Exhibit 10.1

EXECUTION VERSION

CONFIDENTIAL – Subject to FRE 408

THIS RESTRUCTURING SUPPORT AGREEMENT DOES NOT CONSTITUTE (NOR SHALL IT BE
CONSTRUED AS) AN OFFER WITH RESPECT TO ANY SECURITIES OR A SOLICITATION OF
ACCEPTANCES OR REJECTIONS AS TO ANY PLAN OF REORGANIZATION. ANY SUCH OFFER OR
SOLICITATION WILL COMPLY WITH ALL APPLICABLE PROVISIONS OF SECURITIES,
BANKRUPTCY, AND/OR OTHER APPLICABLE LAWS.

 

 

 

RESTRUCTURING SUPPORT AGREEMENT

AMONG

ENDOLOGIX, INC.

AND

THE SUPPORTING LENDERS IDENTIFIED HEREIN

DATED AS OF JULY 5, 2020

 

 

 

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TABLE OF CONTENTS

 

         Page   ARTICLE I        DEFINITIONS       

Section 1.1

 

Defined Terms

     6  

Section 1.2

 

Terms Defined Elsewhere in this Agreement

     15   ARTICLE II        DEFINITIVE DOCUMENTS       

Section 2.1

 

Incorporation of Exhibits and Schedules

     17  

Section 2.2

 

Definitive Documents

     17   ARTICLE III        COMMITMENTS OF THE SUPPORTING LENDERS       

Section 3.1

 

Support of Restructuring

     17  

Section 3.2

 

Rights of Supporting Lenders Unaffected

     19  

Section 3.3

 

Transfer of Claims

     20   ARTICLE IV        COMMITMENTS OF THE COMPANY       

Section 4.1

 

Commitments of the Company

     20  

Section 4.2

 

Rights of the Debtors Unaffected

     23   ARTICLE V        REPRESENTATIONS AND WARRANTIES OF THE COMPANY       

Section 5.1

 

Qualification, Organization, Subsidiaries, etc.

     24  

Section 5.2

 

Capitalization

     24  

Section 5.3

 

Corporate Authority

     25  

Section 5.4

 

Consents and Approvals

     26  

Section 5.5

 

No Violations

     26  

Section 5.6

 

SEC Filings; Financial Statements

     27  

Section 5.7

 

No Undisclosed Liabilities

     28  

Section 5.8

 

Absence of Certain Changes

     28  

Section 5.9

 

Brokers or Finders

     29  

Section 5.10

 

Litigation

     29  

Section 5.11

 

Intellectual Property

     30  

 

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Section 5.12

 

Data Privacy and Cybersecurity; IT Assets

     31  

Section 5.13

 

Real Property Leases

     32  

Section 5.14

 

Material Contracts

     32  

Section 5.15

 

Compliance with Laws; Anticorruption; Permits; Trade Compliance

     35  

Section 5.16

 

Employee Benefit Matters

     37  

Section 5.17

 

Labor Matters

     38  

Section 5.18

 

Environmental Matters

     39  

Section 5.19

 

FDA and Related Regulatory Matters

     39  

Section 5.20

 

Taxes

     42  

Section 5.21

 

Insurance

     43  

Section 5.22

 

No Other Representations; No Reliance

     43   ARTICLE VI        REPRESENTATIONS AND WARRANTIES OF THE SUPPORTING
LENDERS       

Section 6.1

 

Qualification; Organization

     44  

Section 6.2

 

Corporate Authority

     44  

Section 6.3

 

Consents and Approvals

     45  

Section 6.4

 

No Violations

     45  

Section 6.5

 

Brokers

     45  

Section 6.6

 

Ownership of Claims

     46  

Section 6.7

 

No Other Representations; No Reliance

     46   ARTICLE VII        COVENANTS       

Section 7.1

 

Interim Operations

     47  

Section 7.2

 

Access and Information

     50  

Section 7.3

 

Approvals and Consents; Cooperation; Notification

     50  

Section 7.4

 

Employee Communications

     51  

Section 7.5

 

Alternative Transaction Procedures

     51  

Section 7.6

 

Insurance

     52   ARTICLE VIII        CONDITIONS PRECEDENT       

Section 8.1

 

Conditions to Obligation of the Company and the Supporting Lenders

     53  

Section 8.2

 

Conditions to Obligation of the Company

     53  

Section 8.3

 

Conditions to Obligation of the Supporting Lenders

     54  

Section 8.4

 

Frustration of Conditions

     55  

 

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ARTICLE IX        TERMINATION       

Section 9.1

 

Termination

     55  

Section 9.2

 

Termination Upon Effective Date or Outside Date

     58  

Section 9.3

 

Effect of Termination

     59   ARTICLE X        GENERAL PROVISIONS       

Section 10.1

 

Agreement Effective Time

     60  

Section 10.2

 

No Solicitation

     60  

Section 10.3

 

Purpose of Agreement

     60  

Section 10.4

 

Admissibility of this Agreement

     61  

Section 10.5

 

Several, Not Joint Obligations

     61  

Section 10.6

 

Survival

     61  

Section 10.7

 

Public Announcements

     61  

Section 10.8

 

Notices

     61  

Section 10.9

 

Descriptive Headings; Interpretative Provisions

     62  

Section 10.10

 

Representation by Counsel; No Strict Construction

     63  

Section 10.11

 

Entire Agreement

     63  

Section 10.12

 

Governing Law and Venue; Waiver of Jury Trial

     63  

Section 10.13

 

Transaction Expenses

     64  

Section 10.14

 

Amendments and Waivers

     64  

Section 10.15

 

Parties, Succession and Assignment

     65  

Section 10.16

 

No Waiver of Participation and Reservation of Right

     65  

Section 10.17

 

No Third-Party Beneficiaries

     66  

Section 10.18

 

Counterparts; Effectiveness

     66  

Section 10.19

 

Severability

     66  

Section 10.20

 

Specific Performance

     66  

Section 10.21

 

Conflicts

     66  

Schedule 1 Company Subsidiaries

Exhibit A Restructuring Term Sheet

Exhibit B Interim DIP Order

Exhibit C Form of Transfer Joinder

Exhibit D Milestones

 

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RESTRUCTURING SUPPORT AGREEMENT

This RESTRUCTURING SUPPORT AGREEMENT (as amended, modified or supplemented from
time to time in accordance with the terms hereof, and including all exhibits,
annexes, schedules and attachments hereto, this “Agreement”), dated as of
July 5, 2020, is entered into by and among Endologix, Inc., a Delaware
corporation (“Endologix” or the “Company”), on behalf of itself and its
Subsidiaries listed on Schedule 1 hereto (each, a “Company Subsidiary” and
collectively, the “Company Subsidiaries,” and, together with Endologix, each a
“Debtor,” and collectively, the “Debtors”), Deerfield Partners, L.P. (“DPLP”),
Deerfield Private Design Fund III, L.P. (“PDIII”) and Deerfield Private Design
Fund IV, L.P. (“PDIV” or “Term Loan Agent”, and together with DPLP and PDIII,
the “Supporting Lenders”), the lenders pursuant to that certain Amended and
Restated Facility Agreement, dated as of August 9, 2018 (as amended,
supplemented, or otherwise modified from time to time in accordance with the
terms thereof, the “Prepetition Facility Agreement”), by and among the Term Loan
Agent, as agent, and the Supporting Lenders, as lenders, the lenders pursuant to
that certain Credit Agreement, dated as of August 9, 2018 (as amended,
supplemented, or otherwise modified from time to time in accordance with the
terms thereof, the “Prepetition Credit Agreement”), by and among Deerfield ELGX
Revolver, LLC, as agent (in such capacity, the “ABL Agent”, and together with
the Term Loan Agent the “Prepetition Agents”), and the Supporting Lenders, as
lenders (the “Prepetition Lenders”). The Company and the Supporting Lenders are
each referred to herein as a “Party” and collectively, the “Parties.”
Capitalized terms used herein but not otherwise defined have the meanings
ascribed to them in the Restructuring Term Sheet.

RECITALS

WHEREAS, the Debtors are engaged in the business of, directly or indirectly,
researching, developing, manufacturing, marketing and selling medical devices
for the treatment of aortic disorders (including abdominal aortic aneurysms
(“AAA”)) and other products that are as of the date of this Agreement being
researched, developed, tested (including through clinical trials),
commercialized, manufactured, stored, sold, licensed, or distributed by or on
behalf of any of the Debtors, including (i) the AFX® Endovascular AAA System,
(ii) the Ovation® Abdominal Stent Graft System (including the Ovation Alto®
Abdominal Stent Graft System) and (iii) the Nellix® Endovascular Aneurysm
Sealing System (such business, the “Business”; and such products, including
(i)-(v) and any other medical devices, materials, methods, processes, materials,
products or therapies, that are distributed by the Company, including those that
have been acquired, or have been or are under development, manufacture,
distribution or commercialization, by or on behalf of any of the Debtors
(including any Affiliate thereof), taken together, the “Products”);

WHEREAS, the Company and the ABL Agent entered into that certain Forbearance
Agreement, dated May 26, 2020 (as amended from time to time, the “Term Loan
Forbearance Agreement”), under which the ABL Agent agreed to forbear from
exercising certain default-related rights and remedies against the Company with
respect to certain specified defaults under the Prepetition Credit Agreement;

 

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WHEREAS, the Prepetition Agents hold first priority (subject to certain
Permitted Liens (as defined in the Prepetition Credit Agreement and Prepetition
Facility Agreement)) liens on all Collateral, Patent Collateral and Trademark
Collateral, as applicable (as defined in the Prepetition Security Agreements),
which includes all of the assets of the Debtors, including all Company
Intellectual Property, except for Excluded Property and Excluded Accounts (as
defined in the Prepetition Security Agreements);

WHEREAS, as of the date and time of this Agreement, the Company has not
commenced a case under chapter 11 of Title 11 of the United States Code (the
“Bankruptcy Code”);

WHEREAS, the Parties have negotiated a restructuring of the Company (the
“Restructuring”) which shall be implemented in accordance with a pre-negotiated
chapter 11 plan of reorganization, a copy of which has been provided to the
Prepetition Agents (the “Plan”) that implements a reorganization and
recapitalization of the Company pursuant to chapter 11 cases (the “Chapter 11
Cases”) commenced under the Bankruptcy Code in the United States Bankruptcy
Court for the Northern District of Texas (the “Bankruptcy Court”) which will be
filed on the Petition Date (as defined below), and which will be subject to the
Debtors’ evaluation of Alternative Transactions in accordance with the terms
hereof;

WHEREAS, subject to the Company’s evaluation of Alternative Transactions as set
forth herein, the Restructuring contemplated by this Agreement shall be
implemented upon the terms and conditions set forth in the term sheet attached
hereto as Exhibit A (together with all exhibits, schedules, and attachments
thereto and as amended, supplemented, or otherwise modified from time to time in
accordance with the terms hereof, the “Restructuring Term Sheet”);

WHEREAS, subject to Bankruptcy Court approval, the Debtors have obtained the
agreement of the Prepetition Agents for (a) the DIP Facility (as defined below)
on the terms and conditions set forth in a debtor-in-possession credit
agreement, whose form and substance shall be acceptable to the DIP Agent and the
Company and (b) the consensual use of “cash collateral” in each case pursuant to
the terms and conditions of the proposed DIP order attached hereto as Exhibit B
(the “Interim DIP Order”) and a proposed final order to be on terms
substantially identical to the terms set forth in the Interim DIP Order with
such changes necessary to convert the Interim DIP Order into a final order (the
“Final DIP Order” and together with the Interim DIP Order the “DIP Orders” and
each a “DIP Order”) to be entered by the Bankruptcy Court in form and substance
mutually acceptable to the Company and the DIP Agent;

WHEREAS, in order to effectuate the Restructuring, the Debtors intend to file
petitions commencing (the date of commencement being the “Petition Date”) the
Chapter 11 Cases under chapter 11 of the Bankruptcy Code;

WHEREAS, this Agreement is the product of arm’s-length, good-faith negotiations
among the Parties and is not intended to be and shall not be deemed to be a
solicitation of acceptances of any chapter 11 plan; and

WHEREAS, the Parties have agreed to support the Restructuring subject to and in
accordance with the terms of this Agreement and to use commercially reasonable
efforts to

 

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complete the negotiation of the terms of the documents and completion of the
actions specified to effect the Restructuring in accordance with the
Restructuring Term Sheet.

NOW, THEREFORE, in consideration of the promises and mutual covenants and
agreements herein contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties covenant
and agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Defined Terms. As used in this Agreement, the following terms have
the following meanings:

“Affiliate” means, with respect to any Person, any other Person that, directly
or indirectly, controls, is controlled by, or is under common control with, such
Person, and the term “control” (including the terms “controlled by” and “under
common control with”) 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 ownership of voting securities, by contract or otherwise.

“Agreement” has the meaning set forth in the Preamble and shall include the
Exhibits, Annexes and Schedules annexed hereto or referred to herein.

“Alternative Transaction” means (i) any alternative refinancing,
recapitalization, share exchange, rights offering, equity investment or other
transaction or any purchase, sale, or other disposition of all or a material
portion of a Debtor’s business or assets, except for the sale of assets in the
ordinary course of business, in each case, other than pursuant to the
Restructuring, (ii) any issuance, sale, or other disposition of any equity
interest (including securities or instruments directly or indirectly convertible
or exchangeable into equity but excluding any intercompany transactions
necessary or desirable in connection with the Restructuring) in a Debtor (by
such Debtor) in each case other than the Restructuring, (iii) any merger,
acquisition, consolidation, or other business combination transaction involving
a Debtor (excluding any intercompany transactions necessary or contemplated in
connection with the Restructuring) or (iv) any other reorganization,
restructuring or other transaction the purpose or effect of which is to
restructure a significant portion of the Debtor’s business or assets or result
in a significant reduction of the Debtors’ outstanding indebtedness.

“Antitrust Laws” means any applicable supranational, national, federal, state,
county or local antitrust, competition or trade regulation Laws that are
designed or intended to prohibit, restrict or regulate actions having the
purpose or effect of monopolization or restraint of trade or lessening
competition through merger or acquisition, including the HSR Act, the Sherman
Act, the Clayton Act and the Federal Trade Commission Act, in each case, as
amended, and other similar antitrust, competition or trade regulation Laws of
any jurisdiction other than the United States.

“Approved KEIP” means that certain Key Employee Incentive Plan as consented to
by the Supporting Lenders prior to the Petition Date.

 

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“Approved KERP” means that certain Key Employee Retention Plan as consented to
by the Supporting Lenders prior to the Petition Date.

“Board” means the Board of Directors of Endologix. During the term of this
Agreement, the Board shall at all times include one (1) independent director
designated by the Agent (as defined in the Term Loan Forbearance Agreement) in
accordance with the terms of the Term Loan Forbearance Agreement.

“Books and Records” means all documents of, or otherwise in the possession,
custody or control of, or used by, the Debtors in connection with, or relating
to, the Business or the operations of the Debtors, including all books and
records (financial, laboratory and otherwise), files, instruments, papers,
microfilms, photographs, letters, budgets, forecasts, ledgers, journals, title
policies, lists of past, present and/or prospective customers, supplier lists,
regulatory filings, billing records, and patient support and market research
programs and related databases, documents relating to the filing, prosecution,
maintenance, enforcement or defense of Intellectual Property, technical
documentation (design specifications, functional requirements, operating
instructions, manufacturing procedures, methods, and records, validation
protocols and records, supplier qualification and purchasing information, logic
manuals, flow charts, etc.), user documentation (installation guides, user
manuals, training materials, release notes, working papers, etc.), data
(including safety data, clinical trial data, patient data), reports (including
environmental reports and assessments), plans, mailing lists, price lists,
marketing information and procedures, advertising and promotional materials,
equipment records, warranty information, architects agreements, construction
contracts, drawings, plans and specifications, records of operations, standard
forms of documents, and related books, records and workpapers, manuals of
operations or business procedures and other similar procedures (including all
discs, tapes and other media-storage data containing such information), all
non-conforming material reports and assessments, complaint files and adverse
event files in the safety and quality databases of the Debtors or their
Affiliates, in each case, whether or not in electronic form.

“Business Day” means any day other than Saturday, Sunday and any day that is a
legal holiday or a day on which banking institutions in New York, New York are
authorized by Law or other governmental action to close.

“Business Permits” means all Permits that are required for the operation of the
Business, in each case, as conducted or owned and used by the Debtors on the
date of this Agreement.

“Cause of Action” means any action, suit, claim, complaint, litigation,
investigation, proceeding, arbitration or other similar dispute by or before any
Governmental Entity.

“Claim” means any “claim” (as defined in section 101(5) of the Bankruptcy Code)
against the Debtors.

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

“Company Intellectual Property” means all Intellectual Property owned or
purported to be owned by the Company or any of its Subsidiaries, including all
Company Registered Intellectual Property (other than Company Registered
Intellectual Property identified on Section 5.11(a)(ii) of the Company
Disclosure Letter), and all of the Company’s and each of its

 

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Subsidiaries’ rights therein, and, in the case of Trademarks, all goodwill
associated with or symbolized thereby.

“Company IT Assets” means the IT Assets owned, used or held for use by any of
the Company or any of its Subsidiaries.

“Company Specified Representations” means the representations and warranties
contained in the first sentence of Section 5.1, Section 5.3 and Section 5.9.

“Confirmation Order” has the meaning set forth in the Restructuring Term Sheet.

“Contract” means any agreement, commitment, promise, undertaking, contract,
subcontract, settlement agreement, lease, sublease, instrument, permit,
concession, franchise, binding understanding, note, option, bond, mortgage,
indenture, trust document, loan or credit agreement, license, sublicense,
insurance policy or other legally binding commitment or instrument, whether
written or oral.

“Copyrights” means all copyrights and applications for copyright.

“Debtor Plan” means any benefit or compensation plan, program, policy, practice,
agreement, contract, arrangement or other obligation, whether or not in writing
and whether or not funded, in each case, which is sponsored or maintained by, or
required to be contributed to, or with respect to which any potential liability
is borne by, any of the Debtors or any of their Subsidiaries. Debtor Plans
include, but are not limited to, “employee benefit plans” within the meaning of
Section 3(3) of ERISA, whether or not subject to ERISA, employment, consulting,
retirement, severance, separation, termination or change in control agreements,
relocation, repatriation, expatriation, termination pay, performance awards,
bonuses, incentives, equity-based awards, phantom equity, supplemental
retirement, deferred compensation, profit sharing, insurance, medical, welfare,
fringe or other benefits, but excluding any such plans established pursuant to
statute.

“Deerfield” means Deerfield Management Company, L.P. and its Affiliates.

“Definitive Documents” has the meaning set forth in the Restructuring Term
Sheet.

“DIP Agent” has the meaning set forth in the Restructuring Term Sheet.

“DIP Facility” has the meaning set forth in the Restructuring Term Sheet.

“Disclosure Statement” has the meaning set forth in the Restructuring Term
Sheet.

“Disclosure Statement Order” means the order to be entered by the Bankruptcy
Court approving the Disclosure Statement and Solicitation Materials as
containing, among other things, “adequate information” as required by section
1125 of the Bankruptcy Code.

“Effective Date” means the date that the Plan becomes effective.

 

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“Encumbrance” means any lien, pledge, hypothecation, mortgage, deed of trust,
security interest, encumbrance, covenant, charge, claim, lease, sublease,
option, right of first refusal, easement, servitude, restrictive covenant,
encroachment, right of use or possession, right of way, encroachment, occupancy
right, preemptive right, community property interest or restriction of any
nature, whether arising prior to or subsequent to the commencement of the
Chapter 11 Cases, and whether imposed by Law, Contract or otherwise.

“Entity” has the meaning set forth in Section 101(15) of the Bankruptcy Code.

“Environmental Laws” means all Laws relating to the protection of the
environment.

“Equity Interests” means all equity interests of any kind, including common and
preferred stock, options, warrants and other agreements or rights to acquire the
same (including any arising under or in connection with any employment
agreement, incentive plan, benefit plan, or the like).

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and the regulations promulgated and rulings issued thereunder.

“ERISA Affiliate” means, with respect to any entity, trade or business, any
other entity, trade or business that is a member of a group described in
Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA that
includes the first entity, trade or business, or that is a member of the same
“controlled group” as the first entity, trade or business pursuant to
Section 4001(a)(14) of ERISA.

“ERISA Plan” means an “employee benefit plan” within the meaning of Section 3(3)
of ERISA.

“Estates” means individually or collectively, the estate or estates of each
Debtor created under section 541 of the Bankruptcy Code.

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

“Excluded Matter” has the meaning set forth in the definition of “Material
Adverse Effect”.

“Exit Facility” has the meaning set forth in the Restructuring Term Sheet.

“Exit Facility Documents” means the documents and agreements memorializing and
otherwise related to the Exit Facility.

“Expense Reimbursement Amount” means the dollar amount equal to the aggregate
amount of all reasonable and documented out of pocket costs, expenses and fees
incurred by the Supporting Lenders or their respective Affiliates, in connection
with evaluating, negotiating, documenting and performing the transactions
contemplated by this Agreement, the Restructuring Term Sheet and the Definitive
Documents, including fees, costs and expenses of any professionals (including
financial advisors, outside legal counsel, accountants, experts and consultants)
retained by the Supporting Lenders or their respective Affiliates in connection
with

 

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or related to the authorization, preparation, investigation, negotiation,
execution and performance of this Agreement, the transactions contemplated
hereby, including the Chapter 11 Case and other judicial and regulatory
proceedings related to such transactions, which amount shall, subject to
Bankruptcy Court approval, constitute an administrative expense priority claim
under Section 503(b)(1)(A) of the Bankruptcy Code and shall be payable as set
forth in Section 9.3(b).

“FDA” means the United States Food and Drug Administration.

“FDCA” means the U.S. Federal Food, Drug and Cosmetic Act of 1938, as amended
(21 U.S.C. § 301 et seq.).

“Final Order” means an Order which has not been stayed (or with respect to which
any stay has been lifted) and (i) as to which the time to file an appeal, a
motion for rehearing or reconsideration (excluding any motion under
Section 60(b) of the Federal Rules of Civil Procedure) or a petition for writ of
certiorari has expired and no appeal, motion, stay or petition is pending, or
(ii) in the event that such an appeal or petition thereof has been sought,
either (A) such Order shall have been affirmed by the highest court to which
such Order was appealed or certiorari shall have been denied, and the time to
take any further appeal or petition of certiorari shall have expired or (B) such
appeal, motion, stay or petition shall not have been granted and shall no longer
be pending and the time for seeking such appeal, motion, stay or petition shall
have expired.

“GAAP” means United States generally accepted accounting principles.

“Governmental Entity” means any U.S. or non-U.S. governmental or regulatory
authority, agency, commission, body, court or other legislative, executive,
judicial, or administrative governmental entity at any level, or any agency,
department or instrumentality thereof.

“Guarantors” means (i) CVS/DMS Acquisition Corp., (ii) Nellix, Inc., (iii)
TriVascular Technologies, Inc., (iv) TriVascular, Inc., (v) Endologix Canada,
LLC, (vi) TriVascular Sales LLC and (vii) RMS/Endologix Sideways Merger Corp.

“Hazardous Substance” means any substance that is listed, classified or
regulated pursuant to any Environmental Law.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.

“Indebtedness” means, with respect to any Person, (a) all obligations for
borrowed money, (b) all obligations evidenced by bonds, debentures, notes or
similar instruments, (c) all Indebtedness of others secured by any Encumbrance
on owned or acquired property of the reference Person, whether or not the
Indebtedness secured thereby has been assumed, (d) all guarantees (and any other
arrangement having the economic effect of a guarantee) of Indebtedness of
others, (e) all obligations, contingent or otherwise, of such Person as an
account party in respect of financial guaranties, letters of credit, letters of
guaranty, surety bonds and other similar instruments, (f) all obligations
representing the deferred and unpaid purchase price of property (other than
trade payables incurred in the ordinary course of business consistent with

 

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past practice), (g) all obligations, contingent or otherwise, in respect of
bankers’ acceptances and (h) net cash payment obligations of such Person under
swaps, options, derivatives and other hedging agreements or arrangements that
will be payable upon termination thereof (assuming they were terminated on the
date of determination).

“Intellectual Property” means all intellectual property rights and proprietary
rights of any kind or nature, including any and all of the following arising in
any jurisdiction of the world: (a) Patents; (b) Trademarks; (c) Trade Secrets;
(d) Copyrights; (e) internet domain names; and (f) all applications for, and
registrations of, any of the foregoing.

“Inventory” means any and all raw materials, packaging and labelling materials,
components, parts or other supplies or inventories to which the Debtors have
title that are in the possession of the Debtors or any third party and used or
held for use in connection with any Product or related to the Business, whether
located at any premises of the Debtors or elsewhere.

“IRS” means the Internal Revenue Service of the United States.

“IT Assets” means technology devices, computers, Software, servers, networks,
workstations, routers, hubs, circuits, switches, data communications lines, and
all other information technology equipment and all associated documentation.

“Knowledge of the Debtors” means the actual knowledge of the individuals set
forth on Section 1.1 of the Company Disclosure Letter.

“Law” means any U.S. or non-U.S. federal, state, provincial or local law,
statute, code, ordinance, rule, regulation, Order, stipulation, award or common
law requirement.

“Lender Specified Representations” means the representations and warranties
contained in the first sentence of Section 6.1, Section 6.2 and Section 6.5.

“Liability” means any debt, loss, liability, claim (including “claim” as defined
in the Bankruptcy Code), commitment, undertaking, damage, expense, fine,
penalty, cost, royalty or obligation (including those arising out of any action,
such as any settlement or compromise thereof or judgment or award therein), of
any nature, whether known or unknown, disclosed or undisclosed, express or
implied, primary or secondary, direct or indirect, matured or unmatured, fixed,
absolute, contingent, accrued or unaccrued, asserted or not asserted, liquidated
or unliquidated, and whether due or to become due, and whether in Contract, tort
or otherwise.

“Material Adverse Effect” means any event, change, effect, condition, state of
facts or occurrence (regardless of whether such event, change, effect,
condition, state of facts or occurrence constitutes a breach of any
representation, warranty or covenant of the Debtors hereunder) which has had or
would reasonably be expected to have, individually or when considered together
with any other events, changes, effects, conditions, states of facts or
occurrences, (a) a material adverse effect on or a material adverse change in or
to the business, results of operations, financial condition, assets, or
liabilities of the Company and its Subsidiaries (taken as a whole) or (b) a
material adverse effect on the ability of the Debtors to consummate the
Transactions or perform their obligations under this Agreement or the
Restructuring Term Sheet on a timely basis; provided, however, that a Material
Adverse Effect shall not be deemed

 

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to include events, changes, effects, conditions, states of facts or occurrences
arising out of, relating to or resulting from: (i) changes in the United States
or foreign economies or financial markets in general, (ii) general changes or
developments in business, regulatory or macroeconomic conditions or trends that
affect the industries and markets in which the Business operates, (iii) public
announcement of this Agreement or the Chapter 11 Cases, the public announcement
or the consummation of the Restructuring and the Transactions, the commencement
of the Chapter 11 Cases or the identity of the Supporting Lenders, (iv) any
action or omission by the Supporting Lenders in breach of this Agreement,
(v) any action which is expressly requested in writing by a Supporting Lender,
(vi) changes in any applicable Laws or applicable accounting regulations or
principles or the enforcement or interpretation thereof, (vii) any outbreak or
escalation of hostilities or war or any act of terrorism or natural disaster or
act of God (except to the extent related to any effects or conditions resulting
from a disease or pandemic, including SARS-CoV-2 or COVID-19, or any
governmental or other response thereto, in each case, whether or not involving
the United States or any other country in which the Company or any of its
Subsidiaries operate) and (viii) any failure of the Business to meet any
budgets, plans, projections or forecasts (internal or otherwise) or any decline
in the trading price or trading volume of the Company’s common stock or any
change in the ratings or ratings outlook for the Company as a result of the
commencement of the Chapter 11 Cases (each of clauses (i) through (viii), an
“Excluded Matter”); provided further that with respect to clauses (i), (ii),
(vi) and (vii), such effects shall not be deemed to arise out of, relate to or
result from an Excluded Matter to the extent the same disproportionately
adversely affects the Company and its Subsidiaries or the Business, in each
case, taken as a whole, as compared to other similarly situated entities or
businesses.

“Milestones” means those Milestones set forth in Exhibit D.

“Nasdaq” means the Nasdaq Stock Exchange.

“OFAC” means the Office of Foreign Asset Control of the United States Department
of the Treasury.

“Order” means any order, injunction, judgment, decree, ruling, writ, assessment
or arbitration award of, or entered, issued, made or rendered by, a Governmental
Entity, or any settlement agreement entered in connection therewith.

“Outside Date” means October 5, 2020 at 11:59 p.m. Eastern Time.

“Patents” means patents and patent applications, invention disclosures and
rights in respect of utility models or industrial designs, including all related
continuations, continuations-in-part, divisionals, reissues, re-examinations,
renewals, revisions, supplementary protection certificates, substitutions, and
extensions thereof.

“Permits” means all licenses, permits, franchises, approvals, registrations,
listings, authorizations, consents or orders of, or filings with, any
Governmental Entity.

“Permitted Encumbrance” means any (a) Encumbrances for Taxes not yet due and
payable or that are being contested in good faith through appropriate
proceedings, (b) Encumbrance for assessments and other governmental charges or
landlords’, carriers’,

 

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warehousemen’s, mechanics’, repairmen’s, workers’ or any similar Encumbrance
incurred in the ordinary course of business consistent with past practice, in
each case, for sums not yet due and payable or due, but not delinquent or being
contested in good faith by appropriate proceedings, (c) Encumbrance imposed or
promulgated by applicable Law or any Governmental Entity with respect to real
property, including zoning, building, fire, health and Environmental Laws and
similar regulations, (d) pledges or deposits in connection with workers’
compensation, unemployment insurance, social security and other similar
legislation, (e) Encumbrance incurred in the ordinary course of business
consistent with past practice, in connection with workers’ compensation,
unemployment insurance and other types of social security, (f) licenses,
covenants not to sue or similar rights with respect to Intellectual Property
that are granted in the ordinary course of business and (g) those Encumbrances
granted under the DIP Orders.

“Person” means any individual, partnership, joint venture, limited liability
company, corporation, trust, unincorporated organization, group, governmental or
regulatory authority, or any other legal entity or association, including the
United States Trustee and any official or ad hoc committee formed in the
Chapter 11 Cases.

“Personal Information” means any information or data that alone, or together
with any other data or information, identifies any person or device, and any
other personal information whose processing, security, collection, storage, use,
disclosure, transfer or other exploitation is governed under any applicable Laws
with respect to privacy or data protection.

“Plan Supplement” means the documents and forms of documents, schedules and
exhibits to the Plan, to be filed by the Debtors no later than ten (10) calendar
days before the deadline to vote on the Plan filed with the Bankruptcy Court
(including any amendments or supplements thereto). Such documents shall be
consistent with the terms of the Restructuring, the Restructuring Term Sheet and
the Plan and acceptable in form and substance to the Parties.

“Post-Restructuring Insurance” means insurance (under one or more policies,
including product liability insurance) that is acceptable to the Supporting
Lenders in their sole discretion providing coverage for the risks of the
Business and the Reorganized Debtors and their properties and assets.

“Prepetition Security Agreements” means (i) the Amended and Restated Guaranty
and Security Agreement, dated August 9, 2018, among the Company, the Term Loan
Agent and the Guarantors, as amended, supplemented, or otherwise modified from
time to time in accordance with the terms thereof, (ii) the Guaranty and
Security Agreement, dated as of August 9, 2018, among the Company, the ABL Agent
and the Guarantors, as amended, supplemented, or otherwise modified from time to
time in accordance with the terms thereof, (iii) the Patent Security Agreement,
dated as of August 9, 2918, among the Company, Nellix, Inc., TriVascular, Inc.
and the ABL Agent, as amended, supplemented, or otherwise modified from time to
time in accordance with the terms thereof and (iv) the Trademark Security
Agreement, dated as of August 9, 2018, among the Company, TriVascular, Inc. and
the ABL Agent, as amended, supplemented, or otherwise modified from time to time
in accordance with the terms thereof.

“Registered Intellectual Property” means all applications, registrations and
filings for Intellectual Property that have been registered or filed with or by,
or are the subject of an

 

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application before, any Governmental Entity or internet domain name registrar,
including the United States Patent and Trademark Office or United States
Copyright Office, including issued Patents and Patent applications, registered
Trademarks and Trademark applications, registered Copyrights and Copyright
applications, and internet domain name registrations.

“Regulatory Authority” means any national or supranational Governmental Entity,
including the FDA, with responsibility for granting any license, registrations
or approvals with respect to the Products.

“Representatives” means, when used with respect to any Person, the directors,
officers, partners, managers, employees, consultants, financial advisors,
accountants, counsel, investment bankers and other agents, advisors and
representatives of such Person and its Subsidiaries.

“Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002, as amended.

“SEC” means the United States Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended.

“Software” means any and all (a) computer programs and other software, including
software implementations of algorithms, models, and methodologies, whether in
source code, object code or other form, including libraries, subroutines and
other components thereof, together with input and output formats;
(b) computerized databases and other computerized compilations and collections
of data or information; (c) screens, user interfaces, command structures, report
formats, templates, menus, buttons and icons; (d) descriptions, flow charts,
architectures, development tools, and other materials used to design, plan,
organize and develop any of the foregoing; and (e) all documentation, including
development, diagnostic, support, user and training documentation related to any
of the foregoing.

“Solicitation Materials” means, collectively, the Disclosure Statement and the
other solicitation materials in respect of the Plan.

“Subsidiary” means with respect to any Person, any corporation, limited
liability company, partnership or other organization, whether incorporated or
unincorporated, of which (a) at least a majority of the outstanding shares of
capital stock of, or other Equity Interests, having by their terms ordinary
voting power to elect a majority of the board of directors or others performing
similar functions with respect to such corporation, limited liability company,
partnership or other organization is directly or indirectly owned or controlled
by such Person or by any one or more of its Subsidiaries, or by such Person and
one or more of its Subsidiaries or (b) with respect to a partnership, such
Person or any other Subsidiary of such Person is a general partner of such
partnership.

“Takeover Statute” means any “fair price,” “moratorium,” “control share
acquisition” or other similar anti-takeover Law.

“Tax” or “Taxes” means any and all U.S. federal, state, local and non-U.S.
taxes, assessments, levies, duties, tariffs, imposts and other similar charges
and fees imposed by any Governmental Entity, including income, franchise,
windfall or other profits, gross receipts,

 

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property, sales, use, net worth, capital stock, payroll, employment, social
security, workers’ compensation, unemployment compensation, excise, withholding,
ad valorem, stamp, transfer, value-added, occupation, environmental, disability,
real property, personal property, registration, alternative or add-on minimum,
or estimated tax, including any interest, penalty, additions to tax and any
additional amounts imposed with respect thereto.

“Tax Return” means any return, filing, report, questionnaire, information
statement, claim for refund or declaration of estimated Taxes, including any
schedule or attachment thereto or any amendment thereof, filed or required to be
filed with any Taxing Authority in connection with the determination, assessment
or collection of any Tax, or the administration of any laws, regulations or
administrative requirements relating to any Tax, including consolidated,
combined and unitary tax returns.

“Taxing Authority” means any U.S. federal, state, local or non-U.S. Governmental
Entity or authority exercising regulatory authority in respect of taxes or
responsible for the imposition of any Tax.

“Trade Secrets” means trade secrets and rights in confidential or proprietary
information, inventions, know-how, discoveries, methods, processes, formulae,
models, methodologies, drawings, prototypes, designs, customer lists and
supplier lists.

“Trademarks” means trademarks, trade names, service marks, trade dress,
certification marks, collective marks, d/b/a’s, symbols, design rights and other
similar designations of origin, together with the goodwill associated with or
symbolized by any of the foregoing.

“Transaction Expenses” means all fees and expenses of the Prepetition Agents,
the Supporting Lenders, and each of their advisors, that are incurred in
connection with the Restructuring.

“Transactions” means the acquisition of the Equity Interests of the reorganized
Debtors by the Supporting Lenders in accordance with the terms hereof and the
Restructuring Term Sheet.

Section 1.2 Terms Defined Elsewhere in this Agreement. The following terms are
defined elsewhere in this Agreement, as indicated below:

 

510(k)s    Section 5.19(b) AAA    Recitals ABL Agent    Preamble Agreement   
Preamble Alternative Transaction Notice Period    Section 7.5(b) Bankruptcy Code
   Recitals Bankruptcy Court    Recitals Business    Recitals Chapter 11 Cases
   Recitals Company    Preamble Company Disclosure Letter    Article V

 

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Company Registered Intellectual Property    Section 5.11(a) Company SEC
Documents    Section 5.6(a) Company Subsidiaries    Preamble Company Termination
Event    Section 9.1(d) Consent    Section 5.4 Debtor    Preamble Debtors   
Preamble DIP Order    Recitals DIP Orders    Recitals DPLP    Preamble Effective
Period    Section 3.1 Endologix    Preamble Enforceability Limitations   
Section 5.3 Excluded Matter    Section 1.1 FDA Law and Regulation   
Section 5.19(a) FDCA Permits    Section 5.19(b) Final DIP    Recitals Financial
Statements    Section 5.6(e) Insurance Policies    Section 5.21 Interim DIP
Order    Recitals Leases    Section 5.13(b) Material Contracts   
Section 5.14(a) Notice    Section 10.8 Other Motions    Section 4.1(b) Parties
   Preamble Party    Preamble PDIII    Preamble PDIV    Preamble Petition Date
   Recitals Plan    Recitals PMAs    Section 5.19(b) Prepetition Agents   
Preamble Prepetition Agreement Claims    Section 3.3 Prepetition Credit
Agreement    Preamble Prepetition Facility Agreement    Preamble Prepetition
Lenders    Preamble Privacy and Security Policies    Section 5.12(b) Products   
Recitals Proposed Alternative Transaction    Section 7.5(a) Restructuring   
Recitals Restructuring Term Sheet    Recitals Revised Supporting Lender Proposal
   Section 7.5(c) Successor    Section 9.3(c) Superior Alternative Transaction
   Section 7.5(b) Supporting Lender    Preamble Supporting Lender Termination
Event    Section 9.1(b)

 

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Term Loan Agent    Preamble Term Loan Forbearance Agreement    Recitals Third
Day Review Pleadings    Section 4.1(b) Transfer    Section 3.3 Transferee   
Section 3.3 Transferee Joinder    Section 3.3

ARTICLE II

DEFINITIVE DOCUMENTS

Section 2.1 Incorporation of Exhibits and Schedules. Each of the exhibits and
schedules attached hereto, including the Restructuring Term Sheet and all
exhibits thereto, are expressly incorporated by reference and made part of this
Agreement as if fully set forth herein. The Restructuring Term Sheet (including
each of the exhibits thereto) sets forth the material terms and conditions of
the Plan and the Restructuring. Except as otherwise provided herein, neither
this Agreement, the Restructuring Term Sheet nor any provision hereof or thereof
may be modified, amended, waived or supplemented except in accordance with
Section 10.14.

Section 2.2 Definitive Documents. The Definitive Documents, including any
amendments, supplements or modifications thereof, shall contain terms and
conditions consistent in all respects with this Agreement and the Restructuring
Term Sheet. The Parties acknowledge and agree that (a) the Debtors provided
advance draft copies of the Plan and Disclosure Statement to counsel to the
Supporting Lenders; and (b) they will each use commercially reasonable efforts
to provide advance draft copies of all other Definitive Documents and other
pleadings (excluding pleadings of an administrative or ministerial nature) to
counsel to the other Parties at least three (3) Business Days prior to the date
when any Party intends to file such pleading or other document, if applicable;
provided, however, if circumstances reasonably prevent a Party from providing
such drafts at least three (3) Business Days prior to filing, no Party shall be
precluded from filing such Definitive Document and other pleadings, but such
Party shall use commercially reasonable efforts to provide a draft to the other
Parties as soon as practicable under the circumstances prior to such filing;
provided further, however, that the Debtors shall not be required to provide
draft copies of any declarations, retention applications, any fee statements, or
any fee applications to counsel to the Supporting Lenders.

ARTICLE III

COMMITMENTS OF THE SUPPORTING LENDERS

Section 3.1 Support of Restructuring. From the date of this Agreement and as
long as this Agreement has not been terminated pursuant to its terms (such
period, the “Effective Period”), subject to the terms of this Agreement, each
Supporting Lender severally agrees that it shall:

(a) negotiate in good faith all Definitive Documents, reasonably agree to
extensions of the Milestones to the extent required to accommodate the
Bankruptcy Court’s

 

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calendar, and comply with each of its other covenants and commitments set forth
in this Agreement and the Restructuring Term Sheet;

(b) provide prompt written notice to the Company between the date of this
Agreement and the Effective Date of (i) the occurrence, or failure to occur, of
any event of which the occurrence or failure to occur would be reasonably likely
to cause any Lender Specified Representations to be untrue or inaccurate in any
respect or any other representation or warranty of the Supporting Lenders
contained in this Agreement to be untrue or inaccurate in any material respect,
(ii) any material breach of any covenant of the Supporting Lenders contained in
this Agreement, (iii) any event, condition, fact, or circumstance that would
make the timely satisfaction of any of the conditions set forth in Article VIII
impossible or unlikely, (iv) the receipt of any written notice from any third
party alleging that the consent of such party is or may be required as a
condition precedent to consummation of the Transactions or (v) the receipt of
any written notice from any Governmental Entity that is material to the
consummation of the Transactions;

(c) (i) subject to receipt of the Disclosure Statement and other Solicitation
Materials approved by the Disclosure Statement Order, timely vote, or cause to
be voted, all of its Claims to accept the Plan following the commencement of
solicitation of votes for the Plan, by delivering their duly executed and
completed ballots accepting the Plan; (ii) refrain from changing, revoking or
withdrawing (or causing such change, revocation or withdrawal of) such vote or
consent; provided, however, that such vote may be revoked (and, upon such
revocation, deemed void ab initio) by such Supporting Lender at any time
following the termination of this Agreement as to such Supporting Lender
pursuant to the terms hereof; and (iii) not object to, delay, postpone,
challenge, reject, oppose or take any other action that would reasonably be
expected to prevent, interfere with, delay or impede, directly or indirectly,
the releases and exculpations set forth in the Plan and to the extent it is
permitted to elect whether to opt in or opt out of any agreed upon releases or
exculpations set forth in the Plan, to elect to opt in, and not to elect to opt
out of, the releases set forth in the Plan so long as such release may be
revoked (and, upon such revocation, deemed void ab initio) by such Supporting
Lender at any time following the termination of this Agreement as to such
Supporting Lender pursuant to the terms hereof;

(d) to the extent that a legal or structural impediment to consummation of the
Plan arises outside of the jurisdiction of the Bankruptcy Court, and such legal
or structural impediment does not otherwise provide the Supporting Lenders with
a right to terminate this Agreement, negotiate in good faith to address any such
impediment; and

(e) not:

(i) object to, delay, postpone, challenge, reject, oppose or take any other
action that would reasonably be expected to prevent, interfere with, delay or
impede, directly or indirectly, in any material respect, the approval,
acceptance or implementation of the Restructuring on the terms set forth herein
or in the Restructuring Term Sheet;

(ii) object to or oppose, or support any other Person’s efforts to object to or
oppose, any motions filed by the Company that are consistent with this
Agreement,

 

18

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including any request by the Company to extend its exclusive periods solely to
file the Plan and solicit acceptances thereof;

(iii) object to, or vote to reject, the Plan or any other Definitive Document
that comports with this Agreement; provided that the Supporting Lenders shall be
entitled to object to or vote to reject the Plan or any Definitive Document on
the basis that it does not comport with this Agreement;

(iv) initiate any legal proceeding or enforce rights as holders of Claims that
are inconsistent with, or that would reasonably be expected to prevent or
materially delay consummation of, the Restructuring; or

(v) take any actions where such taking would be (A) inconsistent with this
Agreement, the Restructuring Term Sheet or the Definitive Documents or
(B) otherwise inconsistent with, or reasonably expected to prevent, interfere
with or impede the implementation or consummation of, the Restructuring.

Section 3.2 Rights of Supporting Lenders Unaffected. Nothing contained in this
Agreement shall limit:

(a) the rights of any Supporting Lender to appear as a party in interest in any
matter to be adjudicated in order to be heard concerning any matter arising in
the Chapter 11 Cases, in each case, so long as the exercise of any such right is
not inconsistent with such Supporting Lender’s obligations hereunder;

(b) the ability of any Supporting Lender to purchase, sell, or enter into any
transactions in connection with its Claims, subject to the terms hereof and
applicable Law;

(c) the ability of any Supporting Lender to assert or raise any objection in
connection with any hearing in the Bankruptcy Court so long as such objection is
not inconsistent with such Supporting Lender’s obligations hereunder;

(d) any right of any Supporting Lender to take or direct any action relating to
the maintenance, protection, or preservation of any collateral so long as such
action is not inconsistent with this Agreement;

(e) subject to the terms hereof, any right of a Supporting Lender under (x) the
Prepetition Credit Agreements, or that constitutes a waiver or amendment of any
provision of the Prepetition Credit Agreements, (y) the Prepetition Facility
Agreements, or that constitutes a waiver or amendment of any provision of the
Prepetition Facility Agreements or (z) any other applicable agreement,
instrument or document that gives rise to a Supporting Lender’s Claims or
interests, as applicable, or that constitutes a waiver or amendment of any
provision of any such agreement, instrument or document;

(f) the ability of any Supporting Lender to consult with other Supporting
Lenders or the Company;

 

19

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(g) the ability of a Supporting Lender to enforce any right, remedy, condition,
consent or approval requirement under this Agreement, the DIP Orders or any of
the other Definitive Documents; or

(h) the right of any Supporting Lender to assert and receive distributions on
any Claims held by such Supporting Lender (including Claims that do not arise
under the Prepetition Credit Agreement, the Prepetition Facility Agreements, or
the DIP Orders ).

Section 3.3 Transfer of Claims. During the Effective Period, no Supporting
Lender shall sell, contract to sell, give, assign, participate, hypothecate,
pledge, encumber, grant a security interest in, offer, sell any option or
Contract to purchase, or otherwise transfer or dispose of, any economic, voting
or other rights in or to, by operation of Law or otherwise (each, a “Transfer”)
all or any portion of the Claims arising under the Prepetition Credit Agreement
or Prepetition Facility Agreements (“Prepetition Agreement Claims”) (including
granting any proxies, depositing such Prepetition Agreement Claims into a voting
trust or entering into a voting agreement with respect to such Prepetition
Agreement Claims); provided, however, that any Supporting Lender may Transfer
any of its Prepetition Agreement Claims to any Person (so long as such Transfer
is not otherwise prohibited by any order of the Bankruptcy Court) that
(i) agrees in writing, in substantially the form attached hereto as Exhibit C (a
“Transferee Joinder”), to be bound by the terms of this Agreement (each such
transferee, a “Transferee”) or (ii) is a Supporting Lender; provided that upon
any purchase, acquisition or assumption by any Supporting Lender of any
Prepetition Agreement Claims, such Prepetition Agreement Claims shall
automatically be deemed to be subject to the terms of this Agreement. Subject to
the terms and conditions of any order of the Bankruptcy Court limiting a
Transfer, the transferring Supporting Lender shall provide the Company and its
counsel and the Prepetition Agents with a copy of any Transferee Joinder
executed by such Transferee within one (1) Business Day following such
execution. In the case of a Transfer to a Person that is not a Supporting
Lender, the Transfer shall only be effective upon execution and delivery of a
Transferee Joinder in which event (A) the Transferee shall be deemed to be a
Supporting Lender hereunder with respect to all of its owned or controlled
Prepetition Agreement Claims and (B) the transferor Party shall be deemed to
relinquish its rights (and be released from its obligations) under this
Agreement solely to the extent of such transferred Prepetition Agreement Claims.
With respect to Prepetition Agreement Claims held by the relevant Transferee
upon consummation of a Transfer, such Transferee is deemed to make all of the
representations and warranties of a Supporting Lender set forth in this
Agreement. Any Transfer of any Supporting Lender’s Prepetition Agreement Claim
that does not comply with the foregoing shall be deemed void ab initio and the
Company and each other Party shall have the right to enforce the voiding of such
Transfer.

ARTICLE IV

COMMITMENTS OF THE COMPANY

Section 4.1 Commitments of the Company. During the Effective Period, subject to
the terms of this Agreement (including the terms and conditions set forth in the
Restructuring Term Sheet), including, for the avoidance of doubt, the Company’s
rights regarding Alternative Transactions to the extent set forth herein, the
Company agrees that it shall, and shall direct its Subsidiaries and its and
their respective Affiliates, to the extent applicable, to:

 

20

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(a) (i) use commercially reasonable efforts to seek approval of the Plan and to
complete the Restructuring; (ii) prosecute and defend any appeals relating to
the Confirmation Order; (iii) support and consummate the Restructuring in a
timely manner in accordance with this Agreement, including to negotiate in good
faith all Definitive Documents, coordinate its activities with the other Parties
hereto in respect of all matters concerning the implementation and consummation
of the Restructuring and take any and all necessary and appropriate actions in
furtherance of this Agreement, (iv) use reasonable best efforts to comply with
each Milestone as set forth in Exhibit D, including agreeing to the extension of
such Milestones as required to accommodate the Bankruptcy Court’s calendar; and
(v) comply with each of its other covenants and commitments set forth in this
Agreement and the Restructuring Term Sheet;

(b) provide draft copies of (i) the Plan and Disclosure Statement to counsel to
the Supporting Lenders at least ten (10) calendar days prior to filing with the
Bankruptcy Court, (ii) subject to Section 2.2 hereof, the Plan Supplement, the
motion to approve the Disclosure Statement, the Solicitation Materials, any
proposed Confirmation Order, any proposed amended version of the Plan or the
Disclosure Statement, all “first day” pleadings (including forms of orders
relating thereto), and any other motions, draft orders, pleadings or briefs that
are material to the Restructuring (collectively, the “Third Day Review
Pleadings”) the Company intends to file with the Bankruptcy Court to counsel to
the Supporting Lenders at least two (2) Business Days prior to filing with the
Bankruptcy Court, with all other motions, applications, proposed orders,
pleadings and briefs (“Other Motions”) the Company intends to file with the
Bankruptcy Court to be provided to counsel to the Supporting Lenders no fewer
than twenty-four (24) hours prior to filing with the Bankruptcy Court, and in
each case, consult in good faith with such counsel regarding the form and
substance of any such proposed filing with the Bankruptcy Court or, to the
extent such filing is required to be acceptable to the DIP Agent pursuant to
this Agreement, not file such filing until it is acceptable to the DIP Agent;
provided that (x) the Debtors shall not be required to provide draft copies of
any retention applications, any fee statements, any fee applications, or any
supporting applications to counsel to the DIP Agent and (y) if the notice
required by this Section 4.1(b) with respect to the Third Day Review Pleadings
and Other Motions is not reasonably practicable with respect to any document or
pleading, the Debtors may provide such document or pleading as soon as
reasonably practicable;

(c) timely file a formal objection to any motion filed with the Bankruptcy Court
by any Person seeking the entry of an order directing the appointment of an
examiner with expanded powers or a trustee, converting the Chapter 11 Cases to
cases under chapter 7 of the Bankruptcy Code, dismissing the Chapter 11 Cases,
modifying or terminating the Debtors’ exclusive right to file and/or solicit
acceptances of a plan of reorganization or for relief that (x) is inconsistent
with this Agreement or (y) would, or would reasonably be expected to, frustrate
the purposes of this Agreement, including by preventing the consummation of the
Restructuring;

(d) timely file a formal written response in opposition to any objection filed
with the Bankruptcy Court by any Person with respect to the use of cash
collateral pursuant to the DIP Orders or otherwise;

(e) timely file a formal written response in opposition to any objection filed
with the Bankruptcy Court by any Person with respect to the use of proceeds or
with respect to

 

21

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any of the adequate protection granted to the Prepetition Lenders pursuant to
the DIP Orders or otherwise;

(f) consult with the Supporting Lenders with respect to the assumption or
rejection of executory Contracts and unexpired leases of non-residential real
property;

(g) pay all of the Transaction Expenses consistent with Section 10.13 of this
Agreement;

(h) provide prompt written notice to the Supporting Lenders between the date of
this Agreement and the Effective Date of (i) the occurrence, or failure to
occur, of any event of which the occurrence or failure to occur would be
reasonably likely to cause any Company Specified Representations to be untrue or
inaccurate in any respect or any other representation or warranty of the Company
contained in this Agreement to be untrue or inaccurate in any material respect,
(ii) any material breach of any covenant of the Company contained in this
Agreement, (iii) any event, condition, fact, or circumstance that would make the
timely satisfaction of any of the conditions set forth in Article VIII
impossible or unlikely, (iv) the receipt of any written notice from any third
party alleging that the consent of such party is or may be required as a
condition precedent to consummation of the Transactions, (v) the receipt of any
written notice from any Governmental Entity that is material to the consummation
of the Transactions, (vi) the receipt of any written notice of any proceeding
commenced or threatened against the Company or its Subsidiaries that would
otherwise affect in any material respect the Transactions, and (vii) the receipt
of any written notice of any offer to purchase any material assets of (or Equity
Interests in) the Debtors; provided, however, that the delivery of any notice
pursuant to this Section 4.1(h) shall not limit or otherwise affect the remedies
available to the party receiving such notice under this Agreement;

(i) not be in default under the DIP Orders, subject to any applicable grace and
cure periods;

(j) consult weekly (or more frequently as reasonably requested by the Supporting
Lenders) with the Supporting Lenders’ legal counsel and financial advisor
regarding the Debtors’ strategic planning, discussions, negotiations, proposals,
or agreements with respect to the Restructuring; and

(k) not:

(i) object to, delay, postpone, challenge, reject, oppose or take any other
action that would prevent, interfere with, delay or impede, directly or
indirectly, in any material respect, the approval, acceptance or implementation
of the Restructuring on the terms set forth in the Restructuring Term Sheet;

(ii) solicit, negotiate, propose, enter into, consummate, file with the
Bankruptcy Court, vote for or otherwise knowingly support, participate in or
approve any Alternative Transaction; provided, however, that nothing in this
Section 4.1(l) shall in any way limit the Debtors’ rights regarding any
Alternative Transaction in accordance with Section 7.5;

 

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(iii) take any actions where such taking would be (A) inconsistent with this
Agreement, the Restructuring Term Sheet, the DIP Orders or the other Definitive
Documents or (B) otherwise inconsistent with, or reasonably expected to prevent,
interfere with, delay or impede the implementation or consummation of, the
Restructuring;

(iv) seek to amend or modify, or file a pleading seeking authority to amend or
modify, the Definitive Documents in a manner that is inconsistent with this
Agreement;

(v) other than the Approved KEIP and the Approved KERP, seek the payment of any
amount pursuant to a key employee incentive plan, key employee retention plan or
other similar payments during the pendency of the Chapter 11 Cases, unless
consented to by the DIP Agent; or

(vi) file or seek authority to file any pleading inconsistent with the
Restructuring or the terms of this Agreement.

Section 4.2 Rights of the Debtors Unaffected. Nothing contained in this
Agreement shall limit:

(a) the rights of any Debtor under any applicable bankruptcy, insolvency, or
similar proceeding, including appearing as a party in interest in any matter to
be adjudicated in order to be heard concerning any matter arising in the
Chapter 11 Cases, in each case, so long as the exercise of any such right is not
inconsistent with the Company’s obligations hereunder;

(b) the ability of any Debtor to assert or raise any objection in connection
with any hearing in the Bankruptcy Court so long as such objection is not
inconsistent with the Company’s obligations hereunder;

(c) any right of any Debtor to take or direct any action relating to the
maintenance, protection, or preservation of such Debtor; so long as such action
is not inconsistent with the Company’s obligations hereunder; or

(d) the ability of any Debtor to enforce any right, remedy, condition, consent
or approval requirement under this Agreement or any Definitive Document.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Except as disclosed in (x) the Company SEC Documents publicly available prior to
the date of this Agreement (but excluding any predictive, cautionary or
forward-looking disclosures contained under the captions “risk factors,”
“forward-looking statements” or any similar precautionary sections and any other
disclosures contained therein that are predictive, cautionary or forward-looking
in nature) or (y) the disclosure letter delivered by the Company to the
Supporting Lenders simultaneously with the execution of this Agreement (the
“Company

 

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Disclosure Letter”), the Company hereby represents and warrants to the
Supporting Lenders as follows:

Section 5.1 Qualification, Organization, Subsidiaries, etc. The Company and each
of its Subsidiaries is a legal entity duly organized, validly existing and in
good standing (or the equivalent thereof, if applicable, in each case, with
respect to the jurisdictions that recognize the concept of good standing or any
equivalent thereof) under the Laws of the jurisdiction of its incorporation,
organization or formation, as applicable, and has all requisite corporate or
similar power and authority to own, lease and operate its properties and assets,
and to carry on the Business as presently conducted by it. The Company and each
of its Subsidiaries is duly qualified to do business and is in good standing (or
the equivalent thereof, if applicable, in each case, with respect to the
jurisdictions that recognize the concept of good standing or any equivalent
thereof) as a foreign corporation or other entity in each jurisdiction where the
ownership, leasing or operation of its assets or properties or the conduct of
its portion of the Business requires such qualification, except where the
failure to be so qualified or, where relevant, in good standing (x) has not been
and would not reasonably be expected to be, individually or in the aggregate,
material to the Business (taken as a whole) or (y) would not reasonably be
expected to prevent or materially hinder or delay any of the Transactions or the
transactions contemplated by any of the Definitive Documents or affect the
ability of the Company and its Subsidiaries to perform their obligations under
this Agreement, the Restructuring Term Sheet or any of the Definitive Documents.
The Company does not own, directly or indirectly, any capital stock or other
Equity Interests of any Person other than the Company Subsidiaries. Prior to the
date of this Agreement, the Company has made available to the Supporting Lenders
a complete and accurate copy of the organizational documents of the Company and
each of its Subsidiaries as in effect on the date of this Agreement. None of the
Company or its Subsidiaries is in violation of any of the provisions of its
certificate of incorporation or bylaws (or equivalent organizational documents),
in each case, except for violations that (i) have not been and would not
reasonably be expected to be, individually or in the aggregate, material to the
Business (taken as a whole) and (ii) would not reasonably be expected to prevent
or materially hinder or delay any of the Transactions or the transactions
contemplated by any of the Definitive Documents or affect the ability of the
Company or its Subsidiaries to perform their respective obligations under this
Agreement, the Restructuring Term Sheet or any of the Definitive Documents.

Section 5.2 Capitalization. The authorized, issued and outstanding Equity
Interests of the Company and each of its Subsidiaries is set forth on
Section 5.2 of the Company Disclosure Letter. All such Equity Interests were
validly issued and are fully paid and nonassessable (except to the extent such
concepts are not applicable under the applicable Law of the Company’s or such
Subsidiary’s jurisdiction of incorporation, formation or organization, as
applicable). The Equity Interests of each of the Company’s Subsidiaries are
owned beneficially and of record as set forth on Section 5.2 of the Company
Disclosure Letter, free and clear of any Encumbrances (other than any
restrictions imposed by applicable Law) and free of preemptive rights, rights of
first refusal, subscription rights or similar right of any Person and transfer
restrictions (other than transfer restrictions under applicable Law). Other than
the Equity Interests reserved for issuance as set forth on Section 5.2 of the
Company Disclosure Letter, none of the Company or its Subsidiaries has any
Equity Interests reserved for issuance. There are no existing (a) Equity
Interests in the Company or any of its Subsidiaries other than the Equity
Interests set forth on

 

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Section 5.2 of the Company Disclosure Letter, (b) without limitation to
clause (a), rights, agreements or commitments of any character obligating the
Company or any of its Subsidiaries or any of their Affiliates, as applicable, to
issue, transfer or sell any Equity Interests in the Company’s Subsidiaries or
securities convertible into, exchangeable or exercisable for any of the
foregoing, (c) contractual obligations of the Company or any of its Subsidiaries
to repurchase, redeem or otherwise acquire any of the Equity Interests in the
Company or the Company’s Subsidiaries or (d) voting trusts or similar agreements
to which the Company or any of its Subsidiaries is a party with respect to the
voting of the Equity Interests set forth on Section 5.2 of the Company
Disclosure Letter.

Section 5.3 Corporate Authority.

(a) The Company has all requisite corporate power and authority to execute and
deliver, and to cause, directly or indirectly, any of the Company’s Subsidiaries
or their Affiliates to execute and deliver, as applicable, and, subject to the
Company obtaining necessary Bankruptcy Court approvals from and after the
Petition Date, to carry out the Restructuring and to perform its respective
obligations under this Agreement, each of the Definitive Documents and each
other agreement, document or instrument contemplated hereby or thereby to which
each such Person is a party. The execution and delivery of this Agreement, the
consummation of the Transactions by the Company and/or any of its Subsidiaries
or their applicable Affiliates have been duly and validly authorized and
approved by all requisite corporate or similar action of such Person (subject,
from and after the Petition Date, to the approval of the Bankruptcy Court).

(b) The Company further represents and warrants that the respective boards of
directors (or such other governing body) for the Company and each of its
Subsidiaries has approved, by all requisite action, this Agreement and all of
the Transactions, including the terms of the Restructuring set forth in the
Restructuring Term Sheet, and, subject to any necessary Bankruptcy Court
approvals, no other corporate or similar proceedings (pursuant to any such
Person’s organizational documents or otherwise) on the part of any such Person
is necessary to authorize the consummation of, and to consummate, the
Transactions.

(c) The Board has taken all necessary action to ensure that none of the
Supporting Lenders will be an “interested stockholder” or prohibited from
entering into or consummating a “business combination” or similar transaction
with the Company (under Section 203 of the Delaware General Corporation Law or
any other applicable Takeover Statute), as a result of the execution of this
Agreement or the consummation of the Transactions in the manner contemplated
hereby.

(d) Subject to the Company obtaining necessary Bankruptcy Court approvals from
and after the Petition Date, this Agreement and each such other document have
been duly and validly executed and delivered by the Company and each of its
applicable Subsidiaries and each of their applicable Affiliates, and, assuming
the due authorization, execution and delivery of this Agreement and each such
other documents by the relevant Supporting Lender or its Affiliates, as
applicable, constitute a legal, valid and binding agreement of the Company and
each of its applicable Subsidiaries and each of their applicable Affiliates,
enforceable against each such Person in accordance with its terms, subject to
applicable bankruptcy, insolvency,

 

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reorganization, fraudulent transfer, moratorium and similar laws affecting
creditors’ rights generally and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity) (the “Enforceability Limitations”).

Section 5.4 Consents and Approvals. Except as expressly provided in this
Agreement or in the Bankruptcy Code (including, with respect to the Company from
and after the Petition Date, the approval of the Bankruptcy Court) and
Section 6.3, no consent, waiver, approval, Order, permit or authorization
(including those with respect to state licensing required to operate the
Business) of, or declaration, filing or registration with, or notification to,
any Governmental Entity, including in connection or compliance with the HSR Act
(any of the foregoing, a “Consent”) is necessary or required on the part of
(a) the Company or any of its Subsidiaries in connection with the execution and
delivery of this Agreement or any other agreement, document or instrument
contemplated hereby to which the Company or any of its Subsidiaries is a party
and (b) any applicable Affiliate of the Company or any such Subsidiaries in
connection with the execution and delivery of this Agreement or any other
agreement, document or instrument contemplated hereby to which such Person is a
party, or in connection with, in each case of the foregoing clauses (a) and (b),
the performance of such Person’s obligations hereunder and thereunder, or the
consummation of the Transactions (with or without notice or lapse of time, or
both), except in each case of the foregoing clauses (a) and (b), (x) for such
reports under the Exchange Act as may be required to be filed with the SEC in
connection with this Agreement or the Transactions, (y) for such Consents as may
be required under applicable state securities or “blue sky” Laws and the
securities Laws of any foreign country or the rules and regulations of Nasdaq
and (z) for such other Consents which if not obtained or made, (i) would not
reasonably be expected to be, individually or in the aggregate, material to the
Business (taken as a whole) and (ii) would not reasonably be expected to prevent
or materially hinder or delay any of the Transactions or the transactions
contemplated by any of the Definitive Documents or affect the ability of the
Company or its Subsidiaries to perform their respective obligations under this
Agreement, the Restructuring Term Sheet or any of the Definitive Documents.

Section 5.5 No Violations. The execution or delivery of this Agreement or any
agreement, document or instrument contemplated hereby by the Company or any of
its Subsidiaries or any of their applicable Affiliates, the performance of such
Person’s obligations hereunder and thereunder, and the consummation of the
transactions contemplated hereby or thereby, as applicable, do not and will not
(a) conflict with or result in any violation or breach of any provisions of the
certificate of incorporation, bylaws or other organizational documents of any
such Person, (b) with or without notice or lapse of time or both, conflict with
or result in any breach or violation of or constitute a default under, or give
rise to a right of, or result in, termination, modification, cancellation, first
offer, first refusal or acceleration of any obligation or to the loss of a
benefit under any Contract to which any such Person is a party or by or to which
any of their respective properties, rights or assets, or the operations or
conduct of the Business, are bound or subject or (c) conflict with or violate
any Order or Law applicable to any such Person or their respective properties,
rights or assets, or the operations or conduct of the Business, except in the
case of clauses (b) and (c), for any conflicts, breaches, violations, defaults,
rights or results that (x) have not been and would not reasonably be expected to
be, individually or in the aggregate, material to the Business (taken as a
whole) or (y) would not reasonably be expected to prevent or materially hinder
or delay any of the Transactions or the

 

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transactions contemplated by any of the Definitive Documents or affect the
ability of the Company or its Subsidiaries or their Affiliates, as applicable,
to perform their obligations under this Agreement, the Restructuring Term Sheet
or any of the Definitive Documents.

Section 5.6 SEC Filings; Financial Statements.

(a) The Company has timely filed with or furnished to the SEC all reports,
schedules, forms, statements, prospectuses, registration statements and other
documents required to be filed with or furnished to the SEC by the Company since
January 2, 2019 (collectively, together with any exhibits and schedules thereto
and other information incorporated therein, the “Company SEC Documents”). No
Subsidiary of the Company is required to file any report, schedule, form,
statement, prospectus, registration statement or other document with the SEC or
any similar Governmental Entity in any jurisdiction.

(b) As of its filing date (or, if amended or superseded by a filing prior to the
date of this Agreement, on the date of such amended or superseding filing), the
Company SEC Documents filed or furnished prior to the date of this Agreement
complied, and each Company SEC Document filed or furnished subsequent to the
date of this Agreement will comply, in all material respects with the applicable
requirements of Nasdaq, the Securities Act, the Exchange Act and the
Sarbanes-Oxley Act, as the case may be.

(c) As of its filing date (or, if amended or superseded by a filing prior to the
date of this Agreement, on the date of such amended or superseding filing), each
Company SEC Document filed or furnished prior to the date of this Agreement did
not, and each Company SEC Document filed or furnished subsequent to the date of
this Agreement will not, contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading.

(d) The Company is, and since January 2, 2019 has been, in compliance in all
material respects with (i) the applicable provisions of the Sarbanes-Oxley Act
and (ii) the applicable listing and corporate governance rules and regulations
of Nasdaq.

(e) The Company has made available to the Supporting Lenders copies of the
following financial statements (collectively the “Financial Statements”):
(i) the audited consolidated balance sheet of the Company as of December 31,
2019 and the related consolidated statements of operations, comprehensive income
(loss), stockholders’ equity (deficit) and cash flows for the fiscal year then
ended; and (ii) the unaudited consolidated balance sheet of the Company as of
March 31, 2020 and the related consolidated statements of operations,
comprehensive income (loss), stockholders’ equity (deficit) and cash flows for
the three (3) months then ended. Subject to the notes thereto, the Financial
Statements were prepared, in all material respects, in conformity with GAAP and
present fairly, in all material respects, the financial position of the Company
(including its Subsidiaries) and its results of operations and cash flows as of
the respective dates and for the respective periods referred to in the Financial
Statements (in the case of quarterly Financial Statements, subject to normal
year-end adjustments).

 

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(f) Since January 2, 2019, each of the principal executive officer and principal
financial officer of the Company (or each former principal executive officer and
principal financial officer of the Company, as applicable) has made all
certifications required by Rules 13a-14 and 15d-14 under the Exchange Act and
Sections 302 and 906 of the Sarbanes-Oxley Act and any related rules and
regulations promulgated by the SEC and Nasdaq, and the statements contained in
any such certifications are true and complete in all material respects as of the
date on which they were made.

Section 5.7 No Undisclosed Liabilities. There are no liabilities or obligations
of the Company or any of its Subsidiaries of any kind whatsoever, whether
accrued, contingent, absolute, determined, determinable or otherwise, that would
be required by GAAP to be reflected on the consolidated balance sheet of the
Company and its Subsidiaries, other than (a) liabilities or obligations
disclosed and provided for in the Financial Statements or in the notes thereto,
(b) liabilities or obligations incurred in the ordinary course of business
consistent with past practice since March 31, 2020, (c) liabilities arising in
connection with the Transactions, the Restructuring or the Chapter 11 Cases or
(d) other liabilities or obligations that (x) have not been and would not
reasonably be expected to be, individually or in the aggregate, material to the
Business (taken as a whole), (y) would not reasonably be expected to prevent or
materially hinder or delay any of the Transactions or the transactions
contemplated by any of the Definitive Documents or affect the ability of the
Company or its Subsidiaries to perform their obligations under this Agreement,
the Restructuring Term Sheet or any of the Definitive Documents or (z) would not
be discharged in the Chapter 11 Cases upon the Effective Date of the Plan. There
are no off-balance sheet arrangements of any type required to be disclosed
pursuant to Item 303(a)(4) of Regulation S-K promulgated under the Securities
Act that have not been so disclosed in the Company SEC Documents.

Section 5.8 Absence of Certain Changes. Except to the extent arising out of or
relating to the Chapter 11 Cases, this Agreement or the Transactions, from
January 2, 2019 through the date of this Agreement, the Business has been
conducted in all material respects in the ordinary course of business consistent
with past practice, and there has not been:

(a) any material damage, destruction or other casualty loss with respect to any
asset or property owned, leased or otherwise used by the Company or its
Subsidiaries, whether or not covered by insurance;

(b) any declaration, setting aside or payment of any dividend or other
distribution with respect to any shares of capital stock or other Equity
Interests of the Company or its Subsidiaries (except for dividends or other
distributions by any direct or indirect wholly owned Subsidiary to such Person
or to any wholly owned Subsidiary of such Person), or any repurchase, redemption
or other acquisition by the Company or its Subsidiaries of any outstanding
shares of capital stock or other Equity Interests of the Company or its
Subsidiaries;

(c) any material change in any method of accounting or accounting practice by
the Company or its Subsidiaries;

(d) (i) any material increase in the compensation payable or to become payable
to the officers or employees of any of the Company or its Subsidiaries or
material

 

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increases in the benefits of such officers or employees (except for increases in
the compensation of non-officer employees in the ordinary course of business and
consistent with past practice), (ii) any entrance into, adoption, material
amendment or termination of any Debtor Plan (or any arrangement that would have
been a Debtor Plan were it in effect as of the date of this Agreement) that is
or would be material to the Company and its Subsidiaries, taken as a whole or
(iii) any actions taken by the Company and its Subsidiaries to accelerate the
vesting or lapsing of restrictions or payment, or fund or in any other way
secure the payment, of any material compensation or benefits under any Debtor
Plan, taken as a whole, except, in each case, to the extent required by
applicable Laws;

(e) any agreement to do any of the foregoing; or

(f) any event, development, change or effect that has had or would reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.

Section 5.9 Brokers or Finders. Other than Jefferies LLC, none of the Company or
its Subsidiaries has employed or engaged any investment banker, broker or finder
who is entitled to any brokerage, finder’s or other fee or any commission in
connection with this Agreement, the Restructuring Term Sheet, the Definitive
Documents, the transactions contemplated by this Agreement or any other
agreement, document or instrument contemplated hereby or thereby based upon
arrangements made by or on behalf of the Company or its Subsidiaries or any of
their Affiliates.

Section 5.10 Litigation.

(a) Except (x) as set forth on Section 5.10(a) of the Company Disclosure Letter
and (y) for the Chapter 11 Cases, there are no Causes of Action pending or, to
the Knowledge of the Debtors, threatened, and no facts (including any defects or
quality issues related to any former or current Products) exist which would give
rise to any such Causes of Action, against any of the Company or its
Subsidiaries or any of their respective properties, rights or assets, or that
involves or relates to any of the Transactions or the operations or conduct of
the Business, except those which have not been and would not reasonably be
expected to be, individually or in the aggregate, material to the Company or any
of its Subsidiaries. None of the Company, any of its Subsidiaries, any
applicable Affiliates or the Business is subject to any outstanding Order, and
there are no judgments or decrees of or settlement agreements with, any
Governmental Entity, except those which have not been and would not reasonably
be expected to be, individually or in the aggregate, material to the Company and
its Subsidiaries.

(b) There is no (i) settlement agreement involving the Company or any of its
Subsidiaries that impedes or limits the Company or any of its Subsidiaries to
operate in the ordinary course of business, as currently conducted, or
(ii) Cause of Action of any nature pending or, to the Knowledge of the Debtors,
threatened against any Person who has a contractual right or a right to
indemnification from the Company or any of its Subsidiaries related to facts and
circumstances existing prior to the date of this Agreement, nor is there any
reasonable basis therefor, in each case, except as would not reasonably be
expected to be, individually or in the aggregate, material to the Company of any
of its Subsidiaries.

 

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(c) Notwithstanding the foregoing, no representation or warranty is made under
this Section 5.10 in respect of any (i) Intellectual Property matters, which are
addressed in Section 5.11, (ii) employee benefits matters, which are addressed
in Section 5.16, (iii) environmental matters, which are addressed in
Section 5.18, (iv) healthcare regulatory matters, which are addressed in
Section 5.19 or (v) Tax matters, which are addressed in Section 5.20.

Section 5.11 Intellectual Property.

(a) Section 5.11(a) of the Company Disclosure Letter sets forth a true and
complete list, as of the date hereof, of all Registered Intellectual Property
that is (i) owned or purported to be owned by, or (ii) exclusively licensed to,
the Company or any of its Subsidiaries (the “Company Registered Intellectual
Property, setting forth (A) the legal and record owner(s), (B) the registration
or application number (as applicable), (C) the registration or application date
(as applicable) and (D) the jurisdiction in which such item is registered or
pending or, with respect to internet domain names, the applicable internet
domain name registrar. All Company Registered Intellectual Property is
subsisting and (other than Registered Intellectual Property constituting
applications) valid, and to the Knowledge of the Debtors, enforceable. There is
no, and since January 1, 2017, there has been no, Cause of Action or notice of
any objection or claim asserted in writing or, to the Knowledge of the Debtors,
threatened by any Person, seeking to cancel, materially limit, or challenge the
ownership, validity or enforceability of any Company Registered Intellectual
Property, and the Company and each of its applicable Subsidiaries have made
timely payment of all registration, maintenance, renewal and filing fees
required with respect to the Company Registered Intellectual Property.

(b) The Company and its Subsidiaries, taken together, solely and exclusively own
all Company Intellectual Property free and clear of any Encumbrances (other than
Permitted Encumbrances), and no other Person has any joint ownership interest in
or to any of the Company Intellectual Property. None of the Company Intellectual
Property is subject to any Order adversely affecting or restricting the validity
or enforceability thereof, or any of the Company’s or any of its Subsidiaries’
ownership or use thereof.

(c) The Company and its Subsidiaries own or have sufficient and valid right to
use all Intellectual Property that is material to or necessary for the conduct
of the Business as currently conducted and as currently planned to be conducted,
all of which material Intellectual Property rights shall survive the
consummation of the transactions contemplated by this Agreement without
termination or substantial acceleration of any obligation thereunder.

(d) Except as has not resulted in, and would not reasonably be expected to
result in, material liability for the Company or any of its Subsidiaries or
disruption to the Business, since the January 1, 2017, (i) neither (A) the
conduct of the Business, nor (B) the administration, use, supply, manufacture,
import, marketing, commercialization or other exploitation of any of the
Products (including by any applicable customers, suppliers or contractors), has
infringed, misappropriated, or violated any Intellectual Property of any other
Person, (ii) to the Knowledge of the Debtors, no Person has infringed,
misappropriated, or otherwise violated any Company Intellectual Property and
(iii) none of the Company nor any of its Subsidiaries have sent or received any
written claim, notice, demand to license, or similar

 

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communication alleging or suggesting any infringement, misappropriation, or
other violation of the type described in clauses (i) or (ii) of this
Section 5.11(d).

(e) The Company and each of its Subsidiaries have, at all times since January 1,
2017, taken commercially reasonable efforts to protect the confidentiality of
all material Trade Secrets that are owned, used or held by any of the Company or
any of its Subsidiaries, and no such material Trade Secrets have been used by,
disclosed to or otherwise discovered by any Person except pursuant to valid and
enforceable non-disclosure and confidentiality agreements (or obligations
arising by operation of Law) that have not, to the Knowledge of the Debtors,
been breached by such Persons.

(f) Each Person who contributed to the development or creation of any material
Company Intellectual Property used in or held for use in the conduct of the
Business as currently conducted or as currently planned to be conducted has
executed a valid and enforceable agreement containing an irrevocable present
assignment conveying to one or more of the Company or its Subsidiaries (or has
otherwise assigned by operation of Law) all of such Person’s right, title and
interest in and to such Intellectual Property. To the Knowledge of the Debtors,
no current or former employee or contractor of any of the Company or any of its
Subsidiaries retains or claims to retain any ownership interest in or to any
Company Intellectual Property.

(g) None of the Company Intellectual Property is subject to any obligation under
any Contract or other present or contingent obligation as a result of being
developed using any funding or support from, or any arrangement with, a
Governmental Entity or nonprofit organization.

Section 5.12 Data Privacy and Cybersecurity; IT Assets.

(a) The Company IT Assets are sufficient for the current and currently
anticipated needs of the Business, and since January 1, 2017, there has been no
unauthorized access to or unauthorized use of any (i) IT Assets owned, used or
held for use by the Company or any of its Subsidiaries, (ii) information of, or
collected, stored or processed by or on behalf of, the Company or its
Subsidiaries and collected, stored or processed by such IT Assets, or
(iii) confidential or proprietary information of the Company or any of its
Subsidiaries, in each case, in a manner that, individually or in the aggregate,
has resulted in or would reasonably be expected to result in material liability
or disruption of the Business; provided that the foregoing representations with
respect to IT Assets owned or controlled by third-party service providers are
given only to the Knowledge of the Debtors. None of the IT Assets owned, used or
held for use by the Company or any of its Subsidiaries since January 1, 2017
contain or make available any material disabling codes or instructions, spyware,
Trojan horses, worms, viruses or other software routines that facilitate or
cause unauthorized access to, or disruption, impairment, disablement, or
destruction of, Software, data or other materials.

(b) The Company and each of its Subsidiaries have established and implemented
appropriate written policies and organizational, physical, administrative and
technical measures regarding privacy, cyber security and data security, and are
no less protective than (i) reasonable practices in the industry or (ii) any
written commitments of the Company or

 

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any of its Subsidiaries (such policies and measures, collectively, the “Privacy
and Security Policies”).

(c) At all times since January 1, 2017, except as has not resulted in, and would
not reasonably be expected to result in, individually or in the aggregate,
material liability or an obligation to notify any Governmental Entity, (i) the
Company and each of its Subsidiaries have complied in all respects with all of
their respective Privacy and Security Policies and contractual obligations, and
with all applicable Laws (including (A) the Health Insurance Portability and
Accountability Act of 1996, as amended by the Health Information Technology for
Economic and Clinical Health Act of 2009, and their implementing regulations and
agency guidance and (B) any other applicable state or foreign privacy laws), in
each case, regarding Personal Information, including with respect to the
collection, use, storage, processing, transmission, transfer (including
cross-border transfers), disclosure and protection of Personal Information and
(ii) no Person has gained unauthorized access to or misused any Personal
Information collected, stored or processed by or on behalf of, the Company or
any of its Subsidiaries.

Section 5.13 Real Property Leases.

(a) None of the Company or any of its Subsidiaries owns any real property.

(b) Section 5.13(b) of the Company Disclosure Letter sets forth a complete and
correct list, as of the date of this Agreement, of each Contract pursuant to
which the Company or any of its Subsidiaries leases, subleases or occupies any
real property (the “Leases”). None of the Company or any of its Subsidiaries has
subleased, licensed or otherwise granted any Person the right to use or occupy
any real property subject to a Lease or any material portion thereof. Each Lease
is valid, binding and in full force and effect, subject to the Enforceability
Limitations, and no uncured default of a material nature on the part of the
Company or any of its Subsidiaries or, to the Knowledge of the Debtors, the
landlord thereunder exists with respect to any Lease. The Company and its
Subsidiaries have good and valid leasehold interests in or contractual rights to
use or occupy, subject to the terms of the applicable Lease, each real property
subject to the Leases.

Section 5.14 Material Contracts.

(a) Section 5.14(a) of the Company Disclosure Letter contains a complete and
correct list, as of the date of this Agreement, of each Contract described below
in this Section 5.14(a) under which the Company or any of its Subsidiaries has
any current or future rights, responsibilities, obligations or liabilities (in
each case, whether contingent or otherwise) or to which the Company or any of
its Subsidiaries is a party or to which any of their respective properties or
assets is subject, other than the Debtor Plans listed on Section 5.16(a) of the
Company Disclosure Letter (all Contracts of the type described in this
Section 5.14(a), whether or not set forth on Section 5.14(a) of the Company
Disclosure Letter, being referred to herein as the “Material Contracts”):

 

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(i) requires expenditures by the Company or any of its Subsidiaries involving
consideration in excess of two hundred and fifty thousand dollars ($250,000) in
the next twelve (12)-month period;

(ii) provides for payments to be received by the Company or any of its
Subsidiaries in excess of two hundred and fifty thousand dollars ($250,000) in
any twelve (12)-month period;

(iii) relates to the incurrence by the Company or any of its Subsidiaries of any
Indebtedness or any capitalized lease obligations in excess of fifty thousand
dollars ($50,000);

(iv) relates to the acquisition or disposition outside the ordinary course of
business of any assets or any business, or any capital stock of any enterprise
(whether by merger, sale or purchase of stock, sale or purchase of assets or
otherwise) entered into in the past three (3) years, in each case, in excess of
two hundred and fifty thousand dollars ($250,000);

(v) relates to the future acquisition or disposition of any material assets or
properties (whether by merger, sale or purchase of stock, sale or purchase of
assets or otherwise, including any option to acquire, sell, lease or license any
material assets or properties of the Business), other than (A) in the ordinary
course of business consistent with past practice, (B) as contemplated by this
Agreement, the Restructuring Term Sheet or any Definitive Document or (C) to the
extent permitted under applicable Law, any non-disclosure or similar agreement
entered into in connection with the process by which the Company or any of its
Subsidiaries, any of their respective Affiliates or any Representatives of any
of the foregoing solicited, discussed or negotiated strategic alternatives prior
to the date of this Agreement (including the Transactions or any other
transaction prior to the date of this Agreement);

(vi) is a joint venture, profit-sharing, partnership, collaboration,
co-promotion, commercialization, research, development or other similar
agreement involving the sharing of profits or expenses (other than clinical
trial agreements, contract manufacturing agreements or other similar
subcontracting arrangements entered into in the ordinary course of business);

(vii) is a Lease;

(viii) (A) may require the Supporting Lenders to pay milestones, royalties or
other contingent payments based on any research, testing, development,
regulatory filings or approval, sale, distribution, marketing, commercial
manufacture or other similar occurrences, developments, activities or events
with respect to any Product, in each case, which payments are in an amount
having an expected value in excess of fifty thousand dollars ($50,000) during
the fiscal year ending December 31, 2020 or any fiscal year thereafter or
(B) grants to any Person a right of first refusal, right of first negotiation,
option to purchase, option to license, or any other similar rights with respect
to any Product;

 

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(ix) requires the Company or any of its Subsidiaries to purchase from a third
Person their total requirements of any products or services;

(x) with any Governmental Entity;

(xi) (A) limits or purports to limit, in any material respect, the freedom of
the Business to engage or compete in any line of business or with any Person or
in any geographic area, (B) contains exclusivity or “most favored nation”
obligations in favor of any Person other than the Company or its Subsidiaries or
restrictions to which the Business is subject or (C) contains any other
provisions restricting or purporting to restrict the ability of the Company or
its Subsidiaries to sell, market, distribute, promote, manufacture, develop,
commercialize, or test or research the Products, directly or indirectly through
third parties (other than any such restrictions or purported restrictions that
have a de minimis effect on the Business);

(xii) is a material Contract pursuant to which the Company or any of its
Subsidiaries grants or receives any license, covenant not to sue or similar
right with respect to, or governs or restricts the development, ownership, use,
practice or enforcement of, any Intellectual Property (other than non-exclusive
licenses to use Software on standardized terms that are generally commercially
available);

(xiii) relates to sales and distribution activities conducted by a third-party
wholesaler or distributor that are material to the Business;

(xiv) relates to the ongoing supply or manufacturing of clinical and commercial
quantities of any of the Products, the termination of which would reasonably be
expected to be material to the Business (taken as a whole);

(xv) other than the Contracts described in Section 5.14(a)(iii), under which the
Company or any of its Subsidiaries or any of their Affiliates have borrowed or
loaned money, or any note, bond, indenture, mortgage or any guarantee of such
indebtedness, in each case, relating to amounts in excess of one hundred
thousand dollars ($100,000);

(xvi) relates to any settlement or stipulation of any Cause of Action against
the Company or any of its Subsidiaries by any other Person, other than
settlement agreements for cash that do not exceed twenty-five thousand dollars
($25,000) individually as to any such settlement or stipulation (excluding
amounts paid by insurers) or one hundred thousand dollars ($100,000)
individually as to any such settlement or stipulation (including any amounts
paid by insurers), entered into since January 2, 2019; and

(xvii) provides for indemnification of any officer, director or employee of the
Company or its Subsidiaries or any of their Affiliates other than in the
ordinary course of business.

(b) True and complete copies of each Material Contract, together with all
amendments, modifications or supplements thereto, as of the date of this
Agreement have been

 

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made available to the Supporting Lenders. None of the Company or any of its
Subsidiaries has received any written notice of termination (or intent to
terminate) with respect to a Material Contract from any third Person party to
such Material Contract. No event has occurred which, with the passage of time or
the giving of notice, or both, would constitute a default under or a violation
of any Material Contract or would cause the acceleration of any obligation of
the Company or any of its Subsidiaries or their applicable Affiliates or the
creation of an Encumbrance (other than Permitted Encumbrances) upon any assets
or properties of the Company or any of its Subsidiaries, except for such events
that have not had and would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect. To the Knowledge of the Debtors, as
of the date of this Agreement, no other party to any Material Contract is in
breach of or default under the terms of any Material Contract where such breach
or default has had or would reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect. Each Material Contract is a valid,
binding and enforceable obligation of the applicable the Company or its
applicable Subsidiaries or their applicable Affiliates party thereto and, to the
Knowledge of the Debtors, of each other party thereto, and is in full force and
effect, subject to the Enforceability Limitations.

Section 5.15 Compliance with Laws; Anticorruption; Permits; Trade Compliance.

(a) The Company and each of its Subsidiaries and their applicable Affiliates are
and since January 1, 2015 have been, operating the Business in compliance with
all applicable Laws and Orders, including (i) applicable Law administered or
enforced by the FDA, (ii) applicable Laws relating to the Medicare and Medicaid
programs, any other federal healthcare programs, and any state healthcare or
health insurance programs, (iii) applicable Laws relating to healthcare fraud
and abuse, including the federal Anti-Kickback Statute (42 U.S.C. §
1320a-7b(b)), the federal False Claims Act (31 U.S.C. §§ 3729 et seq.), the
federal Stark Law (42 U.S.C. § 1395nn), the federal False Statements Statute (42
U.S.C. § 1320a-7b(a)), the Exclusion Laws (42 U.S.C. § 1320a-7), the Beneficiary
Inducement Statute (42 U.S.C. § 1320a-7a(a)(5)), and the Civil Monetary
Penalties Law (42 U.S.C. § 1320a-7a), (iv) applicable Laws relating to billing
or claims for reimbursement submitted to any government or third-party payor,
(v) applicable Laws relating to fraudulent, abusive or unlawful practices
connected in any way with the provision or marketing of healthcare items or
services, (vi) Physician Payment Sunshine Act (42 U.S.C. § 1320a-7h) and similar
gift and disclosure applicable Laws of any Governmental Entity, and
(vii) applicable Laws relating to health information privacy, including the
Health Insurance Portability and Accountability Act of 1996 (including its
underlying rules) and the Health Information Technology for Economic and
Clinical Health Act of 2009, in each case of clauses (i)-(vii), except as has
not had and would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. Since January 1, 2015, none of the Company
or its Subsidiaries, nor any of their applicable Affiliates, has received any
written notice of or, to the Knowledge of the Debtors, been charged with any
violation of any Laws, except as has not been and would not reasonably be
expected to be, individually or in the aggregate, material to the Business
(taken as a whole).

(b) The Company and its Subsidiaries and their applicable Affiliates are and,
since January 1, 2015, have been operating the Business in compliance with the
U.S. Foreign Corrupt Practices Act and any other applicable anticorruption Laws,
except where the failure to be in compliance has not been and would not
reasonably be expected to be, individually or in the

 

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aggregate, material to the Business (taken as a whole). Since January 1, 2015,
none of the Company or its Subsidiaries, nor any of their applicable Affiliates,
nor to the Knowledge of the Debtors, any officer or director of any of the
foregoing, while acting at the direction of such Person, (a) has made, paid or
received any unlawful bribes, kickbacks or other similar payments or (b) has
made or paid any contributions, directly or indirectly, to a domestic or foreign
political party or candidate, except, in each case, as has not been and would
not reasonably be expected to be, individually or in the aggregate, material to
the Business (taken as a whole).

(c) The Company and its Subsidiaries have all Business Permits, except where the
failure to possess such Business Permits has not had and would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
None of the Company or its Subsidiaries, nor any of their applicable Affiliates,
is in default or violation of any term, condition or provision of any Business
Permit, except as has not had and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. Except as has not
had and would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, all Business Permits are valid and in full
force and effect, subject to the Enforceability Limitations, and, to the
Knowledge of the Debtors, no condition exists that with notice or lapse of time
or both would constitute a default of any term, condition or provision of any
such Business Permits to which the Company or any of its Subsidiaries or any of
their applicable Affiliates is a party. Since January 1, 2015, none of the
Company or its Subsidiaries, or any of their applicable Affiliates, has received
any written notice of any Cause of Action or investigation relating to the
revocation, nonrenewal, suspension or modification of any Business Permit,
except as has not had and would not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect.

(d) Except as has not and would not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect, the Company and its Subsidiaries
and their applicable Affiliates are and, since January 1, 2015, have been in
compliance with: (i) all Laws or regulations regarding the importation of goods,
including the U.S. import laws administered by U.S. Customs and Border
Protection; and (ii) all other applicable Laws, including the Export
Administration Regulations administered by the U.S. Department of Commerce.
Except as has not and would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect, none of the Company or its
Subsidiaries nor any of their applicable Affiliates, nor to the Knowledge of the
Debtors, any officer or director of any of the foregoing Persons, is (i) a
person or entity with whom U.S. persons or entities are restricted from doing
business under regulations of OFAC (including those named on OFAC’s Specially
Designated and Blocked Persons List) or under any statute, executive order
(including the September 24, 2001, Executive Order Blocking Property and
Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support
Terrorism), regulation, or other governmental action, (ii) a “specially
designated global terrorist” or other person listed in Appendix A to Chapter V
of 31 C.F.R., as the same has been from time to time updated and amended or
(iii) a person either (A) included within the term “designated national” as
defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515 or
(B) designated under Sections 1(a), 1(b), 1(c) or 1(d) of Executive Order
No. 13224, 66 Fed. Reg. 49079 (published September 25, 2001) or a person
similarly designated under any related enabling legislation or any other similar
executive orders.

 

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Section 5.16 Employee Benefit Matters.

(a) Section 5.16(a) of the Company Disclosure Letter sets forth a complete and
correct list of each Debtor Plan that is an “employee benefit plan” within the
meaning of Section 3(3) of ERISA, an equity-based plan, or an executive
employment or severance plan or agreement. With respect to each such Debtor
Plan, the Company has made available to the Supporting Lenders, to the extent
applicable, accurate and complete copies of (i) the Debtor Plan document,
including any amendments thereto, and all related trust documents, insurance
contracts or other funding vehicles, (ii) a written description of such Debtor
Plan if such plan is not set forth in writing, (iii) the most recently prepared
actuarial report, (iv) all material correspondence to or from any Governmental
Entity received since January 1, 2017 with respect to any Debtor Plan, (v) the
most recent summary plan description together with any summaries of all material
modifications thereto, (vi) the most recent IRS determination or opinion letter
issued and (vii) the most recent annual report (Form 5500 or 990 series and all
schedules and financial statements attached thereto).

(b) (i) Each Debtor Plan (including any related trusts) has been established,
operated and administered in accordance with its terms and in compliance with
applicable Law, including ERISA and the Code, (ii) all contributions or other
amounts payable by the Company or any of its Subsidiaries with respect to any
Debtor Plan in respect of current or prior plan years have been paid or accrued
in accordance with generally accepted accounting principles and (iii) there are
no pending or, to the Knowledge of the Debtors, threatened claims (other than
routine claims for benefits) or proceedings by a Governmental Entity by, on
behalf of or against any Debtor Plan or any trust related thereto which would
reasonably be expected to result in any material liability to the Company or any
of its Subsidiaries.

(c) Each ERISA Plan that is intended to be qualified under Section 401(a) of the
Code has been determined by the IRS to be qualified under Section 401(a) of the
Code and, to the Knowledge of the Debtors, nothing has occurred that would
adversely affect the qualification or tax exemption of any such Debtor Plan.
With respect to any ERISA Plan, none of the Company or any of its Subsidiaries
has engaged in a transaction in connection with which the Company or any of its
Subsidiaries reasonably could be subject to either a civil penalty assessed
pursuant to Section 409 or 502(i) of ERISA or a tax imposed pursuant to
Section 4975 or 4976 of the Code.

(d) None of the Company or any of its Subsidiaries nor any ERISA Affiliate has,
within the six (6)-year period prior to the date of this Agreement, ever
maintained, established, sponsored, participated in, contributed to, or been
obligated to contribute to, or otherwise incurred any obligation or liability
(including any contingent liability) under any “multiemployer plan” (as defined
in Section 3(37) of ERISA) or any plan that is subject to Section 302 or Title
IV of ERISA or Section 412 of the Code. None of the Company or any of its
Subsidiaries nor any ERISA Affiliate has any actual or potential withdrawal
liability for any complete or partial withdrawal (as defined in Sections 4203
and 4205 of ERISA) from any multiemployer plan.

(e) Except as required by applicable Law, no Debtor Plan provides retiree or
post-employment medical, disability, life insurance or other welfare benefits to
any Person, and

 

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none of the Company or any of its Subsidiaries has any obligation to provide
such benefits. To the extent that the Company or any of its Subsidiaries
sponsors such plans, the Company or the applicable Subsidiary has reserved the
right to amend, terminate or modify at any time each Debtor Plan that provides
retiree or post-employment disability, life insurance or other welfare benefits
to any Person.

(f) Neither the execution and delivery of this Agreement, shareholder or other
approval of this Agreement or the Plan nor the consummation of the transactions
contemplated by this Agreement, whether alone or in combination with any other
event, will (i) entitle any current or former employee, director, officer or
independent contractor of the Company or any of its Subsidiaries to severance
pay or any material increase in severance pay, (ii) accelerate the time of
payment or vesting or materially increase the amount of compensation due to any
such current or former employee, director, officer or independent contractor,
(iii) directly or indirectly cause the Company or any of its Subsidiaries to
transfer or set aside any assets to fund any material benefits under any Debtor
Plan, (iv) otherwise give rise to any material liability under any Debtor Plan
or (v) limit or restrict the right to merge, materially amend, terminate or
transfer the assets of any Debtor Plan on or following the Effective Date.

(g) Neither the Company nor any of its Subsidiaries has any obligation to
provide, and no Debtor Plan or other agreement provides any individual with the
right to, a gross up, indemnification, reimbursement or other payment for any
excise or additional taxes, interest or penalties incurred pursuant to
Section 409A or Section 4999 of the Code or due to the failure of any payment to
be deductible under Section 280G of the Code.

(h) No Debtor Plan is maintained outside the jurisdiction of the United States
or covers any employees or other service providers of the Company or any of its
Subsidiaries who reside or work outside of the United States.

Section 5.17 Labor Matters.

(a) The Company has made available to the Supporting Lenders a true, correct and
complete list, by employee identification number, of all employees employed by
the Company and its Subsidiaries on the date of this Agreement, identifying as
to each a job title, years of service, current amount or rate of compensation
and location of employment.

(b) As of the date of this Agreement, neither the Company nor any of its
Subsidiaries is a party to, or bound by, any collective bargaining agreement or
other agreement with any labor union or like organization, and to the Knowledge
of the Debtors, there are no activities or proceedings by any individual or
group of individuals, including representatives of any labor organizations, or
labor unions, to organize any employees of the Company or any of its
Subsidiaries. As of the date of this Agreement, there is no pending or, to the
Knowledge of the Debtors, threatened labor strike, slowdown, lockout or work
stoppage, unfair labor practice or other labor dispute, or labor arbitration or
grievance.

(c) The Company and each of its Subsidiaries is in compliance in all material
respects with all applicable Laws respecting labor, employment and employment
practices, terms and conditions of employment, wages and hours, and occupational
safety and health. Neither the

 

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Company nor any of its Subsidiaries has incurred any liability or obligation
under the Worker Adjustment and Retraining Notification Act of 1988, as amended,
and the regulations promulgated thereunder or any similar state, local or
foreign Law relating to plant closings or mass layoffs that remains unsatisfied.

Section 5.18 Environmental Matters.

(a) Except as has not and would not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect:

(i) each real property operated by the Company or any of its Subsidiaries and
used in the conduct of their respective businesses: (i) is in compliance with
all applicable Environmental Laws, except as has not and would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect;
(ii) is not the subject of any pending written notice from any Governmental
Entity alleging the violation of any applicable Environmental Law; (iii) is not
currently subject to any Orders arising under any Environmental Law; and
(iv) has not had any emissions or discharges of Hazardous Substances except as
permitted under applicable Environmental Laws;

(ii) no order, decree, settlement or lien is pending or, to the Knowledge of the
Debtors, threatened, against the Company or any of its Subsidiaries relating to
Liability under any Environmental Law that has not been remedied as of the date
of this Agreement; and

(iii) there are no other circumstances or conditions that would reasonably be
expected to result in any claims, liability, investigations, costs or
restrictions on the ownership, use, or transfer of the Company’s or any of its
Subsidiaries’ assets or properties in connection with any Environmental Law.

(b) The Company has made available to the Supporting Lenders copies of all
environmental reports, studies, assessments, sampling data, memoranda and other
information in its possession.

Section 5.19 FDA and Related Regulatory Matters.

(a) Each of the Company and its Subsidiaries is conducting and has at all times
conducted its business and operations in compliance with the FDCA, 21 U.S.C.
§301 et. seq., and all applicable regulations promulgated by the FDA
(collectively, “FDA Law and Regulation”), and the Laws and regulations of other
similar Governmental Entities that regulate the safety and effectiveness of
medical device and biological products. Each Medical Device, as that term is
defined in 21 U.S.C. § 321(h) of the FDCA, that is manufactured, tested,
distributed and/or marketed by the Company and its Subsidiaries, is being
manufactured, tested, distributed and/or marketed by the Company and its
Subsidiaries in material compliance with applicable FDA Law and Regulation and
the Laws and regulations of other similar Governmental Entities that regulate
the safety and effectiveness of medical device and biological products,
including those relating to (i) good manufacturing practices, (ii) regulatory
approvals or clearances to

 

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market Medical Devices, (iii) investigational studies, (iv) labeling, (v) record
keeping, and (vi) filing of reports to FDA or other similar Governmental
Entities.

(b) Section 5.19(b) of the Company Disclosure Letter sets forth a list of all
registrations, clearances and approvals issued under the FDCA (“FDCA Permits”)
and held exclusively by the Company or its Subsidiaries, including pre-market
notifications under section 510(k) of the FDCA (21 U.S.C. § 360(k)) (“510(k)s”)
and pre-market approval applications and associated supplements approved in
accordance with 21 U.S.C. § 360(e) (“PMAs”). Such listed FDCA Permits are the
only FDCA Permits that are required for the Company or its Subsidiaries to
conduct the Business in the United States. Each such FDCA Permit is in full
force and effect and no suspension, revocation, cancellation or withdrawal of
such FDCA Permit is threatened and there is no basis for believing that such
FDCA Permit will be suspended, revoked, cancelled or withdrawn. The Company or
its Subsidiaries exclusively own all 510(k)s and PMAs for the Products, and the
FDA has not threatened in writing to suspend or revoke any such 510(k)s or PMAs.

(c) The Company and its Subsidiaries have paid all fees pursuant to the Medical
Device User Fee Amendments and complied with the Device Facility Registration of
Establishment regulations and all devices of the Company and its Subsidiaries
are appropriately listed with FDA.

(d) Except as set forth on Section 5.19(d) of the Company Disclosure Letter,
none of the Company nor any of its Subsidiaries have received any notice or
communication from the FDA or other similar Governmental Entities alleging
noncompliance with any applicable FDA Law and Regulation and the Laws and
regulations of other similar Governmental Entities that regulate the safety and
effectiveness of medical device and biological products. The Company and its
Subsidiaries are not subject to any enforcement, regulatory or administrative
proceedings by the FDA or other similar Governmental Entities and no such
proceedings have been threatened. There is no civil, criminal or administrative
action, suit, demand, claim, complaint, hearing, investigation, demand letter,
warning letter, untitled letter, proceeding or request for information pending
against the Company or its Subsidiaries, and neither the Company nor any of its
Subsidiaries have any liability (whether actual or contingent) for failure to
comply with any FDA Law and Regulation or the Laws and regulations of other
similar Governmental Entities that regulate the safety and effectiveness of
medical device and biological products. There is no act, omission, event, or
circumstance that would give rise to or lead to any such action, suit, demand,
claim, complaint, hearing, investigation, notice, demand letter, warning letter,
proceeding or request for information or any such liability. There has not been
any violation of any FDA Law and Regulation and the Laws and regulations of
other similar Governmental Entities that regulate the safety and effectiveness
of medical device and biological products in product development efforts,
submissions, record keeping and reports to FDA or other similar Governmental
Entity that could require or lead to investigation, corrective action or
enforcement, regulatory or administrative action. There are no civil or criminal
proceedings relating to the Company, its Subsidiaries or any Company or
Subsidiary employee which involve a matter within or related to the FDA’s
jurisdiction or the jurisdiction of other similar Governmental Entities that
regulate the safety and effectiveness of medical device and biological products
whether within the United States or abroad.

 

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(e) Neither the Company nor any of its Subsidiaries have not introduced into
commercial distribution any products manufactured by or on behalf of the Company
and its Subsidiaries or distributed any products on behalf of another
manufacturer which were upon their shipment adulterated or misbranded in
violation of 21 U.S.C. § 331 or the Laws and regulations of other similar
Governmental Entities that regulate the safety and effectiveness of medical
device and biological products.

(f) Since January 1, 2015, there has been no false or misleading information or
significant omission in any applications, submissions, or reports submitted by
the Company or any of its Subsidiaries to any Governmental Entity, including the
FDA, in violation of any applicable Law or Order.

(g) Except as identified in Section 5.19(g) of the Company Disclosure Letter,
(i) all clinical, pre-clinical and other studies and tests conducted by, or on
behalf of or sponsored by the Company or any of its Subsidiaries have been and
are being conducted in accordance with applicable Law, including the FDCA and
its applicable implementing regulations at 21 C.F.R. Parts 50, 54, 56, 58 and
812, (ii) no investigational device exemption filed by or on behalf of the
Company or any of its Subsidiaries with the FDA has been terminated or suspended
by any Regulatory Authority and (iii) no Regulatory Authority has commenced, or
threatened in writing to initiate, any Cause of Action to place a clinical hold
order on, or otherwise terminate, delay or suspend, any proposed or ongoing
clinical investigation conducted or proposed to be conducted by or on behalf of
the Company or any of its Subsidiaries. There have been no developments in
connection with any clinical, pre-clinical or other studies or tests conducted
by, or on behalf of or sponsored by the Company or its Subsidiaries that would
reasonably be likely to (x) impact any Governmental Entity’s approval of a
Product, (y) create the possibility of the reclassification of any Product or
(z) jeopardize the continuation of such studies or tests.

(h) No officer, employee or agent of the Company or any of its Subsidiaries has:
(i) made any untrue statement or fraudulent statement to the FDA or any other
Governmental Entity; (ii) failed to disclose a fact required to be disclosed to
the FDA or any other Governmental Entity; or (iii) committed an act, made a
statement, or failed to make a statement that would reasonably be expected to
provide a basis for the FDA or any other Governmental Entity to invoke its
policy respecting “Fraud, Untrue Statements of Material Facts, Bribery, and
Illegal Gratuities,” as set forth in 56 Fed. Reg. 46191 (September 10, 1991). No
officer, employee or agent of the Company or its Subsidiaries has been convicted
of any crime or engaged in any conduct for which debarment is mandated or
permitted by 21 U.S.C. § 335a. No officer, employee or agent of the Company or
its subsidiaries has been convicted of any crime or engaged in any conduct for
which such person or entity could be excluded from participating in the federal
health care programs under Section 1128 of the Social Security Act or any
similar law or regulation. Neither the Company nor any of its Subsidiaries is a
party to a Corporate Integrity Agreement with the U.S. Department of Health and
Human Services Office of Inspector General or has had any reporting obligations
pursuant to any settlement, deferred prosecution, consent decree, or any other
agreement entered into with any Governmental Entity.

(i) With respect to each Product sold by the Company or its Subsidiaries, the
Company and its Subsidiaries have complied with (i) all applicable contractual
commitments applicable to such Product, (ii) all product specifications
applicable to such Product and (iii) all

 

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express and implied warranties applicable to each such Product, in each case of
clauses (i)-(iii). The standard warranty terms for the Company and its
Subsidiaries have been made available to the Supporting Lenders.

(j) All material product issues, incidents and complaints have been suitably
investigated, documented and managed, any applicable problem or legally required
reports have been filed with FDA and other similar Governmental Entities that
regulate the safety and effectiveness of medical device and biological products
and any necessary recalls have been fully implemented.

Section 5.20 Taxes.

(a) The Company and each of its Subsidiaries has prepared (or caused to be
prepared) and timely filed (taking into account valid extensions of time within
which to file) all material Tax Returns required to be filed by any of them, and
all such filed Tax Returns (taking into account all amendments thereto) are
accurate and complete in all material respects.

(b) All material Taxes owed by the Company and each of its Subsidiaries that are
due and payable (whether or not shown as due on a Tax Return) have been timely
paid or, if not yet due and payable, adequately reserved against in accordance
with GAAP.

(c) No deficiency for any amount of material Taxes has been proposed or asserted
in writing or assessed by any Taxing Authority against the Company or any of its
Subsidiaries that remains unpaid or unresolved.

(d) The Company and each of its Subsidiaries has not received written notice of
any pending Causes of Action, examinations or proposed adjustments in respect of
any material amount of Taxes of the Company or any of its Subsidiaries.

(e) All material Taxes required to be withheld or collected by the Company or
any of its Subsidiaries have been withheld and collected and, to the extent
required by applicable Law, timely paid to the appropriate Taxing Authority, and
all forms required to be filed with respect thereto have been properly completed
and timely filed.

(f) There are no material Encumbrances for Taxes on any of the assets of the
Company or any of its Subsidiaries, other than Encumbrances for Taxes or other
governmental charges not yet due and payable or that are being contested in good
faith by appropriate proceedings and are reflected on or specifically reserved
against or otherwise disclosed in any consolidated balance sheet included in the
Financial Statements.

(g) Neither the Company nor any of its Subsidiaries has been a “controlled
corporation” or a “distributing corporation” in any distribution occurring
during the two (2)-year period ending on the date of this Agreement that was
purported or intended to be governed by Section 355 of the Code (or any similar
provision of state, local or non-U.S. Law).

(h) No claim has been received, or is expected by the Company to be received,
with respect to the Company or any of its Subsidiaries from a Taxing Authority
in a jurisdiction where such entity does not file Tax Returns that it is or may
be subject to taxation

 

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by, or required to file any Tax Return in, that jurisdiction which claim has not
since been resolved.

(i) Neither the Company nor any of its Subsidiaries has been a member of an
affiliated group of corporations filing a consolidated federal income Tax Return
(other than a group the common parent of which is the Company) or has had any
liability for the Taxes of any person (other than the Company or any of its
Subsidiaries) under U.S. Treasury Regulation Section 1.1502-6 (or any similar
provision of any state, local or non-U.S. Law), as a transferee or successor.

(j) Neither the Company nor any of its Subsidiaries is a party to, or is bound
by, or has any obligation under, any Tax sharing Contract, Tax allocation
agreement, Tax indemnity obligation or similar agreement or practice other than
(A) Contracts solely among the Company and/or its Subsidiaries and (B) customary
Tax indemnification provisions in Contracts entered into in the ordinary course
of business, the primary purpose of which does not relate to Taxes.

(k) Neither the Company nor any of its Subsidiaries has currently in effect any
waiver of any statute of limitations in respect of Taxes or any agreement to any
extension of time with respect to the filing of a Tax Return or an assessment or
deficiency for Taxes (other than pursuant to extensions of time to file Tax
Returns obtained in the ordinary course of business).

(l) Neither the Company nor any of its Subsidiaries has participated in any
“listed transaction” within the meaning of U.S. Treasury Regulations
Section 1.6011-4(b).

(m) The Company has made available to the Supporting Lenders accurate and
complete copies of any private letter ruling requests, closing agreements or
gain recognition agreements with respect to Taxes of the Company or any of its
Subsidiaries requested or executed in the past five (5) years.

Section 5.21 Insurance. The insurance policies maintained by the Company and its
Subsidiaries (the “Insurance Policies”) provide full and adequate coverage for
all normal risks incident to the business of the Company and its Subsidiaries
and their respective properties and assets, except for any such failures to
maintain such insurance policies that have not had and would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
Each of the Insurance Policies is in full force and effect and all premiums due
with respect to all Insurance Policies have been paid, except as has not had and
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.

Section 5.22 No Other Representations; No Reliance.

(a) Notwithstanding the delivery or disclosure to the Supporting Lenders, any of
their Affiliates or any of their respective Representatives of any documentation
or other information (including any financial projections or other supplemental
data) or anything to the contrary in this Agreement, except for the
representations and warranties expressly contained in this Article V (in each
case, as qualified by the Company Disclosure Letter), (i) neither the Company
nor any other Person has made or is making, and each of the Company and its
Affiliates expressly disclaims, any representation or warranty of any kind or
nature, whether

 

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express or implied, at Law or in equity, with respect to the accuracy or
completeness of any information provided or made available to the Supporting
Lenders by or on behalf of the Company in connection with or related to this
Agreement, the transactions contemplated hereby, or the completeness of any
information provided in connection therewith and (ii) the Company hereby
expressly disclaims any such other representations and warranties.

(b) Except for the representations and warranties contained in Article VI, the
Company acknowledges that it (a) has had an opportunity to conduct any and all
due diligence with respect to the Supporting Lenders and any of their respective
Subsidiaries in connection with the transactions contemplated hereby, (b) has
relied solely upon its own independent review, investigation, and/or inspection
of any documents in connection with the transactions contemplated hereby and
(c) did not rely upon any written or oral statements, representations, promises,
warranties, or guaranties whatsoever, whether express, implied, by operation of
Law, or otherwise regarding any Supporting Lender or any Subsidiaries or
Affiliates thereof, or with respect to any other information provided or made
available to the Company or any of its Subsidiaries in connection with the
transactions contemplated hereby, or the completeness of any information
provided in connection therewith.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF THE SUPPORTING LENDERS

Each applicable Supporting Lender represents and warrants to the Company (as to
itself only, severally and not jointly), as follows:

Section 6.1 Qualification; Organization. Each Supporting Lender is a legal
entity duly organized, validly existing and in good standing (with respect to
jurisdictions that recognize such concept) under the laws of its jurisdiction of
organization and has all requisite corporate or similar power and authority to
own, lease and operate its properties and assets and to carry on its business as
presently conducted, except where the failure to be so existing and in good
standing or to have such power and authority would not, individually or in the
aggregate, materially impair or materially delay its ability to perform its
obligations under this Agreement. Each Supporting Lender is qualified to do
business and is in good standing (with respect to jurisdictions that recognize
such concept) as a foreign corporation or other entity in each jurisdiction
where the ownership, leasing or operation of its assets or properties or conduct
of its business requires such qualification, except where the failure to be so
qualified or, where relevant, in good standing, would not, individually or in
the aggregate, materially impair or materially delay its ability to perform its
obligations under this Agreement.

Section 6.2 Corporate Authority. Each Supporting Lender has the requisite power
and authority to execute and deliver (or to cause one or more of its Affiliates
to execute and deliver, as applicable) this Agreement and each other agreement,
document or instrument contemplated hereby or thereby to which it is a party
and, subject to the Company obtaining necessary Bankruptcy Court approvals from
and after the Petition Date, to carry out the Restructuring and to perform its
obligations hereunder and thereunder. The execution and delivery of this
Agreement and each other agreement, document or instrument contemplated hereby
or thereby to which it is a party and the consummation of the Transactions have
been duly authorized by all

 

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requisite corporate or similar action on the part of each Supporting Lender.
This Agreement and each other agreement, document or instrument contemplated
hereby or thereby to which it is a party has been duly and validly executed and
delivered (subject, from and after the Petition Date, to the approval of the
Bankruptcy Court). Subject to the Company obtaining necessary Bankruptcy Court
approvals from and after the Petition Date, this Agreement and each such other
document have been duly and validly executed and delivered by each of the
applicable Supporting Lenders and each of their applicable Affiliates, and,
assuming the due authorization, execution and delivery by the other Parties or
their Affiliates, as applicable, constitute a legal, valid and binding agreement
of each of the Supporting Lenders and their Affiliates, as applicable,
enforceable against such Person in accordance with its terms, subject to the
Enforceability Limitations.

Section 6.3 Consents and Approvals. Except as expressly provided in this
Agreement or in the Bankruptcy Code and Section 5.4, no consent, waiver,
approval, Order, permit or authorization (including those with respect to state
licensing required to operate the Business) of, or declaration, filing or
registration with, or notification to, any Governmental Entity, including in
connection or compliance with the HSR Act, is necessary or required on the part
of (a) any Supporting Lender in connection with the execution and delivery of
this Agreement or any other agreement, document or instrument contemplated
hereby to which such Supporting Lender is a party and (b) any applicable
Affiliate of any Supporting Lender in connection with the execution and delivery
of any agreement, document or instrument contemplated hereby to which such
Person is a party, or in connection with, the performance of such Person’s
obligations hereunder and thereunder, or the consummation of the Transactions
(with or without notice or lapse of time, or both), except in each case of the
foregoing clauses (a) and (b), for immaterial Consents.

Section 6.4 No Violations. The execution or delivery of this Agreement or any
agreement, document or instrument contemplated hereby or thereby by any
Supporting Lender or any of its applicable Affiliates, the performance of such
Person’s obligations hereunder and thereunder, and the consummation of the
transactions contemplated hereby or thereby, as applicable, do not and will not
(a) conflict with or result in any violation or breach of any provisions of the
certificate of incorporation, bylaws or other organizational documents of any
such Person or (b) conflict with or violate any Order or Law applicable to any
Supporting Lender or its properties, rights or assets, except in the case of
clause (b), for any conflicts or violations that (y) have not been and would not
reasonably be expected to be, individually or in the aggregate, material to the
Business (taken as a whole) and (z) would not reasonably be expected to prevent
or materially hinder or delay any of the Transactions or the transactions
contemplated by any of the Definitive Documents or affect the ability of the
Supporting Lenders or their Affiliates, as applicable, to perform their
obligations under this Agreement, the Restructuring Term Sheet or any of the
Definitive Documents.

Section 6.5 Brokers. Other than Houlihan Lokey Capital, Inc., the Supporting
Lenders have not employed or engaged any investment banker, broker or finder who
is entitled to any brokerage, finder’s or other fee or any commission from the
Supporting Lenders in connection with this Agreement, the Restructuring Term
Sheet, the Definitive Documents, the transactions contemplated by this Agreement
or any other agreement, document or instrument contemplated hereby or thereby
based upon arrangements made by or on behalf of the Supporting Lenders or any of
their Affiliates.

 

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Section 6.6 Ownership of Claims. Each Supporting Lender represents and warrants
to each of the other Parties that, as of the date such Party executes this
Agreement or a Transferee Joinder, as applicable: (a) it either (i) is the sole
legal and beneficial owner of the aggregate principal amount of Claims set forth
on its signature page, in each case, free and clear of any pledge, lien,
security interest, charge, claim, proxy, voting restriction, right of first
refusal or other limitation on disposition of any kind, in each case, that is
reasonably expected to adversely affect such Supporting Lender’s performance of
its obligations contained in this Agreement or (ii) has full power and authority
to vote the Claims (including Prepetition Agreement Claims held through
participations or interests or pursuant to permissible transfers) set forth on
its signature page; (b) it has full power and authority to vote on and consent
to all matters concerning the Claims set forth on its signature page and to
exchange, assign, and transfer such Claims; (c) it is either (i) a qualified
institutional buyer as defined in Rule 144A of the Securities Act or (ii) an
institutional accredited investor as defined in Rule 501(a)(l), (2), (3) or
(7) under the Securities Act; (d) any securities acquired by a Supporting Lender
in connection with the Restructuring described herein and in the Restructuring
Term Sheet will be acquired for investment purposes and not with a view to
distribution in violation of the Securities Act; and (e) it has made no prior
assignment, sale, participation, grant, conveyance or other Transfer of, and has
not entered into any other agreement to assign, sell, participate, grant, convey
or otherwise Transfer, in whole or in part, any portion of its right, title, or
interests in any Claims that is inconsistent with the representations and
warranties of such Supporting Lender herein or would render such Supporting
Lender otherwise unable to comply with this Agreement and perform its
obligations hereunder.

Section 6.7 No Other Representations; No Reliance.

(a) Notwithstanding the delivery or disclosure to the Company, any of its
Affiliates or any of their respective Representatives of any documentation or
other information (including any financial projections or other supplemental
data) or anything to the contrary in this Agreement, except for the
representations and warranties expressly contained in this Article VI,
(i) neither the Supporting Lenders nor any other Person has made or is making,
and each of the Supporting Lenders and its Affiliates expressly disclaims, any
representation or warranty of any kind or nature, whether express or implied, at
Law or in equity, with respect to the accuracy or completeness of any
information provided or made available to the Company by or on behalf of the
Supporting Lenders in connection with or related to this Agreement, the
transactions contemplated hereby, or the completeness of any information
provided in connection therewith and (ii) the Supporting Lenders hereby
expressly disclaim any such other representations and warranties.

(b) Except for the representations and warranties contained in Article V, the
Supporting Lenders acknowledge that they (a) have had an opportunity to conduct
any and all due diligence with respect to the Company and any of its respective
Subsidiaries in connection with the transactions contemplated hereby, (b) have
relied solely upon their own independent review, investigation, and/or
inspection of any documents in connection with the transactions contemplated
hereby and (c) did not rely upon any written or oral statements,
representations, promises, warranties, or guaranties whatsoever, whether
express, implied, by operation of Law, or otherwise regarding the Company or any
Subsidiaries or Affiliates thereof, or with respect to any other information
provided or made available to such Supporting Lender in connection with

 

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the transactions contemplated hereby, or the completeness of any information
provided in connection therewith.

ARTICLE VII

COVENANTS

Section 7.1 Interim Operations.

(a) The Company covenants and agrees as to itself and its Subsidiaries that,
during the Effective Period, except (i) as otherwise expressly required or
contemplated by this Agreement or the Restructuring Term Sheet, (ii) as required
by applicable Law (including the Bankruptcy Code) or (iii) as consented to in
writing by the DIP Agent (which consent shall not be unreasonably withheld,
conditioned or delayed), (x) the Business shall be conducted in the ordinary
course of business consistent with past practice and in accordance with
applicable Law and (y) the Company and its Subsidiaries shall use their
respective commercially reasonable efforts to preserve intact the Business and
their relationship with customers, suppliers, distributors, wholesalers,
retailers, employees and Governmental Entities.

(b) Without limiting the generality of, and in furtherance of, the foregoing,
during the Effective Period, except (x) as otherwise expressly required or
contemplated by this Agreement or the Restructuring Term Sheet, (y) as required
by applicable Law (including the Bankruptcy Code) or (z) as consented to in
writing by the DIP Agent (which consent shall not be unreasonably withheld,
conditioned or delayed), the Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly:

(i) amend the certificate of incorporation, bylaws or other organizational
documents of the Company or its Subsidiaries;

(ii) merge or consolidate the Company or any of its Subsidiaries with any other
Person, or restructure, reorganize or completely or partially liquidate the
Company or any of its Subsidiaries or otherwise enter into any agreements
providing for the sale of their respective material assets, operations or
business;

(iii) acquire assets outside of the ordinary course of business from any other
Person;

(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize
the issuance, sale, pledge, disposition, grant, transfer or encumbrance of, any
shares of capital stock or Equity Interests of the Company or any of its
Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of
the Company to the Company or another wholly owned Subsidiary), or securities
convertible or exchangeable into or exercisable for any shares of such capital
stock or Equity Interests, or any options, warrants or other rights of any kind
to acquire any of the foregoing;

(v) incur, create or assume any Encumbrance (other than Permitted Encumbrances)
on any properties or assets, tangible or intangible, of the Company or any of
its Subsidiaries;

 

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(vi) (A) incur, assume or guarantee any Indebtedness or capitalized lease
obligations or issue any debt securities or (B) make any loans, advances,
guarantees or capital contributions to, or investments in, any other Person;

(vii) declare, set aside, make or pay any dividend or other distribution,
payable in cash, stock, property or otherwise, with respect to any of its
capital stock or Equity Interests (except for dividends paid by any direct or
indirect wholly owned Subsidiary to the Company or to any other direct or
indirect wholly owned Subsidiary) or enter into any agreement with respect to
the voting of its capital stock or Equity Interests (other than this Agreement);

(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise
acquire, directly or indirectly, any of its capital stock or Equity Interests or
securities convertible or exchangeable into or exercisable for any of the
foregoing;

(ix) except in accordance with the Budget (as defined in the DIP Orders), make
or authorize any capital expenditure;

(x) enter into any Contract that would have been a Material Contract had it been
entered into prior to this Agreement;

(xi) other than in the ordinary course of business, cancel or terminate (other
than, for the avoidance of doubt, any expiration in accordance with its terms),
or modify or amend in any material respect, or waive any material rights under,
any Material Contract;

(xii) make any material changes with respect to material accounting policies or
procedures, except as required by changes in applicable Law or GAAP;

(xiii) settle or compromise any (A) Cause of Action (other than settlements
involving only unsecured claims with an allowed amount of less than one hundred
thousand dollars ($100,000)), or (B) Patent-related Cause of Action involving
any of the Company Intellectual Property;

(xiv) transfer, assign, sell, lease, grant any license (other than non-exclusive
licenses granted in the ordinary course of business) with respect to, or, to the
extent within the control of the Company or any of its Subsidiaries, abandon or
permit to lapse, any material Company Intellectual Property;

(xv) terminate or fail to renew any material Business Permit;

(xvi) other than in the ordinary course of business, sell, pledge, dispose of,
transfer or authorize the sale, pledge, disposition or transfer of any assets or
properties of the Company or its Subsidiaries;

(xvii) grant any material licenses, sublicenses, covenants not to assert or
similar rights with respect to any assets or properties, whether tangible or
intangible, of the Company or its Subsidiaries;

 

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(xviii) fail to use commercially reasonable efforts to maintain the Insurance
Policies or to renew or replace the Insurance Policies following their
termination;

(xix) except as required pursuant to the terms of any Debtor Plan in effect as
of the date of this Agreement, the Approved KEIP or the Approved KERP,
(A) increase in any manner the compensation, consulting fees, incentive, bonus,
retirement, welfare, fringe or other benefits, severance or termination pay of
any employee or independent contractor, (B) become a party to, establish, adopt,
amend, commence participation in or terminate any Debtor Plan or any arrangement
that would have been a Debtor Plan had it been entered into prior to this
Agreement, (C) grant any new awards, or amend or modify the terms of any
outstanding awards, under any Debtor Plan, (D) take any action to accelerate the
vesting or lapsing of restrictions or payment, or fund or in any other way
secure the payment, of compensation or benefits under any Debtor Plan,
(E) change any actuarial or other assumptions used to calculate funding
obligations with respect to any Debtor Plan that is required by applicable Law
to be funded or change the manner in which contributions to such plans are made
or the basis on which such contributions are determined, except as may be
required by GAAP, (F) forgive any loans or issue any loans (other than routine
travel advances issued in the ordinary course of business) to any employee,
(G) hire any employee or engage any independent contractor (who is a natural
person) other than the engagement of independent contractors to fill vacancies
or staff currently existing or contemplated projects to the extent not currently
staffed or (H) terminate the employment of any officer other than for cause
other than any officer who was provided with written notice of termination prior
to the date of this Agreement and who is listed on Section 7.1(b)(xix) of the
Company Disclosure Letter;

(xx) become a party to, establish, adopt, amend, commence participation in or
terminate any collective bargaining agreement or other agreement with a labor
union, works council or similar organization;

(xxi) (A) change in any material respect any material method of accounting of
the Company or its Subsidiaries for Tax purposes; (B) enter into any agreement
with any Taxing Authority (including a “closing agreement” under Code
Section 7121) with respect to any material Tax or Tax Returns of the Company or
its Subsidiaries; (C) surrender a right of the Company or its Subsidiaries to a
material Tax refund; (D) change an accounting period of the Company or its
Subsidiaries with respect to any material Tax; (E) file an amended Tax Return;
(F) change or revoke any material election with respect to Taxes; (G) make any
material election with respect to Taxes that is inconsistent with past practice;
(H) file any Tax Return that is inconsistent with past practice; (I) consent to
any extension or waiver of the limitations period applicable to any material Tax
claim or assessment (other than in the ordinary course of business); or (J) take
any action (or fail to take any action) that would result in a loss of any
material Tax losses, credits or other attributes that may be used to reduce Tax
liabilities;

(xxii) revalue any assets or properties of the Company or its Subsidiaries
(including Inventory), except to the extent required by GAAP; or

 

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(xxiii) agree, authorize or commit, in writing or otherwise, to take any of the
foregoing actions.

(c) The Supporting Lenders shall not knowingly take or permit any of their
Subsidiaries to take any action that is reasonably likely to prevent or
materially impede the consummation of the Transactions.

Section 7.2 Access and Information. Subject to applicable Law, the Company shall
(and shall cause its Subsidiaries to) afford the Supporting Lenders and the
Supporting Lenders’ officers, directors, employees, agents, counsel,
accountants, investment bankers, financing sources and other authorized
Representatives reasonable access, during normal business hours and upon
reasonable advance notice, to all of the Company’s, its Subsidiaries’ and their
applicable Affiliates’ properties, offices and Books and Records and, during
such period, the Company shall (and shall cause its Subsidiaries to) furnish as
promptly as practicable to the Supporting Lenders all information (financial or
otherwise) the Supporting Lenders may reasonably request concerning its
Business; provided that no investigation pursuant to this Section 7.2 shall
affect or be deemed to modify any representation or warranty made by the Company
herein. Notwithstanding the foregoing, the Company shall not be required by this
Section 7.2 to provide the Supporting Lenders or their Representatives with
access to or to disclose information (i) the disclosure of which would violate
applicable Law, (ii) that in the reasonable judgment of the Company would result
in the disclosure of any Trade Secrets of third parties or violate any of its
obligations with respect to confidentiality or (iii) to disclose any privileged
information of the Company or any of its Subsidiaries.

Section 7.3 Approvals and Consents; Cooperation; Notification.

(a) Subject to the terms and conditions of this Agreement, the Company and the
Supporting Lenders shall reasonably cooperate with each other and use (and shall
cause their respective Subsidiaries and Affiliates to use) their respective
reasonable best efforts to take or cause to be taken all actions, and to do or
cause to be done all things, reasonably necessary, proper or advisable on their
part under this Agreement and applicable Law to consummate the Transactions as
soon as practicable after the date of this Agreement, including (i) unless
otherwise agreed in writing by the Parties, obtaining as promptly as practicable
all necessary waiting period expirations or terminations, consents, clearances,
waivers, licenses, Orders, registrations, approvals, permits, and authorizations
necessary or advisable to be obtained from any third party and/or any
Governmental Entity, and (ii) preparing, filing and providing as promptly as
practicable all documentation to effect all necessary notices, reports and other
filings as may be necessary to obtain all such waiting period expirations or
terminations, consents, clearances, waivers, licenses, Orders, registrations,
permits, approvals, permits or authorizations. Subject to applicable Laws
relating to the exchange of information, the Supporting Lenders and the Company
shall have the right to review in advance, and, to the extent practicable, each
will consult with the other on and consider in good faith the views of the other
in connection with, all of the information relating to the Supporting Lenders or
the Company or the Business, as the case may be, and any of their respective
Affiliates, that appears in any filing made with, or written materials submitted
to, any third party and/or any Governmental Entity in connection with the
Transactions. In exercising the rights specified in the foregoing sentence, the
Company and the Supporting Lenders shall act reasonably and as promptly as
practicable.

 

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(b) Each of the Parties shall, in connection with and without limiting the
obligations set forth in Section 7.3(a), (i) cooperate in all respects and
consult with the other Parties in connection with any filing or submission with
any Governmental Entity in connection with this Section 7.3(b), including by
allowing the other Parties to have a reasonable opportunity to review in advance
and comment on drafts of filings or submissions and reasonably considering in
good faith comments of the other Parties and providing the other Parties with
copies of filings and submissions, (ii) submit to customary background checks in
connection therewith, (iii) respond promptly to any additional requests from
Governmental Entities and (iv) subject to applicable Laws and as required by any
Governmental Entity, keep the other Parties reasonably apprised of the status of
any waiting period expirations or terminations, consents, clearances, waivers,
licenses, Orders, registrations, approvals, permits, and authorization for the
Transactions under any Antitrust Law to the extent relating to the completion of
the Transactions and to the extent such party is aware of such information,
including promptly furnishing the other with copies of notices or other
communications received by the Company or the Supporting Lenders or any of their
respective Affiliates, as the case may be, from any Governmental Entity with
respect to the foregoing clauses (i)-(iii); provided, however, that materials
required to be provided pursuant to the foregoing clauses (i)-(iv) may be
redacted (A) to remove references concerning the valuation of any of the Parties
or any of their respective Subsidiaries, (B) as necessary to comply with
contractual arrangements and (C) as necessary to address reasonable privilege or
confidentiality concerns; provided further that any of the Parties may, as each
deems advisable and necessary, reasonably designate any competitively sensitive
material provided to the other under this Section 7.3(b) as “Outside Counsel
Only Material” and materials so designated shall only be provided to each
party’s outside counsel.

(c) Subject to applicable Laws and as required by any Governmental Entity, the
Company and the Supporting Lenders each shall keep the other reasonably apprised
of the status of matters relating to completion of the Transactions to the
extent such Party is aware of such information.

(d) Notwithstanding the foregoing, nothing in this Agreement shall require the
Supporting Lenders or their Affiliates to take or agree to take any action with
respect to its business or operations unless the effectiveness of such agreement
or action is conditioned upon the completion of the Transactions.

Section 7.4 Employee Communications. During the Effective Period, prior to
making any broad-based written or oral communications to officers and employees
of the Company or any of its Subsidiaries pertaining to compensation or benefit
matters that are affected by the Transactions, the Company shall provide the
Supporting Lenders with a copy of the intended communication, the Supporting
Lenders shall have no less than three (3) Business Days to review and comment on
the communication, and the Company shall consider any such comments in good
faith.

Section 7.5 Alternative Transaction Procedures.

(a) Notwithstanding any provisions to the contrary herein, the Debtors may
receive (but not actively pursue) unsolicited proposals, offers, indications of
interest or inquiries for one or more Alternative Transactions from other
parties (such Alternative Transaction, a

 

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“Proposed Alternative Transaction”); provided that the Debtors shall promptly
notify the Prepetition Agents of any Proposed Alternative Transaction within two
(2) Business Days of receipt thereof with such notice to include the material
terms thereof and any accompanying documentation and/or correspondence relating
to the Proposed Alternative Transaction, including (unless prohibited by a
separate agreement) the identity of the person or group of persons submitting
such Proposed Alternative Transaction.

(b) To the extent that the Debtors, in consultation with the Prepetition Agents,
determine, in good faith and consistent with the Debtors’ fiduciary duties, that
a Proposed Alternative Transaction would reasonably be expected to provide
better recovery to holders of Claims and Equity Interests in the Debtors as
compared to the recovery such holders would receive pursuant to the transactions
contemplated herein, including consummation of the Restructuring (such Proposed
Alternative Transaction, a “Superior Alternative Transaction”), the Debtors may
negotiate, provide due diligence in connection with, discuss, and/or analyze
such Superior Alternative Transaction without breaching or terminating this
Agreement; provided that a determination by the Board, in good faith, after
consulting its outside legal counsel, that proceeding with the Restructuring and
pursuit of confirmation and consummation of the Plan or consummation of the
Transactions instead of a Superior Alternative Transaction would be a breach of
the Board’s fiduciary duties under applicable law shall be required prior to the
Debtors electing to enter into a Superior Alternative Transaction; provided
further that the Debtors shall, prior to electing to enter into a Superior
Alternative Transaction, provide the Prepetition Agents with seven (7) Business
Days’ written notice of their intent to enter into such Superior Alternative
Transaction, with such notice to include the definitive documentation with
respect to such Superior Alternative Transaction (such seven (7) Business Day
notice period, the “Alternative Transaction Notice Period”).

(c) At any time during the Alternative Transaction Notice Period, the Supporting
Lenders may submit to the Debtors a proposal for one or more Alternative
Transactions (any such proposal, a “Revised Supporting Lender Proposal”). The
Debtors shall, (i) promptly following the receipt of any Revised Supporting
Lender Proposal, determine in consultation with the Prepetition Agents whether
the Revised Supporting Lender Proposal would reasonably be expected to provide
equal or better recovery to holders of Claims and Equity Interests in the
Debtors as compared to the recovery such holders would receive pursuant to the
Superior Alternative Transaction, and (ii) if so, immediately terminate any
negotiations, provision of due diligence or other discussions in connection with
such Superior Alternative Transaction.

(d) If the Debtors notify counsel to the Prepetition Agents that the Debtors
have entered, or will be entering, into definitive documentation with respect to
a Superior Alternative Transaction, all obligations of the Supporting Lenders
shall immediately terminate and all of the Supporting Lenders’ rights shall be
reserved.

Section 7.6 Insurance. The Company shall (and shall cause its Subsidiaries to)
provide the Supporting Lenders with all cooperation, information and assistance
reasonably requested by the Supporting Lenders in connection with obtaining the
Post-Restructuring Insurance, including providing any prospective insurer (and
its advisors and representatives) access to information, documents and personnel
as may reasonably be requested by such Persons.

 

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ARTICLE VIII

CONDITIONS PRECEDENT

Section 8.1 Conditions to Obligation of the Company and the Supporting Lenders.
The respective obligations of each Party to consummate the Transactions shall be
subject to the satisfaction at or prior to the Effective Date of the following
conditions:

(a) No Injunctions. There shall not be in effect any Order by a Governmental
Entity of competent jurisdiction restraining, enjoining or having the effect of
making the Transactions or the transactions contemplated by the Definitive
Documents illegal or otherwise prohibiting the consummation of the Transactions
or the transactions contemplated by the Definitive Documents. No applicable Law
shall have been enacted, entered, promulgated and remain in effect that
prohibits or makes illegal the consummation of the Transactions or the
transactions contemplated by the Definitive Documents.

(b) Bankruptcy Court Orders. The Bankruptcy Court shall not have entered an
Order (i) dismissing the Chapter 11 Cases or converting the Chapter 11 Cases to
a case under chapter 7 of the Bankruptcy Code, (ii) pursuant to Section 1104 of
the Bankruptcy Code appointing a trustee, receiver or an examiner to operate,
manage or examine any of the Company’s businesses or (iii) that is inconsistent
with this Agreement, the Plan or the Confirmation Order in a manner adverse to
the Supporting Lenders.

(c) No Alternative Transaction. The Company shall not have entered into
definitive documentation with respect to any Alternative Transaction.

Section 8.2 Conditions to Obligation of the Company. The obligations of the
Company to consummate the Transactions shall be subject to the satisfaction or
waiver (to the extent permitted by applicable Law) by the Company at or prior to
the Effective Date of the following conditions:

(a) Representations and Warranties. (i) The Lender Specified Representations,
determined without regard to any qualification as to materiality, shall be true
and correct in all material respects at and as of the date of this Agreement and
at and as of the Effective Date as though made at and as of the Effective Date,
(ii) the representations and warranties of the Supporting Lenders contained in
Article VI (other than the Lender Specified Representations) shall be true and
correct, determined without regard to any qualification as to materiality, at
and as of the date of this Agreement and at and as of the Effective Date as
though made at and as of the Effective Date, except for such failures to be true
and correct as would not, individually or in the aggregate, reasonably be
expected to (x) prevent or materially hinder or delay any of the Transactions or
the transactions contemplated by any of the Definitive Documents or (y) affect
the ability of the Supporting Lenders to perform their obligations under this
Agreement or the Restructuring Term Sheet or the Supporting Lenders or any of
their Affiliates to perform their respective obligations under any of the
Definitive Documents, in each case, in any material respect; provided, however,
that in each of the foregoing clauses (i) and (ii), any representations and
warranties that are made as of a particular date or period shall be true and
correct (in the manner set forth above), only as of such date or period.

 

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(b) Covenants and Agreements. The covenants and agreements of the Supporting
Lenders to be performed at or prior to the Effective Date shall have been
performed in all material respects in accordance with this Agreement.

(c) Confirmation Order. The Bankruptcy Court shall have entered the Confirmation
Order and if a timely appeal shall have been filed or sought, (A) no stay of the
Confirmation Order shall be in effect or (B) if such a stay shall have been
granted, then (1) (x) the stay shall have been dissolved or lifted and (y) the
appeal would not reasonably be expected to prevent or materially impede the
consummation of the Transactions or (2) a Final Order of the district court,
circuit court, or other court having jurisdiction to hear such appeal shall have
affirmed the Confirmation Order.

Section 8.3 Conditions to Obligation of the Supporting Lenders. The obligations
of the Supporting Lenders to consummate the Transactions shall be subject to the
satisfaction or waiver (to the extent permitted by applicable Law) by the
Supporting Lenders at or prior to the Effective Date of the following
conditions:

(a) Representations and Warranties. (i) The Company Specified Representations,
determined without regard to any qualification as to materiality, shall be true
and correct in all material respects at and as of the date of this Agreement and
at and as of the Effective Date as though made at and as of the Effective Date,
(ii) the representations and warranties of the Company set forth in Article V
(other than the Company Specified Representations and the representations and
warranties set forth in Section 5.8(f)) shall be true and correct, determined
without regard to any qualification as to materiality or “Material Adverse
Effect,” at and as of the date of this Agreement and at and as of the Effective
Date as though made at and as of the Effective Date, except for such failures to
be true and correct as would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect and (iii) the representations and
warranties of the Company set forth in Section 5.8(f) shall be true and correct
at and as of the date of this Agreement and at and as of the Effective Date as
though made at and as of the Effective Date; provided, however, that, in each
case of the foregoing clauses (i) through (ii), any representations and
warranties that are made as of a particular date or period shall be true and
correct (in the manner set forth above), only as of such date or period.

(b) Covenants and Agreements. The covenants and agreements of the Company to be
performed at or prior to the Effective Date shall have been performed in all
material respects in accordance with this Agreement.

(c) Officer’s Certificates. The Company shall have delivered to the Supporting
Lenders a certificate duly executed by an executive officer of the Company
certifying to the effect that the conditions set forth in Section 8.3(a) and
Section 8.3(b) have been satisfied.

(d) Confirmation Order. The Confirmation Order shall be a Final Order.

(e) Post-Restructuring Insurance. The DIP Agent shall have received a commitment
(in form and substance acceptable to the DIP Agent in its sole discretion) from
the provider(s) of the Post-Restructuring Insurance to enter into the
Post-Restructuring Insurance

 

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with the applicable Reorganized Debtors (and their applicable Affiliates) on the
Effective Date upon the effectiveness of the Plan.

Section 8.4 Frustration of Conditions. No Party may rely on the failure of any
condition set forth in Section 8.1, Section 8.2 or Section 8.3, as the case may
be, to be satisfied if such failure was caused by such Party’s breach of any
provision of this Agreement.

ARTICLE IX

TERMINATION

Section 9.1 Termination.

(a) Mutual Termination. This Agreement and the obligations hereunder may be
terminated by mutual written consent to terminate this Agreement among the
Company and the Supporting Lenders.

(b) Supporting Lender Termination. This Agreement and the obligations hereunder
shall automatically terminate one (1) Business Day (or such other notice period
as specifically set forth below) following the delivery of written notice from
the Supporting Lenders to the Company any time after and during the continuance
of any of the following events (each, a “Supporting Lender Termination Event”):

(i) a breach of any of the covenants or agreements or any of the representations
or warranties set forth in this Agreement on the part of the Company which
breach, either individually or in the aggregate with other breaches by the
Company, would result in, if occurring or continuing on the Effective Date, the
failure of the conditions set forth in Section 8.3(a) or Section 8.3(b), as the
case may be, and such breach is not curable or, if such breach is susceptible to
cure, such breach remains uncured for a period of three (3) Business Days after
receipt of notice thereof (provided that the Supporting Lenders are not then in
material breach of any of the covenants, agreements, representations or
warranties set forth in this Agreement on the part of the Supporting Lenders);

(ii) any Debtor shall pay or cause to be paid any amount outside of the ordinary
course of business or inconsistent with the Budget (as defined in the DIP
Orders), subject to Permitted Variances (as defined in the DIP Orders), without
the consent of the DIP Agent;

(iii) the Bankruptcy Court shall have entered an unstayed Order dismissing one
or more of the Chapter 11 Cases or converting any of the Chapter 11 Cases to a
case or cases under chapter 7 of the Bankruptcy Code;

(iv) an Order denying confirmation of the Plan shall have been entered by the
Bankruptcy Court or the Confirmation Order shall have been reversed, vacated or
otherwise modified in a manner inconsistent with this Agreement or the Plan
without the prior written consent of the DIP Agent;

 

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(v) any of the Debtors move to assume any executory Contracts or unexpired
Leases without the consent of the DIP Agent inconsistent with the Plan and such
assumption is not remedied within three (3) Business Days following notice
thereof to the Company by the Supporting Lenders;

(vi) any court of competent jurisdiction or governmental authority, including
any regulatory authority, shall have entered a final, non-appealable judgment or
order declaring the Restructuring, this Agreement, or any material portion
hereof to be unenforceable or illegal or enjoining the consummation of a
material portion of the Restructuring and such judgment or order is not stayed,
dismissed, vacated or modified within five (5) Business Days following notice
thereof to the Company by the Supporting Lenders; provided, however, that in the
case of a stay, upon such judgment or order becoming unstayed and five
(5) Business Days’ notice thereof to the Company by the Supporting Lenders, a
Supporting Lender Termination Event shall be deemed to have occurred;

(vii) the Company fails to comply with or achieve the Milestones set forth in
Exhibit D; provided, however, the Company shall not have failed to comply with
or achieve the Milestones set forth in Exhibit D to the extent that an extension
of any such Milestones for up to three (3) days is required to accommodate the
Bankruptcy Court’s calendar;

(viii) the filing by the Company of any motion or pleading with the Bankruptcy
Court that is inconsistent with this Agreement and the Restructuring Term Sheet
in any material respect and such motion is not withdrawn or appropriately
modified within two (2) calendar days following notice thereof to the Company by
the Supporting Lenders;

(ix) the Bankruptcy Court grants relief that is inconsistent with this Agreement
or the Restructuring and such inconsistent relief is not dismissed, vacated or
modified to be consistent with this Agreement and the Restructuring within five
(5) Business Days following notice thereof to the Company by the Supporting
Lenders;

(x) any of the following shall have occurred: (a) the Company or any of its
Affiliates shall have filed any motion, application, adversary proceeding or
cause of action (1) challenging the validity, enforceability, perfection or
priority of, or seeking avoidance or subordination of any Claims (in any
capacity) of the Prepetition Lenders or the liens securing such Claims or
(2) otherwise seeking to impose liability upon or enjoin the Prepetition Lenders
(in any capacity); or (b) the Company or any affiliate of the Company shall have
supported, encouraged or solicited any other party to file any adversary
proceeding or Cause of Action referred to in the immediately preceding
clause (a) filed by a third party, or consents or does not object (without the
consent of the DIP Agent) to the standing of any such third party to bring such
application, adversary proceeding or Cause of Action;

(xi) the Company (a) withdraws or revokes the Plan or files, propounds or
otherwise supports any chapter 11 plan other than the Plan or (b) files or
publicly

 

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proposes, announces, enters into or otherwise supports any (i) Alternative
Transaction or (ii) amendment or modification to the Restructuring containing
any terms that are inconsistent with the implementation of, and the terms set
forth in, the Restructuring Term Sheet unless such amendment or modification is
otherwise consented to in accordance with Section 10.14;

(xii) on or after the date of this Agreement the Company consummates any merger,
consolidation, material disposition, material acquisition, material investment,
dividend, incurrence of Indebtedness or other similar transaction outside the
ordinary course of business that is inconsistent with the restrictions set forth
in Section 7.1(b), other than with the consent of the DIP Agent;

(xiii) the Definitive Documents and any amendments, modifications or supplements
thereto include terms that are inconsistent in any material respect with this
Agreement or the Restructuring Term Sheet and such inconsistency has not been
corrected within three (3) Business Days after notice thereof has been given by
the Supporting Lenders to the Company;

(xiv) the Bankruptcy Court shall have entered an unstayed Order pursuant to
Section 1104 of the Bankruptcy Code appointing a trustee, receiver or an
examiner to operate and manage any of the Company’s businesses;

(xv) the Bankruptcy Court grants relief terminating, annulling, or modifying the
automatic stay (as set forth in section 362 of the Bankruptcy Code) with regard
to material assets of the Debtors without the consent of the DIP Agent;

(xvi) the occurrence of any event, development, change or effect since the date
of this Agreement that has had or would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect;

(xvii) the Company ceases to have the exclusive right to file and solicit
acceptances of a chapter 11 plan; or

(xviii) the failure of the Company to pay the fees and expenses of the
Supporting Lenders in accordance with Section 10.13 of this Agreement, the
Prepetition Credit Agreement, the Prepetition Facility Agreement, the
Restructuring Term Sheet, and the DIP Orders and such fees and expenses are not
paid within three (3) Business Days following notice thereof to the Company by
the Supporting Lenders.

The Company hereby acknowledges and agrees that the termination of this
Agreement and the obligations hereunder as a result of a Supporting Lender
Termination Event, and the delivery of any notice by the Supporting Lenders
pursuant to any of the provisions of this Section 9.1(b) shall not violate the
automatic stay imposed in connection with the Chapter 11 Cases.

(c) Automatic Termination. This Agreement and the obligations hereunder shall
automatically and immediately terminate if, following the delivery of any notice
by the Supporting Lenders pursuant to Section 9.1(b), the Company or any other
party-in-interest

 

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asserts that the termination of this Agreement or the delivery of such notice
violates the automatic stay imposed in connection with the Chapter 11 Cases.

(d) Company Termination. This Agreement and the obligations, hereunder may be
terminated by the Company upon three (3) Business Days advance written notice
thereof to the Supporting Lenders (or such other notice period as specifically
set forth below) upon the occurrence of any of the following events (each, a
“Company Termination Event”) unless (i) to the extent curable, such Company
Termination Event has been cured by the applicable Supporting Lenders during
such three (3) Business Day notice period (or such other applicable notice
period as specifically set forth below) or (ii) such Company Termination Event
is waived in accordance with Section 10.14:

(i) a breach of any of the covenants or agreements or any of the representations
or warranties set forth in this Agreement on the part of the Supporting Lenders
which breach, either individually or in the aggregate with other breaches by the
Supporting Lenders, would result in, if occurring or continuing on the Effective
Date, the failure of the conditions set forth in Section 8.2(a) or
Section 8.2(b), as the case may be, and such breach is not curable or, if such
breach is susceptible to cure, such breach remains uncured for a period of
twenty (20) Business Days after receipt of notice thereof (provided that the
Company is not then in material breach of any of the covenants, agreements,
representations or warranties set forth in this Agreement on the part of the
Company);

(ii) any court of competent jurisdiction or governmental authority, including
any regulatory authority, shall have entered a Final Order declaring the
Restructuring, this Agreement, or any material portion hereof to be
unenforceable or illegal or enjoining the consummation of a material portion of
the Restructuring and such judgment or order is not stayed, dismissed, vacated
or modified within twenty-five (25) calendar days following notice thereof to
the Supporting Lenders by the Company; provided, however, that in the case of a
stay, upon such judgment or order becoming unstayed and twenty-five
(25) calendar days’ notice thereof to the Supporting Lenders by the Company, a
Company Termination Event shall be deemed to have occurred;

(iii) the Supporting Lenders fail to provide an extension of any of the
Milestones as required to accommodate the Bankruptcy Court’s calendar;

(iv) Deerfield fails, at any time during the Effective Period, to collectively
hold or control 66.67% or more of the aggregate principal amount of the
Prepetition Agreement Claims; or

(v) the filing by the Supporting Lenders of any motion or pleading with the
Bankruptcy Court that is inconsistent in any material respect with this
Agreement and the Restructuring Term Sheet.

Section 9.2 Termination Upon Effective Date or Outside Date. This Agreement
shall terminate automatically without further required action or notice upon the
sooner to occur of (a) the Effective Date and (b) any Party’s written notice to
the other Parties of termination

 

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pursuant to this Section 9.2 on or after the Outside Date; provided, however,
that the right to terminate this Agreement pursuant to this Section 9.2 shall
not be available to any Party whose breach of any representation, warranty,
covenant, or agreement set forth in this Agreement has been the cause of, or
resulted in, the failure of the Plan to become effective on or before the
Outside Date.

Section 9.3 Effect of Termination.

(a) Except as otherwise provided in this Section 9.3, in the event of
termination of this Agreement in accordance with this Article IX, (a) this
Agreement shall be of no further force and effect and each Party shall be
released from its commitments, undertakings and agreements under or related to
this Agreement, and shall have all the rights and remedies that it would have
had it not entered into this Agreement, and shall be entitled to take all
actions, whether with respect to the Restructuring or otherwise, that it would
have been entitled to take had it not entered into this Agreement, including all
rights and remedies available to it under applicable law; provided, however,
that the rights and obligations of the Parties under Section 10.13, if
applicable, with respect to the payment of fees and expenses incurred up to such
date of termination shall survive such termination and all rights and remedies
with respect to such claims shall not be prejudiced in any way; and (b) to the
extent Bankruptcy Court permission shall be required for a Supporting Lender to
change or withdraw (or cause to be changed or withdrawn) its vote in favor of
the Plan or any release, the Company shall support and not object to such change
or withdrawal and shall use reasonable best efforts to modify or amend its Plan
or other pleadings, as applicable, to permit such Supporting Lender to change or
withdraw (or cause to be changed or withdrawn) such vote or release. Nothing in
this Section 9.3 shall relieve any Party from (i) liability for such Party’s
breach of such Party’s obligations hereunder or (ii) obligations under this
Agreement that expressly survive termination of this Agreement pursuant to
Section 10.6.

(b) In consideration of the Supporting Lenders having expended considerable time
and expense in connection with this Agreement, the Plan and the Definitive
Documentation, the Debtors shall pay to the Supporting Lenders the Expense
Reimbursement Amount upon termination of this Agreement pursuant to Section 9.1
(other than pursuant to Section 9.1(d)(i), Section 9.1(d)(iii),
Section 9.1(d)(iv) or Section 9.1(d)(v)). Such Expense Reimbursement Amount
shall be due and payable within five (5) Business Days after the termination of
this Agreement. The Expense Reimbursement Amount shall, subject to Bankruptcy
Court approval, be treated as administrative expenses in the Chapter 11 Case
under Section 503(b)(1)(A) and Section 507(a)(2) of the Bankruptcy Code. The
Debtors acknowledge and agree that: (i) the approval and payment of the Expense
Reimbursement Amount are integral parts of the transactions contemplated by this
Agreement; (ii) in the absence of the Debtors’ obligation to pay the Expense
Reimbursement Amount, the Supporting Lenders would not have entered into this
Agreement; (iii) the entry of the Supporting Lenders into this Agreement is
necessary for preservation of the Estates and is beneficial to the Debtors
because, in the Debtors’ business judgment, it will enhance the Debtors’ ability
to maximize the value of their assets for the benefit of their creditors and
other stakeholders; and (iv) the Expense Reimbursement Amount is reasonable in
relation to the Supporting Lenders’ costs and efforts and to the magnitude of
the transactions contemplated hereby and the Supporting Lenders’ lost
opportunities resulting from the time spent pursuing the transactions
contemplated hereby.

 

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(c) Notwithstanding Section 9.3(a), the Supporting Lenders’ right to receive the
one-time payment of the Expense Reimbursement Amount from the Debtors as
provided in Section 9.3(b) shall be the sole and exclusive monetary remedy
available to the Supporting Lenders against the Debtors with respect to this
Agreement and the transactions contemplated hereby in the event that this
Agreement is terminated pursuant to Section 9.1 (other than pursuant to
Section 9.1(d)(i), Section 9.1(d)(iii), Section 9.1(d)(iv) or Section 9.1(d)(v))
(including if terminated or terminable pursuant to one or more of such
provisions), and upon such payment of the Expense Reimbursement Amount, the
Debtors shall have no further liability or obligation arising out of any such
breach of this Agreement or failure to consummate the Transactions in connection
with such termination event. The Parties acknowledge and agree that in no event
shall the Debtors be required to pay the Expense Reimbursement Amount on more
than one occasion. The Debtors’ obligations to pay the Supporting Lenders the
Expense Reimbursement Amount in accordance with the provisions of Section 9.3(b)
will (i) be binding upon and enforceable against each Debtor immediately upon
the Bankruptcy Court’s entering the Disclosure Statement Order, (ii) not be
terminable or dischargeable thereafter for any reason, (iii) survive any
subsequent conversion, dismissal or consolidation of the Chapter 11 Case, any
plan of reorganization or liquidation in the Chapter 11 Case and (iv) survive
the subsequent termination of this Agreement by any means. The Debtors’
obligations to pay the Supporting Lenders the Expense Reimbursement Amount, as
and when required under this Agreement, are intended to be, and upon entry of
the Disclosure Statement Order are, binding upon (A) each Debtor, (B) any
successors or assigns of any Debtor, (C) any trustee, examiner or other
representative of an Estate, (D) the reorganized Debtors and (E) any other
entity vested or revested with any right, title or interest in or to a Debtor,
or any other Person claiming any rights in or control (direct or indirect) over
any Debtor (each of (A) through (E), a “Successor”) as if such Successor were a
Debtor hereunder. The Debtors’ obligations to pay the Supporting Lenders the
Expense Reimbursement Amount, as and when required under this Agreement, may not
be discharged under Sections 1141 or 727 of the Bankruptcy Code or otherwise and
may not be abandoned under Section 554 of the Bankruptcy Code or otherwise.

ARTICLE X

GENERAL PROVISIONS

Section 10.1 Agreement Effective Time. This Agreement shall become effective and
binding upon each of the Parties as of the date when counterpart signatures
pages to this Agreement are executed and delivered by the Company and the
Supporting Lenders.

Section 10.2 No Solicitation. This Agreement is not and shall not be deemed to
be a solicitation for votes for the acceptance of the Plan (or any other
chapter 11 plan) for the purposes of sections 1125 and 1126 of the Bankruptcy
Code or otherwise or a solicitation to tender or exchange any securities. The
acceptance of the Plan by the Supporting Lenders will not be solicited until the
Supporting Lenders have received the Disclosure Statement and related ballots.

Section 10.3 Purpose of Agreement. Each of the Parties acknowledges and agrees
that this Agreement is being executed in connection with negotiations concerning
the Restructuring.

 

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Section 10.4 Admissibility of this Agreement. Each Party agrees that this
Agreement, the Restructuring Term Sheet and all documents, agreements and
negotiations relating thereto (including any prior drafts of any of the
foregoing) shall not, pursuant to Rule 408 of the Federal Rules of Evidence, any
applicable state rules of evidence and any other applicable law, foreign or
domestic, be admissible into evidence or constitute an admission or agreement in
any proceeding involving a Party, other than the final execution versions of
this Agreement and the Exhibits thereto.

Section 10.5 Several, Not Joint Obligations. The agreements, representations,
and obligations of the Supporting Lenders under this Agreement are, in all
respects, several and not joint. No prior history, pattern, or practice of
sharing confidences among or between the Parties shall in any way affect or
negate this Agreement.

Section 10.6 Survival. Notwithstanding any termination of this Agreement
pursuant to Article IX, the agreements and obligations of the Parties in this
Article X and Section 9.3 shall survive such termination and shall continue in
full force and effect for the benefit of the Parties in accordance with the
terms hereof; provided, however, that any liability of a Party for failure to
comply with the terms of this Agreement shall survive such termination.

Section 10.7 Public Announcements. Unless otherwise required by applicable Law
or by obligations of the Company or the Supporting Lenders or their respective
Affiliates pursuant to any listing agreement with or rules of any securities
exchange or in order to enforce a party’s rights or remedies under this
Agreement, the Company, on the one hand, and the Supporting Lenders, on the
other hand, shall consult with each other before issuing any other press release
or otherwise making any public statement with respect to this Agreement, the
Transactions or the activities and operations of the other and shall not issue
any such release or make any such statement without the prior written consent of
the other (such consent not to be unreasonably withheld, conditioned or
delayed).

Section 10.8 Notices. All notices, demands, requests, consents, approvals and
other communications (each, a “Notice”) hereunder shall be in writing and
delivered by (i) courier or messenger service, (ii) express or overnight mail,
(iii) electronic mail, or (iv) by registered or certified mail, return receipt
requested and postage prepaid, addressed to the respective Parties as follows:

 

  (a)

if to the Supporting Lenders, to:

Deerfield Management Company, L.P.

780 Third Avenue, 38th Floor

New York, New York 10017

Email:        bsendrowski@deerfield.com

                  epress@deerfield.com

Attention:  Bryan Sendrowski

                  Elliot Press

 

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with copies (which will not constitute notice) to:

Sullivan & Cromwell LLP

125 Broad Street

New York, New York 10004

Attention:    Brian E. Hamilton

                    Ari B. Blaut

                    James L. Bromley

Email:         hamiltonb@sullcrom.com

                    blauta@sullcrom.com

                    bromleyj@sullcrom.com

and

 

  (b)

if to the Company, to:

Endologix, Inc.

2 Musick

Irvine, CA 92618

Email:          jonopchenko@endologix.com

Attention:    John Onopchenko, CEO

with copies (which shall not constitute notice) to:

DLA Piper LLP (US)

1251 Avenue of the Americas

New York, NY 10020-1104

Email:          thomas.califano@dlapiper.com

Attention:    Thomas R. Califano

or to such other addresses a Party may hereafter designate. Notice by courier or
messenger service or by express or overnight mail, shall be effective upon
receipt. Notice by electronic mail shall be effective upon delivery by the
sender. Notice by mail shall be complete at the time of deposit in the U.S. mail
system, but any right or duty to do any act or make any response within any
prescribed period or on a date certain after the service of such Notice given by
mail shall be, without further action by any Party, automatically extended three
(3) days.

Section 10.9 Descriptive Headings; Interpretative Provisions. The headings of
the sections, paragraphs and subsections of this Agreement are inserted for
convenience only, and shall not affect the Agreement’s interpretation. The words
“hereof,” “herein” and “hereunder” and words of like import used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. References to Articles, Sections, Exhibits and
Schedules are to Articles, Sections, Exhibits and Schedules of this Agreement
unless otherwise specified. All Exhibits, Annexes and Schedules annexed hereto
or referred to herein are hereby incorporated in and made a part of this
Agreement as if set forth in full herein. Any capitalized terms used in any
Exhibit, Annex or Schedule but not otherwise defined therein, shall have the
meaning as defined in this Agreement. Any singular term in this Agreement shall
be deemed to include the plural, and any plural term the singular. Where a word
or phrase is defined herein,

 

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each of its other grammatical forms shall have a corresponding meaning. Whenever
the words “include,” “includes” or “including” are used in this Agreement, they
shall be deemed to be followed by the words “without limitation,” whether or not
they are in fact followed by those words or words of like import. Whenever the
last day for the exercise of any right or the discharge of any duty under this
Agreement falls on other than a Business Day, the party hereto having such right
or duty shall have until the next Business Day to exercise such right or
discharge such duty. Unless otherwise indicated, the word “day” shall be
interpreted as a calendar day. References to “dollars” or “$” mean United States
dollars, unless otherwise clearly indicated to the contrary. No summary of this
Agreement prepared by or on behalf of any party hereto shall affect the meaning
or interpretation of this Agreement.

Section 10.10 Representation by Counsel; No Strict Construction. Each Party
acknowledges that it has been represented by counsel (or had the opportunity to
be so represented and waived its right to do so) in connection with this
Agreement and the transactions contemplated by this Agreement. Accordingly, any
rule of law or any legal decision that would provide any Party with a defense to
the enforcement of the terms of this Agreement against such Party based upon
lack of legal counsel shall have no application and is expressly waived. This
Agreement is the product of arm’s-length negotiations among the Parties and its
provisions shall be interpreted in a neutral manner and one intended to effect
the intent of the Parties. This Agreement shall be deemed to have been
negotiated and prepared at the joint request, direction and construction of the
Parties, at arm’s length and be interpreted without favor to any Party.

Section 10.11 Entire Agreement. Subject to the Restructuring Term Sheet and the
Definitive Documents, this Agreement constitutes the entire agreement of the
Parties related to the Restructuring, and supersedes all other prior
negotiations, agreements and understandings, whether written or oral, among the
Parties with respect to the subject matter hereof; provided that the Parties
acknowledge that any confidentiality agreements (if any) heretofore executed
between the Company and any Supporting Lender (and such Supporting Lender’s
advisors) shall continue in full force and effect in accordance with and only to
the extent of their respective terms.

Section 10.12 Governing Law and Venue; Waiver of Jury Trial.

(a) This Agreement, and all Causes of Action (whether in contract, tort or
statute) that may be based upon, arise out of or relate to this Agreement, or
the negotiation, execution or performance of this Agreement (including any claim
or cause of action based upon, arising out of or related to any representation
or warranty made in or in connection with this Agreement or as an inducement to
enter into this Agreement), shall be governed by, and enforced in accordance
with, the Laws of the State of New York, including its statutes of limitations,
without giving effect to any borrowing statute or applicable principles of
conflicts of law to the extent that the application of the laws (including
statutes of limitation) of another jurisdiction (whether of the State of New
York or any other jurisdiction) would be required thereby.

(b) By its execution and delivery of this Agreement, subject to the commencement
of the Chapter 11 Cases, each Party hereby irrevocably and unconditionally
consents to submit to the exclusive jurisdiction of the Bankruptcy Court for the
purpose of any

 

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Cause of Action, suit or proceeding arising out of or relating to this Agreement
or any of the transactions contemplated hereby. At any time prior to the filing
of the Chapter 11 Cases, each of the Parties hereby irrevocably and
unconditionally submits to the exclusive jurisdiction of the state or federal
courts located within in the Borough of Manhattan, the City of New York in the
State of New York for purposes of any action, suit or proceeding arising out of
or relating to this Agreement or any of the transactions contemplated hereby.
Each party hereto hereby consents to service of process in the manner and at the
address set forth in Section 10.8.

(c) EACH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT
PERMITTED BY LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY
ACTION BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HEREBY ACKNOWLEDGES AND CERTIFIES
(I) THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF ANY ACTION OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) IT
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) IT MAKES
THIS WAIVER VOLUNTARILY AND (IV) IT HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT, THE RESTRUCTURING TERM SHEET AND THE DEFINITIVE DOCUMENTS AND THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS SET FORTH IN THIS SECTION 10.12(c).

Section 10.13 Transaction Expenses. The Debtors shall pay (a) one (1) Business
Day prior to the Petition Date, (b) subject to the DIP Orders, including the
payment procedures set forth therein, on the Effective Date and (c) otherwise in
accordance with the terms of any applicable fee letters and court orders during
the pendency of the Chapter 11 Cases, all accrued and unpaid fees, costs and
expenses of the Supporting Lenders in connection with the Restructuring
(provided that the amount paid pursuant to (a) above shall be agreed by the
Debtors and the Supporting Lenders and shall be less than the total amount of
accrued and unpaid expenses owing to the Supporting Lenders as of such date)
without the need to file any application with, or obtain any order from, the
Bankruptcy Court, including, without limitation, the fees, costs and expenses of
(i) Sullivan & Cromwell LLP, (ii) Houlihan Lokey Capital, Inc., (iii) local
Texas counsel, (iv) any other professionals that may be retained by the
Supporting Lenders in connection with the Restructuring and (v) counsel for the
Prepetition Agents. The Debtors shall also enter into ordinary and customary fee
letters with the foregoing professionals and fund the retainers and other
amounts required thereunder as a condition precedent to the effectiveness of
this Agreement.

Section 10.14 Amendments and Waivers.

(a) Any amendment or modification of any term or provision of this Agreement or
the Restructuring and any waiver of any term or provision of this Agreement or
of the Restructuring or of any default, misrepresentation, or breach of warranty
or covenant hereunder shall not be valid unless the same shall be in writing and
(i) signed by the Company and the DIP Agent or (ii) confirmed by email by both
counsel to the Company and counsel to the

 

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DIP Agent representing that it is acting with the authority of the Company and
the DIP Agent, respectively.

(b) Any waiver shall not be deemed to extend to any prior or subsequent default,
misrepresentation, or breach of warranty or covenant hereunder or affect in any
way any rights arising by virtue of any prior or subsequent default,
misrepresentation, or breach of warranty or covenant.

(c) The failure of any Party to exercise any right, power or remedy provided
under this Agreement or otherwise available in respect hereof at law or in
equity, or to insist upon compliance by any other Party with its obligations
hereunder shall not constitute a waiver by such Party of its right to exercise
any such or other right, power or remedy or to demand such compliance.

(d) Notwithstanding anything to the contrary in this Section 10.14, no
amendment, modification or waiver of any term or provision of this Agreement or
the Restructuring shall be effective with respect to any Supporting Lender
without such Supporting Lender’s prior written consent to the extent such
amendment, modification or waiver materially affects such Supporting Lender in a
manner that is disproportionately adverse to such Supporting Lender in relation
to the other Supporting Lenders.

(e) All rights, powers, and remedies provided under this Agreement or otherwise
available in respect hereof at law or in equity shall be cumulative and not
alternative, and the exercise of any right, power, or remedy thereof by any
Party shall not preclude the simultaneous or later exercise of any other such
right, power, or remedy by such Party.

Section 10.15 Parties, Succession and Assignment. This Agreement is intended to
bind and inure to the benefit of the Parties and their respective successors,
assigns, heirs, executors, estates (including the Estates), administrators and
representatives. No rights or obligations of any Party under this Agreement may
be assigned or transferred to any other person or entity except as otherwise
expressly provided herein. Nothing in this Agreement, express or implied, shall
give to any person or entity, other than the Parties (and those permitted
assigns under Section 3.3), any benefit or any legal or equitable right, remedy
or claim under this Agreement; provided, however, that a Supporting Lender may
assign some or all of its rights or delegate some or all of its obligations
hereunder to one or more Affiliates without any other Party’s consent. Upon any
such permitted assignment, the references in this Agreement to the applicable
Party will also apply to any such assignee unless the context otherwise
requires.

Section 10.16 No Waiver of Participation and Reservation of Right. Except as
expressly provided in this Agreement or the Plan, nothing herein is intended to,
nor does, in any manner waive, limit, impair, or restrict any right of any Party
or the ability of each of the Parties to protect and preserve its rights,
remedies and interests, including Claims against and interests in the Company.
If the Restructuring is not consummated, or following the occurrence of a
Supporting Lender Termination Event, a Company Termination Event, an event
triggering automatic termination pursuant to Section 9.1(c), or the termination
of this Agreement, nothing herein shall be construed as a waiver by any Party of
any or all of such Party’s rights, and the Parties expressly reserve any and all
of their respective rights. This Agreement, the Plan, and any

 

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related document shall in no event be construed as or be deemed to be evidence
of an admission or concession on the part of any Party of any claim or fault or
liability or damages whatsoever. The Parties acknowledge that this Agreement,
the Plan, and all negotiations related hereto are part of a proposed settlement
of matters that may otherwise be the subject of litigation.

Section 10.17 No Third-Party Beneficiaries. Unless expressly stated herein, this
Agreement shall be solely for the benefit of the Parties and no other person or
entity shall be a third-party beneficiary.

Section 10.18 Counterparts; Effectiveness. This Agreement and any amendments,
joinders, consents or supplements, may be executed in one or more counterparts,
each of which shall be deemed an original and all of which shall constitute one
and the same agreement. Scanned signatures on this Agreement shall be treated as
originals for all purposes. Executed copies of this Agreement may be delivered
by facsimile or by electronic mail in portable document format (.pdf), which
shall be deemed to be an original for the purposes of this Section 10.18.

Section 10.19 Severability. The invalidity or unenforceability at any time of
any provision hereof shall not affect or diminish in any way the continuing
validity and enforceability of the remaining provisions hereof. If any
provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction or other authority of competent jurisdiction to be
invalid, void or unenforceable, or the application of such provision, covenant
or restriction to any Person or any circumstance, is held by a court of
competent jurisdiction or other authority to be invalid, void or unenforceable,
(a) a suitable and equitable provision shall be substituted therefor in order to
carry out, so far as may be valid and enforceable, the intent and purpose of
such invalid or unenforceable provision and (b) the remainder of this Agreement
and the application of such provision, covenant or restriction to other Persons
or circumstances shall not be affected by such invalidity or unenforceability,
nor shall such invalidity or unenforceability affect the validity or
enforceability of such provision, or the application of such provision, in any
other jurisdiction and the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.

Section 10.20 Specific Performance. Each Party hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Agreement would cause the other Parties to sustain damages for which such
Parties would not have an adequate remedy at law for money damages, and
therefore each Party hereto agrees that in the sole event of any breach, the
other Parties shall be entitled to the remedy of specific performance and
injunctive or other equitable relief (including attorney’s fees and costs) to
enforce such covenants and agreements, in addition to any other remedy to which
such non-breaching Party may be entitled, at law or in equity, without the
necessity of proving the inadequacy of money damages as a remedy, including an
order of the Bankruptcy Court requiring any Party to comply promptly with any of
its obligations hereunder.

Section 10.21 Conflicts. In the event the terms and conditions set forth in the
Restructuring Term Sheet and in this Agreement are inconsistent, the
Restructuring Term Sheet shall control. In the event of any conflict among the
terms and provisions of the Plan, this

 

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Agreement and the Restructuring Term Sheet, the terms and provisions of the Plan
shall control. In the event of any conflict among the terms and provisions of
the Confirmation Order, the Plan, this Agreement and the Restructuring Term
Sheet, the terms of the Confirmation Order shall control. Notwithstanding the
foregoing, nothing contained in this Section 10.21 shall affect, in any way, the
requirements that the Plan and the Confirmation Order be in all material
respects materially consistent with this Agreement and the Restructuring Term
Sheet and the requirements set forth herein for the amendment of this Agreement.

[Signature Page Follows]

 

67

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IN WITNESS WHEREOF, the Company and the Supporting Lenders have caused this
Agreement to be executed on their behalf as of the date first written above.

 

ENDOLOGIX, INC.

By:  

/s/ John Onopchenko

 

Name: John Onopchenko

 

Title: Chief Executive Office

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

SUPPORTING LENDERS:

DEERFIELD PRIVATE DESIGN FUND III, L.P.

By:   Deerfield Mgmt III, L.P., General Partner By:   J.E. Flynn Capital III,
LLC, General Partner By:  

/s/ David Clark

  Name: David Clark   Title:   Authorized Signatory

DEERFIELD PRIVATE DESIGN FUND IV, L.P.

By:   Deerfield Mgmt IV, L.P., General Partner By:   J.E. Flynn Capital IV, LLC,
General Partner By:  

/s/ David Clark

  Name: David Clark   Title:   Authorized Signatory

DEERFIELD PARTNERS, L.P.

By:   Deerfield Mgmt, L.P., General Partner By:   J.E. Flynn Capital, LLC,
General Partner By:  

/s/ David Clark

  Name: David Clark   Title:   Authorized Signatory

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

Schedule 1

Company Subsidiaries

 

  1.

CVD/RMS Acquisition Corp., a Delaware corporation.

 

  2.

Nellix, Inc., a Delaware corporation.

 

  3.

RMS/Endologix Sideways Merger Corp., a Delaware corporation.

 

  4.

ELGX International Holdings GP, a Cayman Islands company.

 

  5.

Endologix International Holdings B.V., a Dutch corporation.

 

  6.

Endologix International B.V., a Dutch corporation.

 

  7.

Endologix New Zealand Co., a New Zealand unlimited liability company.

 

  8.

Endologix Bermuda L.P., a Bermuda partnership.

 

  9.

Endologix Italia S.r.l., an Italian corporation.

 

  10.

Endologix Singapore Private Limited, a Singaporean limited private company.

 

  11.

Endologix Poland sp. zo.o, a Polish limited company.

 

  12.

TriVascular Technologies, Inc., a Delaware corporation.

 

  13.

TriVascular, Inc., a California corporation.

 

  14.

TriVascular Sales LLC, a Texas limited liability company.

 

  15.

TriVascular Germany GmbH, a German limited liability company.

 

  16.

TriVascular Italia Sarl, an Italian limited liability company.

 

  17.

Endologix Canada, LLC, a Delaware limited liability company.

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

Exhibit A

Restructuring Term Sheet

[Attached]

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

Exhibit B

Interim DIP Order

[Attached]

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

Exhibit C

Form of Transfer Joinder

Form of Transfer Joinder

The undersigned (“Transferee”) hereby (i) acknowledges that it has read and
understands the Restructuring Support Agreement (the “Agreement”), dated as of
July 5, 2020 among Endologix, Inc. (“Endologix”) and the Supporting Lenders,1
and (ii) agrees to be bound by the terms and conditions thereof with respect to
all of its owned or controlled Prepetition Credit Agreement Claims to the extent
and in the same manner as if Transferee was a Supporting Lender thereunder.
Transferee hereby shall be deemed a “Supporting Lender” and a “Party” under the
Agreement, and shall be deemed to make all of the representations and warranties
of a Supporting Lender set forth in the Agreement.

 

[TRANSFEREE]

By:  

                

 

Name:

 

Title:

Aggregate amount of Prepetition Credit Agreement Claims (whether owned directly
by such Transferee or for which such Transferee has investment or voting
discretion or control):

 

[ADDRESS]

Attention: [________]

Email: [________]

 

1 

Capitalized terms not defined herein shall have the meanings given to such terms
in the Agreement.

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

Exhibit D

Milestones

 

With respect to the Chapter 11 Cases, no later than 11:59 p.m. (Central Time)
on:

1.  Petition Date

   Plan, Disclosure Statement filed.

2.  Petition Date + 2 days

   Hearing to approve ‘first day’ motions.

3.  Petition Date + 3 days

   Solicitation Procedures filed.

4.  40 days after the Petition Date

  

Disclosure Statement approval hearing.

Disclosure Statement Order entered.

5.  60 days after the Petition Date

   DIP Final Order approved.

6.  75 days after the Petition Date

  

Confirmation Hearing to approve Plan.

Confirmation Order entered within three business days following conclusion of
Confirmation Hearing.

7.  As promptly as possible after entry of the Confirmation Order but not later
than 90 days after the Petition Date

   Plan Effective Date.

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

CONFIDENTIAL

 

 

 

COMPANY DISCLOSURE LETTER

TO

RESTRUCTURING SUPPORT AGREEMENT1

AMONG

ENDOLOGIX, INC.

AND

THE SUPPORTING LENDERS IDENTIFIED HEREIN

DATED AS OF JULY 5, 2020

 

 

 

 

1

Capitalized terms used herein but not otherwise defined have the meanings
ascribed to them in the Restructuring Support Agreement.

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

Section 1.1

“Knowledge” of the Debtors

 

1.

John Onopchenko

 

2.

Vaseem Mahboob

 

3.

Cindy Pinto

 

4.

Tim Brady

 

5.

Simpson Kwan

 

6.

James Tejedor

 

7.

Reyna Fernandez

 

8.

Tim Benner

 

9.

Matt Thompson

 

10.

Jeff Fecho

 

11.

Jeff Brown

 

12.

Mike Chobotov

 

13.

Valerie Tansley

 

14.

Elisa Webb

 

15.

Joey Lopes

 

16.

Steffanie Cook

 

17.

Tim Chaplin

 

18.

Carlos Ortega

 

19.

Barbara Kelleter

 

20.

Kimberly Stanley

 

21.

Mark Phillips

 

22.

Virgil Aguirre

 

23.

John Washington

 

24.

Janet McCusker

 

25.

Vay Yam

 

26.

Regional Sales Managers

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

Section 5.2

Capitalization

Company and its Subsidiaries Outstanding Equity Interests

 

Name of Issuer

  

Authorized

Securities

  

Issued and

Outstanding Securities

  

Certificated
(Yes or No)

  

Loan Party/

Subsidiary Owner

Endologix, Inc.    170,000,000 Shares of Common Stock, $0.001 par value   
19,299,228 Shares of Common Stock Issued and 19,173,845 Outstanding    Yes   
N.A.    5,000,000 Shares of Preferred Stock, $0.001 par value, 1,150,000
designated as Series DF-1 Preferred Stock    14,648.75 Shares of Series DF-1
Preferred Stock Outstanding    Yes    N.A. Nellix, Inc.    1,000 Shares of
Common Stock, $0.001 par value    100 Shares of Common Stock    Yes   
Endologix, Inc. CVD/RMS Acquisition Corp.    100 Shares of Common Stock, $0.001
par value    100 Shares of Common Stock    Yes    Endologix, Inc. RMS/Endologix
Sideways Merger Corp.    100 Shares of Common Stock, $0.001 par value    100
Shares of Common Stock    Yes    Endologix, Inc. TriVascular Technologies, Inc.
   1,000 Shares of Common Stock, $0.001 par value    100 Shares of Common Stock
   Yes    Endologix, Inc. ELGX International Holdings GP    Unspecified Number
of Partnership Interests    Unspecified Number of Partnership Interests    No   
Endologix, Inc. Endologix Bermuda, L.P.    Unspecified Number of Partnership
Interests    Unspecified Number of Partnership Interests    No    Endologix,
Inc. Endologix Singapore Private Limited    Unspecified Number of Company
Interests    Unspecified Number of Company Interests    No    Endologix, Inc.
Endologix New Zealand Co.    Unspecified Number of Company Interests   
Unspecified Number of Company Interests    No    Endologix, Inc. TriVascular,
Inc.    100 Shares of Common stock, $0.01 par value    100 Shares of Common
Stock    No    TriVascular Technologies, Inc.

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

Name of Issuer

  

Authorized

Securities

  

Issued and

Outstanding Securities

  

Certificated
(Yes or No)

  

Loan Party/

Subsidiary Owner

Endologix International Holdings B.V.    Unspecified Number of Company Interests
   Unspecified Number of Company Interests    No    Endologix Bermuda, L.P.
Endologix Poland spolkda z ograniczona odpowiedzialnoscia    Unspecified Number
of Company Interests    Unspecified Number of Company Interests    No   
Endologix International Holdings B.V. Endologix International B.V.   
Unspecified Number of Company Interests    Unspecified Number of Company
Interests    No    Endologix International Holdings B.V. Endologix Italia S.r.l
   Unspecified Number of Company Interests    Unspecified Number of Company
Interests    No    Endologix International Holdings B.V. TriVascular Sales LLC
   1,000 Units of Membership Interests    1,000 Units of Membership Interests   
No    TriVascular, Inc. Endologix Canada, LLC    1,000 Units of Membership
Interests    1,000 Units of Membership Interests    No    TriVascular, Inc.
TriVascular Italia Sarl    Unspecified Number of Company Interests   
Unspecified Number of Company Interests    No    TriVascular, Inc. TriVascular
Germany GmbH    Unspecified number of Company Interests    Unspecified number of
Company Interests    No    TriVascular, Inc.

Options and Equity Incentive/Compensation Plans:

2015 Stock Incentive Plan: The Company’s 2015 Stock Incentive Plan as amended
(the “2015 Plan”) authorizes the grant of equity awards to purchase up to
5.13 million shares of Common Stock. As of June 30, 2020 approximately
1.9 million shares were reserved for issuance under outstanding stock options,
including stock options granted under equity compensation plans preceding the
2015 Plan, and approximately 730,000 shares were subject to unvested restricted
stock awards. The outstanding stock options have exercise prices ranging from
$4.71 to $175.80 and a weighted average exercise price of $10.15. There have
been no material changes to the items discussed in this paragraph as of the date
of the Agreement.

Amended and Restated 2006 Employee Stock Purchase Plan (the “ESPP”): As of
June 30, 2020, approximately 374,000 shares of Common Stock were available for
issuance under the ESPP. There have been no material changes to such amount as
of the date of the Agreement.

2017 Inducement Stock Incentive Plan: The Board has reserved 900,000 shares of
the Company’s Common Stock for issuance pursuant to awards granted under the
2017 Inducement Stock Incentive Plan. As of June 30, 2020, approximately 218,000
shares of Common Stock were available for

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

issuance under this plan. There have been no material changes to such amount as
of the date of the Agreement.

Non-Plan Inducement Grants: In connection with its merger with TriVascular
Technologies, Inc., on February 4, 2016 the Company issued non-plan inducement
stock options to purchase 140,000 shares of Common Stock at an exercise price of
$75.30 per share, and non-plan inducement restricted stock units for
approximately 8,000 shares of Common Stock. As of June 30, 2020, there were
non-plan inducement stock options outstanding to purchase approximately 14,000
shares of Common Stock of the Company at a weighted-average exercise price of
$20.40 per share and zero outstanding non-plan inducement restricted stock
units.

Warrants:

In connection with its merger with TriVascular Technologies, Inc. on February 3,
2016, the Company assumed unexercised out-of-the-money warrants of TriVascular
Technologies, Inc., which converted into warrants to purchase 3,508 shares of
Common Stock, 2,426 at an exercise price of $125.80 per share and 1,082 at an
exercise price of $282.10 per share.

The Company has previously issued warrants to Lenders (as defined in the
Prepetition Facility Agreement) to purchase an aggregate of 1,522,002 shares of
Common Stock of the Company at an exercise price of $6.61 per share.

On April 3, 2019, the Company issued and sold a pre-paid warrant exercisable for
the Company’s common stock at an exercise price of $6.61 per share to an
investor, as contemplated pursuant to Equity Financing Documents (as defined in
the Prepetition Facility Agreement). The exercise price for the pre-paid warrant
was fully paid at issuance and is exercisable at any time until April 3, 2029,
subject to satisfaction of certain equity ownership limitations as described in
such warrant.

Convertible Notes:

2020 3.25% Convertible Notes; 2024 5.0% Convertible Senior Notes: On November 2,
2015, the Company issued $125.0 million aggregate principal amount of 3.25%
Convertible Notes. Pursuant to the terms of the Prepetition Facility Agreement
with Deerfield, $40.5 million of the aggregate principal amount of the 3.25%
Convertible Notes was cancelled; $84.5 million aggregate principal amount of
3.25% Convertible Notes were thereafter outstanding. At the Second Amendment
Effective Date (as defined in the Prepetition Facility Agreement), approximately
$73.4 million of the remaining $84.5 million of 3.25% Convertible Notes was
exchanged for (i) approximately $42 million of new 5.0% Voluntary Convertible
Senior Notes due 2024; and $25 million of new 5.0% Mandatory Convertible Senior
Notes due 2024. At the Fourth Amendment Effective Date (as defined in the
Prepetition Facility Agreement), approximately $11.00 million of aggregate
principal plus outstanding interest of the remaining outstanding 3.25%
Convertible Notes will be exchanged for approximately $11.1 million of new 5.0%
Voluntary Convertible Senior Notes due 2024.

Pursuant to the Prepetition Facility Agreement, the Company may issue Conversion
Shares (as defined in the Prepetition Facility Agreement) pursuant to and in
accordance with the terms of the Notes (as defined in the Prepetition Facility
Agreement).

Other Rights to Securities of the Company:

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

In connection with its merger with Nellix, Inc. (“Nellix”), the Company agreed
to issue shares of Common Stock to the former stockholders of Nellix upon the
Company’s receipt of FDA approval to sell its Nellix EVAS System in the United
States (the “PMA Milestone”). The number of shares of Common Stock issuable to
the former stockholders of Nellix upon achievement of the PMA Milestone shall
equal the quotient obtained by dividing $15.0 million by the average per share
closing price of Common Stock on The Nasdaq Global Select Market for each of the
30 consecutive trading days ending with the fifth trading day immediately
preceding the date of the Company’s receipt of FDA approval to sell its Nellix
EVAS System in the United States, subject to a stock price floor of $45.00 per
share, but not subject to a stock price ceiling.

Registration Rights

Amended and Restated Registration Rights Agreement dated as of August 9, 2018,
as amended, by and among the Company, the Lenders and Agent.

Agreement and Plan of Merger and Reorganization, dated October 27, 2010, by and
among the Company, Nepal Acquisition Corporation, Nellix, Inc., certain of
Nellix, Inc.’s stockholders listed therein and Essex Woodlands Health Ventures,
Inc., as representative of Nellix, Inc.’s stockholders (Section 6.12 contains
registration obligation)

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

Section 5.10

Litigation

(a)

Active Matters: Set forth below are certain legal matters that are either in
active litigation or could proceed to active litigation. It is possible that the
Company’s aggregate liability arising for monetary judgements or relief arising
out of these matters, and other litigation involving the Company, could be
material to the Company or its Subsidiaries, however the Company does not
believe that any one of the matters discussed below (including the AFX product
liability suits considered as a consolidated group) would individually result in
monetary judgements or relief which would be material to the Company or its
Subsidiaries.

 

  •  

Derivative Lawsuits: As of June 11, 2017, four shareholders have filed
derivative lawsuits on behalf of the Company, the nominal plaintiff, based on
allegations substantially similar to those alleged by lead plaintiff in Vicky
Nguyen v. Endologix, Inc., et al., Case No. 2:17-cv-00017 (United States
District Court, Central District of California). Those actions consist of:
Sindlinger v. McDermott et al., Case No. BC662280 (Los Angeles Superior Court);
Abraham v. McDermott et al., Case No. 30-2018-00968971-CU-BT-CSC (Orange County
Superior Court); and Green v. McDermott et al., Case No. 8:17-cv-01155-AB
(PLAx), consolidated with Cocco v. McDermott et al., Case No. 8:17-cv-01183-AB
(PLAx) (U.S. District Court for the Central District of California). Plaintiffs
in the Sindlinger, Abraham and Green derivative actions have agreed to stay
litigation pending resolution of the Nguyen action by the United States Court of
Appeals for the Ninth Circuit. A related case, Ahmed v. Endologix, Inc., et al.
(Filed January 11, 2017 in the United States District Court, Central District of
California; Case No. 8:17-cv-00061) was consolidated into Nguyen v. Endologix,
Inc.

 

  •  

Kerr: On July 30, 2019, an action was brought in United States District Court
for the Central District of California (Case No. 8:19-cv-01457) against the
Company and certain other Loan Parties by Andrew Kerr, M.D., alleging
infringement of U.S. Patent Nos. 8,257,423, 9,050,182 and 10,105,209, which
allegedly were issued to and are owned by Dr. Kerr. As alleged in the complaint,
the accused infringing devices include the Ovation Abdominal Stent Graft System,
the Ovation Prime Abdominal Stent Graft System, the Ovation Prime, the Ovation
IX Abdominal Stent Graft System, and the Ovation iX (collectively, the “Ovation
Devices”). The Company believes plaintiff’s claims are without merit and is
vigorously defending the action.

 

  •  

AFX: The Company has been named as a defendant in a number of complaints, in
each case alleging a variety of product liability-based claims pertaining to the
Company’s AFX with Strata product. The Company believes it has insurance
responsive to these claims, which insurance provides for a $150,000 per claim
deductible and an aggregate one million dollar aggregate deductible (for the
policy year applicable to these claims). The Company believes plaintiffs’ claims
are without merit and is vigorously defending the action.

 

  •  

Kaiser: The Company has received a letter, dated January 10, 2020, from outside
counsel to KP Select, LLC, one of the Kaiser Permanent family of companies
(“Kaiser”), demanding that the Company provide reimbursement to Kaiser in the
amount of $4.1 million dollars for costs allegedly incurred by Kaiser for
treating patients whose AFX Endovascular AAA Systems were subject to the July
2018 recall notice. This demand was subsequently lowered to $2.8 million dollars
in March 2020 The Company vigorously disputes this payment demand. Since it is
presently not possible to determine the outcome of any future discussions with
Kaiser regarding this matter, and

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

 

whether litigation will ensue, or the outcomes associated with potential
litigation, no provision has been made in the Company’s financial statements for
the ultimate resolution.

 

  •  

Royalty Demand: The Company has received a letter, dated February 13, 2020, from
a licensor under one of the Company’s inbound patent license agreements alleging
that the Company is in breach of certain royalty payment obligations under such
agreement. In this letter, licensor has expressed a desire to reach a reasonable
and amicable resolution of this matter. The Company vigorously disagrees with
this payment demand. Since it is presently not possible to determine the outcome
of any future discussions with the licensor regarding this matter, and whether
litigation will ensue, or the outcomes associated with potential litigation, no
provision has been made in the Company’s financial statements at this time for
the ultimate resolution. Should a bona fide dispute ensure, it is possible that
the Company will be required to deposit the disputed amount into escrow pending
resolution of the dispute.

 

  •  

Other IP Infringement Notice: The Loan Parties have received notice from an
individual claiming that certain of our products read on certain issued patents
held by such individual. The Loan Parties, after consultation with independent
patent counsel, strongly disagrees with these claims. Since it is presently not
possible to determine the outcome of any future discussions with these
individuals in regard to their patents, and whether litigation will ensue, or
the outcomes associated with potential litigation, no provision has been made in
the Company’s financial statements for the ultimate resolution.

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

Section 5.11

Intellectual Property

(a)

See attached list of Registered Intellectual Property.

(b)

The matters described under the headings “Kaiser” and “Other IP Infringement
Notice” in Section 5.10 are hereby incorporated by reference.

(d)(i)

The matters described under the headings “Kaiser” and “Other IP Infringement
Notice” in Section 5.10 are hereby incorporated by reference.

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

Section 5.13

Real Property

(b)

Leased Real Property:

 

Loan Party or Subsidiary

  

Complete street and mailing address, including zip code

  

Landlord name and contact

information

Endologix, Inc.   

2 Musick, Irvine, County of Orange,

California 92618 U.S.A.;

33 and 35 Hammond, Irvine, County of

Orange, California 92618 U.S.A.

   The Northwestern Mutual Life Insurance Company Endologix International
Holdings B.V.   

Europalaan 30, 5232 BC, ‘s-Hertogenbosch,

The Netherlands

   EL30 B.V. TriVascular Technologies, Inc.    3910 Brickway Blvd., Santa Rosa,
County of Sonoma, CA 95403 U.S.A.    Sonoma Airport Properties LLC Endologix
Singapore Private Limited    6 Raffles Quay #16-01 Singapore 048580    JustCo
(Raffles Quay) Pte. Ltd. Endologix International B.V.    Rahmannstraße 11, 65760
Eschborn, Germany    IntReal International Real Estate
Kapitalverwaltungsgesellschaft mbH

Subleased Real Property:

 

Loan Party or Subsidiary

  

Complete street and mailing address, including
zip code

  

Landlord and sublandlord name and contact
information

N/A      

Other Real Property Operated or Occupied:

 

Loan Party or Subsidiary

  

Complete street and mailing address, including
zip code

  

Nature of use

N/A

     

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

Section 5.14(a)

Material Contracts

(i)

 

  1.

Commercial Premium Finance Agreement, dated May 12, 2020 by and between the
Company and First Insurance Funding.

 

  2.

Engagement Letter, dated March 4, 2020, by and between the Company and Jefferies
LLC

 

  3.

Marketing & Sales Preferred Distribution Agreement, dated September 1, 2019, by
and between the Company and Merit Medical Systems, Inc.

 

  4.

Engagement Letter, dated September 7, 2017, by and between the Company and DLA
Piper LLP (US).

 

  5.

Master Services Agreement, dated June 24, 2020, by and between the Company and
Ernst & Young LLP.

 

  6.

Engagement Letter, dated September 24, 2019, by and between the Company and
KPMG.

 

  7.

Engagement Letter, dated April 7, 2020, by and between the Company and FTI
Consulting Inc.

 

  8.

Carrier Agreement, by and between the Company and United Parcel Services, Inc.

(ii)

 

  1.

Amended and Restated Distribution Agreement for Japan, dated July 4, 2016, by
and between the Company and Japan Lifeline (JLL), as amended by that certain
Amendment No. 1 to Amended and Restated Distribution Agreement for Japan dated
November 9, 2018.

 

  2.

International Distribution Agreement, dated December 31, 2018, by and between
the Company and Angiocor S.A, as amended by that certain Amendment No. 1 to
International Distribution Agreement dated January 1, 2020.

 

  3.

Sales Pricing Agreement, dated November 26, 2019, by and between Scottsdale
Healthcare Hospitals (d/b/a HonorHealth) and the Company, as amended by that
certain First Amendment to Sales Pricing Agreement, dated January 23, 2020.

 

  4.

International Distribution Agreement, dated January 1, 2019, by and between the
Company and H.S. S.r.l., as amended by that certain Amendment No. 1 to
International Distribution Agreement, dated February 3, 2020.

 

  5.

International Distribution Agreement, dated March 22, 2019, by and between the
Company and Somnotec(S) Pte Ltd.

 

  6.

Special Pricing Agreement, dated May 13, 2016, by and between the Company and
Freeman Health Systems, as amended.

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

  7.

Special Pricing Agreement, dated June 9, 2016, by and between the Company and
Kaleida Health, as amended by that First Amendment to Special Pricing Agreement
dated October 15, 2018.

 

  8.

Agreement for AAA and TAA Endoprosthesis, dated as of January 1, 2019, by and
between the Company and Tenet Business Services Corporation, as amended by that
certain Amendment to Agreement dated December 2, 2019.

 

  9.

Customer Contracts with the customers listed on Exhibit A of this Company
Disclosure Letter

(iii)

 

  1.

Promissory Note, dated May 1, 2020, from Bank of America, N.A.

(vii)

 

  1.

Lease for office space located at Europalaan 30, 5232 BC, ‘s-Hertogenbosch, The
Netherlands, dated July 17, 2019, by and between Endologix International
Holdings B.V. and EL30 B.V.

 

  2.

Lease Agreement for Santa Rosa facility for the building located at 3910
Brickway Boulevard, Santa Rosa, California, dated June 16, 2005, by and between
Trivascular, Inc. and Sonoma Airport Properties LLC, as amended.

 

  3.

Lease Agreement for office space located at Rahmannstraße 11, 65760 Eschborn,
Germany, dated April 5, 2016 by and between Endologix Internation B.V. and
IntReal International Real Estate Kapitalverwaltungsgesellschaft mbH.

 

  4.

Membership Agreement for the office space located at 6 Raffles Quay #16-01
Singapore 048580 dated January 7, 2020, by and between Endologix Singapore
Private Limited and JustCo (Raffles Quay) Pte. Ltd.

 

  5.

Standard Industrial/Commercial Multi-Tenant Lease - Net, for 2 Musick and 35
Hammond, located in Irvine, California, dated June 12, 2013, by and between the
Company and The Northwestern Mutual Life Insurance Company, as amended.

 

  6.

Standard Industrial/Commercial Multi-Tenant Lease - Net, for 33 Hammond, Suite
203 located in Irvine, California, dated April 1, 2014, by and between the
Company and The Northwestern Mutual Life Insurance Company.

(viii)

 

  1.

Agreement and Plan of Merger and Reorganization, dated October 27, 2010, by and
among Endologix, Inc., Nepal Acquisition Corporation, Nellix, Inc., certain of
Nellix, Inc.’s stockholders listed therein and Essex Woodlands Health Ventures,
Inc., as representative of Nellix, Inc.’s stockholders.

(ix)

 

  1.

Marketing & Sales Preferred Distribution Agreement, dated September 1, 2019, by
and between the Company and Merit Medical Systems, Inc.

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

(xiii)

 

  1.

See agreements in Section 5.14(a)(ii) above.

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

Section 5.16

Employee Benefit Matters

 

  •  

2020 Short Term Incentive Plan

 

  •  

Amended and Restated 2015 Stock Incentive Plan, as amended

 

  •  

Amended and Restated 2006 Employee Stock Purchase Plan, as amended

 

  •  

2017 Inducement Stock Incentive Plan, as amended

 

  •  

See Employment Agreements included as exhibits to the Company’s Form 10-K for
the fiscal year ended December 31, 2019

 

  •  

Medical Plans through Kaiser Foundation Health Plan and Aetna Health of
California

 

  •  

Dental Plan through Metropolitan Life Insurance

 

  •  

Vision Plan through Metropolitan Life Insurance

 

  •  

Life Insurance Plan through Metropolitan Life Insurance

 

  •  

Short Term and Long Term Disability Plans through Metropolitan Life Insurance

 

  •  

Health Savings Account

 

  •  

Health Care Flexible Savings Account

 

  •  

Pet Plan through National Casualty Company

 

  •  

Online Healthcare Plan through Walkingspree USA Ltd.

 

  •  

Cancer Plan through Wamberg Genomic Advisors, Inc.

 

  •  

Coverage under COBRA

 

  •  

Sick Leave Policy

 

  •  

Vacation Policy

 

  •  

Holiday Policy

 

  •  

Endologix, Inc. 401(k) Plan through Great-West Trust Company, LLC

 

  •  

Endologix, Inc. Severance Program

 

  •  

Online Employee Rewards Program through Global Engagement Solutions, Inc.

 

  •  

Legal Services and Advice through LegalShield

 

  •  

Transportation Program with Metrolink

 

  •  

Benefit Plans listed below:

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

Medical:

2 Plans provided by Kaiser

 

  •  

HMO - Core Plan

  •  

HMO - Buy Up Plan

4 Plans provided by Aetna

 

  •  

HMO - Limited Network

  •  

HMO - Full Network

  •  

PPO

  •  

HSA

Dental: PPO Plan provided by MetLife

Vision:

2 Plans provided by MetLife

 

  •  

PPO

  •  

Buy up PPO

Flexible Spending Account : Provided by FlexFacts

Dependent Care Flexible Spending Account: Provided by FlexFacts

Life and AD&D: Employer paid provided by MetLife (2x annual earnings up to
$200,000)

Voluntary Plans by MetLife:

 

  •  

Short Term Disability

 

  •  

Long Term Disability

 

  •  

Life and AD&D (additional policies and dependent policies)

 

  •  

Critical illness Insurance

 

  •  

Accident Insurance

Additional Benefits:

 

Benefits Support Line    Provided by Marsh & Mclennan 401k Program    Managed by
Empower EE Stock Purchase Program    Managed by Endologix Employee Assistance
Program    Provided by MetLife Benefits Support Line    Health Advocate

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

Section 5.19

FDA and Related Regulatory Matters

(b)

FDA Facility Registrations and Device Listings:

Endologix International Holdings B.V. (Netherlands), Registration Number
3013162347

 

  •  

Specification Developer for:

 

  •  

AFX Delivery System; Powerlink System (P040002)

 

  •  

AFX introducer System (K120212)

 

  •  

Dual Lumen Catheter (K991601)

Endologix, Inc. (Santa Rosa, CA), Registration Number 3008011247

 

  •  

Manufacturer for Ovation Stent Graft System (P120006)

 

  •  

Manufacturer and Complaint File Establishment for Alto Abdominal Stent Graft
System; Ovation Abdominal Stent Graft System; Ovation iX Abdominal Stent Graft
System; Ovation iX Iliac Stent Graft; Ovation Prime Abdominal Stent Graft System
(P120006)

ENDOLOGIX, INC. (Irvine, CA), Registration Number 3011063223

 

  •  

Contract Manufacturer and Complaint File Establishment for:

 

  •  

AFX Delivery System; Powerlink System (P040002)

 

  •  

AFX Introducer System (K120212)

 

  •  

Dual Lumen Catheter (K991601)

FDA Clearances:

AFX Introducer System

 

  •  

K110090

 

  •  

K111747

 

  •  

K120212

Dual Lumen Catheter

 

  •  

K991601

FDA Approvals:

Ovation Platform (including Alto Abdominal Stent Graft System )

 

  •  

P120006; Supplements S001 through S021, S023 through S026, S028 through S032,
and S034 (withdrawn supplements not included); and annual reports filed with FDA
pertaining to such approval

 

  •  

Ovation IDE G090239; sequentially, Supplements S001 through S045; and interim
and final reports pertaining to such investigational uses

 

  •  

Alto IDE G160226; sequentially, Supplements S001 through S005; and interim and
final reports pertaining to such investigational uses

AFX Delivery System; Powerlink System:

 

  •  

P040002; sequentially, Supplements S001 through S063; and annual reports filed
with FDA pertaining to such approval

Nellix Endovascular Aneurysm Sealing System:

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

  •  

IDE G130005; Supplements S001 through S034 and S036 through S056 (withdrawn
supplement not included); and interim and final reports pertaining to such
investigational uses

(d)

The Company is subject to an action FDA Form 483 and its associated response
process. In addition, the Company had a verbal Regulatory Meeting with FDA
regarding the 483 and the Company’s responses. Thus far, the Company has
received no indication that a warning letter is imminent, however, in dealing
with regulators it is difficult to predict their every move and reaction and, as
such, the Company cannot preclude that a warning letter may be issued until such
time as the 483 and its responses are closed and recognized as such by FDA.

(g)

None.

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

Section 7.1(b)(xix)

Interim Operations

None.

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

Exhibit A

[Attached]