each case,
except as would not, individually or in the aggregate, reasonably expected to be
materially adverse to the Purchased Assets or to the operation of the Business;

 

(b)                                 Except as set forth on Schedule 4.09(b), the
Transferred IP Rights constitute all of the IP Rights owned or licensed to or by
Seller and its Affiliates at the Closing that are used to commercialize the
Products, except in respect of the manufacture and packaging of the Products. 
To the Knowledge of Seller, all assignments, declarations and powers of attorney
(collectively, “Formalities”) with respect to the Transferred IP Rights have
been properly obtained and recorded.

 

(c)                                  Each Transferred IP License is valid and
binding on Seller or the Divesting Entity that is a party thereto and, to the
Knowledge of Seller, the other party thereto, and is in full force and effect,
subject to bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or similar laws affecting creditors’ rights generally or by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or law), and neither Seller nor any of the Divesting
Entities nor, to the Knowledge of Seller, any other party to any material
Transferred IP License is in breach thereof or in default thereunder, and no
event has occurred that, with the giving of notice or lapse of time or both,
would constitute a breach thereof or default thereunder.

 

(d)                                 Seller, and each Divesting Entity, has taken
and currently takes commercially reasonable measures to protect the
confidentiality of confidential information material to the conduct of the
Business and owned, used or held for use in the conduct of the Business by
Seller or any Divesting Entity, and to the Knowledge of Seller, there has not
been any disclosure of any material trade secret or confidential information
owned, used or held for use in the conduct of the Business to any Person in a
manner that has resulted in the loss of such trade secret or other rights in and
to such information.

 

(e)                                  [***]

 

(f)                                   [***]

 

(g)                                  [***]

 

Section 4.10                             Brokers.  No broker, finder or
investment banker is entitled to any brokerage, finder’s or other fee or
commission in connection with the Transactions based upon arrangements made by
or on behalf of Seller or any of the Divesting Entities.

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

32

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Section 4.11                             Purchased Assets.  Except as set forth
on Schedule 4.11, Seller and Divesting Entities (a) own, lease or have the legal
right to use all of the Purchased Assets, and (b) have good title to all the
Purchased Assets (other than those Purchased Assets that are licensed) free and
clear of all Liens, except for Permitted Liens.  Other than the Divesting
Entities, no Affiliate of Seller has any right, title or interest in, to or
under the Purchased Assets. Following the Closing, neither Seller nor any of its
Affiliates will own any right, title or interest in or to any of the Purchased
Assets, except as otherwise expressly set forth in Section 2.02, Section 6.11,
Section 6.14, Section 6.26 or any of the Ancillary Agreements.  This
Section 4.11 does not relate to intellectual property, which is the subject of
Section 4.09.

 

Section 4.12                             [***]

 

Section 4.13                             Absence of Material Changes.  Since
[***] and through the date hereof, except as set forth on Schedule 4.13, the
Business has been operated in the ordinary course and there has not been:

 

(a)                                 any Material Adverse Effect;

 

(b)                                 any sale, pledge, disposition, transfer,
lease, license, encumbrance or authorization of the sale, pledge, disposition,
transfer, lease, license or encumbrance of any assets, including any IP Rights,
that are (or would otherwise be) Purchased Assets, other than (i) sales of
Products in the ordinary course of business consistent with past practice or
(ii) Permitted Liens;

 

(c)                                  any waiver of any material claims or rights
of material value that relate to the Purchased Assets;

 

(d)                                 any acquisition of any material properties,
assets or IP Rights that constitute Purchased Assets, other than Purchased
Assets that would not reasonably be expected to result in any material Assumed
Liabilities;

 

(e)                                  any settlement of any Legal Proceeding or
waiver of any material claims or rights of material value in a manner that
constitutes an Assumed Liability or otherwise would reasonably be expected to be
materially adverse to the Purchased Assets or the operation of the Business,
taken as a whole;

 

(f)                                   any termination, cancellation, lapse,
amendment, waiver or modification of any Governmental Authorizations material to
the Business or the Purchased Assets;

 

(g)                                  any waiver of a provision of or amendment
or other modification in any respect to any Transferred Contract;

 

(h)                                 any abandonment, termination or lapse of any
material Transferred IP Rights, or rights relating to any material Transferred
IP Rights, in each case, relating to the Purchased Assets or the Business;

 

(i)                                     any failure to take any material action
necessary to protect or maintain any material Transferred IP Rights or to
prosecute any pending applications for any

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

33

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Trademarks or file any documents or other information or pay any maintenance or
other fees related thereto, in each case, relating to the Purchased Assets or
the Business;

 

(j)                                    any transfer, assignment or grant of any
license or sublicense of any material rights under or with respect to any
Transferred IP Rights relating to the Purchased Assets, the Products or the
Business, other than in the ordinary course of business;

 

(k)                                 any (i) material change in Seller’s or the
Divesting Entities’ activities and practices with respect to inventory levels of
the Products maintained at the wholesale, chain or institutional levels
inconsistent with past practice, (ii) any change in the selling, distribution,
advertising, pricing, terms of sale or collection practices inconsistent with
past practice or (iii) the entry into any program, activity or other action
(including any rebate, discount, chargeback or refund policy or practice), in
each case, that would reasonably be expected to result in a trade buy-in that is
materially in excess of normal customer purchasing patterns consistent with past
course of dealing with the Business during the [***] prior to the date hereof;
or

 

(l)                                     any agreement, commitment to take or
authorization of any action described in this Section 4.13.

 

Section 4.14                             Inventories; Transferred Equipment. 
The Inventories are of usable or saleable quality in the ordinary course of
business and have the expiration dates set forth on the Preliminary Inventories
Statement (except for such inaccuracies as would not be material).  To the
Knowledge of Seller, all of the Inventories are, as of the Closing Date, free of
material defects (including defects in packaging, labeling, and storage) and
systematic or chronic problems and comply in all material respects with all
applicable specifications and all applicable Laws, including all Health Laws and
Environmental Laws.  All Inventories that have been returned, have expired or
have been deemed unusable or not fit for sale, have been or will be destroyed in
accordance with the policies of Seller and applicable Law.  The Transferred
Equipment is in good operating condition and repair (reasonable wear and tear
excepted) and adequate for the purposes for which it is currently used.

 

Section 4.15                             Taxes.  Except as set forth on Schedule
4.15: (a) all material Tax Returns required to be filed by Seller or its
Affiliates with respect to the ownership or use of the Purchased Assets for all
periods through and including the Closing Date have been duly and timely filed;
(b) all material Taxes due and payable by Seller or its Affiliates with respect
to the ownership or use of the Purchased Assets for all periods through and
including the Closing Date have been timely paid; (c) none of the Purchased
Assets is subject to any Liens as a result of a failure to pay any Tax
(excluding, for clarity, any liens for Taxes not yet due and payable); and
(d) other than as relates to Income Taxes, Seller has not received written
notice from a Taxing Authority relating to ongoing or pending Tax audits or
administrative or similar proceedings with respect to any Tax Returns relating
to the ownership or use of the Purchased Assets.  Notwithstanding any provisions
of this Agreement to the contrary, Section 4.05 and the foregoing provisions of
this Section 4.15 constitute the sole representations and warranties of Seller
and its Affiliates relating to Taxes.

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

Purchaser hereby represents and warrants to Seller as follows:

 

Section 5.01                             Organization.  Purchaser is a
corporation duly organized, validly existing and in good standing under the Laws
of the State of California.  Purchaser is authorized to do business under the
Laws of all jurisdictions in which it is required to be so authorized, except as
would not, individually or in the aggregate, have a Purchaser Material Adverse
Effect.

 

Section 5.02                             Authority; Binding Effect.

 

(a)                                 Purchaser has all requisite power and
authority to own and operate its properties and assets, to carry on its business
as it is now being conducted and to execute and deliver this Agreement and the
Ancillary Agreements, and to carry out or cause to be carried out, the
Transactions.  The execution and delivery by Purchaser of this Agreement and the
Ancillary Agreements, and the performance by Purchaser of its obligations
hereunder and thereunder, have been duly authorized by all requisite corporate
action on the part of Purchaser.  No approval of Purchaser’s equity interest
holders is necessary for Purchaser to execute and deliver this Agreement or any
related agreements or perform the Transactions.

 

(b)                                 This Agreement has been duly executed and
delivered by Purchaser and, assuming the valid execution and delivery by Seller,
constitutes a legal, valid and binding obligation of Purchaser, enforceable
against Purchaser in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or similar laws affecting creditors’ rights generally or by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or law).

 

(c)                                  Each of the Ancillary Agreements has been
duly authorized by all necessary action on the part of Purchaser and has been,
or will be at the Closing, duly executed and delivered by Purchaser and,
assuming the valid execution and delivery by Seller, constitutes or will
constitute a legal, valid and binding obligation of Purchaser, enforceable
against Purchaser in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or similar laws affecting creditors’ rights generally or by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or law).

 

Section 5.03                             Non-Contravention.  The execution,
delivery and performance by Purchaser of this Agreement and the other
Transaction Documents, and the consummation of the Transactions, do not and will
not (a) violate any provision of the certificate of incorporation, bylaws or
other organizational documents of Purchaser; (b) conflict with, or result in a
breach of, constitute a default under or result in the termination, cancellation
or acceleration (whether after the giving of notice or the lapse of time or
both) of any right or obligation of Purchaser or any of its Affiliates under, or
to a loss of any benefit to which Purchaser or any of its Affiliates is entitled
under, any agreement, lease of real estate or license of intellectual property
to which

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

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Purchaser or any of its Affiliates is a party or to which its properties or
assets are subject; or (c) assuming compliance with the matters set forth in
Section 4.04 and Section 5.03, violate or result in a breach of or constitute a
default under any Law or other restriction of any Governmental Authority to
which Purchaser is subject, except, with respect to clauses (b) and (c), for any
violations, breaches, defaults, conflicts, losses, Liens, terminations,
cancellations or accelerations that would not, individually or in the aggregate,
reasonably be expected to have a material and adverse effect on the ability of
Purchaser to consummate the Transactions (a “Purchaser Material Adverse
Effect”).

 

Section 5.04                             Governmental Authorization.  Except as
set forth on Schedule 5.04 and in connection with the filings required by the
Competition Laws, the execution and delivery of this Agreement and the other
Transaction Documents, and the consummation of the Transactions, do not require
any consent or approval of, or any notice to or other filing with, any
Governmental Authority, except for consents, approvals, notices and filings the
failure of which to obtain or make would not, individually or in the aggregate,
have a Purchaser Material Adverse Effect.

 

Section 5.05                             Brokers.  Except as set forth on
Schedule 5.05, no broker, finder or investment banker is entitled to any
brokerage, finder’s or other fee or commission in connection with the
Transactions based upon arrangements made by or on behalf of Purchaser or any of
its Affiliates.

 

Section 5.06                             Financial Capability; Purchaser
Registration Statement.

 

(a)                                 As of the Closing, Purchaser will have,
subject to the receipt of proceeds from the Financing by Purchaser at or prior
to the Closing, sufficient cash available to pay the Purchase Price on the terms
and conditions contemplated by this Agreement (including after giving effect to
the Escrow Release as contemplated by Section 2.06(a)) and to pay Purchaser’s
fees and expenses related thereto.

 

(b)                                 As of the Effective Date, (i) Purchaser’s
registration statement on Form S-3 (File No. 333-197433) (the “Registration
Statement”) has become effective, (ii) there is no stop order suspending the
effectiveness of such Registration Statement in effect and (iii) there are no
Legal Proceedings for such purpose pending before or, to the knowledge of
Purchaser threatened in writing by, the SEC.

 

Section 5.07                             Financing.  Purchaser has engaged
Morgan Stanley & Co. LLC (“Morgan Stanley”) as a financial advisor in connection
with the Transactions and has engaged Morgan Stanley in connection with the
Financing.  [***]

 

Section 5.08                             Solvency.  As of the Effective Date,
after giving effect to all of the Transactions, including the payment of the
Purchase Price (less the Escrow Amount delivered to Seller pursuant to the
Escrow Release), and assuming for these purposes the satisfaction of the
conditions set forth in Section 7.01, as of the Effective Date Purchaser shall
be Solvent.  For the purposes of this Section 5.08, the term “Solvent” when used
with respect to any Person, means that, as of any date of determination, (a) the
“fair saleable value” of the assets of such Person will, as of such date, exceed
(i) the value of all “liabilities of such Person, including contingent

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

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and other liabilities,” as of such date, as such quoted terms are generally
determined in accordance with applicable federal laws governing determinations
of the insolvency of debtors, and (ii) the amount that will be required to pay
the probable liabilities of such Person on its existing debts (including
contingent liabilities) as such debts become absolute and matured, (b) such
Person will not have, as of such date, unreasonably small capital for the
operation of the businesses in which it is engaged or proposed to be engaged
following such date and (c) such Person will be able to pay its liabilities,
including contingent and other liabilities, as they mature.

 

ARTICLE VI
COVENANTS

 

Section 6.01                             Conduct of Business.

 

(a)                                 From the Effective Date to the Closing Date,
except as otherwise contemplated by this Agreement or consented to by Purchaser
in writing, Seller agrees that it will conduct the Business, and will cause the
Business to be conducted, in the ordinary course of business consistent in all
material respects with past practice since [***] and in compliance in all
material respects with all applicable Laws, pay or perform all material
obligations relating to the Business as they become due and owing in the
ordinary course of business, and will use, and cause the Divesting Entities to
use, commercially reasonable efforts to preserve intact the Business and related
relationships with employees, customers, suppliers, vendors, regulators and
other third parties.

 

(b)                                 From the Effective Date to the Closing Date,
except as otherwise permitted by this Agreement or consented to by Purchaser in
writing, Seller shall, and shall cause each Divesting Entity to:

 

(i)                                     maintain in effect all Transferred IP
Rights and applications and registrations included in the Transferred IP Rights,
to the extent owned or controlled by Seller or its Affiliates;

 

(ii)                                  maintain all Transferred Equipment in its
present repair, order and condition, except for depletion and ordinary wear and
tear; and

 

(iii)                               maintain in effect and perform its
obligations in all material respects under the Transferred Contracts, including
the License.

 

(c)                                  From and after the date hereof and to the
Closing, except (i) as set forth on Schedule 6.01(c) or as otherwise expressly
contemplated by the Transaction Documents, or (ii) as Purchaser shall otherwise
consent in writing (which consent shall not be unreasonably withheld or
delayed), Seller covenants and agrees that, with respect to the Business, it
shall not, and shall cause the Divesting Entities not to:

 

(i)                                     sell, pledge, dispose of, transfer,
lease, license, encumber or authorize the sale, pledge, disposition, transfer,
lease, license or encumbrance of any assets, including the Transferred IP
Rights, that are (or would otherwise be) Purchased Assets, other than (A) sales
of Products in the ordinary course of

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

37

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business consistent in all material respects with past practice or (B) Permitted
Liens;

 

(ii)                                  waive any material claims or rights of
material value that relate to the Purchased Assets;

 

(iii)                               acquire any material properties, assets or
IP Rights that would constitute Purchased Assets, other than (A) in the ordinary
course of business consistent in all material respects with past practice and
(B) Purchased Assets that would not reasonably be expected to result in the
assumption by Purchaser of material Assumed Liabilities at the Closing pursuant
to the terms of this Agreement;

 

(iv)                              settle any Legal Proceeding or waive any
material claims or rights of material value in a manner that would constitute an
Assumed Liability;

 

(v)                                 terminate, cancel, permit to lapse, amend,
waive or modify any Governmental Authorizations, except as required by any
Governmental Authority;

 

(vi)                              enter into any material new Contract that
would be a Transferred Contract or renew any Transferred Contract, other than
renewals of (A) any Contract set forth on Schedule 6.01(c), (B) any Contract
that is cancelable upon [***] notice without any liability and (C) any Contract
that is necessary or useful to operate the Business in the ordinary course of
business consistent in all material respects with past practice;

 

(vii)                           terminate or waive any material provision of, or
amend or otherwise modify in any material respect, any Transferred Contract
other than in the ordinary course of business consistent in all material
respects with past practice; provided, however, that Seller shall not amend the
License without the prior written consent of Purchaser;

 

(viii)                        abandon, dispose of or permit to lapse any
material Transferred IP Rights;

 

(ix)                              fail to take any material action necessary to
protect or maintain the Transferred IP Rights or to prosecute any pending
applications for Transferred Trademark Rights or file any documents or other
information or pay any maintenance or other fees related thereto;

 

(x)                                 transfer, assign or grant any license or
sublicense of any material rights under or with respect to any Transferred IP
Rights;

 

(xi)                              intentionally disclose or agree to disclose to
any Person, other than representatives of Purchaser or Seller, any trade secret
primarily relating to the Purchased Assets or the Business owned by Seller;

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

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(xii)                           [***]

 

(xiii)                        with respect to the Business, (A) materially
change any activities and practices with respect to inventory levels of
Products, including Products maintained at the wholesale, chain or institutional
levels, (B) enter into any material business practices, programs or long-term
allowances not previously used in the ordinary course of business or change or
modify any material business practices, programs or long-term allowances other
than in the ordinary course of business consistent in all material respects with
past practice or in reasonable furtherance of the Transactions, or (C) engage in
the practice of “channel stuffing” or any similar program, activity or other
action (including any rebate, discount, chargeback or refund policy or
practice), in each case, that would reasonably be expected to result in a trade
buy-in that is materially in excess of normal customer purchasing patterns
consistent with past course of dealing with the Business during the [***] prior
to the date hereof; or

 

(xiv)                       agree, commit to or authorize any of the foregoing
actions.

 

(d)                                 Notwithstanding the foregoing, nothing
herein will prevent Seller or any of its Affiliates from taking actions,
including (i) contributions, transfers, assignments and acceptances of assets
and liabilities; (ii) the repayment of indebtedness and the extinguishment of
Liens; and (iii) the cancellation of any intercompany Contracts and any
Contracts that will not constitute Transferred Contracts, in each case in order
to facilitate the consummation of the Transactions and the activities under the
Ancillary Agreements.

 

Section 6.02                             Condition of the Purchased Assets.

 

(a)                                 Purchaser and its Representatives have made
all inspections and investigations relating to the Products and the Purchased
Assets deemed necessary or desirable by Purchaser.  Purchaser acknowledges and
agrees that (i) it is purchasing the Purchased Assets based on the results of
such inspections and investigations, and on the representations and warranties
of Seller and its Affiliates that are expressly set forth in this Agreement and
(ii) except as otherwise set forth in this Agreement, the Purchased Assets are
sold “as is, where is” and Purchaser accepts the Purchased Assets in the
condition they are in and at the place where they are located on the Closing
Date, subject to the terms and conditions hereof.  In light of such inspections
and investigations, and the representations and warranties expressly made to
Purchaser by Seller in this Agreement, PURCHASER AGREES THAT THE REPRESENTATIONS
AND WARRANTIES GIVEN HEREIN BY SELLER ARE IN LIEU OF, AND PURCHASER HEREBY
EXPRESSLY WAIVES ALL RIGHTS TO, ALL WARRANTIES OF MERCHANTABILITY AND FITNESS
FOR ANY PARTICULAR PURPOSE, AND ALL OTHER WARRANTIES ARISING UNDER THE
UNIFORM COMMERCIAL CODE (OR SIMILAR APPLICABLE LAWS) ARE HEREBY WAIVED BY
PURCHASER.

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

39

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(b)                                 Any claims Purchaser may have for breach of
representation or warranty of Seller under this Agreement shall be based solely
on the representations and warranties of Seller expressly set forth in this
Agreement.

 

(c)                                  Without limiting the foregoing, Purchaser
acknowledges and agrees that (i) it may have received from Seller various
forward looking statements (including estimates, assumptions, projections,
forecasts and plans) regarding the Products (collectively, the “Forward-Looking
Statements”) in connection with Purchaser’s investigation of the Purchased
Assets; (ii) there are uncertainties inherent in attempting to make such
Forward-Looking Statements; (iii) Purchaser is familiar with such uncertainties;
(iv) Purchaser is taking full responsibility for making its own evaluation of
the adequacy and accuracy of all Forward-Looking Statements; (v) Purchaser is
not relying on any Forward-Looking Statement in any manner whatsoever; and
(vi) Purchaser shall have no claim against Seller or any of its Affiliates with
respect to any Forward-Looking Statement.  Purchaser further acknowledges and
agrees that Seller makes no representation or warranty hereunder with respect to
(x) the reasonableness of the assumptions underlying any Forward-Looking
Statement; or (y) any Forward-Looking Statement made in any materials in the
Data Room, any supplemental due diligence information provided or made available
to Purchaser, any of Purchaser’s discussions with management regarding the
Products or any negotiations leading to this Agreement and the other Transaction
Documents and the Post-Transfer Supply Agreement.

 

Section 6.03                             Information and Documents.

 

(a)                                 From and after the Effective Date and for a
period of [***] following the Closing Date, upon reasonable advance notice in
writing and to the extent permitted by applicable Law, Seller shall, and shall
cause the Divesting Entities to, permit Purchaser and its Representatives to
have reasonable access, during normal business hours, to properties, assets,
books, records, agreements, documents, data, files and personnel, in each case
to the extent relating to the Purchased Assets or the Business, as may
reasonably be requested by Purchaser (it being understood that any request for
direct access to Seller’s computer systems shall be deemed unreasonable);
provided, however, that such access shall not unreasonably interfere with
Seller’s or any Divesting Entity’s operation of their respective businesses,
including the Business; provided, further, that Seller may restrict the
foregoing access to the extent that (i) in the reasonable judgment of Seller
(after consulting with counsel), such access or provision of information would
result in a violation of confidentiality obligations to a third party,
(ii) disclosure of any such information would result in disclosure of any
proprietary information or trade secrets of Seller or any other Person (other
than with respect to the Business) or (iii) disclosure of any such information
would result in the loss or waiver of any attorney-client privilege; provided,
further, that Seller may redact any material provided under this Section 6.03 to
the extent such material relates to any assets or products other than such
reasonable financial and operating data and other information that is available
with respect to the Purchased Assets, the Business or sale of the Products (or
consent to authorize Purchaser to obtain appropriate records from any
Governmental Authority) as Purchaser may from time to time reasonably request.

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

40

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(b)                                 Seller shall either (i) cause the Data
Room to remain available and enable the materials included in the Data Room to
be downloaded in their native format by Purchaser for a period of [***]
following the Closing or (ii) deliver to Purchaser a DVD ROM disc (or similar
media) containing a digital copy of all of the materials included in the Data
Room in their native format.

 

Section 6.04                             Publicity; Public Disclosure.

 

(a)                                 Notwithstanding anything herein to the
contrary, each Party hereby agrees with the other Party, except as may be
required to comply with the requirements of any applicable Laws or the rules and
regulations of each stock exchange upon which the securities of such Party are
listed, if any (in which case such Party shall notify without delay the other
Party and provide the other Party with a copy of the contemplated disclosure
prior to submission or release, as the case may be, unless notifying is
impracticable due to circumstances beyond such Party’s control, and such Party
shall give due consideration to any comments provided by the other Party or its
counsel), that no press release or similar public announcement shall, at any
time, be made by it or caused to be made by it concerning the execution or
performance of this Agreement unless it shall have consulted the other Party in
advance with respect thereto and such other Party consents in writing to such
release or announcement; provided, however, that this Section 6.04(a) shall not
apply to any disclosures required by the rules and regulations of the United
States Securities and Exchange Commission (“SEC”).

 

(b)                                 Seller acknowledges that this Agreement must
be filed by Purchaser with the SEC, and the other Transaction Documents and the
Post-Transfer Supply Agreement may have to be filed by Purchaser with the SEC. 
Purchaser agrees, prior to making any such filing, to provide Seller and its
counsel with a redacted version of this Agreement (and any other Transaction
Document and the Post-Transfer Supply Agreement) which it intends to file and
any draft correspondence with the SEC requesting the confidential treatment by
the SEC of those redacted sections of the Agreement, and to give due
consideration to any comments provided by Seller or its counsel and use
reasonable efforts to ensure the confidential treatment by the SEC of those
sections specified by Seller or its counsel.

 

Section 6.05                             Commercially Reasonable Efforts;
Regulatory Approvals; Access.  Subject to any obligation imposed by Law,
including all Competition Laws:

 

(a)                                 Subject to the terms and conditions of this
Agreement, each of Seller and Purchaser shall cooperate, and shall use its
commercially reasonable efforts, to (i) take, or cause to be taken, all actions
and (ii) do, or cause to be done, all things necessary for it to do, under
applicable Laws to consummate and make effective the Transactions, including all
actions and all things necessary for it to (A) comply promptly with all legal
requirements which may be imposed on it with respect to this Agreement and the
Transactions (which actions shall include furnishing all information required by
applicable Law in connection with approvals of or filings with any Governmental
Authority), (B) satisfy the conditions precedent to the obligations of such
Party hereto and (C) obtain any consent, authorization, order or approval of, or
any exemption by, any

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

41

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Governmental Authority or other public or private third party required to be
obtained or made by Seller or Purchaser in connection with the Transactions, in
each case, as soon as reasonably practicable following the Effective Date;
provided, however, that, except as otherwise set forth in this Agreement,
neither Party shall have any obligation to pay money or make any concessions to
obtain such consents.  Subject to appropriate confidentiality protections, each
Party will furnish to the other Party such necessary information and reasonable
assistance as such other Party may reasonably request in connection with the
foregoing.  In addition, Purchaser agrees, subject to any obligations of
confidentiality, to provide such evidence as to financial capability, resources
and creditworthiness as may be reasonably requested by any third party whose
consent or approval is sought hereunder.

 

(b)                                 Subject to applicable Law relating to the
exchange of information, Purchaser and Seller and their respective counsel shall
(i) have the right to review in advance and, to the extent practicable, consult
the other on, any filing made with, or written materials to be submitted to, any
Governmental Authority in connection with the Transactions; (ii) promptly inform
each other of any communication (or other correspondence or memoranda) received
from, or given to, the U.S. Department of Justice, the U.S. Federal Trade
Commission, or any other Governmental Authority in connection with the
Transactions; (iii) consult with the other Party, and consider in good faith the
views of the other Party, prior to entering into any agreement with any
Governmental Authority with respect to the Transactions; and (iv) furnish each
other with copies of all correspondence, filings and written communications
between them, or their respective counsel or Affiliates, on the one hand, and
any Governmental Authority or its respective staff, on the other hand, with
respect to the Transactions.  Purchaser and Seller shall, to the extent
practicable, provide each other and their respective counsel with advance notice
of and the opportunity to participate in any discussion, telephone call or
meeting with any Governmental Authority in respect of any filing, investigation
or other inquiry in connection with the Transactions and to participate in the
preparation for such discussion, telephone call or meeting.

 

(c)                                  Purchaser and Seller shall file any
notification and report form and related material required under the HSR Act,
and any additional filings required under any other Competition Laws, [***]
after the Effective Date.  Purchaser and Seller shall promptly file any
additional information properly requested by any competent Governmental
Authority whose consent has been requested to the Transactions as soon as
practical after receipt of any proper request for additional information.  The
Parties shall use their reasonable best efforts to obtain early termination of
the applicable waiting period, to the extent required, from the applicable
Governmental Authority.

 

Section 6.06                             Books and Records.  Seller shall
transfer to Purchaser on the Closing Date (or as soon as reasonably practicable
after the Closing Date) the Business Books and Records and the Regulatory
Information that are (a) located at Seller’s or an Affiliate’s facilities,
(b) reasonably identifiable and reasonably separable from other books and
records of Seller, (c) in a format that is compatible with Purchaser’s systems
and (d) reasonably relevant to the Purchased Assets, Assumed Liabilities or
Business.  To the extent that Seller is unable to transfer any such Business
Books and Records and Regulatory Information on the Closing Date,

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

42

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Seller shall use commercially reasonable efforts to deliver such Business Books
and Records and Regulatory Information to Purchaser (i) with respect to any such
Business Books and Records and Regulatory Information that are in hard copy
format, within [***] following the Closing Date and (ii) with respect to any
such Business Books and Records and/or Regulatory Information that are in an
electronic format, within [***] following the date on which Purchaser has
established systems that are compatible with the relevant electronic format to
facilitate such delivery; provided, however, that if Purchaser fails to
establish such systems within [***] of the Closing, Seller’s obligation to
transfer such Business Books and Records to Purchaser in electronic format shall
expire.  Seller may transfer copies or originals of the Business Books and
Records and Regulatory Information at its election.

 

Section 6.07                             Ancillary Agreements.  From and after
the Effective Date, the Parties shall negotiate in good faith to agree upon a
definitive form (the “Transitional Supply Agreement Form”) of a transitional
supply agreement on terms in accordance with the relevant terms set forth in
Exhibit D attached hereto; provided that, in any event, the Parties shall use
their best efforts to agree to the Transitional Supply Agreement Form no later
than [***] following the Effective Date.  At the Closing, Purchaser and Seller
shall enter into, execute and deliver (i) a transitional supply agreement, in
substantially the form of the Transitional Supply Agreement Form, (ii) a
government pricing agreement, in substantially the form attached hereto as
Exhibit O (the “Long Term Collaboration Agreement”) and (iii) an API supply
agreement, in substantially the form attached hereto as Exhibit R (the
agreements described in the foregoing clauses (i) through (iii), collectively,
together with the Escrow Agreement, the “Ancillary Agreements”).  Following the
Closing, and as soon as reasonably practicable thereafter, the Parties shall
negotiate in good faith to agree upon and execute a post-transfer supply
agreement, substantially in accordance with the relevant terms set forth in
Exhibit D attached hereto and financial terms mutually agreeable to the Parties
(the “Post-Transfer Supply Agreement”).

 

Section 6.08                             Regulatory Matters.

 

(a)                                 Transfer of Governmental Authorizations. 
Seller shall use commercially reasonable efforts to assign to Purchaser all of
Seller’s right, title, obligations and interest existing in and to the
Transferred Governmental Authorizations on the Closing Date, and Purchaser shall
assume such right, title, obligations and interest from Seller upon Seller’s
assignment of the Transferred Governmental Authorizations.  On the Closing Date,
each Party shall execute and deliver to the FDA the Seller FDA Transfer Letters
and the Purchaser FDA Transfer Letters, as the case may be, and to other
appropriate Governmental Authorities in the United States such documents and
instruments of conveyance as necessary and sufficient to effectuate the transfer
of each Transferred Governmental Authorization to Purchaser under applicable Law
on the Closing Date or as soon as possible if the Transferred Governmental
Authorizations are assigned after the Closing.

 

(b)                                 Governmental Authority Contacts.  Purchaser
and Seller shall promptly give written notice to the other upon becoming aware
of any action by, or notification or other information which it receives
(directly or indirectly) from, any Governmental Authority in the United States
(together with copies of correspondence related thereto), which (A) raises any
material concerns regarding the safety or efficacy of the Products,

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

43

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(B) which indicates or suggests a reasonably likely potential material liability
for either party to third parties arising in connection with the Products, or
(C) which indicates a reasonable potential for a need to initiate a recall,
market withdrawal or similar action; in each case with respect to the Products
sold by Seller on or prior to the Closing Date or Products sold by Purchaser
using any of the Seller Names.

 

(c)                                  Product Complaints.  From and after the
Closing, Purchaser shall be responsible for responding to any complaint
regarding the Products that is received by either Purchaser or Seller after the
Closing Date from any source and for investigating and analyzing such complaint
and making required reports to FDA, regardless of whether the Products involved
were sold by Seller or Purchaser, provided, however, that Seller shall be
responsible for investigating matters relating to the manufacturing of Product
in a manufacturing facility owned or operated by Seller or its Affiliates.

 

Section 6.09                             NDC Numbers, Product Returns, Rebates
and Chargebacks.

 

(a)                                 NDC Numbers.  Following the Closing,
Purchaser shall obtain its own NDC numbers for the Products and shall use
commercially reasonable efforts to have in place as soon as reasonably
practicable all authorizations from Governmental Authorities necessary for
Purchaser to use such NDC numbers for the Products.  Thereafter, Purchaser shall
use its new NDC numbers on all invoices, orders and other communications with
customers and Governmental Authorities.

 

(b)                                 Product Returns.

 

(i)                                     [***]

 

(ii)                                  [***]

 

(iii)                               [***]

 

(c)                                  Commercial Rebates.

 

(i)                                     [***]

 

(ii)                                  [***]

 

(d)                                 GPO Chargeback Claims.

 

(i)                                     [***]

 

(ii)                                  [***]

 

(e)                                  Co-Pay Card Program.  Responsibility for
co-pay card discounts with respect to Products (“Co-Pay Card Discounts”) shall
be allocated between Seller and Purchaser as follows:

 

(i)                                     [***]

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

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(ii)                                  [***]

 

(f)                                   [***]

 

(g)                                  For the avoidance of doubt, the provisions
of this Section 6.09 shall not apply to any matters addressed in the Long Term
Collaboration Agreement.

 

(h)                                 [***]

 

(i)                                     Patient Assistance Program.  Seller
shall be responsible for all patient assistance programs with respect to
Products dispensed to patients prior to the Closing Date.  Seller shall
terminate all patient assistance programs with respect to the Products effective
as of the Closing Date.

 

Section 6.10                             Purchaser Use of Seller Names.

 

(a)                                 During the period commencing on the Closing
Date and ending [***] thereafter (the “Limited License Period”), Seller grants,
and shall cause its Affiliates to grant, to Purchaser and its Affiliates a
limited, non-exclusive, royalty-free right and license to use the Seller Names,
and the UPCs and, subject to Section 6.09, the NDCs for each of the Products, in
each case solely for the purpose of utilizing the labels and packaging, and
advertising, marketing, sales and promotional materials, for the Products as
they exist on the Closing Date.

 

(b)                                 Promptly upon the expiration of the Limited
License Period, Purchaser shall, and shall cause its Affiliates to, destroy and
dispose of all labels and packaging, and all advertising, marketing, sales and
promotional materials, in each case in its possession or subject to its control,
bearing any Seller Names; provided, however, that the expiration of the Limited
License Period shall not restrict Purchaser and its Affiliates from selling the
Inventories or any finished goods inventory of Product acquired by Purchaser on
the Closing Date,  acquired through any purchase order for Products constituting
an Assumed Liability pursuant to Section 2.04(b) after the Limited License
Period or acquired by Purchaser from Seller pursuant to the terms and conditions
in any Ancillary Agreement.

 

(c)                                  In no event shall Purchaser or any of its
Affiliates (i) use any Seller Names in any manner or for any purpose different
from the use of such Seller Names by Seller and its Affiliates immediately prior
to the Closing Date to market, distribute and sell the Products or
(ii) manufacture or produce, or cause or permit any third party to manufacture
or produce, any new labels, packaging or advertising, marketing, sales and
promotional materials using or otherwise incorporating any Seller Names in any
manner.

 

(d)                                 The quality of the acquired Inventories and
finished goods inventory of Products sold by Purchaser under any Seller Names
must be of a sufficiently high quality to be generally comparable to the quality
of the Products sold by Seller prior to the Closing Date.  At the reasonable
request of Seller, Purchaser will send Seller samples of such Inventories or
finished goods inventory of Products.  In the event Purchaser materially
breaches this Section 6.10(d) and fails to cure such breach within [***] after

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

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Seller notifies Purchaser in writing of such breach, Seller may terminate the
license to such Seller Names under Section 6.10(a) by delivery to Purchaser of a
written notice of termination.  If Purchaser disputes in good faith the
existence or materiality of an alleged breach specific in a notice provided by
Seller pursuant to this Section 6.10(d), and provides notice to Seller of such
dispute within the [***] period following the date that Seller notified
Purchaser of the breach, Purchaser will not have the right to terminate the
license to such Inventories or finished goods inventory of Products unless and
until the existence of such material breach has been finally determined in
accordance with the dispute resolution provisions of Section 10.11 and Purchaser
fails to cure such breach within [***] following such determination.

 

(e)                                  Notwithstanding the transfer of any labels
or packaging, or any advertising, marketing, sales and promotional materials,
Purchaser acknowledges that this Agreement does not, and shall not, convey,
transfer or assign any right, title, license or interest in any Trademarks of
Seller or any of its Affiliates other than the Transferred Trademark Rights.

 

(f)                                   Notwithstanding the foregoing, the Parties
acknowledge that this Agreement does not, and shall not, convey, transfer or
assign any right, title, license or interest in any Trademark of any third
party.

 

Section 6.11                             Seller Use of Transferred IP Rights. 
Effective as of the Closing Date, Purchaser shall and hereby does grant to
Seller and its Affiliates a non-exclusive, transferable, paid-up, royalty-free
right and license, with the right to grant sublicenses through multiple tiers to
practice, until [***] the Purchaser IP Rights, including the Transferred IP
Rights, solely for the purpose of [***].  Notwithstanding any provision of this
Agreement, any Ancillary Agreement or the Post-Transfer Supply Agreement to the
contrary, neither Seller nor its Affiliates shall have any rights to the
Purchaser IP Rights, including the Transferred IP Rights, except as expressly
set forth in this Section 6.11 and Section 6.14.

 

Section 6.12                             Further Assurances.  From time to time
after the Closing, and for no further consideration (other than reimbursement
for out of pocket expenses incurred in packing or shipping any Purchased Asset),
each of the Parties shall, and shall cause its Affiliates to, execute,
acknowledge and deliver such assignments, transfers, consents, assumptions and
other documents and instruments (including such assignments and other documents,
certificates and instruments for Purchaser’s filing with the applicable
Governmental Authorities, registries and other recording authorities to record
the transfer of the Transferred IP Rights in accordance with applicable Law) and
take such other commercially reasonable actions as may reasonably be requested
to more effectively assign, convey or transfer to or vest in: (a) Purchaser and
its designated Affiliates, all rights, title and interests in, to and under the
Purchased Assets and the Assumed Liabilities contemplated by this Agreement to
be transferred or assumed at the Closing and (b) Seller, any rights, title or
interests in, to or under any Excluded Asset that may have been transferred to
Purchaser at Closing.  Purchaser agrees that, following the Closing, Purchaser
shall prepare any such additional instruments or documents necessary to assign,
convey or transfer the Transferred IP Rights at its own expense.  Seller agrees
to use commercially reasonable efforts (i) to obtain the Formalities after
Closing to the extent they were not obtained prior to Closing and (ii) [***]

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

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Section 6.13                             Bulk Transfer Laws.  Purchaser
acknowledges that Seller and its Affiliates have not taken, and do not intend to
take, any action required to comply with any applicable bulk sale or bulk
transfer Laws or similar Laws and hereby waives compliance therewith.

 

Section 6.14                             Right of Reference.  Effective as of
the Closing, Purchaser hereby grants to Seller and its Affiliates a [***] right
of reference [***]

 

Section 6.15                             Competition.

 

(a)                                 Except in accordance with the terms and
conditions of the Ancillary Agreements and the Post-Transfer Supply Agreement
and subject to applicable Law, for a period commencing on the Closing Date [***]
Seller shall not, and shall cause its Pharmaceutical Affiliates not to, [***]
(such activities, “Competitive Activity”).  Notwithstanding the foregoing, this
Section 6.15 shall not restrict Seller or its Affiliates from [***]  Seller
acknowledges that (A) the agreements in this Section 6.15 (the “Restrictive
Covenants”) impose a reasonable restraint in light of the activities and
business of Seller and its Affiliates as of the Effective Date and the current
business of Purchaser, Seller and their respective Affiliates; and (B) monetary
damages would not be an adequate remedy for any breach of the Restrictive
Covenants and that Purchaser shall therefore be entitled to specific performance
of the Restrictive Covenants (but subject to Section 10.11) to prevent any
violations thereof.

 

(b)                                 Purchaser acknowledges and agrees that
except as expressly set forth in Section 6.15(a):  [***]

 

Section 6.16                             Insurance.  As of the Closing Date, the
coverage under all insurance policies of Seller and its Affiliates shall
continue in force only for the benefit of Seller and its Affiliates, and not for
the benefit of Purchaser or any of its Representatives.  As of the Closing Date,
Purchaser agrees to arrange for its own insurance policies with respect to the
Purchased Assets covering all periods and agrees not to seek, through any means,
to benefit from any of Seller’s or its Affiliates’ insurance policies which may
provide coverage for claims relating in any way to the Purchased Assets.

 

Section 6.17                             Support.  Following the Closing,
subject to the terms of any applicable Ancillary Agreement or the Post-Transfer
Supply Agreement, Purchaser and its Affiliates, on the one hand, and Seller and
the Divesting Entities, on the other hand, shall reasonably cooperate with each
other in conducting recalls and/or in the defense or settlement of any
Liabilities or lawsuits involving the Purchased Assets, the Products, the
Agreement, the Ancillary Agreements, or the Post-Transfer Supply Agreement, in
each case for which the other Party has responsibility under this Agreement, the
Ancillary Agreements or the Post-Transfer Supply Agreement, by providing the
other Party and such other Party’s legal counsel reasonable access to employees,
records, documents, data, equipment, facilities, products, parts, prototypes and
other information relating primarily to the Purchased Assets or the Products, as
such other Party may reasonably request, to the extent maintained or under the
possession or control of the requested Party; provided, however, that such
access shall not unreasonably interfere with the business of Purchaser or
Seller, or any of their respective Affiliates; provided, further, that either

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

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Party may restrict the foregoing access to the extent that (a) such restriction
is required by applicable Law, (b) such access or provision of information would
reasonably be expected to result in a violation of confidentiality obligations
to a third party or (c) disclosure of any such information would result in the
loss or waiver of the attorney-client privilege.  Subject to the terms of any
applicable Ancillary Agreement or the Post-Transfer Supply Agreement [***] the
requesting Party shall reimburse the other Party for reasonable out-of-pocket
expenses paid by the other Party to third parties in performing its obligations
under this Section 6.17.

 

Section 6.18                             Payments from Third Parties.  In the
event that, on or after the Closing Date, either Party shall receive any
payments or other funds due to the other pursuant to the terms of this Agreement
or any of the other Transaction Documents, then the Party receiving such funds
shall promptly forward such funds to the proper Party.  The Parties acknowledge
and agree that there is no right of offset regarding such payments and a Party
may not withhold funds received from third parties for the account of the other
Party in the event there is a dispute regarding any other issue under any of the
Transaction Documents.

 

Section 6.19                             Resale Exemption Certificates.  At the
Closing (or within such reasonable time thereafter as may be necessary to
perfect the resale or other exemption certificates), Purchaser shall deliver to
Seller fully completed and executed resale exemption certificates or other
applicable exemption certificates for all jurisdictions identified by Seller
prior to Closing as jurisdictions in which inventory is to be transferred and
for which resale exemption certificates are necessary to comply with applicable
Law.  To the extent that any jurisdiction refuses to accept any resale exemption
certificate or other applicable exemption certificate provided by Purchaser,
Seller and Purchaser agree that any Transfer Taxes (and related interest and
penalty) assessed by such jurisdiction shall be borne one-half by Purchaser and
one-half by Seller, as provided in Section 2.09 herein.

 

Section 6.20                             Returned Goods.  Subject to
Section 6.09(b), Purchaser agrees to adhere to the returned goods policy set
forth on Schedule 6.20 attached hereto with respect to all Products received
from customers, whether sold by Purchaser or Seller, to the extent any such
returned Product has the name or any Trademark of Seller or an Affiliate on it.

 

Section 6.21                             Financial Statements.

 

(a)                                 Seller shall deliver an unaudited draft of
the Financial Statements to Purchaser no later than [***] and shall, from and
after such date, to the extent reasonably practicable, consult with Purchaser
with respect to such draft Financial Statements (and give due consideration to
any comments provided by Purchaser with respect thereto).

 

(b)                                 Seller shall deliver to Purchaser the
Financial Statements (including, if applicable, the Q1 Financials) as soon as
practicable after the Effective Date, together with a customary audit opinion
delivered by Seller’s independent registered public accounting firm (which, for
avoidance of doubt, shall not address the Q1 Financials, which shall not be
audited) (the “Audit Opinion”) and a certification executed by the Treasurer,
President or Vice President of Seller (the “Seller Financial Statement
Certification”), which Seller Financial Statement Certification shall certify
that such Financial Statements, as of the time of delivery and as of the
Closing: (i) satisfy the

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

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requirements set forth in the definition of “Financial Statements,” (ii) are
Compliant, (iii) have been prepared from the books and records of Seller and the
Divesting Entities, (iv) properly reflect the inventory balance in accordance
with GAAP (including an appropriate inventory reserve in respect of excess and
obsolete inventory) and (v) fairly present in all material respects the net
assets to be sold of the Business as of the dates indicated in the Financial
Statements and the related revenues and expenses of the Business for the periods
indicated in the Financial Statements in accordance with GAAP, except that, with
respect to clauses (iv) and (v) above, (A) the Financial Statements were
prepared in connection with the sale of the Business and are not intended to be
a complete presentation of the Business’ assets and liabilities or income
statement in conformity with GAAP and (B) the Financial Statements have been
derived from Seller’s historical accounting records and reflect significant
allocations and management’s estimates of the costs of products and services
provided to the Business by Seller and certain of Seller’s Affiliates and,
accordingly, the Financial Statements do not necessarily represent the net
assets and revenues and expenses of the Business had it been operated as a
separate independent entity.  If, after Seller’s delivery to Purchaser of a
Seller Financial Statement Certification and prior to the Closing, Seller
becomes aware that any certification required to be contained in such Seller
Financial Statement Certification is no longer true and correct, Seller shall
deliver to Purchaser a written notice of rescission or revocation of such Seller
Financial Statement Certification as promptly as practicable, but in any event,
within [***] thereof.

 

(c)                                  Seller shall deliver to Purchaser the
(i) unaudited Special Purpose Financial Statements (other than the Stub Period
Financial Statements) as soon as practicable after the Closing Date, but in any
event, within [***] following the Closing Date and (ii) the Stub Period
Financial Statements as soon as practicable after the Closing Date, but in any
event, by [***].  Such Special Purpose Financial Statements shall be unaudited
but, except in the case of Stub Period Financial Statements, shall be reviewed
by Seller’s independent registered public accounting firm (provided that no
review report thereon shall be required) and shall be prepared according to a
methodology consistent with the preparation of the Financial Statements.

 

(d)                                 Seller shall, and shall cause its Affiliates
and each Divesting Entity to (i) [***]; and (iii) upon reasonable written
notice, furnish or cause to be furnished to Purchaser, during normal business
hours (without causing unreasonable disruption) (A) reasonable access to the
operations and properties of Seller, its Affiliates and the Divesting Entities
relating solely to the Business, the Purchased Assets or the Products (including
properties, information, assets, books, records, agreements, documents, data,
files and personnel) and (B) reasonable assistance and cooperation, in each
case, as is necessary for any reasonable purpose in connection with the matters
set forth in this Section 6.21(d), including accounting matters and financial
reporting.  Purchaser shall promptly reimburse Seller its reasonable, customary
and documented out-of-pocket costs and expenses with respect to Seller’s
compliance with this Section 6.21(d).

 

(e)                                  For the avoidance of doubt and
notwithstanding anything else to the contrary in this Agreement, Seller and its
Affiliates shall have no obligation to provide or cause to be provided [***]

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

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Section 6.22                             Financing.

 

(a)                                 Subject to the terms and conditions of this
Agreement, Purchaser shall use, and shall cause its Affiliates to use, their
reasonable best efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable to obtain the
proceeds of the Financing on or prior to the Closing, including (i) identifying
and requesting from Seller any Required Information as promptly as practicable
following the Effective Date, (ii) negotiating and entering into definitive
agreements with respect to the Financing (the “Definitive Financing Agreements”)
on or prior to the Closing, (iii) consummating the Financing on or prior to the
Closing; (iv) paying in a timely manner any commitment fees or other amounts
that are or become due and payable under or with respect to the Financing or any
of the Definitive Financing Agreements on or following the date of this
Agreement but on or prior to the Closing, (v) fully enforcing the obligations of
the parties to the Financing and the Definitive Financing Agreements and
Purchaser’s rights under or with respect to the Financing and the Definitive
Financing Agreements on or prior to the Closing, (vi) as promptly as practicable
after the Effective Date, preparing materials for rating agency or investor
presentations, bank information memoranda, offering memoranda and similar
documents required in connection with the Financing and (vii) otherwise taking,
or causing to be taken, all actions and to do, or causing to be done, all things
reasonably necessary to arrange and obtain the Financing on or prior to the
Closing.  Until the Closing, Purchaser shall give Seller prompt notice of
(A) any material breach or default by any party to the Financing or the
Definitive Financing Agreements of which Purchaser gains knowledge, (B) the
receipt of any written communication with respect to any actual or potential
material breach or default by any party to the Financing or the Definitive
Financing Agreements or any termination of the Financing or the Definitive
Financing Agreements or (C) any dispute or disagreement between or among the
parties to any of the Financing or the Definitive Financing Agreements with
respect to the obligation to fund the Financing or the amount of the Financing
to be funded on the Closing Date.  Until the Closing, Purchaser shall keep
Seller reasonably informed on a current basis and in reasonable detail of the
status of its efforts to arrange the Financing.

 

(b)                                 Prior to the Closing Date, Seller shall (and
shall cause its Affiliates to) use reasonable best efforts to provide to
Purchaser all cooperation reasonably requested by Purchaser that is customary in
connection with the arrangement of the Financing (provided in all cases that
such requested cooperation does not unreasonably interfere with the ongoing
operations of Seller), which reasonable best efforts shall include
(i) furnishing, as promptly as reasonably practicable following the delivery of
Purchaser’s request therefor to Seller (which notice shall state with
specificity the information requested), with (A) such pertinent and customary
information, to the extent reasonably available to Seller regarding the Business
and the Purchased Assets, and any supplements thereto, as may be reasonably
requested by Purchaser to consummate the Financing and (B) all financial
statements (including the Financial Statements) or other customary data
regarding the Products, Business and the Purchased Assets to be included in a
customary preliminary prospectus or preliminary offering memorandum or
preliminary private placement memorandum suitable for use in (x) a customary
(for high yield debt securities) “high yield road show” for an offering
registered under the Securities Act

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

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(subject to customary exceptions for a Rule 144A offering involving high yield
debt) or (y) an SEC registered “high yield” debt, equity-linked or equity
securities offering (the information referred to in clauses (A) and (B) being
referred to in this Agreement as the “Required Information”), in each case, with
a certification executed by the Treasurer, President or Vice President of Seller
(the “Seller Required Information Certification,” and with the Seller Financial
Statement Certification, each, a “Seller Certification”) that such Required
Information provided by Seller is Compliant; provided, that in no event shall
the Required Information be deemed to include (1) pro forma financial statements
or pro forma adjustments (however Seller will use reasonable best efforts to
cooperate with Purchaser in its preparation of such materials), (2) risk factors
specifically relating to all or any component of the Financing (however Seller
will use reasonable best efforts to cooperate with Purchaser in its preparation
of such materials), (3) subsidiary financial statements required by Rule 3-09,
Rule 3-10 or Rule 3-16 of Regulation S-X or (4) Compensation Disclosure and
Analysis required by Regulation S-K, (ii) promptly assisting with the
preparation of materials for rating agency or investor presentations, bank
information memoranda, and similar documents required in connection with the
Financing, (iii) providing the financial statements, business and other
financial data, and audit reports relating to the Business, the Purchased Assets
and the Assumed Liabilities and such other pertinent written financial
information relating to the Business, the Purchased Assets and the Assumed
Liabilities required to be filed by Purchaser or any of its Affiliates with the
SEC in connection with the Transactions, (iv) [***] (v) providing customary and
reasonably available non-financial information related to the Business and the
Products to Purchaser as may be reasonably requested by Purchaser and which is
required by Purchaser based on advice of counsel for disclosure purposes in a
preliminary prospectus, preliminary offering memorandum, preliminary private
placement memorandum in connection with the Financing, (vi) causing appropriate
Seller personnel to participate at reasonable times in a reasonable number of
meetings, drafting sessions, presentations, road shows, rating agency and due
diligence sessions and sessions with prospective lenders and investors,
(vii) facilitating the pledge of collateral in connection with the Financing as
may be reasonably requested by Purchaser, provided that any obligations
undertaken by Seller in any executed agreement shall be effective no earlier
than as of the Closing, (viii) providing at least three (3) Business Days prior
to the expected Closing Date all documentation and other information about the
Business and the Purchased Assets as is requested by Purchaser or any Financing
Source for the Financing and required under applicable “know your customer” and
anti-money-laundering rules and regulations including the USA PATRIOT Act to the
extent requested by Purchaser in writing at least eight (8) Business Days prior
to the expected Closing Date and (ix) using reasonable best efforts to cause
accountants to consent to the use of their reports in any material relating to
the Financing and to provide comfort letters in customary form in connection
with the Financing.  Notwithstanding anything in this Section 6.22(b) or
elsewhere in this Agreement to the contrary, in no event will Seller be required
to make any commitment or agreement effective in connection with the Financing. 
Purchaser shall promptly, upon request by Seller, reimburse Seller for all
reasonable out-of-pocket costs and expenses (including reasonable attorneys’ and
accountants costs and expenses) incurred by Seller in connection with its
cooperation contemplated by this Section 6.22 and, subject to Section 8.03 and
Section 8.04, shall

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

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indemnify and hold harmless Seller and its Representatives from and against all
direct and actual Losses suffered or incurred by any of them in connection with
the arrangement of the Financing, any action taken by them at the request of
Purchaser pursuant to this Section 6.22(b) and any information used in
connection therewith (except with respect to any information provided in writing
by Seller specifically for use in connection therewith), except, in each case,
insofar as such Losses (A) arose out of or resulted from the common law fraud,
willful misconduct, bad faith, intentional misrepresentation or gross negligence
of Seller or its Representatives, (B) directly resulted from the breach of any
of the obligations of Seller or its Representatives under this Agreement or
(C) that were agreed to in a settlement without the written consent of Purchaser
(such consent not to be unreasonably withheld or delayed).  If, after Seller’s
delivery of a Seller Required Information Certification to Purchaser and before
the Closing, Seller becomes aware that any certification required to be
contained in such Seller Required Information Certification is no longer true
and correct, Seller shall deliver to Purchaser a written notice of rescission or
revocation of such Seller Required Information Certification as promptly as
practicable, but in any event, within three (3) Business Days thereof.  [***]

 

(c)                                  Notwithstanding anything contained in this
Section 6.22 or in any other provision of this Agreement, in no event shall
Purchaser be required (i) to amend or waive any of the terms or conditions
hereof or (ii) to consummate the Closing any earlier than [***] after the final
day of the Marketing Period.

 

Section 6.23                             Tax Matters.  Seller and Purchaser
shall provide each other with such cooperation and information as either of them
reasonably may request of the other in filing any Tax Return, amended Tax Return
or claim for refund, determining a liability for Taxes or a right to a refund of
Taxes or participating in or conducting any audit or other proceeding in respect
of Taxes, in each case, relating to the ownership or use of the Purchased
Assets.  Seller and Purchaser shall make themselves (and their respective
employees) reasonably available on a mutually convenient basis to provide
explanations of any documents or information provided under this Section 6.23.

 

Section 6.24                             Licenses and Additional Rights. 
Effective as of the Closing, Seller hereby grants to Purchaser a perpetual,
irrevocable, transferable, sublicensable, non-exclusive, paid-up, royalty-free
right and license to use the Licensed Seller Know-How for the research,
development, manufacture, packaging, importation, distribution,
commercialization, marketing, use and sale of the Products and the Inventory in
the United States and the use of the Purchased Assets in the United States.

 

Section 6.25                             Notice of Certain Events.  Seller shall
promptly notify Purchaser of any of the following:

 

(a)                                 any written notice from any Person alleging
that the consent of such Person is or may be required in connection with the
Transactions, if the failure to obtain such consent would, individually or in
the aggregate, reasonably be expected to be materially adverse to the Business;

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

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(b)                                 any written notice communication from any
Governmental Authority in connection with the Transactions;

 

(c)                                  any Legal Proceeding commenced or, to the
Knowledge of Seller, threatened in writing against, relating to or involving or
otherwise affecting Seller, any Divesting Entity or the Business that, if
pending on the date of this Agreement, would have been required to have been
disclosed pursuant to Section 4.05 or that relate to the consummation of the
Transactions;

 

(d)                                 any (i) debarment or proposed debarment
under to 21 U.S.C. Section 335a(a) or 335a(b) or (ii) engagement in any conduct
that would reasonably be expected to result in debarment or exclusion under 21
U.S.C. Section 335a(a) or 335a(b) or under 42 U.S.C. Section 1320a-7, or
sanction by, suspension, debarment, exclusion or ineligibility to participate in
any federal or state health care program, including Medicare and Medicaid or in
any federal procurement or non-procurement programs, in each case, of or by
Seller, any Divesting Entity or, to the Knowledge of Seller, any director,
officer, agent, or employee of Seller or any Divesting Entity; and

 

(e)                                  any damage or destruction by fire or other
casualty of any material Purchased Asset or part thereof or a Material Loss;

 

provided, however, that the delivery of any notice pursuant to this Section 6.25
shall not limit or otherwise affect the remedies available hereunder to
Purchaser.

 

Section 6.26                             Confidentiality.  After the Closing
Date, Seller shall keep confidential and not disclose to any third party or use,
and shall cause its Affiliates, the Divesting Entities and Representatives to
keep confidential and not disclose to any third party or use, the Confidential
Information, except (a) as permitted by this Agreement, the Ancillary Agreements
or the Post-Transfer Supply Agreement, (b) as necessary to perform this
Agreement, the Ancillary Agreements and the Post-Transfer Supply Agreement,
(c) as required by Law, (d) as necessary to defend, prosecute, arbitrate any
indemnification claim or any litigation or dispute relating to this Agreement or
(e) with respect to Confidential Information relating to the Business, the
Purchased Assets or the Assumed Liabilities, as reasonably necessary to operate
the Seller’s Business, provided that Seller shall not disclose such Confidential
Information to a third party unless such third party is subject to a
confidentiality obligation in favor of Seller no less restrictive than this
Section 6.26.  Notwithstanding the foregoing, nothing in this Agreement shall
restrict the parties hereto from disclosing Confidential Information to a
Governmental Authority in connection with the Anti-Trust Filings.

 

Section 6.27                             Covenant Not to Sue.  Seller shall not,
and Seller shall cause its Affiliates not to sue, bring claims or initiate other
Legal Proceeding against Purchaser or any of its Affiliates and their respective
Representatives, sublicensees and customers based on, or in connection with, the
Infringement or misappropriation of any IP Rights owned or licensed by Seller,
the Divesting Entities or their Affiliates as a result of Purchaser’s operation
of the Business, Purchaser’s ownership and use of the Purchased Assets or
Purchaser’s assumption of the Assumed Liabilities, in each case, in the same or
substantially similar manner as conducted immediately prior to the Effective
Date.

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

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Section 6.28                             No Negotiation.  Between the Effective
Date and the Closing Date, Seller shall not, and shall not permit any of its
Affiliates or Representatives to, directly or indirectly, solicit, initiate,
encourage or entertain any inquiries or proposals, discuss or negotiate with,
provide any information to, consider the merits of any inquires or proposals
from any Person (other than Purchaser) to enter into any Contract or instrument
relating to any transaction involving, in whole or in part, the Purchased Assets
or that would otherwise compromise the ability of Seller or any Divesting Entity
to consummate the Transactions.  Seller shall promptly advise Purchaser, orally
and in writing, of any such inquiry or proposal received from a third party. 
Seller agrees that the rights and remedies for noncompliance with this
Section 6.28 shall include having such provision specifically enforced by a
court having equity jurisdiction, it being acknowledged that any such breach or
threatened breach may cause irreparable injury to Purchaser and that money
damages will not provide an adequate remedy to Purchaser.

 

Section 6.29                             Material Loss.Seller shall use
commercially reasonable efforts to cure any Material Loss prior to the Closing.

 

Section 6.30                             Cooperation in Litigation.

 

(a)                                 Subject to Section 6.26, [***] Seller and
Purchaser shall, subject to the terms of this Section 6.30 cooperate with each
other in the defense or prosecution of any Legal Proceedings, examination or
audit instituted prior to the Closing or that may be instituted thereafter
against or by either Party relating to or arising out of the conduct of the
Business prior to or after the Closing (other than Legal Proceedings between
Seller and Purchaser or their respective Affiliates arising out of the
Transactions, the Ancillary Agreements or the Post-Transfer Supply Agreement). 
In connection therewith, and except as set forth in any Ancillary Agreement or
the Post-Transfer Supply Agreement, from and after the Closing Date, each of
Seller and Purchaser shall make available to the other during normal business
hours and upon reasonable prior written notice, but without unreasonably
disrupting its business, all records to the extent relating to the Purchased
Assets, the Assumed Liabilities and the Retained Liabilities held by it and
reasonably necessary to permit the defense or investigation of any such Legal
Proceedings, examination or audit (other than Legal Proceedings between Seller
and Purchaser or their respective Affiliates arising out of the Transactions,
the Ancillary Agreements or the Post-Transfer Supply Agreement, with respect to
which applicable rules of discovery shall apply), and shall preserve and retain
all such records for the length of time contemplated by its standard record
retention policies and schedules, provided that neither Seller nor Purchaser
shall be obligated pursuant to this Section 6.30 to disclose any document or
information, the disclosure of which would violate the terms of any binding
confidentiality agreements the disclosing party is subject to.  [***]

 

(b)                                 [***]

 

(c)                                  [***]

 

Section 6.31                             License Assignment and Consent. 
Simultaneous with the execution of this Agreement, Purchaser shall join the
Assignment and Consent Agreement, dated as of January 13, 2015, by and between
Grünenthal and Seller (the “Assignment Agreement”) by

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

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executing a joinder agreement in the form of the joinder agreement attached as
Exhibit A to the Assignment Agreement, upon which Purchaser shall become a party
to the Assignment Agreement and shall be fully bound by, and subject to, all of
the terms and conditions of the Assignment Agreement as though Purchaser was an
original party thereto.

 

Section 6.32                             [***].

 

Section 6.33                             Post-Closing Transition.  No later than
[***] following the Effective Date, a Transition Team shall be established by
the Parties (the “Transition Team”) and shall be comprised of [***]  The
Transition Team shall discuss, and to the extent necessary and mutually agreed
by the Parties, meet in person, to develop and draft a Transition Plan that
outlines and facilitates the processes and mechanisms for transferring the
Products and the Purchased Assets from Seller to Purchaser on mutually agreeable
terms and conditions consistent with the terms of this Agreement, including
Section 6.09 (the “Transition Plan”).  The Parties agree to (a) formulate the
Transition Plan within [***] following the date on which the Transition Team is
established and (b) use commercially reasonable efforts to perform their
respective obligations as set forth in the Transition Plan within the timelines
set forth therein.  The Parties will discuss in good faith any changes to the
Transition Plan that become required or advisable.  Except as otherwise set
forth in the Transition Plan, the Ancillary Agreements or elsewhere in this
Agreement, each Party shall be responsible for its respective costs and expenses
incurred in performing the Transition Plan.  In connection with developing or
implementing the Transition Plan, the Parties may elect to enter into additional
agreements on mutually acceptable terms as the Parties deem reasonably necessary
or advisable.

 

Section 6.34                             Seller Affiliates.  Seller shall cause
all Controlled and non-Controlled Affiliates and the Divesting Entities to
comply with the terms of, and to perform their respective obligations under,
this Agreement.

 

ARTICLE VII
CLOSING CONDITIONS

 

Section 7.01                             Conditions Precedent to Purchaser’s
Obligations on the Closing Date.  All of the obligations of Purchaser hereunder
to consummate the Transactions are subject to fulfillment, prior to or at the
Closing, of the following conditions (compliance with which or the occurrence of
which may be waived in whole or in part by Purchaser in writing):

 

(a)                                 The representations and warranties of Seller
contained herein shall be true and correct on and as of the Closing Date as
though made on and as of the Closing Date (other than representations and
warranties made as of a specified date, which shall be true and correct as of
the date specified), except for breaches and inaccuracies of such
representations and warranties (without giving effect to any limitation as to
“materiality,” “material adverse effect” or “Material Adverse Effect” set forth
therein, but giving effect to any dollar threshold specified therein) that would
not reasonably be expected to have a Material Adverse Effect; provided, that the
Fundamental Representations shall be true and correct in all respects as of the
Closing Date as though made on as and of the Closing Date.

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

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(b)                                 Seller shall have performed and complied in
all material respects with all of its covenants and agreements under this
Agreement and the other Transaction Documents to be complied with and performed
by Seller at or before the Closing.

 

(c)                                  Seller shall have delivered to Purchaser a
certificate in the form attached hereto as Exhibit F, dated as of the Closing
Date and executed by an authorized officer of Seller, to the effect that each of
the conditions specified above in Section 7.01(a), Section 7.01(b) and
Section 7.01(g) is satisfied in all respects (the “Seller’s Officer’s
Certificate”).

 

(d)                                 Seller shall have delivered to Purchaser a
certificate of a Secretary or an Assistant Secretary of Seller in the form
attached hereto as Exhibit G enclosing a copy of (i) its certificate of
incorporation certified by the Secretary of State of the State of Pennsylvania,
(ii) its by-laws and (iii) if applicable, board of director resolutions
authorizing Seller to enter into this Agreement and the other Transaction
Documents and to consummate the Transactions (the “Seller’s Secretary’s
Certificate”).

 

(e)                                  No Law or Judgment enacted, entered,
promulgated, enforced or issued by any Governmental Authority or other legal
restraint or prohibition preventing the consummation of any of the Transactions
(each, a “Closing Legal Impediment”) shall be in effect; provided, however, that
Purchaser shall have taken all action and used the efforts required by
Section 6.05 to prevent the occurrence or entry of any such Closing Legal
Impediment and to remove or appeal as promptly as possible any such Closing
Legal Impediment.

 

(f)                                   The waiting periods, clearances and
approvals required under the anti-trust filings as specified on Schedule
7.01(f) (the “Anti-Trust Filings”) shall have expired or been obtained.

 

(g)                                  Since the Effective Date, there shall have
been no events or occurrences that have resulted in a Material Adverse Effect.

 

(h)                                 Seller shall have signed and delivered, or
caused one or more of its Affiliates, to sign and deliver the Ancillary
Agreements and the documents set forth on Exhibit A.

 

(i)                                     Since the Effective Date, there shall
have been no uncured Material Loss.

 

(j)                                    Seller shall have delivered to Purchaser
the Financial Statements (including, if applicable, the Q1 Financials), the
Audit Opinion and the Seller Certifications, which such Seller Certifications
shall not have been rescinded or revoked (or be required to be rescinded or
revoked pursuant to Section 6.21(b) or Section 6.22(b)).

 

(k)                                 The Financing shall (i) have been
consummated and the proceeds of the Financing shall be available to fulfill
Purchaser’s obligations under this Agreement with respect to the Purchase Price
or (ii) be available to be consummated substantially contemporaneously with the
Closing.

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

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(l)                                     The actions set forth in
Section 3.01(b) shall have been completed.

 

Section 7.02                             Conditions Precedent to Seller’s
Obligations on the Closing Date.  All of the obligations of Seller hereunder to
consummate the Transactions are subject to the fulfillment, prior to or at the
Closing, of the following conditions (compliance with which or the occurrence of
which may be waived in whole or in part by Seller in writing):

 

(a)                                 The representations and warranties of
Purchaser contained herein shall be true and correct on and as of the Closing
Date as though made on and as of the Closing Date (other than representations
and warranties made as of a specified date, which shall be true and correct as
of the date specified), except for breaches and inaccuracies of such
representations and warranties (without giving effect to any limitation as to
“materiality,” “material adverse effect” or “Purchaser Material Adverse Effect”
set forth therein, but giving effect to any dollar threshold specified therein)
that would not reasonably be expected to have a Purchaser Material Adverse
Effect; provided, that the Fundamental Representations made by Purchaser shall
be true and correct in all respects as of the Closing Date as though made on as
and of the Closing Date.

 

(b)                                 Purchaser shall have performed and complied
in all material respects with all of its covenants and agreements under this
Agreement and the other Transaction Documents to be complied with and performed
by Purchaser at or before the Closing.

 

(c)                                  Purchaser shall have delivered to Seller a
certificate in the form attached hereto as Exhibit H dated as of the Closing
Date and executed by an authorized officer of Purchaser to the effect that each
of the conditions specified above in Section 7.02(a) and Section 7.02(b) is
satisfied in all respects (the “Purchaser’s Officer’s Certificate”).

 

(d)                                 Purchaser shall have delivered to Seller a
certificate of a Secretary or an Assistant Secretary of Purchaser in the form
attached hereto as Exhibit I enclosing a copy of (i) its articles of
incorporation certified by the Secretary of State of the State of California,
(ii) its by-laws and (iii) board of director resolutions authorizing Purchaser
to enter into this Agreement and the other Transaction Documents and to
consummate the Transactions (the “Purchaser’s Secretary’s Certificate”).

 

(e)                                  No Closing Legal Impediment shall be in
effect; provided, however, that Seller shall have used its commercially
reasonable efforts (as required by Section 6.05) to prevent the occurrence or
entry of any such Closing Legal Impediment and to remove or appeal as promptly
as possible any such Closing Legal Impediment.

 

(f)                                   The waiting periods and approvals required
under the Anti-Trust Filings as specified on Schedule 7.01(f) shall have expired
or been obtained.

 

(g)                                  Purchaser shall have signed and delivered,
or caused one or more of its Affiliates to sign and deliver, the Ancillary
Agreements and the document set forth on Exhibit B.

 

(h)                                 The actions set forth in
Section 3.01(c)(ii) shall have been completed.

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

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ARTICLE VIII
INDEMNIFICATION

 

Section 8.01                             Indemnification by Seller.

 

(a)                                 Subject to the provisions of this
Article VIII, Seller agrees to, from and after the Closing, defend, indemnify
and hold harmless Purchaser and its Affiliates and, if applicable, their
respective directors, officers, agents, representatives, employees, successors
and assigns (collectively, the “Purchaser Indemnitees”), from and against any
and all Losses to the extent arising from or relating to (i) any Retained
Liability; (ii) any Excluded Asset; (iii) any breach by Seller of any of its
covenants or agreements contained in this Agreement or any instruments of
assignment delivered on or prior to Closing in accordance therewith; or (iv) any
breach of any warranty or representation of Seller contained in this Agreement
or in any certificate delivered by Seller pursuant to Section 7.01 (other than a
Seller Required Information Certification).

 

(b)                                 Purchaser shall take, and shall cause the
other Purchaser Indemnitees to take, commercially reasonable actions to mitigate
any Loss (including using commercially reasonable efforts to make claims under
applicable insurance policies) that a Purchaser Indemnitee asserts under this
Article VIII upon becoming aware of any event that would reasonably be expected
to, or does, give rise thereto, provided that the foregoing shall not be deemed
to limit the ability of Purchaser and the other Purchaser Indemnitees to incur
reasonable costs and expenses in connection therewith.

 

Section 8.02                             Indemnification by Purchaser.

 

(a)                                 In addition to the indemnity provided by the
third sentence of Section 6.22(b), subject to the provisions of this
Article VIII, Purchaser agrees to, from and after the Closing, defend, indemnify
and hold harmless Seller and its Affiliates and, if applicable, their respective
directors, officers, agents, representatives, employees, successors and assigns
(collectively, the “Seller Indemnitees”), from and against any and all Losses to
the extent arising from or relating to (i) any Assumed Liability; (ii) any
breach by Purchaser of any of its covenants or agreements contained in this
Agreement or any instruments of assumption delivered on or prior to Closing in
accordance therewith; (iii) any breach of any warranty or representation of
Purchaser contained in this Agreement or in any certificate delivered by
Purchaser pursuant to Section 7.02 or (iv) the use of any Seller Names by
Purchaser or any of Purchaser’s Affiliates (or any third party acting on behalf
of Purchaser or any of Purchaser’s Affiliates) under Section 6.10.

 

(b)                                 Seller shall take, and shall cause the other
Seller Indemnitees to take, commercially reasonable actions to mitigate any Loss
(including using commercially reasonable efforts to make claims under any
applicable insurance policies) that a Seller Indemnitee asserts under this
Article VIII upon becoming aware of any event that would reasonably be expected
to, or does, give rise thereto, provided that the foregoing shall not be deemed
to limit the ability of Seller and the other Seller Indemnitees to incur
reasonable costs and expenses in connection therewith.

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

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Section 8.03                             Notice of Claims.  Any Purchaser
Indemnitee or Seller Indemnitee claiming that it has suffered or incurred any
Loss for which it may be entitled to indemnification under this Article VIII or
the third sentence of Section 6.22(b) (the “Indemnified Party”) shall give
prompt written notice to the Party from whom indemnification is sought (the
“Indemnifying Party”) of the matter, action, cause of action, claim, demand,
fact or other circumstances upon which a claim for indemnification under this
Article VIII or the third sentence of Section 6.22(b) (each, a “Claim”) may be
based.  Such notice shall contain, with respect to each Claim, such facts and
information as are then reasonably available with respect to such Claim,
including a description of the Losses suffered or incurred by the Indemnified
Party, the amount or estimated amount of such Losses (if known or reasonably
capable of estimation) and the method of computation of such Losses, and a
reference to the provisions of this Agreement in respect of which such Loss
shall have occurred.  If any Claim is based on any action, claim, suit or
proceeding (in equity or at law) instituted by a third party with respect to
which the Indemnified Party intends to claim any Loss under this Article VIII (a
“Third Party Claim”), the Indemnified Party shall promptly notify (the “Third
Party Claim Notice”), in writing, the Indemnifying Party of such Third Party
Claim and offer to tender to the Indemnifying Party the defense of such Third
Party Claim.  A failure by the Indemnified Party to give written notice of and
to offer to tender the defense of any Third Party Claim in a timely manner
pursuant to this Section 8.03 shall not limit the obligation of the Indemnifying
Party under this Article VIII, except (a) to the extent such Indemnifying Party
is actually prejudiced thereby or (b) as provided in Section 8.05.

 

Section 8.04                             Third Party Claims.

 

(a)                                 The Indemnifying Party shall have the right,
but not the obligation, exercisable by written notice to the Indemnified Party
within thirty (30) days of receipt of a Third Party Claim Notice from the
Indemnified Party with respect to a Third Party Claim, to assume the conduct and
control, at the expense of the Indemnifying Party and through counsel of its
choosing that is reasonably acceptable to the Indemnified Party, of such Third
Party Claim; provided, however, that the Indemnifying Party shall not be
entitled to assume or maintain control of the defense of such Third Party Claim
and shall pay the fees and expenses of counsel retained by the Indemnified Party
if (i) such Third Party Claim relates to or arises in connection with any
criminal Legal Proceeding, (ii) such Third Party Claim seeks an injunction or
equitable relief against the Indemnified Party or any of its Affiliates,
(iii) such Third Party Claim seeks monetary damages and the sum of the amount of
the monetary damages is greater than twice the maximum amount from which the
Indemnifying Party is required to indemnify the Indemnified Party under this
Agreement, (iv) the Indemnified Party reasonably concludes, based on the advice
of counsel, that there is an irreconcilable conflict of interest between the
Indemnifying Party and the Indemnified Party in the conduct of such defense or
(v) after assuming control of such defense, the Indemnifying Party withdraws
from such defense or fails to diligently pursue and maintain such defense.

 

(b)                                 If the Indemnifying Party is controlling the
defense of a Third Party Claim, the Indemnifying Party may compromise or settle
such Third Party Claim; provided, however, that the Indemnifying Party shall
give the Indemnified Party advance written notice of any proposed compromise or
settlement and shall not, without the prior written consent of the Indemnified
Party, which consent shall not be unreasonably

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

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withheld, consent to or enter into any compromise or settlement that commits the
Indemnified Party to take, or to forbear to take, any action or does not provide
for a full and complete written release by the applicable third party of the
Indemnified Party.  No Indemnified Party may compromise or settle any Third
Party Claim for which it is seeking indemnification hereunder without the
consent of the Indemnifying Party, which consent shall not be unreasonably
withheld.  No Indemnifying Party may consent to the entry of any judgment that
does not relate solely to monetary damages arising from any such Third Party
Claim without the prior written consent of the Indemnified Party, which consent
shall not be unreasonably withheld.

 

(c)                                  Subject to Section 8.04(a), the
Indemnifying Party shall permit the Indemnified Party to participate in, but not
control, the defense of any such Third Party Claim through counsel chosen by the
Indemnified Party, provided that the fees and expenses of such counsel shall be
borne by the Indemnified Party.  If the Indemnifying Party elects not to, or is
not permitted to pursuant to Section 8.04(a), control or conduct the defense of
a Third Party Claim, the Indemnifying Party nevertheless shall have the right to
participate in the defense of any Third Party Claim and, at its own expense, to
employ counsel of its own choosing for such purpose.

 

(d)                                 The Parties shall cooperate in the defense
of any Third Party Claim, with such cooperation to include (i) the retention and
the provision to the Indemnifying Party of records and information that are
reasonably relevant to such Third Party Claim and (ii) reasonable access to
employees on a mutually convenient basis for providing additional information
and explanation of any material provided hereunder.

 

(e)                                  Purchaser and Seller agree to cooperate and
to cause their Affiliates to cooperate with each other to the extent reasonably
required after the Closing Date in connection with any claims conducted by a
Taxing Authority relating to any Taxes with respect to or in relation to any
Purchased Asset for any Tax period ending on or before the Closing Date or, in
the case of any Tax period that includes, but does not end on, the Closing Date,
the portion of such period ending on the Closing Date (each a “Tax Contest”). 
Promptly after Purchaser or any of its Affiliates receives notice of any Tax
Contest, Purchaser shall notify Seller in writing (which notice shall include
copies of any material notices, correspondence and any other documents received
by Purchaser or its Affiliates with respect to such Tax Contest) of the Tax
Contest; provided, that the failure to provide such notice shall not affect
Purchaser’s rights under this Article VIII except to the extent that Seller has
been materially prejudiced by such failure.  Notwithstanding anything to the
contrary, if the Tax Contest relates solely to (i) Seller’s Tax Liability or
rights to any refunds (or the liability or rights of Seller) or (ii) a Tax for
which Seller could have an indemnification obligation under this Agreement,
Seller shall have the sole right to conduct, control, defend, settle or
compromise the defense of the Tax Contest at its own expense, whether the Tax
Contest began before or after the Closing Date; and Purchaser shall provide
Seller with all necessary powers of attorney and other necessary documents and
assistance to allow Seller to effectively conduct and control such defense;
provided, however, that in the case of any Claims conducted by a Taxing
Authority against Purchaser that is a Tax Contest, Purchaser shall have the
right to control the defense against such Claim except that Seller shall have
the right to participate in such

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

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defense and Purchaser shall not settle or resolve such Claim without the consent
of Seller (which consent shall not be unreasonably withheld, conditioned or
delayed).

 

Section 8.05                             Expiration.  If the Closing shall have
occurred, all covenants, agreements, warranties and representations made herein
or in any certificate delivered in accordance herewith shall survive the
Closing.  Notwithstanding the foregoing, all representations, warranties,
covenants and agreements made herein or in any certificate delivered in
accordance herewith, and all indemnification obligations under
Section 8.01(a)(iii), Section 8.01(a)(iv), Section 8.02(a)(ii) and
Section 8.02(a)(iii) with respect to any such representations, warranties,
covenants or agreements shall (a) in the case of such representations and
warranties other than the Fundamental Representations, terminate and expire on,
and no action or proceeding seeking damages or other relief for breach of any
thereof or for any misrepresentation or inaccuracy with respect thereto, shall
be commenced after, the date that is [***] after the Closing Date, (b) in the
case of the Fundamental Representations, terminate and expire on, and no action
or proceeding seeking damages or other relief for breach of any thereof or for
any misrepresentation or inaccuracy with respect thereto, shall be commenced
after, the date that is [***] after the Closing Date, or (c) in the case of any
covenants or agreements, survive indefinitely or for such shorter period of time
specified therein, in each case, unless prior to such date a claim for
indemnification with respect thereto shall have been made, with reasonable
specificity, by written notice given in accordance with Section 8.03.

 

Section 8.06                             Certain Limitations.  Notwithstanding
the other provisions of this Article VIII, neither Seller nor Purchaser shall
have any indemnification obligations for Losses under Section 8.01(a)(iv) or
Section 8.02(a)(iii), as applicable, (a) for any individual item where the Loss
relating thereto is less than [***] (the “De Minimis Amount”) and (b) in respect
of each individual item where the Loss relating thereto is equal to or greater
than the De Minimis Amount, unless the aggregate amount of all such Losses
exceeds [***] (the “Threshold Amount”), in which event Seller shall be required
to pay the amount of such Losses that exceeds [***] but only to a maximum amount
equal to [***] (the “Cap”); provided, however, that the De Minimis Amount, the
Threshold Amount and the Cap shall not apply to any Losses arising or resulting
from any breach of any Fundamental Representation; provided, further, however,
that the maximum amount of Losses for which Seller or Purchaser, as applicable,
shall be liable for under Section 8.01(a)(iii), 8.02(a)(ii) or for any breach of
any Fundamental Representation shall in no event exceed the Purchase Price.  For
purposes of determining the amount of any Loss (but not for determining the
existence of any breach, misrepresentation or inaccuracy with respect to any
representation or warranty of Seller), any qualification as to materiality or
Material Adverse Effect set forth in any such representation or warranty shall
be disregarded.  If Purchaser elects to Close after receiving written notice
from Seller of an uncured Material Loss, Purchaser shall not be permitted to
make a Claim (under this Article VIII or otherwise) with respect to such uncured
Material Loss.

 

Section 8.07                             Sole Remedy/Waiver.  Except as set
forth in the third sentence of Section 6.22(b), the penultimate sentence of this
Section 8.07 and in Section 10.15, this Article VIII provides the sole recourse
and exclusive means from and after the Closing by which a Party may assert and
remedy any Losses arising under or with respect to this Agreement or any
certificate or instrument of transfer, assignment or assumption delivered under
this Agreement, and Section 10.11 provides the exclusive means by which a Party
may bring actions against the

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

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other Party under or with respect to this Agreement or any certificate or
instrument of transfer, assignment or assumption delivered under this
Agreement.  Notwithstanding the foregoing, nothing herein shall limit the
liability of any Party hereto for intentional or willful misrepresentation of
material facts which constitutes common law fraud under applicable Laws.  With
respect to any Losses arising under or with respect to this Agreement or any
certificate or instrument of transfer, assignment or assumption delivered under
this Agreement, each Party agrees that it shall only seek such Losses from the
other Party, and each Party hereby waives the right to seek Losses from or
equitable remedies, such as injunctive relief, against any Affiliate of the
other Party or any director, officer or employee of the other Party (or any of
its Affiliates).

 

Section 8.08                             Indemnity Payments.  In the event that
either Party agrees to, or is determined to have an obligation to, reimburse the
other Party for Losses as provided in this Article VIII, the Indemnifying Party
shall promptly pay such amount to the Indemnified Party in U.S. Dollars via wire
transfer of immediately available funds to the accounts specified in writing by
the Indemnified Party.

 

Section 8.09                             Calculation of Damages.  Except as
otherwise provided in this Article VIII, in any case where the Indemnified Party
subsequently recovers from its insurance provider(s) any amount in respect of a
matter with respect to which an Indemnifying Party has indemnified it pursuant
to this Article VIII (which, for the avoidance of doubt, shall not include an
amount recovered as a Tax benefit), such Indemnified Party shall promptly pay
over to the Indemnifying Party the amount so recovered (after deducting
therefrom the full amount of the expenses incurred by it in procuring such
recovery), but not in excess of any amount previously so paid by the
Indemnifying Party to or on behalf of the Indemnified Party in respect of such
matter.

 

Section 8.10                             Tax Treatment of Indemnity Payments. 
Any indemnity payment under this Agreement shall be treated as an adjustment to
the purchase price for Tax purposes unless otherwise required by applicable Law.

 

Section 8.11                             No Consequential Damages. 
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, WITH THE EXCEPTION OF
RELIEF MANDATED BY STATUTE OR ANY BREACH OF SECTION 6.15 OR SECTION 6.26, NO
PARTY SHALL BE LIABLE TO OR OTHERWISE RESPONSIBLE TO THE OTHER PARTY OR ANY
AFFILIATE OF THE OTHER PARTY FOR LOST REVENUES OR PROFITS DAMAGES OR
INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE, EXEMPLARY OR MULTIPLIED DAMAGES
THAT ARISE OUT OF OR RELATE TO THIS AGREEMENT OR THE PERFORMANCE OR BREACH
HEREOF OR ANY LIABILITY RETAINED OR ASSUMED HEREUNDER; PROVIDED, HOWEVER, THAT
THE FOREGOING SHALL NOT BE CONSTRUED TO PRECLUDE RECOVERY IN RESPECT OF ANY
LOSS DIRECTLY INCURRED OR SUFFERED FROM THIRD PARTY CLAIMS.

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

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ARTICLE IX
TERMINATION

 

Section 9.01                             Termination.

 

(a)                                 Mutual Termination.  This Agreement may be
terminated at any time prior to the Closing by mutual written agreement of
Purchaser and Seller.

 

(b)                                 Termination by Purchaser.

 

(i)                                     This Agreement may be terminated by
Purchaser at any time prior to the Closing, if (A) Seller shall have failed to
comply, in any material respect, with any of Seller’s covenants or agreements
contained in this Agreement or (B) any one or more of the representations or
warranties of Seller contained in this Agreement shall prove to have been
inaccurate in any material respect when made and, in the case of clauses (A) and
(B) above, such failure or inaccuracy would give rise to the failure of a
condition set forth in Section 7.01 to be satisfied, and Purchaser shall have
given Seller a reasonable opportunity to cure (if capable of being cured prior
to the Closing) any such failure or inaccuracy to so comply before the Closing.

 

(ii)                                  This Agreement may be terminated by
Purchaser if the Closing shall not have occurred on or before the Outside Date;
provided, however, that Purchaser may terminate this Agreement pursuant to this
Section 9.01(b)(ii) only if at the time of termination (A) Purchaser is not in
material breach of any of its representations, warranties, covenants or
agreements contained in this Agreement, (B) Purchaser has satisfied those
conditions set forth in Section 7.02 required to be satisfied by it (other than
those conditions that by their terms are to be satisfied by actions taken at the
Closing) and (C) Seller shall have failed to validly exercise its right to
terminate this Agreement under Section 9.01(c)(iii).

 

(iii)                               This Agreement may be terminated by
Purchaser at any time prior to the Closing, if a final, non-appealable Closing
Legal Impediment shall be in effect; provided, that Purchaser may not rely upon
this Section 9.01(b)(iii) to terminate this Agreement if Purchaser shall have
failed to use reasonable best efforts to prevent the occurrence of any such
Closing Legal Impediment or to remove or appeal as promptly as practicable any
such Closing Legal Impediment.

 

(iv)                              This Agreement may be terminated by Purchaser
at any time prior to the Closing if (A) Seller has not delivered the Financial
Statements (excluding the Q1 Financials), the Seller Financial Statement
Certification and the Audit Opinion to Purchaser by March 31, 2015 or (B) the
Financial Statements as delivered by Seller do not reflect [***]

 

(c)                                  Termination by Seller.

 

(i)                                     This Agreement may be terminated by
Seller at any time prior to the Closing, if (A) Purchaser shall have failed to
comply, in any material respect,

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

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with any of Purchaser’s covenants or agreements contained in this Agreement or
(B) any one or more of the representations or warranties of Purchaser contained
in this Agreement shall prove to have been inaccurate in any material respect
when made and, in the case of clauses (A) and (B), such failure or inaccuracy
would give rise to the failure of a condition set forth in Section 7.02 to be
satisfied, and Seller shall have given Purchaser a reasonable opportunity to
cure (if capable of being cured prior to the Closing) any such failure or
inaccuracy to so comply before the Closing.

 

(ii)                                  This Agreement may be terminated by Seller
if the Closing shall not have occurred on or before the Outside Date; provided,
however, that Seller may terminate this Agreement pursuant to this
Section 9.01(c)(ii) only if at the time of termination (A) Seller is not in
material breach of any of its representations, warranties, covenants or
agreements contained in this Agreement and (B) Seller has satisfied those
conditions set forth in Section 7.01 required to be satisfied by Seller (other
than those conditions that by their terms are to be satisfied by actions taken
at the Closing).

 

(iii)                               This Agreement may be terminated by Seller
if (i) all of the conditions set forth in Section 7.01 (other than in
Section 7.01(k)) shall have been satisfied or waived (other than those
conditions that by their nature are to be satisfied by actions taken at the
Closing), (ii) Seller shall have materially complied with its covenants in
Section 6.22(b), but Purchaser shall not have received the proceeds of the
Financing, (iii) Purchaser shall have failed to consummate the Closing by the
date the Closing is required to have occurred pursuant to Section 3.01 and, in
the event such failure occurs more than five (5) Business Days prior to the
Outside Date, such failure shall not have been cured within five (5) days after
written notice thereof has been given by Seller to Purchaser, (iv) at the time
of termination, Seller is not in material breach of any representations,
warranties, covenants or agreements contained in this Agreement or in any Seller
Certification (other than Seller Certifications that have been revoked or
rescinded and been replaced with updated Seller Certifications) and (v) Seller
is ready, willing and able to consummate the Closing.

 

(iv)                              This Agreement may be terminated by Seller at
any time prior to the Closing, if a final, non-appealable Closing Legal
Impediment shall be in effect; provided, that Seller may not rely upon this
Section 9.01(c)(iv) to terminate this Agreement if Seller shall have failed to
use reasonable best efforts to prevent the occurrence of any such Closing Legal
Impediment or to remove or appeal as promptly as practicable any such Closing
Legal Impediment.

 

Section 9.02                             Effect of Termination.

 

(a)                                 In the event of the termination of this
Agreement in accordance with Section 9.01, and with the exception of this
Section 9.02, Section 6.04, Section 6.26 and Article X, this Agreement shall
become void and have no effect and neither Party shall have any liability to the
other Party or to such other Party’s Affiliates or Representatives

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

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in respect of this Agreement except, for the avoidance of doubt, for the
obligations of the Parties contained in this Section 9.02, Section 6.04,
Section 6.26 and in Article X; provided, however, that nothing herein shall
limit the liability of any Party hereto for intentional or willful
misrepresentation of material facts which constitutes common law fraud under
applicable Laws or for any willful breach whereby the breaching Party both
intended to take or fail to take the action giving rise to the breach and had
knowledge that such action or inaction would constitute a breach of this
Agreement.

 

(b)                                 Notwithstanding any provision of this
Agreement or any of the Ancillary Agreements to the contrary, in the event of
any termination of this Agreement by either Party for any reason other than
termination by Seller pursuant to Section 9.01(c)(iii), (i) Purchaser, no later
than five (5) Business Days after such termination, shall send a written
instruction to the Escrow Agent certifying that (A) Purchaser has received a
written notice from Seller terminating (or purporting to terminate) this
Agreement other than pursuant to Section 9.01(c)(iii) or (B) this Agreement has
been validly terminated by Purchaser in accordance with Section 9.01(b), and
directing the Escrow Agent to deliver the Escrow Amount (less the amount of the
Reverse Termination Fee) to Purchaser, (ii) Purchaser and Seller shall deliver a
joint written instruction to the Escrow Agent directing the Escrow Agent to
deliver the amount of the Reverse Termination Fee to Purchaser in accordance
with the Escrow Agreement and (iii) under no circumstances shall Seller or any
of its Affiliates, or their respective creditors, have any interest in, claim to
or right to (including any right to set off any amount against) the Escrow
Amount (or any portion thereof, including the amount of the Reverse Termination
Fee).  Neither Purchaser nor Seller shall (and each of Purchaser and Seller
shall cause its respective Affiliates not to) deliver any conflicting, contrary
or other instructions (whether written or oral) objecting to or in any way
related to the instructions to the Escrow Agent contemplated in this
Section 9.02(b) or Section 9.02(c) or the related transfer or distribution of
the Escrow Amount pursuant to the Escrow Agreement.

 

(c)                                  In the event that Seller exercises its
right to terminate this Agreement pursuant to Section 9.01(c)(iii), no later
than [***] after notice of such termination, (i) Purchaser shall send a written
instruction to the Escrow Agent directing the Escrow Agent to deliver the Escrow
Amount (less the amount of the Reverse Termination Fee) to Purchaser and
(ii) Purchaser and Seller shall deliver a joint written instruction to the
Escrow Agent directing the Escrow Agent to deliver to Seller from the Escrow
Amount an amount equal to Seventy Three Million Five Hundred Thousand U.S.
Dollars ($73,500,000) (the “Reverse Termination Fee”) (it being understood that
in no event shall Seller be entitled to receive the Reverse Termination Fee on
more than one (1) occasion or at all if Purchaser consummates the
Transactions).  Each of the Parties acknowledges and agrees that (A) the
agreements contained in this Section 9.02(c) are an integral part of the
Transactions and that, without these agreements, Seller would not enter into
this Agreement and (B) the payment by Purchaser of the Reverse Termination Fee
is not a penalty.  If Purchaser fails to promptly pay the Reverse Termination
Fee when due, and in order to obtain such payment, Seller commences a Legal
Proceeding against Purchaser for payment of the Reverse Termination Fee,
Purchaser shall reimburse Seller for any reasonable, customary and documented
out-of-pocket legal and other third party fees and expenses incurred by Seller
in connection with such Legal Proceeding (the “Additional

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

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Expenses”) within thirty (30) days of a final non-appealable judgment in such
Legal Proceeding that Purchaser is required to pay the Reverse Termination Fee
to Seller.

 

(d)                                 Notwithstanding anything to the contrary in
this Agreement or otherwise, if Purchaser fails to effect the Closing due to its
inability to satisfy the condition set forth in Section 7.01(k), the sole and
exclusive remedy in connection with termination under Section 9.01(c)(iii) of
Seller against Purchaser or any Financing Source in respect of this Agreement
shall be to terminate this Agreement in accordance with Section 9.01(c)(iii) and
collect the Reverse Termination Fee (and, if applicable, the Additional
Expenses), and upon payment of such amount by Purchaser, (i) Purchaser shall
have no further liability or obligation to Seller (whether at law, in equity, in
contract, in tort or otherwise) relating to or arising out of this Agreement and
(ii) Seller shall not be entitled to bring or maintain any claim, action or
proceeding against Purchaser or any Financing Source arising out of or in
connection with this Agreement (or the abandonment or termination thereof).  For
the avoidance of doubt, no Financing Source will have any liability to Seller or
its Affiliates relating to or arising out of this Agreement or the Financing or
in respect of any oral representations made or alleged to be made in connection
herewith or therewith, whether at law or in equity, in contract, in tort or
otherwise.

 

(e)                                  In the event this Agreement shall be
terminated in accordance with Section 9.01 (other than pursuant to
Section 9.01(c)(iii)) and, at such time, a Party is in material breach of or
default under any term or provision hereof, such termination shall be without
prejudice to, and shall not affect, any and all rights to damages that the other
Party may have hereunder.

 

ARTICLE X
MISCELLANEOUS

 

Section 10.01                      Notices.  All notices or other communications
hereunder shall be deemed to have been duly given and made if in writing and if
served by personal delivery upon the Party for whom it is intended, delivered by
registered or certified mail, return receipt requested, or by a national
overnight courier service, or sent by facsimile (provided that notice by
facsimile is promptly confirmed by telephone confirmation thereof and receipt is
confirmed by the sending facsimile machine), to the Person at the address set
forth below, or such other address as may be designated in writing hereafter, in
the same manner, by such Person:

 

to Seller and any Divesting Entity:

 

Janssen Pharmaceuticals, Inc.

c/o Johnson & Johnson

One Johnson & Johnson Plaza

New Brunswick, NJ 08933

Attention: Assistant General Counsel, Corporate Legal Department

Telephone:                                   (732) 524-3644

Facsimile:                                         (732) 524-5334

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

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Attn:                                                                   
Assistant General Counsel

Corporate Legal Department

 

with copies to:

 

Johnson & Johnson
Office of General Counsel

One Johnson & Johnson Plaza

New Brunswick, NJ 08933
Telephone:                                   (732) 524-2448

Facsimile:                                         (732) 524-5304

Attn:                                                                    General
Counsel

 

and:

 

Ropes & Gray LLP

Prudential Tower

800 Boylston Street

Boston, MA 02199-3600
Telephone:                                   (617) 951-7319

Facsimile:                                         (617) 235-0223

Attn:                                                                    Steven
A. Wilcox

 

to Purchaser:

 

Depomed, Inc.

7999 Gateway Blvd

Suite 300

Newark, CA 94560

Telephone:                                   (510) 744-8000

Facsimile:                                         (510) 744-8001

Attn:                                                                    General
Counsel

 

with a copy to:

 

Baker Botts L.L.P.

1001 Page Mill Road

Building One, Suite 200

Palo Alto, CA 94304
Telephone:                                   (650) 739-7555

Facsimile:                                         (650) 739-7655

Attn:                                                                    John W.
Martin
                                                                                               
Brian D. Lee

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

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All notices and other communications under this Agreement shall be deemed to
have been received (a) when delivered by hand, if personally delivered; (b) one
(1) Business Day after being sent, if delivered to a national overnight courier
service; or (c) when sent, if sent by facsimile, with a telephonic
acknowledgment of sending and confirmation of receipt by the sending facsimile
machine.

 

Section 10.02                      Amendment; Waiver.  Any provision of this
Agreement may be amended or waived if, and only if, such amendment or waiver is
in writing and signed (a) in the case of an amendment, by Purchaser and Seller
and (b) in the case of a waiver, by the Party against whom the waiver is to be
effective.  No failure or delay by either Party 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.

 

Section 10.03                      Assignment.  Neither Party may assign any of
its rights or obligations under this Agreement, without the prior written
consent of the other Party, except that (a) Seller may, without such consent,
assign its rights or obligations to an Affiliate, (b) Purchaser may, without
such consent, assign this Agreement and its rights or obligations under this
Agreement, in whole or in part, (i) to one or more of its Affiliates, (ii) in
connection with any transaction the primary purpose of which is to change the
domicile of Purchaser, (iii) after the Closing (or the termination of this
Agreement), in connection with a sale, merger, consolidation, change of control
or similar transaction of Purchaser, whether by sale of stock, merger, sale of
all or substantially all of Purchaser’s assets, operation of Law or otherwise,
or (iv) to any lender of Purchaser or purchaser of securities used to finance
the Transactions as collateral security to secure the obligations of any
indebtedness of Purchaser and (c) Purchaser may assign this Agreement and its
rights or obligations under this Agreement, in whole or in part, with the prior
written consent of Seller (which such consent shall not be unreasonably
withheld, conditioned or delayed), on or after [***] to a third party at least
as creditworthy as Purchaser, in connection with the transfer or sale of all or
substantially all of the Purchased Assets or the Business, whether by sale of
stock, merger, sale of assets, operation of Law or otherwise; provided, however,
that no such assignment by either Party shall relieve such Party of any of its
obligations hereunder.  Any permitted assignee shall assume all obligations of
its assignor under this Agreement.  Any purported assignment in violation of
this Section 10.03 shall be null and void.

 

Section 10.04                      Entire Agreement.  This Agreement, together
with the Exhibits and Schedules expressly contemplated hereby and attached
hereto (which are hereby incorporated by reference), and the other agreements
and certificates delivered in connection herewith (including the other
Transaction Documents and the Confidentiality Agreement), contains the entire
agreement between the Parties with respect to the Transactions and supersedes
all prior agreements or understandings between the Parties.  Other than the
Confidentiality Agreement, the Transaction Documents are intended to define the
full extent of the legally enforceable agreements, covenants, undertakings,
representations and warranties of the Parties, and no promise, representation or
warranty, written or oral, which is not set forth explicitly in such agreements
is intended by either Party to be legally binding.  Each of the Parties
acknowledges that, in deciding to enter into this Agreement and the other
Transaction Documents and to consummate the Transactions, none of them has
relied upon any statements or representations, written or oral, other than those
explicitly set forth herein or therein.

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

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Section 10.05                      Fulfillment of Obligations.  Any obligation
of a Party to the other Party under this Agreement, which obligation is
performed, satisfied or fulfilled by an Affiliate of such Party, shall be deemed
to have been performed, satisfied or fulfilled by such Party.

 

Section 10.06                      Parties in Interest.  This Agreement shall
inure to the benefit of and be binding upon the Parties and their respective
successors and permitted assigns.  Nothing in this Agreement, express or
implied, is intended to confer upon any Person other than Purchaser, Seller, the
Divesting Entities and the Indemnified Parties, or their successors or permitted
assigns, any rights or remedies under or by reason of this Agreement.  The
Financing Sources are intended third-party beneficiaries of, and may enforce,
the provisions of Section 9.02(d), this Section 10.06 and Section 10.10(c).

 

Section 10.07                      Reserved.

 

Section 10.08                      Expenses.  The fee owed to the Escrow Agent
in accordance with the Escrow Agreement shall be borne by Purchaser.  Except as
otherwise expressly provided in this Agreement, whether or not the Transactions
are consummated, all other costs and expenses incurred in connection with this
Agreement and the Transactions shall be borne by the Party incurring such
expenses.

 

Section 10.09                      Schedules.  The disclosure of any matter in
any Schedule to this Agreement shall be deemed to be a disclosure for the
purposes of the Section or subSection of this Agreement to which it corresponds
in number and each other Section and subSection of this Agreement to the extent
such disclosure is reasonably apparent on the face thereof to be relevant to
such other Section or subSection.  The disclosure of any matter in any Schedule
to this Agreement shall expressly not be deemed to constitute an admission by
any Party, or to otherwise imply, that any such matter is material for the
purposes of this Agreement, could reasonably be expected to have a Material
Adverse Effect or a Purchaser Material Adverse Effect, as applicable, or is
required to be disclosed under this Agreement.

 

Section 10.10                      Governing Law; Jurisdiction; No Jury Trial.

 

(a)                                 This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to the conflicts of law, principles or rules of such state, to the extent such
principles or rules are not mandatorily applicable by statute and would permit
or require the application of the laws of another jurisdiction.

 

(b)                                 The Parties consent to the exclusive
jurisdiction of the Federal and State courts located in the State of New York
for the resolution of all disputes or controversies between the Parties which,
pursuant to applicable Law, are not subject to the provisions of Section 10.11. 
Each of the Parties (i) consents to the exclusive jurisdiction of each such
court in any suit, action or proceeding relating to or arising out of this
Agreement or the Transactions; (ii) waives any objection that it may have to the
laying of venue in any such suit, action or proceeding in any such court; and
(iii) agrees that service of any court paper may be made in such manner as may
be provided under applicable Laws or court rules governing service of process.
THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE, AND AGREE TO CAUSE THEIR RESPECTIVE

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

69

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AFFILIATES TO WAIVE, THE RIGHT TO TRIAL BY JURY IN ANY ACTION DIRECTLY OR
INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, ANY
RELATED AGREEMENTS OR ANY TRANSACTIONS CONTEMPLATED HEREBY.

 

(c)                                  Notwithstanding anything herein to the
contrary, each Party acknowledges and irrevocably agrees that with respect to
any Covered Action, such Party agrees and shall take (or refrain from taking)
such actions as necessary to procure that (i) any Covered Action shall be
subject to the exclusive jurisdiction of any New York State court or federal
court of the United States of America sitting in the Borough of Manhattan in the
county of New York, and any appellate court thereof, (ii) that service of
process, summons, notice or document by registered mail addressed to them at
their respective addresses provided in Section 10.01 shall be effective service
of process against it for any Covered Action, (iii) to waive and hereby waives,
to the fullest extent permitted by applicable Law, any objection which it may
now or hereafter have to the laying of venue of, and the defense of an
inconvenient forum to the maintenance of, any Covered Action, and (iv) that a
final judgment in any Covered Action shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
applicable Law.  Nothing in this paragraph shall affect or eliminate any right
to serve process in any other manner permitted by applicable Law.  EACH PARTY
HERETO HEREBY IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY IN RESPECT OF ANY
COVERED ACTION.

 

Section 10.11                      Dispute Resolution.  The Parties recognize
that a dispute may arise relating to this Agreement (“Dispute”).  Other than
with respect to Third Party Claims, any Dispute, including Disputes that may
involve any Affiliates of a Party, shall be resolved in accordance with this
Section 10.11.

 

(a)                                 Mediation.

 

(i)                                     The Parties shall first attempt in good
faith to resolve any Dispute by confidential mediation in accordance with the
then current Mediation Procedure of the International Institute for Conflict
Prevention and Resolution (“CPR Mediation Procedure”) (www.cpradr.org) before
initiating arbitration.  The CPR Mediation Procedure shall control, except where
it conflicts with these provisions, in which case these provisions control.  The
mediator shall be chosen pursuant to CPR Mediation Procedure.  The mediation
shall be held in New York, New York.

 

(ii)                                  Either Party may initiate mediation by
written notice to the other Party of the existence of a Dispute.  The Parties
agree to select a mediator within twenty (20) days of the notice and the
mediation will begin promptly after the selection.  The mediation will continue
until the mediator, or either Party, declares in writing, no sooner than after
the conclusion of one full day of a substantive mediation conference attended on
behalf of each Party by a senior business person with authority to resolve the
Dispute, that the Dispute cannot be resolved by mediation.  In no event,
however, shall mediation continue more than sixty (60)

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

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days from the initial notice by a Party to initiate meditation unless the
Parties agree in writing to extend that period.

 

(iii)                               Any period of limitations that would
otherwise expire between the initiation of mediation and its conclusion shall be
extended until twenty (20) days after the conclusion of the mediation.

 

(b)                                 Arbitration.

 

(i)                                     If the Parties fail to resolve the
Dispute in mediation, and a Party desires to pursue resolution of the Dispute,
the Dispute shall be submitted by either Party for resolution in arbitration
pursuant to the then current CPR Non-Administered Arbitration Rules (“CPR
Rules”) (www.cpradr.org), except where they conflict with these provisions, in
which case these provisions control.  The arbitration will be held in New York,
New York. All aspects of the arbitration shall be treated as confidential.

 

(ii)                                  The arbitrators will be chosen from the
CPR Panel of Distinguished Neutrals, unless a candidate not on such panel is
approved by both Parties.  Each arbitrator shall be a lawyer with at least
fifteen (15) years’ experience with a law firm or corporate law department of
over twenty-five (25) lawyers or who was a judge of a court of general
jurisdiction.  To the extent that the Dispute requires special expertise, the
Parties will so inform CPR prior to the beginning of the selection process.

 

(iii)                               The arbitration tribunal shall consist of
three (3) arbitrators, of whom each Party shall designate one in accordance with
the “screened” appointment procedure provided in CPR Rule 5.4.  The chair will
be chosen in accordance with CPR Rule 6.4.  If, however, the aggregate award
sought by the Parties is less than [***] and equitable relief is not sought, a
single arbitrator shall be chosen in accordance with the CPR Rules.  Candidates
for the arbitrator position(s) may be interviewed by Representatives of the
Parties in advance of their selection, provided that all Parties are
represented.

 

(iv)                              The Parties agree to select the
arbitrator(s) within forty-five (45) days of initiation of the arbitration.  The
hearing will be concluded within nine (9) months after selection of the
arbitrator(s) and the award will be rendered within sixty (60) days of the
conclusion of the hearing, or of any post-hearing briefing, which briefing will
be completed by both sides within forty-five (45) days after the conclusion of
the hearing.  In the event the Parties cannot agree upon a schedule, then the
arbitrator(s) shall set the schedule following the time limits set forth above
as closely as practical.

 

(v)                                 The hearing will be concluded in ten
(10) hearing days or less.  Multiple hearing days will be scheduled
consecutively to the greatest extent possible.  A transcript of the testimony
adduced at the hearing shall be made and shall be made available to each Party.

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

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(vi)                              The arbitrator(s) shall be guided, but not
bound, by the CPR Protocol on Disclosure of Documents and Presentation of
Witnesses in Commercial Arbitration (www.cpradr.org) (“Protocol”).  The Parties
will attempt to agree on modes of document disclosure, electronic discovery,
witness presentation, etc. within the parameters of the Protocol.  If the
Parties cannot agree on discovery and presentation issues, the
arbitrator(s) shall decide on presentation modes and provide for discovery
within the Protocol, understanding that the Parties contemplate reasonable
discovery.

 

(vii)                           The arbitrator(s) shall decide the merits of any
Dispute in accordance with the law governing this Agreement, without application
of any principle of conflict of laws that would result in reference to a
different law.  The arbitrator(s) may not apply principles such as “amiable
compositeur” or “natural justice and equity.”

 

(viii)                        The arbitrator(s) are expressly empowered to
decide dispositive motions in advance of any hearing and shall endeavor to
decide such motions as would a United States District Court Judge sitting in the
jurisdiction whose substantive law governs.

 

(ix)                              The arbitrator(s) shall render a written
opinion stating the reasons upon which the award is based.  The Parties consent
to the jurisdiction of the United States District Court for the district in
which the arbitration is held for the enforcement of these provisions and the
entry of judgment on any award rendered hereunder.  Should such court for any
reason lack jurisdiction, any court with jurisdiction may act in the same
fashion.

 

(x)                                 Notwithstanding any provision to the
contrary contained in this Agreement, each Party has the right to seek from the
appropriate court provisional remedies such as attachment, preliminary
injunction, replevin or other equitable relief to avoid irreparable harm,
maintain the status quo, preserve its status and priority as a creditor or
preserve the subject matter of the Dispute.  Rule 14 of the CPR Rules does not
apply to this Agreement.

 

Section 10.12                      Counterparts.  This Agreement may be executed
in one or more counterparts, each of which shall be deemed an original, and
together shall constitute one and the same agreement and shall become effective
when one or more counterparts have been signed by each of the Parties and
delivered to the other Party, it being understood that both Parties need not
sign the same counterpart.  This Agreement, following its execution, may be
delivered via telecopier machine or other form of electronic delivery, which
shall constitute delivery of an execution original for all purposes.

 

Section 10.13                      Headings.  The heading references herein and
the table of contents hereto are for convenience purposes only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

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Section 10.14                      Severability.  The provisions of this
Agreement shall be deemed severable and the invalidity or unenforceability of
any provision shall not affect the validity or enforceability of the other
provisions hereof.  If any term or other provision of this Agreement, or the
application thereof to any Person or any circumstance, is invalid, illegal or
unenforceable, (a) a suitable and equitable provision shall be substituted
therefore in order to carry out, so far as may be valid and enforceable, the
intent and purpose of such invalid or unenforceable provision and (b) the
remainder of this Agreement and the application of such provision to other
Persons or circumstances shall not be affected by such invalidity, illegality or
unenforceability, nor shall such invalidity, illegality or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.

 

Section 10.15                      Specific Performance.  The Parties agree that
irreparable damage may occur if any provision of this Agreement were not
performed in accordance with the terms hereof or thereof and that the Parties
may be entitled to seek a temporary injunction or injunctions to prevent
breaches of this Agreement or to enforce specifically the performance of the
terms and provisions hereof or thereof in any court specified in
Section 10.10(b), or to seek a permanent injunction from the arbitrators in
addition to any other remedy to which they are entitled at law or in equity.

 

[remainder of page intentionally blank]

 

Confidential Information indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission.

 

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IN WITNESS WHEREOF, the Parties have executed or caused this Asset Purchase
Agreement to be executed as of the Effective Date.

 

 

JANSSEN PHARMACEUTICALS, INC.

 

 

 

 

 

By:

/s/ Michael Grissinger

 

 

Name: Michael Grissinger

 

 

Title: Authorized Signatory

 

[Signature Page to Asset Purchase Agreement]

 

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IN WITNESS WHEREOF, the Parties have executed or caused this Asset Purchase
Agreement to be executed as of the Effective Date.

 

 

DEPOMED, INC.

 

 

 

 

 

By:

/s/ James A. Schoeneck

 

 

Name: James A. Schoeneck

 

 

Title: President and Chief Executive Officer

 

[Signature Page to Asset Purchase Agreement]

 

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Exhibit A

 

SELLER CLOSING DELIVERABLES

 

(a)                                 A receipt for payment of the Purchase Price
at Closing;

 

(b)                                 A good standing certificate for Seller;

 

(c)                                  Seller’s Officer’s Certificate;

 

(d)                                 Seller’s Secretary’s Certificate;

 

(e)                                  An executed bill of sale in the form
attached hereto as Exhibit J (the “Bill of Sale”), dated as of the Closing Date;

 

(f)                                   An executed instrument of assignment and
assumption in the form attached hereto as Exhibit K (the “Assignment and
Assumption”) dated as of the Closing Date;

 

(g)                                  Executed trademark and domain name
assignments in the forms attached hereto as Exhibit L (with assignments in
recordable form to be delivered after the Closing) (the “IP Assignments”), dated
as of the Closing Date;

 

(h)                                 The Seller FDA Transfer Letters, dated as of
the Closing Date; and

 

(i)                                     The Assignment Agreement, executed by
Grünenthal and Seller.

 

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Exhibit B

 

PURCHASER CLOSING DELIVERABLES

 

(a)                                 The Purchase Price;

 

(b)                                 A good standing certificate for Purchaser;

 

(c)                                  Purchaser’s Officer Certificate;

 

(d)                                 Purchaser’s Secretary Certificate;

 

(e)                                  The executed Bill of Sale, dated as of the
Closing Date;

 

(f)                                   The executed Assignment and Assumption,
dated as of the Closing Date;

 

(g)                                  The executed IP Assignments, dated as of
the Closing Date;

 

(h)                                 The Purchaser FDA Transfer Letters, dated as
of the Closing Date; and

 

(i)                                     Executed exemption certificates
identified by Seller prior to the Closing.

 

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