Exhibit 10.1

 

EXECUTION VERSION

 

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, IT BEING UNDERSTOOD
THAT SUCH A SOLICITATION, IF ANY, ONLY WILL BE MADE IN COMPLIANCE WITH
APPLICABLE PROVISIONS OF SECURITIES, BANKRUPTCY, AND/OR OTHER APPLICABLE LAWS.

 

RESTRUCTURING SUPPORT AGREEMENT

 

This RESTRUCTURING SUPPORT AGREEMENT (together with all exhibits, schedules and
attachments hereto, as amended, supplemented or otherwise modified from time to
time, this “Agreement”), dated as of October 30, 2018, is made and entered into
by and among (1) Egalet Corporation (“Egalet”), a Delaware corporation, and its
direct and indirect subsidiaries listed on the signature pages hereto (each, a
“Company Party,” and collectively, the “Company”), and (2) the undersigned
beneficial holders (or investment advisors or managers executing and delivering
this Agreement for such beneficial holders) of Egalet Claims (as defined below)
(together with their respective successors and permitted assigns, and any holder
of Egalet Claims that becomes a party hereto in accordance with the terms
hereof, each, a “Supporting Noteholder,” and collectively, the “Supporting
Noteholders”).

 

Each of the Company, the Supporting Noteholders, and any Person that
subsequently becomes a party hereto in accordance with the terms hereof is
referred to herein as a “Party” and collectively as the “Parties.”  Capitalized
terms used but not defined herein shall have the meanings ascribed to them in
the Plan (as defined below) attached as Exhibit A hereto.

 

WHEREAS:

 

A.                                    Egalet is party to that certain Indenture,
dated as of August 31, 2016 (as amended, supplemented or otherwise modified from
time to time, the “Existing First Lien Notes Indenture”) by and among Egalet,
the Guarantors from time to time party thereto and U.S. Bank National
Association, as trustee and collateral agent, pursuant to which Egalet issued
the 13% Senior Secured Notes (the “Existing First Lien Notes”);

 

B.                                    Egalet is party to that certain Indenture,
dated as of April 7, 2015 (as amended, supplemented or otherwise modified from
time to time, the “Existing 5.50% Notes Indenture”), among Egalet, the
Guarantors from time to time party thereto and The Bank of New York Mellon, as
trustee, pursuant to which Egalet issued the 5.50% Convertible Senior Notes due
2020 (the “Existing 5.50% Convertible Notes”);

 

C.                                    Egalet is party to that certain Indenture,
dated as of December 27, 2017 (as amended, supplemented or otherwise modified
from time to time, the “Existing 6.50% Notes Indenture,” and together with the
Existing First Lien Notes Indenture and the Existing 5.50% Notes Indenture,
collectively, the “Indentures”), among Egalet, the Guarantors from time to time
party

 

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thereto and The Bank of New York Mellon, as trustee, pursuant to which Egalet
issued the 6.50% Convertible Senior Notes due 2024 (the “Existing 6.50%
Convertible Notes”);

 

D.                                    The Parties have negotiated in good faith
and at arm’s length and have agreed to undertake a financial restructuring of
the existing debt and other obligations and equity interests of the Company and
to consummate the Iroko Acquisition (collectively, the “Restructuring”), to be
implemented pursuant to a pre-arranged chapter 11 plan of reorganization (as may
be amended, supplemented or otherwise modified from time to time in accordance
with the terms of this Agreement, and including all exhibits thereto,
the “Plan”), to be filed in voluntary cases commenced by the Company
(collectively, the “Chapter 11 Cases”) under chapter 11 of title 11 of the
United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court
for the District of Delaware (the “Bankruptcy Court”), all in accordance with
the terms set forth in this Agreement, the Plan and the other Definitive
Documents (as defined below); and

 

E.                                     Subject to the terms and conditions set
forth in this Agreement, the Supporting Noteholders have agreed to support
(i) the commencement and conduct of the Chapter 11 Cases to implement this
Agreement, the transactions contemplated hereby and the Restructuring and
(ii) confirmation of the Plan by the Bankruptcy Court.

 

NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, and for other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, each Party, intending to be legally bound hereby,
agrees as follows:

 

1.                                      Definitions.  The following terms used
in this Agreement shall have the following definitions:

 

“Corporate Governance Documents” means any corporate governance documents of any
of the reorganized Company Parties, including the articles of incorporation or
certificates of formation, by-laws, stockholders’ agreements and/or company
agreements, to be executed in connection with the Restructuring.

 

“Egalet Claims” means any and all Claims against any of the Company Parties,
including the First Lien Secured Notes Claims, the 5.50% Convertible Notes
Claims and the 6.50% Convertible Notes Claims.

 

“Event” means any event, change, effect, occurrence, development, circumstance,
condition, result, state of fact or change of fact.

 

“Governmental Unit” has the meaning of “governmental unit” set forth in section
101(27) of the Bankruptcy Code.

 

“Iroko Reverse Break-Up Fee Approval Motion” means that motion, in form and
substance reasonably satisfactory to Iroko and the Supporting Noteholders,
seeking approval of the reimbursement obligation of the Company referenced in
Section 8.13 of the Purchase Agreement as an administrative expense of the
Chapter 11 Cases under section 503(b) of the Bankruptcy Code, which the Company
is required to file and diligently pursue, in accordance with the Purchase
Agreement.

 

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“Outside Date” means the date that is ninety five (95) days after the Petition
Date.

 

2.                                      Exhibits Incorporated by Reference. 
Each of the exhibits attached hereto is expressly incorporated herein and made a
part of this Agreement, and all references to this Agreement shall include the
exhibits.  Unless otherwise provided herein, in the event the terms and
conditions set forth in the Plan and this Agreement are inconsistent, the terms
and conditions contained in the Plan shall govern.

 

3.                                      Effectiveness.  This Agreement shall
become effective and binding upon each of the Parties upon execution and
delivery by (a) each of the Company Parties, (b) beneficial holders (or
investment advisors or managers executing and delivering this Agreement for such
beneficial holders) of at least two-thirds (2/3) of the aggregate principal
amount of First Lien Secured Notes Claims, (c) beneficial holders (or investment
advisors or managers executing and delivering this Agreement for such beneficial
holders) of at least two-thirds (2/3) of the aggregate principal amount of 5.50%
Convertible Notes Claims, and (d) beneficial holders (or investment advisors or
managers executing and delivering this Agreement for such beneficial holders) of
at least two-thirds (2/3) of the aggregate principal amount of 6.50% Convertible
Notes Claims, of duly executed signature pages for this Agreement to counsel to
each other Party (such date, the “Agreement Effective Date”).  With respect to
any Supporting Noteholder that becomes a Party by executing and delivering a
Transferee Joinder Agreement (as defined below) after the Agreement Effective
Date, this Agreement shall become effective and binding upon such Supporting
Noteholder at the time such Transferee Joinder Agreement is executed and
delivered to counsel to the Company, the Ad Hoc Secured Noteholder Committee and
the Ad Hoc Convertible Noteholder Committee.

 

4.                                      Definitive Documents.  The “Definitive
Documents” (in each case, as amended, supplemented, or otherwise modified from
time to time in accordance with the terms hereof and thereof) shall include,
without limitation: (a) all documents implementing, achieving, contemplated by
or relating to the Restructuring, including, without limitation, (i) the Plan,
(ii) the Disclosure Statement, (iii) the plan supplement and its exhibits,
ballots and other solicitation materials in respect of the Plan (the
“Solicitation Materials”), (iv) the New Secured Notes Indenture, which shall
contain the terms set forth on the term sheet attached hereto as Exhibit B, the
collateral and security agreements creating, evidencing or perfecting the liens
on and security interests in the collateral securing the New Secured Notes, and
any other definitive documentation with respect to the New Secured Notes
(collectively, the “New Secured Notes Documents”), (v) the definitive
documentation with respect to the Iroko Acquisition, including the Purchase
Agreement, attached hereto as Exhibit C and transition services agreement (if
any) with respect thereto, (vi) the definitive documentation with respect to the
Rights Offering (if applicable), including the Backstop Commitment Agreement,
(vii) other commitment agreements, exit financing agreements or collateral or
other financing documents with respect to any indebtedness incurred by any
Company Party under the Plan or otherwise in connection with the Restructuring,
(viii) the organizational documents of any Company Party (including, without
limitation, any Corporate Governance Documents), (ix) the shareholder agreements
and registration rights agreements with respect to the New Egalet Common Stock,
(x) the New Royalty Rights Agreements, and (xi) other transactional or corporate
documents (including, without limitation, any agreements and documents described
in the Plan and the exhibits thereto); (b) all motions,

 

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pleadings, orders or other documents filed in the Chapter 11 Cases by any
Company Party seeking approval, ratification or confirmation of any of the
documents implementing, achieving, contemplated by or relating to the
Restructuring, including, without limitation, (i) the motion or motions to
(A) approve the Disclosure Statement, (B) confirm the Plan, (C) authorize the
use of cash collateral, (D) approve the Solicitation Materials, and (E) grant
any “first-day” relief requested by the Company, and (ii) the order or orders
(A) authorizing the use of cash collateral on an interim and final basis
(respectively, the “Interim Cash Collateral Order” and the “Final Cash
Collateral Order” and, together, the “Cash Collateral Orders”), (B) approving
the Disclosure Statement and the solicitation procedures (the “Disclosure
Statement Order”), (C) confirming the Plan (the “Confirmation Order”), and
(D) granting any “first-day” relief requested by the Company; and (c) all
definitive documentation with respect to the Management Incentive Plan.  The
Definitive Documents remain subject to negotiation and completion and shall,
upon completion, contain terms, conditions, representations, warranties, and
covenants consistent in all material respects with the terms of this Agreement,
and otherwise be in form and substance acceptable to the Company and reasonably
acceptable the Required Supporting Noteholders; provided, that any amendments,
modifications, waivers of or supplements to the Definitive Documents, whether
filed with the Bankruptcy Court or otherwise finalized, shall (w) not be made
without the prior written consent of the Required Supporting Noteholders
(including via email), (x) be consistent in all material respects with this
Agreement, and (y) otherwise be in form and substance acceptable to the Company
and reasonably acceptable to the Required Supporting Noteholders; provided,
further, that if any change, modification or amendment to the Definitive
Documents is non-substantive and would not adversely affect the legal rights or
economic recoveries of any Supporting Noteholder, the consent of the Required
Supporting Noteholders shall not be required; provided, further, that the
foregoing exception shall not apply to the Plan, Confirmation Order, or New
Secured Notes Documents.

 

5.                                      Commitments of Supporting Noteholders.

 

(a)                                 Voting, Support.  Commencing on the
Agreement Effective Date until the Agreement Termination Date (as defined
below), each Supporting Noteholder (severally and not jointly) agrees that it
shall, subject to the terms and conditions hereof:

 

(i)                                     (A) use its commercially reasonable
efforts to support and consummate the Restructuring (including the Iroko Reverse
Break-Up Fee Approval Motion) in a timely manner in accordance with this
Agreement, including the good faith negotiation, preparation and filing of any
Definitive Documents within the time frame provided herein or therein;
(B) execute and deliver any other documents to which it is a party that may be
required to effectuate and consummate the Restructuring; and (C) take any and
all commercially reasonable and appropriate actions in furtherance of the
Restructuring, as contemplated under this Agreement;

 

(ii)                                  subject to the receipt by such Supporting
Noteholder of the Disclosure Statement and Solicitation Materials, in each case
as approved by the Bankruptcy Court, timely vote all Egalet Claims held by such
Supporting Noteholder (or over which such Supporting Noteholder now or hereafter
has voting control) to accept the Plan, by delivering its duly executed and
completed ballots accepting the Plan on a timely basis

 

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following the commencement of the solicitation pursuant to the Solicitation
Materials and to the extent it is permitted to elect whether to opt out of the
releases set forth in the Plan, not “opt out” of any releases under the Plan by
timely delivering its duly executed and completed ballot or ballots indicating
such election;

 

(iii)                               not (A) take, or direct any collateral agent
or indenture trustee (as applicable) to take, any action inconsistent with such
Supporting Noteholder’s obligations under this Agreement and, if any applicable
collateral agent or indenture trustee takes any action inconsistent with such
Supporting Noteholder’s obligations under this Agreement, such Supporting
Noteholder shall use its commercially reasonable efforts to direct and request
that such collateral agent or indenture trustee (as applicable) cease and
refrain from taking any such action (provided that nothing in this Agreement
shall be construed to require any Supporting Noteholder to sue or to indemnify
any administrative agent, collateral agent or indenture trustee for any reason,
or to incur any expense, liability or obligation), (B) exercise any right or
remedy for the enforcement, collection or recovery of any Claim against the
Company except in a manner consistent with this Agreement and the Definitive
Documents, or (C) unless this Agreement or any Definitive Document has been
amended, modified or supplemented in a manner not in compliance with this
Agreement, amend, change or withdraw (or cause to be amended, changed or
withdrawn) its vote to accept the Plan; and

 

(iv)                              not (A) object to, delay, impede or take any
other action directly or indirectly that is inconsistent with, or that is
intended or reasonably likely to interfere with, delay, impede, prevent or
postpone acceptance, confirmation or implementation of, the Restructuring,
(B) directly or indirectly seek, solicit, encourage, assist, consent to,
propose, file, support, participate in the formulation of or vote for, any
restructuring, liquidation, offer of dissolution, winding up, consensual or
nonconsensual foreclosure, sale of assets (including pursuant to section 363 of
the Bankruptcy Code), merger, consolidation, business combination, workout or
plan of reorganization for any Company Party other than the Plan (each, an
“Alternative Proposal”) or (C) publicly announce its intention not to pursue the
Restructuring.

 

(b)                                 Notwithstanding anything to the contrary
contained in this Agreement, nothing herein and neither a vote to accept the
Plan by a Supporting Noteholder nor the acceptance of the Plan by any class of
creditors shall in any way be deemed to impair or waive the rights of a
Supporting Noteholder to assert or raise any objection or otherwise appear as a
party-in-interest in the Chapter 11 Cases so long as, from the Agreement
Effective Date until the Agreement Termination Date, such appearance and the
positions advocated in connection therewith either:  (i) seek to enforce rights,
remedies or obligations under this Agreement; or (ii) are not materially
inconsistent with this Agreement and are not for the primary purpose of
hindering, delaying, or preventing the consummation of the Restructuring. 
Except as expressly set forth herein or in the Definitive Documents, no
Supporting Noteholder shall be required to incur, assume, become liable in
respect of, or suffer to exist any material expenses, liabilities or other
obligations, or agree to or become bound by any commitments, undertakings,
concessions, indemnities or other arrangements that could result in material
expenses, liabilities or other obligations to such Supporting Noteholder.  For
the avoidance of doubt, each Party acknowledges and agrees that this

 

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Agreement shall not be deemed to constitute a waiver of any “Default” or “Event
of Default” under the Indentures (as such terms are defined under each
applicable Indenture).

 

(c)                                  Transfers.

 

(i)                                     Each Supporting Noteholder agrees that,
commencing on the Agreement Effective Date and ending on the Agreement
Termination Date, such Supporting Noteholder shall not (A) directly or
indirectly sell, use, transfer, assign, pledge, grant a participation interest
in or otherwise dispose of, directly or indirectly, its right, title or interest
in respect of any Egalet Claims, as applicable, in whole or in part, or
(B) deposit any of such Egalet Claims against any Company Party, as applicable,
into a voting trust, or grant any proxies, or enter into a voting agreement with
respect to any such Egalet Claims (the actions described in clauses (A) and
(B) are collectively referred to herein as a “Transfer” and the Supporting
Noteholder making such Transfer is referred to herein as the “Transferor”),
unless the transferee thereof (the “Transferee”) is another Supporting
Noteholder or agrees in writing to be bound by the terms of this Agreement
applicable to Supporting Noteholders by executing a Transferee Joinder Agreement
substantially in the form attached hereto as Exhibit D (the “Transferee Joinder
Agreement”) and delivering an executed copy thereof within three (3) Business
Days of such Transfer to counsel to the Company, the Ad Hoc Secured Noteholder
Committee and the Ad Hoc Convertible Noteholder Committee in accordance with
Section 21 hereof.  Upon compliance with the foregoing, the Transferor shall be
deemed to relinquish its rights (and be released from its obligations, except
for any claim for breach of this Agreement that occurs prior to such Transfer)
under this Agreement to the extent of such transferred Egalet Claims and the
Transferor shall have no liability arising from or related to the failure of the
Transferee to comply with the terms and conditions of this Agreement.  Any
Transfer made in violation of this Section 5(c)(i) shall be deemed null and void
ab initio and of no force or effect, regardless of any prior notice provided to
the Company and/or any Supporting Noteholder, and shall not create any
obligation or liability of any Company Party or any other Supporting Noteholder
to the purported Transferee.  Notwithstanding anything in this Agreement to the
contrary and for the avoidance of doubt, if any Party executes and becomes bound
by this Agreement solely as to a specific business unit or division, no
affiliate of such Party or other business unit or division within any such Party
shall be subject to this Agreement unless they separately execute this Agreement
or a Transferee Joinder Agreement.

 

(ii)                                  Notwithstanding anything to the contrary
in Section 5(c)(i), a Supporting Noteholder may (A) settle or deliver any Egalet
Claims to settle any confirmed transaction pending as of the date of such
Supporting Noteholder’s entry into this Agreement, or (B) Transfer any Egalet
Claims to an entity that is acting in its capacity as a Qualified Marketmaker
(as defined herein) (a “Qualified Transfer”) without the requirement that the
Qualified Marketmaker be or become a Supporting Noteholder or otherwise be or
become bound by the terms and conditions of this Agreement, provided that such
Qualified Transfer shall only be valid if the Qualified Marketmaker subsequently
Transfers all right, title and interest in such Egalet Claims within ten
(10) Business Days of its acquisition to a Transferee that is a Supporting
Noteholder (or becomes a Supporting Noteholder at the

 

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time of the Transfer pursuant to a Transferee Joinder Agreement).  For purposes
hereof, a “Qualified Marketmaker” shall mean an entity that (A) holds itself out
to the market as standing ready in the ordinary course of its business to
purchase from customers and sell to customers Egalet Claims (including debt
securities or other debt) or enter with customers into long and short positions
in claims against the Company (including debt securities or other debt), in its
capacity as a dealer or market maker in such claims and (B) is in fact regularly
in the business of making a market in claims against issuers or borrowers
(including debt securities or other debt).

 

(d)                                 Additional Claims.  This Agreement shall in
no way be construed to preclude the Supporting Noteholders from acquiring
additional Egalet Claims, and each Supporting Noteholder agrees that if it
acquires additional Egalet Claims then such Egalet Claims shall automatically be
subject to all of the terms of this Agreement (including the obligations of the
Supporting Noteholders under this Section 5).

 

6.                                      Commitments of the Company.  Commencing
on the Agreement Effective Date until the Agreement Termination Date, each
Company Party, jointly and severally, agrees, that such Company Party shall,
subject to the terms and conditions hereof:

 

(a)                                 (i)  support and take all actions that are
necessary and appropriate or are reasonably requested by the Required Supporting
Secured Noteholders or the Required Supporting Convertible Noteholders to obtain
orders of the Bankruptcy Court, to the extent applicable, in furtherance of the
solicitation, confirmation, and consummation of the Plan and the Restructuring,
including using commercially reasonable efforts to obtain entry of the Cash
Collateral Orders, Disclosure Statement Order and Confirmation Order, each in
accordance with, and within the time frames contemplated by, this Agreement
(including within the deadlines set forth in Section 7(a)); (ii) timely file a
formal written response in opposition to any objection filed with the Bankruptcy
Court by any Person with respect to entry of Cash Collateral Orders, the
Disclosure Statement Order or the Confirmation Order or any relief related
thereto; (iii) support and consummate the Restructuring in a timely manner in
accordance with this Agreement, including the good faith negotiation,
preparation and filing of any Definitive Documents within the time frame
provided herein or therein; (iv) execute and deliver any other documents that
may be required to effectuate and consummate the Restructuring; (v) take any and
all commercially reasonable and appropriate actions in furtherance of the
Restructuring, as contemplated under this Agreement; and (vi) operate its
business in the ordinary course in a manner consistent with past practice (other
than any changes in operations (i) resulting from or relating to the filing or
prosecution of the Chapter 11 Cases or (ii) imposed by the Bankruptcy Court);

 

(b)                                 provide reasonably prompt written notice (in
accordance with Section 21 hereof, and in any event which notice shall be
provided within two (2) Business Days after such Company Party has actual
knowledge of the circumstance giving rise to the notice obligation set forth in
this clause (b)) to the Supporting Noteholders of (i) the receipt by such
Company Party of an unsolicited proposal or expression of interest with respect
to an Alternative Proposal, which notice shall include the material terms of
such Alternative Proposal and the identity of the Person(s) involved, (ii) any
Event that causes or would reasonably be expected to cause (A) any covenant of
any Company Party contained in this Agreement not to be satisfied, or (B) any

 

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condition precedent contained in the Plan not to timely be satisfied or become
incapable of being satisfied, (iii) receipt of any notice from any third party
alleging that the consent of such party is or may be required in connection with
the transactions contemplated by the Restructuring, (iv) receipt of any material
notice from any Governmental Unit with respect to this Agreement or the
Restructuring, (v) receipt of any notice of any complaints, litigations,
investigations, hearings or proceedings commenced other than as filed with the
Bankruptcy Court, or threatened against the Company, relating to or involving or
otherwise affecting the transactions contemplated by the Restructuring, (vi) any
failure of the Company to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder, (vii) any
acquisition or divestiture or business combination made by the Company outside
of the ordinary course of business; and (viii) any material discussions or
negotiations regarding any of the foregoing;

 

(c)                                  use reasonable best efforts to satisfy the
milestones set forth in Section 7(a) of this Agreement;

 

(d)                                 not (i) waive, amend or modify, or file a
pleading seeking authority to waive, amend or modify, any Definitive Document or
the Restructuring without the Required Supporting Noteholders’ prior written
consent (including via email), or (ii) execute or file any Definitive Document
that, in whole or in part, is not consistent with this Agreement, or is not in
form and substance reasonably acceptable to the Required Supporting Noteholders;

 

(e)                                  to the extent applicable, timely file a
formal objection to any motion filed with the Bankruptcy Court seeking the entry
of an order modifying or terminating the Company’s exclusive right to file
and/or solicit acceptances of a plan of reorganization, 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 or for relief that (i) is inconsistent with this Agreement in
any material respect, or (ii) would, or would reasonably be expected to,
frustrate the purposes of this Agreement, including by preventing the
consummation of the Restructuring;

 

(f)                                   use reasonable best efforts to obtain,
file, submit or register any and all required Governmental Unit, regulatory and
third-party approvals of the Restructuring;

 

(g)                                  maintain good standing and legal existence
under the laws of the state or other jurisdiction in which such Company Party is
incorporated, organized or formed;

 

(h)                                 not (i) object to, delay, impede or take any
other action that is inconsistent with, or that is intended or reasonably likely
to interfere with, delay, impede, prevent or postpone acceptance, confirmation
or implementation of, the Restructuring, (ii) seek, solicit, encourage, assist,
consent to, propose, file, support, participate in the formulation of, or enter
or participate in any discussion or enter into any agreement, with any Person,
regarding the negotiation or formulation of any Alternative Proposal, or
(iii) publicly announce its intention not to pursue the Restructuring;

 

(i)                                     (i) provide draft copies of all
Definitive Documents, and all material motions or applications and other
documents that any Company Party intends to file with the Bankruptcy Court, to
counsel to the Ad Hoc Secured Noteholder Committee and the Ad Hoc

 

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Convertible Noteholder Committee as soon as reasonably practicable (but no less
than twenty four (24) hours) prior to the date when the applicable Company Party
intends to execute or file any such pleading or other document (provided that
the Company shall use its reasonable best efforts to provide to counsel to the
Ad Hoc Secured Noteholder Committee and the Ad Hoc Convertible Noteholder
Committee the draft of any such document no later than two (2) Business Days
before making such contemplated filing of such document) or such other time
period agreed to by such counsel, (ii) consult in good faith with such counsel
regarding the form and substance of any such proposed filing with the Bankruptcy
Court, and (iii) not file any document with the Bankruptcy Court that, in whole
or in part, is not consistent with this Agreement, or is not in form and
substance reasonably acceptable to the Required Supporting Noteholders;

 

(j)                                    except as expressly contemplated by this
Agreement and except for changes resulting from or relating to the filing and
prosecution of the Chapter 11 Cases or imposed by the Bankruptcy Court, (i) use
commercially reasonable efforts to preserve the relationships with current
customers, distributors, suppliers, vendors, employees and others having
business dealings with the Company, including but not limited to the performance
of all material obligations under any executory contracts which have not been
rejected and compliance with historical billing practices, (ii) maintain and
insure their physical assets, properties and facilities in the current working
order, condition and repair as of the date hereof (ordinary wear and tear
excepted) and maintain all existing insurance on the foregoing consistent with
past practices, (iii) not take any action, or omit to take any action, the
intent of which is to cause the termination of its current executive officers
(other than for cause), and (iv) maintain the Company’s books and records on a
basis consistent with prior practice, including prior billing and collection
practices;

 

(k)                                 provide the Supporting Noteholders and their
advisors with, and direct its employees, officers, directors, consultants,
attorneys, accountants and other advisors and representatives to provide the
Supporting Noteholders and their advisors (in each case subject to any
applicable confidentiality agreements) with, (i) timely responses to reasonable
information requests from such Supporting Noteholders or their advisors,
(ii) reasonable access to the Company’s (A) facilities, properties, assets,
contracts, books, records and any other information concerning the business and
operations of the Company and (B) officers, management, employees, advisors and
representatives regarding the Company’s liquidity, assets, liabilities,
business, finances, strategies, prospects, the Chapter 11 Cases, and the general
status of ongoing operations, in each case during normal business hours and at
other reasonable times in a manner that does not unreasonably interfere with the
normal business operations of the Company, and (iii) updates regarding any
material developments regarding the Company’s liquidity, assets, liabilities,
business, finances, strategies, prospects and operations, the Chapter 11 Cases
and the Iroko Acquisition;

 

(l)                                     not (i) seek discovery in connection
with, prepare or commence any legal proceeding that challenges the amount,
validity, enforceability or priority of the Egalet Claims of any Supporting
Noteholder, or (ii) otherwise seek to restrict any rights of any of the
Supporting Noteholders; and

 

(m)                             not increase in any manner the compensation or
benefits (including severance, and retention and incentive bonuses) of any
director, officer or employee of any

 

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Company Party in an amount that exceeds $100,000 for any individual director,
officer or employee.

 

7.                                      Termination.

 

(a)                                 Supporting Noteholder Termination.  This
Agreement shall automatically terminate, or otherwise terminate as provided
below, upon the delivery of written notice from the Required Supporting Secured
Noteholders or the Required Supporting Convertible Noteholders, as applicable,
to the Company (in accordance with Section 21), at any time after the occurrence
of any of the following:

 

(i)                                     the Petition Date shall not have
occurred on or before October 31, 2018;

 

(ii)                                  the Company shall have failed to file the
Plan and the Disclosure Statement on the Petition Date;

 

(iii)                               the Bankruptcy Court shall not have entered
the Interim Cash Collateral Order on or before the date that is five (5) days
after the Petition Date;

 

(iv)                              the Bankruptcy Court shall not have entered
the Disclosure Statement Order, the Final Cash Collateral Order on or before the
date that is forty (40) days after the Petition Date;

 

(v)                                 the Bankruptcy Court shall not have entered
the Confirmation Order on or before the date that is eighty (80) days after the
Petition Date;

 

(vi)                              the Effective Date shall not have occurred by
the Outside Date;

 

(vii)                           the termination of the Purchase Agreement in
connection with the Iroko Acquisition;

 

(viii)                        (A) any Definitive Document is not consistent with
this Agreement or is otherwise not in form and substance reasonably acceptable
to the Required Supporting Secured Noteholders or the Required Supporting
Convertible Noteholders, or (B) any of the terms or conditions of any Definitive
Document is waived, amended or modified, or any Company Party files a pleading
seeking authority to waive, amend or modify, any Definitive Document, without
the Required Supporting Noteholders’ prior written consent (including via
email), in each case which remains uncured for five (5) Business Days after the
receipt by the Company of written notice delivered in accordance herewith;

 

(ix)                              the Company shall have withdrawn the Plan
without the consent of the Required Supporting Secured Noteholders or the
Required Supporting Convertible Noteholders;

 

(x)                                 any Company Party files, propounds or
otherwise seeks, solicits, proposes or supports, directly or indirectly, any
Alternative Proposal or publicly announces its intention to pursue an
Alternative Proposal;

 

10

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(xi)                              any Company Party files any motion or
application seeking authority to sell all or a material portion of its assets;

 

(xii)                           the termination of the consensual use of cash
collateral as provided in the Cash Collateral Orders;

 

(xiii)                        the filing by any Company Party of any motion or
other request for relief seeking (A) dismissal of any of the Chapter 11 Cases,
(B) conversion of any of the Chapter 11 Cases to a case under chapter 7 of the
Bankruptcy Code, or (C) appointment of a trustee or an examiner with expanded
powers pursuant to section 1104 of the Bankruptcy Code in any of the Chapter 11
Cases;

 

(xiv)                       the entry of an order by the Bankruptcy Court or any
other court with appropriate jurisdiction (A) dismissing any of the Chapter 11
Cases, (B) converting any of the Chapter 11 Cases to a case under chapter 7 of
the Bankruptcy Code, (C) appointing a trustee or an examiner with expanded
powers pursuant to section 1104 of the Bankruptcy Code with respect to any of
the Chapter 11 Cases, (D) making a finding of fraud, dishonesty, or material
misconduct by any officer or director of the Company or (E) that would have the
effect of restricting, preventing or prohibiting consummation of the
Restructuring or adversely impacting the legal or economic rights of any
Supporting Noteholder;

 

(xv)                          the entry of an order by the Bankruptcy Court or
any other court with appropriate jurisdiction avoiding, invalidating
disallowing, subordinating or recharacterizing any Egalet Claims held by any
Supporting Noteholder;

 

(xvi)                       the breach in any material respect by any Company
Party of any of its covenants, obligations, representations, or warranties
contained in this Agreement, and any such breach (a) remains uncured for a
period of five (5) Business Days from the date the breaching Company Party
receives a written notice of such breach from the Required Supporting Secured
Noteholders or the Required Supporting Convertible Noteholders, and (b) could
reasonably be expected to materially impair the ability to consummate the
Restructuring in accordance with the terms of this Agreement;

 

(xvii)                    any court of competent jurisdiction or other competent
Governmental Unit or regulatory authority shall have issued any ruling,
judgment, or order making illegal or otherwise restricting, preventing,
enjoining or prohibiting the consummation of the Restructuring or adversely
impacting the legal or economic rights of any Supporting Noteholder in a manner
that cannot be reasonably remedied in a timely manner by the Company or the
Supporting Noteholder;

 

(xviii)                 the exclusive right of any Company Party to file and
solicit a chapter 11 plan pursuant to section 1121 of the Bankruptcy Code shall
have terminated;

 

(xix)                       the filing of any motion or pleading by any Company
Party in the Chapter 11 Cases that is not consistent with the terms and
conditions of this Agreement or the

 

11

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Definitive Documents in a manner that is reasonably not acceptable to the
Required Supporting Secured Noteholders or the Required Supporting Convertible
Noteholders; or

 

(xx)                          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 any material assets of the Company that would
have an adverse impact on the Restructuring.

 

(b)                                 Company Termination.  This Agreement shall
automatically terminate upon the delivery of written notice from the Company to
the Supporting Noteholders (in accordance with Section 21), at any time after
the occurrence of any of the following:

 

(i)                                     solely with respect to the Supporting
Noteholders with First Lien Secured Note Claims, the breach in any material
respect by any such Supporting Noteholder of any of its covenants, obligations,
representations, or warranties contained in this Agreement that would reasonably
be expected to have a material adverse impact on the timely consummation of the
Restructuring that (a) (to the extent curable) remains uncured for a period of
five (5) Business Days from the date such breaching Supporting Noteholder
receives a written notice of such breach from the Company, and (b) could
reasonably be expected to materially impair the ability to consummate the
Restructuring in accordance with the terms of this Agreement; provided, however,
that the Company may not seek to terminate this Agreement based upon a breach of
this Agreement by such Supporting Noteholder arising primarily out of the
Company’s own actions in breach of this Agreement; and provided, further, that
so long as non-breaching Supporting Noteholders with First Lien Secured Note
Claims party hereto continue to hold at least two-thirds (2/3) of the
outstanding First Lien Secured Note Claims, such termination shall be effective
only with respect to such breaching Supporting Noteholder;

 

(ii)                                  solely with respect to the Supporting
Noteholders with 5.50% Convertible Notes Claims or 6.50% Convertible Notes
Claims, the breach in any material respect by any such Supporting Noteholder of
any of its covenants, obligations, representations, or warranties contained in
this Agreement that would reasonably be expected to have a material adverse
impact on the timely consummation of the Restructuring that (a) (to the extent
curable) remains uncured for a period of five (5) Business Days from the date
such breaching Supporting Noteholder receives a written notice of such breach
from the Company, and (b) could reasonably be expected to materially impair the
ability to consummate the Restructuring in accordance with the terms of this
Agreement; provided, however, that the Company may not seek to terminate this
Agreement based upon a breach of this Agreement by a Supporting Noteholder
arising primarily out of the Company’s own actions in breach of this Agreement;
and provided, further, that so long as non-breaching Supporting Noteholders with
5.50% Convertible Notes Claims or 6.50% Convertible Notes Claims party hereto
continue to hold at least two-thirds (2/3) of the outstanding 5.50% Convertible
Notes Claims or 6.50% Convertible Notes Claims, respectively, such termination
shall be effective only with respect to such breaching Supporting Noteholder(s);

 

(iii)                               any court of competent jurisdiction or other
competent Governmental Unit or regulatory authority shall have issued any
ruling, judgment, or order making illegal or

 

12

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otherwise restricting, preventing, enjoining or prohibiting the consummation of
the Restructuring in a manner that cannot be reasonably remedied in a timely
manner by the Company or the Supporting Noteholders; or

 

(iv)                              the board of directors, board of managers, or
such similar governing body of any Company Party determines, based on the advice
of outside counsel, that proceeding with the transactions contemplated under
this Agreement (including taking any action or refraining from taking any
action) would be inconsistent with the exercise of its fiduciary duties under
applicable law; provided, however, that the Company shall provide legal counsel
to the Ad Hoc Secured Noteholder Committee and legal counsel to the Ad Hoc
Convertible Noteholder Committee written notice prior to termination of this
Agreement in accordance with Section 7(b)(iv) of this Agreement as soon as
reasonably practicable under the circumstances of such termination.

 

(c)                                  Mutual Termination.  This Agreement may be
terminated by mutual written agreement of the Company and the Required
Supporting Noteholders upon the receipt of written notice delivered in
accordance with Section 21.

 

(d)                                 Termination Upon Completion of the
Restructuring. This Agreement shall terminate automatically upon the Effective
Date.

 

(e)                                  Effect of Termination.  The date on which
termination of this Agreement is effective as to a Party in accordance with
Section 7 shall be referred to as the “Agreement Termination Date.”  Other than
Section 10, Section 12, Section 16, Section 18, Section 19, Section 20,
Section 21, Section 23 and Section 25, which shall survive termination of this
Agreement, upon the termination of this Agreement as to a Party in accordance
with this Section 7, this Agreement shall become void and of no further force or
effect as to such Party, and (i) except as otherwise provided in this Agreement,
such Party shall (A) be immediately released from its respective liabilities,
obligations, commitments, undertakings and agreements under or related to this
Agreement, (B) have no further rights, benefits or privileges hereunder, and
(C) have all the rights and remedies that they would have had and shall be
entitled to take all actions, whether with respect to the Restructuring or
otherwise, that they would have been entitled to take had they not entered into
this Agreement; provided that in no event shall any such termination relieve a
Party from liability for its breach or non-performance of its obligations
hereunder prior to the date of such termination.  Notwithstanding anything to
the contrary contained herein, any termination of this Agreement pursuant to
Section 7(a), (b)(iii) or (iv), (c) or (d) shall terminate this Agreement as to
all Parties, and any termination of this Agreement pursuant to
Section 7(b)(i) or (b)(ii) shall terminate this Agreement only with respect to a
breaching Supporting Noteholder so long as non-breaching Supporting Noteholders
continue to hold the requisite percentage of Claims described in such Sections. 
Upon any termination of this Agreement as to a Party, any and all consents and
ballots tendered by such Party prior to such termination shall be deemed, for
all purposes, automatically null and void ab initio, shall not be considered or
otherwise used in any manner by the Parties in connection with the Plan, this
Agreement or otherwise, and such consents or ballots may be changed or
resubmitted regardless of whether the applicable voting deadline has passed
(without the need to seek a court order or consent from the Company allowing
such change or resubmission), and the Company shall not oppose any such change
or resubmission.

 

13

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(f)                                   Each Company Party acknowledges and
agrees, and shall not dispute, that after the commencement of the Chapter 11
Cases, the giving of notice of termination by any Party pursuant to this
Agreement and any resulting termination thereof shall not be a violation of the
automatic stay of section 362 of the Bankruptcy Code (and each Company Party
hereby waives, to the fullest extent permitted by law, the applicability of the
automatic stay to the giving of such notice or the termination of this
Agreement).

 

8.                                      Representations.

 

(a)                                 Each Party represents and warrants to each
other Party that, as of the Agreement Effective Date (or, as to a Supporting
Noteholder that becomes a Party hereto after the Agreement Effective Date, as of
such date):

 

(i)                                     such Party is duly organized, validly
existing, and in good standing under the laws of the jurisdiction of its
organization, and has all requisite corporate, partnership, or limited liability
company power and authority to enter into this Agreement and to carry out the
transactions contemplated by, and perform its respective obligations under, this
Agreement, and the execution and delivery of this Agreement by such Party and
the performance of such Party’s obligations under this Agreement have been duly
authorized by all necessary corporate, partnership, limited liability company,
or other similar action on its part;

 

(ii)                                  the execution, delivery and performance of
this Agreement by such Party does not and shall not (A) violate any provision of
law, rule or regulation applicable to it or any of its subsidiaries or its
organizational documents or those of any of its subsidiaries, (B) conflict with
its organizational documents, or (C) conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any
material contractual obligations to which it or any of its subsidiaries is a
party, provided, that with respect to the Company, it is understood that
commencing the Chapter 11 Cases may result in a breach of or constitute a
default under such obligations;

 

(iii)                               the execution, delivery and performance by
it of this Agreement, or effectuation of the Restructuring, does not and shall
not require any registration or filing with, consent or approval of, or notice
to, or other action to, with or by, any federal, state or other governmental
authority or regulatory body, except such filing as may be necessary and/or
required by the Bankruptcy Court or for disclosure by the Securities and
Exchange Commission or pursuant to state securities or “blue sky” laws; and

 

(iv)                              subject to the provisions of sections 1125 and
1126 of the Bankruptcy Code, this Agreement is the legally valid and binding
obligation of such Party, enforceable against it in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance, fraudulent transfer or other similar laws,
both foreign and domestic, relating to or limiting creditors’ rights generally
or by equitable principles relating to enforceability.

 

14

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(b)                                 Each of the Supporting Noteholders
represents and warrants (severally and not jointly) that, as of the Agreement
Effective Date (or, as to a Supporting Noteholder that becomes a Party hereto
after the Agreement Effective Date, as of such date):

 

(i)                                     it is the beneficial holder (or
investment advisor or manager for such beneficial holder) of the amount of
Egalet Claims on such Supporting Noteholder’s signature page to this Agreement,
which shall specify the aggregate principal amount held by it;

 

(ii)                                  it does not directly or indirectly own any
Egalet Claims (other than any Egalet Claims for unpaid interest, fees, premiums,
expenses or other amounts associated with or related to the principal amount of
Egalet Claims identified on the signature page herein) other than as identified
below its name on its signature page hereof;

 

(iii)                               each nominee, investment manager or advisor
acting on behalf of the Supporting Noteholders has full power and legal
authority to so act and to bind the applicable beneficial holder and has the
full power and authority to vote on and consent to matters concerning the
applicable Egalet Claims; and

 

(iv)                              other than pursuant to this Agreement, such
Egalet Claims are free and clear of any equity, option, proxy, voting
restriction, right of first refusal or other limitation on disposition of any
kind, in each case that could reasonably be expected to adversely affect such
Supporting Noteholder’s performance of its obligations contained in this
Agreement at the time such obligations are required to be performed.

 

(c)                                  Each Company Party represents and warrants,
jointly and severally, that, as of the Agreement Effective Date:

 

(i)                                     there is no pending agreement,
understanding, negotiation or discussion (in each case, whether oral or written)
with respect to any Alternative Proposal; and

 

(ii)                                  none of the material or information
provided by or on behalf of any Company Party to any Supporting Noteholder in
connection with the Restructuring, when read or considered together, contains
any untrue statement of a fact or omits to state a fact necessary in order to
prevent the statements made therein from being materially misleading; provided,
however, that the foregoing shall not apply to any projections or other forward
looking material or information provided by or on behalf of any Company Party
and, with respect to any such projections or other forward looking material or
information, each Company Party represents, warrants and covenants, on a joint
and several basis, that such material and information was prepared in good faith
by such Company Party based on assumptions that such Company Party determined
were reasonable at the time of the preparation thereof and are not based on any
untrue statements of fact or omissions of facts determined at the time of the
preparation of such projections or other forward looking material or
information.

 

9.                                      Complete Agreement.  The Agreement
(including any exhibits or schedules hereto including as actually executed)
constitutes the entire agreement of the Parties with respect to the

 

15

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subject matter hereof, and cancels, merges and supersedes all other prior or
contemporaneous oral or written agreements, understandings, representations and
warranties both written and oral, among the Parties, with respect to the subject
matter hereof.  Each Party hereto agrees that, except for the representations
and warranties contained in this Agreement or in any Definitive Documents, none
of the Parties make any other representations or warranties, and each Party
hereby disclaims any other representation or warranties, express or implied, or
as to the accuracy or completeness of any information, made by, or made
available by, itself or any of its representatives, with respect to, or in
connection with, the negotiation, execution or delivery of this Agreement or the
transactions contemplated by this Agreement, notwithstanding the delivery or
disclosure to the other or the other’s representatives of any documentation or
other information with respect to any one or more of the foregoing.

 

10.                               Federal Rule of Evidence 408.  This Agreement
and the Plan are part of a proposed settlement of a dispute among the Parties. 
Pursuant to Federal Rule of Evidence 408 and any other applicable rules of
evidence, this Agreement and all negotiations relating hereto shall not be
admissible into evidence in any proceeding other than a proceeding to enforce
its terms.

 

11.                               Representation by Counsel.  Each Party hereto
acknowledges that it has been represented by counsel (or had the opportunity to
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 hereto 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.  The provisions
of this Agreement shall be interpreted in a reasonable manner to effect the
intent of the Parties hereto.  None of the Parties hereto shall have any term or
provision construed against such Party solely by reason of such Party having
drafted the same.

 

12.                               Independent Due Diligence and
Decision-Making.  Each Supporting Noteholder hereby confirms that its decision
to execute this Agreement has been based upon its independent investigation of
the operations, businesses, financial and other conditions and prospects of the
Company.

 

13.                               Counterparts.  This Agreement may be executed
in one or more counterparts, each of which, when so executed, shall constitute
the same instrument and the counterparts may be delivered by facsimile
transmission or by electronic mail in portable document format (.pdf).

 

14.                               Amendments.  Except as otherwise provided
herein, this Agreement may not be modified, amended, supplemented or waived in
any manner except in writing signed by the Company and the Required Supporting
Noteholders; provided, however, that (i) any modification of, or amendment or
supplement to this Section 14 shall require the written consent of all of the
Parties, (ii) any modification, amendment, supplement or waiver that is
materially adverse to any Supporting Noteholder in a manner that is different or
disproportionate in any material respect from the effect on any of the other
Supporting Noteholders (in their capacity as holders of Egalet Claims) set forth
in this Agreement (other than in proportion to the amount of such Egalet Claims)
shall require the prior written consent of such affected Supporting Noteholder,
(iii) any modification, amendment, supplement or waiver to the definition of
Required Supporting Secured Noteholders shall only require the written consent
of the Supporting Noteholders that hold Existing

 

16

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First Lien Notes at such time (and, for the avoidance of doubt, no other Party),
and (iv) any modification, amendment, supplement or waiver to the definition of
Required Supporting Convertible Noteholders shall only require the written
consent of the Supporting Noteholders that hold Existing 5.50% Convertible Notes
or Existing 6.50% Convertible Notes at such time (and, for the avoidance of
doubt, no other Party).

 

15.                               Headings.  The headings of the sections,
paragraphs and subsections of this Agreement are inserted for convenience only
and shall not affect the interpretation hereof.

 

16.                               Relationship Among Parties.  Notwithstanding
anything herein to the contrary, the duties and obligations of the Supporting
Noteholders under this Agreement shall be several, not joint.  No Party shall
have, by reason of this Agreement, a fiduciary relationship in respect of any
other Party, any holder of Egalet Claims, or any other Person, and nothing in
this Agreement, express or implied, is intended to impose, or shall be construed
as imposing, upon any Party any obligations in respect of this Agreement or the
Restructuring except as expressly set forth herein.  It is understood and agreed
that any Supporting Noteholder may trade in the debt or equity securities of the
Company without the consent of the Company or any Supporting Noteholder, subject
to any applicable confidentiality agreements entered into by such Supporting
Noteholder and any Company Party and Sections 5(c) and 5(d) of this Agreement. 
No Party hereto shall have any responsibility for any such trading by any other
entity by virtue of this Agreement.  No prior history, pattern or practice of
sharing confidences among or between the Parties hereto shall in any way affect
or negate this understanding and agreement, and each Supporting Noteholder shall
be entitled to independently protect and enforce its rights, including, without
limitation, the rights arising out of this Agreement, and it shall not be
necessary for any other Supporting Noteholder to be joined as an additional
party in any proceeding for such purpose.  It is hereby expressly acknowledged
by each of the Supporting Noteholders, on the one hand, and the Company, on the
other, that they are in privity with each other and that no Supporting
Noteholder with First Lien Note Secured Claims is in privity with any other
Supporting Noteholder with First Lien Note Secured Claims in connection with
this Agreement or any of the transactions contemplated hereby and no Supporting
Noteholder with Convertible Notes Claims is in privity with any other Supporting
Noteholder with Convertible Notes Claims in connection with this Agreement or
any of the transactions contemplated hereby.  Each Supporting Noteholder
represents and warrants that as of the date hereof and for so long as this
Agreement remains in effect, such Supporting Noteholder has no agreement,
arrangement, or understanding with any other Supporting Noteholder with respect
to acting together for the purpose of acquiring, holding, voting, or disposing
of any equity securities of the Company.  Nothing contained in this Agreement,
and no action taken by any Supporting Noteholder pursuant hereto is intended to
constitute the Supporting Noteholders as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that any Supporting
Noteholder is in any way acting in concert or as a member of a “group” with any
other Supporting Noteholder or Supporting Noteholders within the meaning of
Rule 13d-5 under the Securities Exchange Act of 1934, as amended.

 

17.                               Specific Performance.  It is understood and
agreed by the Parties that money damages would be an insufficient remedy for any
breach of this Agreement by any Party and each non-breaching Party shall be
entitled to specific performance and injunctive or other equitable relief as a
remedy of any such breach, including, without limitation, an order of the
Bankruptcy

 

17

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Court or other court of competent jurisdiction requiring any Party to comply
promptly with any of its obligations hereunder; provided, however, that each
Party agrees to waive any requirement for the securing or posting of a bond in
connection with such remedy.  Notwithstanding anything to the contrary contained
herein, no Party shall be liable to the other for special, indirect, exemplary
or punitive damages arising out of, or associated with or relating to this
Agreement (including loss of profit or business interruptions, however same may
be caused) and the Parties hereby waive all claims for any such damages.

 

18.                               Governing Law.  This Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York, without regard to such state’s choice of law provisions which would
require the application of the law of any other jurisdiction.  By its execution
and delivery of this Agreement, each of the Parties irrevocably and
unconditionally agrees for itself that any legal action, suit or proceeding
against it with respect to any matter arising under or arising out of or in
connection with this Agreement or for recognition or enforcement of any judgment
rendered in any such action, suit or proceeding, may be brought in the United
States District Court for the District of Delaware, and by execution and
delivery of this Agreement, each of the Parties irrevocably accepts and submits
itself to the exclusive jurisdiction of such court, generally and
unconditionally, with respect to any such action, suit or proceeding. 
Notwithstanding the foregoing consent to jurisdiction, if the Chapter 11 Cases
are commenced by the Company, each Party agrees that the Bankruptcy Court shall
have exclusive jurisdiction of all matters arising out of or in connection with
this Agreement.

 

19.                               WAIVER OF TRIAL BY JURY.  EACH PARTY HERETO
ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS
AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE
EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHTS SUCH
PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT.  EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT
(A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH PARTY UNDERSTANDS AND
HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH PARTY MAKES THIS WAIVER
VOLUNTARILY, AND (D) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 19.

 

20.                               Interpretation and Rules of Construction. 
This Agreement is the product of negotiations among the Parties, and in the
enforcement or interpretation hereof, is to be interpreted in a neutral manner,
and any presumption with regard to interpretation for or against any Party by
reason of that Party having drafted or caused to be drafted this Agreement, or
any portion hereof, shall not be effective in regard to the interpretation
hereof.  The Parties were each represented by counsel during the negotiations
and drafting of this Agreement and continue to be represented by

 

18

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counsel.  In addition, this Agreement shall be interpreted in accordance with
section 102 of the Bankruptcy Code.

 

21.                               Notices.  All notices, requests and other
communications hereunder must be in writing and will be deemed to have been duly
given only if delivered personally, by email, courier, by facsimile transmission
or mailed (first class postage prepaid) to the Parties at the following
addresses, emails or facsimile numbers:

 

If to the Company:

 

Egalet Corporation
600 Lee Road, Suite 100
Wayne, PA 19087
Telephone: (484) 259-7220
Facsimile: (454) 447-2425
Attention: Megan C. Timmins, Senior Vice President and General Counsel

Email: mtimmins@egalet.com

 

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

 

Dechert LLP
1095 Avenue of the Americas
New York, NY 10036
Telephone: (212) 698-3500
Facsimile:  (212) 698-3599
Attention: Michael J. Sage, Esq., Brian E. Greer, Esq. and Stephen M.
Wolpert, Esq.   
Email: michael.sage@dechert.com, brian.greer@dechert.com, and
Stephen.wolpert@dechert.com

 

If to the Supporting Noteholders holding the First Lien Secured Notes Claims:

 

to each such Supporting Noteholder at the address identified on the respective
signature page hereto, with a copy to (which shall not constitute notice):

 

Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, New York 10019-6064
Telephone: (212) 373-3000
Facsimile:  (212) 757-3990
Attention:   Andrew N. Rosenberg, Esq., Jacob A. Adlerstein, Esq. and Adam M.
Denhoff, Esq.
Email: arosenberg@paulweiss.com, jadlerstein@paulweiss.com and
adenhoff@paulweiss.com

 

If to the Supporting Noteholders holding the Convertible Notes Claims:

 

19

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to each such Supporting Noteholder at the address identified on the respective
signature page hereto, with a copy to (which shall not constitute notice):

 

Akin Gump Strauss Hauer & Feld LLP
One Bryant Park
Bank of America Tower
New York, NY 10036-6745

 

Phone: (212) 872-1000
Facsimile: (212) 872-1002
Attention: Arik Preis, Stephen B. Kuhn
E-mail: apreis@akingump.com, skuhn@akingump.com

 

22.                               No Third-Party Beneficiaries.  Except as set
forth in Section 25, the terms and provisions of this Agreement are intended
solely for the benefit of the Parties hereto and their respective successors and
permitted assigns, and it is not the intention of the Parties to confer
third-party beneficiary rights upon any other Person.

 

23.                               Public Disclosure.  The Company shall keep
strictly confidential and shall not (and shall cause each of its legal counsel
and financial advisors to not) disclose to any Person other than the Company’s
legal counsel and financial advisors (a) the Supporting Noteholders’ signature
pages to this Agreement (without limiting the foregoing, only redacted signature
pages shall be filed with the Bankruptcy Court), (b) the principal amount or
percentage of any Egalet Claims held by any Supporting Noteholder, or (c) the
identity of any Supporting Noteholder or its controlled affiliates, officers,
directors, managers, stockholders, members, employees, partners, representatives
or agents, in each case without such Supporting Noteholder’s prior written
consent; provided, however, that the Company may disclose such names or amounts
as may be legally required (based on the advice of outside counsel) by an order
of the Bankruptcy Court in connection with the Chapter 11 Cases, in which case
the Company, prior to making such disclosure, shall allow the Supporting
Noteholder to whom such disclosure relates reasonable time at its own cost to
seek a protective order with respect to such disclosure; provided further, that,
the Company shall be permitted to disclose at any time the aggregate principal
amount of and aggregate percentage of Egalet Claims held by the Supporting
Noteholders and, other than as set forth in this Section 23, the contents of
this Agreement.

 

24.                               No Waiver of Participation and Preservation of
Rights.  This Agreement and the Plan are part of a proposed settlement of
disputes among the Parties.  Without limiting the foregoing sentence in any way,
if (a) the transactions contemplated by this Agreement or otherwise set forth in
the Plan are not consummated as provided herein, (b) the Agreement Termination
Date occurs, or (c) this Agreement is otherwise terminated for any reason, the
Parties each fully reserve any and all of their respective rights, remedies,
claims and interests.

 

25.                               Transaction Expenses.

 

(a)                                 Whether or not the Restructuring or any of
the transactions contemplated hereby are consummated, the Company will timely
pay or reimburse all reasonable and documented fees and expenses of (i) the
members of the Ad Hoc Secured Noteholder Committee and their advisors (including
Paul, Weiss, Rifkind, Wharton & Garrison LLP and any local counsel

 

20

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retained by the Ad Hoc Secured Noteholder Committee) and (ii) the members of the
Ad Hoc Convertible Noteholder Committee and their advisors (including Akin Gump
Strauss Hauer & Feld LLP and any local counsel retained by the Ad Hoc
Convertible Noteholder Committee), in each case incurred in connection with this
Agreement or the Restructuring through and including the Agreement Termination
Date (the “Transaction Expenses”), in accordance with any fee reimbursement or
engagement letters between the Company and such advisors (if applicable).

 

(b)                                 The Company’s agreement to pay the
Transaction Expenses is an integral part of the transactions contemplated by
this Agreement and, without such agreement, the Supporting Noteholders would not
have entered into this Agreement, and upon entry of the Confirmation Order, the
Transaction Expenses shall constitute an administrative expense of the Company
under sections 503(b) and 507 of the Bankruptcy Code.

 

26.                               No Solicitation.  This Agreement is not
intended to be, and each signatory to this Agreement acknowledges that this
Agreement is not (a) an offer for the purchase, sale, exchange, hypothecation,
or other transfer of securities for purposes of the Securities Act and the
Securities Exchange Act of 1934, or (b) a solicitation of votes for the
acceptance of a chapter 11 plan of reorganization (including the Plan) for the
purposes of sections 1125 and 1126 of the Bankruptcy Code or otherwise. 
Solicitation of acceptance of the Restructuring will not be solicited from any
creditor of the Company until such party has received the disclosures required
under or otherwise in compliance with applicable law.

 

27.                               Remedies Cumulative.  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.

 

[Signature Pages Follow]

 

21

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly
executed and delivered on the date first written above.

 

 

EGALET CORPORATION

 

 

 

By:

/s/ Robert S. Radie

 

Name

Robert S. Radie

 

Title:

Chief Executive Officer

 

 

 

EGALET US INC.

 

 

 

By:

/s/ Robert S. Radie

 

Name

Robert S. Radie

 

Title:

Chief Executive Officer

 

 

 

EGALET LTD.

 

 

 

By:

/s/ Robert S. Radie

 

Name

Robert S. Radie

 

Title:

Chief Executive Officer

 

[Signature Page to Restructuring Support Agreement]

 

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SUPPORTING NOTEHOLDERS:

 

 

 

 

 

By:

 

 

Name

 

 

Title:

 

 

Principal amount of Existing First Lien Notes:

 

$

 

Principal amount of Existing 5.50% Convertible Notes:

 

$

 

Principal amount of Existing 6.50% Convertible Notes:

 

$

 

Other Egalet Claims (if any):

 

$

 

[Signature Page to Restructuring Support Agreement]

 

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