Exhibit 10.1

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND REPLACED
WITH “[***]”. SUCH IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS
EXHIBIT BECAUSE IT IS (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE
HARM TO THE COMPANY IF DISCLOSED.

 

 

 

ASSET PURCHASE AGREEMENT

 

by and among

 

AVADEL LEGACY PHARMACEUTICALS, LLC,

 

AVADEL US HOLDINGS, INC.,

 

Exela Sterile Medicines llc

 

and

 

Exela Holdings, Inc.

 

June 30, 2020

 

 

 

This document is intended solely to facilitate discussion between the parties.
This document is not intended to create nor will it be deemed to create a
legally binding or enforceable offer or agreement of any type or nature prior to
the duly authorized and approved execution of this document by all parties and
the delivery of an executed copy hereof by each party to the other party.

 

THIS DOCUMENT SHALL BE KEPT CONFIDENTIAL PURSUANT TO THE TERMS OF THE
CONFIDENTIALITY AGREEMENT ENTERED INTO BETWEEN AN AFFILIATE OF SELLER AND
PURCHASER AND, IF APPLICABLE, THEIR AFFILIATES AND REPRESENTATIVES, WITH RESPECT
TO THE SUBJECT MATTER HEREOF.

 

2

 

 

Table of Contents

 

  Page   Article I SALE AND PURCHASE OF ASSETS, ASSUMPTION OF LIABILITIES 1    
    1.01 Transferred Assets 1         1.02 Excluded Assets 1         1.03
Assumed Liabilities 1         1.04 Excluded Liabilities 2         1.05 Business
Transfer Documents 2         1.06 Recording and Similar Responsibilities 2      
Article II CLOSING 2         2.01 Closing 2         2.02 Seller Closing
Deliverables 2         2.03 Purchaser Closing Deliverables 3       Article III
PURCHASE PRICE 4         3.01 Consideration 4         3.02 Withholding 4        
3.03 Transfer Taxes and Other Costs 4         3.04 Allocation of the
Consideration 5         3.05 Monthly Payments 5         3.06 Nouress Cash
Consideration and Admission 7       Article IV CONDITIONS TO CLOSING 8        
4.01 Conditions to Purchaser’s Obligations 8         4.02 Conditions to Seller’s
Obligations 8       Article V REPRESENTATIONS AND WARRANTIES OF SELLER 9        
5.01 Organization and Organizational Power 9         5.02 Authorization; Valid
and Binding Agreement 9         5.03 No Contravention 9         5.04 Absence of
Changes 10         5.05 Transferred Assets 11         5.06 Tax Matters 11      
  5.07 Transferred Contracts 11

 

-i-

 

 

Table of Contents 

(continued)

 

  Page

 

  5.08 Intellectual Property 12           5.09 Litigation 13           5.10
Compliance with Laws; Licenses and Permits 13           5.11 Environmental
Matters 15           5.12 Affiliated Transactions 15           5.13 Brokerage 15
          5.14 No Other Representations and Warranties 16        

Article VI REPRESENTATIONS AND WARRANTIES OF PURCHASER 16

 

 6.01 Organization and Organizational Power 16         6.02 Authorization; Valid
and Binding Agreement 16         6.03 No Contravention 17         6.04
Litigation 17         6.05 Brokerage 17         6.06 Sufficiency of Funds 17   
     6.07 Solvency 18         6.08 Liens 18         6.09 No Additional
Representations; Inspection 18       

Article VII COVENANTS 18

 

 7.01 [Reserved] 18         7.02 Access to Books and Records 18         7.03
Confidentiality of Seller 19         7.04 Regulatory and USPTO Filings 19       
 7.05 [Reserved] 20         7.06 Further Assurances 20         7.07 [Reserved]
20         7.08 Transfer of Marketing Authorizations; National Drug Codes;
Transitional Trademark License; Rebates, Chargebacks and Returns 20         7.09
Shared Contracts 22         7.10 Payments from Third Parties; Accounts Payable
22         7.11 Return of Excluded Assets and Transferred Assets 22

 

-ii-

 

 

Table of Contents 

(continued)

 

 

    Page        7.12 [Reserved] 23         7.13 Mutual Non-Solicitation 23     
   7.14 Insurance 23         7.15 [Reserved] 24         7.16 Dismissal of Claims
24         7.17 Termination of Nouress Trademark Application 24         7.18
Assignment of Transferred Contracts 24       

 

Article VIII TERMINATION 24

 

 8.01 [Reserved] 24         8.02 [Reserved] 24       

Article IX INDEMNIFICATION 24

 

 9.01 Indemnification by Seller 24         9.02 Indemnification by Purchaser 25
        9.03 Indemnification Payments; Limitations on Liability 25         9.04
Survival 27         9.05 Notice; Defense of Claims 27       

Article X ADDITIONAL COVENANTS 29

 

  10.01 Provision Respecting Legal Representation 29           10.02 Tax Matters
30           10.03 Purchaser Parent Guarantee 31           10.04 Seller Parent
Guarantee 31        

Article XI DEFINITIONS 32

 

 11.01 Definitions 32         11.02 Rules of Construction and Other Definitional
Provisions 43         11.03 References 44         11.04 Index of Defined Terms
44

 

Article XII MISCELLANEOUS 46

 

 12.01 Press Releases and Communications 46         12.02 Expenses 46       
 12.03 Notices 46

 

-iii-

 

 

Table of Contents

(continued)

 

  Page

 

 12.04 Successors and Assigns 47         12.05 Severability 48         12.06
Construction 48         12.07 Amendment and Waiver 48         12.08 Entire
Agreement 48         12.09 Third-Party Beneficiaries 49         12.10 Purchaser
Deliveries 49         12.11 Delivery by Electronic Transmission 49         12.12
Counterparts; Effectiveness 49         12.13 Governing Law 49         12.14
Jurisdiction 49         12.15 Waiver of Trial by Jury 50         12.16
Non-Recourse 50         12.17 Specific Performance 51         12.18 Time is of
the Essence 51

 

-iv-

 

 

ASSET PURCHASE AGREEMENT

 

THIS ASSET PURCHASE AGREEMENT (this “Agreement”), dated as of June 30, 2020, is
made by and among Exela Sterile Medicines LLC, a Delaware limited liability
company (“Purchaser”), Avadel Legacy Pharmaceuticals, LLC, a Delaware limited
liability company (“Seller”), solely for purposes of Section 3.06, Section 7.16
and Section 10.03 (as well as any provision of Article XI and Article XII as it
relates to any such Section or Article or as expressly set forth therein), Exela
Holdings, Inc., a Delaware corporation (“Purchaser Parent”), and, solely for
purposes of Section 7.16 and Section 10.04 (as well as any provision of
Article XI and Article XII as it relates to any such Section or Article or as
expressly set forth therein), Avadel US Holdings, Inc., a Delaware corporation
(“Seller Parent”). Capitalized terms used and not otherwise defined herein have
the meanings set forth in Article XI. In this Agreement, Seller, Seller Parent,
Purchaser and Purchaser Parent are individually referred to as a “Party” and
collectively as the “Parties”.

 

WHEREAS, Seller owns, licenses or otherwise holds certain rights to manufacture,
package, promote, market, sell, distribute and/or otherwise commercialize the
Products in the Territory and other assets exclusively related to the Business;
and

 

WHEREAS, Seller desires to sell, transfer, assign, convey and deliver the
Transferred Assets, and Purchaser desires to purchase the Transferred Assets and
assume or cause certain of its Affiliates to assume certain liabilities related
to the Business, in each case, upon the terms and subject to the conditions set
forth herein (the “Purchase”).

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties, intending to be legally bound, hereby agree as
follows:

 

Article I

 

SALE AND PURCHASE OF ASSETS, ASSUMPTION OF LIABILITIES

 

1.01            Transferred Assets. Upon the terms and subject to the conditions
set forth in this Agreement, Seller agrees to sell, transfer, assign, convey and
deliver to Purchaser at the Closing, and Purchaser agrees to purchase, acquire
and accept delivery from Seller at the Closing, all of Seller’s rights, title
and interests in, to and under the Transferred Assets, in each case free and
clear of all Liens other than Permitted Liens.

 

1.02            Excluded Assets. Nothing in this Agreement shall operate to
transfer from Seller, create any obligation on Seller to transfer or cause to
have transferred any rights, title or interests in or to any of the Excluded
Assets.

 

1.03            Assumed Liabilities. Effective at the Closing and from and after
the Closing Date, Purchaser shall assume, or cause its applicable Affiliates to
assume, the Assumed Liabilities and shall pay, perform, satisfy and discharge
when due the Assumed Liabilities.

 

1

 

 

1.04            Excluded Liabilities. Notwithstanding anything to the contrary
set forth herein, Seller shall retain and be responsible for all Excluded
Liabilities, and, as the case may be, their payment, performance, satisfaction
and discharge when due.

 

1.05            Business Transfer Documents. To the extent required under
applicable Law or as reasonably deemed necessary by either of the Parties, to
effect the transactions contemplated hereunder, the Parties shall execute and
deliver, or cause their respective Affiliates to execute and deliver, such asset
and/or business transfer agreements, bills of sale, deeds, assignments,
assumptions and other documents and instruments of sale, conveyance, assignment,
novation, transfer and assumption (the “Business Transfer Documents”) as are
necessary to effect any transfer of the Transferred Assets or related Assumed
Liability or any assumption of the Assumed Liabilities at the Closing. The
Business Transfer Documents shall be in form and substance reasonably agreed to
by the Parties and as is usual and customary in the applicable jurisdiction;
provided, that the Parties agree and acknowledge that the Business Transfer
Documents are intended solely to formalize the terms and conditions of this
Agreement in order to comply with any applicable Law and shall be, in all
respects, consistent with the terms and conditions set forth in this Agreement
and not provide for any additional obligations or restrictions on the Parties.
In the event of any inconsistency between this Agreement and a Business Transfer
Document, this Agreement shall control to the extent it would not be
incompatible with applicable Law.

 

1.06            Recording and Similar Responsibilities. Notwithstanding the
foregoing provisions of this Article I, it shall be Purchaser’s responsibility
(a) to prepare the applicable Patent assignments and Trademark assignments,
which shall be in the form attached to this Agreement as Exhibit A and Exhibit B
(the “IP Transfer Documents”), respectively, and to record such assignments
following execution thereof by Seller at the Closing, and (b) to bear the fees
and other costs in accordance with Section 3.03.

 

Article II

 

CLOSING

 

2.01            Closing. The closing of the Purchase (the ”Closing”) shall take
place at the offices of Goodwin Procter LLP (“Goodwin”) located at 100 Northern
Ave, Boston, Massachusetts 02210, or remotely through the execution and exchange
of the documents and agreements contemplated herein to be executed and delivered
in connection with the Closing, on the second Business Day following the
satisfaction or waiver (by the Party entitled to the benefit of such condition)
of all of the closing conditions set forth in Article IV (other than those to be
satisfied at the Closing itself, but subject to such conditions being capable of
being satisfied at the Closing) unless another time, date or place is mutually
agreed to in writing by the Parties. The date of the Closing is referred to
herein as the “Closing Date.” The Closing shall be effective as of 11:59
p.m. Eastern Time on the Closing Date.

 

2

 

 

2.02        Seller Closing Deliverables. At the Closing, Seller shall deliver or
cause to be delivered to Purchaser (or Purchaser’s designated Affiliate) (unless
previously delivered) the following:

 

(a)            a certificate from Seller, executed by an authorized officer of
Seller and dated as of the Closing Date, stating that the conditions specified
in Sections 4.01(a) and 4.01(b) have been satisfied;

 

(b)            a duly executed IRS Form W-9 certifying that Seller is a U.S.
person and is exempt from backup withholding;

 

(c)            a duly executed counterpart to each Ancillary Agreement;

 

(d)            evidence reasonably satisfactory to Purchaser of the release of
all Liens on the Transferred Assets other than Permitted Liens;

 

(e)            evidence reasonably satisfactory to Purchaser of the receipt of
all Third Party consents, waivers, approvals or notices set forth on Schedule
2.02(e); and

 

(f)             a duly executed Collateral Subordination Agreement by and
between Seller, Deerfield Private Design Fund IV, L.P., as Collateral Agent for
the Junior Lenders (as each term is defined in the Subordination Agreement) (the
“Collateral Agent”), Purchaser and Purchaser Parent (the “Subordination
Agreement”);

 

(g)            a duly executed mutual release by and between Seller and Exela
Pharma Sciences, LLC, a wholly-owned subsidiary of Purchaser Parent, with
respect to the Nouress Litigation, in the form of Exhibit F hereto (the
“Release)”;

 

(h)            a certificate pursuant to Treasury Regulations
Section 1.1445-2(b), duly executed by the Seller.

 

2.03        Purchaser Closing Deliverables. At the Closing, Purchaser shall
deliver or cause to be delivered to Seller (unless previously delivered) the
following:

 

(a)            the Closing Cash Consideration, by wire transfer of immediately
available funds in accordance with Section 3.01;

 

(b)            a certificate of Purchaser, executed by an authorized officer
thereof and dated as of the Closing Date, stating that the conditions specified
in Section 4.02(a) and 4.02(b) have been satisfied;

 

(c)            a duly executed counterpart to each Ancillary Agreement;

 

(d)            the duly executed Subordination Agreement; and

 

(e)            the duly executed Release.

 

3

 

 

Article III

 

PURCHASE PRICE

 

3.01        Consideration. In consideration for the purchase and sale of the
Transferred Assets and the consummation of the transactions contemplated by this
Agreement or the Ancillary Agreements, Purchaser hereby agrees to pay Seller
(such amounts, the “Purchase Price”):

 

(a)            at the Closing, the Closing Cash Consideration by wire transfer
of immediately available funds to one or more accounts designated in writing by
Seller prior to the Closing; and

 

(b)            following the Closing and subject to Section 3.05 and Article IX,
$27,500,000 to be paid in equal monthly installments of $2,750,000 (each, a
“Monthly Payment”, and collectively, the “Monthly Payments”) for ten
(10) consecutive months beginning on (i) the first Business Day on or after
ninety (90) days following the Closing Date for the first Monthly Payment and
(ii) the first Business Day on or after the twentieth (20th) day of each
calendar month (beginning in the calendar month following the calendar month in
which the payment pursuant to subsection (i) is made) for the remaining nine
(9) Monthly Payments thereafter, in each case, by wire transfer of immediately
available funds to one or more accounts designated in writing by Seller prior to
such Monthly Payment.

 

3.02        Withholding. Purchaser shall be entitled to deduct and withhold from
the consideration otherwise payable pursuant to this Agreement to Seller such
amounts as it is required to deduct and withhold with respect to the making of
such payment under applicable Law. To the extent that such amounts are so
deducted and withheld by Purchaser and paid to the applicable Governmental
Entity, such amounts will be treated for all purposes of this Agreement as
having been paid by Purchaser to Seller.

 

3.03        Transfer Taxes and Other Costs.

 

(a)            All Transfer Taxes payable on or in connection with the transfer
of the Transferred Assets to Purchaser and the transactions contemplated by this
Agreement shall be shared equally by Seller and Purchaser.

 

(b)            The Party responsible under applicable Law for filing the
applicable Tax Return with respect to such Transfer Tax shall prepare and file
all necessary Tax Returns and other documentation required to be filed by it
with respect to all Transfer Taxes, and, if required by applicable Law, the
Parties will, and will cause their applicable Affiliates to, join in the
execution of any such Tax Returns and other documentation. Seller and Purchaser
agree to cooperate with each other in the filing of any Tax Returns with respect
to Transfer Taxes, including by promptly supplying any information in its
possession that is reasonably necessary to complete such Tax Returns and other
documentation.

 

4

 

 

(c)            All out-of-pocket costs and fees incurred by Seller and any of
its Affiliates related or necessary to prepare and transfer the Transferred
Assets or the Assumed Liabilities to Purchaser in accordance with the terms of
this Agreement or any Ancillary Agreement, shall be the obligations of and paid
solely by Purchaser when due; provided, that no amount shall be incurred by
Seller without the prior written consent of Purchaser unless it is listed on
Schedule 3.03(c) and, provided, further, that if any such amount has been paid
by Seller or any of its Affiliates, Purchaser shall, subject to receipt of
satisfactory evidence of such Person’s payment thereof, promptly reimburse
Seller. For the avoidance of doubt, Seller shall be responsible for the
Transaction Expenses.

 

(d)            All out-of-pocket costs and expenses associated with removing and
moving any Transferred Asset to a location designated by Purchaser shall be
borne and paid solely by Purchaser when due; provided, that no amount shall be
incurred by Seller without the prior written consent of Purchaser unless it is
listed on Schedule 3.03(d) and, provided, further, that if any such amount shall
be incurred by Seller (after written consent of Purchaser unless such costs or
expenses are listed on Schedule 3.03(d), Purchaser shall, subject to receipt of
satisfactory evidence of Seller’s payment thereof, promptly reimburse Seller.

 

3.04        Allocation of the Consideration. The Parties agree that Seller shall
prepare a draft IRS Form 8594 allocating the Closing Cash Consideration, the
Monthly Payments, the Assumed Liabilities and other relevant items comprising
the purchase price (as determined for U.S. federal income tax purposes and as
adjusted pursuant to the terms of this Agreement) (and all Liabilities and other
capitalizable costs for Tax purposes), among the Transferred Assets in
accordance with the rules under Section 1060 of the Internal Revenue Code of
1986, as amended (the “Code”), and the Treasury Regulations promulgated
thereunder. Seller shall deliver the draft IRS Form 8594 to Purchaser for review
and comment within [***] after the Closing Date. Purchaser shall deliver its
comments to Seller within [***] thereafter and Seller shall consider Purchaser’s
comments in good faith and incorporate any reasonable comments from Purchaser in
such draft Form 8594. If Seller objects to any comment made by Purchaser with
respect to the draft Form 8594 (i.e., on the basis that such comment is not
reasonable), the parties shall proceed in good faith to determine mutually the
appropriate resolution of the issues in dispute. Each of the Purchaser and
Seller shall timely file the final IRS Form 8594 in accordance with the agreed
upon draft Form 8594. None of Purchaser, Seller or their respective Affiliates
shall take any Tax position (whether in Tax audits, Tax Returns or otherwise)
that is inconsistent with the final IRS Form 8594 unless required to do so by
applicable Law. To the extent required under the Code and the applicable
Treasury Regulations, any amendments to the final IRS Form 8594 shall be
prepared by Seller, submitted to Purchaser for its review, and otherwise filed
and treated in a manner consistent with the draft IRS Form 8594 as provided in
this Section 3.04.

 

5

 

 

3.05        Monthly Payments.

 

(a)            Security Interest. As security for the prompt, complete and
indefeasible payment when due (whether on the payment dates or otherwise) of all
or any portion of the Monthly Payments and, if applicable, the Change of Control
Payment, the Product Transfer Payment, the Default Amount, the Default Payment
and the Default Fee (collectively, the “Deferred Payment Obligations”),
Purchaser grants to Seller a security interest in all of Purchaser’s right,
title and interest in and to the Collateral. Purchaser agrees that from time to
time at or following the Closing, at the reasonable expense of Purchaser,
Purchaser will promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary, or that Seller
may reasonably request, in order to perfect and protect any security interest
(including the priority thereof) granted or purported to be granted hereby in
the Collateral or to enable Seller to exercise and enforce its rights and
remedies hereunder with respect to any Collateral, including to (i) execute (if
necessary), authorize the filing of (if applicable) and file such financing or
continuation statements, or amendments thereto, and (ii) file any short form
intellectual property security agreements executed by Purchaser in connection
herewith with the United States Patent and Trademark Office or United States
Copyright Office (or any successor office). Purchaser hereby authorizes Seller
to file one or more financing or continuation statements, and amendments
thereto, relative to all or any part of the Collateral without the signature of
Purchaser. Upon the full and complete payment in cash of all of the applicable
Deferred Payment Obligations to Seller, Seller’s Liens on any of the Collateral
shall be immediately and automatically released and all rights in the Collateral
shall revert to Purchaser and Seller shall, at Seller’s reasonable expense,
promptly take such actions to evidence such release as may be reasonably
requested by Purchaser or its designee; provided, that upon the full and
complete payment in cash of a Product Transfer Payment to Seller, Seller’s Liens
on any of the Collateral specific to the applicable Product that was the subject
of the applicable Product Transfer shall be immediately and automatically
released and all rights in such Collateral shall revert to Purchaser and Seller
shall, at Seller’s reasonable expense, promptly take such actions to evidence
such release as may be reasonably requested by Purchaser or its designee.

 

(b)            Restrictions on Collateral Transfers. Subject to the terms of the
Subordination Agreement, until the full and complete payment in cash of all of
the applicable Deferred Payment Obligations to Seller, Purchaser shall not
(i) create, incur or suffer any Lien upon any of the Collateral (other than a
first priority Lien on the Collateral in favor of Seller in accordance with this
Section 3.05 and, subject to the Subordination Agreement, a second priority Lien
on the Collateral in favor of the Collateral Agent), (ii) assign, sell,
transfer, license or otherwise dispose of any of the Collateral (other than
inventory of the Products in the ordinary course of business consistent with
past practice) or (iii) commit to do any of the foregoing; provided, that this
Section 3.05(b) shall not restrict a Product Transfer if the Product Transfer
Payment is paid in full upon the consummation of such Product Transfer.

 

(c)            Change of Control; Transfer of Product. Upon the consummation of
a Purchaser Change of Control, all Monthly Payments that remain unpaid on the
date of such Purchaser Change of Control shall accelerate and become immediately
due and payable, and all such Monthly Payments shall be paid at or prior to the
consummation of such Purchaser Change of Control (the “Change of Control
Payment”). Upon the transfer of all or substantially all of the rights to any
one of the Products, not including the Nouress Product, to a Third Party (a
“Product Transfer”), [***] of the amount of all Monthly Payments that remains
unpaid on the date of the consummation of such Product Transfer (the “Product
Transfer Payment”), shall accelerate and become immediately due and payable. For
the sake of clarity, if there are two Product Transfers, a Product Transfer
Payment shall accelerate and become immediately due and payable for each such
Product Transfer.

 

6

 

 

(d)            Payment Defaults. (i) Upon [***] prior written notice to
Purchaser, upon the occurrence and during the continuance of any Payment Default
(other than pursuant to clause (d) thereof) and (ii) automatically upon the
occurrence and during the continuance of a Payment Default pursuant to clause
(d) thereof, Seller may in its sole discretion accelerate the obligation of
Purchaser to make all Monthly Payments that remain unpaid on the date of such
Payment Default (the “Default Amount”) and declare all the Default Amount plus
the Default Fee to be immediately due and payable (the “Default Payment”) and
sign and file in Purchaser’s name any and all collateral assignments, notices,
control agreements, security agreements and other documents Seller deems
necessary or appropriate to perfect or protect the repayment of such Default
Payment. For purposes of the prior sentence, any due but unpaid Change of
Control Payment or Product Transfer Payment shall be included as a Default
Amount; provided that the total Default Amount shall not exceed the aggregate of
the Monthly Payments due under this Agreement, less payments made in respect of
Monthly Payments, Change of Control Payments and Product Transfer Payments
hereunder. If the remedy in this Section 3.05(d) is exercised by Seller, Seller
may, at any time or from time to time, apply, collect, liquidate, sell in one or
more sales, lease or otherwise dispose of, any or all of the Collateral, in its
then condition or following any commercially reasonable preparation or
processing. Any such sale may be made either at public or private sale at its
place of business or elsewhere. Purchaser agrees that any such public or private
sale may occur upon [***] prior written notice to Purchaser. Seller may, at
Seller’s sole cost and expense, require Purchaser to assemble the Collateral and
make it available to Seller at a place designated Seller that is reasonably
convenient to both Parties. “Default Fee” means the greater of [***] of the
Default Amount or [***].

 

(e)            Tax Treatment. The Parties agree that unless Seller makes an
election under Section 453(d) of the Code, the Monthly Payments received by
Seller shall be eligible for installment sale treatment under Section 453 of the
Code and any corresponding provision of foreign, state or local Law, as
appropriate.

 

3.06        Nouress Cash Consideration and Admission. Seller and Seller Parent
hereby (i) admit the manufacture, use, sale, offer for sale, distribution and
importation into the United States of the Nouress Product by Seller or Seller
Parent prior to the Closing would infringe one or more claims of U.S. Patent
No. 10,478,453, 10,583,155, 10,653,719 or (if issued) pending in Patent
Application Nos. 16/746,028, 16/773,641, 16/850,726 and 16/850,962 submitted to
the USPTO by Purchaser and/or its Affiliates (such one or more pending and
issued claims collectively being the “Claims”); (ii) admit the Claims, as well
as any future pending or issued claims of substantially similar scope, may be
determined by a court of competent jurisdiction to be valid and enforceable; and
(iii) agree not to challenge the validity or patentability, or aid in any
challenge to validity or patentability, of any issued or pending patents owned
by Purchaser (and/or its affiliates) or Seller covering cysteine hydrochloride
products, including those listed in the FDA’s Orange Book for Elcys® and Nouress
and all patents and patent applications that claim priority to or share a
substantially similar disclosure thereto. Seller and Seller Parent hereby
acknowledge and agree that the Nouress Cash Consideration is consideration for
the dismissal of the Nouress Litigation pursuant to Section 7.16 hereof.

 

7

 

 

Article IV

 

CONDITIONS TO CLOSING

 

4.01        Conditions to Purchaser’s Obligations. The obligations of Purchaser
to consummate the Purchase shall be subject to the fulfillment (or waiver by
Purchaser in writing) of each of the following conditions at or prior to the
Closing Date:

 

(a)            Each of the representations and warranties set forth in Article V
shall be true and correct in all material respects (without giving effect to any
“materiality”, “material adverse effect” or “Material Adverse Effect” qualifiers
set forth therein) as of the Closing Date as though then made, unless made as of
an earlier date, in which case, it shall be true and correct as of such earlier
date;

 

(b)            Seller shall have performed and complied in all material respects
with all of the agreements, covenants and conditions that are required to be
performed by it at or prior to the Closing under this Agreement;

 

(c)            No judgment, decree or judicial order shall have been entered
which prevents the Purchase, declares unlawful the Purchase or causes the
Purchase to be rescinded; and

 

(d)            Seller shall have delivered to Purchaser the deliverables set
forth in Section 2.02.

 

4.02        Conditions to Seller’s Obligations. The obligation of Seller to
consummate the Purchase shall be subject to the fulfillment (or waiver by Seller
in writing) of each of the following conditions at or prior to the Closing Date:

 

(a)            Each of the representations and warranties set forth in
Article VI shall be true and correct in all material respects (without giving
effect to any “materiality”, “material adverse effect” or “material adverse
effect” qualifiers set forth therein) as of the Closing Date as though then made
unless made as of an earlier date, in which case, it shall be true and correct
as of such earlier date;

 

(b)            Purchaser shall have performed and complied in all material
respects with all of the agreements, covenants and conditions that are required
to be performed by it at or prior to the Closing under this Agreement;

 

(c)            No judgment, decree or judicial order shall have been entered
which prevents the Purchase, declares unlawful the Purchase or the Purchase to
be rescinded;

 

(d)            The Collateral Agent, Deerfield Private Design Fund II, L.P.,
Horizon Sante FLML, SARL, Breaking Stick Holdings, L.L.C. and Broadfin
Healthcare Master Fund, Ltd. shall each have delivered to Seller an executed
Termination and Release Agreement in a form acceptable to Seller; and

 

8

 

 

(e)            Purchaser shall have delivered to Seller the deliverables set
forth in Section 2.03.

 

Article V

 

REPRESENTATIONS AND WARRANTIES OF SELLER

 

Except as set forth in the schedules accompanying this Agreement (as updated in
accordance with Section 12.07, each, a “Schedule” and, collectively, the
“Disclosure Schedules”), Seller represents and warrants to Purchaser as follows
as of the date hereof:

 

5.01        Organization and Organizational Power. Seller is a limited liability
company duly organized, validly existing and in good standing under the Laws of
the State of Delaware, and has all requisite limited liability company power and
authority necessary to own its assets and carry on its Business relating to the
Products as currently conducted by it.

 

5.02        Authorization; Valid and Binding Agreement.

 

(a)            This Agreement has been, and the Ancillary Agreements will be by
Closing, duly authorized and approved by all necessary limited liability company
action by Seller. The performance of Seller’s obligations hereunder and
thereunder and the consummation of the transactions contemplated hereby and
thereby have been duly and validly authorized by all requisite limited liability
company action of Seller, and no other proceedings on Seller’s part are
necessary to authorize the execution, delivery or performance of this Agreement.
Seller has duly executed and delivered this Agreement and on the Closing Date
will have duly executed and delivered the Ancillary Agreements.

 

(b)            Assuming the due authorization, execution and delivery of this
Agreement by Purchaser, this Agreement 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,
moratorium or similar Laws affecting creditors’ rights generally and by general
equity principles.

 

(c)            Assuming the due authorization, execution and delivery of the
Ancillary Agreements by Purchaser, each Ancillary Agreement to be executed by
Seller, when delivered hereunder, will be duly and validly executed and
delivered, and will constitute a legal, valid and binding obligation of Seller,
enforceable in accordance with its terms, except as enforcement may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting
creditors’ rights generally and by general equity principles.

 

(d)            The execution, delivery and performance of this Agreement and the
Ancillary Agreements to which it is a party by Seller, and the consummation of
the transactions contemplated hereby or thereby, require no action by or in
respect of, consent of, or any notice, report or other filing with, any
Governmental Entity, other than those consents or notice and transfer filings
set forth on Schedule 5.02(d).

 

9

 

 

 

5.03            No Contravention. Except as set forth on Schedule 5.03, the
execution, delivery and performance of this Agreement and the Ancillary
Agreements by Seller does not and the consummation of the transactions
contemplated hereby or thereby will not (a) violate or result in a breach of or
constitute a default under any Law, authorization of a Governmental Entity or
writ, injunction or decree, applicable to Seller, or any of the Transferred
Assets, (b) violate any provision of Seller’s certificate of formation or
operating agreement, (c) conflict with, result in any breach of, constitute a
default under, or result in the termination, cancellation, modification or
acceleration (whether after the filing of notice or the lapse of time or both)
of any right or obligation of Seller under any Transferred Contract, or result
in the creation of any Lien upon any of the Transferred Assets or in the
cancellation, modification, revocation or suspension of any authorization from
any Governmental Entity, applicable to Seller, or any of the Transferred Assets,
or (d) require any consent, authorization, approval, waiver or other action by
any Person under any provision of any Transferred Contract, except, with respect
to the foregoing clauses (c) and (d), for any violation, conflict, breach,
default, termination, cancellation, acceleration, modification, revocation,
suspension, consent, authorization, approval or waiver which would not
reasonably be expected, individually or in the aggregate, to be material to the
Business.

 

5.04            Absence of Changes. Since January 1, 2020, there have not been
any events or occurrences that have resulted in a Material Adverse Effect.
Except as set forth on Schedule 5.04, since January 1, 2020, Seller has not:

 

(a)            with respect to the Business or the Transferred Assets, suffered
any material damage, destruction or other casualty loss (whether or not covered
by insurance);

 

(b)            sold, assigned, exchanged, leased, licensed, conveyed,
transferred or otherwise disposed of any assets which would constitute
Transferred Assets had they not been so transferred, except for the sale of
Inventory in the ordinary course of business consistent with past practice or
the disposition of obsolete, worn out or excess equipment or asset in the
ordinary course of business consistent with past practice;

 

(c)            entered into, amended, modified, waived any provision of, or
terminated any contract which would constitute a Transferred Contract, except
for amendment or modification of a Shared Contract in a manner which would not
materially adversely affect the ability of Purchaser to operate the Business
following Closing in substantially the same manner as Seller operates the
Business as of immediately prior to the Closing;

 

(d)            collected the accounts receivable of the Business or paid the
accounts payable of the Business other than in the ordinary course of business
consistent with past practices;

 

(e)            except as otherwise set forth herein with respect to the Nouress
Product, commenced or settled any material claim, action, arbitration or
proceeding exclusively related to the Business or the Transferred Assets, except
for any settlement which does not impose any obligation on the Purchaser or
adversely impact the operation of the Business;

 

(f)             except as required by GAAP, (i) changed any of its accounting
principles, methods or practices (including principles, methods and practices
relating to the estimation of reserves and other liabilities) or (ii) written
up, write down or write off the book value of any Transferred Asset;

 

10 

 

(g)            subjected any of the Transferred Assets to any Lien, except for
Permitted Liens and Liens that will be released at or prior to the Closing;

 

(h)            waived, amended or released any material right or claim relating
to any Product (including any Intellectual Property rights covering any
Product);

 

(i)             voluntarily dissolved or liquidated or filed a voluntary
petition in bankruptcy or similar proceeding, or consent to the appointment of a
receiver;

 

(j)            entered into an agreement to do any of the foregoing.

 

5.05            Transferred Assets.

 

(a)            Seller has good and valid title to all of the Transferred Assets,
in each case free and clear of any Liens other than Permitted Liens. Seller
exclusively owns the Know-How that is included in the Transferred IP. The
Transferred Assets constitute all of the assets, rights or properties (tangible
or intangible) of Seller and its Affiliates that are necessary to the conduct of
the Business as currently conducted by Seller, except for the Excluded Assets
listed on Schedule 11.01(b).

 

(b)            All of the Inventory (i) will be as of the Closing Date, free of
any material defect or deficiency and (ii) was produced or manufactured in
accordance with the specifications as set forth in the applicable Marketing
Authorizations and in compliance with applicable Law. The Transferred Assets
include all Inventory as of the Closing Date and, except as set forth on
Schedule 5.05(b), since January 1, 2020, Seller has not made changes or
adjustments to its management of the levels of Inventory maintained for each
Product.

 

5.06            Tax Matters.

 

(a)            Seller has filed all material Tax Returns that they were required
to file on or before the date of this Agreement in respect of the Transferred
Assets, and all such Tax Returns are true, correct, and complete in all material
respects.

 

(b)            Seller has paid all material Taxes in respect of the Transferred
Assets that are due and payable, except for Taxes being contested in good faith
through appropriate proceedings or Taxes for which adequate reserves have been
established in the Financial Statements.

 

(c)            No audits or administrative or judicial proceedings are currently
being conducted or have been threatened in writing with respect to a material
amount of Taxes of Seller in respect of the Transferred Assets.

 

(d)            None of the Transferred Assets are subject to Liens for Taxes,
other than Permitted Liens.

 

11 

 

5.07            Transferred Contracts.

 

(a)            Except as set forth on Schedule 5.06(a)(a), each of the
Transferred Contracts is valid, binding, enforceable and in full force and
effect, and none of Seller, or, to Seller’s Knowledge, any other Person party to
such contract is in default or breach (with or without the lapse of time or the
giving of notice, or both) under any such contract, except as enforceability may
be limited by bankruptcy, insolvency, fraudulent conveyance, moratorium,
sponsorship or other Laws relating to or affecting creditors’ rights generally
and to general principles of equity, whether considered at law or in equity. No
event or circumstance has occurred that, with notice or lapse of time or both,
would result in a termination of a Transferred Contract or would cause or permit
the acceleration or other changes of any right or obligation or the loss of any
benefit thereunder. During the [***] prior to the date hereof, Seller has not
received written notice of any material default, non-renewal, termination or
intention to terminate under any Transferred Contract. Complete and correct
copies of each Transferred Contract (including all modifications, amendments and
supplements thereto and waivers thereunder) have been made available to
Purchaser. There are no material disputes pending or threatened under any
Transferred Contract.

 

(b)            Schedule 5.07(b) sets forth a true and complete list of customers
that have purchased the Products during the [***] period prior to the Closing.

 

5.08             Intellectual Property.

 

(a)            Except with respect to “shrink-wrap” or other generally available
commercial licenses, Schedule 5.08(a) contains a correct, current and complete
list of all Transferred IP. The Transferred IP constitutes all of the
Intellectual Property that is necessary to conduct the Business as currently
conducted. Except as set forth on Schedule 5.08(a), Seller is the sole and
exclusive owner of all right, title and interest each item of Transferred IP and
has valid and continuing rights to use, sell and license, as the case may be,
such Transferred IP, free and clear of all Liens or obligations to others, other
than Permitted Liens.

 

(b)            Except as otherwise set forth in Section 3.06 with respect to the
Nouress Product, to the Knowledge of Seller, the operation of the Business as
currently and formerly conducted or as currently contemplated to be conducted,
does not infringe upon or otherwise violate any of the Intellectual Property
rights of any third Person.

 

(c)            To the Knowledge of Seller, no third Person infringed or is
currently infringing upon or otherwise violating the Transferred IP.

 

(d)            Except for the Nouress Litigation, none of the Transferred IP is
the subject of any Proceeding, written objection or claim, or to the Knowledge
of Seller, pending or threatened Proceeding with respect to the ownership,
validity or enforceability thereof. Seller does not have Knowledge of any facts
or circumstances that could reasonably be expected to give rise to any such
Proceeding. Seller is not subject to any outstanding or prospective order,
judgment or decree by any Governmental Entity that does or could reasonably be
expected to restrict or impair the use of any Transferred IP.

 

12 

 

(e)            Seller has taken commercially reasonable measures to maintain the
Transferred IP under any applicable Law (including making and maintaining in
full force and effect all necessary filings, registrations and issuances).

 

5.09            Litigation. Except as set forth on Schedule 5.09, there are no
Proceedings pending or, to Seller’s Knowledge, threatened in writing against or
by Seller or its Affiliates (a) with respect to the Business, the Transferred
Assets or the Assumed Liabilities or (b) that, individually or when taken as a
whole, would have an adverse effect on or materially impair or delay the ability
of Seller to enter into this Agreement or consummate the transactions
contemplated hereby. Except as set forth on Schedule 5.09, to the Knowledge of
Seller, no event has occurred or circumstances exist that may give rise to, or
serve as a basis for, any such Proceeding. Except as set forth on Schedule 5.09,
Seller is not subject to any outstanding judgment, order, arbitral award or
decree of any court or other Governmental Entity with respect to the Business or
the Transferred Assets.

 

5.10            Compliance with Laws; Licenses and Permits. Except as disclosed
on Schedule 5.10:

 

(a)            During the past [***] prior to the date hereof, the Seller has
conducted the Business in compliance with applicable Laws, except for instances
of noncompliance that, individually or in the aggregate, would not be material
to the Business or the Transferred Assets, and, Seller has not received any
written notice alleging noncompliance with Laws applicable to the conduct of the
Business.

 

(b)            Seller has all required material licenses, franchises, permits,
concessions, exemptions, orders, certificates, registrations, re-registrations,
applications, consents, approvals, qualifications or other similar
authorizations issued by applicable Governmental Entities, including all
material Marketing Authorizations, to operate the Business (the “Permits”). The
Permits are valid and in full force and effect. No Proceeding is pending or, to
the Knowledge of Seller, threatened regarding the withdrawal, modification or
revocation of any such Permit. As of the date hereof, Seller has not received
any written communication from any Governmental Entity threatening to withdraw,
modify or suspend any Permit. Seller is not in material violation of the terms
of any Permit.

 

(c)            (i) There have been no, in the [***] prior to the date hereof,
recalls, withdrawals or suspensions conducted by or on behalf of Seller
concerning the Products, whether voluntary or otherwise; (ii) there are no
Proceedings pending or, to the Knowledge of Seller, threatened seeking the
recall, market withdrawal, or suspension of any Product or otherwise relating to
the alleged lack of safety, efficacy or regulatory compliance of any Product;
and (iii) there have been no warning letters or untitled letters from any
Governmental Entity received by Seller in the [***] prior to the date hereof
relating to any Product or, to the Knowledge of Seller, Product manufacturing
facility.

 

(d)            In the [***] prior to the date hereof, the Products have been
manufactured in compliance with applicable Law in all material respects,
including cGMP and applicable Marketing Authorizations.

 

13 

 

(e)             In the [***] prior to the date hereof, Seller has not received
any written claims alleging that any Product failed to meet its specifications
set forth in applicable Marketing Authorizations.

 

(f)             Seller is not party to any corporate integrity agreements,
monitoring agreements, consent decrees, settlement orders or similar material
agreements with or imposed by any Governmental Entity relating to any part of
the Business.

 

(g)            Seller has not been:

 

(i)             convicted of or charged or threatened in writing with
prosecution or, to Seller’s Knowledge, has been under investigation, by a
Governmental Entity for any violation of a Healthcare Regulatory Law including
any law applicable to a health care program defined in 42 U.S.C.
§ 1320a-7b(f) (“Federal Health Care Programs”);

 

(ii)            convicted of, charged with, or, to Seller’s Knowledge, is under
investigation for, any violation of applicable Law that would or would
reasonably be expected to be material to the Business;

 

(iii)           debarred pursuant to the Healthcare Regulatory Laws;

 

(iv)           excluded, suspended or debarred from participation, or is
otherwise ineligible to participate, in any Federal Health Care Program, any
federal, state, or local governmental procurement or non-procurement program, or
any other federal or state government program or activity; or

 

(v)            found to have committed any violation of Law that is reasonably
expected to serve as the basis for any such exclusion, suspension, debarment or
other ineligibility.

 

(h)            Neither Seller nor, to the Knowledge of Seller, any of its
managers, directors, officers, employees, representatives or authorized agents,
has, with respect to the sale of the Products, the operation of the Business or
the ownership of the Transferred Assets, (i) made any payment of cash or other
consideration (including payments or discounts to customers or clients or
employees of customers or clients) for purposes of doing business with such
Persons, or taken any action, or failed to take any action, in violation of any
Laws prohibiting the payment of undisclosed commissions or bonuses; (ii) made
any illegal contribution, gift, bribe, rebate, payoff, commission, promotional
allowance, influence payment, kickback, or other payment or economic benefit or
anything of value to any person, in any country, private or public, regardless
of what form, whether in money, property, or services; (iii) paid, established
or maintained any funds or assets that have not been recorded in the books and
records of Seller; or (iv) aided, abetted, caused (directly or indirectly),
participated in, or otherwise conspired with, any person or entity to violate
the terms of any judgment, sentence, order or decree of any court or
Governmental Entity applicable to Seller.

 

14 

 

(i)            Except for transactions that have been authorized pursuant to
specific licenses issued by the U.S. Office of Foreign Assets Control (“OFAC”),
in the [***] period prior to the date hereof, neither Seller nor, to the
Knowledge of Seller, any of its managers, directors, officers, employees,
representatives or authorized agents, has, with respect to the sale of the
Products in the Territory, the operation of the Business or the ownership of the
Transferred Assets, participated in any transaction in or involving (i) a party
designated on the OFAC Specially Designated Nationals and Blocked Persons List
or other similar list, or owned fifty percent (50%) or more by one or more such
parties, (ii) a country with which such transactions by Seller or its
Subsidiaries are prohibited pursuant to applicable Laws including U.S. economic
sanctions administered by OFAC (“sanctioned country”), or (iii) a government or
national of a sanctioned country where prohibited by applicable Laws including
U.S. economic sanctions administered by OFAC.

 

(j)            Notwithstanding the foregoing, Seller makes no representation or
warranty in this Section 5.10 with respect to Tax matters, litigation matters or
environmental matters, which matters are exclusively addressed in Sections 5.06,
5.09 or 5.11, respectively.

 

5.11            Environmental Matters. Except as set forth on Schedule 5.11 or
as would not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect:

 

(a)            Seller is, and in the [***] period prior to the date hereof has
been in compliance with all applicable Environmental Laws and are in possession
of, and in compliance with, all Permits required under applicable Environmental
Laws;

 

(b)            Seller has not received any written notice alleging any material
violation of, or material liability arising under, Environmental Laws, which
remains outstanding or unresolved;

 

(c)            There are no Proceedings, with respect to Seller or the Business,
pending or, to Seller’s Knowledge, threatened in writing against Seller pursuant
to Environmental Laws; and

 

(d)            Seller is not subject to any outstanding judgment, order or
decree of any court or other Governmental Entity pursuant to Environmental Laws.

 

5.12            Affiliated Transactions. Except as set forth on Schedule 5.12,
none of the Transferred Assets relate to or will trigger any current or future
rights or obligations between, among or involving Seller or its Affiliates, on
one hand, and any current or former officer, director or employee of Seller (or
Affiliate thereof), on the other hand, which will become an obligations of
Purchaser by reason of the transactions contemplated by this Agreement or the
Ancillary Agreements.

 

5.13            Brokerage. Except for fees and expenses of the Persons listed on
Schedule 5.13, there are no claims for brokerage commissions, finders’ fees or
similar compensation in connection with the transactions contemplated by this
Agreement based on any arrangement or agreement made by or on behalf of Seller
for which Purchaser or any of its Affiliates would be liable following the
Closing.

 

15 

 

5.14            No Other Representations and Warranties. EXCEPT AS SET FORTH IN
THIS ARTICLE V OR IN ANY ANCILLARY AGREEMENT, (A) NONE OF SELLER OR ANY OF ITS
AFFILIATES IS MAKING OR HAS MADE ANY REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, AT LAW OR IN EQUITY, WITH RESPECT TO THIS AGREEMENT, THE ANCILLARY
AGREEMENTS, Seller, THE TRANSFERRED ASSETS, THE ASSUMED LIABILITIES, THE
BUSINESS, THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (INCLUDING ANY
CONSENTS OR APPROVALS REQUIRED IN CONNECTION THEREWITH) OR ANY INFORMATION
PROVIDED OR MADE AVAILABLE TO PURCHASER IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT (INCLUDING ANY FORECASTS, PROJECTIONS, ESTIMATES,
BUDGETS, PRESENTATIONS CONCERNING THE BUSINESS (INCLUDING THE CONFIDENTIAL
INFORMATION MEMORANDA AND ANY “TEASER” DOCUMENTS), OR DUE DILIGENCE OR OTHER
MATERIALS PROVIDED IN THE DATA ROOM), INCLUDING ANY WARRANTY WITH RESPECT TO
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, AND ALL OTHER
REPRESENTATIONS OR WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED AND SHALL NOT BE
DEEMED TO BE OR TO INCLUDE REPRESENTATIONS OR WARRANTIES OF ANY OF THE FOREGOING
PARTIES; AND (B) ALL OF THE ASSETS AND LIABILITIES TO BE SOLD, CONVEYED,
ASSIGNED, TRANSFERRED OR ASSUMED, AS APPLICABLE, IN ACCORDANCE WITH THIS
AGREEMENT, SHALL BE SOLD, CONVEYED, ASSIGNED, TRANSFERRED OR ASSUMED ON AN “AS
IS, WHERE IS” BASIS.

 

Article VI

 

REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

Purchaser represents and warrants to Seller as follows as of the date hereof:

 

6.01            Organization and Organizational Power. Purchaser is a limited
liability company duly organized, validly existing and in good standing under
the Laws of the State of Delaware, and has full corporate power and authority to
enter into this Agreement and the Ancillary Agreements, to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby.

 

6.02            Authorization; Valid and Binding Agreement.

 

(a)            This Agreement has been, and the Ancillary Agreements will be by
Closing, duly authorized and approved by all necessary corporate action by
Purchaser. The performance of Purchaser’s obligations hereunder and thereunder
and the consummation of the transactions contemplated hereby and thereby have
been duly and validly authorized by all requisite corporate action of Purchaser,
and no other proceedings on Purchaser’s part are necessary to authorize the
execution, delivery or performance of this Agreement. Purchaser has duly
executed and delivered this Agreement and on the Closing Date will have duly
executed and delivered the Ancillary Agreements.

 

16 

 

(b)            Assuming the due authorization, execution and delivery of this
Agreement by Seller, this Agreement 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, moratorium or similar Laws affecting creditors’ rights generally
and by general equity principles.

 

(c)            Assuming the due authorization, execution and delivery of the
Ancillary Agreements by Seller, each Ancillary Agreement to be executed by
Purchaser, when delivered hereunder, will be duly and validly executed and
delivered, and will constitute a legal, valid and binding obligation of
Purchaser, enforceable in accordance with its terms, except as enforcement may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws
affecting creditors’ rights generally and by general equity principles.

 

(d)            The execution, delivery and performance of this Agreement and the
Ancillary Agreements to which it is a party by Purchaser, and the consummation
of the transactions contemplated hereby or thereby, require no action by or in
respect of, consent of, or any notice, report or other filing with, any
Governmental Entity, other than those consents or notice and transfer filings
set forth on Schedule 6.02(d).

 

6.03            No Contravention. Except as set forth on Schedule 6.03, the
execution, delivery and performance of this Agreement and the Ancillary
Agreements by Purchaser does not and the consummation of the transactions
contemplated hereby or thereby will not (a) violate or result in a breach of or
constitute or constitute a default, in any material respect, under any Law,
authorization of a Governmental Entity or writ, injunction or decree, applicable
to Purchaser or any of the Transferred Assets or (b) violate in any material
respect any provision of Purchaser’s certificate or articles of formation or
incorporation or bylaws (or similar organizational documents).

 

6.04            Litigation. There are no Proceedings pending or, to the
knowledge of Purchaser, threatened in writing against Purchaser at law or in
equity, or before or by any Governmental Entity, that challenge or seek to
prevent, enjoin or otherwise delay the transactions contemplated by this
Agreement. Purchaser is not subject to any outstanding judgment, order or decree
of any court or other Governmental Entity with respect to the transactions
contemplated hereby.

 

6.05            Brokerage. There are no claims for brokerage commissions,
finders’ fees or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement made by or
on behalf of Purchaser for which Seller or any of its Affiliates would be liable
following the Closing.

 

6.06            Sufficiency of Funds. Purchaser has, or will have when due,
sufficient funds on hand or other sources of immediately available funds to
consummate the transactions contemplated by this Agreement and the Ancillary
Agreements and to satisfy all of its obligations hereunder and thereunder
(including to pay the Closing Cash Consideration, the aggregate amount of the
Deferred Payment Obligations and all fees and expenses related to the
transactions contemplated by this Agreement and the Ancillary Agreements).

 

17 

 

6.07            Solvency. Immediately after giving effect to the Closing (and
any transactions related thereto or incurred in connection therewith), each of
Purchaser and its applicable Subsidiaries (a) will be able to pay their
respective obligations in the ordinary course of business as they become due and
will own property that has a fair saleable value greater than the amounts
required to pay their respective liabilities (including all liabilities, whether
or not reflected in a balance sheet prepared in accordance with GAAP and whether
direct or indirect, fixed or contingent, secured or unsecured, disputed or
undisputed), and (b) will have adequate capital to carry on their respective
businesses, including the Business. No transfer of property is being made and no
obligation is being incurred in connection with the transactions contemplated by
this Agreement with the intent to hinder, delay or defraud either present or
future creditors of Purchaser or its Subsidiaries.

 

6.08            Liens. As of the Closing Date, set forth on Schedule 6.08 is a
list of all Liens on the assets and other property of each of Purchaser and
Purchaser Parent.

 

6.09            No Additional Representations; Inspection. Purchaser
acknowledges and agrees that (i) except as set forth in Article V or the
Ancillary Agreements, none of Seller or any of its Affiliates is making or has
made any representation or warranty, express or implied, at law or in equity,
with respect to this Agreement, the Ancillary Agreements, Seller, the
Transferred Assets, the Assumed Liabilities, the Business, the transactions
contemplated by this Agreement or any of the Ancillary Agreements (including any
consents or approvals required in connection therewith) or any information
provided or made available to Purchaser in connection therewith (including any
forecasts, projections, estimates, budgets, presentations concerning the
business or due diligence or other material provided in the data room),
including any warranty with respect to merchantability or fitness for any
particular purpose, and all other representations or warranties are hereby
expressly disclaimed and shall not be deemed to be or to include representations
or warranties of any of the foregoing parties and have not been relied upon by
Purchaser or any of its Affiliates in executing, delivering and performing this
Agreement, the Ancillary Agreements and the transactions contemplated hereby and
thereby and (ii) all of the assets and liabilities to be sold, conveyed,
assigned, transferred or assumed, as applicable, in accordance with this
Agreement, shall be sold, conveyed, assigned, transferred or assumed on an “as
is, where is” basis.

 

Article VII

 

COVENANTS

 

7.01            [Reserved].

 

7.02            Access to Books and Records.

 

(a)            From and after the Closing, for a period of [***], Purchaser
shall, and shall cause its Affiliates to, provide Seller and its authorized
representatives with reasonable access, during normal business hours and upon
reasonable notice, solely with respect to the Business to (i) the books and
records (for the purpose of examining and copying) of Purchaser and its
Subsidiaries with respect to periods or occurrences prior to or on the Closing
Date, (ii) provide information as needed to assist Seller and its Affiliates
with completing its quarterly reviews and annual audits of its financial
statements by its external auditors and (iii) employees of Purchaser and its
Subsidiaries for purposes of better understanding such books and records;
provided, that notwithstanding the foregoing, (x) such access does not
unreasonably interfere with the normal operations of Purchaser or its
Subsidiaries, (y) nothing herein shall require Purchaser or its Subsidiaries to
provide access to, or to disclose any information to, Seller or its authorized
representatives if such access or disclosure would reasonably be expected to
(A) waive any legal privilege, or (B) be in violation of applicable Law. Unless
otherwise consented to in writing by Seller, Purchaser shall not, and shall not
permit its Subsidiaries to, for a period of [***] following the Closing Date,
destroy, alter or otherwise dispose of any of the books and records of Seller or
its Subsidiaries for any period prior to and including the Closing Date without
first giving reasonable prior notice to Seller and offering to surrender to
Seller such books and records or any portion thereof which Purchaser or Seller
may intend to destroy, alter or dispose of.

 

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7.03            Confidentiality of Seller. From and after the Closing until the
[***] anniversary of the Closing Date, Seller shall, and shall cause its
Affiliates to, treat as confidential and shall safeguard any and all
confidential or proprietary information, knowledge and data related solely to
the Business, Transferred Assets or the Assumed Liabilities by using the same
degree of care to prevent the unauthorized use, dissemination or disclosure of
such information, knowledge and data as Seller and its Affiliates used with
respect to its own similar confidential or proprietary information after the
Closing; provided, however, that Seller and its Affiliates shall be entitled to
use any such information, knowledge and data only to the extent necessary to
perform their respective obligations or exercise or enforce their respective
rights and remedies under this Agreement, any Ancillary Agreement or any
agreements entered into in connection with any of the foregoing. The obligations
of Seller and its Affiliates pursuant to this Section 7.03 shall not extend to
any information, knowledge or data that is (a) required to be disclosed by
applicable Law, (b) requested by a Governmental Entity or (c) except as a result
of a disclosure by Seller or its Affiliates after the Closing in breach of this
Agreement, generally available to the public or already known by a Third Party
receiving such information from Seller or its Affiliates.

 

7.04            Regulatory and USPTO Filings.

 

(a)            Seller and Purchaser shall, and shall cause their respective
Affiliates to, (i) promptly make or cause to be made all filings and submissions
required to be made under any Laws applicable to Seller and Purchaser for the
consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements, (ii) coordinate and cooperate in exchanging such
information and providing such assistance as each Party may reasonably request
in connection with all of the foregoing, and (iii) (A) supply promptly any
additional information and/or documentary material that may be requested in
connection with such filings, (B) make any further filings pursuant thereto that
may be necessary, proper or advisable in connection therewith and (C) use
reasonable best efforts to take all actions necessary to obtain all required
documents and clearances.

 

(b)            Seller shall cooperate, and shall cause its Affiliates to
cooperate, as and to the extent reasonably requested by Purchaser and/or its
Affiliates, in connection with prosecution and maintenance of the Transferred
IP.

 

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(c)            Seller and Purchaser will provide the other Party with prompt
notice of any communication (whether written or oral) received by it from any
Governmental Entity with respect to the foregoing, consult prior to providing
any additional information to or otherwise communicating (whether in written or
oral form) with any Governmental Entity with respect to the foregoing, and
incorporate the reasonable comments of the other Party in connection with
providing any additional information or otherwise communicating (whether in
written or oral form) with any Governmental Entity with respect to the
foregoing.

 

7.05            [Reserved].

 

7.06            Further Assurances. From time to time after the Closing Date, at
the request of another Party, without further consideration and at the expense
of the Party so requesting, each of the Parties shall execute and deliver to
such requesting party, or shall cause to be executed and delivered to such
requesting party, such additional instruments or documents, and shall take or
cause to be taken such other action, as such requesting party may reasonably
request in order to consummate more effectively the transactions contemplated by
this Agreement and the Ancillary Agreements.

 

7.07            [Reserved].

 

7.08            Transfer of Marketing Authorizations; National Drug Codes;
Transitional Trademark License; Rebates, Chargebacks and Returns.

 

(a)            Transfer of Marketing Authorizations; National Drug Codes. As
promptly as reasonably practicable following the Closing, Purchaser and Seller
shall (i) file the Transfer Letters with the FDA to transfer ownership of the
Marketing Authorizations for the Products and (i) submit all appropriate and
necessary documentation with respect to FDA approval by the applicable
Governmental Entity of the removal of Trademarks of Seller or its Affiliates and
the inclusion of Purchaser’s name, corporate logo and National Drug Code on
labeling for each Product, subject to the transitional trademark license set
forth in Section 7.08(b).  As promptly as reasonably practicable following the
Closing, Purchaser shall apply for and initiate applicable processes to obtain,
establish and begin using its own National Drug Code for the Products, and shall
promptly notify Seller thereof.

 

(b)            Transitional Trademark License.

 

(i)             Subject to the terms, conditions, and provisions of this
Agreement, Seller hereby grants to Purchaser a limited, non-exclusive,
non-transferable, non-sublicensable, royalty-free license in the United States
during the Inventory Sell-Down Period to use and display the Licensed Marks
solely for the purpose of selling, offering for sale, advertising, marketing,
distributing, and promoting the existing Inventory of Products that bear
Seller’s National Drug Code (each, a “Seller NDC”).

 

(ii)            Purchaser shall use the Licensed Marks only for the purpose set
forth in Section 7.08(b)(i), in the same manner in which they were used by
Seller in connection with its operation of the Business immediately prior to the
Closing Date and in accordance with this Agreement. Purchaser shall not use any
of the Licensed Marks: (A) for any purpose other than as set forth in
Section 7.08(b)(i), including in connection with the marketing, sale or
promotion of any products or services other than the Inventory of Products;
(B) in any manner that disparages Seller, any of Seller’s Affiliates or any
product or service offered by Seller or any of its Affiliates; (C) in any manner
that injures the goodwill associated with any of the Licensed Marks; or (D) in
any manner that violates any Law, order or other requirement of any Governmental
Entity having jurisdiction. Upon notice of or discovery of any material
noncompliance with the requirements of this Section 7.08(b)(ii), Purchaser shall
promptly notify Seller of the noncompliance, remedy the noncompliance and notify
Seller when remedial action is taken.

 

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(iii)           Purchaser shall completely discontinue use of the Licensed Marks
by Purchaser and its Affiliates as of the end of the Inventory Sell-Down Period.

 

(c)            Rebates, Chargebacks and Returns. The Parties shall be
financially responsible for all Payment Claims and Returns as set forth on
Exhibit C, and shall process and handle all Payment Claims and Returns as set
forth on Exhibit C. The Parties shall cooperate in connection with the
transition of the [***], and for reporting pricing information with respect to
the Products that bear a Seller NDC required under the applicable statutes,
rules and regulatory guidance relating to the [***], and applicable state Laws,
in each case, as set forth on Exhibit C.

 

(d)            Know-How Transfer. From the Closing Date, Seller and Purchaser
shall use commercially reasonable efforts to effect an orderly transfer of the
Transferred Assets which cannot be transferred at Closing, including (i) all
Regulatory Files and (ii) Know-How included in the Transferred IP, as soon as
reasonably practicable following the Closing Date. Seller shall provide
reasonable cooperation and assistance to Purchaser, as reasonably requested by
Purchaser, including making available personnel of Seller and its Affiliates to
answer questions of Purchaser, including by teleconference or other means of
remote communication, in connection with such transfer of such Know-How;
provided, that such cooperation and assistance shall be requested and
coordinated through a single contact person to be designated by Seller (who
shall initially be [***]). In no event shall Seller be obligated to provide
Purchaser with more than [***] of assistance and consultation under this
Section 7.08(d) or any assistance following the date which is [***] following
the Closing Date; provided, that upon Purchaser’s request and at Seller’s
reasonable discretion, Seller may provide additional assistance beyond the
foregoing [***] or [***], at a mutually agreed commercially reasonable hourly
rate. Further: (i) without limiting Seller’s representations and warranties in
Article V, Seller makes no warranty, express or implied, that Purchaser shall be
able to successfully implement and use the Know-How, and (ii) Seller shall not
be in default pursuant to this Section 7.08(d) for any inadvertent failure to
disclose all pertinent information related to the Know-How, provided that such
information shall be supplied to Purchaser promptly upon discovery of such
failure to disclose or upon request of Purchaser identifying the nature of the
information to be disclosed. Purchaser shall be responsible for ensuring that
its personnel who receive such assistance are appropriately qualified and
experienced for such purpose. Purchaser shall promptly reimburse Seller for any
reasonable out-of-pocket costs associated with the activities undertaken under
this Section 7.08(d).

 

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7.09            Shared Contracts. The sole obligation of Seller and its
Affiliates with respect to Shared Contracts shall be to introduce Purchaser to
the applicable Third Party and to reasonably assist Purchaser in the negotiation
and entering into a new agreement with the applicable Third Party, in each case,
for a period of [***] following the Closing. The costs of entering into a new
contract or contract(s) shall be borne by Purchaser.

 

7.10            Payments from Third Parties; Accounts Payable.

 

(a)            Except as expressly provided in any Ancillary Agreement, in the
event that, on or after the Closing Date, (i) Seller or any of its Affiliates
shall receive any payments or other funds due to Purchaser or any of its
Affiliates from Third Parties, or (ii) Purchaser or any of its Affiliates shall
receive any payments or other funds due to Seller or any of its Affiliates from
Third Parties, in each case pursuant to the terms of this Agreement or any
Ancillary Agreement, then the relevant Party receiving such funds shall promptly
forward such funds to the proper party. The Parties acknowledge and agree 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 this Agreement or any
Ancillary Agreement. In the event of any conflict between this Section 7.10 and
the provisions of the relevant Ancillary Agreement (including any provisions
thereof related to the collection of accounts receivable), the provisions of the
relevant Ancillary Agreement shall control.

 

(b)            Seller shall pay all Pre-Closing Accounts Payable related to the
Business that are due after the Closing Date, on or prior to the date such
Pre-Closing Accounts Payable are due. In the event that such Pre-Closing
Accounts Payable are not timely paid by Seller, Purchaser may make such payment
on behalf of Seller and any such amount so paid (in addition to all Losses
incurred in connection therewith) shall continue to be deemed an Excluded
Liability subject to the indemnification provisions of Article IX. For the sake
of clarity, if Purchaser makes a payment with respect to any account payable of
the Business incurred on or prior to the Closing Date, but not paid prior to the
Closing Date, for which the applicable invoice is disputed by Seller, the amount
of such payment shall be an Assumed Liability. Seller shall promptly provide
written notice to Purchaser of any such disputed invoices.

 

7.11            Return of Excluded Assets and Transferred Assets.

 

(a)            If, for any reason after the Business Transfer Effective Date,
any asset transferred to Purchaser or its Affiliates is ultimately determined to
be an Excluded Asset or Purchaser is found to be in possession of any Excluded
Asset: (i) Purchaser or such Affiliate shall be treated as having received and
held the Excluded Asset as nominee for Seller or its Affiliate (as the case may
be); (ii) Purchaser shall promptly notify Seller and, should Seller so request,
return or transfer and convey (without further consideration) to Seller, and
Seller will accept, such asset; (iii) upon any such return, transfer or
conveyance, Seller shall assume and agree to pay, perform, fulfill and discharge
(without further consideration) any Excluded Liabilities associated with such
asset as contemplated in this Agreement and pay any reasonable out-of-pocket
costs and expenses borne by Purchaser or its Affiliates in connection with such
return, transfer or conveyance; and (iv) upon any such return, transfer or
conveyance, Purchaser and Seller shall, and shall cause their respective
Affiliates to, promptly execute such documents or instruments of conveyance or
assumption and take such further actions which are reasonably necessary or
desirable to effect the transfer of such asset back to Seller.

 

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(b)            If, for any reason after the Business Transfer Effective Date,
any asset retained by Seller or its Affiliate is ultimately determined to be a
Transferred Asset or Seller or its Affiliate is found to be in possession of any
Transferred Asset, Seller shall promptly notify Purchaser and should Purchaser
so request: (i) return, deliver, or transfer and convey (without further
consideration) to Purchaser, and Purchaser shall accept, such asset; (ii) upon
such return, delivery, transfer or conveyance, Purchaser shall assume and agree
to pay, perform, fulfill and discharge (without further consideration) any
Assumed Liabilities associated with such asset as contemplated in this
Agreement; and (iii) upon any such return, delivery, transfer or conveyance,
Purchaser and Seller will promptly execute such documents or instruments of
conveyance or assumption and take such further actions which are reasonably
necessary or desirable to effect the transfer of such asset to Purchaser.

 

7.12            [Reserved]. .

 

7.13            Mutual Non-Solicitation. From and after the Closing Date, Seller
and Purchaser each agree that they shall not, and they shall each cause their
respective Affiliates to not, for a period of [***] after such Closing Date,
directly or indirectly, encourage, induce, or solicit (a) in the case of Seller,
any employee of Purchaser or any of its Affiliates to leave employment with
Purchaser or any of its Affiliates or (b) in the case of Purchaser, any employee
of Seller or any of its Affiliates to leave employment with Seller or any of its
Affiliates; provided, that this clause shall not preclude Seller, Purchaser or
any of their respective Affiliates from (i) posting a general solicitation
through a public medium or general or mass mailing by or on behalf of Seller,
Purchaser or any of their respective Affiliates, as applicable, that is not
targeted at employees of such other Person or (ii) soliciting any terminated
employee of such other Person so long as such former employee has been
terminated from the employment with Seller, Purchaser or any of their respective
Subsidiaries or Affiliates, as applicable, for more than [***].

 

7.14            Insurance. The coverage under all insurance policies related to
the Transferred Assets and the Business and arranged or maintained by Seller or
its Affiliates are only for the benefit of Seller and its Affiliates, and not
for the benefit of Purchaser or the Business, and shall continue in force only
for the benefit of Seller or any of its Affiliates following the Closing.
Purchaser agrees to arrange for its own insurance policies with respect to the
Transferred Assets and the Business 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 Transferred Assets and
the Business.

 

7.15            [Reserved].

 

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7.16            Dismissal of Claims. Within [***] following the Closing, the
Parties shall cause the filing of a stipulation of dismissal with prejudice of
all claims, counterclaims and defenses in civil action no. 1:20-cv-00024 pending
in the District Court for the District of Delaware (the “Nouress Litigation”).
Notwithstanding anything to the contrary herein, each Party shall bear its own
costs and expenses, including attorney’s fees, with respect to or arising from
the Nouress Litigation and its dismissal.

 

7.17            Termination of Nouress Trademark Application. As soon as
reasonably practicable following the Closing (but in no instance more than [***]
following the Closing), the Seller shall terminate that certain Intent to Use
Trademark Application with respect to the Nouress trademark and provide to
Purchaser written evidence of such termination.

 

7.18            Assignment of Transferred Contracts. Notwithstanding anything in
this Agreement to the contrary, neither this Agreement nor any Ancillary
Agreement hereby shall constitute either an agreement to assign or an actual
assignment of any Transferred Contract if an attempted assignment thereof,
without consent of a Third Party thereto, would constitute a breach or other
contravention thereof or in any way adversely affect the rights of the parties
thereunder. Seller shall reasonably cooperate with Purchaser following the
Closing to obtain any required Third Party consent to the assignment of a
Transferred Contract. If an attempted assignment thereof would be ineffective or
would adversely affect the rights of Seller thereunder so that Purchaser would
not in fact receive all rights under such Transferred Contract, Seller shall use
its commercially reasonable efforts to cooperate in an arrangement under which
Purchaser would obtain the benefits and assume the obligations under such
Transferred Contract, including by (1) acting, to the maximum extent permitted
by Law, as Purchaser's agent in order to obtain the rights and benefits under
such Transferred Contract, (2) entering into appropriate and reasonable
alternative arrangements on terms mutually agreeable to Purchaser and Seller
that would provide Purchaser with substantially the same rights and benefits as
Seller enjoyed under the Transferred Contracts, and (3) enforcing, at the cost
and for the account of Purchaser, any and all rights of Seller against the other
party thereto arising out of the breach or cancellation thereof by such party or
otherwise. Notwithstanding the foregoing, no Party hereto shall be required to
make any payment or concession in order to obtain any authorizations, approvals,
consents or waivers.

 

Article VIII

 

TERMINATION

 

8.01            [Reserved].

 

8.02            [Reserved].

 

Article IX

 

INDEMNIFICATION

 

9.01            Indemnification by Seller. From and after the Closing, Seller
shall indemnify Purchaser and its Affiliates and their respective directors,
managers, officers, agents, employees, successors and assigns (each, a
“Purchaser Indemnified Party”), against and hold them harmless from any Losses
actually suffered or incurred by any such Purchaser Indemnified Party to the
extent arising from (a) any breach of any representation or warranty of Seller
contained in this Agreement or in any Ancillary Agreement or in any certificate
or instrument delivered pursuant hereto or thereto (other than the Seller
Fundamental Representations), (b) any breach of any Seller Fundamental
Representation, (c) any breach of any covenant of Seller contained in this
Agreement or any Ancillary Agreement, or (d) any Excluded Liability.

 

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9.02            Indemnification by Purchaser. From and after the Closing,
Purchaser shall indemnify Seller and its Affiliates and their respective
directors, managers, officers, agents, employees, successors and assigns (each,
a “Seller Indemnified Party”) against and hold them harmless from any Losses
suffered or incurred by any such Seller Indemnified Party to the extent arising
from (a) any breach of any representation or warranty of Purchaser contained in
this Agreement or in any Ancillary Agreement or in any certificate or instrument
delivered pursuant hereto or thereto (other than the Purchaser Fundamental
Representations), (b) any breach of any Purchaser Fundamental Representation,
(c) any breach of any covenant of Purchaser contained in this Agreement or any
Ancillary Agreement, or (d) Assumed Liability after the Closing, or
(e) following the date of any Reversion, any and all liabilities to the extent
relating to the Reversion Assets or the operating of the Business.

 

9.03            Indemnification Payments; Limitations on Liability.

 

(a)            The Purchaser Indemnified Parties shall not be entitled to any
indemnification until the aggregate dollar amount of all Losses that would
otherwise be indemnifiable pursuant to Section 9.01(a) exceeds an amount equal
to [***] (the “Deductible”), and then only to the extent such aggregate amount
exceeds the Deductible; provided, however, that the Deductible shall not apply
to, and the Purchaser Indemnified Parties shall be entitled to indemnification
under this Agreement for any indemnifiable Loss resulting from, Fraud or any
breach of the Seller Fundamental Representations. The Seller Indemnified Parties
shall not be entitled to any indemnification until the aggregate dollar amount
of all Losses that would otherwise be indemnifiable pursuant to
Section 9.02(a) exceeds the Deductible, and then only to the extent such
aggregate amount exceeds the Deductible; provided, however, that the Deductible
shall not apply to, and the Seller Indemnified Parties shall be entitled to
indemnification under this Agreement for any indemnifiable Loss resulting from,
Fraud or any breach of the Purchaser Fundamental Representations.

 

(b)            Notwithstanding anything to the contrary contained in this
Agreement, the aggregate maximum indemnifiable liability of the Seller
Indemnifying Party or Purchaser Indemnified Party pursuant to Section 9.01(a) or
Section 9.02(a), as applicable, shall be limited to [***] percent [***] of the
Purchase Price actually paid (the “Cap”). Notwithstanding anything to the
contrary herein, the Cap shall not apply to breaches of the Seller Fundamental
Representations, the Purchaser Fundamental Representations or to any claim for
Fraud. Notwithstanding anything to the contrary herein, other than with respect
to (i) claims for indemnifiable Losses made under Section 9.01(c) for breach of
any covenant contained in the Restrictive Covenant Agreement, and (ii) claims
for Fraud, the maximum liability of either Purchaser or Seller under Article IX
shall not exceed [***].

 

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(c)            The amount of any Losses subject to indemnification under
Section 9.01 or 9.02 shall be calculated net of any insurance proceeds actually
received by the Indemnified Party or any indemnification paid by any Third Party
on account of such Losses (each net of any expenses incurred by an Indemnified
Party in connection with collection of such amounts). Purchaser agrees to use
commercially reasonable efforts to seek and collect any Losses recoverable under
indemnities under Transferred Contracts with manufacturers.

 

(d)            If any claim for indemnification is by a Purchaser Indemnified
Party pursuant to and in accordance with this Article IX, Purchaser shall have
the right to withhold Purchaser’s good faith estimate of the amount of such
claim from the payment of any Monthly Payments, Change of Control Payments or
Product Transfer Payment not yet payable to Seller as of the date of the claim,
with such amount withheld first from any due but unpaid Change of Control
Payment, second from any due but unpaid Product Transfer Payment and, third,
from the Monthly Payments, withholding from the last-to-be-paid Monthly Payment
first, until final resolution of such claim. Notwithstanding the foregoing, for
indemnification claims with respect to Pre-Closing Accounts Payable, Purchaser
shall have the right to withhold Purchaser’s good faith estimate of the amount
of such claim from Monthly Payments, withholding from the next-to-be-paid
Monthly Payment first. If the finally determined amount of Losses for such
indemnification claim is less than the amount withheld by Purchaser for such
claim, then Purchaser shall promptly, and in any event within [***] following
the final determination of the amount of such Losses, deliver the difference to
Seller. If the finally determined amount of Losses for such indemnification
claim exceeds the amount withheld by Purchaser for such claim, then, Purchaser
shall continue to be entitled to indemnification for the amount of such excess
by Seller. Prior to seeking recourse against Seller directly for any Loss owed
by Seller to a Purchaser Indemnified Party under this Article IX, Purchaser
shall satisfy such Loss through the offset of any such amount from any Monthly
Payment, Change of Control Payments or Product Transfer Payment in the order set
forth above, to the extent any Change of Control Payments or Product Transfer
Payment is then due or any Monthly Payments remain then payable hereunder as of
the time of such final determination or agreement.

 

(e)            Notwithstanding anything to the contrary in this Agreement, all
materiality qualifications contained in the representations and warranties set
forth in this Agreement shall be disregarded for purposes of determining, under
this Article IX, the amount of any Losses arising out of or resulting from a
breach of any such representation or warranty.

 

(f)            Any Loss for which any Indemnified Party is entitled to
indemnification under Section 9.01 or 9.02 shall be determined without
duplication of recovery by reason of the state of facts giving rise to such Loss
constituting a breach of more than one representation, warranty or covenant or
under any indemnity hereunder.

 

(g)            Notwithstanding any provision herein, neither Seller nor
Purchaser, nor any of their respective Affiliates, shall in any event be liable
for any punitive damages in connection with any damages arising hereunder,
except on account of any indemnity obligation set forth in Section 9.01 or 9.02
to the extent punitive damages are actually awarded to a Third Party in
connection with a Third Party claim.

 

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(h)            The Parties acknowledge and agree that, should the Closing occur,
each Party’s sole and exclusive monetary remedy with respect to claims arising
hereunder or under any Ancillary Agreement (other than claims of, or causes of
action arising from, Fraud) shall be pursuant to the indemnification provisions
set forth in this Article IX. To the maximum extent permitted by Law, the
Indemnified Parties hereby waive all other rights and remedies with respect to
any matter in any way relating to this Agreement, any Ancillary Agreement or
arising in connection herewith or therewith, whether under any Laws at common
law, in equity or otherwise. Notwithstanding anything to the contrary herein,
the existence of this Article IX and of the rights and restrictions set forth
herein do not limit any legal remedy against a Party based on Fraud, for
breaches of any covenants to be performed at or following the Closing, breaches
of the Restrictive Covenant Agreement or under Section 12.17.

 

9.04            Survival.

 

(a)            The representations and warranties made by any Party, and the
covenants that were to be performed at Closing made by any Party and contained
in this Agreement or the Ancillary Agreements shall survive (and not be affected
in any respect by) the Closing until the date that is [***] following the
Closing, whereupon all such representations, warranties, covenants and
agreements shall expire and terminate and shall be of no further force or
effect; provided, however, that the Purchaser Fundamental Representations and
the Seller Fundamental Representations shall survive the Closing until [***]
after the expiration of the applicable statute of limitations with respect to
the particular matter that is the subject thereof. The covenants and agreements
made by any Party and contained in this Agreement that are to be performed after
the Closing shall survive until [***] after the expiration of the applicable
statute of limitations following such time as such covenant has been fully
performed in accordance with its terms or for its stated term, as applicable.
Notwithstanding the foregoing, any claims asserted in good faith with reasonable
specificity (to the extent known at such time) and in writing by notice from the
non-breaching party to the breaching party prior to the expiration date of the
applicable survival period shall not thereafter be barred by the expiration of
the relevant representation or warranty and such claims shall survive until
finally resolved.

 

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9.05            Notice; Defense of Claims. Subject to the terms of this
Section 9.05, any Purchaser Indemnified Party or Seller Indemnified Party
(collectively, the “Indemnified Parties”, or each individually, an “Indemnified
Party”) may make claims for indemnification hereunder by giving prompt written
notice thereof to the Seller, in the case of claims made by a Purchaser
Indemnified Party, or to Purchaser, in the case of claims made by a Seller
Indemnified Party. If indemnification is sought for a claim by or in respect of
any Third Party, the Indemnified Party shall also give Seller or Purchaser, as
the applicable Indemnifying Party, written notice of such claim as to which such
Indemnified Party may request indemnification hereunder as soon as is
practicable and in any event within [***] of the time that such Indemnified
Party learns of such claim; provided, however, that the failure to do so shall
not relieve the party with the indemnification obligation hereunder (each an
“Indemnifying Party”, and collectively, the “Indemnifying Parties”) from any
Liability except to the extent that it is materially prejudiced by the failure
or delay in giving such notice. Such notice shall state all of the information
then available regarding the amount and nature of such claim and shall specify
the representation, warranty or covenant, or Excluded Liability or Assumed
Liability, in this Agreement under which the Liability is asserted. In the case
of any Third Party claim, Seller or Purchaser, whichever is the Indemnifying
Party, shall have the right to direct, through counsel of its own choosing, the
defense or settlement of any such claim at its own expense (subject to the
limitations set forth in this Article IX). If Seller or Purchaser, as
applicable, elects to assume the defense of any such claim, Seller or Purchaser,
as applicable, shall consult with the Indemnified Party for the purpose of
allowing the Indemnified Party to participate in such defense. If Seller or
Purchaser, as applicable, elects not to defend or if, after commencing or
undertaking any such defense, Seller or Purchaser, as applicable, fails to
diligently prosecute or withdraws from such defense, the Indemnified Party shall
have the right to undertake the defense. The Indemnifying Party shall not be
entitled to assume control of such defense if (i) the third-party claim relates
to or arises in connection with any criminal proceeding, action, indictment,
allegation, investigation or any other matter involving a Governmental Entity;
(ii) the third-party claim seeks an injunction or equitable relief against the
Indemnified Party; or (iii) other than with respect to a claim under
Section 9.01(d), the Indemnifying Party is Seller and the Third Party claim is
asserted directly by or on behalf of a Person that is a supplier or customer of
the Business. If Seller or Purchaser, as applicable, does not so assume control
of such defense, the Indemnified Party shall be the Controlling Party. The party
not controlling such defense (the “Non-controlling Party,” and the party
controlling such defense, the “Controlling Party”) may participate therein at
its own expense, which expense shall not be recoverable as part of any
indemnification claim; provided that, if the Non-controlling Party is the
Indemnified Party, if in the reasonable written opinion of counsel there exists
a conflict of interest between the Indemnifying Party and the Indemnified Party
that cannot be waived, then the Indemnifying Party shall be liable for the
reasonable fees and expenses of one counsel to the Indemnified Party in
connection with such defense (but only to the extent the Indemnifying Party is
responsible for any Losses with respect to such claim). The Non-controlling
Party shall provide the Controlling Party and its counsel with access to its
records and personnel relating to any such claim during normal business hours
and shall otherwise cooperate with the Controlling Party in the defense or
settlement thereof. If the Controlling Party elects to direct the defense of any
such claim, the Non-controlling Party shall not pay, or permit to be paid, any
part of any claim or demand arising from such asserted Liability unless
Controlling Party consents in writing to such payment. If the Controlling Party
assumes the defense of any such claim and proposes to settle such claim prior to
a final judgment thereon or to forego any appeal with respect thereto, then the
Controlling Party shall give the Non-controlling Party prompt written notice
thereof, and the Non-controlling Party shall have the right to participate in
and approve (such approval not to be unreasonably withheld, conditioned or
delayed to the extent any settlement (i) solely involves payment in full by the
Indemnifying Party and a full release of the Indemnified Party and (ii) does not
involve any admission by any Indemnified Party of breach, violation or
wrongdoing or involve any future covenants of the Indemnified Party, other than
covenants of confidentiality relating to the terms of such settlement) the
settlement or assume or reassume the defense of such claim or proceeding.

 

Article X

 

ADDITIONAL COVENANTS

 

10.01            Provision Respecting Legal Representation.

 

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(a)            Seller hereby informs Purchaser that Seller and its Affiliates
have retained Goodwin to act as its counsel in connection with the transactions
contemplated hereby and that Goodwin has not acted as counsel for any other
party hereto in connection with the transactions contemplated hereby and that
Seller has the status of a client of Goodwin for conflict of interest or any
other purposes as a result thereof.

 

(b)            Purchaser and Seller hereby agree that, in the event that a
dispute arises under this Agreement after the Closing between Purchaser and/or
its Affiliates on the one hand, and Seller or its Affiliates, on the other hand,
(an “Agreement Dispute”) Goodwin may represent Seller and/or such Affiliates in
any Agreement Dispute even though the interests of Seller and/or such Affiliates
may be directly adverse to Purchaser or its Affiliates, and even though Goodwin
may have represented Purchaser or its Affiliates in a matter substantially
related to such Agreement Dispute, or may be handling other matters for
Purchaser or any of its Affiliates.

 

(c)            Purchaser further agrees that, in any Agreement Dispute, that all
communications in any form or format whatsoever between or among any of Goodwin
and/or Seller or its Affiliates, or any of their respective managers, directors,
officers employees or other representatives that relate in any way to the
negotiation, documentation and consummation of the transactions contemplated by
this Agreement or any dispute arising under this Agreement (collectively, the
“Deal Communications”), shall be deemed to be retained and owned collectively by
Seller and its Affiliates, shall be controlled by Seller on behalf of Seller and
its Affiliates and shall not pass to or be claimed by Purchaser or any of its
Affiliates. All Deal Communications that are attorney–client privileged (the
“Privileged Communications”) shall remain privileged after the Closing and the
expectation of client confidence related thereto belongs solely to Seller, shall
be controlled by Seller and, except as expressly provided in Section 10.01(d),
shall not pass to or be claimed by Purchaser or any of its Affiliates.

 

(d)            Purchaser and Seller hereby agree that the protections afforded
to Seller in Section 10.01(c) shall not be considered, and is not, a waiver by
Purchaser or its Affiliates of any attorney-client privilege that they may have
over the Privileged Communications as against any Third Party other than Seller
and its Affiliates (an “Unaffiliated Party”). In the event of a dispute between
Purchaser and/or its Affiliates, on the one hand, and an Unaffiliated Party, on
the other hand (an “Unaffiliated Party Suit”), Purchaser and its Affiliates may
assert the attorney-client privilege to prevent the disclosure of any Privileged
Communications to such Unaffiliated Party. Notwithstanding anything to the
contrary set forth in this Agreement, in the event that any of Purchaser or its
Affiliates is required or requested by governmental order, other order or
request of a tribunal of competent jurisdiction, or by request or order of any
Governmental Entity, to produce, or otherwise to access or obtain a copy of, all
or a portion of a Privileged Communication, Purchaser shall be entitled to so
produce, access or obtain such Privileged Communication, provided that, as soon
as reasonably practicable following such a request or order, Purchaser shall
notify Seller in writing so that Seller can seek such remedy as may be available
to Seller to prevent the production or disclosure of, or access to, any of such
Privileged Communications or maintain the confidentiality of any of such
Privileged Communications. Where Seller seeks such a remedy regarding such
Privileged Communications in an Unaffiliated Party Suit, Purchaser agrees to
reasonably assist Seller in seeking such remedy.

 

29 

 

(e)            Purchaser agrees that, in any Agreement Dispute, it will not, and
that it will cause its Affiliates to not, (i) seek to obtain such Privileged
Communications, whether by seeking a waiver of the attorney-client privilege or
through other means, or (ii) use or rely on any of the Privileged
Communications. The Privileged Communications may be used by Seller and/or any
of its Closing Affiliates in connection with any Agreement Dispute.

 

10.02            Tax Matters.

 

(a)            Cooperation on Tax Matters. Purchaser and Seller shall cooperate,
as and to the extent reasonably requested by the other party, in connection with
the filing of Tax Returns pursuant to this Agreement and any action, suit,
demand or other proceeding with respect to Taxes relating to the transaction
pursuant to this Agreement. In addition, after Closing, Seller, on the one hand,
and Purchaser, on the other hand, will promptly inform the other party in
writing of any notice that it receives of any audit, examination, proceeding,
request for documents or information related to Taxes that could affect the Tax
liability of the other party.

 

(b)            Tax Contests.

 

(i)            After the Closing, Purchaser shall, and shall cause its
Affiliates to, promptly notify Seller in writing upon receipt of any written
notice, or becoming aware, of any audit, examination, or proceeding with respect
to Taxes that are Excluded Liabilities (a “Tax Claim”).

 

(ii)            Seller shall have the right, directly or through its designated
representatives, to control the defense of any Tax Claim, including the
settlement thereof; provided, that the Seller shall keep Purchaser reasonably
informed regarding the progress and substantive aspects of such Tax Claim and
the Seller shall not compromise or settle any such Tax Claim without obtaining
Purchaser’s prior written consent (which consent shall not be unreasonably
withheld, conditioned or delayed) if the resolution or settlement of such Tax
Claim would adversely impact Purchaser.

 

(c)            Proration. For all purposes under this Agreement involving the
determination of Taxes (including the determination of Taxes that constitute
Excluded Liabilities), in the case of Taxes that are payable with respect to any
period that includes but does not end on the Closing Date, the portion of any
such Tax that is allocable to the portion of the period ending on the close of
the Closing Date shall be (i) in the case of Taxes that are (x) based upon or
related to income or receipts, (y) imposed in connection with the sale or other
transfer or assignment of property (real or personal, tangible or intangible) or
other transaction-based Taxes or (z) employment, social security or other
similar Taxes, deemed equal to the amount which would be payable if the taxable
year ended at the close of business on the Closing Date; and (ii) in the case of
Taxes imposed on a periodic basis with respect to any assets or otherwise
measured by the level of any item, deemed to be the amount of such Taxes for the
entire period (or, in the case of such Taxes determined on an arrears basis, the
amount of such Taxes for the immediately preceding period) multiplied by a
fraction the numerator of which is the number of calendar days in the period
ending at the close of business on the Closing Date and the denominator of which
is the number of calendar days in the entire period.

 

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10.03            Purchaser Parent Guarantee.

 

(a)            As consideration for the benefits that Purchaser Parent will
receive as a result of Seller executing this Agreement, and to induce Seller to
enter into this Agreement, Purchaser Parent hereby guarantees to Seller the due
and punctual payment in full by Purchaser of the payments required under this
Agreement or any Ancillary Agreement as and when due and payable pursuant to any
provision of this Agreement or any Ancillary Agreement (collectively, the
“Purchaser Guaranteed Obligations”).

 

(b)            Purchaser Parent represents and warrants to Seller that the
guarantee by Purchaser Parent hereunder constitutes the legal, valid and binding
agreement of Purchaser Parent enforceable against Purchaser Parent in accordance
with the terms of this Section 10.03, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting
creditors’ rights generally and by general equity principles. Purchaser Parent
further represents and warrants that it is the legal and beneficial owner of all
of the outstanding equity of Purchaser.

 

(c)            The guarantee provided by this Section 10.03 is a guarantee of
payment and not of collection. Other than any and all defenses available to be
raised by Purchaser under this Agreement or any Ancillary Agreement in respect
of the Purchaser Guaranteed Obligations, Purchaser Parent hereby waives and
agrees not to assert any defense, setoff (excluding any right to setoff
expressly contemplated hereunder), counterclaim or any other circumstance that
otherwise might constitute a legal or equitable discharge of Purchaser whether
arising in connection with or in respect of any of the following or otherwise,
hereby agrees that its obligations under this guarantee are primary,
irrevocable, absolute and unconditional and shall not be discharged other than
by complete payment and further agrees that, other than any and all defenses
available to be raised by Purchaser under this Agreement or any Ancillary
Agreement in respect of the Purchaser Guaranteed Obligations.

 

(d)            In the event of any proceeding involving this Section 10.03, the
prevailing party shall be entitled to recover its reasonable out of pocket
expenses, including reasonable attorneys’ fees incurred in connection with such
proceeding.

 

10.04            Seller Parent Guarantee.

 

(a)            As consideration for the benefits that Seller Parent will receive
as a result of Purchaser executing this Agreement, and to induce Purchaser to
enter into this Agreement, Seller Parent hereby guarantees to Purchaser the due
and punctual payment in full by Seller of any indemnification obligations
required under this Agreement as and when due and payable pursuant to Article IX
(collectively, the “Seller Guaranteed Obligations”).

 

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(b)            Seller Parent represents and warrants to Purchaser that the
guarantee by Seller Parent hereunder constitutes the legal, valid and binding
agreement of Seller Parent enforceable against Seller Parent in accordance with
the terms of this Section 10.04, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting
creditors’ rights generally and by general equity principles. Seller Parent
further represents and warrants that it is the legal and beneficial owner of all
of the outstanding equity of Seller.

 

(c)            The guarantee provided by this Section 10.04 is a guarantee of
payment and not of collection. Other than any and all defenses available to be
raised by Seller under this Agreement or any Ancillary Agreement in respect of
the Seller Guaranteed Obligations, Seller Parent hereby waives and agrees not to
assert any defense, setoff (excluding any right to setoff expressly contemplated
hereunder), counterclaim or any other circumstance that otherwise might
constitute a legal or equitable discharge of Seller whether arising in
connection with or in respect of any of the following or otherwise, hereby
agrees that its obligations under this guarantee are primary, irrevocable,
absolute and unconditional and shall not be discharged other than by complete
payment and further agrees that, other than any and all defenses available to be
raised by Seller under this Agreement or any Ancillary Agreement in respect of
the Seller Guaranteed Obligations.

 

(d)            In the event of any proceeding involving this Section 10.04, the
prevailing party shall be entitled to recover its reasonable out of pocket
expenses, including reasonable attorneys’ fees incurred in connection with such
proceeding.

 

Article XI

 

DEFINITIONS

 

11.01            Definitions. For purposes hereof, the following terms when used
herein shall have the respective meanings set forth below:

 

“Affiliate” of any particular Person means any other Person directly or
indirectly controlling, controlled by or under common control with, such
particular 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 possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person whether
through the ownership of voting securities, contract or otherwise, and, in any
event, and without limitation of the previous sentence, any Person owning more
than fifty percent (50%) of the voting securities of another Person shall be
deemed to control that Person.

 

“Ancillary Agreements” means the Business Transfer Documents, the IP Transfer
Documents, Restrictive Covenant Agreement, the Release, and each certificate or
other document to be delivered by a party hereto at the Closing.

 

“Assumed Liabilities” means any and all of the following Liabilities: (a) the
Liabilities of Seller under the Transferred Contracts to the extent arising
after the Closing; and (b) the Liabilities with respect to Purchaser’s operation
of the Business or Purchaser’s ownership of the Transferred Assets to the extent
arising after the Closing; provided that Assumed Liabilities shall not include
any Liabilities relating to any Occurrence that arises out of, or results from,
any action, omission, event, fact, circumstance or condition on, or prior to,
the Closing Date, including all Losses caused by or arising out of the
Exploitation of the Products on, or prior to, the Closing Date, whether the
commencement of any related litigation, arbitration, investigation, proceeding
or claim is before, on or after the Closing Date.

 

32 

 

“Business” means the business of manufacturing, packaging, promoting, marketing,
selling, distributing and/or otherwise commercializing the Products.

 

“Business Day” means any day other than a Saturday, a Sunday or other day on
which banks are required by Law to be closed in Missouri.

 

“Business Transfer Effective Date” means, with respect to a Product in the
Territory, the date after the effective date of the transfer of the applicable
Marketing Authorization when Seller (or its applicable Affiliate) shall cease,
and Purchaser shall commence, deliveries of such Product for use or resale in
the Territory. The Business Transfer Effective date shall be agreed to by the
Parties.

 

“cGMP” means the applicable regulatory requirements for the then-current good
manufacturing practices as are required by the Governmental Entities in the
Territory.

 

“Chargebacks” means all chargebacks and all other credits and reimbursements,
other than Rebates, to Customers with respect to the Products.

 

“Closing Cash Consideration” means an amount equal to $12,500,000 plus the
Nouress Cash Consideration.

 

“Collateral” means solely the following property: (i) the Transferred Assets,
(ii) inventory (as defined in the UCC) of the Products whether now owned or
hereafter acquired, including in connection with the Closing, (iii) accounts (as
defined in the UCC) created by the sale or other disposition of inventory of the
Products, and (iv) to the extent not otherwise included, any proceeds of the
foregoing; provided, that Collateral shall not include any of the following
property (“Excluded Collateral”): (x) any permit, license or agreement entered
into by the applicable Person (A) to the extent that any Law applicable thereto
prohibits the creation of a Lien thereon, but only to the extent, and for as
long as, such prohibition is not terminated or rendered unenforceable or
otherwise deemed ineffective by the UCC or any other applicable Law, and (B) to
the extent that the creation of a Lien in favor of the Seller would result in a
breach or termination pursuant to the terms of or a default under any such
permit, license or agreement (other than to the extent that any such term would
be rendered ineffective by the UCC or any other applicable law or principles of
equity); provided, that that such security interest shall attach immediately and
automatically at such time as the condition causing such, prohibition, breach,
termination, invalidation or voiding shall be remedied or no longer exists, and
(y) any “intent to use” trademark applications for which a statement of use has
not been filed (but only until such statement is filed); provided, however, that
Excluded Collateral shall not include any proceeds of Excluded Collateral
(unless such proceeds would otherwise constitute Excluded Collateral).

 

33 

 

“Customers” means Third Party wholesalers, pharmacy benefit managers, managed
care organizations, government buyers, group purchasing organizations or other
Third Parties that contract with Seller with respect to the Products or purchase
any Product from Seller up to and including the Closing Date.

 

“Customer Rebates” means, except for Medicaid Rebates, the rebate programs
established and in effect for the Products as of the Closing Date between Seller
and its active Customer.

 

“Environmental Laws” means any applicable Law relating to pollution, protection
of the environment or protection of worker health and safety (as such relates to
exposure to Hazardous Materials), including the Comprehensive Environmental
Response, Compensation and Liability Act of 1960 (42 U.S.C. §9601 et seq.), as
amended by the Superfund Amendments and Reauthorization Act of 1986, the
Resource Conservation and Recovery Act (42 U.S.C. §6901 et seq.), as amended by
the Hazardous and Solid Waste Amendments of 1984, the Hazardous Substances
Transportation Act (49 U.S.C. §1801 et seq.), the Toxic Substances Control Act
(15 U.S.C. §2601 et seq.), the Clean Water Act (33 U.S.C. §1321 et seq.), the
Clean Air Act (42 U.S.C. §7401 et seq.), the Federal Water Pollution Control Act
(33 U.S.C. §1251 et seq.) and the Safe Drinking Water Act (42 U.S.C. §3808 et
seq.).

 

“Excluded Assets” means any assets, properties and rights of Seller or any of
its Affiliates (i) not exclusively relating to the Business unless specifically
identified as a Transferred Asset, (ii) any contract or agreement which is not a
Transferred Contract and (iii) the assets, rights and interests of Seller and
its Affiliates set forth or described on Schedule 11.01(b), all of which assets,
rights and interests are not to be transferred to Purchaser hereunder.

 

“Excluded Liabilities” means all Liabilities of Seller other than the Assumed
Liabilities, including but not limited to (i) any Liabilities relating to any
Occurrence that arises out of, or results from, any action, omission, event,
fact, circumstance or condition on, or prior to, the Closing Date, including the
Pre-Closing Accounts Payable and all Losses caused by or arising out of any
Exploitation of the Products on, or prior to, the Closing Date, whether the
commencement of any related litigation, arbitration, investigation, proceeding
or claim is before, on or after the Closing Date, (ii) (A) any Liabilities of
Seller or any member or affiliate of Seller for income Taxes, (B) any liability
of Seller for Taxes pursuant to Section 3.03(a) herein, (C) any liability of
Seller for Taxes arising with respect to periods through the Closing Date, and
(D) any liability of Seller for the unpaid Taxes of any person as a transferee
or successor, by contract, or otherwise, and (iii) solely for illustrative
purposes, the Liabilities set forth or described on Schedule 11.01(c).

 

“Exploit” means to make, have made, import, export, use, have used, sell, offer
for sale, have sold, research, develop (including seeking, obtaining and
maintaining Regulatory Approvals), commercialize, hold or keep (whether for
disposal or otherwise), transport, distribute, promote, market, or otherwise
dispose of and manufacture or have manufactured. “Exploitation” has a
corresponding meaning.

 

“Fraud” means an act committed by or on behalf of a party, and requires: (a) a
false representation made herein, (b) with actual knowledge (as opposed to
constructive, imputed or implied knowledge) or belief that such representation
is false, (c) an intention to deceive another party, to induce him, her or it to
enter into this Agreement, (d) causing that party, in justifiable or reasonable
reliance upon such false representation, to enter into this Agreement, and
(e) causing such party to suffer damage by reason of such reliance. For the
avoidance of doubt, “Fraud” does not include any claim for equitable fraud,
promissory fraud, unfair dealings fraud or any torts based on negligence or
recklessness.

 

34 

 

“GAAP” means United States generally accepted accounting principles,
consistently applied by Seller, in effect at the date of the financial statement
to which it refers.

 

“Governmental Entity” means any (a) supranational, national, regional, state,
county, city, town, village, district or other jurisdiction; (b) federal, state,
local, municipal, foreign or other government; (c) governmental or
quasi-governmental authority of any nature (including any agency, branch,
department or instrumentality thereof, including any business, company,
enterprise or other entity owned or controlled, in whole or in part, by any
government and any court or other tribunal); (d) multinational organization;
(e) body exercising, or entitled to exercise, any administrative, executive,
judicial, legislative, police, regulatory or taxing authority or power of any
nature; or (f) any arbitral authority; provided that any Governmental Entity
acting in its capacity as a contract counterparty shall not be a Governmental
Entity for the purposes of this Agreement.

 

“Hazardous Materials” means: (a) any “hazardous substance”, “hazardous waste” or
“hazardous material” defined in or regulated under any Environmental Law;
(b) petroleum, including any fraction thereof, and any petroleum product; and
(c) radioactive materials, polychlorinated biphenyls, asbestos or
asbestos-containing materials or urea formaldehyde foam insulation.

 

“HCR Fees” means the fees described in Section 9008 of the Patient Protection
and Affordable Care Act, Pub. L. No. 111-148, as amended by Section 1404 of the
Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152.

 

“Healthcare Regulatory Laws” means Laws relating to healthcare regulatory
matters, including, but not limited to: (a) 42 U.S.C. §§ 1320a-7, 7a, and 7b,
which are commonly referred to as the “Federal Fraud Statutes;” (b) Title XVIII
of the Social Security Act (42 U.S.C. § 1395 et seq.), the “Medicare Laws;”
(c) 42 U.S.C. § 1395nn, which is commonly referred to as the “Stark Statute;”
(d) 31 U.S.C. §§ 3729-3733, which is commonly referred to as the “Federal False
Claims Act;” (e) 42 U.S.C. §§ 1320d through 1320d-8 and 42 C.F.R. §§ 160, 162
and 164, which are commonly referred to as the “Health Insurance Portability and
Accountability Act of 1996” or “HIPAA;” (f) any federal, state or local
applicable Law that regulates either the approval, clinical development,
manufacturing, promotion or distribution of products; (g) any state law
regulating the interactions with health care professionals and reporting
thereof; or (h) any federal, state or local statute or regulation relevant to
false statements or claims including knowingly and willfully making or causing
to be made any false statement or representation of a material fact for use in
determining rights to any benefit, payment or registration.

 

“Insolvency Event” means Purchaser or any of its Affiliates suffering any of the
following: (a) filing a petition in bankruptcy; (b) becoming or is declared
insolvent, or becoming the subject of any proceedings (not dismissed within
[***]) related to its liquidation, insolvency or the appointment of a receiver;
(c) making an assignment on behalf of all or substantially all of its creditors;
or (d) taking any company action for its winding up or dissolution.

 

35 

 

“Intellectual Property” means any or all of the following in any jurisdiction in
the world: (a) copyrights, copyrightable works, and registrations and
applications for registration thereof; (b) trade names, trademarks, service
marks, and trade dress, and registrations and applications for registration
thereof, and all goodwill associated therewith; (c) patents and applications
therefor and all reissues, divisions, renewals, extensions, provisionals,
continuations and continuations-in-part thereof; (d) internet uniform resource
locators and domain names; (e) rights in software, data, and databases; and
(f) Know-How and other confidential information.

 

“Inventory” means all inventory owned by Seller and used exclusively in the
Business in connection with the sale of the Products to customers of the
Business, including the Products and active pharmaceutical ingredients, spare
parts, raw materials, containers, packaging and packaging supplies and
work-in-process exclusively used for the Products.

 

“Inventory Sell-Down Period” means the period beginning on the Closing Date and
ending on the earlier to occur of (a) the date on which Purchaser exhausts all
of the Inventory of Products, and (b) [***] from the Closing Date.

 

“Knowledge” means the actual knowledge, after due and reasonable investigation,
of [***].

 

“Know-How” means all inventions, Trade Secrets, discoveries, know-how, data,
information (including scientific, technical or regulatory information),
processes, means, methods, practices, formulae, instructions, procedures,
techniques, materials, technology, results, analyses, designs, drawings,
computer programs, specifications, technical assistance, in written, electronic
or any other form, whether or not patentable.

 

“Law” means any law, rule, regulations, judgment, injunction, order, ordinance,
statute, or decree issued, promulgated or enforced by any Governmental Entity.

 

“Liabilities” means any and all debts, liabilities, assessments, expenses,
deficiencies, judgments, losses, damages, fines, penalties and obligations of
any nature, whether accrued or unaccrued, known or unknown, express or implied,
primary or secondary, direct or indirect, liquidated, disputed or undisputed,
absolute or contingent, matured or un-matured or determined or determinable and
whether due or to become due.

 

“Licensed Marks” means the trademarks owned by Seller and displayed on the
Products or on the label or packaging for the Products included in the
Inventory.

 

“Liens” means any encumbrance, hypothecation, infringement, lien, deed of trust,
mortgage, easement, encroachment, pledge, restriction, security interest,
option, title retention or other security arrangement, or any other adverse
right or interest, charge or claim of a similar nature in or on any asset,
property or property interest.

 

36 

 

“Loss” or “Losses” means, without duplication, (a) any and all judgments,
awards, penalties, losses, Taxes, costs, expenses or damages, including
reasonable fees and expenses of attorneys, accountants and other professional
advisors, whether involving a dispute solely between the parties hereto or
otherwise; (b) the cost to Purchaser of investigating, defending or settling any
Third Party claim that is merely alleged or threatened against Purchaser but
only to the extent such Third Party claim relates to an indemnifiable Loss
pursuant to Section 9.01; and (c) the cost to Seller of investigating, defending
or settling any Third Party claim that is merely alleged or threatened against
Seller but only to the extent such Third Party claim relates to an indemnifiable
Loss pursuant to Section 9.02.

 

“Marketing Authorization” means the registrations, approvals, licenses, New Drug
Applications (pursuant to Section 505 of the Act (21 U.S.C. Section 355)
(“NDA”), Regulatory Applications, including any supplements, amendments or
modifications submitted to or required by any Governmental Entity or any
successor application or procedure) or other Permits granted by a Governmental
Entity, owned by Seller and necessary for Exploitation of the Products in the
Territory, including those identified on Schedule 11.01(d) attached hereto.

 

“Material Adverse Effect” means any change, effect, event or condition that,
individually or in the aggregate, is, or would reasonably be expected have or
result in a material adverse change in, or effect on, the assets, properties,
liabilities, financial condition or results of operations of the Business, taken
as a whole; provided, however, that none of the following shall be deemed in and
of itself, either alone or in combination, to constitute, and none of the
following shall be taken into account in determining whether there has been or
will be, a Material Adverse Effect: (a) any change in economic conditions
generally or capital and financial markets generally, (b) any change in the
industry in which the Business operates or in which the Products are used or
distributed, including changes that directly or indirectly result in increased
operating costs or decrease in sales, (c) any change or proposed change in Laws
or GAAP, or the enforcement or interpretation thereof, after the date of this
Agreement, (d) any actions taken in order to comply with applicable Law,
contracts or agreements, (e)  any failure by the Business to achieve any
internal or external earnings or other financial projections or forecasts
(provided, that this clause (e) shall not prevent a determination that any
change or effect underlying such failure to meet projections or forecasts has
resulted in a Material Adverse Effect (to the extent such change or effect is
not otherwise excluded from this definition of Material Adverse Effect)),
(f) geographic and political conditions in or affecting jurisdictions in which
the Business operates or the Products are sold, including hostilities, acts of
war, sabotage, terrorism, military actions or other material international or
national calamity or strife, or any escalation or worsening of any of the
foregoing, (g) any change resulting from the negotiation, execution,
announcement or consummation of the transactions contemplated by, or the
performance of obligations under, this Agreement or the Ancillary Agreements,
including any such change relating to the identity of, or facts and
circumstances relating to, Purchaser or any actions or threats by employees,
customers, suppliers, licensors, distribution partners or other business
partners, including those related to the Business or the Products, (h) any
change resulting directly or indirectly from any earthquake, hurricane, tsunami,
tornado, flood, mudslide, wild fire, epidemic, pandemic, health or healthcare
crisis or other similar disasters, acts of God, weather conditions or other
force majeure events in the U.S. or any other country or region in the world,
including the impacts of such events, including on infrastructure, employees,
travel, the markets and business generally, (i) changes resulting directly or
indirectly from any actions required to be taken or omitted pursuant to this
Agreement or the Ancillary Agreements or taken with Purchaser’s consent or
waiver, or not taken because Purchaser withheld, delayed or conditioned its
consent or waiver, or (j) any effect that is cured by Seller prior to the
termination of this Agreement or the consummation of the transactions
contemplated hereby; provided that, in the case of clauses (a), (b), and (c),
above, if such change, effect, event or condition disproportionately affects the
Business as compared to other businesses that operate in the industry and
geographies in which Seller and the Business operate, then the disproportionate
aspect of such change, effect, event, occurrence, state of facts or development
may be taken into account in determining whether a Material Adverse Effect has
or will occur.

 

37 

 

“Medicaid Rebate Program” means the rebate program established pursuant to 42
U.S.C. §1396r-8.

 

“Medicare Part D Coverage Gap Discount Program” means the rebate program
pursuant to Section 1860D-14A and 1860D-43 of the Social Security Act and
implementing regulations.

 

“Medicare Part D Prescription Drug Plan” means a Prescription Drug Plan as
defined in 42 C.F.R. §423.4 or the Medicare Advantage Prescription Drug plan
that has been approved by CMS to offer prescription drug coverage that is
integrated with health care coverage provided under Part C of the Medicare
Program to enrollees, and that satisfies the definition of an “MA-PD plan” under
42 C.F.R. § 423.4.

 

“Nouress Cash Consideration” means an amount equal to $2,000,000.

 

“Nouress Product” means Nouress (L-cysteine hydrochloride injection) N212535
approved by the FDA on December 13, 2019.

 

“Occurrence” means any accident, happening, event or Loss that is caused or
allegedly caused by (a) any Product Exploited by or on behalf of Seller in
connection with the Business on or prior to the Closing Date or (b) any claim or
statement made or failed to have been made by Seller in connection with any of
the foregoing, which, in either case, results or is alleged to have resulted in
injury, death, economic harm or Loss to any Person, damage to or destruction of
property (including damage to or destruction of the product itself) or Loss, at
any time.

 

“Patents” means patents (as well as the relevant complementary protection
certificates where applicable) and patent applications (including any divisions,
continuations, continuations-in-part, provisional applications, reexamined
versions or reissues thereof) whether or not patents are issued on any such
applications and whether or not any such applications.

 

“Payment Claims” means any Rebates or Chargebacks, and without limiting the
foregoing, includes prompt payment discounts, distribution service fees, and
administrative fees charged by Customers.

 

“Payment Default” means any of the following: (a) Purchaser’s failure to make
any Monthly Payment within [***] following the date due; (b) Purchaser’s failure
to make the Change of Control Payment at or prior to the consummation of a
Purchaser Change of Control; (c) Purchaser’s failure to make a Product Transfer
Payment at or prior to the consummation of a Product Transfer; (d) an Insolvency
Event; (e) the occurrence of an “Event of Default” (or similar term) (as defined
in the Note Purchase Agreement, dated as of April 19, 2017, which has been
amended and restated pursuant to the Second Amendment and Restatement Agreement,
dated as of the date hereof, among Purchaser Parent, the Collateral Agent,
Purchaser and the other parties thereto (as the same may be further amended,
supplemented, restated or otherwise modified from time to time in accordance
with, and as permitted by, the terms thereof and the Subordination Agreement,
the “Note Purchase Agreement”)) and the effect of such occurrence is to cause
any of the obligations in respect of the Note Purchase Agreement (the “Note
Purchase Agreement Obligations”) to become due and payable prior to its stated
maturity; (f) failure of Purchaser Parent or any of its Affiliates to pay when
due or within any applicable grace period any principal, interest or other
amount on the Note Purchase Agreement Obligations upon the final maturity of the
obligations under the Note Purchase Agreement or (g) a breach of the
Subordination Agreement by the Collateral Agent, Purchaser or Purchaser Parent
that would, or reasonably would be expected to, prevent, restrict, impede or
delay Seller’s ability to exercise its remedies under Section 3.05 hereof in any
material respect; provided, that a Payment Default shall not occur to the extent
any payment is not made in accordance with the offset rights set forth in
Article IX; provided, further, that Purchaser shall promptly (and, in any event,
within [***] of the occurrence thereof) upon any officer of Purchaser or
Purchaser Parent obtaining knowledge thereof, provide written notice to Seller
of the occurrence or existence of one or more Payment Defaults described in
clauses (a) through (g) above.

 

38 

 

“Permitted Liens” means: (a) Liens on goods in transit incurred pursuant to
documentary letters of credit set forth on Schedule 11.01(e); (b) non-exclusive
licenses of Intellectual Property as set forth on Schedule 11.01(e); and
(c) Liens arising under the Royalty Agreements.

 

“Person” means a natural person, a partnership, a limited partnership, a
corporation, a limited liability company, an association, a joint stock company,
a trust, a joint venture, any other entity or organization, or a Governmental
Entity or any department, agency or political subdivision thereof.

 

“Pharmacy Claim Payment Date” means the date on which a pharmacy or other entity
dispenses the Product as reflected on Rebate claim utilization data.

 

“PHS 340B Program” means the drug discount program, available to “covered
entities”, that is administered by the Health Resources and Services
Administration pursuant to 42 U.S.C. §256b.

 

“Pre-Closing Accounts Payable” means all accounts payable of the Business
incurred on or prior to the Closing Date, but not paid prior to the Closing
Date, for which there are undisputed invoices, including those listed on
Schedule 11.01(n).

 

“Proceeding” means any action, arbitration, audit, examination, investigation,
hearing, litigation or suit (whether civil, criminal, administrative, judicial
or investigative, whether formal or informal, and whether public or private)
commenced, brought, conducted or heard by or before, or otherwise involving, any
Governmental Entity.

 

“Products” means each pharmaceutical product identified on Schedule 11.01(f).

 

39 

 

 

“Purchaser Change of Control” means (a) the consummation of a merger or
consolidation of Purchaser (or its parent entity, if applicable) with or into
another entity (except a merger or consolidation in which the holders of equity
interests of Purchaser (or its parent entity, if applicable) immediately prior
to such merger or consolidation continue to hold more than 50% of the
outstanding voting equity interests of the surviving or resulting entity (or its
parent entity) immediately after such transaction), (b) the transfer (whether by
merger, consolidation or otherwise), directly or indirectly, in one transaction
or a series of related transactions, to a Person or group of affiliated Persons,
of equity interests of Purchaser if, after such transfer, such Person or group
of affiliated Persons would be deemed an Affiliate of Purchaser (or any
surviving entity (or its parent entity), if applicable), or (c) the sale of all
or substantially all of the assets of Purchaser or the transfer of all or
substantially all of the rights to all of the Products to a Third Party or Third
Parties in one transaction or a series of related transactions, or the sale of a
majority of the consolidated assets of Purchaser’s parent entity, taken as a
whole (if applicable).

 

“Purchaser Fundamental Representations” means those representations and
warranties contained in the first sentence of Section 6.01 (Organization and
Organizational Power), Section 6.02 (Authorization), Section 6.05 (Brokerage),
Section 6.06 (Sufficiency of Funds) and Section 6.07 (Solvency).

 

“Rebates” means any Customer Rebates, Medicaid Rebate Programs, TriCare Rebate
Program and State Assistance Programs, based upon the utilization of the
Products.

 

“Regulatory Applications” means copies of any and all applications (including
pending NDAs) filed with any Governmental Entity by or on behalf of Seller or
its Affiliates with respect to any of the Products for approval to develop,
test, manufacture, process, distribute, import, market, store, label, package,
promote, sell, or offer to sell the Products, and all supplements, amendments
and revisions thereto, whether approved or pending.

 

“Regulatory Files” means copies of all U.S. regulatory files with respect to
(a) Marketing Authorizations for the Products, (b) all adverse event reports and
other data, information and materials relating to adverse experiences and other
safety issues submitted to any Governmental Entity with respect to any of the
Products and (c) all material correspondence with any Governmental Entity
relating to any of the Products, including any safety reports or updates,
complaint files and product quality reviews.

 

“Restrictive Covenant Agreement” means that certain Restrictive Covenant
Agreement between Seller, its affiliates and Purchaser, in the form of Exhibit E
hereto.

 

“Royalty Agreement ” means each of the contracts listed on Schedule 11.01(g).

 

“Seller Fundamental Representations” means those representations and warranties
contained in the first sentence of Section 5.01 (Organization and Organizational
Power), Section 5.02 (Authorization), Section 5.05(a) (Title to Transferred
Assets), Section 5.06 (Tax Matters) and Section 5.13 (Brokerage).

 

40 

 

 

“Shared Contract” means each agreement, contract, arrangement, commitment,
purchase order and other contract that relates to both (a) the Business or any
Transferred Assets and (b) one or more other businesses or products of Seller or
any of its Affiliates.

 

“State Assistance Programs” means any Medicaid supplemental rebate programs,
state pharmaceutical assistance programs, and other state programs to provide
pharmaceutical assistance for which Seller has entered into a rebate or discount
agreement with a state effective prior to the Closing Date with respect to the
Products.

 

“Subsidiary” means, with respect to any Person, any corporation of which a
majority of the total voting power of shares of stock entitled (without regard
to the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of such
Person or a combination thereof, or any partnership, association or other
business entity of which a majority of the partnership or other similar
ownership interest is at the time owned or controlled, directly or indirectly,
by such Person or one or more Subsidiaries of such Person or a combination
thereof. For purposes of this definition, a Person is deemed to have a majority
ownership interest in a partnership, association or other business entity if
such Person is allocated a majority of the gains or losses of such partnership,
association or other business entity or is or controls the managing director or
general partner of such partnership, association or other business entity.

 

“Tax” (including with correlative meaning the term “Taxes”) means U.S. federal,
state, local or non-U.S. taxes (including interest, penalties or additions
associated therewith), including income, alternative, minimum, franchise,
capital stock, profits, real property, personal property, tangible, withholding,
employment, payroll, social security, social contribution, unemployment
compensation, severances, disability, stamp, transfer, registration, sales, use,
excise, premium, ad valorem, gross receipts and value-added taxes.

 

“Tax Returns” means any return, report, declaration, statement, information
return or other document (including schedules, attachments or any related or
supporting information and any amended returns) filed or required to be filed
with any Governmental Entity charged with the determination, assessment or
collection of any Tax or the administration of any Laws relating to any Tax.

 

“Territory” means fifty (50) states of the United States of America and its
territories, commonwealths, possessions and associated states, including the
District of Columbia and the Commonwealth of Puerto Rico.

 

“Third Party” means any Person other than Seller, Purchaser or one of their
respective Affiliates.

 

“Trademarks” means trademarks, service marks, trade names, logos, slogans,
designs, trade dress, common law trademarks and service marks and trade dress
registrations and any registrations and applications for the foregoing to the
extent exclusively related to a Product, together with all goodwill associated
therewith.

 

41 

 

 

“Trade Secrets” means information that derives independent economic value from
not being generally well known to, and not being readily ascertainable by proper
means by, other persons who can obtain economic value from its disclosure or
use, including confidential or proprietary information including customer,
supplier, vendor and distributor lists and related data, invention disclosures,
discoveries, lab notebooks or journals.

 

“Transaction Expenses” means all fees, commissions and expenses of attorneys,
accountants, investment bankers and other similar advisors of Seller and its
Affiliates.

 

“Transfer Letters” means the letters to be filed with the FDA, substantially in
the form attached to this Agreement as Exhibit D-1, Exhibit D-2, Exhibit D-3 and
Exhibit D-4, respectively, to transfer the Marketing Authorizations for the
Products from Seller to Purchaser in accordance with 21 C.F.R. § 314.72.

 

“Transfer Taxes” means any U.S., state, county, local, non-U.S. and other sales,
use, transfer, goods and services, value added, conveyance, documentary
transfer, stamp duty, recording or other similar Tax, fee or charge imposed on
or in connection with the transactions contemplated by or the instruments
executed under or in connection with this Agreement or the recording of any
sale, transfer, or assignment or property (or any interest therein) effected
pursuant to this Agreement.

 

“Transferred Assets” means the assets, rights and interests of Seller and its
Affiliates (a) exclusively relating to the Business, including the Inventory of
the Product owned by Seller as of the Closing, the Marketing Authorizations for
the Products, the Regulatory Files and the Transferred IP, (b) the Transferred
Contracts (together with prepaid accounts thereunder), and (c) the other assets
listed on Schedule 11.01(h).

 

“Transferred Contracts” means the agreements, contracts, licenses and purchase
orders identified on Schedule 11.01(i).

 

“Transferred IP” means (a) the domain names identified on Schedule 11.01(j),
(b) the Patents identified on Schedule 11.01(k), (c) the Trademarks identified
on Schedule 11.01(l), (d) all other Intellectual Property listed on Schedule
11.01(m), and (e) all Know-How and other Intellectual Property owned by Seller
and used or held for use exclusively in the operation of the Business or
Exploitation of the Products.

 

“TriCare Rebate Program” means the rebate program described in the final
rule published by the Department of Defense at 74 Fed. Reg. 11,279 to implement
Section 703 of the National Defense Authorization Act of 2008, and includes
rebates pursuant to any voluntary rebate agreement described therein.

 

“UCC” means the Uniform Commercial Code as the same is, from time to time, in
effect in the State of California; provided, that in the event that, by reason
of mandatory provisions of Law, any or all of the attachment, perfection or
priority of, or remedies with respect to, Seller’s Lien on any Collateral is
governed by the Uniform Commercial Code as the same is, from time to time, in
effect in a jurisdiction other than the State of California, then the term “UCC”
shall mean the Uniform Commercial Code as in effect, from time to time, in such
other jurisdiction solely for purposes of the provisions thereof relating to
such attachment, perfection, priority or remedies and for purposes of
definitions related to such provisions.

 

42 

 

 

“VA Master Agreement” means an agreement between a pharmaceutical manufacturer
and the Veterans Administration to implement the provisions of the Veterans
Health Care Act of 1992, 38 U.S.C. § 8126;

 

“VA Pharmaceutical Pricing Agreement” means that certain Pharmaceutical Pricing
Agreement between the Secretary of Veterans Affairs and Seller.

 

11.02       Rules of Construction and Other Definitional Provisions. For
purposes of this Agreement, unless the express context otherwise requires:

 

(a)            the words “include,” “includes” and “including” will be deemed to
be followed by the words “without limitation”;

 

(b)            the word “or” will be interpreted in the inclusive sense commonly
associated with the term “and/or,” unless used in conjunction with “either” or
the like;

 

(c)            the words “herein,” “hereof”, “hereby”, “hereto,” “hereunder,”
and words of similar import, will be construed to refer to this Agreement as a
whole, as the context requires, and not to any particular provision hereof;

 

(d)            the phrase “ordinary course of business” means “ordinary course
of business consistent with past practice;”

 

(e)            whenever this Agreement refers to a number of days or months
without using a term otherwise defined herein, such number refers to calendar
days or months, respectively;

 

(f)            all references to “$” shall be deemed references to United States
dollars;

 

(g)            the word “shall” will be construed to have the same meaning and
effect as the word “will;”

 

(h)            references herein to Articles, Sections, clauses, Exhibits and
Schedules refer, respectively, to the Articles, Sections and clauses of, and the
Exhibits and Schedules attached to, this Agreement;

 

(i)             each reference to an agreement, instrument, plan or other
document means such agreement, instrument, plan or other document as amended,
supplemented or otherwise modified from time to time to the extent permitted by
the provisions thereof and by this Agreement;

 

(j)              each reference to a law, rule or regulation, or article,
section or other division thereof, will be deemed to include the then-current
amendments thereto or any replacement or successor law, rule or regulation
thereof;

 

43 

 

 

(k)             accounting terms which are not otherwise defined in this
Agreement have the meanings given to them under GAAP, and, to the extent that
the definition of an accounting term defined in this Agreement is inconsistent
with the meaning of such term under GAAP, the definition set forth in this
Agreement will control;

 

(l)              the definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such term; and

 

(m)            this Agreement shall be construed without regard to any
presumption or rule requiring construction or interpretation against the party
drafting an instrument or causing any instrument to be drafted.

 

11.03         References. The table of contents and the section and other
headings and subheadings contained in this Agreement and the Exhibits hereto are
solely for the purpose of reference, are not part of the agreement of the
Parties, and shall not in any way affect the meaning or interpretation of this
Agreement or any Exhibit hereto. Capitalized terms used in the Disclosure
Schedules and not otherwise defined therein have the meanings given to them in
this Agreement.

 

11.04         Index of Defined Terms.

 

 

  Page     Affiliate 32 Agreement 1 Agreement Dispute 28 Ancillary Agreements 32
Assumed Liabilities 32 Business 32 Business Day 33 Business Transfer Documents 2
Business Transfer Effective Date 33 Cap 25 cGMP 33 Change of Control Payment 6
Chargebacks 33 Claims 7 Closing 2 Closing Cash Consideration 33 Closing Date 2
Code 5 Collateral 33 Collateral Agent 3 Controlling Party 28 Customer Rebates 33
Customers 33

 

 

  Page     Deal Communications 29 Deductible 25 Default Amount 7 Default Fee 7
Default Payment 7 Disclosure Schedules 9 Environmental Laws 33 Excluded Assets
34 Excluded Liabilities 34 Exploit 34 Federal Health Care Programs 14 Fraud 34
GAAP 34 Goodwin 2 Governmental Entity 34 Hazardous Materials 35 Healthcare
Regulatory Laws 35 Indemnified Parties 27 Indemnified Party 27 Indemnifying
Parties 27 Indemnifying Party 27 Insolvency Event 35 Intellectual Property 35

 

 

 

44

 

 

Inventory 36 Inventory Sell-Down Period 36 IP Transfer Documents 2 Know-How 36
Knowledge 36 Law 36 L-Cysteine Cash Consideration 38 Liabilities 36 Licensed
Marks 36 Liens 36 Loss 36 Marketing Authorization 36 Material Adverse Effect 37
Medicaid Rebate Program 37 Medicare Part D Coverage Gap Discount Program 37
Medicare Part D Prescription Drug Plan 38 Monthly Payment 4 Monthly Payments 4
Non-controlling Party 28 Nouress Litigation 23 Nouress Product 38 Occurrence 38
OFAC 14 Party, Parties 1 Patents 38 Payment Claims 38 Payment Default 38 Permits
13 Permitted Liens 39 Person 39 Pharmacy Claim Payment Date 39 PHS 340B Program
39 Pre-Closing Accounts Payable 39 Privileged Communications 29 Proceeding 39
Product Transfer 6 Product Transfer Payment 6 Products 39 Purchase 1 Purchase
Price 4 Purchaser 1

 

Purchaser Change of Control 39 Purchaser Fundamental Representations 39
Purchaser Guaranteed Obligations 31 Purchaser Indemnified Party 24 Purchaser
Parent 1 Rebates 40 Regulatory Applications 40 Regulatory Files 40 Release 3
Restrictive Covenant Agreement 40 Royalty Agreements 40 sanctioned country 15
Schedule 9 Seller 1 Seller Fundamental Representations 40 Seller Guaranteed
Obligations 31 Seller Indemnified Party 24 Seller NDC 20 Seller Parent 1 Shared
Contract 40 State Assistance Programs 40 Subordination Agreement 3 Subsidiary 40
Tax 41 Tax Claim 30 Tax Returns 41 Territory 41 Third Party 41 Trade Secrets 41
Trademarks 41 Transaction Expenses 41 Transfer Letters 41 Transfer Taxes 41
Transferred Assets 42 Transferred Contracts 42 Transferred IP 42 TriCare Rebate
Program 42 UCC 42 Unaffiliated Party 29 Unaffiliated Party Suit 29 VA Master
Agreement 42 VA Pharmaceutical Pricing Agreement 42

 

 

45

 

 

Article XII

 

MISCELLANEOUS

 

12.01            Press Releases and Communications. Each of the Parties is
permitted to make a press release announcing transactions contemplated herein;
provided, that the form and substance of any such press release shall be
provided to the other Party for review and any timely comments provided will be
considered by such Party in good faith prior to issuing such press release;
provided, further, that in no event shall a Party or its Affiliates be
restricted from making any public announcements required by Law or the listing
requirements of the Nasdaq (on the reasonable advice of counsel). If either
Party, based on the advice of its counsel, determines that this Agreement, or
any of the Ancillary Agreements, must be publicly filed with a Governmental
Entity, then such Party, prior to making any such filing, shall provide the
other Party and its counsel with a redacted version of this Agreement (and any
other Ancillary Agreement) which it intends to file, and will give due
consideration to any comments provided by the other Party or its counsel.

 

12.02            Expenses. Except as otherwise expressly provided herein, all
costs, fees and expenses incurred in connection with the negotiation of this
Agreement, the Ancillary Agreements, the performance of the obligations
hereunder and thereunder and the consummation of the transactions contemplated
hereby and thereby, whether or not consummated, shall be paid by the Party
incurring such cost or expense.

 

12.03            Notices. All notices, demands and other communications to be
given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed to have been given (a) when personally
delivered, (b) upon confirmation of receipt when transmitted by electronic mail,
(c) the day following the day (except if not a Business Day then the next
Business Day) on which the same has been delivered prepaid to a reputable
national overnight air courier service or (d) the third Business Day following
the day on which the same is sent by certified or registered mail, postage
prepaid. Notices, demands and communications, in each case to the respective
Parties, shall be sent to the applicable address set forth below, unless another
address has been previously specified in writing:

 

Notices to Purchaser or Purchaser Parent:

 

Exela Sterile Medicines LLC

PO Box 818,

Lenoir, NC 28645-0818

Attention: Phanesh Koneru

Email: phanesh@exela.us

 

with copies (which shall not constitute notice) to:

 

Brown Rudnick LLP

7 Times Square
New York, NY

Attention: Catherine Gardner

Email: cgardner@brownrudnick.com

 

46 

 

 

Notices to Seller or Seller Parent:

 

Avadel Legacy Pharmaceuticals, LLC
16640 Chesterfield Grove Road, Suite 200

Chesterfield, MO 63005
Attention:      Legal Department
Email: legal@avadel.com

 

with copies (which shall not constitute notice) to:

 

Goodwin Procter LLP

100 Northern Ave

Boston, Massachusetts 02110
Attention:     Robert Puopolo and Jason Breen
Email:           rpuopolo@goodwinlaw.com; jbreen@goodwinlaw.com

 

Or to such other address with respect to a Party as such Party notifies the
other in writing as above provided.

 

12.04            Successors and Assigns. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the Parties
and their respective heirs, successors and permitted assigns; provided that
neither this Agreement nor any of the rights, interests or obligations hereunder
may be assigned or delegated by (a) Purchaser without the prior written consent
of Seller, or (b) Seller without the prior written consent of Purchaser.
Notwithstanding the foregoing, Purchaser may assign (without relieving it of its
obligations under) this Agreement in whole or in part to any of its Subsidiaries
or Affiliates so long as Purchaser remains liable for all obligations of
Purchaser’s obligations hereunder. For the avoidance of doubt, any permitted
assignment to an Affiliate shall be deemed null and void as of the time of the
assignment if, following such assignment, such Affiliate ceases to be an
Affiliate of the assigning Party. Any attempted assignment or transfer in
violation of this Section 12.04 shall be null and void.

 

12.05            Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable Law, but if any provision, including any phrase, sentence, clause,
section or subsection, of this Agreement is determined by a court of competent
jurisdiction to be invalid, inoperative or unenforceable for any reason, such
provision shall be modified or eliminated to the minimum extent necessary to
achieve, to the extent possible, the purpose of such provision, and the
Agreement shall otherwise remain in full force and effect and enforceable;
provided, that such modification or elimination does not affect the economic or
legal substance of this Agreement or transactions contemplated by this Agreement
in a manner adverse to any Party.

 

47 

 

 

12.06            Construction. The language used in this Agreement shall be
deemed to be the language chosen by the Parties to express their mutual intent,
and no rule of strict construction shall be applied against any Person. The
Disclosure Schedules have been arranged for purposes of convenience in
separately titled sections; provided, however, that each section of the
Disclosure Schedules shall be deemed to incorporate by reference all information
disclosed in any other section of the Disclosure Schedules to the extent its
relevance is reasonably apparent on its face. Any information set forth in any
Schedule or incorporated in any Section of the Agreement shall, to the extent
its relevance is reasonably apparent on its face, be considered to have been set
forth in each other Schedule and shall be deemed to modify the representations
and warranties in Article V of this Agreement whether or not such
representations and warranties refer to such Schedule or any Schedule; provided,
that the disclosures and information in the Schedules shall not constitute a
representation or warranty and shall not expand any representation or warranty
in Article V. The specification of any dollar amount or the inclusion of any
item in the representations and warranties contained in this Agreement or the
Disclosure Schedules or Exhibits is not intended to imply that the amounts, or
higher or lower amounts, or the items so included, or other items, are or are
not required to be disclosed (including whether such amounts or items are
required to be disclosed as material or threatened) or are within or outside of
the ordinary course of business. The information contained in this Agreement and
in the Disclosure Schedules and Exhibits hereto is disclosed solely for purposes
of this Agreement, and no information contained herein or therein shall be
deemed to be an admission by any Party to any Third Party of any matter
whatsoever (including any violation of Law or breach of contract). For purposes
of this Agreement, if Seller or a Person acting on its behalf posts a document
to the online data room hosted on behalf of Seller and located at Merrill
Datasite, such document shall be deemed to have been “delivered,” “furnished” or
“made available” (or any phrase of similar import) to Purchaser by Seller.

 

12.07            Amendment and Waiver. Any provision of this Agreement or the
Disclosure Schedules or Exhibits hereto may be amended or waived only in a
writing signed by Purchaser and Seller.

 

12.08            Entire Agreement. This Agreement (including the Exhibits and
Schedules hereto), the Ancillary Agreements (when executed and delivered) and
the Confidentiality Agreement constitute the entire agreement and supersede all
prior agreements, understandings and representations, both written and oral,
between the Parties with respect to the subject matter hereof. In the event of
any conflict between this Agreement and any agreement entered into in connection
herewith, including any Ancillary Agreement, the provisions of this Agreement
will control. The Parties agree that no Ancillary Agreement is intended or will
be construed in any way, to enhance, decrease or otherwise modify any of the
rights or obligations of Purchaser, Seller or any of their respective Affiliates
from those contained in this Agreement.

 

12.09            Third-Party Beneficiaries. Except as otherwise expressly
provided herein, nothing expressed or referred to in this Agreement will be
construed to give any Person other than the Parties any legal or equitable
right, remedy, or claim under or with respect to this Agreement or any provision
of this Agreement.

 

12.10            Purchaser Deliveries.  Purchaser agrees and acknowledges that
all documents or other items delivered or made available to Purchaser’s
Representatives shall be deemed to be delivered or made available, as the case
may be, to Purchaser for all purposes hereunder.

 

12.11            Delivery by Electronic Transmission.  This Agreement and any
signed agreement entered into in connection herewith or contemplated hereby, and
any amendments hereto or thereto, to the extent signed and delivered by means of
a facsimile machine or by .pdf, .tif, .gif, .jpeg or similar attachment to
electronic mail, shall be treated in all manner and respects as an original
contract and shall be considered to have the same binding legal effects as if it
were the original signed version thereof delivered in person. At the request of
any Party or to any such contract, each other Party or thereto shall re–execute
original forms thereof and deliver them to all other Parties. No Party or to any
such contract shall raise the use of a facsimile machine or by .pdf, .tif, .gif,
.jpeg or similar attachment to electronic mail to deliver a signature or the
fact that any signature or contract was transmitted or communicated through the
use of facsimile machine or by .pdf, .tif, .gif, .jpeg or similar attachment to
electronic mail as a defense to the formation of a contract and each such Party
forever waives any such defense.

 

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12.12            Counterparts; Effectiveness. This Agreement may be executed in
several counterparts, each of which shall be deemed an original and all of which
shall together constitute one and the same instrument. This Agreement shall
become effective when each Party shall have received a counterpart hereof signed
by all of the other Parties. Until and unless each Party has received a
counterpart hereof signed by the other Party, this Agreement shall have no
effect and no Party shall have any right or obligation hereunder (whether by
virtue of any other oral or written agreement or other communication).

 

12.13            Governing Law. All issues and questions concerning the
construction, validity, interpretation and enforceability of this Agreement and
the Exhibits and Schedules hereto shall be governed by, and construed in
accordance with, the Laws of the State of Delaware, without giving effect to any
choice of law or conflict of law rules or provisions (whether of the State of
Delaware or any other jurisdiction) that would cause the application of the Laws
of any jurisdiction other than the State of Delaware. Neither this Agreement nor
any right or obligation of any of the Parties under this Agreement shall be
governed by the U.N. Convention on Contracts for the International Sale of
Goods, and the Parties to this Agreement expressly waive or disclaim, as the
case may be, any right or obligation they may have under this Agreement pursuant
to the U.N. Convention on Contracts for the International Sale of Goods.

 

12.14            Jurisdiction. Except as otherwise expressly provided in this
Agreement, any Proceeding seeking to enforce any provision of, or based on any
matter arising out of or in connection with, this Agreement or the transactions
contemplated hereby shall be brought in the United States District Court for the
District of Delaware, the Delaware Court of Chancery of the State of Delaware or
any other court of the State of Delaware, and each of the Parties hereby
consents to the exclusive jurisdiction of such courts (and of the appropriate
appellate courts therefrom) in any such Proceeding and irrevocably waives, to
the fullest extent permitted by Law, any objection which it may now or hereafter
have to the laying of the venue of any such Proceeding in any such court or that
any such Proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such Proceeding may be served on any Party
anywhere in the world, whether within or without the jurisdiction of any such
court. Without limiting the foregoing, each Party agrees that service of process
on such Party as provided in Section 12.03 shall be deemed effective service of
process on such Party.

 

12.15            Waiver of Trial by Jury. EACH PARTY TO THIS AGREEMENT HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF
ANY CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION (A) ARISING UNDER THIS AGREEMENT
OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS AMONG
THE PARTIES IN RESPECT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS RELATED
HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN
CONTRACT, TORT, EQUITY, OR OTHERWISE. EACH PARTY TO THIS AGREEMENT HEREBY AGREES
AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT THE PARTIES TO THIS AGREEMENT
MAY FILE A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE PARTIES TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

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12.16            Non-Recourse. Except as expressly set forth herein, this
Agreement may only be enforced against, and any claim or cause of action based
upon, arising out of or related to this Agreement may only be brought against,
the Persons that are expressly named as Parties. Except to the extent named as a
Party, and then only to the extent of the specific obligations of such Parties
set forth in this Agreement, no past, present or future shareholder, member,
partner, manager, director, officer, employee, Affiliate, agent or
representative of any Party or successor or assignee of any of the foregoing
will have any liability (whether in contract, tort, equity or otherwise) for any
of the representations, warranties, covenants, agreements or other obligations
or liabilities of any of the Parties or for any claim based upon, arising out of
or related to this Agreement. IN CONNECTION WITH ANY DISPUTE HEREUNDER, EACH
PARTY HERETO WAIVES ANY CLAIM OF CONSEQUENTIAL, SPECIAL, INCIDENTAL, INDIRECT,
SPECULATIVE, TREBLE OR PUNITIVE DAMAGES, LOSS OF BUSINESS REPUTATION OR
OPPORTUNITY, LOST REVENUE, INCOME OR PROFITS, DIMINUTION IN VALUE OR SIMILAR
ITEMS FROM THE OTHER PARTY HERETO (OR ANY AFFILIATE OF SUCH OTHER PARTY HERETO),
EXCEPT THAT THE COURT SHALL HAVE THE POWER TO AWARD ANY RELIEF PROVIDED BY
GOVERNING STATUTE (IT BEING UNDERSTOOD THAT THIS WAIVER DOES NOT COVER ANY RIGHT
TO INDEMNITY FOR CONSEQUENTIAL, SPECIAL, INCIDENTAL, INDIRECT OR PUNITIVE
DAMAGES, LOST PROFITS, DIMINUTION IN VALUE OR SIMILAR ITEMS PAYABLE TO THIRD
PARTIES THAT MAY BE IMPOSED OR OTHERWISE INCURRED).

 

12.17       Specific Performance.

 

(a)            Each of the Parties acknowledges that the rights of each Party to
consummate the transactions contemplated hereby are unique and recognizes and
affirms that in the event of a breach of this Agreement by any Party, money
damages may be inadequate and the non-breaching Party may have no adequate
remedy at law. Accordingly, the Parties agree that such non breaching Party
shall have the right, in addition to any other rights and remedies existing in
their favor at law or in equity, to enforce their rights and the other Party’s
obligations hereunder not only by an action or actions for damages but also by
an action or actions for specific performance, injunctive and/or other equitable
relief (without posting of bond or other security).

 

(b)            To the extent any Party brings any Proceeding before any
Governmental Entity to enforce specifically the performance of the terms and
provisions of this Agreement prior to the Closing, the Outside Date shall
automatically be extended by (i) the amount of time during which such action,
claim, complaint or other proceeding is pending, plus [***], or (ii) such other
time period established by the court presiding over such action, claim,
complaint or other proceeding.

 

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12.18            Time is of the Essence. The Parties hereby expressly
acknowledge and agree that time is of the essence for each and every provision
of this Agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Asset Purchase
Agreement on the date first above written.

 

Purchaser: Exela Sterile MEdicines LLC   By: /s/ Phanesh Koneru       Name:
Phanesh Koneru       Title:    President and CEO     Purchaser Parent: Exela
HOLDINGS, INC.   By: /s/ Phanesh Koneru       Name: Phanesh Koneru     Title:
   Chief Executive Officer Seller:   AVADEL LEGACY PHARMACEUTICALS,
LLC     By: /s/ Gregory J. Divis       Name: Gregory J. Divis       Title:
   President       Seller Parent: AVADEL US HOLDINGS, INC.   By: /s/ Thomas S.
McHugh       Name: Thomas S. McHugh       Title:    President

 

[Signature Page to Asset Purchase Agreement]