Execution Version

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ASSET PURCHASE AGREEMENT

Dated as of February 9, 2020

By and Among

ZEALAND PHARMA A/S

as Purchaser,

and

VALERITAS, INC.

as Seller

and

VALERITAS HOLDINGS, INC.

as Company Affiliates

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Table of Contents

Page

ARTICLE I. PURCHASE AND SALE OF THE PURCHASED ASSETS; ASSUMPTION OF ASSUMED
LIABILITIES
2

1.1
Purchase and Sale of the Purchased Assets    2

1.2
Excluded Assets    4

1.3
Assumption of Liabilities    5

1.4
Excluded Liabilities    6

1.5
Post-Closing Liabilities    8

1.6
Assumption/Rejection of Certain Contracts.    8

1.7
Disclaimer    10

ARTICLE II. CONSIDERATION
10

2.1
Consideration.    10

2.2
Withholding    10

2.3
Deposit    11

ARTICLE III. CLOSING AND TERMINATION
11

3.1
Closing    11

3.2
Closing Deliveries by Sellers    11

3.3
Closing Deliveries by Purchaser    13

3.4
Termination of Agreement    13

3.5
Procedures Upon Termination    14

 
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Table of Contents
(continued)
Page

3.6
Effect of Termination    14

ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE SELLERS
15

4.1
Organization and Qualification    15

4.2
Authorization of Agreement    15

4.3
Conflicts; Consents; Compliance with Law    15

4.4
Brokers and Finders    17

4.5
Title to Purchased Assets    17

4.6
Tangible Personal Property    17

4.7
Intellectual Property    17

4.8
Litigation    17

4.9
Inventory.    18

4.10
Contracts    18

4.11
Tax Returns; Taxes.    19

4.12
Employees; Seller Benefit Plans.    20

4.13
Bank Accounts    21

4.14
Financial Statements    21

4.15
WARN Act    22

4.16
Absence of Certain Changes.    22

4.17
Real Property    23

 
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Table of Contents
(continued)
Page

4.18
Environmental Matters    24

4.19
Insurance    24

4.20
Healthcare Regulatory Matters    24

4.21
No Other Representations or Warranties    25

ARTICLE V. REPRESENTATIONS AND WARRANTIES OF PURCHASER
25

5.1
Organization and Qualification    25

5.2
Authority    25

5.3
No Inconsistent Obligations    25

5.4
Conflicts; Consents.    26

5.5
Brokers    26

5.6
Adequate Assurances Regarding Assigned Contracts    26

5.7
No Litigation    26

5.8
Due Diligence    26

ARTICLE VI. EMPLOYEES
27

6.1
Employee Matters.    27

ARTICLE VII. BANKRUPTCY COURT MATTERS
29

7.1
Approval of Bid Protections    29

7.2
Competing Bid and Other Matters.    29

7.3
Sale Order    30

 
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Table of Contents
(continued)
Page

7.4
Contracts    30

7.5
Bankruptcy Filings    30

7.6
Sale Free and Clear    30

ARTICLE VIII. COVENANTS AND AGREEMENTS
30

8.1
Conduct of Business of Sellers    30

8.2
Access to Information    32

8.3
Assignability of Certain Contracts    32

8.4
Rejected Contracts    33

8.5
Reasonable Efforts; Cooperation.    33

8.6
Further Assurances    34

8.7
Notification of Certain Matters    34

8.8
Confidentiality    34

8.9
Preservation of Records    35

8.10
Publicity    35

8.11
Material Adverse Effect    35

8.12
Casualty Loss    35

8.13
No Successor Liability    36

8.14
Seller Assistance    36

ARTICLE IX. CONDITIONS TO CLOSING
36

 
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Table of Contents
(continued)
Page

9.1
Conditions Precedent to the Obligations of Purchaser and Sellers    36

9.2
Conditions Precedent to the Obligations of Sellers    37

9.3
Conditions Precedent to the Obligations of Purchaser    37

ARTICLE X. ADDITIONAL DEFINITIONS
38

10.1
Definitions    38

ARTICLE XI. TAXES
48

11.1
Certain Taxes.    48

11.2
Allocation of Purchase Price    49

11.3
Cooperation on Tax Matters    49

11.4
Tax Reporting of Contingent Liabilities    49

ARTICLE XII. MISCELLANEOUS
49

12.1
Payment of Expenses    49

12.2
Survival of Representations and Warranties; Survival of Confidentiality    50

12.3
Entire Agreement; Amendments, and Waivers    50

12.4
Execution of Agreement; Counterparts; Electronic Signatures.    50

12.5
Governing Law    50

12.6
Jurisdiction, Waiver of Jury Trial.    50

12.7
Notices    51

12.8
Binding Effect; Assignment    52

 
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Table of Contents
(continued)
Page

12.9
Severability    52

12.10
Bulk Sales Laws    52

12.11
Certain Interpretive Matters    52

 
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INDEX OF EXHIBITS
EXHIBIT A
FORM OF BILL OF SALE
EXHIBIT B
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT C
FORM OF ASSUMPTION AND ASSIGNMENT OF LEASES
EXHIBIT D
IP ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT E
BIDDING PROCEDURES ORDER
EXHIBIT F
SALE ORDER
EXHIBIT G
ESCROW AGREEMENT

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218943403 v14

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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this “Agreement”), dated as of February 9, 2020
(the “Agreement Date”), by and among Zealand Pharma A/S, a Danish limited
liability company organized and existing under the laws of Kingdom of Denmark
(“Purchaser”) and one or more other persons designated by the Purchaser, and
Valeritas, Inc., a Delaware corporation (the “Company”) and Valeritas Holdings,
Inc., a Delaware Corporation (together with the Company, each a “Seller” and
collectively, the “Sellers”). Purchaser and the Sellers are collectively
referred to herein as the “Parties” and individually as a “Party”. For the
purposes of this Agreement, capitalized terms used herein shall have the
meanings set forth herein or in Article X.
RECITALS
WHEREAS, on February 9, 2020, the Sellers intend to file voluntary petitions
(the “Chapter 11 Petitions”) for relief under chapter 11 of title 11 of the
United States Bankruptcy Code (the “Bankruptcy Code”) in the United States
Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”)
commencing chapter 11 cases (collectively, the “Bankruptcy Cases”).
WHEREAS, the Sellers will continue to manage their properties and operate their
businesses as “debtors in possession” under the jurisdiction of the Bankruptcy
Court and in accordance with the applicable provisions of the Bankruptcy Code;
WHEREAS, the Sellers wish to sell the Business;
WHEREAS, Purchaser desires to purchase the Purchased Assets and assume the
Assumed Liabilities from the Sellers and the Sellers desire to sell, convey,
assign and transfer to Purchaser the Purchased Assets together with the Assumed
Liabilities, all in the manner and subject to the terms and conditions set forth
in this Agreement and in accordance with sections 105, 363, and 365 and other
applicable provisions of the Bankruptcy Code;
WHEREAS, the Purchased Assets and Assumed Liabilities shall be purchased and
assumed by Purchaser pursuant to the Sale Order approving such sale, free and
clear of all Claims, Liabilities and Encumbrances (other than Permitted
Encumbrances), pursuant to sections 105, 363, and 365 of the Bankruptcy Code,
and Rules 6004 and 6006 of the Federal Rules of Bankruptcy Procedure, which Sale
Order will include the authorization for the assumption by Seller and assignment
to Purchaser of the Assigned Contracts and the liabilities thereunder in
accordance with section 365 of the Bankruptcy Code, all in the manner and
subject to the terms and conditions set forth in this Agreement and the Sale
Order and in accordance with other applicable provisions of the Bankruptcy Code
and the Federal Rules of Bankruptcy Procedure and the Local Rules of Bankruptcy
Practice and Procedure for the United States Bankruptcy Court for the District
of Delaware (together, the “Bankruptcy Rules”); and
WHEREAS, the board of directors (or similar governing body) of each Seller has
determined that it is advisable and in the best interests of such Seller and its
constituencies to enter into this Agreement and to consummate the transactions
provided for herein, subject to entry of the Sale Order, and each has approved
the same.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements set forth herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, Purchaser and
Sellers hereby agree as follows:

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Article I.

PURCHASE AND SALE OF THE PURCHASED ASSETS; ASSUMPTION OF ASSUMED LIABILITIES

1.1    Purchase and Sale of the Purchased Assets. Pursuant to sections 105, 363,
and 365 of the Bankruptcy Code and on the terms and subject to the conditions
set forth herein, at the Closing, Sellers shall sell, transfer, assign, convey,
and deliver to Purchaser, and Purchaser (or a designee of Purchaser in the
Purchaser’s sole discretion) shall purchase, acquire, and accept from Sellers,
free and clear of all Claims, Liabilities and Encumbrances, all of Sellers’
right, title and interest in and to its medical technology business, including
but not limited to h-Patch and the V-Go® Wearable Insulin Delivery device (and
including all versions thereof, including but not limited to V-Go Sim, V-Go
Prefill) (the “Business”), including but not limited to the following, but
excluding the Excluded Assets, (the “Purchased Assets”) as of the Closing:
(a)    all of Sellers’ properties, rights, claims, and assets (other than the
Excluded Assets) of every kind and description, wherever situated or located,
real, personal, or mixed, tangible or intangible, contingent, owned, leased, or
licensed, used or held for use in, or otherwise relating to, useful in or
necessary for the conduct of the Business, whether or not reflected on the books
and records of Sellers, as the same shall exist on the Closing Date;
(b)    subject to Section 1.6, all Contracts, agreements and purchase and sale
orders that (i) are not Rejected Contracts (as defined in Section 1.6(a)(i)),
(ii) have not expired prior to the Closing Date and (iii) are listed on Schedule
1.1(b), as it may be amended from time to time in accordance with Section 1.6,
including all rights under any lease for Assumed Leased Real Property and any
customer contracts and any contract renewal rights, (the “Assigned Contracts”),
and all rights thereunder, but excluding obligations under the DIP Financing
Agreements and any contracts related to providing financing to the Sellers on or
prior to the Closing Date (the “Excluded Contracts”);
(c)    except as set forth on Schedule 1.1(c), all trade and non-trade accounts
receivable, notes receivable, and negotiable instruments payable to Sellers, but
excluding intercompany Indebtedness among the Sellers, if any (the “Accounts
Receivable”);
(d)    all Cash and Cash Equivalents other than as provided herein;
(e)    all Documents relating to the Business, Purchased Assets or Assumed
Liabilities, including, without limitation, customer lists;
(f)    the Leased Real Property listed on Schedule 1.1(f) (the “Assumed Leased
Real Property”), including any security deposits or other deposits delivered in
connection therewith;
(g)    all tangible assets of Sellers relating to the Business, other than the
assets set forth on Schedule 1.1(g), including, without limitation, the tangible
assets of Seller located at any Assumed Leased Real Property or at the Locations
listed on Schedule 1.1(f);
(h)    all Documents relating to and personnel files for Transferred Employees
except as prohibited by Law; provided, however, that Sellers have the right to
retain duplicate copies to the extent required by Law;

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(i)    any chattel paper owned or held by Sellers relating to the Business or
the Purchased Assets other than the Excluded Assets;
(j)    any lock boxes to which account debtors of the Sellers remit payment
relating to the Business or the Purchased Assets other than the Excluded Assets;
(k)    all Permits and all pending applications therefor;
(l)    all express or implied guarantees, warranties, representations,
covenants, indemnities, rights, claims, counterclaims, defenses, credits, causes
of action or rights of set off against third parties relating to the Purchased
Assets (including, for the avoidance of doubt, those arising under, or otherwise
relating to the Assigned Contracts) or Assumed Liabilities, including rights
under vendors’ and manufacturers’ warranties, indemnities, guaranties and
avoidance claims and causes of action under the Bankruptcy Code or applicable
Law that are possessed by the Sellers;
(m)    all Seller Intellectual Property, including all Seller Registered
Intellectual Property (including all of the items set forth in Schedule 4.7(a)),
and all of the Sellers’ rights therein;
(n)    all goodwill, payment intangibles and general intangible assets and
rights of Seller to the extent associated with, held for use in, or otherwise
relating to, useful in or necessary for the conduct of, the Business or the
Purchased Assets other than the Excluded Assets;
(o)    all Inventory, including raw materials, work in process, parts,
subassemblies and finished goods, wherever located and whether or not obsolete
or carried on the Sellers’ books of account, in each case with any transferable
warranty and service rights of the applicable Seller with respect to such
Purchased Assets;
(p)    all financial accounting and other financial books and records, a copy of
Tax Returns, and canceled checks, correspondence, and all customer sales,
marketing, advertising, packaging and promotional materials, files, data,
software (whether written, recorded or stored on disk, film, tape or other
media, and including all computerized data, all to the extent transferrable),
drawings, engineering and manufacturing data and other technical information and
data, and all other business and other records, in each case arising under or
relating to the Purchased Assets, the Assumed Liabilities or the Business
generally, provided, however, that Sellers have the right to retain duplicate
copies of all of the foregoing;
(q)    all rights and claims under or arising out of all insurance policies
relating to the Business or any of the Purchased Assets (including proceeds,
condemnation awards or other compensation in respect of loss or damage to the
Purchased Assets, returns and refunds of any premiums paid, or other amounts due
back to Sellers, with respect to cancelled policies) but excluding any insurance
policies relating to any Benefit Plan (other than an Assumed Plan);
(r)    except to the extent set forth on Schedule 1.1(r), all rights and
obligations under non-disclosure or confidentiality, invention or other
Intellectual Property assignment agreements, restrictive covenant agreements,
and similar arrangements with employees and agents of Sellers (including the
foregoing or similar arrangements entered into in connection with or in
contemplation of the filing of the Bankruptcy Cases and the Auction contemplated
by the Bidding Procedures Order);
(s)    all Benefit Plans (including but not limited to all assets, trusts,
insurance policies, and administration service contracts related thereto) listed
on Schedule 1.1(s) (collectively, the “Assumed Plans”), which schedule shall be
delivered pursuant to 6.1(f);

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(t)    all fixed assets and other personal property and interests related to the
Business or Purchased Assets, wherever located, including all vehicles, tools,
parts and supplies, fuel, machinery, equipment, furniture, furnishing,
appliances, fixtures, office equipment and supplies, owned and licensed computer
hardware and related documentation, stored data, communication equipment, trade
fixtures, and leasehold improvements, in each case with any freely transferable
warranty and service rights of the applicable Seller with respect to such
Purchased Assets;
(u)    telephone, fax numbers, and email addresses;
(v)    all prepaid expenses or other prepaid items related to the Business or
Purchased Assets;
(w)    except to the extent set forth on Schedule 1.2(j), any and all credits,
claims, deposits, prepayments, refunds, rebates, causes of action, rights of
recovery, rights of set-off, and rights of recoupment relating to or in respect
of the Business or the Purchased Assets, including with respect to Taxes;
(x)    except to the extent set forth on Schedule 1.1(x), all Bank Accounts; and
(y)    all avoidance claims or causes of action arising under Chapter 5 of the
Bankruptcy Code or applicable Law, and all other claims or causes of action
under any other provision of the Bankruptcy Code or applicable laws relating to
the Purchased Assets and/or Assumed Liabilities, including all actions against
current or former officers of the Debtors and actions relating to vendors and
service providers used in the Business that are counterparties to Assigned
Contracts or relating to Assumed Liabilities (collectively, the “Avoidance
Actions”).

1.2    Excluded Assets. Notwithstanding anything to the contrary in this
Agreement, in no event shall Sellers be deemed to sell, transfer, assign or
convey, and Sellers shall retain all right, title and interest to, in, and under
only the following assets, properties, interests, and rights of such Seller
(collectively, the “Excluded Assets”):
(a)    any asset of Sellers that otherwise would constitute a Purchased Asset
but for the fact that it is sold or otherwise disposed of in compliance with the
terms and conditions of this Agreement, including Section 8.1 hereof, during the
time from the Agreement Date until the Closing Date;
(b)    all agreements and Contracts of Sellers other than the Assigned
Contracts, including the Rejected Contracts, the Excluded Contracts and any
Contracts listed on Schedule 1.2(b);
(c)    all Documents and all personnel records of Sellers’ employees that any
Seller is required by Law to retain; provided, however, that Sellers shall
promptly provide Purchaser with copies of any of the foregoing upon request by
the Purchaser unless prohibited by Law from providing copies thereof to
Purchaser;
(d)    all shares of capital stock or other equity interests issued by any
Seller or securities convertible into, exchangeable, or exercisable for any such
shares of capital stock or other equity interests;
(e)    all Claims that any of the Sellers may have against any Person with
respect to any Excluded Assets or any Excluded Liabilities;
(f)    Sellers’ rights under this Agreement, the Purchase Price hereunder, any
agreement, certificate, instrument, or other document executed and delivered by
Purchaser to any Seller in connection

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with the transactions contemplated hereby, or any side agreement between any
Seller and Purchaser entered into on or after the Agreement Date;
(g)    all current and prior director and officer insurance policies of the
Sellers and all rights of any nature with respect thereto, including all
insurance recoveries thereunder and rights to assert claims with respect to any
such insurance recoveries;
(h)    the Sellers’ financial accounting books and records, corporate charter,
minute and stock record books, Tax Returns, corporate seal, and, to the extent
no constituting or relating to the Purchased Assets, checkbooks and canceled
checks, however, that Sellers shall promptly provide Purchaser with copies of
any of the foregoing upon request by the Purchaser unless prohibited by Law from
providing copies thereof to Purchaser;
(i)    all Benefit Plans, together with all funding arrangements or obligations
of any type relating thereto (including all assets, trusts, insurance policies
and administration service contracts related thereto) except for the Assumed
Plans;
(j)    except to the extent set forth on Schedule 1.2(j), any and all claims,
deposits, prepayments, refunds, rebates, causes of action, rights of recovery,
rights of set-off, and rights of recoupment relating to or in respect of an
Excluded Asset;
(k)    all Tax assets (including duty and Tax refunds and prepayments) relating
to the Business, the Purchased Assets or Assumed Liabilities; and
(l)    the Intellectual Property listed on Schedule 1.2(l) (the “Excluded
Intellectual Property”).

1.3    Assumption of Liabilities. On the terms and subject to the conditions set
forth in this Agreement and the Sale Order, effective as of the Closing,
Purchaser (or a designee of Purchaser in Purchaser’s sole discretion) shall
assume from the Sellers (and pay, perform, discharge or otherwise satisfy in
accordance with their respective terms), and the Sellers shall irrevocably
convey, transfer and assign to Purchaser, the “Assumed Liabilities” and only the
Assumed Liabilities and no other obligations or liabilities. “Assumed
Liabilities” shall mean only the following Liabilities:
(a)    all Liabilities of Sellers arising from the ownership of the Purchased
Assets by the Purchaser, solely to the extent arising after the Closing Date;
(b)    [intentionally omitted]
(c)    Liabilities and obligations of Sellers under the Purchased Assets and
under the Assigned Contracts, including, without limitation, all prepetition
cure costs required to be paid pursuant to section 365 of the Bankruptcy Code in
connection with the assumption and assignment of the Assigned Contracts in an
amount not to exceed US$1,500,000 (the “Cure Cap”);
(d)    US$400,000 in payment to Roche required in June 2020 under the Roche
License Agreement;
(e)    all Liabilities and obligations of Sellers under any contract that is an
Assigned Contract, solely to the extent arising after the Closing Date;
(f)    all Liabilities with respect to open purchase orders set forth on
Schedule 1.3(c) arising out of the conduct of the Business and incurred in the
Ordinary Course of Business; and
(g)    all Liabilities, if any, set forth on Schedule 1.3(g).
The assumption by Purchaser of the Assumed Liabilities shall not, in any way,
enlarge the rights of any third parties relating thereto.

1.4    Excluded Liabilities. Notwithstanding any provision in this Agreement to
the contrary, Purchaser is assuming only the Assumed Liabilities and is not
assuming, and shall not be deemed to have assumed, any other Liabilities of any
Seller of whatever nature (whether arising prior to, at the time of, or
subsequent to Closing), whether absolute, accrued, contingent or otherwise,
whether due or to become due and whether or not assets, and whether or not known
or unknown or currently existing or hereafter arising or matured or unmatured,
direct or indirect, and the Sellers shall be solely and exclusively liable for
any and all such Liabilities, including those relating to, arising out of or in
connection with the operation of the Business or the Purchased Assets (including
the use and ownership thereof) at any time prior to the Closing Date, and
including, without limitation, those Liabilities set forth below (collectively,
the “Excluded Liabilities”):
(a)    all Liabilities of the Sellers relating to or otherwise arising, whether
before, on or after the Closing, out of, or in connection with, any of the
Excluded Assets;
(b)    any and all Liabilities for Indebtedness, including all intercompany
Indebtedness among the Sellers, except as set forth on Schedule 1.4(b);
(c)    all guarantees of third-party obligations and reimbursement obligations
to guarantors of Sellers’ obligations or under letters of credit;
(d)    any and all (i) Taxes of the Sellers (or any member, stockholder or
Affiliate of the Sellers), or for which the Sellers (or any member, stockholder
or Affiliate of the Sellers) are liable, for any taxable period (other than
Transfer Taxes), (ii) any Taxes imposed on any Person that are the
responsibility of the Sellers pursuant to Section 11.1, (iii) any Taxes
attributable to the ownership of the Purchased Assets, the operation of the
Business, or related to the Assumed Liabilities for any Pre-Closing Tax Period,
(iv) any Taxes arising from or in connection with an Excluded Asset or Excluded
Liability; and (v) Taxes imposed on Purchaser as a result of the parties’
failure to comply with any bulk sales Law and other similar Laws in any
applicable jurisdiction in respect of the transactions contemplated by this
Agreement;
(e)    any and all Liabilities of the Sellers in respect of Contracts that are
not Assigned Contracts;
(f)    except as specifically provided with respect to any Assumed Plans, all
Liabilities relating to or in any way arising out of any present and past
employees of Sellers or their Affiliates and/or the employment or service of any
such Person including with respect to any Benefit Plans, other plans, programs,
policies, commitments, terms and conditions of employment, employment decisions,
compensation or other benefits or entitlements established or existing on or
prior to Closing (whether or not such liabilities are accrued or payable at
Closing, and whether or not such liabilities are contingent in nature),
including, without limitation, any liability (i) for any accrued wages or
salaries for periods prior to the Closing, (ii) for severance, dismissal pay
damages or otherwise in connection with any termination of employment by Sellers
or their Affiliates on or prior to the Closing, (iii) for accrued vacation or
sick time accrued prior to the Closing, (iv) relating to any Benefit Plan and
any Contract or insurance policy or other funding medium with respect thereto,
(v) for misclassification of any employee or independent contractor prior to the
Closing, or (vi) any commission, transaction incentive bonus, change in control
bonus or payment, “stay” bonus or similar arrangement or agreement that is owed
to employees or other service providers of Sellers or their Affiliates that
arose on, prior to or in connection with the Closing, whether due, payable or
accrued prior to or after the Closing;
(g)    drafts or checks outstanding at the Closing (except to the extent an
Assumed Liability or relating to an Assigned Contract);
(h)    all Liabilities under any futures contracts, options on futures, swap
agreements or forward sale agreements;
(i)    all Liabilities for fees, costs and expenses that have been incurred or
that are incurred or owed by Sellers in connection with this Agreement or the
administration of the Bankruptcy Cases (including all fees and expenses of
professionals engaged by Sellers) and administrative expenses and priority
claims accrued through the Closing Date and all post-closing administrative
wind-down expenses of the bankrupt estates pursuant to the Bankruptcy Code
(which such amounts shall be paid by the Sellers) and all costs and expenses
incurred in connection with (i) the negotiation, execution and consummation of
the transactions contemplated under this Agreement and each of the other
documents delivered in connection herewith, (ii) the preparation and submission
of any filing or notice required to be made or given in connection with any of
the transactions contemplated by this Agreement, and the obtaining of any
consent required to be obtained in connection with any of such transactions,
(iii) the negotiation, execution and consummation of the DIP Financing
Agreements, and (iv) the consummation of the transactions contemplated by this
Agreement, including any retention bonuses, “success” fees, change of control
payments and any other payment obligations of Sellers payable as a result of the
consummation of the transactions contemplated by this Agreement and the
documents delivered in connection herewith;
(j)    all Liabilities related to the WARN Act, to the extent applicable, for
any action resulting from Employees’ separation of employment prior to or on the
Closing Date;
(k)    all Liabilities of any Seller to its equity holders, including but not
limited to those respecting dividends, distributions in liquidation, redemptions
of interests, option payments or otherwise, and any Liability of any Seller
pursuant to any Affiliate Agreement;
(l)    all Liabilities arising out of or relating to any business or property
formerly owned or operated by any Seller, any Affiliate or predecessor thereof,
but not presently owned and operated by the Sellers;
(m)    all Liabilities relating to claims, actions, suits, arbitrations,
litigation matters, proceedings or investigations (in each case whether
involving private parties, Governmental Bodies, or otherwise), including any
potential claims, rights, or causes of action under Chapter 5 of the Bankruptcy
Code (11 U.S.C. §§ 501-562), involving, against, or affecting any Purchased
Asset, the Business, the Products, any Seller, or any assets or properties of
any Seller, whether commenced, filed, initiated, or threatened before or after
the Closing and whether relating to facts, events, or circumstances arising or
occurring before or after the Closing;
(n)    all obligations of the Sellers arising and to be performed prior to the
Closing Date arising from or related to the Business or the Purchased Assets;
(o)    all Environmental Liabilities and Obligations;
(p)    all Liabilities of any Seller or their predecessors arising out of any
contract, agreement, Permit, franchise or claim that is not transferred to
Purchaser as part of the Purchased Assets or, is not transferred to Purchaser
because of any failure to obtain any third-party or governmental consent
required for such transfer;
(q)    all Liabilities of any kind relating to Avoidance Actions;
(r)    all Liabilities for intercompany Indebtedness, accounts payable, or other
Liabilities or obligations that are owed or payable to any Seller or for which
any Seller is an obligor or is otherwise responsible or liable;
(s)    all Liabilities of any Seller relating to the sale of any product
included in the Purchased Assets prior to Closing (including claims related to
or arising from returns, rebates, coupon programs, chargebacks, credits,
warranties or expirations);
(t)    all payroll Liabilities and withholding obligations related thereto
during any payroll period prior to or that included the Closing Date;
(u)    all Cure Costs in excess of the Cure Cap;
(v)    all Liabilities with respect to any and all 503(b)(9) Claims; and
(w)    all other Liabilities set forth on Schedule 1.4(w).

1.5    Post-Closing Liabilities. Except as provided in Section 1.4, Purchaser
acknowledges that Purchaser shall be responsible for all Liabilities and
obligations relating to Purchaser’s ownership or use of, or right to use, the
Purchased Assets and the Assumed Liabilities after the Closing Date, including
all Taxes arising out of or related to the Purchased Assets or the operation of
conduct of the Business acquired pursuant to this Agreement for all tax periods
beginning after the Closing Date.

1.6    Assumption/Rejection of Certain Contracts.
(a)    Assignment and Assumption at Closing.
(i)    Schedule 1.6(a) sets forth a list of all executory Contracts (including
all leases with respect to Leased Real Property (the “Real Property Leases”)) to
which one or more of the Sellers are party as of the date hereof and as of the
Closing Date and the Sellers’ good faith estimate of the Cure Costs. From and
after the date hereof until the Closing, Schedule 1.6(a) shall be updated in
accordance with the procedures set forth in Section 1.6(b)(i). Notwithstanding
anything to the contrary in Section 1.1, all Contracts of Sellers that are not
listed on Schedule 1.6(a), or any Contract listed on Schedule 1.6(a) but not
also listed on Schedule 1.1(b), in each case at or after the Closing, shall not
be considered an Assigned Contract or Purchased Asset and shall be deemed
“Rejected Contracts” for which the Purchaser shall have no obligations.
(ii)    At Seller’s sole cost and expense (except as otherwise set forth herein
with respect to Cure Costs), Sellers shall take all actions required to assume
and assign the Assigned Contracts to Purchaser. Such actions shall include
payment of Cure Costs in excess of the Cure Cap, facilitating any negotiations
with the counterparties to such Assigned Contracts, and obtaining an Order
containing a finding that the proposed assumption and assignment of the Assigned
Contracts to Purchaser satisfies all applicable requirements of section 365 of
the Bankruptcy Code.
(iii)    At Closing, (x) Sellers shall, pursuant to the Sale Order and the
Assumption and Assignment Agreement or the Assumption and Assignment of Leases,
as applicable, assume and assign to Purchaser (the consideration for which is
included in the Purchase Price) each of the Assigned Contracts that is capable
of being assumed and assigned and pay all unpaid Cure Costs (if any) in excess
of the Cure Cap in connection with such assumption and assignment, and (y)
Purchaser shall pay promptly all Cure Costs (up to the Cure Cap), and shall
assume, perform, and discharge the Assumed Liabilities (if any) under the
Assigned Contracts, pursuant to the Assumption and Assignment Agreement or the
Assumption and Assignment of Leases, as applicable.
(b)    Previously Omitted Contracts.
(i)    If prior to or following Closing, it is discovered that a Contract should
have been listed on Schedule 1.6(a) but was not listed on Schedule 1.6(a), or if
Purchaser desires, in its sole discretion, to acquire any Contract listed on
Schedule 1.6(a) that is not also listed on Schedule 1.1(b) (including any
Rejected Contract prior to the entry by the Bankruptcy Court of an order with
respect thereto) (any such Contract, a “Previously Omitted Contract”), then (x)
in the case of the discovery of such a Previously Omitted Contract or receipt of
notice from Purchaser of its desire to acquire any such Previously Omitted
Contract prior to the Closing, Sellers shall, promptly, following the discovery
thereof or receipt of such notice (but in no event later than two (2) Business
Days following the discovery thereof or receipt of such notice), notify
Purchaser in writing of such Previously Omitted Contract and all Cure Costs (if
any) in excess of the Cure Cap for such Previously Omitted Contract or (y) in
the case of the discovery of such a Previously Omitted Contract or receipt of
notice from Purchaser of its desire to acquire any such Previously Omitted
Contract following the Closing, Seller shall, promptly following the discovery
thereof or receipt of such notice from Purchaser (but in no event later than two
(2) Business Days following the discovery thereof or receipt of such notice),
notify Purchasers in writing of such Previously Omitted Contract and all Cure
Costs (if any) in excess of the Cure Cap for such Previously Omitted Contract.
Purchaser shall thereafter deliver written notice to Sellers, no later than five
(5) Business Days following notification of such Previously Omitted Contract’s
Cure Costs , designating such Previously Omitted Contract as “Assumed” or
“Rejected” (a “Previously Omitted Contract Designation”). A Previously Omitted
Contract designated in accordance with this Section 1.6(b)(i) as “Rejected,” or
with respect to which Purchaser fails to timely deliver a Previously Omitted
Contract Designation, shall be a Rejected Contract.
(ii)    If Purchaser designates a Previously Omitted Contract as “Assumed” in
accordance with Section 1.6(b)(i), Sellers shall, within five (5) business days
following receipt of Purchaser’s designation of the Previously Omitted Contract
as “Assumed” (A) amend Schedule 1.6(a) to include such Previously Omitted
Contract and (B) serve a notice (the “Previously Omitted Contract Notice”) on
the counterparties to such Previously Omitted Contract notifying such
counterparties of the Cure Costs with respect to such Previously Omitted
Contract and Sellers’ intention to assume and assign such Previously Omitted
Contract in accordance with this Section 1.6. The Previously Omitted Contract
Notice shall provide the counterparties to such Previously Omitted Contract with
fifteen (15) Business Days to object, in writing to the Sellers and Purchaser,
to the Cure Costs associated with the assumption of its Contract. If the
counterparties, Sellers and Purchaser are able to reach a consensual resolution
with respect to the objection, such Previously Omitted Contract shall be added
to Schedule 1.1(b) and shall be an “Assigned Contract” for purposes of this
Agreement. If the counterparties, Sellers, and Purchaser are unable to reach a
consensual resolution with respect to the objection, the Sellers shall seek an
expedited hearing before Bankruptcy Court to determine the Cure Costs and
approve the assumption/assignment of the Previously Omitted Contract to the
Purchaser; provided, that the Purchaser shall be under no obligation to accept
the assignment of such Contract to Purchaser. If no objection is timely served
on and received by the Sellers and Purchaser, Sellers shall obtain an order of
the Bankruptcy Court approving the Cure Costs and assumption/assignment of the
Previously Omitted Contract. The payment of the Cure Costs and all other costs
associated with the process of assuming and assigning the Previously Omitted
Contract shall be the responsibility of Purchaser (to the extent the Cure Cap is
not exceeded) or the Seller (for all amounts in excess of the Cure Cap). If the
Bankruptcy Court approves the assumption/assignment of the Previously Omitted
Contract to the Purchaser and the Purchaser accepts such assignment, such
Previously Omitted Contract shall be deemed added to Schedule 1.1(b) and shall
be an “Assigned Contract” for purposes of this Agreement.
(c)    Removal of Assigned Contracts. If, prior to Closing, Purchaser desires,
in its sole discretion, to remove any Contract from Schedule 1.1(b), then
Purchaser shall provide Seller with notice of its desire to remove such Contract
prior to the Closing and Schedule 1.1(b) hereof shall be deemed automatically
amended to remove such Contract (such Contract, after removal, a “Removed
Contract”). A Removed Contract shall not be considered an Assigned Contract or
Purchased Asset and shall be deemed a Rejected Contract for which the Purchaser
shall have no obligations (including, for the avoidance of doubt, any
obligations with respect to Cure Costs).
(d)    Production of Contracts. Sellers shall promptly provide Purchasers with
true and correct copies of the Contracts on Schedule 1.6(a), as well as any
Previously Omitted Contract, upon request of Purchaser.

1.7    Disclaimer. PURCHASER HEREBY ACKNOWLEDGES AND AGREES THAT, EXCEPT AS
PROVIDED IN THIS AGREEMENT OR ANY CERTIFICATE OR DOCUMENT DELIVERED PURSUANT TO
THIS AGREEMENT, SELLERS MAKE NO REPRESENTATIONS OR WARRANTIES WHATSOEVER,
EXPRESS OR IMPLIED, WITH RESPECT TO ANY MATTER RELATING TO THE PURCHASED ASSETS.
WITHOUT LIMITING THE FOREGOING, SELLERS HEREBY DISCLAIM ANY WARRANTY, EXPRESS OR
IMPLIED, OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE AS TO ANY
PORTION OF THE PURCHASED ASSETS. PURCHASER FURTHER ACKNOWLEDGES THAT PURCHASER
HAS CONDUCTED AN INDEPENDENT INSPECTION AND INVESTIGATION OF THE PHYSICAL
CONDITION OF THE PURCHASED ASSETS AND ALL SUCH OTHER MATTERS RELATING TO OR
AFFECTING THE PURCHASED ASSETS AS PURCHASER DEEMED NECESSARY OR APPROPRIATE AND
THAT IN PROCEEDING WITH ITS ACQUISITION OF THE PURCHASED ASSETS, EXCEPT FOR ANY
REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS AGREEMENT, PURCHASER IS DOING
SO BASED SOLELY UPON SUCH INDEPENDENT INSPECTIONS AND INVESTIGATIONS.
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE FOREGOING LIMITATIONS SHALL
NOT APPLY TO, AND NOTHING HEREIN SHALL LIMIT, THE PURCHASER’S REMEDIES IN THE
EVENT OF FRAUD.

ARTICLE II.    

CONSIDERATION

2.1    Consideration.
(a)    The aggregate consideration (collectively, the “Purchase Price”) to be
paid for the purchase of the Purchased Assets shall be: (i) the assumption of
Assumed Liabilities and (ii) US$23,000,000, in cash in immediately available
funds (the “Cash Consideration”); provided, however, that Purchaser reserves the
right to increase the Purchase Price, subject to the Bidding Procedures Order
and applicable Law.
(b)    Limitation on Purchaser Liability. For the avoidance of doubt, Purchaser
shall have no liability with respect to any costs, fees, or expenses of any
nature incurred by the Sellers or, if different, the Debtors, following the
Closing Date.

2.2    Withholding. Purchaser shall be entitled to deduct and withhold from all
amounts payable pursuant to this Agreement all amounts that Purchaser may be
required to deduct and withhold under any provision of applicable Law. To the
extent such amounts are withheld and paid over to the applicable Governmental
Body, such amounts shall be treated for all purposes under this Agreement as
having been paid to the Person to whom such amounts would otherwise have been
paid. Purchaser will use reasonable efforts to reduce or eliminate any such
withholding including by requesting any appropriate Tax forms, including IRS
Form W-9 or the appropriate series of IRS Form W-8, as applicable, or any
similar information, from the applicable payee prior to withholding on any such
payment.

2.3    Deposit. No later than two (2) Business Days following the entry of the
Bidding Procedures Order, Purchaser will make an earnest money deposit in the
amount of US$2,300,000 (the “Deposit”) to the Escrow Agent pursuant to the terms
of the Escrow Agreement. If the Closing occurs, the Deposit shall be applied
against payment of the Purchase Price on the Closing Date. If this Agreement is
terminated pursuant to Sections 3.4(a)-(e) or Section 3.4(g) hereof, or in the
event that any Person other than Purchaser purchases all or any material portion
of the Purchased Assets, then the Deposit shall be returned to Purchaser
promptly, and in no event later than two (2) Business Days after such
termination, and the parties agree that they will promptly execute joint written
instructions to the Escrow Agent pursuant to the Escrow Agreement to effect such
return of the Deposit. If this Agreement shall be terminated by the Sellers
pursuant to Section 3.4(f) hereof, then Seller shall retain the Deposit, and the
parties agree that they will promptly execute joint written instructions to the
Escrow Agent pursuant to the Escrow Agreement to effect such retention of the
Deposit. The Parties agree that the Sellers’ right to retain the Deposit, as set
forth herein, is not a penalty, but rather is liquidated damages in a reasonable
amount that will compensate the Sellers for their respective efforts and
resources expended and the opportunities foregone while negotiating this
Agreement and in reliance on this Agreement and on the expectation of the
consummation of the transactions contemplated hereby, which amount would
otherwise be impossible to calculate with precision. Notwithstanding anything to
the contrary in this Agreement, the Parties agree that if this Agreement is
terminated under circumstances in which Sellers are entitled to the Deposit, the
delivery of the Deposit is the sole and exclusive remedy available to Sellers
with respect to this Agreement and the transactions contemplated hereby, and,
upon delivery of the Deposit, none of the Purchaser or any of its former,
current or future equity holders, directors, officers, Affiliates, agents or
Representatives (collectively, the “Purchaser Releasees”) shall have any further
liability or obligation relating to or arising out of this Agreement or the
transactions contemplated hereby.

ARTICLE III.    

CLOSING AND TERMINATION

3.1    Closing. Subject to the satisfaction or waiver by the appropriate Party
of the conditions set forth in Article IX, the closing of the purchase and sale
of the Purchased Assets, the payment of the Purchase Price, the assumption of
the Assumed Liabilities, and the consummation of the other transactions
contemplated by this Agreement (the “Closing”) shall occur as soon as
practicable following the satisfaction or waiver of all conditions set forth in
this Agreement (other than those conditions that by their terms are to be
satisfied at the Closing, but subject to the satisfaction or waiver of such
conditions). The Closing shall take place by telephone conference and electronic
exchange of documents (or, if the Parties agree to hold a physical closing, at
the offices of DLA Piper LLP (US), 1201 North Market Street, Suite 2100,
Wilmington, Delaware 19801, or at such other place as the Parties may agree).
Unless otherwise agreed by the Parties in writing, the Closing shall be deemed
effective and all right, title and interest of each of the Sellers in the
Purchased Assets to be acquired by Purchaser hereunder shall be deemed to have
passed to Purchaser and the assumption of all of the Assumed Liabilities shall
be deemed to have occurred as of 12:01 a.m. prevailing Eastern Time on the
Closing Date.

3.2    Closing Deliveries by Sellers. At or prior to the Closing, the Sellers
shall deliver to Purchaser:
(a)    a bill of sale in the form of Exhibit A or such other form as is agreed
to by the Purchaser (the “Bill of Sale”) duly executed by the Sellers;
(b)    an assignment and assumption agreement in the form of Exhibit B or such
other form as is agreed to by the Purchaser (the “Assignment and Assumption
Agreement”) duly executed by the Sellers;
(c)    a certified copy of the Sale Order;
(d)    copies of all instruments, certificates, documents, and other filings (if
applicable) necessary to release the Purchased Assets from all Encumbrances, all
in a form reasonably satisfactory to Purchaser;
(e)    documentation satisfactory to the Purchaser evidencing any waivers,
consents, and approvals necessary or required to (i) effect the transfer and
assignment of the Purchased Assets and Assigned Contracts and (ii) operate the
Business in the Ordinary Course of Business from and after the Closing;
(f)    an officer’s certificate, dated as of the Closing Date, executed by a
duly authorized officer of each of the Sellers certifying that the conditions
set forth in Section 9.3 have been satisfied;
(g)    a copy of the resolutions adopted by the board of directors (or similar
governing body) of each of the Sellers evidencing the authorization of the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, certified by an authorized officer of
such Seller;
(h)    an instrument of assumption and assignment of the Assumed Leased Real
Property substantially in the form of Exhibit C (the “Assumption and Assignment
of Leases”), duly executed by the Sellers, in form for recordation with the
appropriate public land records, if necessary;
(i)    an Intellectual Property Assignment and Assumption Agreement
substantially in the form of Exhibit D (the “IP Assignment and Assumption
Agreement”), executed accordingly by the Sellers;
(j)    possession of the Purchased Assets and the Business;
(k)    such other bills of sale, deeds, endorsements, assignments and other good
and sufficient instruments of conveyance and transfer, in form reasonably
satisfactory to Purchaser, as Purchaser may reasonably request to vest in
Purchaser all of Sellers’ right, title and interest of Sellers in, to or under
any or all the Purchased Assets;
(l)    evidence satisfactory to the Purchaser that Sellers paid all Cure Costs
in excess of the Cure Cap to the Assigned Contract counterparties;
(m)    from each Seller, (A) a non‑foreign Person affidavit from such Seller
dated as of the date hereof, sworn under penalties of perjury and in form and
substance required under the Treasury Regulations issued pursuant to
Section 1445 of the Code, stating that such Seller is not a “foreign person” as
defined in Code Section 1445 and (B) a duly completed and executed IRS Form W-9;
(n)    evidence satisfactory to the Purchaser that all 503(b)(9) Claims have
been satisfied by the Sellers or will be satisfied by the Sellers; and
(o)    such other documents as Purchaser may reasonably request that are not
inconsistent with the terms of this Agreement and customary for a transaction of
this nature and necessary to evidence or consummate the transactions
contemplated by this Agreement.

3.3    Closing Deliveries by Purchaser. At the Closing, Purchaser shall deliver
to (or at the direction of) the Company:
(a)    the Assignment and Assumption Agreement duly executed by Purchaser;
(b)    the Intellectual Property Assignment and Assumption Agreement, executed
by Purchaser;
(c)    satisfactory evidence of payment of the Cure Costs up to the Cure Cap;
(d)    the Cash Consideration;
(e)    the Assumption and Assignment of Leases, duly executed by the Purchaser;
(f)    an officer’s certificate, dated as of the Closing Date, executed by a
duly authorized officer of Purchaser certifying that the conditions set forth in
Sections 9.2(a) and 9.2(b) have been satisfied;
(g)    all other certificates, agreements and other documents required by this
Agreement (or as the Sellers may reasonably request that are customary for a
transaction of this nature and necessary to evidence or consummate the
transactions contemplated by this Agreement) to be delivered by Purchaser at or
prior to the Closing in connection with the transactions contemplated by this
Agreement; and
(h)    any other agreements expressly required by the terms of this Agreement.

3.4    Termination of Agreement. This Agreement may be terminated only in
accordance with this Section 3.4. This Agreement may be terminated at any time
prior to the Closing, as follows:
(a)    by the mutual written consent of the Company and Purchaser;
(b)    by written notice of either the Company or the Purchaser to such other
Party, if the Closing shall not have been consummated prior to May 9, 2020 (the
“Outside Date”); provided, however, that the Outside Date may be extended by the
mutual written consent of Sellers and Purchaser, for a period up to thirty (30)
days to the extent that all conditions to Closing set forth in this Agreement
are capable of being satisfied as of such time; provided further, however, that
a Party shall not be permitted to terminate this Agreement pursuant to this
Section 3.4(b) if the failure of the Closing to occur prior to the Outside Date
is as a result of the failure of the Party seeking to terminate this Agreement
to materially perform any of its obligations or covenants under this Agreement
required to be performed by it at or prior to the Closing;
(c)    by written notice from Purchaser to the Company, if (i) any Seller seeks
to have the Bankruptcy Court enter an Order dismissing, or converting into cases
under chapter 7 of the Bankruptcy Code, any of the cases commenced by Sellers
under chapter 11 of the Bankruptcy Code and comprising part of the Bankruptcy
Cases, appointing a chapter 11 trustee in the Bankruptcy Cases, or appointing a
responsible officer or an examiner with enlarged power relating to the operation
of the Business (beyond those set forth in section 1106(a)(3) or (4) of the
Bankruptcy Code) under section 1106(b) of the Bankruptcy Code, or (ii) an order
of dismissal, conversion, or appointment is entered for any reason and is not
reversed or vacated within fourteen (14) days after entry thereof;
(d)    by written notice of either the Company or Purchaser, if any Seller has
entered into any agreement or understanding with respect to or initiated
proceedings regarding an Alternative Transaction or if proceedings related to an
Alternative Transaction has otherwise been initiated;
(e)    automatically upon closing of an Alternative Transaction;
(f)    by written notice from the Company to Purchaser, if Purchaser shall have
materially breached or failed to perform in any respect any representations,
warranties or covenants of Purchaser contained in this Agreement and such breach
or failure to perform: (i) would give rise to the failure of a condition set
forth in Section 9.1 or 9.2, (ii) cannot be or has not been cured within ten
(10) days following delivery of notice to Purchaser of such breach or failure to
perform and (iii) has not been waived by the Company; or
(g)    by written notice from Purchaser to the Company, if any Seller shall have
materially breached or failed to perform in any respect any of its
representations, warranties, or covenants contained in this Agreement, any
certificate delivered by a Seller pursuant to this Agreement or the Bidding
Procedures Order or Sale Order and such breach or failure to perform: (i) would
give rise to the failure of a condition set forth in Section 9.1 or Section 9.3,
(ii) cannot be or has not been cured within ten (10) days following delivery of
notice to the Company of such breach or failure to perform, and (iii) has not
been waived by Purchaser.
Each condition set forth in this Section 3.4, pursuant to which this Agreement
may be terminated shall be considered separate and distinct from each other such
condition. If more than one of the termination conditions set forth in this
Section 3.4 is applicable, the applicable Party shall have the right to choose
the termination condition pursuant to which this Agreement is to be terminated.
The Parties acknowledge and agree that no notice of termination or extension of
the Outside Date provided pursuant to this Section 3.4 shall become effective
upon receipt.

3.5    Procedures Upon Termination. In the event of termination and abandonment
by Purchaser or Sellers, or both such Parties, pursuant to Section 3.4 hereof,
written notice thereof shall forthwith be given to the other Party or Parties,
and this Agreement shall terminate, and the purchase of the Purchased Assets and
the assumption of the Assumed Liabilities hereunder shall be abandoned, without
further action by Purchaser or Sellers. If this Agreement is terminated pursuant
to any of Sections 3.4(a)-(e) or Section 3.4(g) (regardless of simultaneous
occurrence of any other condition set forth in Section 3.4), in addition to the
return of the Deposit pursuant to procedures in Section 2.3, Sellers shall pay
in cash to Purchaser the Expense Reimbursement and, only if this agreement is
terminated pursuant to Section 3.4(d) (only to the extent no transaction of the
type described herein with Purchaser is ultimately consummated) or Section
3.4(e), the Break-Up Fee in an aggregate amount equal to US$690,000 (the
“Break-Up Fee” and, together with the Expense Reimbursement, the “Bid
Protections”), and the Parties shall have no further obligations to one another
except for any obligations that, by their terms, survive the termination of this
Agreement, as described in Section 3.6.

3.6    Effect of Termination. In the event of termination of this Agreement
pursuant to Section 3.4, this Agreement shall forthwith become null and void and
there shall be no liability on the part of any Party or any of its partners,
officers, directors or shareholders; provided, however, that (a) this Section
3.6, Section 2.3, the Sellers’ obligation to pay the Bid Protections pursuant to
Section 3.5 and Section 7.1, Article XII (Miscellaneous), and the Bidding
Procedures Order (if entered) shall survive any such termination. All remedies
hereunder are cumulative and are not exclusive of any other remedies provided by
Law. Each Party acknowledges that the agreements contained in this Section 3.6
and in Section 3.5 are an integral part of the transactions contemplated by this
Agreement, that without these agreements such Party would not have entered into
this Agreement, and that any amounts payable pursuant to this Section 3.6 and
Section 3.5 do not constitute a penalty.

ARTICLE IV.    

REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Subject to the exceptions noted in the Disclosure Schedules delivered by the
Sellers concurrently herewith, and except as publicly disclosed by the Company
in its financial statements, or the notes thereto, filed with the U.S.
Securities and Exchange Commission from December 31, 2017 through January 1,
2019 (provided, however, that such disclosure shall be deemed not to include any
predictive, cautionary or forward looking disclosures or any similar general
precautionary statements and any other disclosures in such financial statements
or notes that are predictive, cautionary or forward looking in nature) the
Sellers represent and warrant to Purchaser as follows as of the Agreement Date
and as of the Closing Date:

4.1    Organization and Qualification. Each Seller is a legal entity duly
incorporated or organized, validly existing, and in good standing under the Laws
of the jurisdiction of its incorporation or formation. Such Seller has all
requisite power and authority to own, lease, and operate its properties and to
carry on its business (including the Business) as it is now being conducted,
subject to the provisions of the Bankruptcy Code. Each Seller has previously
delivered to Purchaser complete and correct copies of its Organizational
Documents, as amended and in effect on the Agreement Date. None of the Sellers
is in violation of any of the provisions of its Organizational Documents. Each
Seller is duly qualified or licensed to do business and is in good standing in
each jurisdiction where the character of the Business or the nature of its
properties makes such qualification or licensing necessary.

4.2    Authorization of Agreement. Subject to the entry of the Sale Order, each
Seller has all requisite power and authority to execute and deliver this
Agreement and each of the Ancillary Documents to which it is a party, to perform
its obligations hereunder and thereunder, and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
and each of the Ancillary Documents to which it is a party, the performance by
each Seller of its obligations hereunder and thereunder and the consummation of
the transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary action on the part of each Seller. This Agreement
has been, and at or prior to the Closing, each of the Ancillary Documents to
which it is a party will be, duly and validly executed and delivered by each
Seller and (assuming the due authorization, execution, and delivery by the other
Parties, and the entry of the Sale Order) this Agreement constitutes, and each
Ancillary Document to which it is a party when so executed and delivered
(assuming the due authorization, execution and delivery by the other parties
thereto) will constitute, legal, valid, and binding obligations of each Seller,
enforceable against each Seller in accordance with its terms. Subject to entry
of the Sale Order, except (a)) for entry of the Sale Order, (b) for notices,
filings and consents required in connection with the Bankruptcy Cases, and (c)
for the notices, filings and consents set forth on Schedule 4.2(c) (if any),
Sellers are not required to give any notice to, make any registration,
declaration or filing with or obtain any consent, waiver or approval from, any
Person (including any Governmental Body) in connection with the execution and
delivery of this Agreement and each of the Ancillary Documents or the
consummation or performance of any of the transactions contemplated hereby and
thereby.

4.3    Conflicts; Consents; Compliance with Law.
(a)    Except as set forth on Schedule 4.3(a), the execution, delivery, and
performance by each Seller of this Agreement or any Ancillary Document to which
it is a party, the compliance by Sellers with any of the provisions hereof or
thereof, the consummation of the transactions contemplated hereby or thereby and
the taking by Sellers of any other action contemplated hereby or thereby, do not
and will not (with or without notice, or lapse of time or both): (i) contravene,
violate or conflict with any term or provision of its respective
Organizational Documents; (ii) conflict with or result in any breach or
violation of or constitute a default or change of control 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 Assigned Contract; (iii) result in the creation or imposition of any
Encumbrance on any Purchased Asset; (iv) conflict with or violate any Order or
Law applicable to any Seller or their respective properties, rights or assets,
except in the case of the foregoing clauses (ii), (iii) and (iv), for breaches,
violations, defaults, rights, creations or impositions that are excused by or
unenforceable as a result of the entry or effectiveness of the Sale Order.
(b)    Except (i) for the entry of the Sale Order, and (ii) as set forth on
Schedule 4.3(b), no filing with, notice to, or consent from any Person is
required in connection with the execution, delivery and performance by each
Seller of this Agreement or the Ancillary Documents to which it is a party, the
compliance by Seller with any of the provisions hereof or thereof, the
consummation of the transactions contemplated hereby or thereby, or the taking
by any Seller of any other action contemplated hereby or thereby.
(c)    Each Seller is in compliance, in all material respects with all
applicable Orders and Laws. Except as set forth on Schedule 4.3(c), no Seller
has received any outstanding written notice from any Governmental Body regarding
any actual or possible violation of, or failure to comply in any respect with,
any Order or Law. No Seller is in default in any material respect of any order,
writ, injunction, judgment, or decree applicable to the Business or the
Purchased Assets.
(d)    Notwithstanding the foregoing, each Seller is in compliance, in all
material respects, with all reporting requirements for medical device products
under regulations promulgated by the FDA (the “Reporting Requirements”), as
necessary to, in the Ordinary Course of Business, obtain and maintain Regulatory
Approvals. Schedule 4.3(d) identifies each Regulatory Approval that is held by
Seller and/or any Affiliate of any Seller that relates to or is used in the
Business. Each such Regulatory Approval is valid and in full force and effect.
No event has occurred, and no condition or circumstance exists, that might (with
or without notice or lapse of time) (i) constitute or result directly or
indirectly in a violation of or a failure to comply with any term or requirement
of any Regulatory Approval, or (ii) result directly or indirectly in the
revocation, withdrawal, suspension, cancellation, termination or negative
modification of any Regulatory Approval.
(e)    Each Seller has filed, or a Representative on behalf of such Seller has
filed, with the FDA or other appropriate Governmental Body all required notices,
including any Medical Device Reports.
(f)    Neither Sellers nor, to the Knowledge of Seller, any of Sellers’
Representatives has committed any act, made any statement or failed to make any
statement that would reasonably be expected to provide a basis for the FDA to
invoke its policy with respect to “Fraud, Untrue Statements of Material Facts,
Bribery, and Illegal Gratuities” set forth in 56 Fed. Reg. 46191 (September 10,
1991) (the “Fraud Policy”) and any amendments thereto. Neither Sellers, nor to
the Knowledge of Sellers, any Representative of any Seller has been convicted of
any crime or engaged in any conduct that would reasonably be expected to result,
or has resulted, in (i) debarment under 21 U.S.C. Section 335a or any similar
state Law, or (ii) exclusion under 42 U.S.C. Section 1320a-7 or any similar
state Law. To the Knowledge of Sellers, no Seller is the subject of any pending
or threatened investigation by the FDA pursuant to the Fraud Policy or by any
Governmental Body pursuant to a comparable policy.
(g)    There are no investigations, suits, arbitrations, charges, complaints,
claims, actions or proceedings against or affecting any Seller relating to or
arising under the Federal Food, Drug, and Cosmetic Act, the FDA regulations
adopted thereunder, or any other legislation or regulation promulgated by any
other Governmental Body.

4.4    Brokers and Finders. Except as set forth on Schedule 4.4, no Person has
acted, directly or indirectly, as a broker, finder, or financial advisor for
Sellers in connection with the transactions contemplated by this Agreement.
Purchaser is not or will not become obligated to pay any fee or commission or
like payment to any broker, finder, or financial advisor as a result of the
consummation of the transactions contemplated by this Agreement based upon any
arrangement made by or on behalf of Sellers.

4.5    Title to Purchased Assets. Except for Permitted Encumbrances, Sellers
have good title to or, in the case of property leased by Sellers, a valid
leasehold interest in or all rights to use all of the Purchased Assets and, at
the Closing, Purchaser, pursuant to the Sale Order, shall acquire good and
marketable title or, in the case of property leased by the Sellers, a valid
leasehold interest, in, and under all of such Purchased Assets, in each case
free and clear of all Claims, Liabilities and Encumbrances to the fullest extent
permissible under sections 363(f) and 365 of the Bankruptcy Code and Bankruptcy
Rules 6004 and 6006. The Purchased Assets (i) include all of the properties,
rights and assets necessary or required to operate the Business in the Ordinary
Course of Business and (ii) are sufficient for the continued conduct of the
Business after the Closing in the Ordinary Course of Business and in
substantially the same manner as conducted prior to the Closing. For the sake of
clarity, the right to use any assets included in the Purchased Assets in which
Sellers have leasehold or non-ownership rights to use shall be assigned to
Purchaser only through the assumption and assignment of the Assigned Contracts
in accordance with and subject to this Agreement.

4.6    Tangible Personal Property. Schedule 4.6 sets forth all leases of
personal property (“Personal Property Leases”) relating to personal property
used by Sellers or to which any Seller is a party or by which the properties or
assets of any Seller are bound, in each case relating to the Business. Each
Seller has a valid and enforceable leasehold interest under each Personal
Property Lease under which it is a lessee.

4.7    Intellectual Property. Schedule 4.7(a) sets forth an accurate and
complete list of all Seller Registered Intellectual Property. Except as set
forth on Schedule 4.7(b)(i), Sellers own all right, title, and interest to, or
possess valid and binding licenses to use, the Seller Intellectual Property.
Except as set forth on Schedule 4.7(b)(ii), Seller can convey the Seller
Intellectual Property free and clear of Encumbrances pursuant to the Sale Order.
No third party has brought any claim in any suit or action that has been served
on any Seller related to the Seller Intellectual Property. To the Knowledge of
Sellers, no Person is engaging in any activity that infringes any Seller
Intellectual Property. No claim has been asserted to any Seller that the use of
any Seller Intellectual Property or the operation of the Business infringes or
violates the Intellectual Property of any third party. The Seller Intellectual
Property and the rights under the Assigned Contracts include the rights to use
all Intellectual Property required to operate the Business in the Ordinary
Course of Business, as currently conducted and as currently proposed to be
conducted.

4.8    Litigation. Except as set forth on Schedule 4.8 and other than the
Bankruptcy Cases, there is no suit, action, litigation, arbitration proceeding,
or governmental proceeding or audit, including appeals and applications for
review, in progress, pending or, to the best of Sellers’ Knowledge, threatened,
nor is there any judgment, decree, injunction, deficiency, rule or order of any
court, governmental department, commission, agency, instrumentality or
arbitrator which, in any case, (i) relates to any Seller, or any of the assets
owned or used by the Sellers, including the Business, the Products, the
Purchased Assets or the Assumed Liabilities, or any Person whose Liability the
Sellers have or may have assumed, either contractually or by operation of law,
or (ii) challenges, or would be reasonably be expected to have the effect of
preventing, delaying, making illegal or otherwise interfering with the
transactions contemplated by this Agreement. Sellers have no Knowledge of any
existing ground on which any such action, suit, litigation, audit or proceeding
may be commenced with any reasonable likelihood of success.

4.9    Inventory.
(a)    No Inventory is materially damaged in any significant way, including, but
not limited to, damage caused by water, except for any such damage which would
not have a material and adverse effect on the Inventory taken as a whole.
(b)    The Inventory is not part of or subject to a current or past recall
(including, to the Sellers’ Knowledge, any threatened recall), nor have any such
recalls been pending at any time.
(c)    All Inventory was manufactured, and has been shipped, stored, and
otherwise maintained in accordance with, to the extent applicable, Good
Manufacturing Practice requirements of the FDA and any other applicable Law.
(d)    The Inventory is free of any defect or deficiency and is in working
condition except for such failure to be in working condition which would not
have a material and adverse effect on the Inventory taken as a whole.
(e)    Sellers do not hold any Inventory on consignment.

4.10    Contracts.
(a)    Schedule 4.10(a)(X) contains a complete and correct list, as of the date
hereof, of each Contract that is material to the Seller Intellectual Property or
the operation of the Business under which any Seller has any current or future
rights, responsibilities, obligations or Liabilities (in each case, whether
contingent or otherwise) or to which any Seller is a party or to which any of
their respective properties or assets is subject (all Contracts of the type
described in this Section 4.10(a), whether or not set forth on Schedule
4.10(a)(X), being referred to herein as the “Material Contracts”). Schedule
4.10(a)(Y) contains a complete and correct list, as of the date hereof, of each
Contract that would otherwise be disclosed on Schedule 4.10(a)(X) but for the
fact that the Contract has terminated or has not been renewed and the parties to
such Contract are still performing, whether in whole or in part, in accordance
with the terms of such Contract. Schedule 4.10(a)(Z) contains a complete and
correct list (divided by subtypes) of each Contract listed on Schedule
4.10(a)(X) or 4.10(a)(Y):
(i)    relating to sales and distribution activities conducted by a third party
wholesaler or distributor or any contract with a pharmacy benefit manager;
(ii)    relating to marketing and advertising of the Business, including the
Products; or
(iii)    relating to the ongoing supply or manufacturing of clinical and
commercial quantities of any of the Products.
(b)    True and complete copies of each Material Contract in effect as of the
date hereof have been made available to the Purchaser. No Seller is in breach of
or default under the terms of any Material Contract, except as would not have a
material and adverse effect on the Business. To the Knowledge of the Sellers, as
of the date hereof, no other party to any Material Contract is in breach of or
default under the terms of any Material Contract. To the Knowledge of the
Sellers, no event has occurred that would, with or without notice or lapse of
time or both, result in any breach or violation of or constitute a default or
give rise to any right of termination, acceleration, vesting, payment, exercise
or revocation under any Material Contract. Each Material Contract is a valid,
binding and enforceable obligation of the Seller party thereto and, to the
Knowledge of the Sellers, of each other party thereto, and is in full force and
effect.
(c)    Except as set forth on Schedule 4.10(c), Sellers have not, and, to
Sellers’ Knowledge, no other party to any Assigned Contract has, commenced any
action against any of the parties to any Assigned Contract or given or received
any written notice of any default or violation under any Assigned Contract that
has not been withdrawn or dismissed except to the extent such default or
violation will be cured as a result of the payment of the applicable Cure Costs.
Assuming payment of the Cure Costs, each Assigned Contract is, or will be upon
the Closing, valid, binding and in full force and effect in accordance with its
terms.

4.11    Tax Returns; Taxes.
(a)    All Tax Returns required to have been filed by the Sellers with respect
to the Purchased Assets or the Business have been duly and timely filed and are
true, correct, and complete in all material respects and have been prepared in
accordance with all applicable Law. Except as set forth on Schedule 4.11(a), no
Seller is currently the beneficiary of any extension of time within which to
file any Tax Return. True and correct copies of Sellers’ Tax Returns filed since
December 31, 2015 with respect to the Purchased Assets or the Business have been
delivered to Purchaser (or its representatives) prior to the Agreement Date.
(b)    The Sellers have timely paid all Taxes required to have been paid by them
with respect to the Purchased Assets or the Business (whether or not shown on
any Tax Returns), other than Taxes that are not yet due and payable. No
deficiency for any Tax with respect to the Purchased Assets or the Business has
been asserted or assessed by a Governmental Body against the Sellers which
deficiency has not been paid in full.
(c)    The Sellers have timely collected, withheld and paid to the appropriate
Governmental Body all Taxes with respect to the Purchased Assets or the Business
required to have been collected, withheld and paid under applicable Law,
including collections and withholdings with respect to amounts paid or owing to
any employee, independent contractor, customer, creditor, stockholder or other
third party.
(d)    No written claim has ever been made by a Governmental Body in a
jurisdiction where the Sellers do not file Tax Returns that a Seller is or may
be subject to taxation or required to file Tax Returns in that jurisdiction with
respect to the Purchased Assets or the Business. The Sellers are not subject to
any Tax payment obligation or Tax Return filing obligation in any jurisdiction
outside the United States with respect to the Purchased Assets or the Business.
(e)    Except as set forth on Schedule 4.11(e), no Tax Proceeding is being
asserted in writing against any of the Sellers with respect to the Purchased
Assets or the Business, nor to the Knowledge of the Sellers, has any claim with
respect to Taxes relating to the Purchased Assets or the Business been
threatened or asserted in writing.
(f)    There are no Encumbrances for Taxes on the Purchased Assets, other than
Permitted Encumbrances.
(g)    None of the Sellers is a “foreign person” as that term is used in
Treasury Regulations Section 1.1445-2.
(h)    None of the Purchased Assets or the Business constitutes a direct or
indirect interest in any trust, partnership, corporation, limited liability
company, or other “business entity” for U.S. federal income Tax purposes.
(i)    None of the Purchased Assets are (i)  “tax-exempt use property” within
the meaning of Section 168(h)(1) of the Code, (ii) “tax-exempt bond financed
property” within the meaning of Section 168(g) of the Code, (iii) subject to
Section 168(g)(1)(A) of the Code, or (iv) subject to a “section 467 rental
agreement” as defined in Section 467 of the Code.

4.12    Employees; Seller Benefit Plans.
(a)    Sellers have provided Purchaser with a true, complete, and correct list
of the Employees as of the Agreement Date, specifying their position, FLSA
classification, annual salary, target bonus opportunity, value of accrued but
unused vacation time, date of hire and current leave status. The Sellers are in
compliance in all material respects with all Laws relating to the employment,
classification, and termination of employment of the Employees.
(b)    Except as set forth on Schedule 4.12(b), there are no Actions pending or,
to the Knowledge of any Seller, threatened, against any Seller by any Employee,
former employee, or current or former service provider of any Seller.
(c)    Set forth on Schedule 4.12(c) is a true and complete list of each Benefit
Plan. As applicable with respect to each Benefit Plan, the Sellers have
delivered to Purchaser true and complete copies of (i) each plan document,
including all amendments thereto, and in the case of an unwritten plan, a
written description thereof, (ii) all current trust documents, investment
management contracts, custodial agreements and insurance contracts relating
thereto, (iii) the current summary plan description and each summary of material
modifications thereto, (iv) the most recent Internal Revenue Service (“IRS”)
determination or opinion letter, as applicable, (v) the most recent summary
annual report, actuarial report, financial statement and trustee report and
non-discrimination test results, and (vi) any material correspondence with a
Governmental Body.
(d)    Each Benefit Plan has been maintained, operated, and administered in
compliance in all material respects with its terms and any related documents or
agreements and the applicable provisions of ERISA, the Code and all other Laws.
Each Benefit Plan intended to be qualified under Section 401(a) of the Code is
so qualified and heretofore been determined by the IRS to be so qualified and,
nothing has occurred since the issuance of each such letter that could
reasonably be expected to cause the loss of the tax-qualified status of any such
Benefit Plan. All contributions and payments required to be made by the Sellers
or any ERISA Affiliate to or with respect to any Benefit Plan have been timely
paid.
(e)    There are no pending audits or investigations by any Governmental Body
involving any Benefit Plan, and no pending or, to the Knowledge of the Sellers,
threatened claims (except for individual claims for benefits payable in the
normal operation of the Benefit Plans), suits or proceedings involving any
Benefit Plan, any fiduciary thereof or service provider thereto, nor to the
Knowledge of the Sellers is there any reasonable basis for any such audit,
investigation, claim, suit, or proceeding.
(f)    No Benefit Plan provides benefits, including, without limitation, death
or medical benefits, beyond termination of service or retirement other than
coverage mandated by law and neither the Sellers nor any ERISA Affiliate has
made a written or oral representation promising the same.
(g)    No Seller or any ERISA Affiliate has ever maintained, 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 to any “pension plan” (as defined in Section 3(2) of ERISA) subject to Title
IV of ERISA or Section 412 of the Code. No Seller 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.
(h)    The Sellers’ execution of, and performance of the transactions
contemplated by this Agreement could not reasonably be expected to, either alone
or in connection with any other event(s), (I) result in any payment or benefit,
result in the funding of any payment or benefit, or increase in payments or
benefits or acceleration in the timing of payments or benefits becoming due to
any current or former employee, director, officer, or independent contractor of
any Seller, (II) limit the right to merge, amend, or terminate any Benefit Plan,
(III) result in the payment or provision of an “excess parachute payment” under
Section 280G of the Code, whether under a Benefit Plan or otherwise, (IV)
directly or indirectly cause Sellers or any of their ERISA Affiliates to
transfer or set aside any assets to fund or otherwise provide for the benefits
under any Benefit Plan for any current or former employee, officer or director,
or (V) result in any requirement to pay any Tax “gross-up” or similar “make
whole” payment to any employee or officer of Sellers or any ERISA Affiliate.
(i)    Each Benefit Plan that constitutes a “non-qualified deferred compensation
plan” within the meaning of Section 409A of the Code, complies in both form and
operation with the requirements of Section 409A of the Code so that no amounts
paid pursuant to any such Benefit Plan is subject to Tax under Section 409A of
the Code.
(j)    The employment of each Employee of Sellers is at-will without required
payment of severance or other consideration, except as set forth on Schedule
4.12(j).
(k)    No Benefit Plan is sponsored, maintained or contributed to under the law
or applicable custom or rule of the any jurisdiction outside of the United
States.

4.13    Bank Accounts. Schedule 4.13 sets forth a complete list of all bank
accounts (including any deposit accounts, securities accounts and any
sub-accounts) of Sellers (the “Bank Accounts”).

4.14    Financial Statements.
(a)    The Sellers have timely filed all reports, schedules, forms, statements
or other documents required to be filed by them under the United States
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (the “Securities Act”), or the United States Securities Exchange Act
of 1934, as amended, and the rules and regulations promulgated thereunder (the
“Exchange Act”), as the case may be, since January 1, 2017 (collectively, the
“Seller SEC Reports”). Each Seller SEC Report (i) as of its date, complied as to
form in all material respects with the applicable requirements of the Securities
Act or the Exchange Act, as the case may be, as in effect on the date so filed
and (ii) did not, at the time it was filed (or, if subsequently amended or
supplemented, at the time of such amendment or supplement), contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading.
(b)    The Sellers have made available to the Purchaser complete and accurate
copies of the following financial statements (collectively the “Financial
Statements”): (i) the audited consolidated balance sheet of the Sellers as of
December 31, 2018 and December 31, 2017, and the related consolidated statements
of operations, comprehensive income (loss), stockholders’ equity (deficit) and
cash flows for each fiscal year then ended; and (ii) the unaudited consolidated
balance sheet of the Sellers as of September 30, 2019 and the related
consolidated statements of operations, comprehensive income (loss),
stockholders’ equity (deficit) and cash flows for the nine (9) months then
ended. Subject to the notes thereto, the Financial Statements were prepared in
accordance with GAAP consistently applied during the periods involved and
present fairly, in all material respects, the consolidated financial position,
results of operations, changes in stockholders’ equity (deficit) and cash flows
of the Sellers 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). There are no Liabilities of
the Business (whether accrued, absolute, contingent or otherwise) required under
GAAP to be reflected on the Financial Statements that are not reflected therein
other than (i) Liabilities incurred in the Ordinary Course of Business since
September 30, 2019 and (ii) Liabilities that are not, or would not reasonably be
expected to be, individually or in the aggregate, material to the Business.
(c)    The Sellers established and maintain disclosure controls and procedures
and internal controls over financial reporting (as such terms are defined in
paragraphs (e) and (f), respectively, of Rule 13a-15 under the Exchange Act) as
required by Rule 13a-15 under the Exchange Act designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with GAAP, and which
include policies and procedures that: (a) pertain to the maintenance of records
that in reasonable detail accurately and fairly reflect the transactions and
dispositions of the assets of the Sellers, (b) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and that receipts and expenditures are being
made only in accordance with authorizations of management and directors of the
Sellers and (c) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of the assets of the
Sellers that could have a material effect on the Financial Statements.

4.15    WARN Act. No Seller has, within the ninety (90) days immediately prior
to the Closing Date, in whole or in part taken any action or actions which
would, independent of the transaction contemplated hereby, result in a plant
closing or mass layoff, temporary or otherwise, within the meaning of the WARN
Act, or any similar Law.

4.16    Absence of Certain Changes.
(a)    Except as set forth on Schedule 4.16(a), since September 30, 2019, there
has not been a Material Adverse Effect.
(b)    Except as set forth on Schedule 4.16(b) or as expressly required pursuant
to this Agreement, from September 30, 2019 to the Agreement Date, Sellers have
not:
(i)    except for executory contracts and unexpired leases rejected by Sellers
pursuant to a Bankruptcy Court order with the prior written consent of
Purchaser, terminated, modified, or amended any material Assigned Contract or
taken any action which materially violates, materially conflicts with, or
resulted in a material breach of any provision of, or constitutes a default
under, or give rise to the right of any counterparty to accelerate the
obligations under or modify the terms of, any Assigned Contract;
(ii)    purchased or otherwise acquired any material properties or assets
(tangible or intangible) or sold, leased, transferred, or otherwise disposed of
any Purchased Assets, except for purchases of materials and sales of Inventory
in the Ordinary Course of Business, (i) permitted, allowed, or suffered any of
the Purchased Assets to be subjected to any Encumbrance (other than Permitted
Encumbrances), or (ii) removed any equipment or other material assets (other
than Inventory) from the Leased Real Property other than in the Ordinary Course
of Business;
(iii)    waived or released any claim or rights included in or related to the
Purchased Assets or the Business, except for adjustments to the value of
Inventory in the Ordinary Course of Business;
(iv)    entered into any material contractual relationship with any third party
related to the Purchased Assets or the Business;
(v)    adopted, amended or terminated any Benefit Plan;
(vi)    except for consequences relating to the filing of the Bankruptcy Cases,
conducted the Business outside the Ordinary Course of Business;
(vii)    changed in any way Sellers’ accounting methods, principles, or
practices other than required by changes in GAAP;
(viii)    incurred any Indebtedness or paid, discharged, or satisfied any
claims, Liabilities or obligations, other than the incurrence of Indebtedness
under the DIP Financing Agreements and the payment, discharge, or satisfaction
in the Ordinary Course of Business of Liabilities incurred in the Ordinary
Course of Business;
(ix)    allowed any Permit held by any Seller to terminate, expire, or lapse
relating to the Purchased Assets or the Business, except for any such damage as
would not have a material and adverse effect on the Business;
(x)    made or changed any Tax election, filed any amended Tax Return, entered
into any closing agreement, settled any Tax claim or assessment, surrendered any
right to claim a refund of Taxes, consented to any extension or waiver of the
limitation period applicable to any Tax claim or assessment, incurred any
liability for Taxes outside the ordinary course of business, failed to pay any
Tax that became due and payable (including any estimated tax payments), prepared
or filed any Tax Return in a manner inconsistent with past practice, or adopted
or changed any accounting method in respect of Taxes; or
(xi)    agreed or committed to do any of the foregoing.

4.17    Real Property. No Seller owns any real property. Schedule 4.17 sets
forth a complete and correct list of all Real Property Leases. Complete and
correct copies of the Real Property Leases have been made available to the
Purchaser prior to the date hereof. No Seller has subleased, licensed or
otherwise granted any Person the right to use or occupy any real property or any
portion thereof. Each Real Property Lease is valid, binding and in full force
and effect, and no uncured default of a material nature on the part of any
Seller or, to the Knowledge of the Sellers, the landlord thereunder exists with
respect to any Real Property Lease. The Sellers have good and valid leasehold
interest in or contractual right to use or occupy, subject to the terms of the
applicable Real Property Lease, the Leased Real Property. As of the date hereof,
no party, other than the Sellers, has any right to use or occupy the Leased Real
Property or any portion thereof, whether as tenants, subtenants, trespassers or
otherwise. The Leased Real Property is in good condition and repair (ordinary
wear and tear excepted) and is sufficient for the operation of the Business in
the Ordinary Course of Business and the uses in which such property is presently
employed.

4.18    Environmental Matters. Each Seller is in material compliance with all
applicable Environmental Laws. The Sellers possess all permits and approvals
issued pursuant to any applicable Law relating to the protection of the
environment or, as such relates to exposure to Hazardous Materials, to health
and safety that are required to conduct the Business, and are in material
compliance with all such permits and approvals. No Releases of Hazardous
Materials have occurred at, on, from or under any real property currently or, to
the Knowledge of the Sellers, formerly owned or operated by any Seller in a
manner that would reasonably be expected to result in a Liability under any
Environmental Laws. There is no Action currently pending or, to the Knowledge of
the Sellers, threatened alleging that a Seller is or may be in violation of or
liable under, any Environmental Law. No Seller has entered into or agreed to any
consent decree or order or is subject to any judgment, decree or judicial order
relating to compliance with Environmental Laws or the investigation, sampling,
monitoring, treatment, remediation, removal or cleanup of Hazardous Materials.

4.19    Insurance. Schedule 4.19 sets forth a complete and correct list, as of
the date hereof, of all insurance policies maintained by any Seller with respect
to the Business, the Products, the Purchased Assets or the Assumed Liabilities,
including in respect of properties, buildings, equipment, fixtures, employees
and operations. All such insurance policies (i) are, to the Knowledge of the
Sellers, in full force and effect and all premiums thereon have been paid, and,
to the Knowledge of the Sellers, the Sellers are otherwise in compliance in all
material respects with the terms and provisions of such policies, (ii) such
policies provide insurance in such amounts and against such risks as is
sufficient to comply with applicable Law, and (iii) the Sellers are not in
breach or default of such policies and have not taken any action or failed to
take any action which, with notice, the lapse of time or the happening of any
other event or condition, would constitute such a breach or default, or permit
termination or modification of, any of such insurance policies. To the Sellers’
Knowledge there are no pending notices of cancellation or non-renewal of any
such insurance policy nor has the termination of any such insurance policy been
threatened, and, to the Knowledge of the Seller, there exists no event,
occurrence, condition or act (including the purchase of the Purchased Assets
hereunder) that, with the giving of notice, the lapse of time or the happening
of any other event or condition, would entitle any insurer to terminate or
cancel any such insurance policies.

4.20    Healthcare Regulatory Matters. Each Seller is, and at all times has
been, in material compliance with all applicable Healthcare Laws. Each Seller
possesses all Permits required to conduct its operations, which are set forth on
Schedule 4.20, is in material compliance with all such Permits, and has not
received any notice of any revocation of, or modification to, any such Permit.
Except as set forth on Schedule 4.20, Seller represents that each Permit is
transferrable to Purchaser subject to making all appropriate filings with the
applicable Governmental Bodies. In addition, each Seller maintains compliance
plans that were created to reasonably assure that (1) any Person providing
healthcare services to or on behalf of a Seller or (2) any employee or
individual contractor of a Seller, in either case (1) or (2), is in compliance
in all material respects with all applicable Healthcare Laws and are structured
to account for the guidance issued by the U.S. Department of Health and Human
Services regarding characteristics of effective corporate compliance programs.
No Seller is a “covered entity” or “business associate” as such terms are
defined under HIPAA and has not entered into a business associate agreement as
described under HIPAA. No Seller has received any notice of any Action or third
party notice alleging that any Seller product, operation or activity is in
violation of any Healthcare Laws nor, to any Seller’s Knowledge, is any such
Action been threatened. Each Seller has filed, maintained or submitted all
material reports, documents, forms, notices, applications, records, claims,
submissions and supplements or amendments as required by any healthcare Permit
or Healthcare Laws in all material respects, and all such reports, documents,
forms, notices, applications, records, claims, submissions and supplements or
amendments were complete and accurate on the date filed in all material respects
(or were corrected or supplemented by a subsequent submission). No Seller or any
of their respective employees, officers, directors, or agents is a party to any
corporate integrity agreements, monitoring agreements, consent decrees,
settlement orders, or similar agreements with, or imposed by, any Governmental
Body. Neither the Sellers nor any of their respective employees, officers,
directors, or agents have been excluded, suspended or debarred from
participation in any U.S. federal health care program or human clinical research
or is subject to a governmental inquiry, investigation, proceeding, or other
similar action that would reasonably be expected to result in debarment,
suspension, or exclusion therefrom.

4.21    No Other Representations or Warranties. PURCHASER HEREBY ACKNOWLEDGES
AND AGREES THAT, EXCEPT AS PROVIDED IN THIS AGREEMENT OR ANY CERTIFICATE OR
DOCUMENT DELIVERED PURSUANT TO THIS AGREEMENT, SELLERS MAKE NO REPRESENTATIONS
OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO ANY MATTER
RELATING TO THE PURCHASED ASSETS. WITHOUT LIMITING THE FOREGOING, SELLERS HEREBY
DISCLAIM ANY WARRANTY, EXPRESS OR IMPLIED, OF MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE AS TO ANY PORTION OF THE PURCHASED ASSETS. NOTWITHSTANDING
ANYTHING HEREIN TO THE CONTRARY, THE FOREGOING LIMITATIONS SHALL NOT APPLY TO,
AND NOTHING HEREIN SHALL LIMIT, THE PURCHASER’S REMEDIES IN THE EVENT OF FRAUD.

ARTICLE V.    

REPRESENTATIONS AND WARRANTIES OF PURCHASER
Subject to the exceptions noted in the schedules delivered by Purchaser
concurrently herewith, Purchaser represents and warrants to the Sellers as
follows as of the Agreement Date and as of the Closing Date:

5.1    Organization and Qualification. Purchaser is duly organized, validly
existing and in good standing under the Laws of its jurisdiction of
organization. Purchaser has all requisite power and authority to own, lease and
operate its properties and to carry on its business (including the Business) as
it is now being conducted, except as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Purchaser’s
ability to consummate the transactions contemplated hereby.

5.2    Authority. Purchaser has the requisite power and authority to execute and
deliver this Agreement and each of the Ancillary Documents to which it is a
party, to perform its obligations hereunder and thereunder, to consummate the
transactions contemplated hereby and thereby and to assume and perform the
Assumed Liabilities. The execution and delivery of this Agreement by Purchaser
and each of the Ancillary Documents to which it is a party, the performance by
Purchaser of its obligations hereunder and thereunder, the consummation of the
transactions contemplated hereby and thereby, and the assumption and performance
of the Assumed Liabilities have been duly and validly authorized by all
necessary actions on the part of Purchaser. This Agreement has been, and at or
prior to the Closing, each of the Ancillary Documents to which it is a party
will be, duly and validly executed and delivered by Purchaser. Assuming the due
authorization, execution and delivery of this Agreement and the Ancillary
Documents by the Sellers and subject to the effectiveness of the Sale Order,
this Agreement constitutes, and each Ancillary Document to which Purchaser is a
party when so executed and delivered will constitute, legal, valid, and binding
obligations of Purchaser, enforceable against Purchaser in accordance with its
terms.

5.3    No Inconsistent Obligations. Neither the execution and delivery of this
Agreement or any other documents contemplated hereby, nor the consummation of
the transactions contemplated herein or therein in accordance with the Sale
Order, will, to Purchaser’s Knowledge, result in a violation or breach of, or
constitute a default under, (a) the Organizational Documents of Purchaser, (b)
any applicable ruling or order of any Governmental Body, (c) any term or
provision of any contract or agreement to which Purchaser is a party (d) any
writ, order, judgment, decree, law, rule, regulation, or ordinance, applicable
to Purchaser or (e) any other commitment or restriction to which Purchaser is a
party, except as would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on the Purchaser’s ability to
consummate the transactions contemplated hereby.

5.4    Conflicts; Consents.
(a)    The execution, delivery and performance by Purchaser of this Agreement or
any Ancillary Document to which it is a party, the compliance by Purchaser with
any of the provisions hereof or thereof, the consummation of the transactions
contemplated hereby or thereby and the taking by Purchaser of any other action
contemplated hereby or thereby, do not and will not contravene, violate or
conflict with any term or provision of its Organizational Documents, except as
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Purchaser’s ability to consummate the
transactions contemplated hereby.
(b)    Except as set forth on Schedule 5.4(b), no consent, waiver, approval,
order or authorization of, or registration, qualification, designation or filing
with any Person or Governmental Body is required in connection with the
execution, delivery and performance by Purchaser of this Agreement or the
Ancillary Documents to which it is a party, the compliance by Purchaser with any
of the provisions hereof or thereof, the consummation of the transactions
contemplated hereby or thereby, the assumption and performance of the Assumed
Liabilities, or the taking by Purchaser of any other action contemplated hereby
or thereby, other than such filings, notices or consents, the failure of which
to make or obtain would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on Purchaser’s ability to perform its
obligations under this Agreement and the Ancillary Documents to which it is a
party, to assume and perform the Assumed Liabilities or to consummate on a
timely basis the transactions contemplated hereby or thereby.

5.5    Brokers. Except as set forth on Schedule 5.5, no Person has acted,
directly or indirectly, as a broker, finder or financial advisor for Purchaser
in connection with the transactions contemplated by this Agreement and Sellers
are not and will not become obligated to pay any fee or commission or like
payment to any broker, finder, or financial advisor as a result of the
consummation of the transactions contemplated by this Agreement based upon any
arrangement made by or on behalf of Purchaser.

5.6    Adequate Assurances Regarding Assigned Contracts. As of the Closing,
Purchaser will be capable of satisfying the adequate assurance of future
performance conditions contained in sections 365(b)(1)(C) and 365(f) of the
Bankruptcy Code with respect to the Assigned Contracts, subject to the
fulfillment by the Sellers of the conditions set forth in Section 3.2(l) of this
Agreement.

5.7    No Litigation. To Purchaser’s knowledge, there are no actions, suits,
claims, investigations, hearings, or proceedings of any type pending (or, to the
knowledge of Purchaser, threatened) instituted against Purchaser challenging the
legality of the transactions contemplated in this Agreement (other than with
respect to any objection which may be filed in connection with the Bankruptcy
Cases), except as would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on the Purchaser’s ability to
consummate the transactions contemplated hereby.

5.8    Due Diligence. PURCHASER HEREBY ACKNOWLEDGES AND AGREES THAT, EXCEPT AS
PROVIDED IN THIS AGREEMENT OR ANY CERTIFICATE OR DOCUMENT DELIVERED PURSUANT TO
THIS AGREEMENT, SELLERS MAKE NO REPRESENTATIONS OR WARRANTIES WHATSOEVER,
EXPRESS OR IMPLIED, WITH RESPECT TO ANY MATTER RELATING TO THE PURCHASED ASSETS.
WITHOUT LIMITING THE FOREGOING, SELLERS HEREBY DISCLAIM ANY WARRANTY, EXPRESS OR
IMPLIED, OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE AS TO ANY
PORTION OF THE PURCHASED ASSETS. NOTWITHSTANDING ANYTHING HEREIN TO THE
CONTRARY, THE FOREGOING LIMITATIONS SHALL NOT APPLY TO, AND NOTHING HEREIN SHALL
LIMIT, THE PURCHASER’S REMEDIES IN THE EVENT OF FRAUD.

ARTICLE VI.    

EMPLOYEES

6.1    Employee Matters.
(a)    The Purchaser intends to extend offers of employment (which may be for
employment with Purchaser or any of its Affiliates) to a majority of the
Sellers’ Employees related to the Purchased Assets as of the Agreement Date who
have not been terminated or otherwise left the employ of the Sellers prior to
the Closing Date, which offers will be effective as of and contingent upon the
Closing. Sellers will make available to Purchaser a correct and complete list of
all their then current employees within five (5) days after the date of this
Agreement, and again thirty (30) days prior to the Closing Date, ten (10) days
prior to the Closing Date and also on the Closing Date. Consistent with
applicable law, the Sellers shall provide Purchaser access to their personnel
records and personnel files and shall provide such other information regarding
their employees as Purchaser may reasonably request. All such Employees who
accept such offers of employment, and commence such employment immediately after
the Closing, with Purchaser or its Affiliates are hereinafter referred to as the
“Transferred Employees”. Effective as of immediately before the Closing, each
Seller shall terminate the employment of its respective employees who have
accepted offers of employment with Purchaser or an Affiliate.
(b)    Subject to Purchaser’s right to terminate any Transferred Employees,
Purchaser shall provide for a period of one (1) year from and after the Closing
Date, each Transferred Employee with (i) base salary, medical, dental, hospital,
pharmaceutical, and vision benefits, as well as target bonus opportunities that
are, in the aggregate, substantially comparable to those provided to such
Transferred Employees as of the date of this Agreement. For purposes of
eligibility, vesting and participation (but not for purposes of benefits
accrual, or for any purposes under any defined benefit plan, severance, equity
or equity-like incentive compensation plan, program or arrangement) under any
Purchaser plans and programs providing employee benefits to Transferred
Employees after the Closing Date (the “Post-Closing Plans”), each Transferred
Employee shall be credited with his or her years of service with Sellers before
the Closing Date to the same extent as such Transferred Employee was entitled,
before the Closing Date, to credit for such service under substantially similar
employee benefit plans in which such Transferred Employees participated before
the Closing Date, except to the extent such credit would result in a duplication
of benefits and only to the extent that such service was relevant for such
determination under the corresponding Benefit Plan. Notwithstanding the
foregoing, Purchaser, or its applicable Affiliate, may permit or require the
Transferred Employees to continue to participate in the Assumed Plans.
(c)    For purposes of each Post-Closing Plan providing medical, dental,
hospital, pharmaceutical, or vision benefits to any Transferred Employee, to the
extent permitted under the applicable Post-Closing Plan(s), Purchaser shall use
commercially reasonable efforts to cause to be waived all pre-existing condition
exclusions and actively-at-work requirements of such Post-Closing Plan for such
Transferred Employee and his or her covered dependents (unless such exclusions
or requirements were applicable under comparable Benefit Plans). In addition, to
the extent permitted under the applicable Post-Closing Plan(s), Purchaser shall
use commercially reasonable efforts to cause any co-payments, deductible, and
other eligible expenses actually incurred by such Transferred Employee and/or
his or her covered dependents under any Benefit Plan providing, medical, dental,
hospital, pharmaceutical, or vision benefits during the plan year ending on the
Closing Date to be credited for purposes of satisfying all deductible,
coinsurance, and maximum out-of-pocket requirements applicable to such
Transferred Employee and his or her covered dependents for the applicable plan
year of each comparable Post-Closing Plan in which he or she participates, and
solely to the extent such amounts were credited for such purpose under the
comparable Benefit Plan.
(d)    To the extent permitted by state and local Law, Purchaser shall assume
and honor all vacation days and other paid-time-off accrued or earned, but not
yet taken, by each Transferred Employee as of the Closing Date, a record of
which shall be delivered by Sellers to Purchaser promptly following the Closing
Date.
(e)    The Sellers shall be responsible for the payment of any severance payment
or benefits that become due to any current or former employee, officer,
director, member, partner, or independent contractor as a result of the
termination of such individual by any Seller, including any such Employees that
incur a termination of employment in connection with the Closing. The Sellers
shall be responsible for all legally mandated health care continuation coverage
for their current and former employees (and their qualified beneficiaries) who
had or have a loss of coverage due to a “qualifying event” (within the meaning
of Section 603 of ERISA) which occurred or occurs on or prior to the Closing
Date including, without limitation, any loss of coverage that results directly
or indirectly from the transactions contemplated by this Agreement. The
Purchaser shall be responsible for any severance benefits for any Transferred
Employee who terminates employment with the Purchaser after the Closing Date.
(f)    Purchaser shall assume the Assumed Plans. Purchaser shall deliver a list
of the Assumed Plans to Company at least two (2) days prior to the Closing.
Purchaser, on the one hand, and the Sellers, on the other, shall take such
actions as are necessary and reasonably requested by the other Party to cause
Purchaser to assume sponsorship of the Assumed Plans as of the Closing and to
effect the transfer of all assets and benefit liabilities of the Assumed Plans
together with all related trust, insurance policies, and administrative services
agreements, effective as soon as practicable following the Closing; provided,
however, that Purchaser is not assuming, nor shall it be responsible for, any
Liabilities or obligations arising under an Assumed Plan that relate to any
employee or former employee of the Sellers who does not become a Transferred
Employee (except to cause payment for any claim appropriately covered by a
transferred insurance policy), or with respect to any claims incurred under any
such Assumed Plans prior to the Closing. For purposes of this Agreement, a claim
is deemed incurred when the services that are the subject of the claim are
performed; in the case of life insurance, when the death occurs, in the case of
long-term disability benefits, when the disability occurs and, in the case of a
hospital stay, when the employee first enters the hospital.
(g)    On or before the Closing Date, the Purchaser or one of its Affiliates
shall have offered an employment agreement to each of the Key Employees
(collectively, the “Employment Contracts”) with effectiveness as of and
contingent upon the Closing.
(h)    On and following the Agreement Date, Sellers and Purchaser shall
reasonably cooperate in all matters reasonably necessary to effect the
transactions contemplated by this Section 6.1, including exchanging information
and data relating to workers’ compensation, employee benefits, and employee
benefit plan coverage, and in obtaining any governmental approvals required
hereunder, except as would result in the violation of any applicable Law,
including without limitation, any Law relating to the safeguarding of data
privacy.
(i)    The provisions of this Section 6.1 are for the sole benefit of the
parties to this Agreement only and shall not be construed to grant any rights,
as a third party beneficiary or otherwise, to any person who is not a party to
this Agreement, nor shall any provision of this Agreement be deemed to be the
adoption of, or an amendment to, any employee benefit plan, as that term is
defined in Section 3(3) of ERISA, or otherwise to limit the right of Purchaser
or the Sellers or any of their Affiliates to amend, modify, or terminate any
such employee benefit plan. In addition, nothing contained herein shall be
construed to (i) prohibit any amendments to or termination of any employee
benefit plans or (ii) prohibit the termination or change in terms of employment
of any employee (including any Transferred Employee) as permitted under
applicable Law. Nothing herein, expressed or implied, shall confer upon any
employee (including any Transferred Employee) any rights or remedies (including,
without limitation, any right to employment or continued employment for any
specified period) of any nature or kind whatsoever, under or by reason of any
provision of this Agreement.

ARTICLE VII.    

BANKRUPTCY COURT MATTERS

7.1    Approval of Bid Protections. Subject to the entry of the Bidding
Procedures Order, in consideration for Purchaser having expended considerable
time and expense in connection with this Agreement and the negotiation hereof
and the identification and quantification of assets of Sellers, Sellers shall
pay the Bid Protections to Purchaser promptly upon the effective date of
termination of this Agreement (and in no event later than three (3) Business
Days after such termination) in accordance with, and only to the extent provided
in, the provisions of Section 3.5, and the Bidding Procedures Order. The
obligations of Seller to pay the Bid Protections (i) shall be entitled to
super-priority administrative expense claim status under sections 503(b)(1)(A)
and 507(a)(2) of the Bankruptcy Code, (ii) shall not be subordinated to any
other administrative expense claim against the Sellers, other than any adequate
protection order in existence at the time the Bid Protections are approved, and
(iii) shall survive the termination of this Agreement in accordance with Section
3.6.

7.2    Competing Bid and Other Matters.
(a)    Within two (2) business days following the Petition Date, Seller shall
file with the Bankruptcy Court an application or motion seeking approval of (i)
the Bidding Procedures Order and (ii) the form of this Agreement (a true and
complete copy of which shall be attached to such application or motion without
schedules) and the Sellers’ authority to enter into this Agreement (the “Sale
and Bidding Procedures Motion”); provided, that such application or motion and
all exhibits thereto shall be in form and substance reasonably acceptable to
Purchaser.
(b)    This Agreement and the transactions contemplated hereby are subject to
Sellers’ right and ability to consider higher or otherwise better competing bids
with respect to the Business and a material portion of the Purchased Assets
pursuant to the Bidding Procedures Order (each a “Competing Bid”).
(c)    If an Auction is conducted, and Purchaser is not the prevailing party at
the conclusion of such Auction (such prevailing party, the “Prevailing Bidder”),
Purchaser shall, if its bid is determined to be the next highest bid, serve as a
back-up bidder (the “Back-up Bidder”) and keep Purchaser’s bid to consummate the
transactions contemplated by this Agreement on the terms and conditions set
forth in this Agreement (as the same may be improved upon in the Auction) open
and irrevocable until 5:00 p.m. (prevailing Eastern time) on the date which is
thirty (30) days after the date of the Sale Hearing (the “Outside Back-up
Date”).
(d)    The Sellers shall promptly serve true and correct copies of the Sale and
Bidding Procedures Motion and all related pleadings in accordance with the
Bidding Procedures Order, the Bankruptcy Code, the Federal Rules of Bankruptcy
Procedure, the Local Rules for the United States Bankruptcy Court for the
District of Delaware and any other applicable order of the Bankruptcy Court.

7.3    Sale Order. The Sale Order shall be entered by the Bankruptcy Court. The
Sale Order shall, among other things, (i) approve, pursuant to sections 105, 363
and 365 of the Bankruptcy Code, (A) the execution, delivery, and performance by
Sellers of this Agreement, (B) the sale of the Purchased Assets to Purchaser on
the terms set forth herein, free and clear of all Claims, Liabilities and
Encumbrances (other than Encumbrances included in the Assumed Liabilities and
Permitted Encumbrances), and (C) the performance by Sellers of their respective
obligations under this Agreement; (ii) authorize and empower Sellers to assume
and assign to Purchaser the Assigned Contracts; and (iii) find that Purchaser is
a “good faith” buyer within the meaning of section 363(m) of the Bankruptcy
Code, not a successor to any Sellers and grant Purchaser the protections of
section 363(m) of the Bankruptcy Code. Purchaser agrees that it will promptly
take such actions as are reasonably requested by Sellers to assist in obtaining
Bankruptcy Court approval of the Sale Order, including furnishing affidavits or
other documents or information for filing with the Bankruptcy Court for
purposes, among others, of (a) demonstrating that Purchaser is a “good faith”
purchaser under section 363(m) of the Bankruptcy Code, and (b) establishing
adequate assurance of future performance within the meaning of section 365 of
the Bankruptcy Code.

7.4    Contracts. Sellers shall serve on all non-Seller counterparties to all of
their Contracts a notice specifically stating that Sellers are or may be seeking
the assumption and assignment of such Contracts and shall notify such non-Seller
counterparties of the deadline for objecting to the Cure Costs, if any.

7.5    Bankruptcy Filings. From and after the Agreement Date and until the
Closing Date, Sellers shall deliver to Purchaser drafts of any and all
pleadings, motions, notices, and all material statements, schedules,
applications, reports, and other papers to be filed or submitted in connection
with this Agreement for Purchaser’s prior review and comment. Sellers shall use
commercially best efforts to ensure that such filings are delivered to Purchaser
no later than two (2) Business Days prior to filing. Such filings shall be
reasonably acceptable to Purchaser to the extent they relate to the DIP
financing, Purchased Assets, any Assumed Liabilities or any of Purchaser’s
obligations hereunder. Sellers agree to diligently prosecute the entry of the
Bidding Procedures Order and the Sale Order. In the event the entry of the
Bidding Procedures Order or the Sale Order shall be appealed, Sellers shall use
their best efforts to defend such appeal. Sellers shall comply with all notice
requirements (i) of the Bankruptcy Code and the Federal Rules of Bankruptcy
Procedure, or (ii) imposed by the Sale Order, in each case, in connection with
any pleading, notice, or motion to be filed in connection herewith.

7.6    Sale Free and Clear. Sellers acknowledge and agree, and the Sale Order
shall provide that, on the Closing Date and concurrently with the Closing, all
then existing or thereafter arising obligations, Liabilities, Claims and
Encumbrances of, against or created by Sellers or their bankruptcy estate, to
the fullest extent permitted by section 363 of the Bankruptcy Code, shall be
fully released from and with respect to the Purchased Assets. On the Closing
Date, the Purchased Assets shall be transferred to Purchaser free and clear of
all obligations, Claims, Liabilities, and Encumbrances, other than Permitted
Encumbrances and the Assumed Liabilities to the fullest extent permitted by
section 363 of the Bankruptcy Code.

ARTICLE VIII.    

COVENANTS AND AGREEMENTS

8.1    Conduct of Business of Sellers. During the Pre-Closing Period, Sellers
shall use commercially reasonable efforts, except as otherwise required,
authorized, or restricted pursuant to the Bankruptcy Code or an Order of the
Bankruptcy Court, to operate the Business in the Ordinary Course of Business.
Sellers shall use commercially reasonable efforts to (A) preserve intact their
respective business organizations, (B) maintain the Business and the Purchased
Assets (normal wear and tear excepted), (C) keep available the services of their
respective officers and Employees, (D) maintain satisfactory relationships with
licensors, licensees, suppliers, contractors, distributors, consultants,
customers, vendors, and others having business relationships with Sellers in
connection with the operation of the Business (other than payment of
pre-petition claims), (E) pay all of their respective post-petition obligations
in the Ordinary Course of Business, and (F) continue to operate the Business and
Purchased Assets in all material respects in compliance with all Orders and Laws
applicable to the Business and Sellers. Without limiting the generality of the
foregoing, and except (i) as otherwise expressly provided in or contemplated by
this Agreement, or (ii) required, authorized, or restricted pursuant to the
Bankruptcy Code or an Order of the Bankruptcy Court, on or prior to the Closing
Date, Sellers may not, without the prior written consent of Purchaser, take any
of the following actions with respect to the Business or the Purchased Assets:
(a)    except as set forth in Schedule 8.1(a), remove or permit to be removed
from any building, facility, or real property any asset, equipment, machinery,
or any Inventory (other than in connection with the sale of Inventory in the
Ordinary Course of Business and the sale of fixtures, equipment and related
assets in connection with the closing of facilities in an amount not to
exceed $1,000);
(b)    sell, lease, or otherwise dispose of, mortgage, hypothecate, or otherwise
encumber any asset (other than sales of Inventory in the Ordinary Course of
Business and other than any liens provided for in the DIP Order);
(c)    enter into, amend, terminate or renew any Contract if such entry,
amendment, termination or renewal would result in an obligation of any Seller in
excess of $100,000;
(d)    fail to use commercially reasonable efforts to maintain the validity of
Sellers’ rights in, to, or under any Seller Intellectual Property;
(e)    fail to use best efforts to maintain all material Permits of Sellers,
used in the operation of the Business or the Purchased Assets;
(f)    make any unusual or extraordinary efforts to collect any outstanding
Accounts Receivable or intercompany obligation, liability, or Indebtedness, give
any discounts or concessions for early payment of such Accounts Receivable or
intercompany obligation, Liability, or Indebtedness, other than discounts
consistent with past practice and given by the Business in the Ordinary Course
of Business and make any sales of, or other than liens provided for in the DIP
Order, convey any interest in, any Accounts Receivable or intercompany
obligation, Liability, or Indebtedness to any third party;
(g)    other than transactions pursuant to agreements or arrangements in effect
on the Petition Date as set forth on Schedule 8.1(g), engage in any transaction
with any Affiliate, subsidiary, shareholder, officer or director of any Seller,
incur or assume any long term or short term debt with or on behalf of any such
Person or guarantee, endorse or otherwise be liable or responsible (whether
directly, indirectly, contingently or otherwise) for the obligations of any such
Person;
(h)    make any change in their method of accounting, except as required
by GAAP;
(i)    fail to maintain any insurance policy in effect on the Agreement Date or
amend any such policy (other than extensions, replacements or amendments thereof
in the Ordinary Course of Business);
(j)    accelerate the payment of any obligation, Liability or Indebtedness of
any Seller;
(k)    make or change any Tax election, file any Tax Return (other than
consistent with past practice and applicable Law), file any amended Tax Return,
enter into any closing agreement, settle any Tax claim or assessment, surrender
any right to claim a refund of Taxes, consent to any extension or waiver of the
limitation period applicable to any Tax claim or assessment, incur any liability
for Taxes outside the Ordinary Course of Business, fail to pay any Tax that
becomes due and payable (including any estimated tax payments), prepare or file
any Tax Return in a manner inconsistent with past practice, or adopt or change
any accounting method in respect of Taxes;
(l)    establish, enter into, terminate, adopt or amend any Benefit Plan (other
than (i) amendments required by Law or to maintain the tax qualified status of
any Benefit Plan under Section 401(a) of the Code and (ii) any Court-approved
employee incentive or retention plan that constituted an Excluded Liability
hereunder), or any other plan, trust, policy, agreement, program or arrangement
for the benefit of any current or former employees or other service providers,
including but not limited to, any change in control or severance agreement;
(m)    loan to, or enter into any other transaction (other than in the Ordinary
Course of Business) with, any employee, officer, director, or independent
contractor;
(n)    settle or agree to settle any pending or threatened Action or litigation;
(o)    agree, whether in writing or otherwise, to do any of the foregoing; or
(p)    amend, terminate or renew any Contract listed on Schedule 1.6(a);
(q)    take, or commit or otherwise obligate any Seller to take, any other
action which would be required to be disclosed under Section 4.16 if such action
had occurred prior to the date hereof.

8.2    Access to Information. Sellers agree that, between the Agreement Date and
the earlier of the Closing Date and the date on which this Agreement is
terminated in accordance with Section 3.4, Purchaser shall be entitled, through
its officers, employees, legal counsel, accountants, and other authorized
representatives, agents, and contractors (“Representatives”), to have such
reasonable access to and make such reasonable investigation and examination of
the books and records, properties, businesses, assets, Employees, accountants,
auditors, counsel, and operations of Sellers as Purchaser’s Representatives may
reasonably request. Any such investigations and examinations shall be conducted
during regular business hours upon reasonable advance notice and under
reasonable circumstances. Each Seller shall use commercially reasonable efforts
to cause its Representatives to cooperate reasonably with Purchaser and
Purchaser’s Representatives in connection with such investigations and
examinations, and Purchaser shall, and shall use its commercially reasonable
efforts to cause its Representatives to, cooperate reasonably with the Sellers
and their respective Representatives, and shall use its commercially reasonable
efforts to minimize any disruption to the Business.

8.3    Assignability of Certain Contracts. To the extent that the assignment to
Purchaser of any Assigned Contract pursuant to this Agreement is not permitted
without the consent of a non-Seller counterparty and such restriction cannot be
overridden effectively or canceled by the Sale Order or other related order of
the Bankruptcy Court, then this Agreement will not be deemed to constitute an
assignment of or an undertaking or attempt to assign such Contract or any right
or interest therein unless and until such consent is obtained; provided,
however, that the Parties will use their commercially reasonable efforts, before
the Closing, to obtain all such consents; provided, further, that, subject to
Section 9.3, if any such consents are not obtained prior to the Closing Date,
Sellers and Purchaser will, at the election of Purchaser, cooperate reasonably
with each other in any lawful and feasible arrangement designed to provide
Purchaser with the benefits and obligations of any such Contract.

8.4    Rejected Contracts. Sellers shall not reject any Assigned Contract in any
bankruptcy proceeding following the Agreement Date without the prior written
consent of Purchaser.

8.5    Reasonable Efforts; Cooperation.
(a)    Subject to the other provisions hereof, and unless this Agreement is
terminated in accordance with its terms, each Party shall use its commercially
reasonable efforts to perform its obligations hereunder and to take, or cause to
be taken, and do, or cause to be done, all things necessary, proper, or
advisable under applicable Law to cause the transactions contemplated herein to
be effected as soon as practicable, but, in any event, on or prior to the
Outside Date, in accordance with the terms hereof and shall cooperate in a
commercially reasonable manner with each other Party and its Representatives in
connection with any step required to be taken as a part of its obligations
hereunder.
(b)    In the event that any of the Parties to this Agreement discovers a
Contract related to the Business, the Purchased Assets, or the Assumed
Liabilities during the period from and after the Agreement Date, and such
Contract (i) was unknown as of the Agreement Date, (ii) is a Contract that
Purchaser wishes to assume the rights and obligations of, and (iii) such
Contract is not a Rejected Contract, Purchaser and Seller shall execute,
acknowledge, and deliver such other instruments and take such further actions as
are reasonably practicable for Purchaser to assume the rights and obligations
under such Contract at the Closing.
(c)    The obligations of Seller pursuant to this Section 8.5 shall be subject
to any orders entered, or approvals or authorizations granted or required, by
the Bankruptcy Court or under the Bankruptcy Code (including in connection with
the Bankruptcy Cases), and each of Sellers’ obligations as a debtor in
possession to comply with any order of the Bankruptcy Court (including the
Bidding Procedures Order or the Sale Order) and Sellers’ duty to seek and obtain
the highest or otherwise best offer for the Business as required by the
Bankruptcy Code.
(d)    Purchaser shall make available to Sellers, without charge to Sellers,
such information reasonably necessary to assist Sellers to wind up Sellers’
operations following the Closing, as needed, resolve the Bankruptcy Cases, and
dissolve any or all of the Sellers. Any information obtained under this Section
8.5(d) shall be kept confidential except as may be otherwise necessary in
connection with the filing of Tax Returns or claims for refund or in conducting
any audit or other proceeding.
(e)    Sellers, on the one hand, and Purchaser, on the other hand, (i) shall
promptly inform each other of any communication from any Governmental Body
concerning this Agreement, the transactions contemplated hereby, and any filing,
notification, or request for approval and (ii) shall permit the other to review
in advance, with a reasonable opportunity for comment thereon, any proposed
written or material oral communication or information submitted to any such
Governmental Body in response thereto. In addition, none of Parties shall agree
to participate in any meeting with any Governmental Body with respect to any
filings, investigation, or other inquiry with respect to this Agreement or the
transactions contemplated hereby, unless such Party consults with the other
Parties in advance and, unless prohibited by any such Governmental Body, gives
the other Parties the opportunity to attend and participate, in each case to the
maximum extent practicable. Subject to restrictions under any Order or Law,
Purchaser, on the one hand, and Sellers, on the other hand, shall furnish the
other with copies of all correspondences, filings, and communications (and
memoranda setting forth the substance thereof) between it and its Affiliates and
their respective Representatives on the one hand, and the Governmental Body or
members of its staff on the other hand, with respect to this Agreement, the
transactions contemplated hereby (excluding documents and communications which
are subject to preexisting confidentiality agreements or to the attorney-client
privilege or work product doctrine or which refer to valuation of the Business),
or any such filing, notification, or request for approval. Each Party shall also
furnish the other Party with such necessary information and assistance as such
other Party and its Affiliates may reasonably request in connection with their
preparation of necessary filings, registration, or submissions of information to
the Governmental Body in connection with this Agreement, the transactions
contemplated hereby and any such filing, notification, or request for approval.
Each Party shall be responsible for payment of its own respective costs and
expenses (including attorneys’ fees and other legal fees and expenses) in
respect of such actions.
(f)    Sellers shall assist the Purchaser, upon Purchaser’s request, in the
Purchaser’s submission of all required filings, notifications, or applications
to all applicable Governmental Bodies in connection with or arising from the
transactions contemplated by this Agreement, including without limitation, the
transfer of the Permits to the Purchaser or its designee.

8.6    Further Assurances. Each Party shall execute and cause to be delivered to
each other Party such instruments and other documents, and shall take such other
actions, as such other Party may reasonably request (prior to, at, or after the
Closing) for the purpose of carrying out or evidencing any of the transactions
contemplated by this Agreement. If, following the Closing, any Seller receives
or becomes aware that it holds any asset, property or right which constitutes a
Purchased Asset, then Sellers shall transfer such asset, property or right to
the Purchaser and/or, as applicable, one or more designees of the Purchaser as
promptly as practicable for no additional consideration. If, following the
Closing, the Purchaser receives or becomes aware that it holds any asset,
property or right which constitutes an Excluded Asset, then the Purchaser shall
transfer such asset, property or right to the Sellers as promptly as practicable
for no additional consideration.

8.7    Notification of Certain Matters. Sellers shall give prompt notice to
Purchaser, and Purchaser shall give prompt notice to Sellers, of (i) any notice
or other communication from any Person alleging that the consent of such Person
which is or may be required in connection with the transactions contemplated by
this Agreement or the Ancillary Documents is not likely to be obtained prior to
Closing, (ii) any written objection or proceeding that challenges the
transactions contemplated hereby or the entry of the Bidding Procedures Order or
the Sale Order, and (iii) the status of matters relating to the completion of
the transactions contemplated hereby, including furnishing promptly the other
with copies of notices or other communications received by Sellers or Purchaser
or by any of their respective Affiliates (as the case may be), from any third
party and/or any Governmental Body with respect to the transactions contemplated
by this Agreement.

8.8    Confidentiality.
(a)    Purchaser acknowledges that the confidential information provided in
connection with this Agreement, including under Section 8.2, and the
consummation of the transactions contemplated hereby, is subject to the terms
and conditions of that certain Confidential Disclosure Agreement, dated as of
December 22, 2019 (the “Confidentiality Agreement”). As of the Closing, the
Purchaser’s obligations under the Confidentiality Agreement related to (i)
non-use, non-disclosure and return or destruction of Evaluation Material (as
defined in the Confidentiality Agreement) to the extent related to the Business,
the Purchased Assets and the Assumed Liabilities shall terminate and (ii)
non-solicitation of employees shall terminate with respect to the Transferred
Employees; provided, that any action of Purchaser pursuant to Section 6.1 shall
not constitute a violation of the Confidentiality Agreement. All other
provisions of the Confidentiality Agreement shall remain in full force and
effect in accordance with their terms.
(b)    Following the completion of the Auction, Sellers agree (A) not to
disclose to any Person, or use or otherwise exploit for their benefit any
confidential information regarding the Business, the Purchased Assets or the
Assumed Liabilities or any of the discussions or negotiations conducted with
Purchaser in connection with this Agreement and (B) to take all appropriate
steps, to safeguard such confidential information and to protect it against
disclosure, misuse, loss, or theft, provided, that obligations under (A) above
shall not apply to information that becomes generally available to the public
other than as a result of the breach of this Section 8.8(b) or information not
otherwise known by the Sellers that becomes available to any Seller from a
Person other than Purchaser without any breach of such Person’s confidentiality
obligations to any other Person. Notwithstanding the foregoing, Sellers shall be
entitled to disclose (i) any information required to be disclosed by Sellers to
the Bankruptcy Court, the United States Trustee, parties in interest in the
Bankruptcy Cases, other Persons bidding on assets of Sellers, (ii) any
information required to be disclosed by Sellers pursuant to any applicable Law
(including, without limitation, the Bankruptcy Code), legal proceeding, or
Governmental Body, or (iii) any information to Sellers’ counsel and advisors;
provided, that, in each case, (x) such disclosure shall be limited to the
information that is so required to be disclosed and to the Person(s) to whom
such disclosure is required, (y) such counsel and advisors have agreed not to
disclose or use such confidential information except under the conditions that
Sellers are permitted to disclose or use such information pursuant to this
Section 8.8 and (z) if information is required to be disclosed pursuant to
clauses (i) or (ii) above, Seller shall provide Purchaser with prompt notice of
such requirement prior to making any disclosure so that Purchaser may seek at
its own cost and expense an appropriate protective order. Notwithstanding
anything in this Section 8.8 to the contrary, unless disclosure is required by
applicable Law, the confidentiality of any trade secrets of the Business shall
be maintained by Sellers and their Affiliates or Representatives for so long as
such trade secrets continue to be entitled to protection as trade secrets of the
Business.

8.9    Preservation of Records. Sellers (or any subsequently appointed
bankruptcy estate representative, including, but not limited to, a trustee, a
creditor trustee, or a plan administrator) and Purchaser agree that each of them
shall preserve and keep the books and records held by it relating to the
pre-Closing Business for the period commencing on the Agreement Date and ending
on the earlier of (i) such date on which an orderly wind-down of the Sellers’
operations has occurred in the reasonable judgment of Purchaser and Sellers and
(ii) the 36 month anniversary of the Agreement Date, and during such period each
of Seller and Purchaser shall make such books and records available to the other
Parties (and permit such other Party to make extracts and copies of such books
and records at its own expense) as may be reasonably required by such Party in
connection with, among other things, any insurance claims by, legal proceedings,
or Tax audits against or governmental investigations of Sellers or Purchaser or
in order to enable Sellers or Purchaser to comply with their respective
obligations under this Agreement and each other agreement, document, or
instrument contemplated hereby or thereby. In the event any Party wishes to
destroy such records during such 36-month period, such Party shall first provide
ten (10) business days’ prior written notice to the other, and such other Party
shall have the right, at its option and expense, to take possession of such
records within five (5) business days after notice thereof.

8.10    Publicity. Neither Sellers nor Purchaser shall issue any press release
or public announcement concerning this Agreement or the transactions
contemplated hereby without obtaining the prior written approval of the other
party hereto, which approval will not be unreasonably withheld, conditioned or
delayed, unless, in the sole discretion of Purchaser or Seller, disclosure is
otherwise required by applicable Law or by the Bankruptcy Court with respect to
filings to be made with the Bankruptcy Court in connection with this Agreement
or by the applicable rules of any stock exchange on which Purchaser lists
securities or in order to enforce a Party’s rights or remedies under this
Agreement.

8.11    Material Adverse Effect. Sellers shall promptly inform Purchaser in
writing of the occurrence of any event that has had, or is reasonably expected
to have, a Material Adverse Effect.

8.12    Casualty Loss. Notwithstanding any provision of this Agreement to the
contrary, if, before the Closing, all or any portion of the Purchased Assets is
(a) condemned or taken by eminent domain, (b) is damaged, destroyed stolen or
lost, Seller shall notify Purchaser promptly in writing of such fact, (i) in the
case of condemnation or taking, Seller shall assign or pay, as the case may be,
any proceeds thereof to Purchaser at the Closing, and (ii) in the case of
damage, destruction, loss or theft, Seller shall assign the insurance proceeds
therefrom to Purchaser at the Closing. Notwithstanding the foregoing, the
provisions of this Section 8.12 shall not in any way modify Purchaser’s other
rights under this Agreement, including any applicable right to terminate the
Agreement if any condemnation, taking, loss, theft, damage, or other destruction
resulted in a Material Adverse Effect or otherwise pursuant to Section 3 hereof.

8.13    No Successor Liability. The Parties intend that, except where prohibited
expressly under applicable Law, upon the Closing, Purchaser shall not be deemed
to: (i) be the successor of Sellers, (ii) have, de facto or otherwise, merged
with or into Sellers, (iii) be a mere continuation or substantial continuation
of Sellers or the enterprise(s) of Sellers, or (iv) be liable for any acts or
omissions of Sellers in the conduct of the Business or arising under or related
to the Purchased Assets other than as set forth in this Agreement. Without
limiting the generality of the foregoing, and except as otherwise provided in
this Agreement, the Parties intend that Purchaser shall not be liable for any
Encumbrance (other than Assumed Liabilities and Permitted Encumbrances thereon)
against Sellers or any of Sellers’ predecessors or Affiliates, and Purchaser
shall have no successor or vicarious liability of any kind or character whether
known or unknown as of the Closing Date, whether now existing or hereafter
arising, or whether fixed or contingent, with respect to the Business, the
Purchased Assets, or any Liabilities of Sellers arising prior to the Closing
Date.

8.14    Seller Assistance. Sellers agree to use commercially reasonable efforts
to perform, at Purchaser’s expense, but without charge by Sellers, all acts
reasonably necessary to assist Purchaser in perfecting and enforcing the full
benefits, enjoyment, rights and title throughout the world in the Patents
included in the Purchased Assets (the “Transferred Patents”). Such acts may
include (a) execution of documents, (b) assistance in the filing, registration,
and/or enforcement of Transferred Patents or other legal proceedings relating
thereto (including providing documents and materials in the possession or
control of Sellers and testifying as a witness), and (c) assistance in
contacting and securing the cooperation of relevant third parties (e.g., the
inventor of the Transferred Patents), including obtaining such individuals'
execution of documents and encouraging each such individual to appear as a
witness if requested by the Purchaser. A portion of the Purchase Price is paid
by Purchaser as consideration to ensure Sellers’ assistance as described in this
Section 8.14.

ARTICLE IX.    

CONDITIONS TO CLOSING

9.1    Conditions Precedent to the Obligations of Purchaser and Sellers. The
respective obligations of each Party to this Agreement to consummate the
transactions contemplated by this Agreement are subject to the satisfaction (or
to the extent permitted by Law, written waiver by each of the Sellers and
Purchaser) on or prior to the Closing Date, of each of the following conditions:
(a)    there shall not be in effect, enacted, enforced or entered by a
Governmental Body any Law, Order, writ, injunction, judgment, decision or decree
preventing, enjoining, restraining, making illegal, or otherwise prohibiting the
consummation of the transactions contemplated by this Agreement or the Ancillary
Documents; provided, however, that (i) the right to terminate this Agreement
pursuant to this Section 9.1(a) shall not be available to any Party whose breach
of any of its representations, warranties, covenants or agreements contained
herein results in such Order, writ, injunction, judgment, decision or decree,
and (ii) the Party seeking to terminate this Agreement (and its Affiliates)
shall have used reasonable best efforts to have such Law declared invalid or
inapplicable or such Order, writ, injunction, judgment, decision or decree
vacated.
(b)    the Bankruptcy Court shall have entered the Bidding Procedures Order and
the Sale Order (as provided in Article VII) and each of such orders shall be a
Final Order and in form and substance reasonably satisfactory to Sellers and
Purchaser, which orders shall not have been reversed, modified, amended, or
stayed; and
(c)    to the extent applicable, any waiting period (including any extension
thereof) applicable to the purchase and sale of the Purchased Assets under any
other applicable antitrust or competition Law shall have expired or been
terminated.

9.2    Conditions Precedent to the Obligations of Sellers. The obligations of
Sellers to consummate the transactions contemplated by this Agreement are
subject to the fulfillment, on or prior to the Closing Date, of each of the
following conditions, any of which may be waived in writing by Sellers in their
sole discretion:
(a)    the representations and warranties made by Purchaser in this Agreement or
in any Ancillary Document shall be true and correct in all material respects
(without giving effect to any materiality or similar qualification contained
therein), in each case as of the Agreement Date and as of the Closing Date, with
the same force and effect as though all such representations and warranties had
been made as of the Closing Date (other than representations and warranties that
by their terms address matters only as of another specified date, which shall be
so true and correct only as of such other specified date), except where the
failure of such representations or warranties to be so true and correct has not
had, and would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on Purchaser’s ability to consummate the
transactions contemplated hereby;
(b)    Purchaser shall have performed and complied in all material respects with
all obligations and agreements required by this Agreement to be performed or
complied with by Purchaser on or prior to the Closing Date; and
(c)    Purchaser shall have delivered, or caused to be delivered, to Sellers all
of the items set forth in Section 3.3.

9.3    Conditions Precedent to the Obligations of Purchaser. The obligations of
Purchaser to consummate the transactions contemplated by this Agreement are
subject to the fulfillment, on or prior to the Closing Date, of each of the
following conditions, any of which may be waived in writing by Purchaser in its
sole discretion:
(a)    the representations and warranties made by the Sellers in this Agreement
and in any Ancillary Document (A) that are not qualified by “Material Adverse
Effect” or other materiality qualifiers shall be true and correct in all
material respects (without giving effect to any materiality or similar
qualification contained therein), and (B) that are qualified by “Material
Adverse Effect” or other materiality qualifiers shall be true and correct in all
respects, in each case as of the Agreement Date and as of the Closing Date, with
the same force and effect as though all such representations and warranties had
been made as of the Closing Date (other than representations and warranties that
by their terms address matters only as of another specified date, which shall be
so true and correct only as of such other specified date);
(b)    Sellers shall have delivered to Purchaser a certified copy of the Sale
Order;
(c)    Sellers shall have performed and complied in all material respects with
all obligations and agreements required in this Agreement to be performed or
complied with by them on or prior to the Closing Date;
(d)    [Intentionally omitted]
(e)    Sellers shall have delivered, or caused to be delivered, to Purchaser,
all of the items set forth in Section 3.2;
(f)    Sellers shall have complied with the sale process deadlines set forth in
the Bidding Procedures Order in all material respects;
(g)    Sellers shall have delivered duly executed consents, in form and
substance and on terms satisfactory to the Purchaser, to the extent necessary to
effect the valid and effective assignment to the Purchaser of the Contracts set
forth on Schedule 9.3(g);
(h)    Sellers shall have complied with all of Seller’s obligations under the
patent license agreement with Roche Diabetes Care, Inc. dated 16 July 2019 (the
“Roche License Agreement”), and no material breach of the terms of, or material
default under, the Roche License Agreement (including, for the avoidance of
doubt, the breach of any payment obligations thereunder, which shall be deemed
material), shall have occurred and not been cured in accordance with the terms
of the Roche License Agreement;
(i)    [Intentionally omitted]
(j)    the Permits listed on Schedule 9.3(j) shall be in full force and effect,
and any application, maintenance or renewal costs with respect thereto shall
have been fully paid as of the Closing;
(k)    the Permits listed on Schedule 9.3(k) shall have been validly transferred
to the Purchaser or its designee and all applicable Governmental Bodies shall
have provided all required approvals in connection with or arising from the
transfer of such Permits;
(l)     (a) Sellers shall have provided to Purchaser, no later than 5:00 pm,
Eastern Time, March 13, 2020 (the “Manufacturing Deadline”), lot release testing
data for the first ten (10) lots utilizing the KIS Springs consisting of the
four (4) V-Go 20 Lots and the six (6) V-Go 30 Lots (provided, that the
Manufacturing Deadline may be extended by the mutual written consent of the
Parties), and (b) at least three (3) of the V-Go 20 Lots and at least four (4)
of the V-Go 30 Lots shall have passed the lot release specifications in the
applicable 510(k) currently approved by the FDA;
(m)    Sellers shall have delivered duly executed amendments to such contracts
listed on Schedule 4.10, reasonably requested by the Purchaser, to the extent
necessary to prevent the occurrence of a Material Adverse Effect; and
(n)    Substantially all of the Employees to whom the Purchaser (or its
designee) has offered employment to prior to the Closing (such Employees to whom
offers are made, the “Offered Employees”), including each Key Employee and at
least seventy-five percent (75%) of the Offered Employees, shall have accepted
and not rescinded offers of employment with the Purchaser (or its designee) as
of the Closing on terms reasonably satisfactory to the Purchaser.

ARTICLE X.    

ADDITIONAL DEFINITIONS

10.1    Definitions. As used herein:
“503(b)(9) Claim” means any Claim asserted pursuant to section 503(b)(9) of the
Bankruptcy Code.
“Accounts Receivable” shall have the meaning set forth in Section 1.1(c).
“Action” means any action, claim, complaint, grievance, summons, suit,
litigation, arbitration, mediation, proceeding (including any civil, criminal,
administrative, investigative, or appellate proceeding), prosecution, contest,
hearing, inquiry, inquest, audit, examination, or investigation by or before any
Governmental Body.
“Affiliate” means, with respect to any Person, any other Person that, directly
or indirectly through one or more intermediaries, controls, or 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 (i) 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 or (ii) an officer,
director, or any Person that has the power, directly or indirectly, to vote 5%
or more of the securities having ordinary voting power for the election of
directors (or persons performing similar functions) of such Person.
“Affiliate Agreement” means any agreement or contract between any director,
officer, employee or greater than five percent (5%) stockholder of any Seller or
Affiliate of any such Person, on one hand, and any Seller, on the other hand,
related to the Business, including any contract providing for the employment of,
furnishing of services by, rental of real or personal property from or otherwise
requiring payments to any such Person or firm, other than employment-at-will
arrangements in the Ordinary Course of Business.
“Agreement” shall have the meaning set forth in the preamble.
“Agreement Date” shall have the meaning set forth in the preamble.
“Allocation” shall have the meaning set forth in Section 11.2.
“Alternative Transaction” means (i) the approval by the Bankruptcy Court of a
sale or sales of a material portion of the Purchased Assets to a Person other
than Purchaser, or (ii) the filing of a plan of reorganization that does not
contemplate the sale of the Purchased Assets to Purchaser in accordance with the
terms hereof.
“Ancillary Documents” means any certificate, agreement, document or other
instrument (other than this Agreement) to be executed and delivered by a Party
in connection with the consummation of the transactions contemplated this
Agreement.
“Assigned Contracts” shall have the meaning set forth in Section 1.1(b).
“Assignment and Assumption Agreement” shall have the meaning set forth in
Section 3.2(b).
“Assumed Leased Real Property” shall have the meaning set forth in Section
1.1(f).
“Assumed Liabilities” shall have the meaning set forth in Section 1.3.
“Assumed Plans” shall have the meaning set forth in Section 1.1(s).
“Assumption and Assignment of Leases” shall have the meaning set forth in
Section 3.2(h).
“Auction” has that meaning ascribed to such term by the Bidding Procedures
Order.
“Avoidance Actions” shall have the meaning set forth in Section 1.1(y).
“Back-up Bidder” shall have the meaning set forth in Section 7.2(c).
“Bankruptcy Cases” shall have the meaning set forth in the Recitals.
“Bankruptcy Code” shall have the meaning set forth in the Recitals.
“Bankruptcy Court” shall have the meaning set forth in the Recitals.
“Bankruptcy Rules” shall have the meaning set forth in the Recitals.
“Benefit Plan” means (i) all “employee benefit plans” (including, without
limitation, as defined in Section 3(3) of ERISA) and any other employee benefit
arrangements or payroll practices (including severance pay, vacation pay,
company awards, salary continuation for disability, sick leave, death benefit,
hospitalization, welfare benefit, group or individual health, dental, medical,
life, insurance, fringe benefit, deferred compensation, profit sharing,
retirement, retiree medical, supplemental retirement, bonus or other incentive
compensation, stock purchase, equity-based, stock option, stock appreciation
rights, restricted stock and phantom stock arrangements or policies) and (ii)
all other employment, termination, bonus, severance, change in control,
collective bargaining, or other similar plans, programs, policies, contracts, or
arrangements (whether written or unwritten), in each case, adopted, sponsored
by, entered into, maintained, contributed to, or required to be contributed to
by any Seller or any ERISA Affiliate for the benefit of any current or former
employee, director, officer or independent contractor of any Seller, under or
with respect to which any Seller or ERISA Affiliate has or reasonably could have
any Liability.
“Bid Protections” shall have the meaning set forth in Section 3.5.
“Bidding Procedures Order” means an order substantially in the form attached
hereto as Exhibit E and otherwise in form and substance reasonably satisfactory
to Seller and Purchaser.
“Bill of Sale” shall have the meaning set forth in Section 3.2(a).
“Break-Up Fee” shall have the meaning set forth in Section 3.5.
“Business” shall have the meaning set forth in the Section 1.1.
“Business Day” means any day other than a Saturday, Sunday, or other day on
which banks in New York City, New York are authorized or required by Law to be
closed.
“Cash and Cash Equivalents” means all of Sellers’ cash (including petty cash and
checks received or in transit prior to the close of business on the Closing
Date), checking account balances, marketable securities, certificates of
deposits, time deposits, bankers’ acceptances, commercial paper, security
entitlements, securities accounts, commodity Contracts, commodity accounts,
government securities, and any other cash equivalents, whether on hand, in
transit, in banks or other financial institutions, or otherwise held (but
specifically excluding any cash payable by Purchaser to Seller pursuant to this
Agreement).
“Chapter 11 Petition” shall have the meaning set forth in the Recitals.
“Claim” has the meaning given that term in section 101(5) of the Bankruptcy Code
and includes, inter alia, all rights, claims, causes of action, defenses, debts,
demands, damages, offset rights, setoff rights, recoupment right, obligations,
and liabilities of any kind or nature under contract, at law or in equity, known
or unknown, contingent or matured, liquidated or unliquidated, and all rights
and remedies with respect thereto.
“Closing” shall have the meaning set forth in Section 3.1.
“Closing Date” means the date on which the Closing occurs.
“Code” means the United States Internal Revenue Code of 1986, as the same may be
amended from time to time.
“Company” shall have the meaning set forth in the preamble.
“Competing Bid” shall have the meaning set forth in Section 7.2(b).
“Contract” means any written or oral contract, purchase order, service order,
sales order, indenture, note, bond, lease, sublease, license, understanding,
instrument or other agreement, arrangement or commitment that is binding upon a
Person or its property, whether express or implied.
“Copyrights” means all copyrights and copyrightable subject matter.
“Cure Cap” shall have the meaning set forth in Section 1.3(c).
“Cure Costs” means costs that must be paid and obligations that must be
satisfied under section 365 of the Bankruptcy Code in connection with the
assumption and/or assignment of any Assigned Contracts as agreed to among the
various counterparties or as determined by the Bankruptcy Court.
“Debtors” means Valeritas Holdings, Inc. and its direct and indirect
subsidiaries, which all filed for relief under the Bankruptcy Code on February
9, 2020, in the United States Bankruptcy Court for the District of Delaware.
“Deposit” shall have the meaning set forth in Section 2.3.
“DIP Financing Agreements” means that certain Senior Secured Superpriority
Priming Debtor-in-Possession Credit Facility Term Sheet, dated as of February 9,
2020, by and among HB Fund LLC, as lender, Debtors and the Prepetition Secured
Parties (as defined therein).
“DIP Order” means the interim order (i) authorizing the Debtors to obtain
postpetition financing, (ii) authorizing the Debtors to use cash collateral,
(iii) granting liens and providing superpriority administrative expense status,
(iv)  granting adequate protection, (v) modifying the automatic stay, (vi)
scheduling a final hearing, and (vii) granting related relief  and any related
final order (each as amended, modified or supplemented in accordance with the
terms thereof).
“Disclosure Schedules” means the Schedules included with this Agreement pursuant
to Article IV hereof.
“Documents” means all of Sellers’ written files, documents, instruments, papers,
books, reports, records, tapes, microfilms, photographs, letters, budgets,
forecasts, plans, operating records, safety and environmental plans and reports,
data, Permits and Permit applications, studies and documents, Tax Returns,
ledgers, journals, title policies, customer lists, regulatory filings, operating
data and plans, research material, technical documentation (design
specifications, engineering information, test results, maintenance schedules,
functional requirements, operating instructions, logic manuals, processes, flow
charts, etc.), user documentation (installation guides, user manuals, training
materials, release notes, working papers, etc.), marketing documentation (sales
brochures, flyers, pamphlets, web pages, etc.), and other similar materials, in
each case whether or not in electronic form relating to the Business.
“Employee” means an individual who, as of the applicable date, is employed by
any Seller in connection with the Business.
“Employment Contracts” shall have the meaning set forth in Section 6.1(g).
“Encumbrance” means any lien (as defined in section 101(37) of the Bankruptcy
Code), encumbrance, claim (as defined in Section 101(5) of the Bankruptcy Code),
right, demand, charge, mortgage, deed of trust, option, pledge, security
interest or similar interests, title defects, hypothecations, easements, rights
of way, restrictive covenants, encroachments, rights of first refusal,
preemptive rights, judgments, conditional sale or other title retention
agreements and other impositions, imperfections, or defects of title or
restrictions on transfer or use of any nature whatsoever.
“Environmental Law” means any federal, state or local law, statute, regulation,
or ordinance relating to the protection of human health, safety, the
environment, natural resources, or consumer products. “Environmental Liabilities
and Obligations” means all Liabilities arising from any impairment, impact or
damage to the environment, health or safety, or any failure to comply with
Environmental Law in connection with the operation of the Business, the
Purchased Assets, or the Assumed Leased Real Property or any other location
where the Business is currently located or conducted, including Liabilities
related to: (i) the transportation, storage, use, arrangement for disposal or
disposal of, or exposure to, Hazardous Materials; (ii) the Release of Hazardous
Materials, including migration onto or from the Assumed Leased Real Property;
(iii) any other pollution or contamination of the surface, substrata, soil, air,
ground water, surface water or marine environments; (iv) any other obligations
imposed under Environmental Law including pursuant to any applicable Permits
issued pursuant to under any Environmental Law; (v) Orders, notices to comply,
notices of violation, alleged non-compliance and inspection reports with respect
to any Liabilities pursuant to Environmental Law; and (vi) all obligations with
respect to personal injury, property damage, wrongful death and other damages
and losses arising under applicable Environmental Law but only as a result of
any of the matters identified in clauses (i)-(v) of this definition.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and the regulations promulgated thereunder.
“ERISA Affiliate” means any entity which is a member of (A) a controlled group
of corporations (as defined in Section 414(b) of the Code), (B) a group of
trades or businesses under common control (as defined in Section 414(c) of the
Code), (C) an affiliated service group (as defined under Section 414(m) of the
Code) or (D) any group specified in Treasury Regulations promulgated under
Section 414(o) of the Code, any of which includes or included any Seller.
“Escrow Agent” means a third-party entity approved by the Parties that has
fiduciary obligations with respect to the transfer of funds in accordance with
this Agreement and whose actions will be governed by the Escrow Agreement.
“Escrow Agreement” means the agreement substantially in the form attached hereto
as Exhibit G.
“Excluded Assets” shall have the meaning set forth in Section 1.2.
“Excluded Contracts” shall have the meaning set forth in Section 1.1.
“Excluded Intellectual Property” shall have the meaning set forth in Section
1.2.
“Excluded Liabilities” shall have the meaning set forth in Section 1.4.
“Expense Reimbursement” shall mean the reasonable and documented out-of-pocket
fees, costs, and expenses of the Purchaser (including attorneys’ costs and fees
and the costs and fees of any other advisor to Purchaser), subject to a cap of
US$1,000,000.
“Final Order” means an order or judgment of the Bankruptcy Court or any other
court of competent jurisdiction entered by the Clerk of the Bankruptcy Court or
such other court on the docket in Sellers’ Bankruptcy Cases or the docket of
such other court, which has not been modified, amended, reversed, vacated, or
stayed and as to which (a) the time to appeal, petition for certiorari, or move
for a new trial, reargument or rehearing has expired and as to which no appeal,
petition for certiorari or motion for new trial, reargument, or rehearing shall
then be pending or (b) if an appeal, writ of certiorari new trial, reargument or
rehearing thereof has been sought, such order or judgment of the Bankruptcy
Court or other court of competent jurisdiction shall have been affirmed by the
highest court to which such order was appealed, or certiorari shall have been
denied, or a new trial, reargument, or rehearing shall have been denied or
resulted in no modification of such order, and the time to take any further
appeal, petition for certiorari, or move for a new trial, reargument or
rehearing shall have expired, as a result of which such order shall have become
final in accordance with Rule 8002 of the Federal Rules of Bankruptcy Procedure;
provided, that the possibility that a motion under Rule 60 of the Federal Rules
of Civil Procedure, or any analogous rule under the Bankruptcy Rules, may be
filed relating to such order, shall not cause such order not to be a Final
Order.
“Financial Statements” shall have the meaning set forth in Section 4.14.
“GAAP” means United States generally accepted accounting principles as in effect
from time to time.
“Governmental Body” means any government, quasi-governmental entity, or other
governmental or regulatory body, agency or political subdivision thereof of any
nature, whether national, international, multi-national, supra-national,
federal, state, or local, or any agency, branch, department, official, entity,
instrumentality, or authority thereof, or any court or arbitrator (public or
private) of applicable jurisdiction.
“Hazardous Material” means any substance, material or waste which is regulated
by any Governmental Body, including petroleum and its by-products, asbestos,
polychlorinated biphenyls and any material, waste or substance which is defined
or identified as a “hazardous waste,” “hazardous substance,” “hazardous
material,” “restricted hazardous waste,” “industrial waste,” “solid waste,”
“contaminant,” “pollutant,” “toxic waste” or “toxic substance” or otherwise
regulated under or subject to any provision of Environmental Law.
“Healthcare Laws” means (i) the Federal Food, Drug, and Cosmetic Act and the
Public Health Service Act, and the regulations promulgated thereunder; (ii) all
applicable federal, state, local and foreign health care fraud and abuse laws,
including, without limitation, the U.S. Anti-Kickback Statute (42 U.S.C. Section
1320a-7b(b)), the U.S. Civil False Claims Act (31 U.S.C. Section 3729 et seq.),
18 U.S.C. Sections 286, 287, 1035, 1347, and 1349, the health care fraud
criminal provisions under the Health Insurance Portability and Accountability
Act of 1996 (“HIPAA”) (42 U.S.C. Section 1320d et seq.), the civil monetary
penalties law (42 U.S.C. Section 1320a-7a), the exclusions law (42 U.S.C.
Section 1320a-7), laws governing government funded or sponsored healthcare
programs; (iii) HIPAA, as amended by the Health Information Technology for
Economic and Clinical Health Act (the “HITECH Act”) (42 U.S.C. Section 17921 et
seq.); (iv) the Patient Protection and Affordable Care Act of 2010, as amended
by the Health Care and Education Reconciliation Act of 2010, including the
Physician Payments Sunshine Act; (v) licensure, quality, safety and
accreditation requirements under applicable federal, state, local or foreign
Laws or Governing Bodies; and (vi) all other Laws relating to the regulation of
the Sellers or the Sellers’ Business, and (vii) the directives and regulations
promulgated pursuant to such statutes and any applicable state or non-U.S.
counterpart thereof. “Indebtedness” of any Person means, without duplication,
(i) the interest in respect of, principal of and premium (if any) in respect of
(x) indebtedness of such Person for money borrowed and (y) indebtedness
evidenced by notes, debentures, bonds, or other similar instruments for the
payment of which such Person is responsible or liable; (ii) all obligations of
such Person with respect to any Contracts relating to the deferred and unpaid
purchase price of property or services, including any interest accrued thereon
and prepayment or similar penalties and expenses; (iii) all obligations of such
Person under leases required to be capitalized in accordance with GAAP; (iv) all
obligations of such Person for the reimbursement of any obligor on any letter of
credit, banker’s acceptance or similar credit transaction; (v) all obligations
of the type referred to in clauses (i) through (iv) of any Persons for the
payment of which such Person is responsible or liable, directly or indirectly,
as obligor, guarantor, surety or otherwise, including guarantees of such
obligations; and (vi) all obligations of the type referred to in clauses (i)
through (v) of other Persons secured by any Encumbrance (other than Permitted
Encumbrances), on any property or asset of such Person (whether or not such
obligation is assumed by such Person).
“Intellectual Property” means all intellectual property and proprietary rights
of any kind, including the following: (i) Trademarks, slogans, logos, designs,
symbols, trade dress, internet domain names, uniform resource identifiers,
rights in design, brand names, any fictitious names, d/b/a’s or similar filings
related thereto, or any variant of any of them, and other similar designations
of source or origin, together with all goodwill, registrations and applications
related to the foregoing; (ii) Copyrights and copyrightable subject matter
(including any registration and applications for any of the foregoing); (iii)
trade secrets and other confidential or proprietary business information
(including manufacturing and production processes and techniques, research and
development information, technology, intangibles, drawings, specifications,
designs, plans, proposals, technical data, financial, marketing and business
data, pricing and cost information, business and marketing plans, customer and
supplier lists and information), know how, proprietary processes, formulae,
algorithms, models, industrial property rights, and methodologies; (iv) computer
software, computer programs, and databases (whether in source code, object code
or other form); (v) Patents, and (vi) all rights to sue for past, present and
future infringement, misappropriation, dilution or other violation of any of the
foregoing and all remedies at law or equity associated therewith.
“Inventory” means all inventory (including finished goods, supplies, raw
materials, work in progress, spare, replacement, and component parts) related to
the Business maintained or held by, stored by or on behalf of, or in transit to,
any of the Sellers.
“IP Assignment and Assumption Agreement” shall have the meaning set forth in
Section 3.2(i).
“IRS” shall have the meaning set forth in Section 4.12(c).
“Key Employees” means the employees set forth on Schedule 9.3(n).
“Knowledge” or (“Knowledge of Seller” or “Seller Knowledge”) means the actual
knowledge of a natural person, or, with respect to a Person that is not a
natural person, the actual knowledge of the officers or management of any
person, in each case, after due inquiry and including facts of which any such
individual should be aware in the reasonably prudent exercise of his or her
duties.
“Law” means any federal, state, local, municipal, multinational, or other law,
treaty, statute, constitution, principle of common law, resolution, ordinance,
code, edict, decree, rule, regulation, ruling, or requirement issued, enacted,
adopted, promulgated, implemented, or otherwise put into effect by or under the
authority of any Governmental Body, in each case as in effect as of the Closing
Date.
“Lease” means any Personal Property Lease or Real Property Lease.
“Leased Real Property” means all of the real property leased, subleased, used,
or occupied by any of the Sellers, together with all buildings, structures,
fixtures, and improvements erected thereon, and any and all rights privileges,
easements, licenses, hereditaments, and other appurtenances relating thereto,
and used, or held for use, in connection with the operation of the Business.
“Liability” means, as to any Person, any debt, adverse claim, liability
(including any liability that results from, relates to or arises out of tort or
any other product liability claim), duty, responsibility, obligation,
commitment, assessment, cost, expense, loss, expenditure, charge, fee, penalty,
fine, contribution, or premium of any kind or nature whatsoever, whether known
or unknown, asserted or unasserted, absolute or contingent, direct or indirect,
accrued or unaccrued, liquidated or unliquidated, or due or to become due, and
regardless of when sustained, incurred or asserted or when the relevant events
occurred or circumstances existed.
“Locations” shall mean the locations set forth on Schedule 1.1(f).
“Material Adverse Effect” means any event, change, occurrence or state of facts
that has had, or is reasonably likely to have, individually or in the aggregate,
a material adverse effect on the (i) Purchased Assets, Assumed Liabilities, or
Business, taken as a whole, provided, however, that in no event shall any of the
following, alone or in combination, be deemed to constitute, or be taken into
account, in determining whether there has been, or would be, a Material Adverse
Effect: (a) changes in the U.S. economy or capital markets in general but that
do not have a disproportionate effect on the Sellers relative to other
participants in the industry in which the Sellers conduct the Business, (b)
changes that affect generally the industry in which the Sellers operate but that
do not have a disproportionate effect on the Business relative to other
participants in the industry in which the Sellers conduct the Business, (c)
changes after the Agreement Date in any applicable Law or GAAP or (d) the
commencement of the Bankruptcy Cases; or (ii) the ability of Sellers to
consummate the transactions contemplated hereby pursuant to the terms of this
Agreement.
“Order” means any award, writ, injunction, judgment, order, ruling, decision,
subpoena, mandate, precept, command, directive, consent, approval, award, decree
or similar determination, or finding entered, issued, made, or rendered by any
Governmental Body.
“Ordinary Course of Business” means the ordinary and usual course of normal day
to day operations of the Business consistent with past practice.
“Organizational Documents” means, with respect to a particular entity Person,
(i) if a corporation, the articles or certificate of incorporation and bylaws,
(ii) if a general partnership, the partnership agreement and any statement of
partnership, (iii) if a limited partnership, the limited partnership agreement
and certificate of limited partnership, (iv) if a limited liability company, the
articles or certificate of organization or formation and any limited liability
company or operating agreement, (v) if another type of Person, all other charter
and similar documents adopted or filed in connection with the creation,
formation or organization of the Person, and (vi) all amendments or supplements
to any of the foregoing.
“Outside Back-up Date” shall have the meaning set forth in Section 7.2(c).
“Outside Date” shall have the meaning set forth in Section 3.4(b).
“Party” shall have the meaning set forth in the preamble.
“Patent” means any patents and patent applications in any country in the world,
together with any patents that may issue therefrom and any future patent filings
claiming priority to existing patents or patent applications in any country in
the world, including any and all extensions, renewals, continuations,
continuations-in-part, divisionals, patents-of-additions, reissues,
supplementary protection certificates or foreign counterparts of any of the
foregoing and any patents based on applications that claim priority from any of
the foregoing, and the right to claim priority to any of the foregoing.
“Permits” means to the fullest extent permitted under applicable law, all
notifications, licenses, permits (including environmental, construction and
operation permits), franchises, certificates, approvals, consents, waivers,
clearances, exemptions, classifications, registrations, variances, orders,
tariffs, rate schedules, and other similar documents and authorizations issued
by any Governmental Body to any of the Sellers and used, or held for use, in
connection with the operation of the Business or applicable to the Purchased
Assets or the Assumed Liabilities.
“Permitted Encumbrances” means (i) Encumbrances for utilities and current Taxes
not yet due and payable; (ii) easements, rights of way, restrictive covenants,
encroachments, and similar non-monetary encumbrances or non-monetary impediments
against any of the Purchased Assets which do not, individually or in the
aggregate, adversely affect the operation of the Business and, in the case of
the Leased Real Property, which do not, individually or in the aggregate,
adversely affect the use or occupancy of such Leased Real Property as it relates
to the operation of the Business or materially detract from the value of the
Leased Real Property, (iii) applicable zoning Laws, building codes, land use
restrictions, and other similar restrictions imposed by Law, and (iv)
materialmans’, mechanics’, artisans’, shippers’, warehousemans’ or other similar
common law or statutory liens incurred in the Ordinary Course of Business, (v)
licenses granted on a nonexclusive basis in the Ordinary Course of Business and
(vi) such other Encumbrances or title exceptions as Purchaser may approve in
writing in its sole discretion or which do not, individually or in the
aggregate, materially and adversely affect the operation of the Business.
“Person” means an individual, corporation, partnership, limited liability
company, joint venture, association, trust, unincorporated organization, labor
union, estate, Governmental Body, or other entity or group.
“Personal Property Leases” shall have the meaning set forth in Section 4.6.
“Petition Date” means the date on which the Sellers commenced the Bankruptcy
Cases.
“Post-Closing Plans” shall have the meaning set forth in Section 6.1(b).
“Pre-Closing Period” means the period commencing on the Agreement Date and
ending on the earlier of the date upon which this Agreement is terminated
pursuant to Section 3.4 or the Closing Date.
“Pre-Closing Tax Period” means any taxable period (or portion thereof) ending on
or before the Closing Date.
“Prevailing Bidder” shall have the meaning set forth in Section 7.2(c).
“Previously Omitted Contract” shall have the meaning set forth in Section
1.6(b)(i).
“Previously Omitted Contract Designation” shall have the meaning set forth in
Section 1.6(b)(i).
“Previously Omitted Contract Notice” shall have the meaning set forth in
Section 1.6(b)(ii).
“Products” means the products researched, developed, tested, commercialized,
manufactured, sold, licensed or distributed by or on behalf of any of the
Sellers in connection with the Business.
“Purchase Price” shall have the meaning set forth in Section 2.1(a).
“Purchased Assets” shall have the meaning set forth in Section 1.1.
“Purchaser” shall have the meaning set forth in the preamble.
“Real Property Lease” shall have the meaning set forth in Section 1.6(a).
“Registered Intellectual Property” means all applications, registrations and
filings for Intellectual Property that have been registered or filed with or by
any state, government or other public or quasi-public legal authority anywhere
in the world, 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 Approvals” means any consents, waivers, clearances, approvals,
orders, Permits, or authorizations of any Governmental Body, including, but not
limited to, the U.S. Food and Drug Administration (“FDA”), and required in
connection with the execution, delivery and performance of this Agreement of any
Ancillary Document and the consummation of the transactions contemplated hereby
and thereby.
“Rejected Contracts” shall have the meaning set forth in Section 1.6(a)(i).
“Release” means any actual or threatened release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal or leaching into the
indoor or outdoor environment, or including migration to or from a property,
including but not limited to any Leased Real Property.
“Reporting Requirements” shall have the meaning set forth in Section 4.3(d).
“Representatives” shall have the meaning set forth in Section 8.2.
“Sale and Bidding Procedures Motion” shall have the meaning set forth in
Section 7.2(a).
“Sale Hearing” means the hearing to approve this Agreement and seeking entry of
the Sale Order.
“Sale Order” means an order substantially in the form attached hereto as Exhibit
F.
“Sellers” shall have the meaning set forth in the preamble.
“Seller Intellectual Property” means all Intellectual Property owned or
purported to be owned by any Seller, other than Intellectual Property that is
Excluded Intellectual Property.
“Seller Registered Intellectual Property” means all Registered Intellectual
Property included in the Seller Intellectual Property.
“Straddle Period” shall have the meaning set forth in Section 11.1(b).
“Tax” and “Taxes” mean any federal, state, provincial, local, or other income,
gross receipts, sales, value added, use, production, ad valorem, transfer,
franchise, registration, profits, license, lease, service, service use,
withholding, payroll, employment, unemployment, estimated, excise, severance,
environmental, stamp, occupation, premium, property (real or personal), real
property gains, escheat windfall profits, capital, production, recapture, net
worth, surplus, customs, duties, levies, surtaxes or other taxes, fees,
assessments, reassessments or charges of any kind whatsoever, whether disputed
or not, together with any interest, additions, installments or penalties with
respect thereto and any interest in respect of such additions or penalties, in
each case, imposed by a Governmental Body, and any obligations to indemnify or
otherwise assume or succeed to the Tax liability of any other Person.
“Tax Proceeding” means any action, suit, investigation, audit, Claim,
investigation, or other action or proceeding with respect to Taxes.
“Tax Return” means any return, report, information return, declaration, claim
for refund or other document (including any schedule or related or supporting
information) supplied or required to be supplied to any Governmental Body with
respect to Taxes, including amendments thereto.
“Trademarks” means unregistered and registered trademarks, trade names, service
marks, trade dress, design rights, common law trademarks and service marks, and
other similar designations of origin, together with the goodwill symbolized by
any of the foregoing, and any renewals and extensions of the foregoing.
“Transferred Employee” shall have the meaning set forth in Section 6.1(a).
“Treasury Regulations” means the regulations promulgated under the Code by the
United States Department of the Treasury (whether in final, proposed, or
temporary form), as the same may be amended from time to time.
“V-Go 20 Lots” means the V-Go lots containing KIS springs and represented by the
following lot numbers: (i) VG220003B, (ii) VG220006B, (iii) VG220008B and (iv)
VG220012B.
“V-Go 30 Lots” means the V-Go lots containing KIS springs and represented by the
following lot numbers: (i) VG320004B, (ii) VG320005B, (iii) VG320007B, (iv)
VG320009B, (v) VG320010B and (vi) VG320011B.
“WARN Act” means the United States Worker Adjustment and Retraining Notification
Act, and the rules and regulations promulgated thereunder.

ARTICLE XI.    

TAXES

11.1    Certain Taxes.
(a)    Any sales, use, purchase, transfer, franchise, deed, fixed asset, stamp,
documentary, use or other Taxes and recording charges which may be payable by
reason of the sale of the Purchased Assets or the assumption of the Assumed
Liabilities under this Agreement or the transactions contemplated hereby, and
that are not exempt under Section 1146(a) of the Bankruptcy Code (“Transfer
Taxes”), shall be payable one-half by Purchaser and one-half by Sellers. The
Sellers shall, at their own expense, timely file any Tax Return or other
document required to be filed with respect to such Taxes, and Purchaser shall
join in the execution of any such Tax Return if required by Law. Purchaser and
Sellers agree to use their best efforts to obtain any certificate, include a
resale certificate, or other documents from any Governmental Body as may be
necessary to mitigate, reduce, or eliminate any Transfer Tax.
(b)    In the case of any taxable period that begins on or before, and ends
after, the Closing Date (a “Straddle Period”), any real property, personal
property, ad valorem and similar Taxes allocable to the portion of such Straddle
Period ending with the end of the day on the Closing Date shall be equal to the
amount of such Taxes for the entire Straddle Period multiplied by a fraction,
the numerator of which is the number of days during the Straddle Period that is
in the Pre-Closing Tax Period and the denominator of which is the number of days
in the entire Straddle Period, which amount shall be an Excluded Liability.

11.2    Allocation of Purchase Price. As soon as reasonably practicable after
the Closing Date, the Purchaser shall determine the (i) allocation of the
Purchase Price, plus (ii) the Assumed Liabilities, plus (iii) all other items
required to be treated as consideration for federal income Tax purposes, among
the Purchased Assets and the agreements provided herein, for all purposes
(including financial, accounting and Tax) (the “Allocation”) and deliver the
Allocation to the Sellers. The Purchaser and Sellers shall each report the
federal, state and local income and other Tax consequences of the transactions
contemplated hereby in a manner consistent with the Allocation unless otherwise
required pursuant to a “determination” within the meaning of Section 1313 of the
Code. The Sellers shall provide the Purchaser, and the Purchaser shall provide
the Sellers, with a copy of any information required to be furnished to the
Secretary of the Treasury under Code Section 1060. Each Party shall notify the
other Party if it receives notice that the IRS or other Governmental Body
proposes any allocation different than that set forth in the Allocation.

11.3    Cooperation on Tax Matters. The Purchaser and the Sellers agree to
provide each other with such information and assistance as is reasonably
necessary, including access to records, Tax Returns and personnel, for the
preparation and filing of any Tax Returns or for the defense of any Tax claim or
assessment, whether in connection with a Tax Proceeding or otherwise, in each
case related to the Purchased Assets. Any information obtained under this
Section 11.3 shall be kept confidential except as may be otherwise necessary in
connection with the filing of Tax Returns or claims for refund or in conducting
any audit or other proceeding.

11.4    Tax Reporting of Contingent Liabilities. Purchaser and each Seller agree
that the assumption of any deferred revenue obligations with respect to the
Purchased Assets or the Business shall be treated for U.S. federal income tax
purposes as an assumption by Purchaser from the applicable Seller of a
contingent liability and neither Purchaser nor Seller shall take any position
for Tax purposes inconsistent therewith.

ARTICLE XII.    

MISCELLANEOUS

12.1    Payment of Expenses. Except as otherwise provided in this Agreement
(including, but not limited to, Section 3.5 and Section 7.1) and whether or not
the transactions contemplated hereby are consummated, Sellers and the Purchaser
shall bear their own expenses incurred or to be incurred in connection with the
negotiation and execution of this Agreement and the Ancillary Documents and the
consummation of the transactions contemplated hereby and thereby.

12.2    Survival of Representations and Warranties; Survival of Confidentiality.
The Parties agree that the representations and warranties contained in this
Agreement shall expire upon the Closing Date. The Parties agree that the
covenants contained in this Agreement to be performed at or after the Closing
shall survive in accordance with the terms of the particular covenant or until
fully performed.

12.3    Entire Agreement; Amendments, and Waivers. This Agreement, together with
the Ancillary Documents, represents the entire understanding and agreement
between the Parties with respect to the subject matter hereof. This Agreement
may be amended, supplemented, or changed, and any provision hereof may be
waived, only by written instrument making specific reference to this Agreement
signed by the Party against whom enforcement of any such amendment, supplement,
modification, or waiver is sought; provided, that, notwithstanding the
foregoing, the Schedules hereto may be amended in accordance with Section 1.6.
No action taken pursuant to this Agreement, including any investigation by or on
behalf of any Party shall be deemed to constitute a waiver by the Party taking
such action of compliance with any representation, warranty, condition,
covenant, or agreement contained herein. The waiver by any Party of a breach of
any provision of this Agreement shall not operate or be construed as a further
or continuing waiver of such breach or as a waiver of any other or subsequent
breach. No failure on the part of any Party to exercise, and no delay in
exercising, any right, power, or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of such right, power or remedy
by such Party preclude any other or further exercise thereof or the exercise of
any other right, power or remedy. All remedies hereunder are cumulative and are
not exclusive of any other remedies provided by applicable Law.

12.4    Execution of Agreement; Counterparts; Electronic Signatures.
(a)    This Agreement may be executed in several counterparts, each of which
shall be deemed an original and all of which shall constitute one and the same
instrument, and shall become effective when counterparts have been signed by
each of the Parties and delivered to the other Parties; it being understood that
all Parties need not sign the same counterparts.
(b)    The exchange of copies of this Agreement and of signature pages by
facsimile transmission (whether directly from one facsimile device to another by
means of a dial-up connection or whether mediated by the worldwide web), by
electronic mail in “portable document format” (“.pdf”) form, or by any other
electronic means intended to preserve the original graphic and pictorial
appearance of a document, or by combination of such means, shall constitute
effective execution and delivery of this Agreement as to the Parties and may be
used in lieu of the original Agreement for all purposes. Signatures of the
Parties transmitted by facsimile shall be deemed to be their original signatures
for all purposes.

12.5    Governing Law. THIS AGREEMENT IS TO BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH FEDERAL BANKRUPTCY LAW, TO THE EXTENT APPLICABLE, AND WHERE
STATE LAW IS IMPLICATED, THE LAWS OF THE STATE OF DELAWARE SHALL GOVERN, WITHOUT
GIVING EFFECT TO THE CHOICE OF LAW PRINCIPLES THEREOF (EXCEPT FOR ANY LAWS OF
THAT STATE WHICH WOULD RENDER SUCH CHOICE OF LAWS INEFFECTIVE), INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY, AND PERFORMANCE.

12.6    Jurisdiction, Waiver of Jury Trial.
(a)    THE BANKRUPTCY COURT WILL HAVE JURISDICTION OVER ANY AND ALL DISPUTES
BETWEEN OR AMONG THE PARTIES, WHETHER AT LAW OR IN EQUITY, ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY AGREEMENT CONTEMPLATED HEREBY; PROVIDED,
HOWEVER, THAT IF THE BANKRUPTCY COURT IS UNWILLING OR UNABLE TO HEAR ANY SUCH
DISPUTE, THE COURTS OF THE STATE OF DELAWARE AND THE FEDERAL COURTS OF THE
UNITED STATES OF AMERICA LOCATED IN DELAWARE WILL HAVE SOLE JURISDICTION OVER
ANY AND ALL DISPUTES BETWEEN OR AMONG THE PARTIES, WHETHER AT LAW OR IN EQUITY,
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY AGREEMENT CONTEMPLATED
HEREBY.
(b)    EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL
BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.

12.7    Notices. Unless otherwise set forth herein, any notices, consents,
waivers, and other communications required or permitted by this Agreement shall
be in writing and shall be deemed given to a Party when (a) delivered to the
appropriate address by hand or by nationally recognized overnight courier
service (costs prepaid), or (b) sent by facsimile or e-mail, in each case, if
sent during the normal business hours of the recipient, with confirmation of
transmission by the transmitting equipment confirmed with a copy delivered as
provided in clause (a), in the case of each of clauses (a) and (b), to the
following addresses, facsimile numbers or e-mail addresses and marked to the
attention of the person (by name or title) designated below (or to such other
address, facsimile number, e-mail address, or person as a Party may designate by
notice to the other Parties):
If to Seller, to:
Valeritas, Inc.
Attn: John E Timberlake, President & Chief Executive Officer
750 Route 202 South, Suite 600
Bridgewater, NJ 08807
jetimberlake@valeritas.com
With a copy (which shall not constitute effective notice) to:
DLA Piper LLP (US)
Rachel Ehrlich Albanese
1251 Avenue of the Americas
New York, NY 10020
Rachel.albanese@us.dlapiper.com

If to Purchaser, to:

Zealand Pharma A/S
Attn: Ravinder Singh Chahil
Sydmarken 11
DK-2860 Søborg
Denmark
rsc@zealandpharma.com

With a copy (which shall not constitute effective notice) to:
Cooley LLP
Attn: Marc Recht
500 Boylston St.
Boston, MA 02116
mrecht@cooley.com

12.8    Binding Effect; Assignment. This Agreement shall be binding upon
Purchaser and, subject to entry of the Bidding Procedures Order (with respect to
the matters covered thereby) and the Sale Order, upon Sellers, and shall inure
to the benefit of the Parties and their respective successors and permitted
assigns, including any trustee or estate representative appointed in the
Bankruptcy Cases or any successor chapter 7 case. Nothing in this Agreement
shall create or be deemed to create any third-party beneficiary rights in any
Person or entity not a party to this Agreement except the Purchaser Releasees
pursuant to Section 2.3. No assignment of this Agreement or of any rights or
obligations hereunder may be made by Sellers or Purchaser (by operation of law
or otherwise) without the prior written consent of the other Parties and any
attempted assignment without such required consents shall be void.

12.9    Severability. Whenever possible, each provision or portion of any
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable Law, but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal, or unenforceable in
any respect under any applicable Law in any jurisdiction, such invalidity,
illegality, or unenforceability shall not affect any other provision or portion
of any provision in such jurisdiction and in lieu of such invalid, illegal, or
unenforceable provision or portion of any provision, there will be added
automatically as a part of this Agreement a valid legal and enforceable
provision as similar in terms to such invalid, illegal or unenforceable
provision as may be possible.

12.10    Bulk Sales Laws. Each Party hereby waives compliance by the other
Parties with the “bulk sales,” “bulk transfers” or similar Laws in all
applicable jurisdictions in respect of the transactions contemplated by this
Agreement or any Ancillary Document.

12.11    Certain Interpretive Matters. The information contained in the
Schedules is disclosed solely for the purposes of this Agreement and may include
items or information not required to be disclosed under this Agreement. No
information contained in any Schedule shall be deemed to (i) be an admission by
any party hereto to any third Person of any matter whatsoever, including an
admission of any violation of any Laws or breach of any agreement, (ii) be
deemed to be material (whether individually or in the aggregate) to the
business, assets, liabilities, financial position, operations, or results of
operations of the Sellers, or (iii) give rise to circumstances which may result
in a Material Adverse Effect solely by reason of it being disclosed. Information
contained in a Section, subsection or individual Schedule (or expressly
incorporated therein) of the Disclosure Schedules shall (A) qualify the
representations and warranties made in the identically numbered Section or, if
applicable, subsection of Article IV of this Agreement and all other
representations and warranties made in any other Section, subsection, or
Schedule of Article IV to the extent its applicability to such Section,
subsection or Schedule is reasonably apparent on its face, (B) references to
agreements in the Disclosure Schedules are not intended to be a full description
of such agreements, and all such disclosed agreements should be read in their
entirety, and (C) nothing disclosed in any Disclosure Schedule is intended to
broaden any representation or warranty contained in Articles IV or V.
[Remainder of page intentionally left blank]

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed
and delivered as of the date first above written.
SELLERS:

VALERITAS, INC.
                    
By:_s/ John E. Timberlake___________
Name: John E. Timberlake
Title: Chief Executive Officer

VALERITAS HOLDINGS, INC.

By:_s/ John E. Timberlake___________
Name: John E. Timberlake
Title: Chief Executive Officer

PURCHASER:

ZEALAND PHARMA A/S

By: s/ Emmanuel Dulac___________
Name: Emmanuel Dulac
Title: Chief Executive Officer

By:_s/ Martin Nicklasson___________
Name: Martin Nicklasson
Title: Chairman of the Board of Directors

[Signature Page to Asset Purchase Agreement]

EXHIBIT A
[FORM OF] BILL OF SALE
This Bill of Sale is entered into as of [_________], 2020 by Valeritas, Inc., a
Delaware corporation and Valeritas Holdings, Inc., a Delaware corporation, (
collectively, the “Sellers”), in favor of [_________] (“Purchaser”) and its
permitted assignee. This Bill of Sale is made pursuant to the Asset Purchase
Agreement (the “Agreement”) dated February 9, 2020 by and between Sellers and
Purchaser, to transfer the Purchased Assets, as fully defined herein. Any
capitalized term used but not defined in this Bill of Sale shall have the
meaning set forth in the Agreement.
1.Conveyance. For good and valuable consideration in the amount paid under
Section 2.1 of the Agreement, the receipt and adequacy of which Sellers hereby
acknowledge, Sellers hereby irrevocably sell, convey, assign and transfer to
Purchaser, all of their right, title, and interest in and to the Purchased
Assets (“Purchased Assets”), all in accordance with the Agreement, the IP
Assumption and Assignment Agreement, the Assumption and Assignment of Lease and
the Assignment and Assumption Agreement.
2.    Representations and Warranties. The terms of the Agreement, including, but
not limited to, the representations, warranties, covenants, agreements and
indemnities relating to the Purchased Assets are incorporated herein by
reference. Sellers represent and warrant that (1) Sellers are conveying good and
valid title to all Purchased Assets, free and clear of all Claims, Liabilities
and Encumbrances; and (2) Sellers have the right to sell the Purchased Assets to
Purchaser and shall warrant and defend the right against the lawful claims and
demands of all persons in accordance with the terms and conditions of the
Agreement.
3.    Disclaimer of Warranties. Section 1.7 of the Agreement is incorporated
herein by reference.
4.    Further Assurances. Sellers, for themselves and their successors and
assigns, hereby covenant and agree that, at any time and from time to time on
Purchaser’s written request, Sellers will do, execute, acknowledge, and deliver
or cause to be done, executed, acknowledged, and delivered, all such further
acts, deeds, assignments, transfers, conveyances, powers of attorney, and
assurances as may be reasonably required by Purchaser in order to assign,
transfer, set over, convey, assure, and confirm unto and vest in Purchaser and
its successors and assigns title to the assets sold, conveyed, and transferred
by this Bill of Sale.
5.    Governing Law. This Bill of Sale is governed by, and construed in
accordance with, the laws of the State of Delaware, without regard to the
conflict of laws provisions thereof to the extent such principles or rules would
require or permit the application of the laws of any jurisdiction other than
those of the State of Delaware.
6.    Incorporation of Agreement. This Bill of Sale incorporates by reference
all of the terms of the Agreement, including but not limited to Sellers’
representations, warranties, covenants, and agreements relating to the Purchased
Assets, as if each term was fully set forth herein. In the event of conflict
between the terms of the Agreement and the terms of this Bill of Sale, the terms
of the Agreement govern and control.
7.    Counterparts. This Bill of Sale may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall be deemed to
be one and the same agreement. A signed copy of this Bill of Sale delivered by
facsimile, e-mail or other means of electronic transmission shall be deemed to
have the same legal effect as delivery of an original signed copy of this Bill
of Sale.
8.    Binding Effect; Benefit; Assignment. This Bill of Sale will inure to the
benefit of and bind the parties and their respective successors and permitted
assigns. Nothing in this Bill of Sale, express or implied, may be construed to
give any person other than the parties hereto and their respective successors
and permitted assigns any right, remedy, claim, obligation or liability arising
from or related to this Bill of Sale. This Bill of Sale and the rights and
obligations hereunder shall not be assignable by Sellers without the prior
written consent of Purchaser, and any such purported assignment without such
consent shall be void. This Bill of Sale and the rights and obligations
hereunder shall be assignable by Purchaser without the written consent of
Sellers.
9.    Amendment. This Bill of Sale may not be amended or modified except by an
instrument in writing signed by or on behalf of each of the parties hereto.

10.    [Remainder of page intentionally left blank]

IN WITNESS WHEREOF, Sellers and Purchaser have each duly executed and delivered
this Bill of Sale as of the date first written above.
                            
SELLERS:

VALERITAS, INC.
                    
By:_________________________________
Name:
Title:

VALERITAS HOLDINGS, INC.

By:_________________________________
Name:
Title:

PURCHASER:
[_____]

By:_________________________________
Name:
Title:

EXHIBIT B
[FORM OF] ASSIGNMENT AND ASSUMPTION AGREEMENT

This Assignment and Assumption Agreement (the “Agreement”), effective as of
[______], 2020 (the “Effective Date”), is by and Valeritas, Inc., a Delaware
corporation and Valeritas Holdings, Inc., a Delaware corporation (collectively,
“Sellers”), and [_____] (“Purchaser”).

WHEREAS, Sellers and Purchaser have entered into that certain Asset Purchase
Agreement, dated as of February 9, 2020 (the “Purchase Agreement”), pursuant to
which, among other things, Sellers have agreed to assign all of their rights,
title and interest in, and Purchaser has agreed to assume all of Sellers’ duties
and obligations under, the Assigned Contracts.
NOW, THEREFORE, in consideration of the mutual covenants, terms, and conditions
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
11.    Definitions. All capitalized terms used in this Agreement but not
otherwise defined herein are given the meanings set forth in the Purchase
Agreement.
12.    Assignment and Assumption. Sellers hereby sell, assign, grant, convey and
transfer to Purchaser all of Sellers’ right, title and interest in and to the
Assigned Contracts. Purchaser hereby accepts such assignment and assumes all of
Sellers’ duties and obligations under the Assigned Contracts and agrees to pay,
perform and discharge, as and when due, all of the obligations of Seller under
the Assigned Contracts accruing on and after the later of the Effective Date and
(ii) the date a Contract becomes an “Assigned Contract” pursuant to the terms of
Section 1.6 of the Purchase Agreement.
13.    Terms of the Purchase Agreement. The terms of the Purchase Agreement,
including, but not limited to, the representations, warranties, covenants,
agreements and indemnities relating to the Assigned Contracts are incorporated
herein by reference. The parties hereto acknowledge and agree that the
representations, warranties, covenants, agreements and indemnities contained in
the Purchase Agreement shall not be superseded hereby but shall remain in full
force and effect to the full extent provided therein. In the event of any
conflict or inconsistency between the terms of the Purchase Agreement and the
terms hereof, the terms of the Purchase Agreement shall govern.
14.    Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Delaware without giving effect
to any choice or conflict of law provision or rule (whether of the State of
Delaware or any other jurisdiction).
15.    Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall be deemed to
be one and the same agreement. A signed copy of this Agreement delivered by
facsimile, email or other means of electronic transmission shall be deemed to
have the same legal effect as delivery of an original signed copy of this
Agreement.
16.    Binding Effect; Benefit; Assignment. This Agreement will inure to the
benefit of and bind the parties and their respective successors and permitted
assigns. Nothing in this Agreement, express or implied, may be construed to give
any person other than the parties hereto and their respective successors and
permitted assigns any right, remedy, claim, obligation or liability arising from
or related to this Agreement. This Agreement and the rights and obligations
hereunder shall not be assignable by Sellers without the prior written consent
of Purchaser, and any such purported assignment without such consent shall be
void. This Agreement and the rights and obligations hereunder shall be
assignable by Purchaser without the written consent of Sellers.
17.    Amendment. This Agreement may not be amended or modified except by an
instrument in writing signed by or on behalf of each of the parties hereto.
18.    Further Assurances. Each of the parties hereto shall execute and deliver,
at the reasonable request of the other party hereto, such additional documents,
instruments, conveyances and assurances and take such further actions as such
other party may reasonably request to carry out the provisions hereof and give
effect to the transactions contemplated by this Agreement.
[Remainder of page intentionally left blank]

IN WITNESS WHEREOF, the parties have executed this Agreement to be effective as
of the date first above written.
SELLERS:

VALERITAS, INC.
                    
By:_________________________________
Name:
Title:

VALERITAS HOLDINGS, INC.

By:_________________________________
Name:
Title:

PURCHASER:

[____]

By:_________________________________
Name:
Title:

EXHIBIT C

[FORM OF] ASSIGNMENT AND ASSUMPTION OF LEASE

This ASSIGNMENT AND ASSUMPTION OF LEASE (this “Assignment”) is made and entered
into effective as of [_________], 2020, by and between Valeritas, Inc., a
Delaware corporation (“Assignor”), and [_________] (“Assignee”).

W I T N E S S E T H:

WHEREAS, Assignor is the tenant under that certain Office Lease Agreement, dated
May 10, 2017, by and between RFP Lincoln 293, LLC and Assignor, as amended by
that certain First Amendment to Lease, dated February 11, 2019, by and between
BPR 293 Equity Partners, LLC and Assignor (the “Lease”), for the demised
premises described therein as set forth on Exhibit A attached hereto (the
“Premises”); and

WHEREAS, in connection with that certain Asset Purchase Agreement, dated as of
February 9, 2020, by and between Assignor and Valeritas Holdings, Inc., a
Delaware corporation and Assignee (the “Purchase Agreement”), Assignor has
agreed to assign all of its right, title and interest in and to the Lease to
Assignee, and Assignee has agreed to accept such assignment and assume and
perform Assignor’s liabilities and obligations arising under the Lease from and
after the assignment hereunder, all in accordance with this Assignment and the
Purchase Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and intending to be legally bound, the parties
agree as follows:

1.    Assignment. Assignor hereby assigns, transfers and delivers to Assignee
all of Assignor’s right, title and interest as lessee or tenant in and to the
Lease and all of the rights, benefits and privileges of the lessee or tenant
thereunder, together with all security and other deposits and advance rent, if
any, paid by Assignor under the Lease, to the extent provided under the Purchase
Agreement.
2.    Assumption. Assignee hereby assumes all liabilities and obligations of
Assignor under the Lease (arising on and after the assignment hereunder) and
agrees to perform all obligations of Assignor under the Lease, to the extent
provided under the Purchase Agreement.
3.     Governing Law. This Assignment will be governed by and construed in
accordance with the internal laws of the State of Delaware (regardless of the
laws that might otherwise govern under applicable principles of conflicts of
laws thereof).

4.    Further Assurances. Assignor covenants with Assignee and Assignee
covenants with Assignor that each will execute or procure any additional
documents necessary to establish the rights of the other hereunder.

5.    Counterparts. This Assignment may be executed by the parties in
counterparts (including by means of facsimile or PDF signature pages delivered
electronically), in which event the signature pages thereof shall be combined in
order to constitute a single original document.
6.    Binding Effect. This Assignment shall be binding upon and inure to the
benefit of Assignor, Assignee and their respective successors and assigns.
Nothing in this Agreement, express or implied, may be construed to give any
person other than the parties hereto and their respective successors and
permitted assigns any right, remedy, claim, obligation or liability arising from
or related to this Assignment. This Assignment and the rights and obligations
hereunder shall not be assignable by Sellers without the prior written consent
of Assignee, and any such purported assignment without such consent shall be
void. This Agreement and the rights and obligations hereunder shall be
assignable by Assignee without the written consent of Sellers.
7.    Amendment. This Assignment may not be amended or modified except by an
instrument in writing signed by or on behalf of each of the parties hereto.
8.    Terms of the Purchase Agreement. The terms of the Purchase Agreement are
incorporated herein by this reference. In the event of any conflict or
inconsistency between the terms of the Purchase Agreement and the terms of this
Assignment, the terms of the Purchase Agreement will govern.
[The remainder of this page intentionally left blank]

IN WITNESS WHEREOF, the parties have executed this Assignment as of the date
first set forth above.
ASSIGNOR:
VALERITAS, INC.
                        

By:__________________________
Name:    
Title:    

ASSIGNEE:
[__________]

By:__________________________
Name:
Title:

EXHIBIT A
Description of Premises
[INCLUDE LEGAL DESCRIPTION FROM LEASE]

EXHIBIT D
[FORM OF] IP ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS IP ASSIGNMENT AND ASSUMPTION AGREEMENT (this “IP Assignment”) is made and
entered into as of [______], 2020 by and among [_____] (“Purchaser”) [and one or
more other persons designated by the Purchaser], and Valeritas, Inc., a Delaware
corporation and Valeritas Holdings, Inc., a Delaware corporation (collectively,
the “Sellers”). Purchaser and Sellers are collectively referred to herein as the
“Parties” and individually as a “Party.”
WHEREAS, Sellers have agreed to sell to Purchaser and Purchaser has agreed to
purchase from Sellers various assets, including without limitation, all
intellectual property assets included within the meaning of Seller Intellectual
Property and Seller Registered Intellectual Property (collectively, the
“Intellectual Property”) as such terms are defined in that certain Asset
Purchase Agreement, dated as of February [9], 2020, by and between Purchaser and
Sellers (the “Asset Purchase Agreement”), along with the goodwill of the
business associated therewith; and
WHEREAS, Purchaser desires to acquire Sellers’ entire right, title and interest
in and to such Intellectual Property.
NOW THEREFORE, in consideration of the mutual covenants and agreements set forth
below and in the Asset Purchase Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties agree as follows:
Defined Terms. All capitalized terms not defined herein shall have the meaning
ascribed to them in the Asset Purchase Agreement.
Assignment. Sellers hereby irrevocably and unconditionally sell, assign,
transfer, deliver, and convey to Purchaser all of Sellers’ right, title and
interest in and to the Intellectual Property, including the Seller Intellectual
Property and Seller Registered Intellectual Property and the goodwill and all
rights associated therewith, and all other corresponding rights that are or may
be secured under the laws of the United States, any jurisdiction thereof, any
foreign country or any multinational jurisdiction now or hereafter in effect,
the same to be held by Purchaser for Purchaser’s own use and enjoyment, and for
the use and enjoyment of Purchaser’s successors and assigns and other legal
representatives, together with all rights to income, royalties and license fees
deriving from the Intellectual Property, all claims for damages by reason of
past, present and future infringements or unauthorized uses of the Intellectual
Property and the right to sue for and collect such damages, as permitted under
the applicable laws of any jurisdiction or country in which such claims may be
asserted for the use and benefit of Purchaser and each of Purchaser’s
successors, assigns and other legal representatives.
Assistance. Subject to Section 5, Sellers and Purchaser shall execute and
deliver such instruments and take such other actions as may reasonably be
required in order to carry out the intent of this IP Assignment and to evidence
and effectuate the transactions contemplated herein.
Relation to Asset Purchase Agreement. In the event of any conflict or
inconsistency between the terms of the Asset Purchase Agreement and the terms
hereof, the terms of the Asset Purchase Agreement shall govern.
Severability; Amendment. Any provision in this IP Assignment which is illegal,
invalid or unenforceable shall be ineffective to the extent of such illegality,
invalidity or unenforceability, without affecting in any way the remaining
provisions hereof. This IP Assignment may not be amended except by execution and
delivery of an instrument in writing signed by officers of Sellers and Purchaser
on behalf of Sellers and Purchaser.
Entire Agreement; No Third-Party Beneficiaries. This IP Assignment, including
the Asset Purchase Agreement and the other documents attached or referred to
herein, which form a part hereof, embodies the entire agreement and
understanding of the Parties, and supersedes all prior or contemporaneous
agreements or understandings (whether written or oral) between the Parties, in
respect to the subject matter contained herein. This IP Assignment and the
obligations hereunder are not intended to confer any rights or remedies to any
third party and are not intended to operate, in anyway, as an agreement for the
benefit of any third party.
Successors and Assigns. This IP Assignment shall inure to the benefit of and be
binding upon the Parties hereto and their respective successors and permitted
assigns. This IP Assignment and the rights and obligations hereunder shall not
be assignable by Sellers without the prior written consent of Purchaser, and any
such purported assignment without such consent shall be void. This IP Assignment
and the rights and obligations hereunder shall be assignable by Purchaser
without the written consent of Sellers.
Governing Law. This IP Assignment shall be governed and construed in accordance
with federal bankruptcy and federal intellectual property law, to the extent
applicable, and where state law is implicated, the laws of the State of Delaware
(without giving reference to the principles of conflicts of law).
Counterparts. This IP Assignment may be executed in any number of counterparts,
all of which, taken together, shall constitute one document. Counterparts of
this IP Assignment (or applicable signature pages hereof) that are manually
signed and delivered by facsimile or other electronic transmission shall be
deemed to constitute signed original counterparts hereof and shall bind the
Parties signing and delivering in such manner.
[Remainder of page intentionally left blank]

IN WITNESS WHEREOF, the undersigned parties have caused this IP Assignment to be
executed and delivered as of the date first above written.

SELLERS:

                
VALERITAS, INC.
                        

By:__________________________
Name:    
Title:

VALERITAS HOLDINGS, INC.
                        

By:__________________________
Name:    
Title:

PURCHASER:
                
[ ]
                        
By:__________________________
Name:    
Title:

5

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

EXHIBIT E

[FORM OF] BIDDING PROCEDURES ORDER

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
---------------------------------------------------------------

In re:

VALERITAS HOLDINGS, INC., et al.,

Debtors.

---------------------------------------------------------------
x
:
:
:
:
:
:
:
x

 
Chapter 11 
 
Case No. 20-______ (___)

(Jointly Administered)

Re: D.I. ____ 

ORDER (A) ESTABLISHING BIDDING PROCEDURES; (B) APPROVING BID PROTECTIONS; (C)
ESTABLISHING PROCEDURES RELATING TO ASSUMPTION AND ASSIGNMENT OF CERTAIN
EXECUTORY CONTRACTS AND UNEXPIRED LEASES, INCLUDING NOTICE OF PROPOSED CURE
AMOUNTS; (D) APPROVING FORM AND MANNER OF NOTICE; (E) SCHEDULING A HEARING TO
CONSIDER ANY PROPOSED SALE; AND (F) GRANTING CERTAIN RELATED RELIEF

This matter coming before the court upon the Motion of Debtors for Entry of
Orders (I)(A) Establishing Bidding Procedures; (B) Approving Bid Protections;
(C) Establishing Procedures Relating to Assumption and Assignment of Certain
Executory Contracts and Unexpired Leases, Including Notice of Proposed Cure
Amounts; (D) Approving Form and Manner of Notice; (E) Scheduling a Hearing to
Consider any Proposed Sale; and (F) Granting Certain Related Relief; and (II)(A)
Approving a Sale; (B) Authorizing Assumption and Assignment of Certain Executory
Contracts and Unexpired Leases in Connection with the Sale; and (C) Granting
Related Relief (the “Motion”), filed by the above‑captioned debtors and debtors
in possession (collectively, the “Debtors”) for entry of an order (this “Order”)
(a) authorizing and approving the bidding procedures attached hereto as Exhibit
1 (the “Bidding Procedures”) in connection with a Sale, (b) approving the Bid
Protections, (c) approving the form and manner of notice of any Auction and any
Sale Hearing, (d) scheduling the Sale Hearing, if applicable, and setting other
related dates and deadlines, attached hereto as Exhibit 2, (e) establishing
procedures for the assumption and assignment of contracts and noticing of
related Cure Amounts, and (f) granting related relief all as further described
in the Motion; and upon consideration of the First Day Declaration, the Murphy
Declaration, and the record of these Chapter 11 Cases; and this Court having
found that (i) this Court has jurisdiction over the Debtors, their estates,
property of their estates and to consider the Motion and the relief requested
therein under 28 U.S.C. §§ 157 and 1334 and the Amended Standing Order of
Reference from the United States District Court for the District of Delaware,
dated February 29, 2012, (ii) this Court may enter a final order consistent with
Article III of the United States Constitution, (iii) and the matter being a core
proceeding within the meaning of 28 U.S.C. § 157(b)(2), (iv) venue of this
Motion in this District is proper under 28 U.S.C. §§ 1408 and 1409, and (v) no
further or other notice of the Motion is required under the circumstances; and
this Court having reviewed the Motion and having heard the statements in support
of the relief requested in the Motion at a hearing before this Court; and having
determined that the legal and factual bases set forth in the Motion, the First
Day Declaration, and the Bock Declaration establish just cause for the relief
granted in this Order; and this Court having found and determined that the
relief sought in the Motion is in the best interests of the Debtors’ estates,
their creditors and other parties in interest; and after due deliberation and
sufficient cause appearing therefor,
IT IS HEREBY ORDERED THAT:
A.Bidding Procedures. The Debtors have articulated good and sufficient reasons
for authorizing and approving the Bidding Procedures attached hereto as Exhibit
1, which are fair, reasonable, and appropriate under the circumstances and
designed to achieve the highest or otherwise best offer and to maximize the
value of the Debtors’ estates. The Bidding Procedures shall govern the
submission, receipt, and analysis of all bids relating to the Sale and any party
desiring to submit a bid shall do so strictly in accordance with the terms of
the Bidding Procedures and this Order.
B.Sale Notice. The notice, substantially in the form attached hereto as Exhibit
3, provided by the Debtors regarding the Sale, the Auction, and the Sale Hearing
(the “Sale Notice”) is reasonably calculated to provide all interested parties
with timely and proper notice of the proposed Sale, including: (i) the date,
time, and place of the Auction (if one is held); (ii) the Bidding Procedures and
certain dates and deadlines related thereto; (iii) the objection deadline for
the Motion and the date, time, and place of the Sale Hearing; (iv) reasonably
specific identification of the assets subject to any Sale; (v) instructions for
promptly obtaining a copy of the form APA; (vi) representations describing any
Sale as being free and clear of liens, claims, interests, and other
encumbrances, with all such liens, claims, interests, and other encumbrances
attaching with the same validity and priority to the sale proceeds; (vii) notice
of the proposed assumption of the Designated Contracts by the Debtors and
assignment to, the Successful Bidder, and the right, procedures, and deadlines
for objecting thereto, and no other or further notice of any Sale shall be
required.
C.Assumption and Assignment Procedures. The Motion and the Contract Assumption
Notice (as defined herein) are reasonably calculated to provide counterparties
to the Designated Contracts with proper notice of the intended assumption and
assignment of their executory contracts, any Cure Amounts (as defined herein),
and the Assumption Procedures (as defined herein), and are appropriate.
D.Other Findings. The findings and conclusions set forth herein constitute the
Court’s findings of fact and conclusions of law pursuant to Bankruptcy Rule
7052, made applicable to this proceeding pursuant to Bankruptcy Rule 9014. To
the extent any of the findings of fact herein constitute conclusions of law,
they are adopted as such. To the extent any of the conclusions of law herein
constitute findings of fact, they are adopted as such.
NOW, THEREFORE, IT IS ORDERED, ADJUDGED, AND DECREED THAT:
1.
The Motion is GRANTED as set forth herein.

I.Important Dates and Deadlines
1.    Sale Hearing. The Sale Hearing will commence on March [20], 2020, at
[♦].m., EDT, before the Honorable Laurie Selber Silverstein of the United States
Bankruptcy Court for the District of Delaware, 824 Market St. N., 6th Floor,
Courtroom #2, Wilmington, Delaware 19801. The Sale Hearing may be adjourned by
the Debtors without further notice other than by announcement in open Court, on
the Court’s calendar, or in the applicable hearing agenda.
3.Sale Objection Deadline. Objections, if any, to the Motion and the sale of the
Assets to a Successful Bidder, except objections solely related to the identity
of the Successful Bidder, any changes to the Form APA, and adequate assurance of
future performance by a Successful Bidder other than the Stalking Horse Bidder
(“Initial Objections”), must be made by March [12], 2020, at 4:00 p.m., EDT (the
“Sale Objection Deadline”). Objections solely to the conduct of the Auction, the
identity of the Successful Bidder, changes to the form APA, and adequate
assurance of future performance by a Successful Bidder other than the Stalking
Horse Bidder must be made by 4:00 p.m., EDT on March [19], 2020. In each case,
all objections must: (a) be in writing; (b) conform to the applicable provisions
of the Bankruptcy Rules, the Local Rules, and any orders of the Court; (c) state
with particularity the legal and factual bases for the objection and the
specific grounds therefor; and (d) be filed with the Court no later than the
Sale Objection Deadline and served on (i) the proposed counsel to the Debtors
and (ii) counsel to the Stalking Horse Bidder.
4.Response Deadline. Responses or replies, if any, to (a) Initial Objections
must be filed by March [19], 2020, at 12:00 p.m., EDT or (b) an objection to the
(i) conduct of the Auction, (ii) the proposed Sale to the Successful Bidder, and
(iii) the ability of the Successful Bidder to provide adequate assurance of
future performance, or the proposed form of adequate assurance of future
performance, with respect to the assumption and assignment of any Designated
Contracts, must be filed by 4:00 p.m., EDT on March [19], 2020; provided that
such deadlines may be extended by agreement of the Debtors and the affected
objecting party.
5.
Competitive Bidding. The following dates and deadlines regarding competitive
bidding are hereby established:

a)
Bid Deadline: March [12], 2020, at 4:00 p.m., EDT, the deadline by which all
Qualified Bids (as defined in the Bidding Procedures) must be actually received
in writing in electronic format by the parties specified in the Bidding
Procedures (the “Bid Deadline”); and

b)
Auction: March [17], 2020, at 10:00 a.m., EDT, is the date and time the Auction,
if one is needed; the Auction will be held at the offices of proposed counsel to
the Debtors: DLA Piper LLP (US), 1251 Avenue of the Americas, New York, New York
10020, or such other place and time as the Debtors shall notify all Qualified
Bidders that have submitted Qualified Bids (which shall be deemed to include the
Stalking Horse Bidder).

I.    Bidding Procedures and Related Relief
1.    The Bidding Procedures, substantially in the form attached hereto as
Exhibit 1 and incorporated by reference as though fully set forth herein, are
hereby approved in their entirety. The Bidding Procedures shall govern the
submission, receipt, and analysis of all Bids relating to any proposed Sale, and
any party desiring to submit a higher or better offer for the Assets must comply
with the terms of the Bidding Procedures and this Order. The Bidding Procedures
shall also govern the terms on which the Debtors will proceed with the Auction,
the Sale pursuant to the modified APA, and/or the selection of the Stalking
Horse Bidder as the Successful Bidder. The Debtors are authorized to take any
and all actions reasonably necessary or appropriate to implement the Bidding
Procedures.
7.
The failure to specifically include or reference any particular provision,
section, or article of the Bidding Procedures in this Order shall not diminish
or impair the effectiveness of such provision, section, or article, it being the
intent of this Court that the Bidding Procedures are authorized in their
entirety.

II.    Auction
8.
The Debtors are authorized, subject to the terms of this Order and the Bidding
Procedures, to take actions reasonably necessary, in the discretion of the
Debtors, to conduct and implement the Auction.

9.Any party in interest may attend (but not participate in) the Auction if any
such party in interest provides the Debtors with written notice of its intention
to attend the Auction on or before the Bid Deadline, which written notice shall
be sent to proposed counsel for the Debtors via electronic mail, to Maris J.
Kandestin, Esq., at maris.kandestin@us.dlapiper.com. For the avoidance of doubt,
only Qualified Bidders (including the Stalking Horse Bidder, which shall be
deemed a Qualified Bidder at all times) will be entitled to make any Bids at the
Auction. For the avoidance of doubt, the Consultation Parties may attend the
Auction without sending prior written notice of their intention to do so.
10.The Debtors shall maintain a written transcript of all Bids made and
announced at the Auction, including the Baseline Bid, all Overbids, and the
Successful Bid. Other than as expressly set forth in this Order or the Bidding
Procedures, the Debtors may conduct the Auction in the manner they reasonably
determine will result in the highest or otherwise best Qualified Bid.
11.Each Qualified Bidder participating at the Auction will be required to
confirm on the record at the Auction that (i) it has not engaged in any
collusion with respect to the bidding, (ii) its Qualified Bid is a good-faith
bona fide offer, and (iii) it intends to consummate the proposed Sale if
selected as the Successful Bidder.
12.Other than as expressly set forth in this Order or the Bidding Procedures,
the Debtors (in consultation with the Consultation Parties) reserve the right as
they may reasonably determine to be in the best interest of their estates and in
the exercise of their fiduciary duties to: (a) determine which bidders are
Qualified Bidders; (b) determine which Bids are Qualified Bids; (c) determine
which Qualified Bid is the highest or otherwise best proposal and which is the
next highest or otherwise best proposal; (d) reject any Bid that is (i)
inadequate or insufficient, (ii) not in conformity with the requirements of the
Bidding Procedures or the requirements of the Bankruptcy Code or (iii) contrary
to the best interests of the Debtors and their estates; (e) impose additional
terms and conditions with respect to all potential bidders (other than the
Stalking Horse Bidder); (f) extend the deadlines set forth herein or in the
Bidding Procedures; and (g) continue or cancel the Auction and/or Sale Hearing,
including by announcement in open court without further notice.
1.    In recognition of the considerable time, energy, and resources that the
Stalking Horse Bidder has expended in connection with the Stalking Horse
Transaction, the Debtors have agreed that if the Stalking Horse Bidder is not
the Successful Bidder (or if the Debtors consummate any plan or sale of all or
substantially all of the Debtors’ Assets other than the Stalking Horse
Transaction), the Stalking Horse Bidder shall be entitled to the Bid
Protections, including a Break-Up Fee of 3% of the Purchase Price and an Expense
Reimbursement of up to $1,000,000. The Bid Protections shall be deemed allowed
administrative expenses under Bankruptcy Code sections 503(b) and 507(a)(2) and
shall be paid in accordance with the provisions of the Stalking Horse APA in the
event that the Stalking Horse Bidder is not the Successful Bidder.
III.    Sale Hearing Notice and Related Relief
14.
The Sale Notice is hereby approved. Within three (3) business days following the
entry of this Order, or as soon as reasonably practicable thereafter (the
“Service Date”), the Debtors will cause the Sale Notice to be served in
accordance with the Local Rules on: (a) the Office of the United States Trustee;
(b) the Securities & Exchange Commission; (c) the Internal Revenue Service; (d)
the Delaware State Treasury; (e) the Delaware Secretary of State; (f) counsel to
the Unsecured Creditors’ Committee; (g) counsel to the DIP Lender; (h) the
United States Attorney’s Office for the District of Delaware; (i) any party
known or reasonably believed to have asserted any lien, claim, or encumbrance or
other interest in the Assets; (j) any party known or reasonably believed to have
expressed an interest in acquiring some or substantially all of the Assets; (k)
any parties that have requested notice in these Cases pursuant to Bankruptcy
Rule 2002; (l) all taxing authorities; and (m) to the extent not covered by (a)
through (l), all known creditors and parties in interest of the Debtors. The
Debtors shall also post the Sale Notice and the Order on the website of the
Debtors’ claims and noticing agent located at http://www.kccllc.net/valeritas.

15.Additionally, on the Service Date or as soon as practicable thereafter, the
Debtors shall publish notice of the proposed Sale, substantially in the form of
the Sale Notice (the “Publication Notice”), once in the national edition of The
Wall Street Journal, The New York Times, USA Today, or another publication of
similar circulation. Publication of the Publication Notice shall be sufficient
and proper notice of any Sale to any other interested parties whose identities
are unknown to the Debtors.
IV.    Assumption Procedures
16.
The procedures set forth below regarding the assumption and assignment of the
executory contracts and/or executory leases proposed to be assumed and assigned
by the Debtors pursuant to section 365(b) and (f) of the Bankruptcy Code in
connection with the Sale (the “Assumption Procedures”), substantially in the
form attached hereto as Exhibit 4 and incorporated by referenced, are hereby
approved.

17.The Assumption Procedures shall govern the assumption and assignment of all
of the Debtors’ executory contracts and unexpired leases to be assumed and
assigned in connection with the Sale (each, a “Designated Contract” and,
collectively, the “Designated Contracts”), subject to the payment of any amounts
necessary to cure any defaults arising under any Designated Contract (the “Cure
Amount”).
18.Except as provided in the applicable modified APA, the Debtors shall have no
liability or obligation with respect to defaults relating to the Designated
Contracts arising, accruing, or relating to a period on or after the effective
date of assignment.
20.
The Contract Assumption Notice, substantially the form attached hereto as
Exhibit 5, is hereby approved.

V.    Other Related Relief
1.    Any objections to the entry of this Order and the relief granted herein
that have not been withdrawn, waived, resolved, or settled, and all reservations
of rights included therein, are hereby overruled on the merits.
1.    Notwithstanding Bankruptcy Rule 6004(h), this Order shall be effective and
enforceable immediately upon entry hereof.
23.
To the extent the provisions of this Order are inconsistent with the provisions
of any exhibits referenced herein or with the Motion, the provisions of this
Order shall control.

24.The Debtors are authorized and empowered to take all actions they deem
necessary to implement the relief granted in this Order.
25.This Court shall retain jurisdiction with respect to all matters arising from
or related to the implementation, interpretation, or enforcement of this Order.

EAST\171589786.12

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Exhibit 1

Bidding Procedures

EAST\171589786.9

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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
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In re:

VALERITAS HOLDINGS, INC., et al.,

Debtors.

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Chapter 11 
 
Case No. 20-10290 (LSS)

(Jointly Administered)

 

BIDDING PROCEDURES
Valeritas Holdings, Inc., a Delaware corporation, and its wholly owned
subsidiary debtors and debtors in possession in the above-captioned Chapter 11
Cases (collectively, the “Debtors”) have executed that certain Asset Purchase
Agreement (together with all exhibits, schedules, and attachments thereto, the
“Stalking Horse APA”), dated as of February 9, 2020, with Zealand Pharma A/S
(“Zealand”), by which Zealand or a designee of Zealand as permitted pursuant to
the Stalking Horse APA (collectively, the “Stalking Horse Bidder”) proposes to
purchase substantially all of the Debtors’ assets (the “Assets”), for a purchase
price in the aggregate amount of $23 million in cash plus the assumption of
certain liabilities, pursuant to a sale pursuant to section 363 of the
Bankruptcy Code. The Stalking Horse Bidder’s proposal to acquire the Debtors’
Assets in accordance with the Stalking Horse APA is referred to as the “Stalking
Horse Transaction.”
On February [l], 2020, the Bankruptcy Court entered an order [D.I. [l]] (the
“Order”) approving these bidding procedures (the “Bidding Procedures”). The
Bidding Procedures set forth the process by which the Debtors, in consultation
with the Consultation Parties (as defined and set forth below), will solicit and
evaluate higher or otherwise better Bids for the acquisition of the Debtors’
business and Assets. If the Debtors receive one or more Qualified Bids, in
addition to the Stalking Horse Transaction, the Debtors will conduct an auction
(the “Auction”) among such Qualified Bidders in accordance with these Bidding
Procedures. If the Debtors do not receive a Qualified Bid (other than that of
the Stalking Horse Bidder), the Debtors will not conduct an Auction and shall
designate the Stalking Horse Bidder as the Successful Bidder.
The Debtors will consider Bids that are structured as an offer to purchase the
Assets in a sale under section 363 of the Bankruptcy Code (a “Sale”).

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KEY SALE PROCESS DATES
Subject to the Debtors’ rights set forth herein, the proposed key dates for the
sale process are as follows:
March 2, 2020, at [l]:[l][l].m. (EST)
Proposed hearing to consider entry of the Order approving the Bidding Procedures
March 3, 2020, at 11:59 p.m. (EST)
Deadline for Debtors to provide non-debtor parties with (i) a list of Designated
Contracts, and (ii) notice of the proposed Cure Amounts for the Designated
Contracts (the “Assumption and Assignment Service Deadline”)
March 12, 2020, at 4:00 p.m. (EDT)
Deadline to object to the Debtors’ proposed assumption and assignment of
Designated Contracts and related Cure Amounts
March 12, 2020, at 4:00 p.m. (EDT)
Deadline to object (“Sale Objection Deadline”) to Sale (“Sale Objections”)
March 12, 2020, at 4:00 p.m. (EDT)
Bid Deadline
March 16, 2020, at 10:00 a.m. (EDT)
Deadline for Debtors to notify bidders of whether their Bids are Qualified Bids
March 17, 2020, at 10:00 a.m. (EDT)
Auction to be held (if necessary)
March 18, 2020, at 10:00 a.m. (EDT)
Deadline for Debtors to (i) file with the Court the Notice of Successful Bidder
and (ii) provide notice to non-Debtor parties of any Designated Contracts
March 19, 2020, at 10:00 a.m. (EDT)
Deadline to object to (i) conduct of the Auction, (ii) the proposed Sale to the
Successful Bidder, and (iii) the ability of the Successful Bidder to provide
adequate assurance of future performance, or the proposed form of adequate
assurance of future performance, with respect to the assumption and assignment
of any Designated Contracts
March 19, 2020, at 4:00 p.m. (EDT)
Deadline for Debtors and other parties to file responses to Sale Objections
March 20, 2020, at [l]:[l][l].m. (EDT)
Date of a proposed Sale Hearing to consider entry of the Sale Order
April 2, 2020

Closing

Marketing Process
I.
Contact Parties

The Debtors, in consultation with their investment banker Lincoln International
(“Lincoln”), developed a list of parties whom they believe may be interested in,
and whom the Debtors reasonably believe would have the financial resources to
consummate, a transaction (a “Transaction”). The list of parties includes both
strategic investors and financial investors (collectively, the “Contact
Parties”). The Contact Parties include parties whom the Debtors or their
advisors previously contacted regarding a Transaction, regardless of whether
such parties expressed any interest at such time in pursuing a Transaction.

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The Debtors will continue to discuss and may supplement the list of Contact
Parties throughout the marketing process, as appropriate.
The Debtors may distribute (to the extent not already distributed) to each
Contact Party and any other interested party or potential bidder (each, a
“Potential Bidder”) an “Information Package” consisting of: (i) a copy of the
Bidding Procedures, the Order, and the Motion; (ii) a form confidentiality
agreement (a “Confidentiality Agreement”), which shall include typical
agreements by the Contact Party not to solicit employees of the Debtors; and
(iii) such other materials as may be appropriate under the circumstances.
II.
Participation Requirements

To receive due diligence information, including full access to the Debtors’
electronic data room and to additional non-public information regarding the
Debtors, a Potential Bidder, other than the Stalking Horse, must deliver the
following documents (collectively, the “Preliminary Bid Documents”) by email to
each of: (i) proposed counsel for the Debtors, DLA Piper LLP (US), 1201 North
Market Street, Suite 2100 Wilmington, Delaware 19801 (Attn: Maris J. Kandestin,
Esq., Maris.Kandestin@us.dlapiper.com), and 1251 Avenue of the Americas, New
York, New York 10020 (Attn: Rachel Ehrlich Albanese, Esq.,
Rachel.Albanese@us.dlapiper.com); (ii) proposed investment banker to the
Debtors, Lincoln International, 500 West Madison Street, Suite 3900, Chicago,
Illinois 60661 (Attn: Brendan J. Murphy, BMurphy@lincolninternational.com, Brian
Bock, bbock@lincolninternational.com, and Jeremy Klein,
JKlein@lincolninternational.com); (iii) counsel to the DIP Lender, Landis Rath &
Cobb LLP, 919 Market Street, Suite 1800, Wilmington, Delaware 19899 (Attn: Adam
G. Landis, landis@lrclaw.com, and Kerri Mumford, mumford@lrclaw.com), and
Proskauer Rose LLP, Eleven Times Square, New York, New York 10036 (Attn: Peter
Antozsyk, Esq., pantoszyk@proskauer.com and Lucy F. Kweskin, Esq.,
lkweskin@proskauer.com); and (iv) counsel to the official committee of unsecured
creditors, if any (the “Committee”) (collectively, the “Bid Recipients”):
a.
an executed Confidentiality Agreement on terms acceptable to the Debtors, to the
extent not already executed; and

b.
evidence by the Potential Bidder of its financial capacity to close a proposed
transaction, which may include financial statements of, or verified financial
commitments obtained by, the Potential Bidder (or, if the Potential Bidder is an
entity formed for the purpose of acquiring the Assets, the party that will bear
liability for a breach).

Promptly after a Potential Bidder delivers Preliminary Bid Documents to the Bid
Recipients, the Debtors, in consultation with the Consultation Parties, will
assess the adequacy of the evidence of its financial capacity and notify the
Potential Bidder whether such Potential Bidder has submitted acceptable
Preliminary Bid Documents so that the Potential Bidder may proceed to conduct
due diligence and ultimately submit a Bid and participate in the Auction, as
applicable. Only those Potential Bidders that have submitted acceptable
Preliminary Bid Documents (each, a “Bidder”) may submit Bids.
As soon as reasonably practicable after the Debtors, in consultation with the
Consultation Parties, determine that a Potential Bidder is a Bidder, the Debtors
will provide such Bidder with access to an electronic data room and reasonable
due diligence information as requested by such Bidder (to the extent such Bidder
has not already been provided such access and information). All due diligence
requests must be directed to Lincoln. Lincoln will work to facilitate meetings
between any interested Bidder and the Debtors’ management team. For all
Potential Bidders (except for the Stalking Horse Bidder), the due

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diligence period will end on the Bid Deadline, and after the Bid Deadline, the
Debtors will have no obligation to furnish any due diligence information.
The Debtors and their advisors will coordinate all reasonable requests from
Bidders for additional information and due diligence access. The Debtors, in
consultation with the Consultation Parties, may decline to provide such
information to Bidders who, in the Debtors’ business judgment and in
consultation with the Consultation Parties, have not established, or who have
raised doubt, that such Bidder intends in good faith or has the capacity to
consummate a Transaction.
For any Bidder who is a competitor of the Debtors or is affiliated with any
competitor of the Debtors, the Debtors reserve the right to withhold, in
consultation with the Consultation Parties, any diligence materials that the
Debtors determine are business-sensitive or otherwise inappropriate for
disclosure to such Bidder at such time.
Each Bidder shall comply with all reasonable requests for additional information
and due diligence access by the Debtors or their advisors regarding such Bidder
and its contemplated Transaction.
Stalking Horse Bid Deadline and Bid Protections
The Stalking Horse Bidder shall be deemed to be a Qualified Bidder at all times.
Likewise, the Stalking Horse APA shall at all times be deemed a Qualified Bid
(as defined herein). The Stalking Horse is not required to provide any Deposit
other than the deposit set forth in the Stalking Horse APA.
In recognition of the considerable time, energy, and resources that the Stalking
Horse Bidder has expended in connection with the Stalking Horse Transaction, the
Debtors have agreed that if the Stalking Horse Bidder is not the Successful
Bidder (or if the Debtors consummate any sale of all or substantially all of the
Debtors’ Assets other than the Stalking Horse Transaction), the Stalking Horse
Bidder shall be entitled to the following Bid Protections: (1) a Break-Up Fee of
3% of the Purchase Price, and (2) Expense Reimbursement of up to $1,000,000.
The Bid Protections are payable pursuant to the terms and conditions of, and
under certain circumstances as set forth in, the Stalking Horse APA. Payment of
the Bid Protections shall be governed by the Stalking Horse APA and the Order.
The Bid Protections will be an allowed super-priority administrative expense
claim in accordance with the terms of the Stalking Horse APA and pursuant to the
Order, senior to all other administrative expense claims against the Debtors’
estates but junior to the DIP Obligations (as defined in the Interim DIP Order).
The Stalking Horse Bidder shall have standing to appear and be heard on all
issues related to the Auction, the Sale, and related matters, including the
right to object to the conduct of the Auction and interpretation of these
Bidding Procedures.
Auction Process
I.Bid Deadline
A Bidder that desires to make a proposal, solicitation, or offer (each, a “Bid”)
shall transmit such proposal, solicitation, or offer via email to each of the
Bid Recipients so as to be actually received by them on or before March 12, 2020
at 4:00 p.m. (EDT) (the “Bid Deadline”).

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II.Bid Requirements
Each Bid by a Bidder must be submitted in writing and satisfy the following
requirements (collectively, the “Bid Requirements”):
a.
Purpose: Each Bid must state that it includes an offer by the Bidder to purchase
substantially all of the Assets.

b.
Purchase Price: Each Bid must clearly set forth the terms of any proposed
Transaction, including and identifying separately any cash and non-cash
components of the proposed Transaction consideration, such as certain
liabilities to be assumed by the Bidder as part of the Transaction, for example
(the “Purchase Price”).

c.
Deposit: Each Bid must be accompanied by a cash deposit in an amount equal to
10% of the aggregate value of the cash and non-cash consideration of the Bid to
be held in an escrow account to be identified and established by the Debtors
(the “Deposit”).

d.
Marked Agreement: Each Bid must include, at a minimum, a draft asset purchase
agreement (the “APA”), together with a redline version of the revised APA
against the Stalking Horse APA, including the exhibits and schedules related
thereto and any related Transaction documents or other material documents
integral to such Bid, pursuant to which the Bidder proposes to effectuate the
Transaction (collectively, the “Transaction Documents”). Each Bidder’s APA must
provide (i) a commitment to close within two business days after all closing
conditions are met and in any event no later than April 2, 2020, and (ii) a
representation that the Bidder will use its reasonable best efforts to satisfy
all applicable regulatory conditions.

e.
Committed Financing: To the extent that a Bid is not accompanied by evidence of
the Bidder’s capacity to consummate the Transaction set forth in its Bid with
cash on hand, each Bid must include evidence of committed financing that
demonstrates that the Bidder has received sufficient debt and/or equity funding
commitments to satisfy the Bidder’s Purchase Price and other obligations under
its Bid. Such funding commitments or other financing acceptable to the Debtors
(in consultation with the Consultation Parties) and must be unconditional and
not be subject to any internal approvals, syndication requirements, diligence,
or credit committee approvals, and shall have covenants and conditions
acceptable to the Debtors (in consultation with the Consultation Parties).

f.
Contingencies; No Financing or Diligence Outs: A Bid shall not be conditioned on
a Bidder obtaining, or the sufficiency of, financing or any internal approval,
or on the outcome or review of due diligence, but may

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be subject to the accuracy at the closing of specified representations and
warranties or the satisfaction at the closing of specified conditions.
g.
Identity: Each Bid must fully disclose the identity of each entity that will be
bidding or otherwise participating in connection with such Bid (including each
equity holder or other financial backer of the Bidder if such Bidder is an
entity formed for the purpose of consummating the proposed Transaction
contemplated by such Bid), and the complete terms of any such participation.
Under no circumstances shall any undisclosed principals, equity holders, or
financial backers be associated with any Bid. Each Bid must also include contact
information for the specific person(s) and counsel whom the Debtors’ advisors
should contact regarding such Bid.

h.
Authorization: Each Bid must contain evidence that the Bidder has obtained
authorization or approval from its board of directors (or a comparable governing
body acceptable to the Debtors) with respect to the submission of its Bid and
the consummation of the Transactions contemplated in such Bid.

i.
Substantial Contribution Waiver. Each Bid must contain an express waiver,
effective upon submission of the Bid, of any substantial contribution claims by
the Bidder.

j.
As-Is, Where-Is: Each Bid must include a written acknowledgement and
representation that the Bidder: (1) has had an opportunity to conduct any and
all due diligence regarding the Assets prior to making its offer; (2) has relied
solely upon its own independent review, investigation, and/or inspection of any
documents and/or the Assets in making its Bid; and (3) 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 Assets or the completeness of any information provided in
connection therewith or the Auction, except as expressly stated in the Bidder’s
Transaction Documents.

k.
Same or Better Terms. Each Bid shall be based on the Stalking Horse Bid and must
be on terms that are not more burdensome than the terms of the Stalking Horse
Bid, as determined by the Debtors, in consultation with the Consultation
Parties, and considering, among other factors, the scope and manner of the
proposed transaction. Each Bid must include duly executed, non-contingent
transaction documents necessary to effectuate the Sale and shall include a
schedule of assumed contracts to the extent applicable to the Bid, and a copy of
the Stalking Horse APA clearly marked to show all changes requested by the
Potential Bidder, including those related to the respective Purchase Price and
Assets to be acquired by such Qualified Bidder, as well as all other material
documents integral to such Bid.

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l.
Expenses; Disclaimer of Fees. Each Bid (other than that set forth in the
Stalking Horse APA) must disclaim any right to receive a break-up fee, expense
reimbursement, termination fee, or any other similar form of compensation. For
the avoidance of doubt, no Potential Bidder (other than the Stalking Horse
Bidder) will be permitted to request, nor be granted by the Debtors, at any
time, whether as part of the Auction or otherwise, a break-up fee, expense
reimbursement, termination fee, or any other similar form of compensation, and
by submitting a Bid any Potential Bidder is waiving any assertion or request for
reimbursement on any basis, including under section 503(b) of the Bankruptcy
Code.

By submitting its Bid, each Bidder is agreeing, and shall be deemed to have
agreed, to abide by and honor the terms of the Bidding Procedures and to refrain
from submitting a Bid or seeking to reopen the Auction after conclusion of the
Auction. The submission of a Bid shall constitute a binding and irrevocable
offer to acquire the Assets reflected in such Bid.
III.Designation of Qualified Bidders
A Bid will be considered a “Qualified Bid,” and each Bidder that submits a
Qualified Bid will be considered a “Qualified Bidder,” if the Debtors, in
consultation with the Consultation Parties, determine that such Bid:
a.
satisfies the Bid Requirements;

b.
is reasonably likely (based on availability of financing, antitrust, or other
regulatory issues, experience, and other considerations) to be consummated, if
selected as the Successful Bid (as defined below), within a time frame
acceptable to the Debtors (in consultation with the Consultation Parties); and

c.
Within two (2) business days after the Bid Deadline, the Debtors (after
consulting with the Consultation Parties) will notify each Qualified Bidder
whether such party is a Qualified Bidder and shall provide the Notice Parties
(as defined below), as well as the Stalking Horse Bidder with a copy of each
Qualified Bid.

If any Bid is determined not to be a Qualified Bid, the Debtors will refund such
Bidder’s Deposit promptly after the Bid Deadline.
Between the date that the Debtors notify a Bidder that it is a Qualified Bidder
and the Auction date, the Debtors may (in consultation with the Consultation
Parties) discuss, negotiate, or seek clarification of any Qualified Bid from a
Qualified Bidder. Without the prior written consent of the Debtors (in
consultation with the Consultation Parties), a Qualified Bidder may not modify,
amend, or withdraw its Qualified Bid, except for proposed amendments to increase
its Purchase Price, or otherwise improve the terms of, the Qualified Bid, during
the period that such Qualified Bid remains binding as specified in these Bidding
Procedures; provided that any Qualified Bid may be improved at the Auction as
set forth herein. Any improved Qualified Bid must continue to comply with the
requirements for Qualified Bids set forth

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in these Bidding Procedures. As stated above, the Stalking Horse shall be deemed
a Qualified Bidder at all times, and the Stalking Horse APA shall be a Qualified
Bid.
IV.DIP Lender
The DIP Lender shall automatically be deemed a Qualified Bidder and shall have
the right to credit bid on a dollar-for-dollar basis all or a portion of the
outstanding DIP Obligations in accordance with section 363(k) of the Bankruptcy
Code and applicable law.
Nothing in these Bidding Procedures shall be deemed to provide the consent of
the DIP Lender (including under 363(f) or otherwise) to the sale of the assets
or entry of the Sale Order. Subject to the DIP Order, each of the DIP Lender and
the Prepetition Lenders expressly reserves all rights to object or otherwise
contest any such sale or aspects thereof including valuation of non-cash
consideration and the Debtors’ determination of highest and best bids; provided
that until the indefeasible payment of the DIP Obligations in full and
termination of the DIP Facility, the Prepetition Lenders shall take no such
action if the DIP Lender consents to the Successful Bid or otherwise objects to
the Prepetition Lender taking such action.
V.The Auction
If necessary, the Auction shall take place on March 17, 2020, at 10:00 a.m.
(EDT) at the offices of proposed counsel for the Debtors, DLA Piper LLP (US),
1251 Avenue of the Americas New York, New York 10020, or such other place and
time as the Debtors shall notify all Qualified Bidders that have submitted
Qualified Bids (including the Stalking Horse Bidder).
No later than March 16, 2020 at 4:00 p.m. (EDT), the Debtors will notify all
Qualified Bidders of the highest or otherwise best Qualified Bid (the “Baseline
Bid”) and provide copies of the documents supporting the Baseline Bid to all
Qualified Bidders. The determination of which Qualified Bid constitutes the
Baseline Bid and which Qualified Bid constitutes the Successful Bid shall take
into account any factors the Debtors (in consultation with the Consultation
Parties) deem relevant to the value of the Qualified Bid to the Debtors’
estates, including, among other things: (a) the type and amount of Assets sought
to be purchased in the Bid; (b) the amount and nature of the total
consideration; (c) the likelihood of the Bidder’s ability to close a transaction
and the timing thereof including any terms or consideration of such Qualified
Bid; (d) the net economic effect of any changes to the value to be received by
the Debtors’ estates from the transaction contemplated by the Baseline Bid; and
(e) the tax consequences of such Qualified Bid (collectively, the “Bid
Assessment Criteria”).
The Auction shall be conducted according to the following procedures:
a.The Debtors Shall Preside Over the Auction; Participation and Attendance at
the Auction
The Debtors and their professionals shall direct and preside over the Auction.
At the start of the Auction, the Debtors shall describe the terms of the
Baseline Bid. All incremental Bids made thereafter shall be Overbids (as defined
herein) and shall be made and received on an open basis, and all material terms
of each Overbid shall be fully disclosed to all other Qualified Bidders. The
Debtors shall maintain a written transcript of all Bids made and announced at
the Auction, including the Baseline Bid, all Overbids, and the Successful Bid.

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Only Qualified Bidders that have submitted Qualified Bids by the Bid Deadline
are eligible to participate in the Auction, subject to the terms of these
Bidding Procedures and other limitations as may reasonably be imposed by the
Debtors. Qualified Bidders participating in the Auction must appear at the
Auction in person or through a duly authorized representative.
Any party in interest may attend (but not participate in) the Auction if any
such party in interest provides the Debtors with written notice of its intention
to attend the Auction on or before the Bid Deadline, which written notice shall
be sent to proposed counsel for the Debtors via electronic mail, to Maris J.
Kandestin, Esq., at maris.kandestin@us.dlapiper.com. For the avoidance of doubt,
only Qualified Bidders (including the Stalking Horse Bidder) will be entitled to
make any Bids at the Auction. For the avoidance of doubt, the Consultation
Parties may attend the Auction without sending prior written notice of their
intention to do so.
b.Terms of Overbids
“Overbid” means any bid made at the Auction by a Qualified Bidder after the
Debtors’ announcement of the Baseline Bid. Each Overbid must comply with the
following conditions:
(i)
Minimum Initial Overbid. Any Overbid following the Baseline Bid shall be no less
than the value of the Bid Protections, plus a value equal to $750,000.

(ii)
Minimum Overbid Increment. Any Overbid to a Prevailing Highest Bid (as defined
below) shall be in increments of no less than $250,000.

(iii)
Conclusion of Each Overbid Round. Upon the solicitation of each round of
Overbids, the Debtors may announce a deadline (the “Overbid Round Deadline”),
subject to extension by the Debtors, by which time any Overbids must be
submitted to the Debtors.

(iv)
Overbid Alterations. An Overbid may contain alterations, modifications,
additions, or deletions of any terms of the Bid no less favorable to the
Debtors’ estates than any prior Qualified Bid or Overbid and shall otherwise
comply with the terms of these Bidding Procedures.

(v)
Announcing Highest Bid. After each Overbid Round Deadline, the Debtors shall
determine, in consultation with the Consultation Parties and taking into account
the Bid Assessment Criteria, whether an Overbid is higher or otherwise better
than the Baseline Bid in the initial Overbid round or, in subsequent rounds, the
Overbid previously designated by the Debtors as the prevailing highest or
otherwise best Bid (the “Prevailing Highest Bid”). The Debtors shall announce
and describe to all Qualified Bidders present at the Auction the material terms
of any new Overbid designated by the Debtors as the Prevailing Highest Bid, the
identity of the bidder with the Prevailing Highest Bid, as well as the value
attributable by the Debtors to such Prevailing Highest Bid based on, among other
things, the Bid Assessment Criteria.

c.Consideration of Overbids
The Debtors, in consultation with the Consultation Parties, reserve the right to
adjourn the Auction as necessary to (i) facilitate discussions between the
Debtors and Qualified Bidders, (ii) provide Qualified

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Bidders with additional time to consider how they wish to proceed, and (iii)
provide Qualified Bidders the opportunity to offer such additional evidence as
the Debtors may require, such as with respect to financial capacity or
sufficient funding or financing, in order to consummate the proposed Transaction
at the prevailing Overbid amount.
d.Closing the Auction
The Auction shall continue until there is only one Qualified Bid that the
Debtors determine, after consultation with the Consultation Parties, and taking
into account the Bid Assessment Criteria, to be the highest or otherwise best
Qualified Bid for the Assets. Such Qualified Bid shall be declared the
“Successful Bid,” and such Qualified Bidder, the “Successful Bidder,” and the
Auction will be closed. Such acceptance by the Debtors of the Successful Bid (to
be made in accordance with the terms of this section V(d) of the Bidding
Procedures) is conditioned upon approval by the Court of the Successful Bid.
Following the closing of the Auction or termination of the Stalking Horse APA,
whichever occurs first, the Debtors shall not initiate contact with, solicit, or
encourage proposals from any person or entity with respect to the Assets.
e.No Collusion; Good-Faith Bona Fide Offer
Each Qualified Bidder participating at the Auction will be required to confirm
on the record at the Auction that (i) it has not engaged in any collusion with
respect to the bidding, (ii) its Qualified Bid is a good-faith bona fide offer,
and (iii) it intends to consummate the proposed Transaction if selected as the
Successful Bidder.
VI.Backup Bidder
a.
Notwithstanding anything in these Bidding Procedures to the contrary, if an
Auction is conducted, the Qualified Bidder with the next-highest or otherwise
second-best Qualified Bid at the Auction for the Assets shall be required to
serve as a backup bidder (the “Backup Bidder”) until such time that the Sale to
the Successful Bidder is consummated, but no later than thirty (30) days past
the Sale Hearing, and each Qualified Bidder shall agree and be deemed to agree
to be the Backup Bidder if so designated by the Debtors.

b.
The identity of the Backup Bidder and the amount and material terms of the
Qualified Bid of the Backup Bidder shall be announced by the Debtors, after
consultation with the Consultation Parties, at the conclusion of the Auction at
the same time the Debtors announce the identity of the Successful Bidder. The
Backup Bidder shall be required to keep its Qualified Bid (or if the Backup
Bidder submits one or more Overbids at the Auction, its final Overbid) open and
irrevocable until such time that the Transaction is consummated. The Backup
Bidder’s Deposit shall be held in escrow pending consummation of the Sale to the
Successful Bidder.

c.
If a Successful Bidder fails to consummate the approved Transaction contemplated
by its Successful Bid, the Debtors may select the Backup Bidder as the
Successful Bidder, and such Backup Bidder shall be deemed a Successful Bidder
for all purposes. The Debtors will be authorized, but not required, to
consummate all transactions contemplated by the Bid of such Backup Bidder
without further order of the Court or notice to any party. In such case, the
defaulting Successful Bidder’s Deposit shall be forfeited to the Debtors,

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and the Debtors specifically reserve the right to seek all available remedies
against the defaulting Successful Bidder, including with respect to specific
performance.
VII.Notice and Consultation Parties
Information that must be provided to the “Notice Parties” under these Bidding
Procedures must be provided to the following parties: (a) counsel to the DIP
Lender, Landis Rath & Cobb LLP, 919 Market Street, Suite 1800, Wilmington,
Delaware 19899 (Attn: Adam G. Landis, landis@lrclaw.com, and Kerri Mumford,
mumford@lrclaw.com), and Proskauer Rose LLP, Eleven Times Square, New York, New
York 10036 (Attn: Peter Antozsyk, Esq., pantoszyk@proskauer.com and Lucy F.
Kweskin, Esq., lkweskin@proskauer.com); (b) Venable LLP (Attn: Jeffrey S. Sabin,
Esq., jssabin@venable.com), 1270 Avenue of the Americas, 24th Fl., New York, New
York 10020, as counsel to the Prepetition Lender; and (c) counsel to the
Committee, if any.
The term “Consultation Parties” shall mean: (a) the Committee, if any, (b) the
DIP Lender, to the extent it does not intend to participate as a Qualified
Bidder at the Auction, and (c) the Prepetition Lender, as it does not intend to
submit a credit bid for the Assets under section 363(k) of the Bankruptcy Code,
and the advisors for each of the foregoing.
X.Reservation of Rights
Without prejudice to the rights of the Stalking Horse Bidder under the terms of
the Stalking Horse APA, the Debtors reserve their rights to modify these Bidding
Procedures, after consultation with the Consultation Parties, in any manner that
they reasonably determine will best promote the goals of these Bidding
Procedures, or impose, at or prior to the Auction, additional customary terms
and conditions in connection with a Sale, including, without limitation:
(a) extending the deadlines set forth in these Bidding Procedures; (b)
adjourning the Auction at the Auction; (c) adding procedural rules that are
reasonably necessary or advisable under the circumstances for conducting the
Auction; (d) canceling the Auction; and (e) rejecting any or all Bids or
Qualified Bids.
For the avoidance of doubt, nothing in these Bidding Procedures shall prevent
the Debtors from exercising their respective fiduciary duties under applicable
law.
XI.Consent to Jurisdiction
All Qualified Bidders at the Auction shall be deemed to have consented to the
jurisdiction of the Court and waived any right to a jury trial in connection
with any disputes relating to the Auction or the construction and enforcement of
these Bidding Procedures.
XII.Sale Hearing / Confirmation Hearing
A hearing to consider approval of the Successful Bid (or to approve the Stalking
Horse APA, as applicable, if no Auction is held) (the “Sale Hearing”) is
proposed to take place on March 20, 2020, at [l] [l].m., EST, at the Court. At
the Sale Hearing, the Debtors will present such Successful Bid to the Court for
approval.

XIII.Return of Deposit

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The Deposit of the Successful Bidder shall be applied to the purchase price of
such transaction at closing. The Deposits for each Qualified Bidder shall be
held in one or more escrow accounts on terms acceptable to the Debtors in their
sole discretion and shall be returned (other than with respect to the Successful
Bidder and the Backup Bidder) promptly after the Auction.
If a Successful Bidder fails to consummate a proposed transaction because of a
breach by such Successful Bidder, the Debtors will not have any obligation to
return the Deposit deposited by such Successful Bidder, which may be retained by
the Debtors as liquidated damages, in addition to any and all rights, remedies,
or causes of action that may be available to the Debtors, and the Debtors shall
be free to consummate the proposed transaction with the applicable Backup Bidder
without the need for an additional hearing or order of the Court.
XIV.No Modification of Bidding Procedures
These Bidding Procedures may not be modified except with the express prior
written consent of the Debtors and the DIP Lender.

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Exhibit 2
Key Sale Process Dates
March 2, 2020, at [l]:[l][l].m. (EST)
Proposed hearing to consider entry of the order approving the Bidding Procedures
March 3, 2020, at 11:59 p.m. (EST)
Deadline for Debtors to provide non-debtor parties with (i) a list of Designated
Contracts, and (ii) notice of the proposed Cure Amounts for the Designated
Contracts (the “Assumption and Assignment Service Deadline”)
March 12, 2020, at 4:00 p.m. (EDT)
Deadline to object to the Debtors’ proposed assumption and assignment of
Designated Contracts and related Cure Amounts
March 12, 2020, at 4:00 p.m. (EDT)
Deadline to object (“Sale Objection Deadline”) to Sale (“Sale Objections”)
March 12, 2020, at 4:00 p.m. (EDT)
Bid Deadline
March 16, 2020, at 10:00 a.m. (EDT)
Deadline for Debtors to notify bidders of whether their Bids are Qualified Bids
March 17, 2020, at 9:00 a.m. (EDT)
Auction to be held (if necessary)
March 18, 2020, at 10:00 a.m. (EDT)
Deadline for Debtors to (i) file with the Court the Notice of Successful Bidder
and (ii) provide notice to non-Debtor parties of any Designated Contracts
March 19, 2020, at 10:00 a.m. (EDT)
Deadline to object to (i) conduct of the Auction, (ii) the proposed Sale to the
Successful Bidder, and (iii) the ability of the Successful Bidder to provide
adequate assurance of future performance, or the proposed form of adequate
assurance of future performance, with respect to the assumption and assignment
of any Designated Contracts
March 19, 2020, at 4:00 p.m. (EDT)
Deadline for Debtors and other parties to file responses to Sale Objections
March 20, 2020, at [l]:[l][l].m. (EDT)
Date of a proposed Sale Hearing to consider entry of the Sale Order
April 2, 2020

Closing

Exhibit 3

Sale Notice

Exhibit 4

Assumption Procedures

Exhibit 5

Contract Assumption Notice

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EXHIBIT F

[FORM OF] SALE ORDER

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
---------------------------------------------------------------

In re:

VALERITAS HOLDINGS, INC., et al.,

Debtors.
---------------------------------------------------------------
x
:
:
:
:
:
:
x

 
Chapter 11 
 
Case No. 20-______ (___)

(Jointly Administered) 

ORDER (I) AUTHORIZING THE SALE OF SUBSTANTIALLY ALL OF THE DEBTORS’ ASSETS FREE
AND CLEAR OF LIENS, CLAIMS, ENCUMBRANCES, AND INTERESTS, (II) APPROVING THE
AGREEMENT, (III) AUTHORIZING THE ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY
CONTRACTS AND UNEXPIRED LEASES, AND (IV) GRANTING RELATED RELIEF
Upon the Motion (the “Sale Motion”) of the above-captioned debtors and debtors
in possession (collectively, the “Debtors”) for entry of an order (this “Sale
Order”): (a) authorizing and approving the sale of the Assets free and clear of
liens, claims, encumbrances, and other interests to the extent set forth in that
certain Asset Purchase Agreement (the “Agreement”) attached to this Sale Order
as Exhibit 1, (b) approving the Agreement, (c) authorizing the assumption and
assignment of the Assumed Contracts to [______________________] (the
“Purchaser”), and (d) granting related relief; and this Court having entered an
order on February [__], 2020 (the “Bid Procedures Order”) [ECF No. [l]]
approving, among other things, the proposed form of notice of the Sale Hearing;
and the Debtors having determined, after an extensive marketing process, that
the Purchaser has submitted the highest or otherwise best bid for the Assets;
and the Debtors having

EAST\171589786.9

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submitted the Declaration of Brendan J. Murphy (the “Murphy Declaration”) of
Lincoln International, the Debtors’ investment banker, in support of the Sale;
and upon adequate and sufficient notice of the Sale Motion, the Agreement, and
all other related transactions contemplated thereunder and in this Sale Order;
and all interested parties having been afforded an opportunity to be heard with
respect to the Sale Motion and all relief related thereto; and the Court having
reviewed and considered the Sale Motion and any objections thereto; and upon the
Murphy Declaration and the full record in support of the relief requested by the
Debtors in the Sale Motion; and this Court having found that (i) this Court has
jurisdiction over the Debtors, their estates, and property of their estates and
to consider the Motion and the relief requested therein under 28 U.S.C. §§ 157
and 1334 and the Amended Standing Order of Reference from the United States
District Court for the District of Delaware, dated February 29, 2012, (ii) this
Court may enter a final order consistent with Article III of the United States
Constitution, (iii) this is a core proceeding under 28 U.S.C § 157(b)(2)(A),
(iv) venue of the Sale Motion in this District is proper under 28 U.S.C. §§ 1408
and 1409; and it further appearing that the legal and factual bases set forth in
the Sale Motion and at the Sale Hearing establish just cause for the relief
granted herein; and it appearing that the relief requested in the Sale Motion is
in the best interests of the Debtors, their estates, their creditors, and all
other parties in interest; and upon the full record of these Chapter 11 Cases
and all other pleadings and proceedings, including the Sale Motion, and after
due deliberation thereon, and good and sufficient cause appearing therefor,

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THE COURT HEREBY FINDS THAT:
Jurisdiction, Final Order, and Statutory Predicates.
This Court has jurisdiction to hear and determine the Sale Motion pursuant to 28
U.S.C. §§ 157(b)(1) and 1334(a). Venue is proper in this District and in this
Court pursuant to 28 U.S.C. §§ 1408 and 1409.
The statutory predicates for the relief requested in the Sale Motion are
sections 105(a), 363, and 365 of the Bankruptcy Code and Bankruptcy Rules 2002,
6004, 6006, 9007, and 9014.
This Sale Order constitutes a final order within the meaning of 28 U.S.C.
§ 158(a). Notwithstanding the provisions of Bankruptcy Rules 6004(h) and
6006(d), and to any extent necessary under Bankruptcy Rule 9014 and rule 54(b)
of the Federal Rules of Civil Procedure, as made applicable by Bankruptcy Rule
7054, the Court expressly finds that there is no just reason for delay in the
implementation of this Sale Order, waives any stay, and expressly directs entry
of judgment as set forth herein.
Notice of the Sale Motion and Cure Amounts.
Notice of the Sale Hearing and the Sale was timely, proper, and reasonably
calculated to provide interested parties with timely and proper notice of the
Sale and the Sale Hearing, and no other or further notice of the Sale Motion,
the Sale, or the Sale Hearing is, or shall be, required. The requirements of
Bankruptcy Rule 6004(a) and all applicable Local Rules are satisfied by such
notice.
A reasonable opportunity to object and be heard with respect to the Sale and the
Sale Motion and the relief requested therein has been afforded to all interested
persons and entities, including the Notice Parties.

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Good Faith of Purchaser.
The Agreement was negotiated, proposed, and entered into by the Debtors and the
Purchaser without collusion, in good faith, and from arm’s-length bargaining
positions.
Neither the Debtors nor the Purchaser has engaged in any conduct that would
cause or permit the Agreement or the Sale to be avoided, consummation of the
Sale to be avoided, or costs or damages to be imposed, under section 363(n) of
the Bankruptcy Code. All payments to be made by the Purchaser and other
agreements or arrangements entered into by the Purchaser in connection with the
Sale have been disclosed. The Purchaser is purchasing the Assets in good faith
and is a good-faith buyer within the meaning of section 363(m) of the Bankruptcy
Code. The Purchaser is not an “insider” of any Debtor (as defined under section
101(31) of the Bankruptcy Code). The Purchaser is therefore entitled to all of
the protections afforded under section 363(m) of the Bankruptcy Code.
Highest or Otherwise Best Offer.
The Debtors’ marketing and Auction process, including the Debtors’ prepetition
marketing process, afforded a full, fair, and reasonable opportunity for any
person or entity to make a higher or otherwise better offer to purchase the
Assets. The Agreement constitutes the highest or otherwise best offer for the
Assets, and the Debtors’ determination that the Agreement constitutes the
highest or otherwise best offer for the Assets constitutes a valid and sound
exercise of the Debtors’ business judgment.
Approval of the Sale Motion and the Agreement, and consummation of the
transactions contemplated thereby, are in the best interests of the Debtors’
chapter 11 estates, the Debtors’ creditors, and other parties in interest.

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No Merger.
The Purchaser is not a mere continuation of the Debtors or their estates and
there is no continuity of enterprise between the Purchaser and the Debtors. The
Purchaser is not holding itself out to the public as a continuation of the
Debtors, including, but not limited to, any warranty or similar obligations. The
Purchaser is not a successor to the Debtors or their estates by reason of any
theory of law or equity, and the Sale does not amount to a consolidation,
merger, or de facto merger of Purchaser and the Debtors.
Validity of Transfer.
The Agreement was not entered into for the purpose of hindering, delaying, or
defrauding creditors under the Bankruptcy Code or under the laws of the United
States, any state, territory, possession, or the District of Columbia. Neither
the Debtors nor the Purchaser is entering into the transactions contemplated by
the Agreement fraudulently under applicable federal and state fraudulent
conveyance and fraudulent transfer laws.
The Debtors are the sole and lawful owners of the Assets. The Assets constitute
property of the Debtors’ estates and title to the Assets is vested in the
Debtors’ estates within the meaning of section 541(a) of the Bankruptcy Code.
Subject to section 363(f) of the Bankruptcy Code, the transfer of each of the
Assets to the Purchaser will be, as of the Closing Date, a legal, valid, and
effective transfer of the Assets, which transfer vests or will vest the
Purchaser with all right, title, and interest of the Debtors to the Assets free
and clear of (a) all liens (including any liens as that term is defined in
section 101(37) of the Bankruptcy Code) and encumbrances relating to, accruing,
or arising at any time prior to the Closing Date (collectively, the “Liens”) and
(b) all debts arising under, relating to, or in connection with any act of the
Debtors or claims (as that term is defined in section 101(5) of the Bankruptcy
Code), liabilities, obligations, demands, guaranties, options in

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favor of third parties, rights, contractual commitments, restrictions,
interests, mortgages, hypothecations, charges, indentures, loan agreements,
instruments, collective bargaining agreements, leases, licenses, deeds of trust,
security interests, conditional sale or other title retention agreements,
pledges, judgments, claims for reimbursement, contribution, indemnity,
exoneration, infringement, products liability, alter-ego, and matters of any
kind and nature, whether arising prior to or subsequent to the commencement of
these cases, and whether imposed by agreement, understanding, law, equity, or
otherwise, known or unknown, contingent or matured, liquidated or unliquidated,
and all rights and remedies with respect thereto (i) that purport to give to any
party a right of setoff or recoupment against, or a right or option to effect
any forfeiture, modification, profit sharing interest, right of first refusal,
purchase or repurchase right or option, or termination of, any of the Debtors’
or the Purchaser’s interests in the Assets, or any similar rights, or (ii) in
respect of taxes, restrictions, rights of first refusal, charges of interests of
any kind or nature, if any, including, without limitation, any restriction of
use, voting, transfer, receipt of income or other exercise of any attributes of
ownership) (collectively, as defined in this clause (b), “Claims”), relating to,
accruing or arising at any time prior to entry of this Sale Order, with the
exception of any such Liens or Claims that are expressly assumed by Purchaser or
otherwise permitted under the Agreement (the “Permitted Encumbrances”),
including, for the avoidance of doubt, Cure Costs up to the Cure Cap or any
other obligations arising under the Assumed Contracts to the extent set forth in
the Agreement.
Section 363(f) Is Satisfied.
The conditions of section 363(f) of the Bankruptcy Code have been satisfied in
full; therefore, the Debtors may sell the Assets free and clear of any interest
in the property other than the Permitted Encumbrances.

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The Purchaser would not have entered into the Agreement and would not consummate
the transactions contemplated thereby if the sale of the Assets to the Purchaser
were not free and clear of all Liens and Claims, other than Permitted
Encumbrances, or if the Purchaser would, or in the future could, be liable for
any of such Liens and Claims (other than the Permitted Encumbrances).
The Debtors may sell the Assets free and clear of all Liens and Claims against
the Debtors, their estates, or any of the Assets (except the Permitted
Encumbrances) because, in each case, one or more of the standards set forth in
section 363(f)(1)-(5) of the Bankruptcy Code has been satisfied. Those holders
of Liens or Claims against the Debtors, their estates, or any of the Assets who
did not object, who withdrew their objections, or whose objections were
overruled, to the Sale or the Sale Motion are deemed to have consented pursuant
to section 363(f)(2) of the Bankruptcy Code. All other holders of Liens or
Claims (except to the extent that such Liens or Claims are Permitted
Encumbrances) are adequately protected by having their Liens or Claims, if any,
in each instance against the Debtors, their estates, or any of the Assets,
attach to the net cash proceeds of the Sale ultimately attributable to the
Assets in which such creditor alleges a Lien or Claims, in the same order of
priority, with the same validity, force, and effect that such Liens or Claims
had prior to the Sale, subject to any claims and defenses the Debtors and their
estates may possess with respect thereto.
Cure Costs and Adequate Assurance of Future Performance.
The assumption and assignment of the Executory Contracts listed in the Agreement
(the “Assumed Contracts”) pursuant to the terms of this Sale Order is integral
to the Agreement and is in the best interests of the Debtors and their estates,
their creditors, and all other parties in interest, and represents the
reasonable exercise of sound and prudent business judgment by the Debtors.
Subject to the terms and conditions of the Agreement, the Purchaser shall: (a)
to the extent necessary,

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cure or provide adequate assurance of cure, of any default existing prior to the
date hereof with respect to the Assumed Contracts, within the meaning of
sections 365(b)(1)(A) and 365(f)(2)(A) of the Bankruptcy Code, and (b) to the
extent necessary and subject to the Cure Cap, provide compensation or adequate
assurance of compensation to any party for any actual pecuniary loss to such
party resulting from a default prior to the date hereof with respect to the
Assumed Contracts, within the meaning of sections 365(b)(1)(B) and 365(f)(2)(A)
of the Bankruptcy Code. The Purchaser’s obligation under the Agreement to pay
the Cure Amounts up to the Cure Cap (with the Debtors responsible for any Cure
Amounts in excess of the Cure Cap) and to perform the obligations under the
Assumed Contracts shall constitute adequate assurance of future performance
within the meaning of sections 365(b)(1)(C) and 365(f)(2)(B) of the Bankruptcy
Code.
Compelling Circumstances for an Immediate Sale.
Good and sufficient reasons for approval of the Agreement and the Sale have been
articulated. The relief requested in the Sale Motion is in the best interests of
the Debtors, their estates, their creditors, and other parties in interest. The
Debtors have demonstrated both (a) good, sufficient, and sound business purposes
and justifications for approving the Agreement and (b) compelling circumstances
for consummating the Sale outside the ordinary course of business, pursuant to
section 363(b) of the Bankruptcy Code before, and outside of, a plan of
reorganization, in that, among other things, the immediate consummation of the
Sale to the Purchaser is necessary and appropriate to maximize the value of the
Debtors’ estates and the Sale will permit the Debtors to maximize distributions
to creditors.

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THE COURT HEREBY ORDERS THAT:
General Provisions.
The findings and conclusions set forth herein constitute the Court’s findings of
fact and conclusions of law pursuant to Bankruptcy Rule 7052, made applicable to
these Chapter 11 Cases pursuant to Bankruptcy Rule 9014. To the extent that any
findings of fact constitute conclusions of law, they are adopted as such. To the
extent any conclusions of law constitute findings of fact, they are adopted as
such.
The relief requested in the Sale Motion, and the transactions contemplated
thereby and by the Agreement, are approved as set forth in this Sale Order and
on the record of the Sale Hearing, which is incorporated herein as if set forth
fully in this Sale Order, and the Sale contemplated by the Agreement is
approved.
All objections to the Sale Motion or the relief requested therein that have not
been withdrawn, waived, or settled as announced to the Court at the Sale Hearing
or by stipulation filed with the Court, and all reservations of rights included
in such objections or otherwise, are hereby denied and overruled on the merits
with prejudice. Those parties who did not object or withdrew their objections to
the Sale Motion are deemed to have consented to the Sale under to section
363(f)(2) of the Bankruptcy Code.
Approval of the Agreement.
The Agreement and all other ancillary documents, and all of the terms and
conditions thereof, are hereby approved.
Pursuant to sections 363(b) and (f) of the Bankruptcy Code, the Debtors are
authorized and empowered to take any and all actions necessary or appropriate to
(a) consummate the Sale pursuant to and in accordance with the terms and
conditions of the Agreement, (b) close the Sale as

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contemplated in the Agreement and this Sale Order, and (c) execute and deliver,
perform under, consummate, implement, and fully close the Agreement, including
the assumption and assignment to the Purchaser of the Assumed Contracts,
together with all additional instruments and documents that may be reasonably
necessary or desirable to implement the Agreement and the Sale.
The terms and provisions of the Agreement and this Sale Order shall be binding
in all respects upon the Debtors, their estates, all creditors of and holders of
equity interests in any Debtor, any holders of Liens, Claims, or other interests
(whether known or unknown) in, against, or on all or any portion of the Assets,
all counterparties to any executory contract or unexpired lease of the Debtors,
the Purchaser and all successors and assigns of the Purchaser, and any trustees,
if any, subsequently appointed in any of the Debtors’ Chapter 11 Cases or upon a
conversion to chapter 7 under the Bankruptcy Code of any of the Debtors’ cases.
This Sale Order and the Agreement shall inure to the benefit of the Debtors,
their estates and creditors, the Purchaser, and the respective successors and
assigns of each of the foregoing.
Transfer of the Assets.
Pursuant to sections 105(a), 363(b), 363(f), 365(b), and 365(f) of the
Bankruptcy Code, the Debtors are authorized to transfer the Assets to the
Purchaser in accordance with the terms of the Agreement, and such transfer shall
constitute a legal, valid, binding, and effective transfer of such Assets. Such
transfer shall vest Purchaser with title to the Assets and, other than the
Permitted Encumbrances, shall be free and clear of all Liens, Claims, and other
interests of any kind or nature whatsoever, with all such Liens, Claims, or
other interests to attach to the net cash proceeds ultimately attributable to
the property against or in which such Liens, Claims, or other interests are
asserted, subject to the terms thereof, with the same validity, force, and
effect, and in the same order of

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priority, which such Liens, Claims, or other interests had prior to the Sale,
subject to any rights, claims, and defenses the Debtors or their estates, as
applicable, may possess with respect thereto.
The Debtors are hereby authorized to take any and all actions they deem
necessary to consummate the Agreement, including any actions that otherwise
would require further approval by shareholders, members, or their boards of
directors, as the case may be, without the need to obtain such approvals.
The transfer of the Assets to the Purchaser under the Agreement does not require
any consents other than as specifically provided for in the Agreement. Each and
every federal, state, and local governmental agency or department is hereby
directed to accept any and all documents and instruments necessary or
appropriate to consummate the transactions contemplated by the Agreement. A
certified copy of this Sale Order may be filed with the appropriate clerk or
recorded with the recorder of any state, county, or local authority to act to
cancel any of the Liens, Claims, and other encumbrances of record, except those
assumed as Permitted Encumbrances.
If any person or entity that has filed statements or other documents or
agreements evidencing Claims or Liens on, or interests in, all or any portion of
the Assets (other than statements or documents with respect to Permitted
Encumbrances) shall not have delivered to the Debtors, in proper form for filing
and executed by the appropriate parties, termination statements, instruments of
satisfaction, releases of liens and easements, and any other documents necessary
for the purpose of documenting the release of all Claims, Liens, or interests
which the person or entity has or may assert with respect to all or any portion
of the Assets, the Debtors are hereby authorized, and the Purchaser is hereby
authorized, on behalf of the Debtors and the Debtors’ creditors, to execute and
file such statements, instruments, releases and other documents on behalf of
such person or entity with respect to the Assets. The Debtors and Purchaser are
each authorized to file a copy of this Sale Order, which,

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upon filing, shall be conclusive evidence of the release and termination of such
Claim, Lien, or interest.
This Sale Order is and shall be binding upon and govern the acts of all persons
and entities, including, without limitation, all filing agents, filing officers,
title agents, title companies, recorders of mortgages, recorders of deeds,
registrars of deeds, administrative agencies, governmental departments,
secretaries of state, federal, state, and local officials, and all other persons
and entities who may be required by operation of law, the duties of their
office, or contract, to accept, file, register, or otherwise record or release
any documents or instruments, or who may be required to report or insure any
title or state of title in or to any lease; and each of the foregoing persons
and entities is hereby directed to accept for filing any and all of the
documents and instruments necessary and appropriate to consummate the
transactions contemplated by the Agreement.
All persons and entities that are presently, or on the Closing may be, in
possession of some or all of the Assets to be sold, transferred or conveyed to
the Purchaser under the Agreement are hereby directed to surrender possession of
the Assets to the Purchaser on the Closing Date. Subject to the terms,
conditions, and provisions of this Sale Order, all persons and entities are
hereby forever prohibited and enjoined from taking any action that would
adversely affect or interfere with the ability of the Debtors to sell and
transfer the Assets to the Purchaser in accordance with the terms of the
Agreement and this Sale Order.
Assumption and Assignment of Assumed Contracts.
The Debtors are hereby authorized and directed in accordance with sections
105(a), 363, and 365 of the Bankruptcy Code to (a) assume and assign to
Purchaser, in accordance with the terms of the Agreement, the Assumed Contracts
free and clear of all Liens, Claims, and other interests of any kind or nature
whatsoever (other than the Permitted Encumbrances), and (b) execute and deliver

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to Purchaser such documents or other instruments as Purchaser deems necessary to
assign and transfer the Assumed Contracts to Purchaser.
With respect to the Assumed Contracts: (a) the Debtors may assume each of the
Assumed Contracts in accordance with section 365 of the Bankruptcy Code; (b) the
Debtors may assign each Assumed Contract in accordance with sections 363 and 365
of the Bankruptcy Code, and any provisions in any Assumed Contract that prohibit
or condition the assignment of such Assumed Contract or allow the party to such
Assumed Contract to terminate, recapture, impose any penalty, condition renewal
or extension, or modify any term or condition upon the assignment of such
Contract, constitute unenforceable anti-assignment provisions which are void and
of no force and effect; and (c) all other requirements and conditions under
sections 363 and 365 of the Bankruptcy Code for the assumption by the Debtors
and assignment to Purchaser of each Assumed Contract have been satisfied. The
Assumed Contracts shall be transferred and assigned to, and following the
Closing of the Sale remain in full force and effect for the benefit of,
Purchaser, notwithstanding any provision in any such Assumed Contract (including
those of the type described in sections 365(c) and (f) of the Bankruptcy Code)
that prohibits, restricts, or conditions such assignment or transfer and,
pursuant to section 365(k) of the Bankruptcy Code, the Debtors shall be relieved
from any further liability with respect to the Assumed Contracts after such
assumption and assignment to Purchaser.
All defaults or other obligations of the Debtors under the Assumed Contracts
arising or accruing prior to the closing of the Sale or required to be paid
pursuant to section 365 of the Bankruptcy Code in connection with the assumption
and assignment of the Assumed Contracts, shall be cured by the Purchaser,
subject to the Cure Cap. For the avoidance of doubt, the Debtors shall be
responsible for any Cure Amounts in excess of the Cure Cap.

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Upon the Closing, in accordance with sections 363 and 365 of the Bankruptcy
Code, the Purchaser shall be fully and irrevocably vested in all right, title
and interest of each Assumed Contract. To the extent provided in the Agreement,
the Debtors shall cooperate with, and take all actions reasonably requested by,
the Purchaser to effectuate the foregoing.
Each Assumed Contract counterparty is deemed to have consented to assumption and
assignment, and the Purchaser shall be deemed to have demonstrated adequate
assurance of future performance with respect to such Assumed Contract pursuant
to sections 365(b)(1)(C) and 365(f)(2)(B) of the Bankruptcy Code.
Upon the Debtors’ assignment of the Assumed Contracts to the Purchaser under the
provisions of this Sale Order, any additional orders of this Court, and the
payment of any Cure Amounts pursuant to the terms hereof or the Agreement, no
default shall exist under any Assumed Contract, and no counterparty to any
Assumed Contract shall be permitted (a) to declare a default by the Purchaser
under such Assumed Contract or (b) to otherwise take action against the
Purchaser as a result of any Debtors’ financial condition, bankruptcy, or
failure to perform any of its obligations under the relevant Assumed Contract.
Each non-Debtor party to an Assumed Contract hereby is also forever barred,
estopped, and permanently enjoined from (i) asserting against the Debtors or
Purchaser, or the property of any of them, any default or Claim arising out of
any indemnity obligation or warranties for acts or occurrences arising prior to
or existing as of the closing of the Sale, or, against Purchaser, any
counterclaim, defense, setoff, or any other Claim asserted or assertable against
the Debtors and (ii) imposing or charging against Purchaser or its affiliates
any rent accelerations, assignment fees, increases, or any other fees as a
result of the Debtors’ assumption and assignments to Purchaser of the Assumed
Contracts.

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The Purchaser shall be deemed to be substituted for the Debtors as a party to
the applicable Assumed Contracts and the Debtors shall be relieved, pursuant to
section 365(k) of the Bankruptcy Code, from any further liability under the
Assumed Contracts.
All non-Debtor counterparties to the Assumed Contracts shall cooperate and
expeditiously execute and deliver, upon the reasonable requests of the
Purchaser, and shall not charge the Debtors or the Purchaser for any
instruments, applications, consents, or other documents that may be required or
requested by any public authority or other party or entity to effectuate the
applicable transfers in connection with the sale of the Assets.
Prohibition of Actions Against the Purchaser.
Except for the Permitted Encumbrances, or as otherwise expressly provided for in
this Sale Order or the Agreement, the Purchaser shall not have any liability or
other obligation of the Debtors arising under or related to any of the Assets.
Without limiting the generality of the foregoing, and except as otherwise
specifically provided herein or in the Agreement, the Purchaser shall not be
liable for any Claims or Liens against the Debtors or any of their predecessors
or affiliates, and the Purchaser shall have no successor or vicarious
liabilities of any kind or character, including, but not limited to, under any
theory of antitrust, environmental, successor, or transferee liability, labor
law, de facto merger, mere continuation, or substantial continuity, whether
known or unknown, now existing or hereafter arising, whether fixed or
contingent, whether asserted or unasserted, whether legal or equitable, whether
liquidated or unliquidated, including, but not limited to, liabilities on
account of warranties, intercompany loans, and receivables among the Debtors,
and any taxes arising, accruing, or payable under, out of, in connection with,
or in any way relating to the operation of any of the Assets prior to the
closing of the Sale. The Purchaser has given substantial consideration under the
Agreement for the benefit of the holders of any Liens or Claims. The
consideration to be

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paid by the Purchaser shall constitute valid and valuable consideration for the
releases of any potential claims of successor liability against the Purchaser,
which releases shall be deemed to have been given in favor of the Purchaser by
all holders of Liens or Claims against or interests in the Debtors or any of the
Assets.
Except with respect to Permitted Encumbrances, or as otherwise permitted by the
Agreement or this Sale Order, all persons and entities, including, but not
limited to, all debt security holders, equity security holders, governmental,
tax and regulatory authorities, lenders, trade creditors, litigation claimants,
and other creditors, holding Liens, Claims, or other interests of any kind or
nature whatsoever against or in all or any portion of the Assets (whether legal
or equitable, secured or unsecured, matured or unmatured, contingent or
non-contingent, liquidated or unliquidated, senior or subordinate), arising
under or out of, in connection with, or in any way relating to the Debtors, the
Assets, the operation of the Debtors’ business prior to the Closing of the Sale,
or the transfer of the Assets to the Purchaser, hereby are forever barred,
estopped and permanently enjoined from asserting against the Purchaser, any of
the Purchaser’s affiliates, successors, or assigns, their property or the
Assets, such persons’ or entities’ Liens, Claims, or interests in and to the
Assets, including, without limitation, the following actions: (a) commencing or
continuing in any manner any action or other proceeding against the Purchaser,
its affiliates, its successors, assets or properties; (b) enforcing, attaching,
collecting, or recovering in any manner any judgment, award, decree, or order
against the Purchaser, its affiliates, its successors, assets, or properties;
(c) creating, perfecting, or enforcing any Lien or other Claim against the
Purchaser, its affiliates, its successors, assets, or properties; (d) asserting
any setoff, right of subrogation, or recoupment of any kind against any
obligation due the Purchaser, its affiliates or its successors; (e) commencing
or continuing any action, in any manner or place, that does not comply or is
inconsistent with the provisions of this

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Sale Order or other orders of the Court, or the agreements or actions
contemplated or taken in respect thereof; or (f) revoking, terminating or
failing or refusing to transfer or renew any license, permit or authorization to
operate any of the Assets or conduct any of the businesses operated with the
Assets.
All persons and entities are hereby forever prohibited and enjoined from taking
any action that would adversely affect or interfere with the ability of the
Debtors to sell and transfer the Assets to the Purchaser in accordance with the
terms of the Agreement and this Sale Order.
Mutual Releases
Except with respect to the obligations under this Sale Order and the Agreement,
upon payment of the Purchase Price, Purchaser, its affiliates, subsidiaries, and
successors, and all of their past, present and future shareholders, partners,
members, board of directors and/or supervisors, managers, officers, employees,
agents, representatives and advisors (the “Purchaser Entities”), shall
irrevocably and unconditionally release, remise, and forever discharge Seller,
its affiliates, and all of their past, present and future shareholders,
partners, members, board of directors and/or supervisors, managers, officers,
employees, agents, representatives and advisors (the “Seller Entities”) from any
and all suits, legal or administrative proceedings, Claims, demands, damages,
losses, costs, liabilities, interest or causes of action whatsoever at law or in
equity, known or unknown, which Purchaser Entities might now or subsequently may
have, based on, relating to or arising out of the Agreement, the Sale, the
ownership or use of the Assets, including breaches of statutory or implied
warranties, nuisance or other tort actions, rights to punitive damages, common
law rights of contribution and rights under insurance maintained by Seller or
its affiliates.
Except with respect to the obligations under this Sale Order and the Agreement,
upon receipt of payment of the Purchase Price, the Seller Entities shall
irrevocably and unconditionally release,

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remise, and forever discharge the Purchaser Entities from any and all suits,
legal or administrative proceedings, Claims, demands, damages, losses, costs,
liabilities, interest or causes of action whatsoever at law or in equity, known
or unknown, which Seller Entities might now or subsequently may have, based on,
relating to or arising out of the Agreement, the Sale, the ownership or use of
the Assets, including breaches of statutory or implied warranties, nuisance or
other tort actions, rights to punitive damages, common law rights of
contribution and rights under insurance maintained by Purchaser or its
affiliates.
Other Provisions.
Within one business day of the closing of the Sale, cash proceeds of the Sale in
an amount of the outstanding DIP Obligations shall be indefeasibly paid directly
to the DIP Lender in satisfaction of the DIP Obligations and shall not be
subject to disgorgement for any reason.
The consideration provided by the Purchaser to the Debtors pursuant to the
Agreement constitutes reasonably equivalent value and fair consideration for the
Assets under the Bankruptcy Code, Uniform Fraudulent Transfer Act, Uniform
Fraudulent Conveyance Act, and other applicable law within the meaning of 11
U.S.C. § 544(b), under the laws of the United States, any state, territory,
possession, or the District of Columbia.
The transactions contemplated by the Agreement are undertaken by the Purchaser
without collusion and in good faith, as that term is defined in section 363(m)
of the Bankruptcy Code, and, accordingly, the reversal or modification on appeal
of the authorization provided herein to consummate the Sale shall not affect the
validity of the Sale, or the assumption and assignment of the Assumed Contracts,
unless such authorization and such Sale are duly stayed pending such appeal. The
Purchaser is a good faith buyer within the meaning of section 363(m) of the
Bankruptcy Code and, as such, is entitled to the full protections of section
363(m) of the Bankruptcy Code.

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For cause shown, pursuant to Bankruptcy Rules 6004(h) and 7062(g), this Sale
Order shall not be stayed, shall be effective immediately upon entry, and the
Debtors and Purchaser are authorized to close the Sale immediately upon entry of
this Sale Order.
The failure to specifically include any particular provision of the Agreement in
this Sale Order shall not diminish or impair the effectiveness of such
provision, it being the intent of the Court that the Agreement be authorized and
approved in its entirety; provided that this Sale Order shall govern if there is
any inconsistency between the Agreement (including all ancillary documents
executed in connection therewith) and this Sale Order.
The Agreement and any related agreements, documents, or other instruments may be
modified, amended, or supplemented by the parties thereto and in accordance with
the terms thereof, without further order of the Court.
The Court shall retain exclusive jurisdiction to, among other things, interpret,
implement, and enforce the terms and provisions of this Sale Order and the
Agreement, all amendments thereto and any waivers and consents thereunder and
each of the agreements executed in connection therewith to which any Debtor is a
party or which has been assigned by the Debtors to the Purchaser, and to
adjudicate, if necessary, any and all disputes concerning or relating in any way
to the Sale, including, but not limited to, retaining jurisdiction to: (a)
compel delivery of the Assets to the Purchaser; (b) interpret, implement, and
enforce the provisions of this Sale Order; (c) protect Purchaser against any
Liens, Claims, or other interest in or against the Sellers or the Assets of any
kind or nature whatsoever, attaching to the proceeds of the Sale; and (d) enter
any orders under sections 363 and 365 of the Bankruptcy Code with respect to the
Assumed Contracts.
Subject to the sales proceeds provisions contained in the Final DIP Order, and,
if and when entered by this Court, the 9019 Order, to the extent that this Sale
Order is inconsistent with any

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prior order or pleading related to the Sale in these Chapter 11 Cases, the terms
of this Sale Order shall govern.

EXHIBIT G

[FORM OF] ESCROW AGREEMENT

THIS ESCROW AGREEMENT (the “Escrow Agreement”) is entered into and effective
this [•] day of [•], 2020, by and among Acquiom Clearinghouse LLC (the “Escrow
Agent”), Zealand Pharma A/S (“Purchaser”) and Valeritas, Inc. (the “Seller” and
together with the Purchaser, the “Parties”).

WHEREAS,

Purchaser and Seller have entered into that certain Asset Purchase Agreement,
dated as of February 9, 2020 (the “Acquisition Agreement”), by and among
Purchaser, Seller and [Subsidiaries or Affiliates].

Purchaser and Seller desire for the Escrow Agent to act as escrow agent of the
Escrow Funds (defined below), and Escrow Agent is willing to act in such
capacity subject to the terms and conditions hereof.

Schedule I to this Agreement sets forth the wire transfer instructions for the
Purchaser and the Seller and the Escrow Agent.

NOW, THEREFORE, in consideration of the premises herein, the parties hereto
agree as follows:

I.    Terms and Conditions

1.1.    Purchaser and Seller hereby appoint the Escrow Agent as their escrow
agent, and the Escrow Agent hereby accepts such appointment under the terms and
conditions set forth herein and agrees to perform its duties as provided herein.

1.2    In accordance with Section 2.3 of the Acquisition Agreement, Purchaser
shall deposit, or cause to be deposited, US$2,300,000.00 in immediately
available funds (the “Escrow Funds”) to an account designated by the Escrow
Agent (the “Escrow Account”), to be held, disbursed and invested as provided in
this Escrow Agreement.

1.3.    Within two Business Days (except as provided below) of receipt of
written instructions (“Joint Instructions”), signed by an authorized
representative of each of Purchaser and Seller (a list of whom are provided in
Exhibit A-1 and Exhibit A-2), the Escrow Agent shall disburse funds held in the
Escrow Account as provided in such Joint Instructions and this Section 1.3, but
only to the extent that funds are collected and available. The Joint
Instructions shall include the amount to be disbursed and shall identify the
party to whom the disbursement shall be made. Disbursements shall be made in
accordance with the payment instructions set forth in such Joint Instructions.
Disbursements to the Purchaser or the Seller pursuant to Joint Instructions
shall be transferred by the Escrow Agent into the account designated in Schedule
I hereto. For purposes of this Escrow Agreement, “Business Day” shall mean any
day other than a Saturday, Sunday or any other day on which the Escrow Agent
located at the notice address set forth in Section 4.4 is authorized or required
by law or executive order to remain closed.

1.4    In the event that Purchaser or Seller provides a formal notice to the
other regarding a claim against funds in the Escrow Funds, the party delivering
such notice shall simultaneously deliver a copy of such notice to Escrow Agent;
provided, however, that Escrow Agent shall have no duty to act upon any such
notice and shall be considered informational only with respect to Escrow Agent.

II.    Provisions as to the Escrow Agent

2.1.    This Escrow Agreement expressly and exclusively sets forth the duties of
the Escrow Agent with respect to any and all matters pertinent hereto and no
implied duties or obligations shall be read into this Escrow Agreement against
the Escrow Agent. In performing its duties under this Escrow Agreement, or upon
the claimed failure to perform its duties, the Escrow Agent shall have no
liability except to the extent the Escrow Agent’s willful misconduct, bad faith
or gross negligence was finally adjudicated to have been the direct cause of any
direct loss to either Party. In no event shall the Escrow Agent be liable for
incidental, indirect, special, consequential or punitive damages of any kind
whatsoever (including but not limited to lost profits), even if the Escrow Agent
has been advised of the likelihood of such loss or damage and regardless of the
form of action. The Escrow Agent shall have no liability with respect to the
transfer or distribution of any funds effected by the Escrow Agent pursuant to
wiring or transfer instructions provided to the Escrow Agent in accordance with
the provisions of this Escrow Agreement. Any wire transfers of funds made by the
Escrow Agent pursuant to this Escrow Agreement will be made subject to and in
accordance with the Escrow Agent’s usual and ordinary wire transfer procedures
in effect from time to time, including without limitation call-back procedures.
The Parties understand that the Escrow Agent’s inability to receive or confirm
funds transfer instructions pursuant to such security procedure may result in a
delay in accomplishing such funds transfer and agree that the Escrow Agent shall
not be liable for any loss caused by any such delay. No provision of this Escrow
Agreement shall require the Escrow Agent to risk or advance its own funds or
otherwise incur any financial liability or potential financial liability in the
performance of its duties or the exercise of its rights under this Escrow
Agreement. To the extent practicable, the Parties agree to pursue any redress or
recourse in connection with any dispute without making the Escrow Agent a party
to the same.

2.2.    This Escrow Agreement constitutes the entire agreement between the
Escrow Agent and Purchaser and Seller in connection with the subject matter of
this Escrow Agreement, and no other agreement entered into between Purchaser and
Seller, or either of them, including, without limitation, the Acquisition
Agreement, shall be considered as adopted or binding, in whole or in part, upon
the Escrow Agent notwithstanding that any such other agreement may be deposited
with the Escrow Agent or the Escrow Agent may have knowledge thereof.

2.3.    The Escrow Agent shall be protected in acting upon any written
instruction, notice, request or instrument delivered by the Parties which the
Escrow Agent in good faith believes to be genuine and what it purports to be,
including, but not limited to, items directing investment or non-investment of
funds, items requesting or authorizing release, disbursement or retainage of the
subject matter of this Escrow Agreement and items amending the terms of this
Escrow Agreement.

2.4.    The Escrow Agent may consult with legal counsel in the event of any
dispute or question as to the construction of any of the provisions hereof or
its duties hereunder, and it shall incur no liability and shall be fully
protected in acting in accordance with the advice of such counsel.

2.5.    In the event of any disagreement between Purchaser and Seller, or
between either of them and any other party, resulting in adverse claims or
demands being made in connection with the matters covered by this Escrow
Agreement, or in the event that the Escrow Agent, in good faith, be in doubt as
to what action it should take hereunder, the Escrow Agent shall promptly notify
the Parties of such uncertainty and may, at its option, refuse to comply with
any claims or demands on it, or refuse to take any other action hereunder, so
long as such disagreement continues or such doubt exists, and in any such event,
the Escrow Agent shall not be or become liable in any way or to any party for
its failure or refusal to act, and the Escrow Agent shall be entitled to
continue to refrain from acting until (i) the rights of Purchaser and Seller and
all other interested parties shall have been fully and finally adjudicated by a
court of competent jurisdiction, or (ii) all differences shall have been
adjudged and all doubt resolved by agreement among Purchaser and Seller and all
other interested parties, and the Escrow Agent shall have been notified thereof
in writing signed by Purchaser and Seller. Notwithstanding the preceding, the
Escrow Agent may in its discretion obey the order, judgment, decree or levy of
any court, whether with or without jurisdiction, or of an agency of the United
States or any political subdivision thereof, or of any agency of any State of
the United States or of any political subdivision thereof, and the Escrow Agent
is hereby authorized in its sole discretion, to comply with and obey any such
orders, judgments, decrees or levies and it shall not be liable to any of the
Parties hereto or to any other person, firm or corporation, by reason of such
compliance notwithstanding such writ, order or decree be subsequently reversed,
modified, annulled, set aside or vacated. The rights of the Escrow Agent under
this sub-paragraph are cumulative of all other rights which it may have by law
or otherwise.

2.6.    Purchaser and Seller jointly and severally agree to defend, indemnify
and hold harmless the Escrow Agent and each of the Escrow Agent’s officers,
directors, agents and employees (the “Indemnified Parties”) from and against any
and all losses, liabilities, claims made by any Party or any other person or
entity, damages, expenses and costs (including, without limitation, attorneys’
fees and expenses) of every nature whatsoever (collectively, “Losses”) which any
such Indemnified Party may incur and which arise directly or indirectly from
this Escrow Agreement or which arise directly or indirectly by virtue of the
Escrow Agent’s undertaking to serve as the Escrow Agent hereunder; provided,
however, that no Indemnified Party shall be entitled to indemnity with respect
to Losses that have been finally adjudicated by a court of competent
jurisdiction to have been directly caused by such Indemnified Party’s gross
negligence, bad faith or willful misconduct. Notwithstanding anything to the
contrary herein, Purchaser and Seller agree, solely as between themselves, that
any obligation for indemnification under this Section 2.6 shall be borne by the
Party or Parties determined by a court of competent jurisdiction to be
responsible for causing the Losses for which the Indemnified Party is entitled
to indemnification or, if no such determination is made, then one-half by
Purchaser and one-half by Seller. The provisions of this section shall survive
the termination of this Escrow Agreement and any resignation or removal of the
Escrow Agent.

2.7.    Any entity into which the Escrow Agent may be merged or converted or
with which it may be consolidated, or any entity to which all or substantially
all the escrow business of the Escrow Agent may be transferred, shall be the
Escrow Agent under this Escrow Agreement without further act.

2.8.    The Escrow Agent may resign at any time from its obligations under this
Escrow Agreement by providing thirty (30) calendar days prior written notice to
Purchaser and Seller. Similarly, the Escrow Agent may be removed at any time,
with or without cause, by the Parties by providing thirty (30) calendar days
prior written notice, signed by an authorized representative of each of
Purchaser and Seller, to the Escrow Agent of such removal. In either event, such
resignation or removal shall be effective on the date set forth in such written
notice, which shall be no earlier than thirty (30) calendar days after such
written notice has been furnished, and the Escrow Agent shall have no further
obligation thereafter except to hold the Escrow Funds as depository and
cooperate reasonably in the transfer of the Escrow Funds to a successor escrow
agent. Purchaser and Seller shall promptly appoint a successor escrow agent. In
the event no successor escrow agent has been appointed on or prior to the date
such resignation is to become effective, the Escrow Agent shall be entitled to
tender into the custody of any court of competent jurisdiction all Escrow Funds
delivered hereunder and the Escrow Agent shall thereupon be relieved of all
further duties and obligations under this Escrow Agreement. The Escrow Agent
shall have no responsibility for the appointment of a successor escrow agent
hereunder.

III.    Compensation of the Escrow Agent

3.1.    Purchaser and Seller shall equally pay the fees for the services
provided by the Escrow Agent hereunder in accordance with invoices, consistent
with the fees set forth on Exhibit B delivered to Purchaser and Seller. The
Escrow Agent shall have, and is hereby granted, a prior lien upon the Escrow
Fund with respect to its unpaid fees and unsatisfied indemnification rights,
superior to the interests of any other persons or entities and is hereby granted
the right to set off and deduct any unpaid fees and unsatisfied indemnification
rights from the Escrow Fund that remain unpaid for a period of thirty (30) days
after providing the Purchaser and Seller with an invoice for such amounts.

IV.    Miscellaneous

4.1.    During the term of this Escrow Agreement, the Escrow Fund shall be held
at an account designated by the Escrow Agent at Citizens Bank, that will not
earn interest. The Parties recognize and agree that the Escrow Agent will not
provide supervision, recommendations or advice relating to either the investment
of moneys held in the Escrow Account or the purchase, sale, retention or other
disposition of any investment. Any interest that may accrue on Escrow Fund
deposits beginning the day immediately following the day Escrow Fund deposits
are received, based on the daily average balances of Escrow Funds so held in the
Escrow Account. Any interest that may accrue will be credited monthly and become
part of the Escrow Fund. Deposits into the Escrow Account are insured, subject
to the applicable rules and regulations of the Federal Deposit Insurance
Corporation (the “FDIC”), in the standard FDIC insurance amount of $250,000,
including principal and accrued interest, and are not secured. Escrow Agent or
its affiliates may receive compensation from third parties based on balances
deposited in the Escrow Account.

4.2    Purchaser and Seller agree that, subject to the terms and conditions of
this Escrow Agreement and until dispersed from the Escrow Account, the owner of
the Escrow Funds is the Seller and all interest and income from the investment
of the funds shall be reported as having been earned by Purchaser as of the end
of the calendar year in which it was earned, whether or not such income was
disbursed during such calendar year, to the extent required by the United States
Internal Revenue Service (“IRS”). The Escrow Agent shall be deemed a payor of
any interest or other income paid upon investment of the Escrow Account for
purposes of performing tax reporting. With respect to any other payments made
under this Escrow Agreement, the Escrow Agent shall not be deemed a payor and
shall have no responsibility for performing tax reporting. The Escrow Agent’s
function of making such payments is solely ministerial and upon express
direction of the Parties. On or before the execution and delivery of this Escrow
Agreement, each of Purchaser and Seller shall provide to the Escrow Agent a
correct, duly completed, dated and executed current IRS Form W-9 or Form W-8,
whichever is appropriate or any successor forms thereto, in a form and substance
satisfactory to the Escrow Agent including appropriate supporting documentation
and/or any other form, document, and/or certificate required or reasonably
requested by the Escrow Agent to validate the form provided. Notwithstanding
anything to the contrary herein provided, except for the delivery and filing of
tax information reporting forms required pursuant to the Internal Revenue Code
of 1986, as amended, to be delivered and filed with the IRS by the Escrow Agent,
as escrow agent hereunder, the Escrow Agent shall have no duty to prepare or
file any Federal or state tax report or return with respect to any funds held
pursuant to this Escrow Agreement or any income earned thereon. Purchaser and
Seller, jointly and severally, agree to indemnify, defend and hold the Escrow
Agent harmless from and against any tax, late payment, interest, penalty or
other cost or expense that may be assessed against the Escrow Agent on or with
respect to the funds deposited under this Escrow Agreement or any earnings or
interest thereon unless such tax, late payment, interest, penalty or other cost
or expense was finally adjudicated by a court of competent jurisdiction to have
been directly caused by the gross negligence, bad faith or willful misconduct of
the Escrow Agent. The indemnification provided in this section is in addition to
the indemnification provided to the Escrow Agent elsewhere in this Escrow
Agreement and shall survive the resignation or removal of the Escrow Agent and
the termination of this Escrow Agreement.

4.3    The Escrow Agent shall provide monthly reports of transactions and
balances to the Parties as of the end of each month, until the disbursement of
all Escrow Funds. This Escrow Agreement shall terminate upon the final
disbursement of all Escrow Funds.

4.4.    Any notice, request for consent, report, or any other communication
required or permitted in this Escrow Agreement shall be in writing and shall be
deemed to have been given when delivered (i) personally, (ii) by facsimile
transmission with written confirmation of receipt, (iii) by electronic mail to
the e-mail address given below, and written confirmation of receipt is obtained
promptly after completion of the transmission, (iv) by overnight delivery with a
reputable national overnight delivery service, or (v) by United States mail,
postage prepaid, or by certified mail, return receipt requested and postage
prepaid, in each case to the appropriate address set forth below or at such
other address as any party hereto may have furnished to the other parties hereto
in writing:

If to the Escrow Agent:

Acquiom Clearinghouse LLC
10 South Riverside Plaza, Suite 875
Chicago, IL 60606
Attn: Timothy P. Martin
Facsimile: (312) 474-6099
Email: tmartin@srsacquiom.com

With a mandatory copy to:

Acquiom Clearinghouse LLC
950 17th Street, Suite 1400
Denver, CO 80202
Facsimile: (720) 554-7828
Email: escrowagent@srsacquiom.com

If to Purchaser:        

Zealand Pharma A/S
Attn: Ravinder Singh Chahil
Sydmarken 11
DK-2860 Søborg
Denmark
rsc@zealandpharma.com

With a copy to:

Cooley LLP
Attn: Marc Recht
500 Boylston St.
Boston, MA 02116
mrecht@cooley.com

If to Seller:
                
Valeritas, Inc.
Attn: John E Timberlake, President & Chief Executive Officer
750 Route 202 South, Suite 600
Bridgewater, NJ 08807
jetimberlake@valeritas.com

With a copy to:

DLA Piper LLP (US)
Rachel Ehrlich Albanese
1251 Avenue of the Americas
New York, NY 10020
Rachel.albanese@us.dlapiper.com

Any party may unilaterally designate a different address by giving notice of
each change in the manner specified above to each other party.

4.5.    This Escrow Agreement shall be governed by and construed according to
the laws of the State of Delaware, without regard to principles of conflicts of
law. The parties hereto consent to the exclusive jurisdiction of the state and
federal courts sitting in the State of Delaware and consent to personal
jurisdiction of and venue in such courts with respect to any and all matters or
disputes arising out of this Escrow Agreement. TO THE EXTENT NOT PROHIBITED BY
APPLICABLE LAW THAT CANNOT BE WAIVED, EACH PARTY HEREBY WAIVES, AND COVENANTS
THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY
RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION ARISING IN WHOLE OR IN PART UNDER, RELATED TO, BASED
ON OR IN CONNECTION WITH THIS ESCROW AGREEMENT OR THE SUBJECT MATTER HEREOF,
WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER SOUNDING IN TORT OR
CONTRACT OR OTHERWISE. ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS SECTION 4.5 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF
EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.

4.6.    Except as permitted in Section 2.7, neither this Escrow Agreement nor
any rights or obligations hereunder may be assigned by any party hereto without
the express written consent of each of the other parties hereto. This Escrow
Agreement shall inure to and be binding upon the parties hereto and their
respective successors, heirs and permitted assigns.

4.7.    The terms of this Escrow Agreement may be altered, amended, modified or
revoked only by an instrument in writing signed by all the parties hereto.

4.8.    If any provision of this Escrow Agreement shall be held or deemed to be
or shall in fact, be illegal, inoperative or unenforceable, the same shall not
affect any other provision or provisions herein contained or render the same
invalid, inoperative or unenforceable to any extent whatsoever.

4.9.    This Escrow Agreement is for the sole benefit of the Indemnified
Parties, Purchaser, Seller and the Escrow Agent, and their respective successors
and permitted assigns, and nothing herein, express or implied, is intended to or
shall confer upon any other person or entity any legal or equitable right,
benefit or remedy of any nature whatsoever under or by reason of this Escrow
Agreement. The Escrow Agent shall have the right to perform any of its duties
hereunder through its affiliates, agents, attorneys, custodians or nominees.

4.10.    No party to this Escrow Agreement shall be liable to any other party
hereto for losses due to, or if it is unable to perform its obligations under
the terms of this Escrow Agreement because of, acts of God, fire, war,
terrorism, floods, strikes, electrical outages, equipment or transmission
failure, or other causes reasonably beyond its control.

4.11.    Following the public announcement of the transactions contemplated in
the Acquisition Agreement, Escrow Agent may reference the parties as clients and
disclose that it is serving as the escrow agent in connection herewith.

4.12.    All titles and headings in this Escrow Agreement are intended solely
for convenience of reference and shall in no way limit or otherwise affect the
interpretation of any of the provisions hereof.

4.13.    This Escrow Agreement may be executed in one or more counterparts, each
of which shall be deemed an original but all of which together shall constitute
one and the same instrument. All signatures of the parties to this Escrow
Agreement and in any Joint Instruction or other instruction, instrument or
notice delivered hereunder may be transmitted by facsimile (including PDF) or
email, and such transmission will, for all purposes, be deemed to be the
original signature of such party whose signature it reproduces, and will be
binding upon such party.

4.13. Contemporaneously with the execution and delivery of this Escrow Agreement
and, if necessary, from time to time thereafter, each of the parties to this
Escrow Agreement (other than the Escrow Agent) shall execute and deliver to the
Escrow Agent a Certificate of Incumbency substantially in the form of Exhibit
A-1 and A-2 hereto (a “Certificate of Incumbency”) for the purpose of
establishing the identity and authority of persons entitled to issue notices,
instructions or directions to the Escrow Agent on behalf of each such party.
Until such time as the Escrow Agent shall receive an amended Certificate of
Incumbency replacing any Certificate of Incumbency theretofore delivered to the
Escrow Agent, the Escrow Agent shall be fully protected in relying, without
further inquiry, on the most recent Certificate of Incumbency furnished to the
Escrow Agent. Whenever this Escrow Agreement provides for joint written notices,
joint written instructions or other joint actions to be delivered to the Escrow
Agent, the Escrow Agent shall be fully protected in relying, without further
inquiry, on any joint written notice, instructions or action executed by persons
named in such Certificate of Incumbency.

IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT:

To help the government fight the funding of terrorism and money laundering
activities, Federal law requires all financial institutions to obtain, verify
and record information that identifies each person who opens an account. When a
party opens an account, the Escrow Agent will ask for each party’s name,
address, date of birth, or other appropriate information that will allow the
Escrow Agent to identify such party. The Escrow Agent may also ask to see each
party’s driver’s license or other identifying documents.

20
 

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

        

IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be
executed as of the date first above written.

ACQUIOM CLEARINGHOUSE LLC, as the Escrow Agent

By:        
Name: Timothy P. Martin
Title: Senior Director

PURCHASER

ZEALAND PHARMA A/S

By:        
Name:
Title:

SELLER

VALERITAS, INC.

By:        
Name:
Title:

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

        

SCHEDULE I
WIRE TRANSFER INSTRUCTIONS

Purchaser:
Bank Name:
ABA #:
Account Name:
Account #:

Seller:
Bank Name:
ABA #:
Account Name:
Account #:

Escrow Agent:

Bank Name: Citizens Bank
ABA #: 011-500-120
Account Name: Citizens Bank NA fbo Acquiom Clearinghouse Escrow Clients
Account : #1339477782
For further credit: Zealand Pharma/Valeritas Escrow
Attn: Tim Martin

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

        

EXHIBIT A-1

Certificate of Incumbency
(List of Authorized Representatives)

Client Name: Zealand Pharma A/S

As an authorized officer of the above referenced entity, I hereby certify that
each person listed below is an authorized signer for such entity, and that the
title and signature appearing beside each name is true and correct.

Name
Title
Signature
Contact Number
Secondary Contact Number
Email

 
 
 
 
 

 
 
 
 
 

 
 
 
 
 

 
 
 
 
 

 
 
 
 
 

 
 
 
 
 

IN WITNESS WHEREOF, this certificate has been executed by a duly authorized
officer on:

.
Date

By:    
Name:
Title:

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

        

EXHIBIT A-2

Certificate of Incumbency
(List of Authorized Representatives)

Client Name: Valeritas, Inc.

As an authorized officer of the above referenced entity, I hereby certify that
each person listed below is an authorized signer for such entity, and that the
title and signature appearing beside each name is true and correct.

Name
Title
Signature
Contact Number
Secondary Contact Number
Email

 
 
 
 
 

 
 
 
 
 

 
 
 
 
 

 
 
 
 
 

 
 
 
 
 

 
 
 
 
 

IN WITNESS WHEREOF, this certificate has been executed by a duly authorized
officer on:

.
Date

By:    
Name:
Title:

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

        

EXHIBIT B

SCHEDULE OF ESCROW AGENT FEES

Acceptance Fee:
Waived

Initial Fees as they relate to Acquiom Clearinghouse LLC acting in the capacity
of Escrow Agent – includes review of the Escrow Agreement; acceptance of the
Escrow appointment; setting up of Escrow Account(s) and accounting records; and
coordination of receipt of funds for deposit to the Escrow Account(s).
Annual Administration Fee
3,500

For ordinary administrative services by Escrow Agent – includes daily routine
account management; interest tracking; monitoring claim notices pursuant to the
agreement; disbursement of funds in accordance with the agreement; and delivery
of trust account statements to all applicable parties. These fees cover a full
year, or any part thereof, and thus are not pro-rated in the year of
termination. The annual fee is billed in advance and payable prior to that
years’ service.
Acquiom Clearinghouse LLC’s bid is based on the following assumptions:
•
Number of Escrow Accounts to be established: One (1)

•
Estimated Term: [TBD]

•
Amount of Escrow: $2,300,000

•
Estimated number of disbursements: 6

•
Investment in an account at Citizens Bank that will remain un-invested

Out-of-Pocket Expenses:
Billed At Cost