Exhibit 10.1

 

REVENUE INTEREST PURCHASE AGREEMENT

 

dated as of June 26, 2019

 

among

 

ESPERION THERAPEUTICS, INC.,

 

the Purchasers from time to time party hereto

 

and

 

Eiger III SA LLC, as Purchaser Agent

 

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TABLE OF CONTENTS

 

ARTICLE I DEFINITIONS

1

 

 

 

Section 1.01

Definitions

1

 

 

 

ARTICLE II PURCHASE OF REVENUE INTERESTS; PAYMENTS

22

 

 

 

Section 2.01

Purchase of Revenue Interests

22

Section 2.02

Payments by the Company

23

Section 2.03

Purchaser Payments; Conditions Precedent

24

Section 2.04

No Assumed Obligations

26

 

 

 

ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY

26

 

 

 

Section 3.01

Organization

26

Section 3.02

Authorization

26

Section 3.03

Governmental Authorization

27

Section 3.04

Ownership

27

Section 3.05

Financial Statements

27

Section 3.06

No Undisclosed Liabilities

27

Section 3.07

Solvency

28

Section 3.08

Litigation

28

Section 3.09

Compliance with Laws

28

Section 3.10

Conflicts

28

Section 3.11

Intellectual Property

29

Section 3.12

Regulatory Approvals

30

Section 3.13

Material Contracts

31

Section 3.14

Place of Business

31

Section 3.15

Subordination

32

Section 3.16

Insurance

32

Section 3.17

Tax

32

Section 3.18

Disclosure

32

Section 3.19

Investment Company Act

32

Section 3.20

OFAC; Anti-Terrorism Laws

32

Section 3.21

Broker’s Fees

33

 

 

 

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS

33

 

 

 

Section 4.01

Organization

33

Section 4.02

Authorization

33

Section 4.03

Broker’s Fees

33

Section 4.04

Conflicts

33

Section 4.05

Compliance with Laws

34

Section 4.06

Financing

34

 

 

 

ARTICLE V COVENANTS

34

 

 

 

Section 5.01

Notices; Access; Information

34

Section 5.02

Reports

35

Section 5.03

Compliance with Law; Existence and Maintenance of Properties; Material Contracts

36

Section 5.04

Confidentiality; Public Announcement

37

Section 5.05

Security Agreement

38

 

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Section 5.06

Further Assurances; Creation/Acquisition of Subsidiaries; Additional Collateral

38

Section 5.07

Put Option; Call Option

39

Section 5.08

Intellectual Property; Regulatory Approvals

41

Section 5.09

Use of Proceeds; Initial Product Development and Commercialization

42

Section 5.10

Protective Covenants

42

Section 5.11

Insurance and Landlord Waiver

42

Section 5.12

Taxes

43

 

 

 

ARTICLE VI TERMINATION

43

 

 

 

Section 6.01

Termination Date

43

Section 6.02

Effect of Termination

43

 

 

 

ARTICLE VII PURCHASER AGENT

44

 

 

 

Section 7.01

Appointment and Authority

44

Section 7.02

Rights as a Purchaser

44

Section 7.03

Exculpatory Provisions

44

Section 7.04

Reliance by Purchaser Agent

45

Section 7.05

Delegation of Duties

45

Section 7.06

Resignation of Purchaser Agent

46

Section 7.07

Non-Reliance on Purchaser Agent and Other Purchasers

46

Section 7.08

Collateral and Guaranty Matters

46

Section 7.09

Reimbursement by Purchasers

47

 

 

 

ARTICLE VIII MISCELLANEOUS

47

 

 

 

Section 8.01

Limitations on Damages

47

Section 8.02

Notices

48

Section 8.03

Successors and Assigns

49

Section 8.04

Indemnification

49

Section 8.05

No Implied Representations and Warranties; Survival of Representations and
Warranties

49

Section 8.06

Independent Nature of Relationship

50

Section 8.07

Entire Agreement

50

Section 8.08

Amendments; No Waivers

50

Section 8.09

Interpretation

51

Section 8.10

Headings and Captions

51

Section 8.11

Counterparts; Effectiveness

51

Section 8.12

Severability

51

Section 8.13

Expenses

51

Section 8.14

Governing Law; Jurisdiction

51

Section 8.15

Waiver of Jury Trial

52

 

SCHEDULES

 

 

 

 

 

Schedule 1.01(a)

–

Knowledge Persons

Schedule 1.01(b)

–

Purchaser Commitments

Schedule 3.04(a)

–

Ownership

Schedule 3.04(b)

–

Ownership

Schedule 3.08

–

Litigation

 

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Schedule 3.10

–

Conflicts

Schedule 3.11(a)

–

Intellectual Property

Schedule 3.14

–

Place of Business

Schedule 5.10(a)(i)

–

Permitted Indebtedness

Schedule 5.10(a)(ii)

–

Permitted Liens

Schedule 5.10(a)(iii)

–

Permitted Investments

 

 

 

EXHIBITS

 

 

 

 

 

Exhibit A

–

Form of Security Agreement

Exhibit B

–

Form of Guaranty

Exhibit C

–

Subordination Terms

 

iii

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REVENUE INTEREST PURCHASE AGREEMENT

 

This REVENUE INTEREST PURCHASE AGREEMENT (as amended, supplemented or otherwise
modified from time to time, this “Agreement”) is made and entered into as of
June 26, 2019, by and among Esperion Therapeutics, Inc., a Delaware corporation
(the “Company”), the Purchasers from time to time party hereto (each, a
“Purchaser” and collectively, the “Purchasers”) and Eiger III SA LLC, as
collateral agent and administrative agent for the Purchasers (the “Purchaser
Agent”).

 

WHEREAS, the Company wishes to obtain financing in respect of the
commercialization and further development of the Included Products (as
hereinafter defined) and other working capital needs;

 

WHEREAS, the Purchasers wish to purchase the Revenue Interests (as hereinafter
defined) from the Company, and the Company wishes to sell, assign and transfer
the Revenue Interests to the Purchasers in consideration for its payment of the
Purchaser Payments (as hereinafter defined) all upon and subject to the terms
and conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration of the mutual covenants, agreements
representations and warranties set forth herein, the parties hereto agree as
follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.01         Definitions.

 

The following terms, as used herein, shall have the following meanings:

 

“Affiliate” means any Person that Controls, is Controlled by, or is under common
Control with another Person.

 

“Agreement” has the meaning set forth in the first paragraph hereof.

 

“ANDA” means an abbreviated new drug application pursuant to 21 U.S.C. § 355(j),
any corresponding or equivalent applications or submissions filed with the
relevant Regulatory Agency to obtain regulatory approval of a pharmaceutical
product in any other country or region outside of the United States, and all
amendments and supplements thereof.

 

“Annual Net Sales” means, as of any date of determination, the amount of Net
Sales of all Included Products for the applicable calendar year within the
Covered Territory.

 

“Applicable Percentage” means the percentage based on the applicable portion of
Annual Net Sales for any calendar year as set forth in the chart below:

 

Tier

 

Annual Net Sales

 

Applicable Percentage

 

Third Payment
Applicable Percentage

 

1

 

Portion of Annual Net Sales for such calendar year less than or equal to
$250,000,000

 

7.5

%

10

%

2

 

Portion of Annual Net Sales for such calendar year exceeding $250,000,000

 

2.5

%

3.33

%

 

1

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provided that:

 

(A)          subject to clauses (B) and (C) below, commencing with Net Sales for
the calendar quarter in which the Third Payment is received by the Company, the
Applicable Percentage shall be equal to the “Third Payment Applicable
Percentage”;

 

(B)          (i) if Annual Net Sales for the calendar year ending December 31,
2021 are equal to or greater than $350,000,000, the Applicable Percentage for
Tier 1 shall decrease to 2.5% (or 3.33% if the Third Payment has been made) for
all subsequent calendar years beginning on January 1, 2022 and (ii) if Annual
Net Sales for the calendar year ending December 31, 2021 are less than
$350,000,000, the Applicable Percentages shall remain the same (subject to
clause (A) above) and the definition of Covered Territory shall, for purposes of
the definition of Annual Net Sales, include the whole world for all subsequent
calendar years beginning on January 1, 2022; and

 

(C)          (i) if (x) Annual Net Sales for the calendar year ending
December 31, 2021 are equal to or greater than $350,000,000 and (y) the
Purchasers have received Revenue Interest Payments under this Agreement
(excluding any payments under Section 2.05) in an amount equal to or greater
than the Cumulative Purchaser Payments on or prior to December 31, 2024, the
Applicable Percentages for Tier 1 and Tier 2 shall decrease to 0.4% (or 0.53% if
the Third Payment has been made) for all subsequent calendar years beginning on
January 1, 2025, or (ii) if (x) Annual Net Sales for the calendar year ending
December 31, 2021 are less than $350,000,000 and (y) if the Purchasers have
received Revenue Interest Payments under this Agreement (excluding any payments
under Section 2.05) in an amount equal to or greater than the Cumulative
Purchaser Payments on or prior to December 31, 2024, the Applicable Percentages
for Tier 1 shall decrease to 2.5% (or 3.33% if the Third Payment has been made)
for all subsequent calendar years beginning on January 1, 2025, and (iii) if the
Purchasers have not received Revenue Interest Payments under this Agreement
(excluding any payments under Section 2.05) in an amount equal to or greater
than the Cumulative Purchaser Payments on or prior to December 31, 2024, the
Applicable Percentages for Tier 1 and Tier 2 shall be increased for all
subsequent calendar years beginning on January 1, 2025 to a single defined rate
(with no separate Tiers) that would have provided the Purchasers with an amount
equal to the Cumulative Purchaser Payments based on Annual Net Sales from the
Effective Date through December 31, 2024 had such rate applied to Tier 1 from
and after the Effective Date through December 31, 2024.

 

“Audit Costs” means, with respect to any audit of the books and records of the
Company and its Affiliates and Licensees with respect to amounts payable or paid
under this Agreement, the reasonable and documented out-of-pocket cost of such
audit, including all reasonable and documented fees, costs and expenses incurred
in connection therewith.

 

“BA Products” means (a) any Initial Product and (b) any product containing or
comprising the Compound, in all forms, presentations, doses and formulations,
whether used as a single agent or in combination with other therapeutically
active agents.

 

“Bankruptcy Event” means the occurrence of any of the following:

 

(a)           the Company or any Subsidiary shall commence any case, proceeding
or other action (i) under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization, relief
of debtors or the like, seeking to have an order for relief entered with respect
to it, or seeking to adjudicate it bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-

 

2

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up, liquidation or dissolution (other than a solvent winding-up, dissolution or
liquidation of a Subsidiary into the Company or a Subsidiary Guarantor),
composition or other relief with respect to it or its debts, or (ii) seeking
appointment of a receiver, trustee, custodian or other similar official for it
or for all or any portion of its assets, or the Company or any Subsidiary shall
make a general assignment for the benefit of its creditors or enter into a
composition, compromise, assignment or arrangement with any of its creditors
(whether by way of a voluntary arrangement, scheme of arrangement, deed of
compromise or otherwise);

 

(b)           there shall be commenced against the Company or any Subsidiary any
case, proceeding or other action of a nature referred to in clause (a) above
which remains undismissed, undischarged or unbonded for a period of sixty (60)
days or an order is made for the winding-up, administration, liquidation or
dissolution of the Company;

 

(c)           the Company or any Subsidiary is unable or admits in writing its
inability to make payments in respect of any Indebtedness as they fall due or
declares a moratorium in respect of any Indebtedness;

 

(d)           an administrator, liquidator (other than a liquidator appointed in
a solvent winding up, dissolution or liquidation of a Subsidiary into the
Company or a Subsidiary Guarantor), provisional liquidator, receiver,
administrative receiver, insolvency practitioner, receiver and manager,
voluntary arrangement supervisor, compulsory manager or other similar officer is
appointed, either voluntarily or involuntarily, to or in respect of the Company
or any Subsidiary or the whole or any part of the property, assets or
undertaking of the Company or any Subsidiary;

 

(e)           there shall be commenced against the Company or any Subsidiary any
case, proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against (i) all or a substantial portion
of its assets and/or (ii) any Initial Product or any Collateral, which results
in the entry of an order for any such relief which shall not have been vacated,
discharged, stayed, satisfied or bonded pending appeal within sixty (60) days
from the entry thereof;

 

(f)            the Company or any Subsidiary, shall be insolvent as defined in
any statute of the United States Bankruptcy Code or in the fraudulent conveyance
or fraudulent transfer statutes of the State of Delaware or other applicable
jurisdiction of organization; or

 

(g)           an affirmative vote by the applicable Board to commence any case,
proceeding or other action described in clause (a) above or any other action by
the Company or any Subsidiary to otherwise cause, consent to, approve or
acquiesce in any of the acts described in clauses (a) through (f) inclusive
above.

 

“Board” means the Board of Directors of the Company or board of directors or
similar governing body of any Subsidiary, as applicable.

 

“Business Day” means any day other than a Saturday, a Sunday, any day which is a
legal holiday under the laws of the State of New York, or any day on which
banking institutions located in the State of New York are required by law or
other governmental action to close.

 

“Call Closing Date” has the meaning set forth in Section 5.07(b).

 

“Call Option” has the meaning set forth in Section 5.07(b).

 

3

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“Cash Receipts” means, for any calendar quarter, the actual cash receipts of the
Company and its Subsidiaries during such calendar quarter arising from the sale
and distribution of the Included Products within the Covered Territory.

 

“Change in Law” means the occurrence, after the date of this Agreement, of: 
(a) the adoption or taking effect of any law, rule, regulation or treaty or
(b) any change in any law, rule, regulation or treaty or in the administration,
interpretation, implementation or application thereof by the U.S. Internal
Revenue Service that is of general application to all taxpayers.

 

“Change of Control” means, at any time, the occurrence of any of the following
events or circumstances:

 

(a)           the acquisition by any “person” or “group” (within the meaning of
Sections 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended) of beneficial ownership of any Equity Interests of the Company, if
after such acquisition, such “person” or “group” would be the “beneficial owner”
(as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as
amended), directly or indirectly, of securities of the Company representing more
than fifty percent (50%) of the combined voting power of the Company’s then
outstanding securities entitled to vote generally in the election of directors;

 

(b)           a merger or consolidation of the Company with any other Person,
other than a merger or consolidation of the Company in which the Company is the
surviving Person and which results in the Company’s voting securities
outstanding immediately prior thereto continuing to represent more than fifty
percent (50%) of the combined voting power of the Company’s voting securities
outstanding immediately after such merger or consolidation;

 

(c)           any Transfer by any Obligor to another Person of all or
substantially all of the Product Assets; or

 

(d)           any Transfer of all or substantially all of the assets of the
Company on a consolidated basis to a Third Party.

 

“CLEAR Outcome Study” means CLEAR (“Cholesterol Lowering via Bempedoic Acid, an
ACL-inhibiting Regimen”) outcome study, NCT number: NCT02993406.

 

“Clinical Trial” means any clinical trial or investigation of the Included
Products conducted by or on behalf of the Company or any Subsidiary.

 

“Clinical Update Summary” means a summary of all material information and
developments with respect to each Clinical Trial, including any decision to
terminate a Clinical Trial before completion and the rationale for any such
early termination, which summary may be comprised of materials provided by the
Company to the Board and senior management.

 

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

 

“Collateral” means the property included in the definition of “Collateral” in
the Security Agreement; provided, however, that from and after the occurrence of
the Milestone, “Collateral” shall not include the Follow-On/Cannibalizing
Product Assets.

 

“Commercialization” means any and all activities, other than manufacturing,
directed to the preparation for sale of, offering for sale of, or sale of a drug
product, including activities related to marketing, promoting, distributing, and
importing a drug product, and interacting with Regulatory Agencies

 

4

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regarding any of the foregoing.  When used as a verb, “to Commercialize” and
“Commercializing” means to engage in Commercialization, and “Commercialized” has
a corresponding meaning.

 

“Commercial Update Summary” means a summary of all material information and
developments with respect to the Company’s Commercialization and Manufacturing
plans for the Included Products, which summary may be comprised of materials
provided by the Company to the Board and senior management and shall include
quarterly and year-to-date comparisons of actual performance to budgeted
performance for the Included Products and updated budgets and forecasts (as
submitted to the Board) for the Included Products.

 

“Company” has the meaning set forth in the first paragraph hereof.

 

“Compound” means bempedoic acid.

 

“Confidential Information” means all confidential business information,
financial data and other like information and other proprietary information or
material, together with such other information that either party identifies to
the other as confidential or the nature of which or the circumstances of the
disclosure of which would reasonably indicate that such information is
confidential.

 

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise; provided
that with respect to any Intellectual Property, “control” means that the
applicable Persons owns or has a license to such item or right and has the
ability to grant to a party a license, sublicense, or rights of access and use
under such item or right without violating the terms or conditions of any
agreement or other arrangement between such Person and any Third Party in
existence as of the time such party would be required hereunder to grant such
license, sublicense, or rights of access and use.  “Controlling” and
“Controlled” have meanings correlative thereto.

 

“Covered Territory” means the United States; provided that, if Annual Net Sales
for the calendar year ending December 31, 2021 are less than $350,000,000, the
definition of Covered Territory, solely for purposes of the definition of Annual
Net Sales, shall be expanded to include the whole world for all subsequent
calendar years beginning on January 1, 2022.

 

“Cumulative Purchaser Payments” means (a) if the Purchasers have made the First
Payment, $125,000,000, (b) if the Purchasers have made the First Payment and the
Second Payment, $150,000,000 and (c) if the Purchasers have made the First
Payment, the Second Payment and the Third Payment, $200,000,000.

 

“Development” means all activities related to research, development, creation
and prosecution of Intellectual Property, pre-clinical and other non-clinical
testing, test method development and stability testing, toxicology, formulation,
process development, manufacturing scale-up, qualification and validation,
quality assurance/quality control, clinical studies, including Manufacturing in
support thereof, statistical analysis and report writing, the preparation and
submission of Drug Approval Applications, regulatory affairs with respect to the
foregoing and all other activities necessary or reasonably useful or otherwise
requested or required by a Regulatory Agency as a condition or in support of
obtaining or maintaining a Regulatory Approval.  When used as a verb, “Develop”
means to engage in Development.

 

“Dispute” has the meaning set forth in Section 3.11(d).

 

“Disqualified Equity Interests” means Equity Interests of a Person subject to
repurchase or redemption rights or obligations (excluding repurchases or
redemptions at the sole option of such Person

 

5

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or net share settlement features); provided that if such Equity Interests are
issued pursuant to a plan for the benefit of the Company or any Subsidiary or
their directors, officers, employees and/or consultants or by any such plan to
directors, officers, employees or consultants of the Company or any Subsidiary,
such Equity Interests shall not constitute Disqualified Equity Interests solely
because they may be repurchased by the Company or any Subsidiary in order to
satisfy applicable contractual, statutory or regulatory obligations or as a
result of such director, officer, employee or consultant’s termination, death or
disability.

 

“Domestic Subsidiary” means any direct or indirect Subsidiary that is organized
under the laws of the United States, any state or commonwealth thereof, or the
District of Columbia

 

“Drug Approval Application” means a New Drug Application as defined in the
FFDCA, or any corresponding foreign application.

 

“DSE Agreement” means that certain License and Collaboration Agreement by and
between Daiichi Sankyo Europe GmbH and the Company, dated as of January 2, 2019.

 

“Effective Date” means June 26, 2019.

 

“Eligible Assignee” is (i) a Purchaser, (ii) an Affiliate of a Purchaser or any
fund or investment vehicle managed by the Purchaser or an Affiliate of a
Purchaser or under common management with a Purchaser and (iii) any Person that,
to the knowledge of the Purchaser Agent, is a “qualified institutional buyer”
(as defined in Rule 144A under the Securities Act of 1933, as amended) or an
“accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7)) with
assets under management (together with its Affiliates) of at least $150,000,000,
as determined by the Purchaser Agent in its good faith discretion; provided
that, notwithstanding the foregoing, “Eligible Assignee” shall not include,
unless a Put Option Event, or any event that with the giving of notice or
passage of time would constitute a Put Option Event, has occurred and is
continuing, (x) any operating company primarily engaged in the Development or
Commercialization of pharmaceutical products, (y) any entity identified in the
Letter Agreement by and between the Company and the Purchaser Agent and any
Affiliate thereof that is identifiable as such by name (or otherwise known to
the Purchaser Agent to be an Affiliate) or (z) any stockholder activist hedge
fund, in each case of clause (x), (y) and (z) as reasonably determined by the
Purchaser Agent in its good faith discretion (any such person, a “Disqualified
Person”).

 

“Equity Interests” means any and all shares, interests, participations or other
equivalents (however designated) of equity interests of a corporation, any and
all equivalent ownership interests in a Person other than a corporation
(including, without limitation, partnership interests, membership interests and
similar ownership interests), any and all warrants, rights or options to
purchase or other arrangements or rights to acquire any of the foregoing, and
all other ownership or profit interests in a Person (including partnership,
member or trusts interests in such Person), in each case whether voting or
non-voting and whether or not outstanding on any date of determination.

 

“Excluded Liabilities” has the meaning set forth in Section 2.04.

 

“FDA” means the United States Food and Drug Administration or any successor
federal agency thereto.

 

“FDA Approval Date” means the date on which the first Initial Product receives
Regulatory Approval from the FDA for labeled indications reasonably consistent
with the labels included in the applicable NDA submitted to the FDA prior to the
Effective Date and with no BLACK BOX warnings.

 

6

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“FFDCA” means the United States Food, Drug, and Cosmetic Act, as amended from
time to time, together with any rules, regulations and requirements promulgated
thereunder (including all additions, supplements, extensions, and modifications
thereto).

 

“Financial Condition and Results of Operations Summary” means a summary of all
material information and developments with respect to the Company’s financial
condition and results of operations, which summary shall be comprised of
materials provided by the Company to the Board and senior management and shall
include management projections (as submitted to the Board) of revenue and cash
flow for the next twelve months.

 

“Financial Statements” means (a) the audited balance sheets of the Company as of
December 31, 2018, and 2017, and the related audited statements of operations,
cash flows and stockholders’ equity for the calendar years then ended, (b) the
unaudited balance sheet of the Company and the unaudited balance sheet of the
Company as of March 31, 2019, and the related unaudited consolidated statements
of operations and cash flows for the three (3) month period then ended, and
(c) each financial statement delivered pursuant to Section 5.02(a).

 

“First Commercial Sale” means the first sale to a Third Party of an Initial
Product in the United States by the Company or any of its Affiliates or
Licensees after the granting of Regulatory Approval by the FDA.

 

“First Payment” means $125,000,000, which shall be paid by the Purchasers on the
First Purchaser Payment Date in accordance with Section 2.03(a)(i).

 

“First Purchaser Payment Date” means the date that is fifteen (15) Business Days
following the Effective Date (or such earlier date as agreed among the parties).

 

“Follow-On Product Lien Release” has the meaning set forth in Section 2.02(d).

 

“Follow-On/Cannibalizing Product” means any product that the Company or any of
its Affiliates has any rights to that is being Developed or Commercialized to
lower LDL cholesterol in a population in excess of 200,000 people in the United
States, in all forms, presentations, doses and formulations, whether used as a
single agent or in combination with other therapeutically active agents.

 

“Follow-On/Cannibalizing Product Assets” means each of the following but solely
to the extent not (1) related primarily to, (2) used in or (3) reasonable
necessary for the Development, Commercialization or Manufacture of any BA
Product: (a) all Intellectual Property assets necessary or useful for the
Development, Manufacture or Commercialization of any Follow-On/Cannibalizing
Product that is not a BA Product and are not necessary or useful for the
Development, Manufacture or Commercialization of any BA Product, and that are
owned by, licensed to, or otherwise Controlled by the Company or any Subsidiary,
and (ii) any other assets other than account receivables or payment intangibles
that are owned by, licensed to, or otherwise Controlled by the Company or any
Subsidiary that are necessary or useful for the Development, Commercialization
or Manufacture of any Follow-On/Cannibalizing Product that is not a BA Product.

 

“Foreign Subsidiary” means any direct or indirect Subsidiary of the Company that
is not a Domestic Subsidiary.

 

“GAAP” means generally accepted accounting principles in the United States in
effect from time to time.

 

7

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“Generic Equivalent” means a pharmaceutical product that receives approval for
Commercialization pursuant to an ANDA in the applicable portion of the Covered
Territory.

 

“Governmental Authority” means any government, court, regulatory or
administrative agency or commission, or other governmental authority, agency or
instrumentality, whether foreign, federal, state, local or supranational
(domestic or foreign), including each Patent Office, the FDA or the United
States National Institutes of Health.

 

“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.

 

“Guaranty” means a guaranty agreement made by each Subsidiary Guarantor in favor
of the Purchaser Agent and the Purchasers substantially in the form attached as
Exhibit B hereto.

 

“Included Product” means (a) any BA Product and (c) any Follow-On/Cannibalizing
Product.

 

“Indebtedness” means with respect to any Person: (a) any liability or obligation
of such Person (i) for borrowed money, (ii) evidenced by a bond, note,
debenture, or similar instrument, (iii) in respect of the deferred purchase
price of property or services, including a purchase money obligation given in
connection with the acquisition of any businesses, properties or assets of any
kind (other than a current trade payable or a current liability arising in the
ordinary course of business), (iv) under conditional sale or other title
retention agreements relating to property acquired by such Person, (v) upon
which interest charges are customarily paid, (vi) contingent or otherwise, in
respect of bankers’ acceptances, letters of credit or similar extensions of
credit, (vii) in respect of hedging agreements and other derivative contracts
(for the net amount owed by such Person thereunder), or (viii) for the payment
of money relating to any obligations under any capital lease of real or personal
property which are required to be recorded as a capitalized lease obligation in
accordance with GAAP; (b) all Disqualified Equity Interests of such Person;
(c) any Guarantee by such Person of Indebtedness or obligations of others; and
(d) (without duplication) any amendment, supplement, modification, deferral,
renewal, extension or refunding of any liability of the types referred to in
clauses (a), (b) and (c) above.  Indebtedness of any Person shall include
(A) all Indebtedness referred to in clauses (a) through (d) above secured by (or
for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property (including, without
limitation, accounts and contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such Indebtedness and
(B) the Indebtedness of any other entity (including any partnership in which
such Person is a general partner) to the extent such Person is liable therefor
as a result of such Person’s ownership interest in or other relationship with
such entity, except to the extent the terms of such Indebtedness provide that
such Person is not liable therefor.

 

“Indemnified Liabilities” means, collectively, all Excluded Liabilities and any
and all liabilities, obligations, losses, damages, penalties, claims, costs,
expenses and disbursements of any kind or nature whatsoever (including the
reasonable and documented fees and disbursements of counsel for Indemnified

 

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Parties in connection with any investigative, administrative or judicial
proceeding commenced or threatened by any Person whether or not any such
Indemnified Party shall be designated as a party or a potential party thereto,
and whether or not such Indemnified Party is required by applicable law to be
involved therein, and any fees or expenses actually incurred by the Indemnified
Parties in enforcing the indemnity provided herein), whether direct, indirect or
consequential, whether based on any federal, state or foreign laws, statutes,
rules or regulations (including securities and commercial laws, statutes,
rules or regulations), on common law or equitable cause or on contract or
otherwise, imposed on, incurred by, or asserted against any such Indemnitee, in
any manner relating to or arising out of this Agreement or the other Transaction
Documents or the transactions contemplated hereby or thereby (including any
enforcement of any of the Transaction Documents (including any sale of,
collection from, or other realization upon any of the Collateral)), subject in
all cases to Section 8.01.

 

“Indemnified Party” has the meaning set forth in Section 8.04.

 

“Initial Products” means (a) bempedoic acid tablet for LDL-C lowering
indications, and (b) bempedoic acid/ezetimibe combination tablet for LDL-C
lowering indications.

 

“Intellectual Property” means all intellectual property and other proprietary
rights of any kind or nature, whether registered or unregistered and whether
registrable or not, protected, created or arising under any law, including any
and all rights in: proprietary information; technical data; laboratory
notebooks; clinical data; priority rights; trade secrets; know-how; confidential
information; inventions (whether patentable or unpatentable and whether or not
reduced to practice or claimed in a pending patent application); Patents;
registered or unregistered trademarks, trade names, service marks, trade dress,
logos, slogans, including all goodwill associated therewith; domain names;
registered and unregistered copyrights and all applications thereof and all
rights in works of authorship of any type, in all forms or media, designs
rights, registered designs, database rights and rights in compilations of data.

 

“Intellectual Property Docket Report” means a list of any new Patents,
trademarks or copyrights issued or patent, trademark or copyright applications
filed, amended or supplemented, constituting Collateral (in form sufficient to
allow Purchaser Agent to prepare appropriate filings in respect thereof to
protect its Liens thereon).

 

“Intellectual Property Update Summary” means a summary of all material
information and developments with respect to Product Intellectual Property,
which summary shall be comprised of materials provided by the Company to the
Board and senior management.

 

“Investment” means any beneficial ownership interest in any Person (including
stock, partnership interest or other securities) and any loan, advance,
extension of credit, capital contribution or similar payment to any Person, and
any payment in respect of any purchase, license or other acquisition of any
business, division, product line, or rights to any pharmaceutical or product of
any Person.

 

“IRS” means United States Internal Revenue Service.

 

“Knowledge of the Company” means the actual knowledge, after reasonable inquiry,
of any of the persons listed on Schedule 1.01(a) (each a “Knowledge Person”).

 

“License Agreement” means any existing or future license, commercialization,
co-promotion, collaboration, distribution, marketing or partnering agreement
entered into before or during the Revenue Interest Period by the Company or any
of its Affiliates that grants a license to a Third Party under any Product
Intellectual Property.

 

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“Licensees” means, collectively, the licensees and any sublicensees under any
License Agreement (other than License Agreements described in clause (d) of the
definition of Permitted Licenses); each a “Licensee”.

 

“Liens” means all liens, encumbrances, security interests, mortgages, rights to
preferential payments or charges of any kind, but excluding any Permitted
Licenses.

 

“Manufacture” and “Manufacturing” means all activities related to the
production, manufacture, processing, filling, finishing, packaging, labeling,
shipping, and holding of the Included Product, or any intermediate thereof,
including process development, process qualification and validation, scale-up,
pre-clinical, clinical and commercial manufacture and analytic development,
product characterization, stability testing, quality assurance, and quality
control.

 

“Material Adverse Effect” means (a) the effect of a material adverse change in
the business, operations, assets, or financial condition of the Company and its
Subsidiaries, taken as a whole, (b) a material adverse effect on the validity or
enforceability of any of the Transaction Documents, (c) a material adverse
effect on the ability of the Company or any Obligor to perform any of its
material obligations under the Transaction Documents, (d) a material adverse
effect on the rights or remedies of the Purchaser Agent or any Purchaser under
any of the Transaction Documents (including without limitation the ranking or
enforceability of any Lien thereunder), or (e) a material adverse effect on the
Initial Products (taken as a whole), the Product Intellectual Property (taken as
a whole) or the ability of the Company or a Person acting on behalf of the
Company to Develop, Commercialize or Manufacture any Initial Product in the
Covered Territory.

 

“Material Contract” means: (a) any “material contract” (as such term is defined
in Item 601(b)(10) of Regulation S-K of the Securities Act of 1933, as amended,
other than those agreements and arrangements described in Item 601(b)(10)(iii))
with respect to Company or its Affiliates that involves the Development,
Manufacture, or Commercialization of any Included Product; (b) any development
agreement, collaboration agreement, marketing agreement, co-promotion agreement,
license agreement, option agreement, partnering agreement or similar agreement
with respect to Company or its Affiliates related to the Development,
Manufacture, or Commercialization of any Included Product (including the DSE
Agreement); or (c) any other agreement with respect to Company or its Affiliates
relating to any Material Patent or Included Product, for which breach,
non-performance or failure to renew by the Company or its Affiliates or the
respective counterparty would reasonably be expected to have a Material Adverse
Effect.  “Material Contracts” shall include, without limitation, all License
Agreements.

 

“Milestone” means that the Purchasers have received Revenue Interest Payments
under this Agreement (excluding any payments under Section 2.05) in an amount
equal to or greater than the Cumulative Purchaser Payments on or prior to
December 31, 2024.

 

“Net Sales” means, with respect to an Included Product, the aggregate gross
invoiced sales prices from sales of all units of such Included Product sold by
the Company, its Affiliates and any Licensee to Third Parties in accordance with
GAAP after deducting, if not previously deducted, from the amount invoiced or
received:

 

(a)           trade, quantity and cash discounts, credits or allowances actually
given;

 

(b)           allowances for returns or rejections (due to spoilage, damage,
expiration of useful life or otherwise);

 

(c)           freight and insurance, if separately identified on the invoice;

 

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(d)                                 mandatory discounts or rebates imposed by
any Governmental Authority against the Company, any Affiliate or any Licensee,
as applicable, including any claw-backs or similar pharma taxes directly related
to the Included Product and paid directly by the Company, such Affiliate or such
Licensee, as applicable, or, in the case of claw-backs related to aggregate
sales of the Company, such Affiliate or such Licensee, as applicable, such
portion of the claw-back as shall be reasonably determined by the Company, such
Affiliate or such Licensee, as applicable, based on the proportion between the
share of Net Sales hereunder and aggregate sales of the Company, such Affiliate
or such Licensee, as applicable;

 

(e)                                  Third Party rebates, chargebacks, hospital
buying group/group purchasing organization administration fees or managed care
organization rebates actually given;

 

(f)                                   rebates and similar payments made with
respect to sales paid for by any Governmental Authority or Regulatory Agency
such as federal or state Medicaid, Medicare or similar state program;

 

(g)                                  value-added tax, sales, use or turnover
taxes, excise taxes and customs duties assessed by Governmental Authorities on
the sale of the Included Product;

 

(h)                                 retroactive price reductions or billing
corrections; and

 

(i)                                     other reductions or specifically
identifiable amounts deducted for reasons similar to those listed above in
accordance with GAAP; provided that no item shall be deducted pursuant to this
clause (i) if included in any other deduction provided for under clauses
(a) through (h) above.

 

In the case of any sale or other disposal for value, such as barter or
counter-trade, of an Included Product, or part thereof, other than in an arm’s
length transaction exclusively for cash, Net Sales shall be calculated as above
on the value of the non-cash consideration received or the fair market price (if
higher) of such Included Product in the country of sale or disposal, as
determined in accordance with GAAP.

 

Notwithstanding the foregoing, the following will not be included in Net Sales
for a Party: (1) sales between or among such Party and its Affiliates and/or
Licensees (but Net Sales shall include sales to the first Third Party (other
than a Licensee) by such Party or its Affiliates and/or Licensees); and
(2) samples of an Included Product in amounts consistent with normal business
practices of such Party or its Affiliates and/or Licensees where the Included
Product is supplied without charge or at or below the actual manufacturing cost
thereof (without allocation of indirect costs or any mark-up).

 

Except to the extent specified in the immediately succeeding sentence, in no
event shall Net Sales for the United States for any period be less than net
revenue for the Included Products for the United States as reported in the
Company’s financial statements prepared in accordance with GAAP and filed
publicly.

 

Solely for purposes of calculating Net Sales for any BA Product (other than the
Initial Products), from and after the occurrence of the Milestone, if Company or
its Affiliates or any permitted Licensee sells a BA Product in any jurisdiction
within the Covered Territory (other than the DSE Territory (as defined in the
DSE Agreement)) in the form of a combination product that contains the Compound
and one or more other therapeutically or prophylactically active ingredients
that are not the Compound and that are not Generic Equivalents (such other
therapeutically or prophylactically active ingredient(s), the “Other Product”)
(whether combined in a single formulation or package, as applicable, or
formulated separately but packaged under a single label approved by a Regulatory
Agency and sold together for a single price) (such combination product, a
“Combination Product”), Net Sales of such Combination Product for the purpose of
determining the payments due to the Purchasers pursuant to this Agreement will
be the greater of: (x) the number of units of such Combination Product sold by
the Company, its Affiliates or Licensees, multiplied by the Floor Price of the
Compound in the applicable jurisdiction, and (y) an amount equal to (i)

 

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the actual Net Sales of such Combination Product as determined in the first
paragraph of the definition of “Net Sales”, multiplied by the fraction A/(A+B)
where A is the gross selling price of such Included Product containing the
Compound that does not contain such Other Product in the applicable
jurisdiction, and B is the gross selling price of the Other Product in the
applicable jurisdiction when sold separately, in each case, during the relevant
period, or, if the gross selling price of such Included Product containing the
Compound in the applicable jurisdiction when sold separately in finished form
(i.e., without the Other Product) can be determined but the gross selling price
of the Other Product in the applicable jurisdiction cannot be determined,
(ii) the actual Net Sales of the Combination Product in applicable jurisdiction
multiplied by the fraction A / C where A is the gross selling price of an
Included Product containing the Compound that does not contain such Other
Product in the applicable jurisdiction when sold separately during the relevant
period and C is the gross selling price of the Combination Product in the
applicable jurisdiction, or, if such separate sales are not made in the
applicable jurisdiction, (iii) the actual Net Sales of the Combination Product
in such country multiplied by a fraction fairly and reasonably reflecting the
relative value contributed by the Compound (without the Other Product) to the
total value of the Combination Product as determined by the parties in good
faith. “Floor Price” for purposes of this definition, means, with respect to any
jurisdiction within the Covered Territory, the highest initial gross selling
price of any Included Product that does not include the Other Product upon the
first commercial sale thereof in such jurisdiction, plus all increases to such
gross selling price in such jurisdiction thereafter. For clarity, the
calculations above shall be made without regard to to the  pharmaceutical dosage
of the Compound in any Included Product or Combination Product and
pharmaceutical dosage form vehicles, delivery devices, adjuvants and excipients
shall be deemed not to be “active ingredients.”

 

Notwithstanding the foregoing, when calculating Net Sales for purposes of this
Agreement, the net sales generated by a Licensee under a License Agreement will
be determined in accordance with the terms (including the definition of “net
sales”) provided in the relevant License Agreement; provided that such License
Agreement is the product of a negotiation with a Third Party and its terms are
consistent with customary practices within the pharmaceutical industry for
comparable agreements.

 

“Non-U.S. Purchaser” means any Purchaser or Eligible Assignee that is not a U.S.
Person.

 

“Obligations” means, without duplication, all obligations of the Company in
respect of the Revenue Interests, including all obligations to make Revenue
Interest Payments and to pay the Put/Call Price, and all present and future
Indebtedness, taxes, liabilities, obligations, covenants, duties, and
debts, Indemnified Liabilities owing by the Company to the Purchasers, arising
under or pursuant to the Transaction Documents, including all Reimbursable
Expenses (and including any interest, fees and other charges that would accrue
but for the filing of a bankruptcy action with respect to the Company, whether
or not such claim is allowed in such bankruptcy action).

 

“Obligors” means the Company and each Subsidiary Guarantor.

 

“OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets
Control and any successor thereto.

 

“Patent Office” means the respective patent office, including the United States
Patent and Trademark Office, the European Patent Office and any comparable
patent office in any other jurisdiction, for any Patents.

 

“Patents” means all issued national, regional and international patents and
patent applications (and any patents that issue as a result of those patent
applications or from an application claiming priority from any of those and
which for the purposes of this Agreement, shall be deemed to include all
certificates of invention and applications for certificates of invention) and
any renewals, restorations, reissues,

 

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reexaminations or other post-grant proceedings, extensions, continuations,
continuations-in-part, divisions, revisions, certificates of invention,
registrations, revalidations, utility models, supplemental protection
certificates, patent term extensions, pediatric exclusivity periods and
substitutions relating to any of the issued patents and patent applications, in
any jurisdiction.

 

“PATRIOT Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT Act
of 2001) and any successor statute.

 

“Payment Date” means each of March 31, June 30, September 30 and December 31,
commencing on the first such date to occur following the First Commercial Sale.

 

“Permitted Acquisition” means any transaction or series of related transactions
by which the Company or any of its Subsidiaries acquires all or substantially
all of the assets of a Person or business, division, product line, rights to any
pharmaceutical or product or acquires Equity Interests of any Person having at
least a majority of combined voting power of the then outstanding Equity
Interests of such Person which meets the following conditions:

 

(a)                                 immediately prior to, and after giving
effect thereto, no material breach or default under the Transaction Documents
and no Put Option Event shall have occurred and be continuing or would
reasonably be expected to result therefrom;

 

(b)                                 all transactions in connection therewith
shall be consummated, in all material respects, in accordance with applicable
law;

 

(c)                                  in the case of the purchase or other
acquisition of Equity Interests, all of the Equity Interests (except for any
such Equity Interest in the nature of directors’ qualifying shares required
pursuant to applicable law) acquired or otherwise issued by such Person or any
newly formed Subsidiary in connection with such acquisition shall be wholly
owned by the Company or a Subsidiary;

 

(d)                                 (i) prior to the occurrence of the
Milestone, the aggregate purchase price (including all deferred or contingent
consideration but excluding any royalties based on net sales or revenue) payable
in cash of such transactions shall not exceed 10% of the market capitalization
of the Company, measured as of the date the definitive documentation for such
transaction is executed and (ii) after the occurrence of the Milestone, the
aggregate purchase price (excluding contingent consideration based on the
occurrence of future events or any royalties based on net sales or revenue)
payable in cash of such transactions shall not exceed 25% of the market
capitalization of the Company, measured as of the date the definitive
documentation for such transaction is executed;

 

(e)                                  no Change of Control shall result from such
transaction;

 

(f)                                   the Person whose Equity Interests or
business are being acquired shall be engaged, or the asset acquired shall be
used to engage, in the Development and Commercialization of products with a
substantially similar call point to the Initial Products;

 

(g)                                  such transaction would not result in a
going concern qualification in the Company’s next audit, without regard to any
subsequent financing transactions of the Company, as reasonably determined by
the Board acting in good faith after reviewing projections (taking into account
the terms of such transaction and all upfront, milestone and other payments
required to be made pursuant to, and costs incurred or expected to be incurred
in connection with or as a result of, such transaction) prepared by the Company
acting in good faith; provided that an officer of the Company shall deliver a
certificate to the Purchaser Agent at least five (5) Business Days prior to the
consummation of such transaction, which

 

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certificate shall (i) have attached such projections, (ii) contain a
certification that such projections were reviewed by the Board and (iii) contain
a certification that the Board has reasonably determined that such transaction
would not result in a going concern qualification in the Company’s next audit
opinion, without regard to any subsequent financing transaction of the Company;
and

 

(h)                                 such transaction shall be consensual and, if
required, shall have been approved by the target’s board of directors.

 

“Permitted Convertible Notes” means unsecured Indebtedness of the Company in the
form of senior subordinated convertible notes; provided that such convertible
notes shall (a) permit physical settlement upon conversion (and the Company
shall not elect cash or combination settlement upon conversion unless the
Milestone shall have occurred and such payment would not result in a going
concern qualification in the Company’s next audit, without regard to any
subsequent financing transactions of the Company, as reasonably determined by
the Board acting in good faith after reviewing projections (taking into account
the terms of such transaction) prepared by the Company; provided that an officer
of the Company shall deliver a certificate to the Purchaser Agent at least two
(2) Business Days prior to the election to so settle conversions, which
certificate shall (i) have attached such projections, (ii) contain a
certification that such projections were reviewed by the Board and (iii) contain
a certification that the Board has reasonably determined that such transaction
would not result in a going concern qualification in the Company’s next audit
opinion, without regard to any subsequent financing transaction of the Company),
(b) not be guaranteed by any Subsidiary of the Company, (c) not provide for any
scheduled amortization or mandatory prepayment of principal prior to the stated
maturity thereof (other than customary payments upon a “change of control” or
“fundamental change” (it being understood that conversion of any such
Indebtedness shall not be considered a prepayment), (d) contain usual and
customary subordination terms for underwritten or Rule 144A offerings of senior
subordinated convertible notes and (e) specifically designate this Agreement and
all Obligations as “designated senior indebtedness” or similar term so that the
subordination terms referred to in clause (d) of this definition specifically
refer to such notes as being subordinated to the Secured Obligations pursuant to
such subordination terms.  For purposes of clause (d), language in substantially
the same form and substance as set forth on Exhibit C shall be deemed “usual and
customary”.

 

“Permitted Indebtedness” means:

 

(a)                                 Indebtedness owed to the Purchasers and the
Purchaser Agent under this Agreement and the other Transaction Documents;

 

(b)                                 Indebtedness existing on the Effective Date
and disclosed on Schedule 5.10(a)(i);

 

(c)                                  unsecured Indebtedness to trade creditors
incurred in the ordinary course of business;

 

(d)                                 Indebtedness constituting Permitted
Investments under clause (f) or (g) thereof;

 

(e)                                  Guarantees of the Company and its
Subsidiaries in respect of Indebtedness and other obligations of the Company and
any Subsidiary otherwise permitted hereunder;

 

(f)                                   Indebtedness incurred by the Company or
its Subsidiaries to finance the payment of insurance premiums;

 

(g)                                  Indebtedness owed to any Person providing
worker’s compensation, health, disability or other employee benefits or
property, casualty or liability insurance to the Company or any Subsidiary
incurred in connection with such Person providing such benefits or insurance
pursuant to customary reimbursement or indemnification obligations to such
Person;

 

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(h)                                 Guarantees (or liabilities as a surety,
endorser, accommodation endorser or otherwise) in respect of performance,
surety, statutory, appeal or similar obligations incurred in the ordinary course
of business but excluding guaranties with respect to any obligations for
borrowed money;

 

(i)                                     Indebtedness in respect of payment
processing services, business credit card programs, and netting services,
overdrafts and related liabilities arising from treasury, depositary and cash
management services securing maximum amounts;

 

(j)                                    Indebtedness consisting of capitalized
lease obligations and purchase money Indebtedness, in each case incurred by the
Company or any of its Subsidiaries to finance the acquisition, repair,
improvement or construction of fixed or capital assets of such person, provided
that the principal amount of such Indebtedness does not exceed the lower of the
cost or fair market value of the property so acquired or built or of such
repairs or improvements financed with such Indebtedness (each measured at the
time of such acquisition, repair, improvement or construction is made);

 

(k)                                 Indebtedness in respect of hedging
agreements entered into for bona fide hedging purposes in the ordinary course
and not for speculative purposes;

 

(l)                                     Permitted Convertible Notes;

 

(m)                             Indebtedness incurred to finance a Permitted
Acquisition; provided that such Indebtedness (i) is not secured by any Product
Assets constituting Collateral and (ii) if secured by any assets of any Obligor,
is subject to an intercreditor agreement in form and substance satisfactory to
the Purchaser Agent; and

 

(n)                                 other unsecured Indebtedness not otherwise
permitted under clauses (a) through (m) inclusive of this definition in an
aggregate outstanding principal amount not to exceed at any time (x) prior to
the occurrence of the Milestone, $2,000,000 and (y) after the occurrence of the
Milestone, $20,000,000.

 

“Permitted Investments” means:

 

(a)                                 Investments existing on the Effective Date
and listed on Schedule 5.10(a)(iii) and any modifications, renewals or
extensions thereof so long as the net investment amount is not increased;

 

(b)                                 Investments consisting of cash and cash
equivalents;

 

(c)                                  Investments consisting of (i) travel
advances and employee relocation loans and other employee loans and advances in
the ordinary course of business, and (ii) loans to employees, officers or
directors relating to the purchase of Equity Interests of the Company pursuant
to employee stock purchase plans or agreements approved by the Board;

 

(d)                                 Investments (including debt obligations)
received in connection with the bankruptcy or reorganization of customers or
suppliers and in settlement of delinquent obligations of, and other disputes
with, customers or suppliers arising in the ordinary course of business;

 

(e)                                  Investments consisting of notes receivable
of, or prepaid royalties and other credit extensions, to customers and suppliers
who are not Affiliates, in the ordinary course of business;

 

(f)                                   Investments in the Company or any
Subsidiary Guarantor;

 

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(g)                                  Investments in a Specified Foreign
Subsidiary arising out of the Transfer of Intellectual Property relating to the
Commercialization of Included Products outside the United States, together with
any Regulatory Approvals for jurisdictions outside the United States, to a
Specified Foreign Subsidiary;

 

(h)                                 (i) Permitted Acquisitions and
(ii) Investments of a Person existing at the time such Person is acquired in a
Permitted Acquisition; provided that such Investments were not entered into in
connection with or in anticipation of the applicable Permitted Acquisition; and

 

(i)                                     other Investments in an aggregate amount
not to exceed (x) prior to the occurrence of the Milestone, $2,000,000 and
(y) after the occurrence of the Milestone, $20,000,000.

 

“Permitted Licenses” means (a) the DSE Agreement; (b) any License Agreement for
the Development, Manufacture or Commercialization of (i) the Initial Products
exclusively outside the United States and the DSE Territory (as defined in the
DSE Agreement) or (ii) any Included Products that are not Initial Products
exclusively outside the United States; provided that, in each case of clauses
(i) and (ii), (x) the license constitutes an arms-length transaction, the terms
of which, on its face, does not provide for a sale or assignment of any
Intellectual Property (but for the avoidance of doubt, the Transfer of any
Regulatory Approvals for the applicable jurisdiction outside the United States
and the DSE Territory is permitted pursuant to Section 5.10(a)(iv)(F)); (y) such
License Agreement complies with the terms of Section 5.03(b)(ii) and (z) all
upfront payments, royalties, milestone payments or other proceeds arising from
the licensing agreement that are payable to any Obligor are paid to a deposit
account that is subject to a control agreement in favor of Purchaser Agent;
(c) any License Agreement relating to Follow-On/Cannibalizing Products acquired
in a Permitted Acquisition; provided that such License Agreement was not entered
into in connection with or anticipation of such Permitted Acquisition; (d) any
license granted to any Third Party for the Manufacture of any Included Product
or otherwise granted to a contract to a vendor or service provider in order to
provide services for the benefit of the Company or its Affiliates but granting
no rights to sell, offer to sell, have sold or otherwise Commercialize any
Included Product; provided that any such license complies with
Section 5.03(b)(ii); and (e) any sponsored research or similar agreement
providing for the Development of an Included Product that does not grant the
counterparty any right to sell, offer to sell, have sold or otherwise
Commercialize any Included Product.

 

“Permitted Liens” means:

 

(a)                                 Liens in favor of the Purchaser Agent or the
Purchasers created by or otherwise existing under or in connection with the
Transaction Documents;

 

(b)                                 Liens in existence as of the date hereof and
set forth on Schedule 5.10(a)(ii);

 

(c)                                  Liens imposed by mandatory provisions of
law of landlords, carriers, warehousemen, bailees, mechanics and materialmen
incurred in the ordinary course of business for sums that are (i) not yet more
than sixty (60) days past due or (ii) being contested in good faith by
appropriate proceedings;

 

(d)                                 Liens (other than those imposed by ERISA)
incurred in the ordinary course of business in connection with worker’s
compensation, unemployment insurance or other forms of governmental insurance or
benefits, insurance, surety bonds, or other obligations of a like nature or to
secure the performance of letters of credit, banker’s acceptances, bids,
tenders, statutory obligations, leases and contracts (other than for borrowed
money) entered into in the ordinary course of business;

 

(e)                                  Liens for Taxes that are not delinquent or
remain payable without any penalty or that are being contested in good faith and
with due diligence by appropriate proceedings and for which adequate reserves
have been established in accordance with GAAP;

 

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(f)                                   (i) banker’s Liens for collection or
rights of set off or similar rights and remedies as to deposit accounts or other
funds maintained with depositary institutions; provided that such deposit
accounts or funds are not established or deposited for the purpose of providing
collateral for any Indebtedness and are not subject to restrictions on access by
the Company or any Subsidiary in excess of those required by applicable banking
regulations; and (ii) customary Liens incurred in the ordinary course of
business to secure obligations in respect of payment processing services,
business credit card programs, and netting services, overdrafts and related
liabilities arising from treasury, depositary and cash management services
securing maximum amounts not to exceed at any time outstanding (x) prior to the
occurrence of the Milestone, $10,000,000 and (y) after the occurrence of the
Milestone, $20,000,000;

 

(g)                                  Liens on insurance policies, premiums and
proceeds thereof, or other deposits, to secure insurance premium financings with
respect to unearned premiums and other liabilities to insurance carriers;

 

(h)                                 Liens securing Indebtedness permitted under
clause (j) of the definition of Permitted Indebtedness; provided that (i) such
Liens exist prior to the acquisition of, or attach substantially simultaneous
with, or within twenty (20) days after the, acquisition, lease, repair,
improvement or construction of, such property financed or leased by such
Indebtedness and (ii) such Liens do not extend to any property of the Company or
any Subsidiary other than the property (and proceeds thereof) acquired, leased
or built, or the improvements or repairs, financed by such Indebtedness;

 

(i)                                     Liens on specific items of inventory or
other goods (and the proceeds thereof) of the Company securing such Person’s
obligations in respect of bankers’ acceptances issued or created for the account
of such Person to facilitate the purchase, shipment or storage of such inventory
or other goods;

 

(j)                                    Liens arising out of conditional sale,
title retention, consignment or similar arrangements for the sale of goods
entered into in the ordinary course of business;

 

(k)                                 Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of customs duties in
connection with the importation of goods in the ordinary course of business;

 

(l)                                     any interest or title of a lessor or
licensor under any lease, sublease, license or sublicense entered into by the
Company or any Subsidiary entered into in the ordinary course of its business;

 

(m)                             Liens on cash collateral securing hedging
agreements entered into for bona fide hedging purposes in the ordinary course of
business and not for speculative purposes;

 

(n)                                 Liens on deposits or other amounts held in
escrow to secure payments (contingent or otherwise) payable by the Company with
respect to (i) the settlement, satisfaction, compromise or resolution or
judgments, litigation, arbitration or other disputes and (ii) any commercial
contracts for manufacturing, production and other service arrangements entered
into in the ordinary course of business; and

 

(o)                                 following the Follow-On Product Lien
Release, Liens on Follow-On/Cannibalizing Product Assets.

 

“Person” means an individual, corporation, partnership, limited liability
company, association, trust or other entity or organization, but not including a
government or political subdivision or any agency or instrumentality of such
government or political subdivision.

 

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“Pro Rata Portion” means, with respect to any Purchaser, the sum of the unfunded
Purchaser Commitment of such Purchaser and Purchaser Payments made by such
Purchaser divided by the sum of all unfunded Purchaser Commitments and all
Purchasers Payments made by the Purchasers.

 

“Product Assets” means (a) all Product Intellectual Property, (b) each Material
Contract related to any Included Product, (c) all Regulatory Approvals related
to any Included Product, (d) all inventory of Included Products and any raw
materials and work-in-process relating thereto, (e) all accounts receivables and
payment intangibles arising out of sales of any Included Product or licenses of
any Product Intellectual Property, (f) all other assets primarily related to the
Development, Manufacture or Commercialization of any Included Product and that
are owned by, licensed to, or otherwise Controlled by the Company or any
Subsidiary, (g) any other assets that are owned by, licensed to, or otherwise
Controlled by the Company or any Subsidiary that are reasonably necessary for
the Development, Commercialization or Manufacture of any Included Products, the
absence of which would reasonably be expected to cause a Material Adverse Effect
and (h) all proceeds of any of the foregoing.

 

“Product Intellectual Property” means all Intellectual Property that is
necessary for, or otherwise material to, the Development, Commercialization,
and/or Manufacture, or other exploitation, of any Included Product that is
owned, licensed or otherwise controlled by any Obligor as of the Effective Date
or acquired by an Obligor thereafter, which shall initially include, without
limitation, the Patents identified in Schedule 3.11(a).

 

“Promotional Efforts” means, with respect to the performance of Development,
Commercialization or Manufacturing activities for an Included Product, the
carrying out of such activities in a sustained and diligent manner, and at all
times using personnel (including salespeople promoting the Included Products in
first position in the United States), efforts and resources available to the
Company or resources that the Company is reasonably capable of generating and
comparable to the personnel, efforts and resources commonly used in the
pharmaceutical industry by a publicly traded pharmaceutical company for such
company’s primary and top priority compound.  “Promotional Efforts” shall be
determined without regard to any other product opportunities of the Company and
any payments owed by the Company to the Purchasers under this Agreement.

 

“Purchaser” has the meaning set forth in the first paragraph hereof.

 

“Purchaser Agent” has the meaning set forth in the first paragraph hereof.

 

“Purchaser Commitment” means, with respect to any Purchaser, the commitment of
such Purchaser to purchase the Revenue Interests and pay the Purchaser Payments
in an aggregate amount up to the amount set forth opposite such Purchaser’s name
on Schedule 1.01(b).

 

“Purchaser Payments” means each of the First Payment, the Second Payment and the
Third Payment.

 

“Put Option” has the meaning set forth in Section 5.07(a).

 

“Put Option Closing Date” has the meaning set forth in Section 5.07(a).

 

“Put Option Event” means any one of the following events:

 

(a)                                 any Bankruptcy Event;

 

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(b)                                 the Company fails to make any payment within
two (2) Business Days of when due under Section 2.02; provided that, no more
than five times during the term of this Agreement, such failure shall not
constitute an Put Option Event if the Company makes such payment within five
(5) Business Days of the applicable due date;

 

(c)                                  a Material Adverse Effect;

 

(d)                                 any representation, warranty or statement
made or deemed made by or on behalf of any Obligor in or in connection with any
Transaction Document or any amendment or modification hereof or thereof, or in
any report, certificate, financial statement or other document furnished
pursuant to or in connection with any Transaction Document or any amendment or
modification hereof or thereof, shall: (i) prove to have been incorrect when
made or deemed made to the extent that such representation, warranty or
statement contains any materiality or Material Adverse Effect qualifier; or
(ii) prove to have been incorrect in any material respect when made or deemed
made to the extent that such representation, warranty or statement does not
otherwise contain any materiality or Material Adverse Effect qualifier;

 

(e)                                  (i) the Company breaches in any material
respect any term, covenant or agreement in any Transaction Document (other than
a breach of Section 5.01(a)(i) or Section 5.01(a)(ii)), which such breach, if
capable of cure, is not cured within ten (10) Business Days after receipt of
written notice of such breach from the Purchaser Agent, and (ii) the Company
fails to provide any notice when required by Section 5.01(a)(i) or
Section 5.01(a)(ii);

 

(f)                                   (i) the occurrence of any “fundamental
change”, “change of control” or “event of default” or similar event under the
terms of any Permitted Convertible Notes giving the holders thereof the right to
require the repurchase of, or to accelerate, such Permitted Convertibles Notes
and (ii), unless the Applicable Percentage for Tier 1 and Tier 2 has actually
decreased to 0.4% (or 0.53% if the Third Payment has been made), the date six
months prior to the stated maturity date of any Permitted Convertible Notes;

 

(g)                                  any Change of Control; and

 

(h)                                 the fifteenth (15th) anniversary of the
First Purchaser Payment Date.

 

“Put/Call Price” means, as of any date of determination:

 

(a)                                 in case of an exercise of the Put Option by
the Required Purchasers (other than in connection with a Change of Control) on
or prior to the first anniversary of the First Purchaser Payment Date, an amount
equal to 120.0% of the Cumulative Purchaser Payments; and

 

(b)                                 in all other cases,

 

(i)                                     on or prior to the third anniversary of
the First Purchaser Payment Date, an amount equal to 175.0% of the Cumulative
Purchaser Payments; and

 

(ii)                                  after the third anniversary of the First
Purchaser Payment Date, an amount equal to 195.0% of the Cumulative Purchaser
Payments;

 

minus, in each case, the sum of all Revenue Interest Payments made by the
Company to the Purchasers prior to such date; provided that the Put/Call Price
shall not be less than zero.

 

For the avoidance of doubt, the Put/Call Price shall be calculated as of the
date of the payment of the Put/Call Price.

 

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“Reconciliation Report” means, with respect to the relevant calendar quarter or
calendar year of the Company, (a) a report showing Net Sales for the Product for
such calendar period, reconciled, in each case, to the most applicable line item
in the Company’s statements of operations for the applicable calendar period and
(b) a reconciliation of all payments made by the Company to the Purchasers
pursuant to this Agreement during such calendar period.  The Reconciliation
Report for a calendar year shall also include the foregoing information with
respect to the fourth quarter of such calendar year.

 

“Regulatory Agency” means the FDA and any other Governmental Authority with
responsibility for the approval of the marketing and sale of pharmaceuticals or
other regulation of pharmaceuticals.

 

“Regulatory Approval” means all approvals (including, without limitation, where
applicable, Drug Approval Applications, pricing and reimbursement approval,
labeling approval and schedule classifications), licenses, registrations,
certificates, permits or authorizations (including, without limitation, pre- and
post-approval marketing authorizations (including any prerequisite Manufacturing
approval or authorization related thereto)) of any Governmental Authority
necessary for the manufacture, use, storage, import, export, transport, offer
for sale, or sale of any Included Product, together with all amendments,
supplements and updates thereto.

 

“Regulatory Filings” means all applications, filings, dossiers and the like
submitted to a Regulatory Agency for the purpose of obtaining Regulatory
Approval from that Regulatory Agency.  Regulatory Filings shall include, but not
be limited to, all Drug Approval Applications.

 

“Reimbursable Expenses” means all costs, and expenses (including reasonable
attorneys’ fees and expenses, as well as appraisal fees, consulting fees,
advisory fees, fees incurred on account of lien searches, inspection fees and
filing fees) for preparing, amending, negotiating, administering, defending and
enforcing the Transaction Documents (including, without limitation, those
incurred in connection with appeals or any Bankruptcy Event) or otherwise
incurred by the Purchaser Agent and/or the Purchasers in connection with the
Transaction Documents; provided that Reimbursable Expenses incurred prior to the
Effective Date in connection with the preparation and negotiation of the
Transaction Documents shall not exceed $350,000.

 

“Related Party” means, with respect to any Person, such Person’s Affiliates and
the partners, directors, officers, employees, agents, trustees and advisors of
such Person and of such Person’s Affiliates.

 

“Required Purchasers” means the Purchasers whose aggregate Pro Rata Portions
exceed 50%.

 

“Revenue Interest Period” means the period from and including the First
Purchaser Payment Date through and including the date on which the Purchasers
have received Revenue Interest Payments of 195.0% of the Cumulative Purchaser
Payments, unless earlier terminated upon (i) the Purchasers’ exercise, or deemed
automatic exercise, of the Put Option in accordance with Section 5.07(a) or
(ii) the Company’s exercise of the Call Option in accordance with
Section 5.07(b), in each case upon the indefeasible payment of the Put/Call
Price.

 

“Revenue Interest Payments” means, with respect to each calendar quarter during
the Revenue Interest Period, payments to the Purchasers in respect of the
Revenue Interests calculated by multiplying the Applicable Percentage(s) by the
corresponding amount of incremental Annual Net Sales of all Included Products
for such calendar quarter.

 

“Revenue Interests” means all of the Company’s right, title and interest in and
to that portion of the accounts and payment intangibles arising out of sales and
licenses of the Included Products and the Product

 

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Assets equal to the Revenue Interest Payments for each calendar quarter (or
portion thereof) during the Revenue Interest Period.

 

“Sanctioned Country” means a country subject to a sanctions program identified
on the list maintained by OFAC and available at
http://www.treas.gov/offices/enforcement/ofac/programs/, or as otherwise
published from time to time.

 

“Sanctioned Person” means (i) a Person named on the list of Specially Designated
Nationals or Blocked Persons maintained by OFAC available at
http://www.treas.gov/offices/enforcement/ofac/sdn/index.shtml, or as otherwise
published from time to time, or (ii)(A) an agency of the government of a
Sanctioned Country, (B) an organization controlled by a Sanctioned Country or
(C) a Person resident in a Sanctioned Country, to the extent subject to a
sanctions program administered by OFAC.

 

“SEC” means the Securities and Exchange Commission.

 

“Second Payment” means $25,000,000, which shall be paid by the Purchasers on the
Second Purchaser Payment Date in accordance with Section 2.03(a)(ii).

 

“Second Purchaser Payment Date” means the date specified in the applicable
notice sent to the Purchaser Agent pursuant to Section 2.03(b)(v)(D) with
regards to the Second Payment; provided that such date shall occur no later than
thirty (30) days after the FDA Approval Date.

 

“Security Agreement” means the Security Agreement between the Company, each
Subsidiary Guarantor and the Purchaser Agent providing for, among other things,
the grant by the Company in favor of the Purchaser Agent, for the benefit of the
Purchasers, of a valid continuing, perfected lien on and security interest in
the Collateral described therein, which Security Agreement shall be
substantially in the form of Exhibit A.

 

“Specified Foreign Subsidiary” means any Foreign Subsidiary of the Company that
meets the following conditions: (i) the Equity Interests of such Foreign
Subsidiary are directly owned by any Obligor and pledged in favor of the
Purchaser Agent to the extent required pursuant to Section 5.06(b), (ii) such
Foreign Subsidiary shall not voluntarily pledge, or grant any security interest
in, any Product Assets (other than following the Follow-Lien Release, Follow-On
Cannibalizing Product Assets) to any Person (other than any Obligor or the
Purchaser Agent or the Purchasers pursuant to the Transaction Documents),
(iii) such Foreign Subsidiary shall not incur any Indebtedness  (other than
Indebtedness owed to an Obligor and Permitted Indebtedness set forth in clauses
(a), (c), (f), (g), (h) and (i) of the definition thereof), (iv) such Foreign
Subsidiary shall in all material respects conduct its business solely in its own
name and comply with all organizational formalities necessary to maintain its
separate existence, not comingle its assets with those of any Person, only enter
into contracts in its own name as a legal entity separate from any other Person,
maintain separate books and records, pay its own liabilities and expenses out of
its own funds and maintain adequate capital in light of its contemplated
business purpose and operations, and (v) such Foreign Subsidiary shall engage
solely in the Commercialization of an Included Product in a jurisdiction outside
the United States and shall not engage in the Development of any Included
Product.

 

“Subsidiary” means with respect to any Person (i) any corporation of which the
outstanding Equity Interests having at least a majority of votes entitled to be
cast in the election of directors under ordinary circumstances is at the time
owned, directly or indirectly, by such Person or (ii) any other Person of which
at least a majority voting interest under ordinary circumstances is at the time,
directly or indirectly, owned by such Person.  Unless the context otherwise
requires, “Subsidiary” refers to a direct or indirect Subsidiary of the Company.

 

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“Subsidiary Guarantor” means any Subsidiary of the Company that is a guarantor
of the Obligations under the Guaranty (or under another guaranty agreement in
form and substance satisfactory to the Purchaser Agent) and has granted to the
Purchaser Agent, on behalf of the Purchasers, a Lien upon and security interest
in its right, title and interest in, to and under the Collateral pursuant to the
Security Agreement.

 

“Tax” or “Taxes” means any federal, state, local or foreign tax, levy, impost,
duty, assessment, fee, deduction or withholding or other charge, including all
excise, sales, use, value added, transfer, stamp, documentary, filing,
recordation and other fees imposed by any taxing authority (and interest, fines,
penalties and additions related thereto).

 

“Tax Return” means any report, return, form (including elections, declarations,
statements, amendments, claims for refund, schedules, information returns or
attachments thereto) or other information supplied or required to be supplied to
a Governmental Authority with respect to Taxes.

 

“Term” has the meaning set forth in Section 6.01.

 

“Third Party” means any Person other than the Purchaser Agent, any Purchaser,
the Company or any Subsidiary provided that, for purposes of the Net Sales
definition, “Third Party” means any Person other than the Company, its
Affiliates and any Licensee.

 

“Third Payment” means $50,000,000, which shall be paid by the Purchasers on the
Third Purchaser Payment Date in accordance with Section 2.03(a)(iv).

 

“Third Purchaser Payment Date” means the date specified in the applicable notice
sent to the Purchaser Agent pursuant to Section 2.03(b)(v)(D) with regards to
the Third Payment.

 

“Transaction Documents” means, collectively, this Agreement, the Security
Agreement, each Guaranty and any related ancillary documents or agreements.

 

“Transfer” means any sale, conveyance, assignment, disposition, license,
sub-license or other transfer.

 

“UCC” means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.

 

“UCC Financing Statements” means the UCC-1 financing statements, in form and
substance reasonably satisfactory to the Purchaser Agent, that shall be filed by
the Purchaser Agent at or promptly following the Effective Date, as well as any
additional UCC-1 financing statements or amendments thereto as reasonably
requested from time to time, to perfect the Purchaser Agent’s security interest
in the Assigned Interests Collateral.

 

“United States” and “U.S.” mean the United States of America.

 

“U.S. Purchaser” means any Purchaser or Eligible Assignee that is a U.S. Person.

 

“U.S. Person” means any Person that is a “United States Person” as defined in
Section 7701(a)(30) of the Code.

 

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ARTICLE II

 

PURCHASE OF REVENUE INTERESTS; PAYMENTS

 

Section 2.01                            Purchase of Revenue Interests.

 

(a)                                 Upon the terms and subject to the conditions
set forth in this Agreement, the Company agrees to sell, assign and transfer to
each Purchaser, and each Purchaser agrees to purchase and accept from the
Company, free and clear of all Liens, such Purchaser’s Pro Rata Portion of the
Revenue Interests.  The Purchasers’ interest in the Revenue Interests shall vest
immediately upon the Company’s receipt of payment of the First Payment pursuant
to Section 2.03(b), subject to the termination provisions of Section 6.01.

 

(b)                                 The Company hereby consents to the Purchaser
Agent recording and filing, at the Company’s sole cost and expense, the UCC
Financing Statements and other financing statements in the appropriate filing
offices under the UCC (and continuation statements with respect to such
financing statements when applicable) and any other notices of security or
notices of charge meeting the requirements of applicable law in such manner and
in such jurisdictions as are necessary or appropriate to perfect the assignment
to the Purchasers of the Revenue Interests and the Liens in the Collateral
granted to the Purchaser Agent under the Security Agreement.

 

Section 2.02                            Payments by the Company.

 

(a)                                 Payments in Respect of the Revenue
Interests.

 

(i)                                     In consideration of the Purchaser
Payments made by the Purchasers, the Purchasers shall be entitled to receive,
and the Company shall pay to the Purchasers, on a calendar quarterly basis, the
Revenue Interest Payments during the Revenue Interest Period and, upon the
exercise (or deemed exercise) by the respective party of the Call Option or the
Put Option, as the case may be, the Put/Call Price in respect thereof.

 

(ii)                                  With respect to each calendar quarter
commencing with the first Payment Date, the Company shall pay to the Purchasers,
the Revenue Interest Payment for such calendar quarter on the Payment Date at
the end of such calendar quarter with such payment to be calculated based on the
Cash Receipts for such calendar quarter; provided that all payments in respect
of any calendar quarter shall be subject to reconciliation based on (A) the
final Net Sales for the applicable calendar quarter on the Payment Date for the
subsequent calendar quarter and (B) the final Net Sales for the applicable
calendar year in which such calendar quarter occurs based on the audited
financial statements for such calendar year on the Payment Date for the first
calendar quarter of the subsequent calendar year, in each case of (A) and (B),
with such reconciliation to be prepared by the Company and delivered to the
Purchasers and the Purchaser Agent in the form of a Reconciliation Report in
accordance with Section 5.02(b)(i).  With respect to each reconciliation, any
overpayments shall be credited against, and any underpayments shall be added to,
the subsequent payments in respect of the Revenue Interests.  For the avoidance
of doubt, the Purchasers shall not be required to refund any Revenue Interest
Payments.

 

(b)                                 Reimbursable Expenses.  The Company shall
pay to the Purchaser Agent all Reimbursable Expenses (including reasonable
attorneys’ fees and expenses for documentation and negotiation of this
Agreement) incurred through and after the Effective Date, when due.  It is the
intention of the parties hereto that the Company shall pay Reimbursable Expenses
directly; provided that, at the discretion of the Purchasers, Reimbursable
Expenses may be deducted from the Purchaser Payments.  In the event the

 

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Purchaser Agent or any Purchaser pays any of such expenses directly, the Company
will promptly reimburse the Purchaser Agent or such Purchaser for such expenses.

 

(c)                                  Payment Procedure; Currency Conversion;
Late Payments.  Any payments to be made by the Company to the Purchasers
hereunder or under any other Transaction Document shall be made in United States
dollars by wire transfer of immediately available funds. All Revenue Interest
Payments and other payments by the Company (other than payments in respect of
Reimbursable Expenses and indemnification obligations pursuant to Section 8.04)
shall be made to each Purchaser in accordance with its Pro Rata Portion.  If any
currency conversion shall be required in connection with the calculation of
amounts payable hereunder, such conversion shall be made using the average of
the buying and selling rates on the last five (5) Business Days of the calendar
quarter to which such amounts pertain, as published by The Wall Street
Journal, Internet Edition at www.wsj.com.

 

(d)                                 Follow-On Product Lien Release.  Following
the occurrence of the Milestone, the Purchasers’ Lien in all of the
Follow-On/Cannibalizing Product Assets shall be released without any further
action of any party (the “Follow-On Product Lien Release”).  The Purchaser Agent
shall prepare and file, at the sole cost and expense of the Company, following
the occurrence of the Follow-On Product Lien Release, all documents and take all
other actions reasonably requested by the Company to evidence the release of the
Purchasers’ Lien on the Follow-On/Cannibalizing Product Assets.

 

Section 2.03                            Purchaser Payments; Conditions
Precedent.

 

(a)                                 Purchaser Payments.  In each case subject to
the applicable conditions precedent in clause (b), which may be waived by the
Required Purchasers in their sole discretion:

 

(i)                                     On the First Purchaser Payment Date,
each Purchaser shall pay to the Company, and the Company shall accept, such
Purchaser’s Pro Rata Portion of the First Payment (less any then unpaid
Reimbursable Expenses) by wire transfer of immediately available funds.

 

(ii)                                  On the Second Purchaser Payment Date, each
Purchaser shall pay to the Company, and the Company shall accept, such
Purchaser’s Pro Rata Portion of the Second Payment (less any then unpaid
Reimbursable Expenses) by wire transfer of immediately available funds.

 

(iii)                               On the Third Purchaser Payment Date, at the
Company’s option, each Purchaser shall pay to the Company, such Purchaser’s Pro
Rata Portion of the Third Payment (less any then unpaid Reimbursable Expenses)
by wire transfer of immediately available funds.

 

(b)                                 Conditions Precedent.

 

(i)                                     Conditions Precedent to the Effective
Date.  The Company shall have delivered to the Purchaser Agent:

 

(A)                               this Agreement, duly executed by the Company;
and

 

(B)                               a completed Perfection Certificate, duly
executed by the Company.

 

(ii)                                  Conditions Precedent to the First
Payment.  The Company shall have delivered to the Purchaser Agent:

 

(A)                               the Security Agreement, duly executed by the
Company;

 

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(B)                               to the extent there are changes to the
information provided therein since the Effective Date, an update to the
Perfection Certificate, duly executed by the Company;

 

(C)                               subject to Section 5.11, one or more duly
executed account control agreements in respect of each Obligor’s bank and
securities accounts;

 

(D)                               a secretary’s certificate, with certified
organizational documents and resolutions,

 

(E)                                an officer’s certificate, certifying as to
the conditions in Section 2.03(b)(v)(A) and (B);

 

(F)                                 a UCC-1 financing statement in proper form
for filing against the Company;

 

(G)                               short-form security agreements in respect of
the Product Intellectual Property; and

 

(H)                              legal opinions of counsel to the Company in the
form previously agreed between the Company and the Purchaser Agent.

 

(iii)                               Conditions Precedent to the Second Payment.

 

(A)                               The FDA Approval Date shall have occurred no
later than thirty (30) days prior to the Second Purchaser Payment Date;

 

(B)                               The Company shall have delivered to the
Purchaser Agent written notice of the FDA Approval Date within five (5) Business
Days of the occurrence thereof, together with the approval letter from the FDA,
the approved label and any other information requested by the Purchaser Agent;
and

 

(C)                               The Company shall have delivered to the
Purchaser Agent an officer’s certificate certifying as to the conditions in
Section 2.03(b)(v)(A) and (B).

 

(iv)                              Conditions Precedent to the Third Payment.

 

(A)                               The Second Payment shall have occurred;

 

(B)                               The Third Payment shall occur on a Business
Day on or prior to the fifteenth Business Day following December 31, 2021;

 

(C)                               The Company shall have achieved trailing
six-month worldwide Net Sales of at least $100,000,000 on or prior to
December 31, 2021;

 

(D)                               The Company shall have delivered to the
Purchaser Agent an officer’s certificate certifying the satisfaction of the
condition set forth in clause (C) above, together with any related information
requested by the Purchaser Agent, and the Purchaser Agent shall have been
reasonably satisfied that such condition has been met; and

 

(E)                                The Company shall have delivered to the
Purchaser Agent, an officer’s certificate certifying as to the conditions in
Section 2.03(b)(v)(A) and (B).

 

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(v)                                 Conditions Precedent to each Purchaser
Payment.

 

(A)                               The representations and warranties in
Article III hereof shall be true, accurate and complete in all material respects
on the date of the applicable payment; provided, however, that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof; provided
further that those representations and warranties expressly referring to a
specific date shall be true, accurate and complete in all material respects as
of such date.

 

(B)                               No Put Option Event or material breach or
default under any of the Transaction Documents shall have occurred and be
continuing.

 

(C)                               To the extent not deducted from the applicable
Purchaser Payment, payment of Reimbursable Expenses then due as specified in
Section 2.02(b).

 

(D)                               With respect to the Second Payment and Third
Payment, the Company shall have provided to the Purchaser Agent at least fifteen
(15) Business Days’ (or such shorter period as agreed in writing by Purchaser
Agent) advance written notice of the Second Purchaser Payment Date or Third
Purchaser Payment Date, as applicable.

 

(E)                                The Purchaser Commitments shall not have
expired.

 

Notwithstanding anything to the contrary herein, the Purchaser Commitments shall
terminate to the extent funded and shall terminate in their entirety on the
earliest of (i) the sixteenth Business Day following December 31, 2021, (ii) the
occurrence of a Bankruptcy Event, (iii) the exercise of the Put Option by the
Purchasers or the Call Option by the Company and (iv) the expiration of the
Revenue Interest Period.

 

Section 2.04                            No Assumed Obligations.

 

Notwithstanding any provision in this Agreement or any other writing to the
contrary, the Purchasers are acquiring only the Revenue Interests and are not
assuming any liability or obligation of the Company or any of its Affiliates of
whatever nature, whether presently in existence or arising or asserted
hereafter, whether under any Transaction Document or otherwise.  All such
liabilities and obligations shall be retained by and remain obligations and
liabilities of the Company or its Affiliates (the “Excluded Liabilities”).

 

Section 2.05                            AHYDO Catch-Up Payments.

 

Notwithstanding anything to the contrary, if the Revenue Interests shall remain
outstanding after the fifth (5th) anniversary of the initial purchase thereof,
then the Company shall prepay to the Purchasers on the fifth (5th) anniversary
of the closing of the transaction contemplated by this Agreement and on each
applicable Payment Date occurring after such fifth (5th) anniversary that
portion of the outstanding Revenue Interests Payments necessary to prevent the
Revenue Interests from constituting “applicable high yield discount obligations”
within the meaning of Section 163(i) of the Code.

 

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ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company hereby represents and warrants to the Purchaser Agent and the
Purchasers, as of the Effective Date, the First Purchaser Payment Date, the
Second Purchaser Payment Date and the Third Purchaser Payment Date, as
applicable, the following:

 

Section 3.01                            Organization.

 

Each Obligor is a corporation duly incorporated, validly existing and in good
standing under the laws of its respective jurisdiction of formation and has all
corporate powers and all licenses, authorizations, consents and approvals
required to carry on its respective business as now conducted and as proposed to
be conducted in connection with the transactions contemplated by the Transaction
Documents.  Each Obligor is duly qualified to do business as a foreign
corporation and is in good standing in every jurisdiction in which the failure
to do so would be reasonably expected to have a Material Adverse Effect.  As of
the Effective Date, the Company has no direct or indirect Subsidiaries.

 

Section 3.02                            Authorization.

 

Each Obligor has all necessary power and authority to enter into, execute and
deliver the Transaction Documents to which it is a party and to perform all of
the obligations to be performed by it hereunder and thereunder and to consummate
the transactions contemplated hereunder and thereunder. Each Transaction
Document has been duly authorized, executed and delivered by each Obligor party
thereto, and each Transaction Document constitutes the valid and binding
obligation of each Obligor party thereto, enforceable against such Obligor in
accordance with their respective terms, subject, as to enforcement of remedies,
to bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally or general equitable principles.

 

Section 3.03                            Governmental Authorization.

 

The execution and delivery by each Obligor of the Transaction Documents to which
it is a party, and the performance by such Obligor of its obligations
thereunder, does not require any notice to, action or consent by, or in respect
of, or filing with, any Governmental Authority, except for the filing of the UCC
Financing Statements and any filings with the SEC.

 

Section 3.04                            Ownership.

 

(a)                                 The Company owns or holds a valid license
granting exclusive rights to, all of the Product Intellectual Property,
Regulatory Filings and the Regulatory Approvals related to each Initial Product
free and clear of all Liens (other than Permitted Liens), and no license or
covenant not to sue under any such Product Intellectual Property, or right of
reference under any such Regulatory Filings, has been granted by the Company to
any Third Party, except for Permitted Licenses or as set forth on Schedule
3.04(a).

 

(b)                                 The Company, immediately prior to the
assignment of the Revenue Interests, owns, and is the sole holder of, all the
Revenue Interests and all Collateral, free and clear of any and all Liens (other
than Permitted Liens). Except as set forth on Schedule 3.04(b) or as permitted
pursuant to this Agreement, no Obligor has Transferred or granted any Lien in
respect of or agreed to Transfer or grant any Lien in respect of, any portion of
the Revenue Interests or the Collateral. Except for the sale of the Revenue
Interests pursuant hereto and as set forth on Schedule 3.04(b), no Person other
than the Company has any right to receive any payments in respect of Net Sales
or revenues of any Included Product. The Company has the

 

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full right to sell, transfer, convey and assign to the Purchasers all of the
Company’s rights, title and interests in and to the Revenue Interests to the
Purchasers pursuant to this Agreement without any requirement to obtain the
consent of any Person, except such consents as are obtained at or prior to the
Effective Date.  At the Effective Date, the Purchasers shall have acquired good
and valid rights and interests in and to the all of the Revenue Interests, free
and clear of any and all Liens, subject to the terms of this Agreement.

 

Section 3.05                            Financial Statements.

 

The Financial Statements are complete and accurate in all material respects,
were prepared in conformity with GAAP and present fairly in all material
respects the financial position and the financial results of the Company and its
Subsidiaries as of the dates and for the periods covered thereby, subject in the
case of the unaudited financial statements to the absence of footnotes, year-end
adjustments and other supplementary information required by GAAP.

 

Section 3.06                            No Undisclosed Liabilities.

 

Except for those liabilities (a) identified in the Financial Statements
(including the notes thereto) and/or in any current or periodic filing made by
the Company with the SEC or incurred in the ordinary course of business since
the date of the most recent Financial Statements; (b) Permitted Indebtedness; or
(c) in connection with the Obligations under the Transaction Documents, there
are no material liabilities of the Company or its Subsidiaries related to any
Initial Product, of any kind whatsoever, whether accrued, contingent, absolute,
determined or determinable.

 

Section 3.07                            Solvency.

 

The Company and the Subsidiaries, taken as a whole, are not insolvent as defined
in any statute of the United States Bankruptcy Code or in the fraudulent
conveyance or fraudulent transfer statutes of the State of Delaware.  Assuming
consummation of the transactions contemplated by the Transaction Documents,
(a) the present fair saleable value of the Company’s and the Subsidiaries’
assets is greater than the total amount of liabilities of the Company and the
Subsidiaries as such liabilities mature, (b) the Company and the Subsidiaries,
taken as a whole, do not have unreasonably small capital with which to engage in
its business, and (c) the Company and the Subsidiaries, taken as a whole, have
not incurred, nor do they have present plans to or intend to incur, debts or
liabilities beyond their ability to pay such debts or liabilities as they become
absolute and matured.

 

Section 3.08                            Litigation.

 

Other than as set forth on Schedule 3.08, there is no (a) action, suit,
arbitration proceeding, claim, investigation or other proceeding (whether
administrative, judicial or otherwise) pending or, to the Knowledge of the
Company, threatened against the Company or any Subsidiary or (b) any
governmental inquiry pending or, to the Knowledge of the Company, threatened
against the Company or any Subsidiary, in each case with respect to clauses
(a) and (b) above, which would, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Except as set forth on Schedule
3.08, as of the First Purchaser Payment Date, there is no action, suit,
arbitration proceeding, claim, investigation, governmental inquiry or other
proceeding (whether administrative, judicial or otherwise) pending or, to the
Knowledge of the Company, threatened against the Company, any Subsidiary or any
other Person relating to the Revenue Interests, any Included Product or any
other Product Asset.

 

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Section 3.09                            Compliance with Laws.

 

Neither the Company nor any Subsidiary (a) is in violation of, has violated, or
to the Knowledge of the Company, is under investigation with respect to, or
(b) has been threatened to be charged with or been given notice of any violation
of any law, rule, ordinance or regulation of, or any judgment, order, writ,
decree, permit or license entered by any Governmental Authority applicable to,
the Company or any of its Subsidiaries, the Revenue Interests or any Included
Product or any other Product Asset, in each case which would reasonably be
expected to have a Material Adverse Effect.

 

Section 3.10                            Conflicts.

 

Except as set forth on Schedule 3.10, neither the execution and delivery of any
of this Agreement or the other Transaction Documents to which any Obligor is a
party nor the performance or consummation of the transactions contemplated
hereby or thereby will: (a) contravene, conflict with, result in a breach or
violation of, constitute a default under, or accelerate the performance provided
by, in any material respects any provisions of: (i) any law, rule, ordinance or
regulation of any Governmental Authority, or any judgment, order, writ, decree,
permit or license of any Governmental Authority, to which the Company or any
Subsidiary or any of their respective assets or properties may be subject or
bound; or (ii) (A) any material contract, agreement, commitment or instrument
that has been filed with the SEC to which the Company or any Subsidiary is a
party or by which the Company or its Subsidiary or any of their respective
assets or properties is bound or committed or (B) any other contract, agreement,
commitment or instrument to which the Company or any Subsidiary is a party or by
which the Company or its Subsidiary or any of their respective assets or
properties is bound or committed; (b) contravene, conflict with, result in a
breach or violation of, constitute a default under, or accelerate the
performance provided by, any provisions of the articles or certificate of
incorporation or bylaws (or other organizational or constitutional documents) of
the Company or any Subsidiary; (c) except for the filing of the UCC Financing
Statements and any other notices of security or notices of charge required
hereunder and filings with the United States Patent and Trademark Office or
filings with the SEC, require any notification to, filing with, or consent of,
any Person or Governmental Authority, except such consents that are obtained at
or prior to the Effective Date; (d) give rise to any right of termination,
cancellation or acceleration of any right or obligation of the Company, any
Subsidiary or any other Person involving the Revenue Interests; or (e) other
than pursuant to, or any other Transaction Document, result in the creation or
imposition of any Lien (other than a Permitted Lien) on (i) the assets or
properties of the Company or any Subsidiaries or (ii) the Revenue Interests or
any Collateral, except, in the case of the foregoing clauses (a)(i),
(a)(ii)(B) or (c), as would not reasonably be expected to have a Material
Adverse Effect.

 

Section 3.11                            Intellectual Property.

 

(a)                                 Schedule 3.11(a) sets forth, as of the
Effective Date, an accurate, true and complete list of all (i) Patents and
utility models, (ii) trade names, registered trademarks, registered service
marks, and applications for trademark registration or service mark registration,
(iii) registered copyrights and (iv) domain name registrations and websites, in
each case with respect to clauses (i), (ii), (iii) and (iv) above in this clause
(a) that constitute Product Intellectual Property. Except as disclosed therein,
to the Knowledge of the Company, each issued Patent and trademark listed on
Schedule 3.11(a) is valid, enforceable and subsisting and has not lapsed,
expired, been cancelled or become abandoned, except in the ordinary course of
business or where such lapse or abandonment would not reasonably be likely to
result in a Material Adverse Effect.

 

(b)                                 Except for Product Intellectual Property
licensed to or owned by any Obligor and set forth on Schedule 3.11(a), to the
Knowledge of the Company, no other Intellectual Property is necessary to use,
Develop, Manufacture, import or Commercialize the Initial Products.  To the
Knowledge of the Company,

 

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the use, Development, Manufacture, import or Commercialization of the Initial
Products does not and will not infringe any Patents or misappropriate any other
Intellectual Property that is owned or controlled by a Third Party.

 

(c)                                  To the Knowledge of the Company, there are
no unpaid maintenance, annuity or renewal fees currently overdue for any of the
Patents that constitute Product Intellectual Property or which cover
compositions of matter, formulation, method of use, method of manufacture and/or
processes which relate to the Initial Products or alternatives thereto, and that
are owned by or licensed to the Company (“Material Patents”).

 

(d)                                 There is, and has been, no pending, decided
or settled opposition, interference proceeding, reexamination proceeding,
cancellation proceeding, injunction, claim, lawsuit, declaratory judgment,
administrative post-grant review proceeding, other administrative or judicial
proceeding, hearing, investigation, complaint, arbitration,
mediation, International Trade Commission investigation, decree, or any other
filed claim (collectively referred to hereinafter as “Disputes”) related to any
of the Material Patents nor has any such Dispute been threatened in writing
challenging the legality, validity, enforceability or ownership of any Material
Patents. There are no Disputes by any Person or Third Party against the Company,
its Affiliates or its Licensees or its licensor, and the Company has not
received any written notice or claim of any such Dispute as pertaining to the
Initial Products.

 

(e)                                  The Company and its Affiliates have taken
commercially reasonable measures and precautions to protect and maintain (i) the
confidentiality of all trade secrets with respect to any Initial Product that it
owns or exclusively licenses and (ii) the value of all Intellectual Property
related to any Initial Product, except where such failure to take action would
not reasonably be expected to have a Material Adverse Effect.

 

(f)                                   No material trade secret of the Company or
its Affiliates with respect to any Initial Product has been published or
disclosed to any Person except pursuant to a written agreement requiring such
Person to keep such trade secret confidential, except where such disclosure
would not reasonably be expected to have a Material Adverse Effect.

 

Section 3.12                            Regulatory Approvals.

 

(a)                                 The Company and its Affiliates and Licensees
have made available to the Purchaser Agent any written reports or other written
communications received from a Governmental Authority that would indicate that
any Regulatory Agency (A) is likely to revise or revoke any current Regulatory
Approval granted by any Regulatory Agency with respect to any Initial Product or
may not grant Regulatory Approval for any Initial Product or (B) is likely to
pursue any material compliance actions against the Company. To the Knowledge of
the Company there are no other facts or circumstances that would reasonably be
expected to (i) indicate that any of the events specified in the immediately
preceding clauses (A) or (B) may occur or (ii) cause the Company or any of its
Subsidiaries to voluntarily revise, withdraw or not apply for any Regulatory
Approval.

 

(b)                                 The Company and its Subsidiaries possess all
Regulatory Approvals issued or required by the Regulatory Agencies, which
Regulatory Approvals are necessary to conduct the business relating to the
Initial Products, including to conduct the current clinical trials relating to
the Initial Products, and neither the Company nor its Subsidiaries has received
any notice of proceedings relating to, and there are no facts or circumstances
to the Knowledge of the Company that would reasonably be expected to lead to,
the revocation, suspension, termination or modification of any such Regulatory
Approvals. As to all Regulatory Approvals for the Initial Products, all
preclinical and clinical data contained in the applications for such Regulatory
Approvals was truly and accurately reported to the Regulatory Agencies granting
such

 

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Regulatory Approvals, and, to the Knowledge of the Company, there has been no
failure to disclose any material fact required to be disclosed to such
Regulatory Agencies.

 

(c)                                  The Company and its Affiliates and
Licensees are in compliance with, and have complied with, all applicable
federal, state, local and foreign laws, rules, regulations, standards, orders
and decrees governing its business, including all regulations promulgated by
each Regulatory Agency, the failure of compliance with which would reasonably be
expected to result in a Material Adverse Effect; the Company and its Affiliates
and Licensees have not received any notice citing action or inaction by any of
them that would constitute any non-compliance with any applicable federal,
state, local and foreign laws, rules, regulations, or standards, which would
reasonably be expected to result in a Material Adverse Effect; and to the
Knowledge of the Company, no prospective change in any applicable federal,
state, local or foreign laws, rules, regulations or standards has been adopted
which, when made effective, would reasonably be expected to result in a Material
Adverse Effect.

 

(d)                                 Non-clinical investigations and clinical
trials conducted on behalf of the Company or its Affiliates or Licensees
relating to each Initial Product were conducted in all material respects in
compliance with applicable laws and, in all material respects, in accordance
with experimental protocols, procedures and controls pursuant to, where
applicable, accepted professional and scientific standards. The descriptions and
the results of such trials provided to the Purchaser Agent are accurate in all
material respects. Neither the Company nor its Affiliates and Licensees has
received any notices or correspondence from any Regulatory Agency or comparable
authority requiring the termination, suspension, or modification or clinical
hold of any clinical trials conducted by or on behalf of the Company or its
Affiliates and Licensees with respect to any Initial Product.

 

(e)                                  Neither the Company nor any of its
Affiliates or Licensees have received any notices from, or had any written or
oral communications with, (i) any Governmental Authority or (ii) any pricing and
reimbursement representative of any Person, in each case exercising authority
with respect to pricing and reimbursement for the Initial Products, that have
resulted in, or would reasonably be expected to result in, any non-coverage
decision in respect of, or material reduction in the expected pricing of, the
Initial Products.

 

(f)                                   All manufacturing operations conducted by
or on behalf of the Company and its Affiliates and Licensees relating to the
Initial Products have been and are being conducted in compliance with current
good manufacturing practices set forth in 21 C.F.R. Parts 210 and 211 and
applicable FDA guidance documents.

 

(g)                                  Neither the Company, its Affiliates, its
Licensees nor their respective officers, employees or agents, has been convicted
of any crime or engaged in any conduct for which (i) debarment is mandated by 21
U.S.C. § 335a(a) or authorized by 21 U.S.C. § 335a(b); or (ii) exclusion is
required pursuant to 42 U.S.C. § 1320a-7b and related regulations, nor is any
such debarment or exclusion threatened or pending.

 

(h)                                 The Company and its Affiliates and Licensees
are in material compliance with all applicable federal, state and local laws and
regulations regarding the privacy and security of health information and
electronic transactions, including the Health Insurance Portability and
Accountability Act (HIPAA), and has implemented adequate policies, procedures
and training designed to assure continued compliance and to detect
non-compliance.

 

(i)                                     The Company has made available to the
Purchasers all Regulatory Approvals and all material correspondence with
Governmental Authorities (including the FDA) with respect to such Regulatory
Approvals, with respect to the Initial Products and all requested documents
related to the Initial Products in each case in the possession and control of
the Company or its Subsidiaries.

 

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Section 3.13                            Material Contracts.

 

The Company has made available to Purchasers correct and complete copies of all
Material Contracts.  Neither the Company nor its Affiliates is in material
breach of any Material Contract or in material default under any Material
Contract.  There is no event or circumstance that with notice or lapse of time,
or both, would reasonably be expected to (a) constitute a material breach or
default by the Company and/or its Affiliates or (to the Knowledge of the
Company) any other party under any Material Contract, (b) give any Person the
right to receive or require a rebate, chargeback, penalty or change in delivery
schedule under any Material Contract, (c) give any Person the right to
accelerate the maturity or performance of any Material Contract or (d) give any
Person the right to cancel, terminate or modify any Material Contract. To the
Knowledge of the Company, nothing has occurred and no condition exists that
would permit any other party thereto to terminate any Material Contract. Neither
the Company nor its Affiliates has received any notice or, to the Knowledge of
the Company, any threat of termination of any such Material Contract. To the
Knowledge of the Company, no other party to a Material Contract is in material
breach of or in default under such Material Contract. All Material Contracts are
valid and binding on the Company and its Affiliates and, to the Knowledge of the
Company, on each other party thereto, and are in full force and effect.

 

Section 3.14                            Place of Business.

 

The Company’s principal place of business and chief executive office are set
forth on Schedule 3.14.

 

Section 3.15                            Subordination.

 

The claims and rights of the Purchaser Agent and the Purchasers created by any
Transaction Document are not and shall not be subordinated to any creditor of
any Obligor or any other Person and the Liens created pursuant to the
Transaction Documents will have first ranking priority and will not be subject
to any prior ranking or pari passu ranking Lien other than as permitted by this
Agreement.

 

Section 3.16                            Insurance.

 

There are in full force and effect insurance policies maintained by reputable
insurance companies in accordance with standards customary for companies such as
the Company, with coverage of the Company and each of its Subsidiaries in
amounts customary for companies of comparable size and condition similarly
situated in the same industry as, including product liability insurance,
directors and officers insurance and insurance against litigation liability,
subject only to such exclusions and deductible items as are usual and customary
in insurance policies of such type.

 

Section 3.17                            Tax.

 

Each of the Company and its Subsidiaries has paid all material Taxes when due,
except for any Taxes the amount or validity of which is currently being
contested in good faith by appropriate proceedings, and there are no Liens in
respect of Taxes applicable to the Company or any of its Subsidiaries except
Permitted Liens.

 

Section 3.18                            Disclosure.

 

All information heretofore furnished to the Purchaser Agent or any Purchaser by
or on behalf of the Company for purposes of or in connection with any
Transaction Document or any transaction contemplated hereby, after giving effect
to all supplements thereto made prior to the Effective Date, the

 

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Second Purchaser Payment Date or Third Purchaser Payment Date, as applicable, is
or will be, true, complete and correct in every material respect; provided that
projections and other forward looking information are based on reasonable
estimates on the date as of which such information is stated or certified (it
being understood that forecasts and projections are subject to contingencies and
no assurance can be given that any forecast or projection will be realized).

 

Section 3.19                            Investment Company Act.

 

None of the Company or any of its Subsidiaries is an “investment company” or a
company “controlled” by an “investment company,” within the meaning of the
Investment Company Act of 1940.

 

Section 3.20                            OFAC; Anti-Terrorism Laws.

 

(a)                                 None of the Company, any Subsidiary of the
Company or, to the knowledge of the Company, any Affiliate of the Company (i) is
a Sanctioned Person, (ii) has more than 10% of its assets in Sanctioned
Countries or (iii) derives more than 10% of its operating income from
investments in, or transactions with, Sanctioned Persons or Sanctioned
Countries.  No part of the proceeds of any Purchaser Payment hereunder will be
used directly or indirectly to fund any operations in, finance any investments
or activities in or make any payments to, a Sanctioned Person or a Sanctioned
Country.

 

(b)                                 Each of the Company and its Subsidiaries is
in compliance in all material respects with the PATRIOT Act.  No part of the
proceeds of the Purchaser Payments hereunder will be used, directly or
indirectly, for any payments to any governmental official or employee, political
party, official of a political party, candidate for political office, or anyone
else acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage, in violation of the United States
Foreign Corrupt Practices Act of 1977.

 

Section 3.21                            Broker’s Fees.

 

The Company and its Subsidiaries have not taken any action that would entitle
any Person to any commission or broker’s fee in connection with this Agreement.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS

 

Each Purchaser represents and warrants to the Company, as of the Effective Date,
the First Purchaser Payment Date, the Second Purchaser Payment Date and the
Third Purchaser Payment Date, as applicable, the following:

 

Section 4.01                            Organization.

 

Such Purchaser is a duly organized and validly existing under the laws of its
jurisdiction of organization.

 

Section 4.02                            Authorization.

 

Such Purchaser has all necessary power and authority to enter into, execute and
deliver the Transaction Documents and to perform all of the obligations to be
performed by it hereunder and thereunder and to consummate the transactions
contemplated hereunder and thereunder.  The Transaction Documents have been duly
authorized, executed and delivered by such Purchaser and each Transaction
Document

 

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constitutes the valid and binding obligation of such Purchaser, enforceable
against such Purchaser in accordance with their respective terms, subject, as to
enforcement of remedies, to bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors’ rights generally or general equitable
principles.

 

Section 4.03                            Broker’s Fees.

 

Such Purchaser has not taken any action that would entitle any Person to any
commission or broker’s fee in connection with the transactions contemplated by
the Transaction Documents.

 

Section 4.04                            Conflicts.

 

Neither the execution and delivery of this Agreement or any other Transaction
Document to which such Purchaser is a party nor the performance or consummation
of the transactions contemplated hereby or thereby will: (a) contravene,
conflict with, result in a breach or violation of, constitute a default under,
or accelerate the performance provided by, in any material respects any
provisions of: (i) any law, rule or regulation of any Governmental Authority, or
any judgment, order, writ, decree, permit or license of any Governmental
Authority, to which such Purchaser or any of its assets or properties may be
subject or bound; or (ii) any contract, agreement, commitment or instrument to
which such Purchaser is a party or by which such Purchaser or any of its assets
or properties is bound or committed; (b) contravene, conflict with, result in a
breach or violation of, constitute a default under, or accelerate the
performance provided by, any provisions of the organizational or constitutional
documents of such Purchaser; or (c) require any notification to, filing with, or
consent of, any Person or Governmental Authority, except, in the case of the
foregoing clauses (a) or (c), as would not, individually or in the aggregate,
have a material adverse effect on the ability of such Purchaser to perform any
of its obligations under the Transaction Documents.

 

Section 4.05                            Compliance with Laws.

 

Such Purchaser (a) is not in violation of, has not violated, or to the Knowledge
of such Purchaser, is not under investigation with respect to, or (b) has not
been threatened to be charged with or been given notice of any violation of any
law, rule, ordinance or regulation of, or any judgment, order, writ, decree,
permit or license entered by any Governmental Authority that would reasonably be
expected to have a material adverse effect on such Purchaser.

 

Section 4.06                            Financing.

 

Such Purchaser has sufficient funds or capital commitments available to make its
Pro Rata Portion of the Purchaser Payments.

 

ARTICLE V

 

COVENANTS

 

From the date hereof through and including the end of the Revenue Interest
Period, the following covenants shall apply:

 

Section 5.01                            Notices; Access; Information.

 

(a)                                 Notices. The Company shall provide the
written notice to the Purchaser Agent and the Purchasers of the following
events:

 

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(i)                                     Promptly (and in any event within two
(2) Business Days) upon Knowledge thereof, the occurrence of any Put Option
Event or any material breach or default by the Company of any covenant,
agreement or other provision of this Agreement, or any other Transaction
Document;

 

(ii)                                  Promptly (and in any event within two
(2) Business Days) upon Knowledge thereof, the occurrence of any Material
Adverse Effect or any event which could reasonably be expected to have a
Material Adverse Effect;

 

(iii)                               Promptly upon receipt of written notice
thereof, or otherwise obtaining Knowledge, any default or event of default
under, or any termination (other than expiration in accordance with its terms)
of, any Material Contract;

 

(iv)                              Promptly (and in any event within five
(5) Business Days) upon Knowledge thereof, any litigation or proceedings to
which the Company or any Subsidiary is a party or which would reasonably be
expected to have a Material Adverse Effect or which challenge the validity of
the Transaction Documents or any of the transactions contemplated therein;

 

(v)                                 Promptly upon Knowledge thereof, the
occurrence of (A) a material manufacturing disruption or (B) any circumstance,
event or condition that has resulted in, or would reasonably be expected to
result in, a recall of any Included Product;

 

(vi)                              Promptly upon Knowledge thereof, any
infringement by any Third Party of any Product Intellectual Property which has
had, or would reasonably be expected to have, individually or in the aggregate,
a material adverse effect on the level of Net Sales of the Included Products and
any infringement by any Included Product of any Third Party Intellectual
Property that would reasonably be expected to have a Material Adverse Effect;

 

(vii)                           Promptly (and in any event within five
(5) Business Days of the occurrence thereof), the FDA Approval Date, the
Company’s receipt of any other Regulatory Approval of an Included Product in the
United States or the receipt of Regulatory Approval from the European Medicines
Agency;

 

(viii)                        Promptly (and in any event within ten
(10) Business Days) of the receipt, any material written communication from the
FDA to the Company prior to the completion of the CLEAR Outcome Study and
related FDA submissions; and

 

(ix)                              Not less than ten (10) calendar days prior
thereto, any change in, or amendment or alteration of, any Obligor’s legal name,
form of legal entity or jurisdiction of organization.

 

(b)                                 Maintenance of Books and Records. The
Company shall keep and maintain, and cause its Affiliates and Licensees to keep
and maintain, at all times full and accurate books of account and records
adequate to correctly reflect (and in sufficient detail to permit the Purchaser
Agent to confirm the accuracy of) all payments paid and/or payable with respect
to the Revenue Interests.  Such records shall be kept and maintained for a
minimum of seven (7) years from the end of the calendar year to which they
pertain.

 

(c)                                  Inspection Rights.  The Purchaser Agent
shall have the right, not more than once a year (or more frequently if a Put
Option Event shall have occurred and be continuing), to designate a Third Party
independent public accounting firm (the “Purchaser Agent Representative”) to
visit the Company’s and its Affiliates’ and Licensees’ offices and properties
where the Company and its Affiliates and Licensees keep and maintain their books
and records relating or pertaining to Net Sales and the Revenue Interests for

 

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purposes of conducting an audit of Net Sales during the term of this Agreement,
during normal business hours, and, upon five (5) Business Days’ written notice
given by the Purchaser Agent to the Company, the Company will provide such
Purchaser Agent Representative reasonable access to such books and records.

 

(d)                                 Audit Costs. In the event any audit of the
books and records of the Company and its Affiliates and Licensees relating to
the Revenue Interests and the Collateral by the Purchaser Agent and/or the
Purchaser Agent Representative reveals that the amounts paid to the Purchasers
hereunder for the period of such audit have been understated by more than five
percent (5%) of the amounts determined to be due for the period subject to such
audit, then the Audit Costs in respect of such audit shall be borne by the
Company; and in all other cases, such Audit Costs shall be borne by the
Purchasers.

 

(e)                                  Data Room Access.  The Company will cause
to be maintained, provide access to the Purchasers to, and ensure that all
documents and other information posted thereon on or before the Effective Date
remain posted on, the electronic datasite maintained by Merrill Corporation with
the name “Eclipse Corporate Data Room” until such time as the Company has
provided to the Purchaser Agent all such documents and other information via USB
or other transferable electronic format.

 

Section 5.02                            Reports.

 

(a)                                 Periodic Reports. The Company shall deliver
to the Purchaser Agent the following financial statements:

 

(i)                                     as soon as available, but no later than
forty-five (45) days after the last day of each calendar quarter, (A) a company
prepared balance sheet, statement of operations and cash flow statement covering
the consolidated operations of the Company and the Subsidiaries for such quarter
certified by the chief financial officer of the Company and (B) a statement, on
a country-by-country, if applicable, and Included Product-by-Included Product
basis, of the amount of gross sales and Net Sales of Included Products during
the applicable calendar quarter (including details of the deductions from gross
sales taken in accordance with the definition of Net Sales), the calculation of
the Applicable Percentage, the calculation of the amount of Revenue Interest
Payment due on such sales for such calendar quarter, and the exchange rates
used, if applicable; and

 

(ii)                                  as soon as available, but no later than
ninety (90) days after the last day of each calendar year, audited consolidated
financial statements prepared under GAAP, consistently applied, together with an
unqualified opinion on the financial statements from Ernst & Young LLP or other
independent public accounting firm certified by the Public Company Accounting
Oversight Board.

 

Any documents required to be delivered pursuant to this Section 5.02(a) may be
delivered electronically and if so delivered, shall be deemed to have been
delivered on the date on which (A) the Company posts such documents, or provides
a link thereto, on Company’s website on the internet at Company’s website
address or (B) such documents are posted on Company’s behalf on the internet or
an intranet website, if any, to which Purchaser Agent and the Purchasers have
access.

 

(b)                                 Reconciliation Reports; Updates.

 

(i)                                     Within forty-five (45) days after the
last day of each calendar quarter, the Company shall deliver to Purchaser Agent
a Reconciliation Report for such quarter or year, together with a certificate of
the Company, certifying that to the Knowledge of the Company (i) such
Reconciliation Report is a true and complete copy and (ii) any statements and
any data and

 

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information therein prepared by the Company are true, correct and accurate in
all material respects. Upon request by the Purchaser Agent, the Company and the
Purchaser Agent shall meet in person or by teleconference to discuss each
Reconciliation Report;

 

(ii)                                  Within forty-five (45) days after the last
day of each calendar quarter, the Company shall deliver to Purchaser Agent (v) a
Financial Condition and Results of Operations Summary, (w) if prior to the FDA
Approval Date, a Clinical Update Summary, (x) a Commercial Update Summary,
(y) an Intellectual Property Docket Report and (z) an Intellectual Property
Update Summary; and

 

(iii)                               Within a reasonable time after the receipt
by the Purchaser Agent or the Purchasers of any report or notice from the
Company or upon the occurrence of any material event affecting the Company, the
Company shall provide such other information about such report, notice or
material event as any Purchaser or the Purchaser Agent may reasonably request.

 

Section 5.03                            Compliance with Law; Existence and
Maintenance of Properties; Material Contracts.

 

(a)                                 The Company shall, and shall cause its
Subsidiaries to, (i) comply with all material federal, state, local and foreign
laws, regulations and orders applicable to the Company or any Subsidiary or any
of their respective assets, including all environmental laws, (ii) obtain and
maintain any and all material licenses, permits, franchises, governmental
authorizations, Intellectual Property or other rights necessary for the
ownership of its properties and the advantageous conduct of its business and as
may be required from time to time by applicable law and (iii) maintain each
obtained material Regulatory Approval necessary to sell the Included Products
within the United States, except in the case of (i) or (ii) where the failure to
do so, individually or in the aggregate, would not reasonably be expected to
result in a Material Adverse Effect.

 

(b)                                 The Company shall, and shall cause its
Subsidiaries to, (i) maintain and preserve in full force and effect its legal
existence, its good standing under the laws of the jurisdiction of its
incorporation or formation, as the case may be, and its qualification to do
business in every other jurisdiction where the nature of its business or its
properties makes such qualification necessary (except where the failure to be so
qualified or licensed would not reasonably be expected to have a Material
Adverse Effect); and (ii) maintain all material tangible properties in good
working order and condition (normal wear and tear and damage by casualty
excepted) and from time to time make all necessary repairs to and renewals and
replacements of such properties, except to the extent that any of such
properties are obsolete or are being replaced or, in the good faith judgment of
the Company, are surplus or no longer useful or desirable in the conduct of the
business.

 

(c)                                  Each of the Company and its Affiliates
shall comply with all terms and conditions of and fulfill all of its obligations
under all the Material Contracts, except for such noncompliance which would not
reasonably be expected to give rise to a material breach thereof or a Material
Adverse Effect. Neither the Company nor any of its Subsidiaries shall, without
the prior consent of the Purchaser Agent, which shall not be unreasonably
withheld, conditioned or delayed (i) amend, modify, restate, cancel, supplement,
terminate or waive any provision of any Material Contract, or grant any consent
thereunder, or agree to do any of the foregoing, in each case which would
reasonably be expected to have an adverse effect on the Revenue Interests in any
material respect or a Material Adverse Effect or (ii) except for License
Agreements for the Development or Commercialization of any Included Product in
any jurisdiction outside of the United States and the DSE Territory (as defined
in the DSE Agreement), enter into any Material Contract (A) under which a
default or of which a termination could interfere with the Purchaser Agent’s or
any Purchaser’s right to sell any Collateral, (B) that cannot be collaterally
assigned to secure the Obligations, or (C) that contains provisions that
restrict or penalize the granting of a security interest in such Material
Contract or

 

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the assignment of such Material Contract upon the sale or other disposition of
all or substantially all of a product or the business to which such Material
Contract relates.

 

Section 5.04                            Confidentiality; Public Announcement.

 

(a)                                 All Confidential Information furnished by
the Purchaser Agent or any Purchaser to the Company or by the Company to the
Purchaser Agent or any Purchaser in connection with this Agreement and any other
Transaction Document and the transactions contemplated hereby and thereby, as
well as the terms, conditions and provisions of this Agreement and any other
Transaction Document, shall be kept confidential by the Company, the Purchaser
Agent and the Purchasers. Notwithstanding the foregoing, the Company, the
Purchaser Agent and the Purchasers may disclose such Confidential Information to
their partners, directors, employees, managers, officers, investors, bankers,
advisors, trustees and representatives, provided that such Persons shall be
informed of the confidential nature of such information and shall be obligated
to keep such information confidential on the same terms and conditions as the
terms of this Section 5.04(a); provided, further, that unless a Put Option
Event, or any event that with the giving of notice or passage of time would
constitute a Put Option Event, has occurred and is continuing, no such
disclosure shall be made to any Disqualified Person. The Company will consult
with the Purchaser Agent, and the Purchaser Agent will consult with the Company,
on the form, content and timing of any such disclosures of Confidential
Information, including, without limitation, any disclosures made pursuant to
applicable securities laws or made to investment or other analysts. 
Notwithstanding the foregoing, the foregoing restrictions shall not apply to
information that (A) is already in the public domain at the time the information
is disclosed (other than as a result of its improper disclosure by the Company,
the Purchaser Agent, any Purchaser or their respective Affiliates and
representatives), (B) thereafter becomes lawfully obtainable from other sources
who are not under an obligation of confidentiality and are not otherwise
prohibited from disclosing such information by a contractual, legal or fiduciary
obligation, (C) is required to be disclosed (i) in any document filed with any
Governmental Authority, (ii) to any regulatory authority who has jurisdiction or
supervisory oversight over the Purchaser Agent or any Purchaser and/or their
respective Affiliates, whether pursuant to an exam, audit, inquiry, request or
general supervisory oversight,  or (iii) pursuant to a subpoena or order of a
court or in connection with any judicial, administrative or legal proceeding or
otherwise required by law (provided that in the case of this clause (iii), to
the extent legally permissible, the party receiving such Confidential
Information and subject to such disclosure requests promptly notifies the
disclosing party thereof and uses reasonable efforts to cooperate at the
disclosing party’s cost and expense to obtain an order or other reliable
assurance that confidential treatment will be accorded to the Confidential
Information so disclosed so long as such reasonable cooperation does not cause
the receiving party to be in violation of the terms of any law, rule or
regulation), or (D) is required to be disclosed under securities laws, rules and
regulations applicable to the Company or pursuant to the rules and regulations
of any securities exchange or trading system on which securities of the Company
may be listed for trading. Each Purchaser acknowledges that information provided
pursuant to the Transaction Documents may include material non-public
information and acknowledges it responsibilities under applicable securities
laws in respect thereof.

 

(b)                                 Except as required by law or the rules and
regulations of any securities exchange or trading system or the FDA or any
Governmental Authority with similar regulatory authority, or except with the
prior written consent of the other party (which consent shall not be
unreasonably withheld), no party shall issue any press release or make any other
public disclosure with respect to the transactions contemplated by this
Agreement or any other Transaction Document; provided, however, that the Company
and the Purchaser Agent shall jointly prepare a press release for dissemination
promptly following the Effective Date.  The Company and the Purchasers (and
their investors) shall have the right to make subsequent public disclosures
consistent therewith (including such investors’ participation in the
transactions contemplated by the Transaction Documents).

 

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(c)                                  The rights to review, consult with or
consent, as applicable and as set forth in this Section 5.04, with respect to
any disclosures shall only apply for the first time that specific information is
to be disclosed, and shall not apply to the subsequent disclosure of
substantially similar information that has previously been disclosed unless
there have been material changes in the disclosure since the date of the
previous disclosure.

 

Section 5.05                            Security Agreement.

 

During the Revenue Interest Period, and at all times until the Obligations are
paid and performed in full (other than contingent indemnity obligations for
which no claim has been made), each Obligor shall grant in favor of the
Purchaser Agent, for the benefit of the Purchasers, a valid, continuing, first
perfected lien on and security interest in the Collateral described in the
Security Agreement.

 

Section 5.06                            Further Assurances; Creation/Acquisition
of Subsidiaries; Additional Collateral.

 

(a)                                 The Company shall promptly execute and
deliver to the Purchaser Agent and the Purchasers such further instruments and
documents, and take such further action, as the Purchaser Agent or Purchaser
may, at any time and from time to time, reasonably request in order to carry out
the intent and purpose of this Agreement and the other Transaction Documents to
which it is a party and to establish and protect the rights, interests and
remedies created, or intended to be created, in favor of the Purchaser Agent and
the Purchasers hereby and thereby (including any actions necessary, appropriate
or desirable to protect, perfect and maintain the Lien of the Purchaser Agent or
the Collateral).

 

(b)                                 In the event the Company or any of its
Subsidiaries creates or acquires any Subsidiary, or any Subsidiary ceases to
qualify as a Specified Foreign Subsidiary, the Company shall provide prior
written notice to the Purchaser Agent of the creation or acquisition of such new
Subsidiary, or such Subsidiary ceasing to qualify as a Specified Foreign
Subsidiary, and, if such Subsidiary holds or will hold any Collateral (or assets
that constituted Collateral prior to the transfer thereof) or any proceeds from
the Purchaser Payments, promptly (and in any event no later than earliest of any
Transfer of such assets to such Subsidiary, such Subsidiary ceasing to qualify
as Specified Foreign Subsidiary or thirty (30) days after the creation or
acquisition thereof), take all such action as may be reasonably required by the
Purchaser Agent or any Purchaser to cause such Subsidiary to become a Subsidiary
Guarantor hereunder, including without limitation by executing and delivering a
Guaranty (or a joinder thereto), becoming a party to the Security Agreement and
delivering such proof of corporate action, incumbency of officers, opinions of
counsel and other documents as requested by the Purchaser Agent; provided that a
Specified Foreign Subsidiary shall not be required to become a Subsidiary
Guarantor or become a party to the Security Agreement if doing so would result
in material adverse tax consequences to (i) the Company and its Subsidiaries,
taken as a whole, or (ii) after the occurrence of the Milestone, the Company or
any of its Subsidiaries (in each case as determined by the Purchaser Agent in
good faith after consultation with the Company); provided further that the
Obligors shall promptly (and in an case prior to the Transfer of any Collateral
to such Specified Foreign Subsidiary) grant a lien and security interest in
(A) if such lien and grant would result in material adverse tax consequences to
(i) the Company and its Subsidiaries, taken as a whole,  or (ii) after the
occurrence of the Milestone, the Company or any of its Subsidiaries (in each
case as determined by the Purchaser Agent in good faith after consultation with
the Company), 65% of each class of voting Equity Interests and 100% of all other
Equity Interests in such Specified Foreign Subsidiary in favor of the Purchaser
Agent for the benefit of the Purchasers as collateral for the Obligations and
(B) in any other case, 100% of the Equity Interests of such Specified Foreign
Subsidiary in favor of the Purchaser Agent for the benefit of the Purchasers as
collateral for the Obligations, in each case including entering into any
necessary local law security documents and delivery of certificated securities
issued by such Specified Foreign Subsidiary as required by this Agreement or the
Security Agreement.

 

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(c)                                  With respect to any Collateral acquired
after the Effective Date by any Obligor that is not already subject to the Lien
created by any of the Transaction Documents or specifically excluded from the
requirement to be subject to such Lien in the Transaction Documents, the Company
shall promptly (and in any event within thirty (30) days after the acquisition
thereof) (i) execute and deliver to the Purchaser Agent such amendments or
supplements to the relevant Transaction Documents or such other documents as the
Purchaser Agent shall reasonably deem necessary or advisable to grant for its
benefit, a Lien on such property subject to no Liens other than Permitted Liens,
and (ii) take all actions necessary to cause such Lien to be duly perfected in
accordance with all applicable requirements of Law, including the filing of
financing statements in such jurisdictions as may be reasonably requested by the
Purchaser Agent. The Company shall, and shall cause each other Obligor to,
otherwise take such actions and execute and/or deliver to the Purchaser Agent
such documents as the Purchaser Agent shall reasonably require to confirm the
validity, perfection and priority of the Lien of the Security Agreement on such
after-acquired properties.

 

Section 5.07                            Put Option; Call Option.

 

(a)                                 Put Option.  Upon the occurrence of a Put
Option Event, the Required Purchasers shall have the right, but not the
obligation (the “Put Option”), to require the Company to repurchase from the
Purchasers all, but not less than all, of the Revenue Interests at the Put/Call
Price.  In addition, upon the occurrence of a Put Option Event, the Purchaser
Agent may, and at the direction of the Required Purchasers, shall terminate the
Purchaser Commitments. In the event that the Required Purchasers elect to
exercise the Put Option, the Required Purchasers shall, or shall direct the
Purchaser Agent to, deliver written notice to the Company specifying the closing
date which date shall be ten (10) days from such notice date (the “Put Option
Closing Date”). On the Put Option Closing Date, the Company shall repurchase
from the Purchasers the Revenue Interests at the Put/Call Price in cash, the
payment of which shall be made by wire transfer of immediately available funds
to the account designated by the Purchasers. Notwithstanding anything to the
contrary contained herein, immediately upon the occurrence of a Bankruptcy
Event, each Purchaser shall be deemed to have automatically and simultaneously
elected to terminate the Purchaser Commitment and have the Company repurchase
from such Purchaser the Revenue Interests for the Put/Call Price in cash and the
Purchaser Commitments shall immediately terminate and the Put/Call Price shall
be immediately due and payable without any further action or notice by any
party.  For the avoidance of doubt, any Purchaser’s election not to exercise the
Put Option with respect to a given Put Option Event will not preclude such
Purchaser from exercising the Put Option with respect to a continuing or
subsequent Put Option Event; provided that (i) if such Put Option Event is
triggered by a Change of Control, the failure of the Purchaser Agent or the
Required Purchasers to deliver the written notice to elect to exercise the Put
Option within twenty (20) days of the receipt of written notice of such Change
of Control from the Company shall be deemed a waiver of the right to exercise
the Put Option with respect to such Change of Control, and (ii) if such Put
Option Event is triggered within the first year after the Effective Date in
connection with the failure to obtain Regulatory Approval for the Initial
Products within such first year, the failure of the Purchaser Agent or the
Required Purchasers to deliver the written notice to elect to exercise the Put
Option on or prior to the later of (A) first anniversary of the Effective Date
and (B) twenty (20) days after the later of such failure to obtain Regulatory
Approval and the date the Company has provided the Purchaser Agent notice
thereof shall be deemed a waiver of the right to exercise the Put Option with
respect to such Put Option Event (but for the avoidance of doubt, shall not be
deemed any waiver of any rights in respect of any failure to obtain Regulatory
Approval after the first year after the Effective Date or any other Put Option
Event).

 

(b)                                 Call Option.  At any time after the First
Purchaser Payment Date, the Company shall have the right, but not the obligation
(the “Call Option”), exercisable upon ten (10) days’ written notice to the
Purchasers, to repurchase, all, but not less than all, of the Revenue Interests
from the Purchasers at a repurchase price equal to the Put/Call Price.  In order
to exercise the Call Option, the Company shall deliver written notice to the
Purchaser Agent and Purchasers of its election to so repurchase the Revenue
Interests

 

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not less than ten (10) days prior to the proposed closing date (the “Call
Closing Date”). Upon delivery of such notice all Purchaser Commitments shall
terminate and on the Call Closing Date, the Company shall repurchase from the
Purchasers the Revenue Interests at the Put/Call Price, the payment of which
shall be made by wire transfer of immediately available funds to the account
designated by the Purchasers.

 

(c)                                  Purchaser Remedies. Upon the exercise of
the Put Option, unless payment of the Put/Call Price has been made when due, the
Purchaser Agent and the Purchasers may exercise all rights and remedies
available to the Purchaser Agent and the Purchasers as a creditor hereunder and
under the other Transaction Documents and applicable law (which exercise may be
determined in its sole discretion and which such exercise shall not constitute
an election of remedies), including enforcement of the Liens created thereby. 
For the avoidance of doubt the Put/Call Price shall be due and payable (in the
case of an exercise of the Put Option or Call Option, as set forth in this
Section 5.07) at any time the Put Option or the Call Option is exercised or the
Obligations are otherwise accelerated hereunder for any reason, whether due to
acceleration pursuant to the terms of this Agreement, by operation of law or
otherwise (including where bankruptcy filings or the exercise of any bankruptcy
right or power, whether in any plan of reorganization or otherwise, results or
would result in a payment, discharge, modification or other treatment of the
Revenue Interests that would otherwise evade, avoid, or otherwise disappoint the
expectations of the Purchasers in receiving the full benefit of their
bargained-for Put/Call Price).  The Company and the Purchasers acknowledge and
agree that none of the Put/Call Price shall constitute unmatured interest,
whether under Section 502(b)(2) of the United States Bankruptcy Code or
otherwise, but instead is reasonably calculated to ensure that the Purchasers
receive the benefit of their bargain under the terms of this Agreement. The
Company acknowledges and agrees that the Purchasers shall be entitled to recover
the full amount of the Put/Call Price in each and every circumstance such amount
is due pursuant to or in connection with this Agreement, including in the case
of any Bankruptcy Event, so that the Purchasers shall receive the benefit of
their bargain hereunder and otherwise receive full recovery as agreed under
every possible circumstance, and, to the fullest extent permitted by maximum
law, the Company hereby waives any defense to payment, whether such defense may
be based in public policy, ambiguity, or otherwise. The Company further
acknowledges and agrees, and, to the fullest extent permitted by maximum law,
waives any argument to the contrary, that payment of such amounts does not
constitute a penalty or an otherwise unenforceable or invalid obligation. Any
damages that the Purchasers may suffer or incur resulting from or arising in
connection with any breach hereof or thereof by the Company shall constitute
secured obligations owing to the Purchasers.

 

(d)                                 Rights Not Exclusive. The rights provided
for herein are cumulative and are not exclusive of any other rights, powers,
privileges or remedies provided by applicable law.

 

(e)                                  Obligations of Purchaser Agent.  In
connection with the consummation of a repurchase of the Revenue Interests
pursuant to the Put Option or the Call Option, the Purchaser Agent agrees that
it will, at the cost and expense of the Company, after each Purchaser has
received payment in full of its Pro Rata Portion of the Put/Call Price
(i) promptly but no later than five (5) Business Days after receipt of the
Put/Call Price execute and deliver to the Company such UCC termination
statements and other documents as may be necessary to release the Purchaser
Agent’s Lien on the Revenue Interests Collateral and otherwise give effect to
such repurchase and (ii) take such other actions or provide such other
assistance as may be necessary to give effect to such repurchase.

 

Section 5.08                            Intellectual Property; Regulatory
Approvals.

 

(a)                                 The Company shall, at its sole expense,
either directly or by causing any Affiliate or Licensee to do so, use
Promotional Efforts (potentially including taking legal action to specifically
enforce the applicable terms of any License Agreement) to prepare, execute,
deliver and file any and all agreements, documents or instruments which are
reasonably necessary to diligently maintain the Material Patents. The Company
shall use Promotional Efforts to ensure that all patent applications
corresponding to the Material

 

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Patents are diligently prosecuted with the intent to protect the Development,
Manufacture and Commercialization of the Included Products. The Company shall
use Promotional Efforts to diligently defend or assert all Intellectual Property
owned by or licensed to the Company and relating to the Included Products
against infringement or interference by any other Persons, and against any
claims of invalidity or unenforceability, except where the failure to do so
would not reasonably be expected to result in a Material Adverse Effect. The
Company shall not, and shall use its Promotional Efforts to cause any Licensee
not to, disclaim or abandon, or fail to take any action necessary to prevent the
disclaimer or abandonment of, the Material Patents, except where the failure to
do so would not reasonably be expected to result in a Material Adverse Effect.

 

(b)                                 In the event that the Company becomes aware
that any Included Product infringes or violates any Intellectual Property that
is owned or controlled by a Third Party, the Company shall use Promotional
Efforts to attempt to secure the right to use such intellectual property on
behalf of itself and any affected Licensee, as applicable, except where the
failure to do so would not reasonably be expected to result in a Material
Adverse Effect, and shall pay all reasonable costs and amounts associated with
obtaining any such license, without any reduction in the Revenue Interests.

 

(c)                                  The Company shall directly, or through an
Affiliate or Licensee, use Promotional Efforts to take any and all actions and
prepare, execute, deliver and file any and all agreements, documents or
instruments to secure and maintain, all applicable Regulatory Approvals, except
where the failure to do so would not reasonably be expected to result in a
Material Adverse Effect.

 

(d)                                 Neither the Company nor any of its
Affiliates shall enter into any License Agreement to Commercialize any Included
Products in the United States.

 

Section 5.09                            Initial Product Development and
Commercialization.

 

The Company shall use Promotional Efforts to Develop, Commercialize, Manufacture
or have Manufactured, and obtain and maintain Regulatory Approvals for the
Initial Products in the Covered Territory.

 

Section 5.10                            Protective Covenants.

 

(a)                                 Neither the Company nor any of its
Subsidiaries shall, without the prior written consent of the Purchaser Agent:

 

(i)                                     create, incur, assume or suffer to exist
any Indebtedness, except for Permitted Indebtedness;

 

(ii)                                  create, incur, assume or suffer to exist
any Lien upon or with respect to the Collateral, or agree to do or suffer to
exist any of the foregoing, except for Permitted Liens;

 

(iii)                               make or permit to exist any Investment,
except for Permitted Investments;

 

(iv)                              Transfer any Collateral or Product Assets,
other than (A) the use of cash and cash equivalents, disposition of inventory
and the disposition of obsolete, worn-out or surplus equipment, in each case in
the ordinary course of business, (B) the incurrence of Permitted Liens, (C) the
entry into Permitted Licenses, (D) the use of cash and cash equivalents to make
Permitted Investments, (E) Transfers of Intellectual Property relating to the
Commercialization of Included Products outside of the United States (other than,
for the avoidance of doubt, Intellectual Property relating to the
Commercialization of Included Products within the United States), together with
any

 

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Regulatory Approvals for jurisdictions outside the United States, to a Specified
Foreign Subsidiary, (F) Transfers of Regulatory Approvals (other than Regulatory
Approvals for the United States) pursuant to the terms of the DSE Agreement and
any other Permitted Licenses relating to the Development and Commercialization
of Included Products outside the United States, and (G) a Transfer to another
Obligor, provided that such Transfer does not impair the Liens of the Purchaser
Agent in the Transferred Collateral; or

 

(v)                                 change the fiscal year end (other than, in
the case of any Subsidiary, to conform to the Company’s fiscal year end).

 

(b)                                 The Company shall not take any action or
engage in any transaction (or series of actions or transactions), whether by
reorganization, Transfer of assets, merger, dissolution, amendment of
organizational documents or otherwise, the primary purpose of which is to evade,
avoid or seek to avoid the performance or observance of the covenants,
agreements or obligations of the Company under the Transaction Documents.

 

Section 5.11                            Insurance and Landlord Waiver; Control
Agreements.

 

The Company shall maintain the current insurance policies with its current
insurance companies or comparable policies consistent with industry standards. 
Within sixty (60) days following the Effective Date (as may be extended by the
Purchaser Agent), the Company shall provide to the Purchaser Agent a landlord
waiver and collateral access agreement with regard to each of the Company’s
locations set forth in the Perfection Certificate.  In addition, to the extent
duly executed account control agreements in respect of the Obligor’s bank and
securities accounts have not been delivered on or prior to the First Purchaser
Payment Date pursuant to Section 2.03(a)(ii)(C), the Company shall deliver duly
executed account control agreements for such accounts within thirty (30) days
following the Effective Date (as may be extended by the Purchaser Agent).

 

Section 5.12                            Taxes.

 

(a)                                 The Company shall timely file (taking into
account all extensions of due dates) all income and all other material Tax
Returns required to be filed by it and will pay all Taxes required to be paid
with such returns.

 

(b)                                 The Purchasers and the Company agree that
the transactions contemplated by this agreement constitute a debt instrument for
U.S. federal and applicable state and local income tax purposes, and that the
payments under the debt instrument are not subject to Section 871(h)(4)(A) of
the Code, except as required by an applicable taxing authority.

 

(c)                                  The Company covenants that all amounts
payable hereunder shall be paid without deduction or withholding for any Taxes
imposed pursuant to a law in effect on the date hereof, except as required by an
applicable taxing authority, provided, that, each Purchaser and Eligible
Assignee provides to the Company, (i) in the case of a U.S. Purchaser, executed
copies of IRS Form W-9 certifying that such U.S. Purchaser is exempt from U.S.
federal backup withholding tax, (ii) in the case of a Non-U.S. Purchaser
claiming the benefits of an income tax treaty to which the United States is a
party, executed copies of IRS Form W-8BEN or IRS Form W-8BEN-E establishing an
exemption from U.S. federal withholding Tax pursuant to the “interest” article
of such tax treaty or (iii) in the case of a Non-U.S. Purchaser claiming the
benefits for the exemption for portfolio interest under Section 881(c) of the
Code, (x) a certification that such Non-U.S. Purchaser is not a “bank” within
the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of
the Company within the meaning of Section 881(c)(3)(B) of the Code, or a
“controlled foreign corporation” related to the Company as described in
Section 881(c)(3)(C) of the Code

 

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and (y) executed copies of IRS Form W-8BEN or IRS Form W 8BEN-E. 
Notwithstanding the foregoing, a taxing authority will be deemed to require
deduction or withholding only upon the earlier of (A) the receipt of a “90-Day
Letter” from the Internal Revenue Service or (B) 135 days following receipt of a
“30-Day Letter” from the Internal Revenue Service, in each case asserting that
such deduction or withholding is required.  If, as a result of a Change in Law,
the Company is compelled to deduct or withhold Taxes, such payment will be
grossed up by the Company for the amount deducted such that Purchasers and
Eligible Assignees receive an amount equal to the amount they would have
received had no withholding or deduction been made.

 

(d)                                 Upon request, the Company shall provide the
Purchasers any reasonable assistance it may seek in obtaining an exemption or
reduced rate from, or refund of, any withholding tax, if applicable. In
addition, the Purchasers and the Company shall use commercially reasonable
efforts to cooperate, as and to the extent reasonably requested by the other
Parties, in connection with the filing of Tax Returns, any Tax audits, Tax
proceedings or other Tax-related claims in connection with the matters covered
by this Section 5.12.

 

ARTICLE VI

 

TERMINATION

 

Section 6.01                            Termination Date.

 

Except as provided in this Section 6.01 and in Section 6.02, this Agreement
shall terminate upon expiration of the Revenue Interest Period (the “Term”).  If
any payments are required to be made by one of the Parties hereunder after that
date, this Agreement shall remain in full force and effect until any and all
such payments have been made in full, and (except as provided in Section 6.02)
solely for that purpose. In addition, this Agreement shall sooner terminate if
the Purchasers shall have exercised the Put Option in accordance with
Section 5.07(a) or the Company shall have exercised the Call Option in
accordance with Section 5.07(b), in each case upon the payment of the Put/Call
Price and any other Obligations (other than contingent indemnity obligations for
which no claim has been made).

 

Section 6.02                            Effect of Termination.

 

In the event of the termination of this Agreement pursuant to Section 6.01, this
Agreement shall forthwith become void and have no effect without any liability
on the part of any party hereto or its Affiliates, directors, officers,
stockholders, partners, managers or members other than the provisions of this
Section 6.02, Section 5.04, Article VII and Article VIII hereof, which shall
survive any termination indefinitely, and Section 5.01(c) and Section 5.01(d),
which shall survive for three (3) years after any termination. Nothing contained
in this Section 6.02 shall relieve any party from liability for any breach of
this Agreement.

 

ARTICLE VII

 

PURCHASER AGENT

 

Section 7.01                            Appointment and Authority.  Each of the
Purchasers hereby irrevocably appoints Eiger III SA LLC, an Affiliate of
Oberland Capital LLC (together with any successor Purchaser Agent pursuant to
Section 7.06), as the Purchaser Agent hereunder and authorizes Purchaser Agent
to (i) execute and deliver the Transaction Documents and accept delivery thereof
on its behalf from the Company or any of its Subsidiaries, (ii) take such action
on its behalf and to exercise all rights, powers and remedies and perform the
duties as are expressly delegated to the Purchaser Agent under such Transaction
Documents, (iii) act as

 

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agent of such Purchaser for purposes of acquiring, holding, enforcing and
perfecting all Liens granted by the Company on the Collateral to secure any of
the Obligations and (iv) exercise such powers as are reasonably incidental
thereto.  Except for the Company’s approval rights in Section 7.06 and the last
paragraph of Section 7.08, the provisions of this Article VII are solely for the
benefit of the Purchaser Agent and the Purchasers, and neither the Company nor
any other Obligor shall have rights as a third party beneficiary of any of such
provisions.  Subject to Section 7.08 and Section 8.08, any action required or
permitted to be taken by the Purchaser Agent hereunder shall be taken with the
prior approval of the Required Purchasers.

 

Section 7.02                            Rights as a Purchaser.  The Person
serving as the Purchaser Agent hereunder shall have the same rights (including
under Section 5.12) and powers, and shall be subject to the same obligations
under Section 5.12, as any other Purchaser and may exercise the same as though
it were not the Purchaser Agent and the term “Purchaser” or “Purchasers” shall,
unless otherwise expressly indicated or unless the context otherwise requires,
include the Person serving as the Purchaser Agent hereunder.  Such Person and
its Affiliates may lend money to, own securities of, act as the financial
advisor or in any other advisory capacity for and generally engage in any kind
of business with the Company or any Subsidiary or other Affiliate thereof as if
such Person were not the Purchaser Agent hereunder and without any duty to
account therefor to the Purchasers.

 

Section 7.03                            Exculpatory Provisions.

 

(a)                                 The Purchaser Agent shall not have any
duties or obligations except those expressly set forth herein and in the other
Transaction Documents to which it is a party.  Without limiting the generality
of the foregoing, the Purchaser Agent:

 

(i)                                     shall not be subject to any fiduciary or
other implied duties, regardless of whether a Put Option Event, or any event
that with, the giving of notice or passage of time, would constitute a Put
Option Event, has occurred and is continuing;

 

(ii)                                  shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby or by the other Transaction
Documents to which it is a party that the Purchaser Agent is required to
exercise as directed in writing by the Required Purchasers (or such other number
or percentage of the Purchasers as shall be expressly provided for herein or in
such other Transaction Documents), provided that the Purchaser Agent shall not
be required to take any action that, in its opinion or the opinion of its
counsel, may expose the Purchaser Agent to liability or that is contrary to any
Transaction Document or applicable law; and

 

(iii)                               shall not, except as expressly set forth
herein and in the other Transaction Documents to which it is a party, have any
duty to disclose, and shall not be liable for the failure to disclose, any
information relating to the Company or any of its Affiliates that is
communicated to or obtained by the Person serving as the Purchaser Agent or any
of its Affiliates in any capacity.

 

(b)                                 The Purchaser Agent shall not be liable for
any action taken or not taken by it (i) with the consent or at the request of
the Required Purchasers (or such other number or percentage of the Purchasers as
shall be necessary, or as the Purchaser Agent shall believe in good faith shall
be necessary, under the circumstances as provided in Section 8.08) or (ii) in
the absence of its own gross negligence or willful misconduct as determined by a
court of competent jurisdiction by final and nonappealable judgment.  The

 

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Purchaser Agent shall be deemed not to have knowledge of any Put Option Event
unless and until notice describing such Put Option Event is given to the
Purchaser Agent in writing by the Company or a Purchaser.

 

(c)                                  The Purchaser Agent shall not be
responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with this Agreement or any
other Transaction Document, (ii) the contents of any certificate, report or
other document delivered hereunder or thereunder or in connection herewith or
therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth herein or therein or the
occurrence of any Put Option Event, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement, any other Transaction Document
or any other agreement, instrument or document or (v) the satisfaction of any
condition set forth in Article II or elsewhere herein, other than to confirm
receipt of items expressly required to be delivered to the Purchaser Agent.

 

(d)                                 Notwithstanding anything to the contrary
herein, the Purchaser Agent’s sole duty with respect to the custody, safekeeping
and physical preservation of the Collateral in its possession, under the UCC or
otherwise, shall be to deal with it in the same manner as the Purchaser Agent
deals with similar property for its own account, and the Purchaser Agent shall
be deemed to have exercised reasonable care in the custody and preservation of
the Collateral in its possession if the Collateral is accorded treatment
substantially equal to that which comparable secured parties accord comparable
collateral.

 

(e)                                  In addition to and not in limitation of the
provisions of this Section 7.03, under no circumstances shall the Purchaser
Agent have any duty or obligation to take any actions hereunder, even if
instructed to do so by the Required Purchasers, if the Purchaser Agent
determines, in its sole and absolute discretion, that such actions would subject
it to liability or expense for which indemnity or security satisfactory to it
has not been provided hereunder or otherwise or would be contrary to the
Transactions Documents or Requirements of Law.

 

Section 7.04                            Reliance by Purchaser Agent.  The
Purchaser Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic
message, internet or intranet website posting or other distribution) believed by
it to be genuine and to have been signed, sent or otherwise authenticated by the
proper Person.  The Purchaser Agent also may rely upon any statement made to it
orally or by telephone and believed by it to have been made by the proper
Person, and shall not incur any liability for relying thereon.  The Purchaser
Agent may consult with legal counsel (who may be counsel for the Company),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts.

 

Section 7.05                            Delegation of Duties.  The Purchaser
Agent may perform any and all of its duties and exercise its rights and powers
hereunder or under any other Transaction Document by or through any one or more
sub-agents appointed by the Purchaser Agent.  The Purchaser Agent and any such
sub-agent may perform any and all of its duties and exercise its rights and
powers by or through their respective Related Parties.  The exculpatory
provisions of this Article VII shall apply to any such sub-agent and to the
Related Parties of the Purchaser Agent and any such sub-agent.  The Purchaser
Agent shall not be responsible for the negligence or misconduct of any sub-agent
except to the extent that a court of competent jurisdiction determines in a
final and nonappealable judgment that the Purchaser Agent acted with gross
negligence or willful misconduct in the selection of such sub-agent.

 

Section 7.06                            Resignation of Purchaser Agent.  The
Purchaser Agent may at any time give notice of its resignation to the Purchasers
and the Company upon thirty (30) days written notice.  Upon the receipt of any
such notice of resignation, the Required Purchasers shall appoint a successor,
which successor, so long as no Put Option Event shall have occurred and be
continuing, shall be reasonably acceptable to the

 

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Company.  If no successor shall have been so appointed by the Required
Purchasers and shall have accepted such appointment within thirty (30) days
after the retiring Purchaser Agent gives notice of its resignation, then the
retiring Purchaser Agent may, on behalf of the Purchasers, appoint a successor
Purchaser Agent, which successor, so long as no Put Option Event shall have
occurred and be continuing, shall be reasonably acceptable to the Company;
provided that, whether or not a successor has been appointed or has accepted
such appointment, such resignation shall become effective upon delivery of the
notice thereof.  Upon the acceptance of a successor’s appointment as Purchaser
Agent hereunder, such successor shall succeed to and become vested with all of
the rights, powers, privileges and duties of the retiring (or retired) Purchaser
Agent, and the retiring Purchaser Agent shall be discharged from all of its
duties and obligations under the Transaction Documents (if not already
discharged therefrom as provided above in this Section 7.06).  After the
retiring Purchaser Agent’s resignation, the provisions of this Article VII and
Section 8.04 shall continue in effect for the benefit of such retiring Purchaser
Agent, its sub-agents and their respective Related Parties in respect of any
actions taken or omitted to be taken by any of them while the retiring Purchaser
Agent was acting as Purchaser Agent.  Upon any resignation by the Purchaser
Agent, all payments (if any), communications and determinations provided to be
made by, to or through the Purchaser Agent shall instead be made by, to or
through each Purchaser directly, until such time as a Person accepts an
appointment as Purchaser Agent in accordance with this Section 7.06.

 

Section 7.07                            Non-Reliance on Purchaser Agent and
Other Purchasers.  Each Purchaser acknowledges that it has, independently and
without reliance upon the Purchaser Agent or any other Purchaser or any of their
Related Parties and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement.  Each Purchaser also acknowledges that it will, independently and
without reliance upon the Purchaser Agent or any other Purchaser or any of their
Related Parties and based on such documents and information as it shall from
time to time deem appropriate, continue to make its own decisions in taking or
not taking action under or based upon this Agreement, any other Transaction
Document or any related agreement or any document furnished hereunder or
thereunder.

 

Section 7.08                            Collateral and Guaranty Matters.  Each
Purchaser agrees that any action taken by the Purchaser Agent or the Required
Purchasers in accordance with the provisions of this Agreement or of the other
Transaction Documents, and the exercise by the Purchaser Agent or Required
Purchasers of the powers set forth herein or therein, together with such other
powers as are reasonably incidental thereto, shall be authorized and binding
upon all of the Purchasers. Without limiting the generality of the foregoing,
the Purchasers irrevocably authorize the Purchaser Agent, at its option and in
its discretion:

 

(a)                                 to release any Lien on any property granted
to or held by the Purchaser Agent under any Transaction Document (A) upon the
discharge of the Obligations (other than contingent indemnity obligations for
which no claim has been made), (B) that is sold, transferred, disposed or to be
sold, transferred, disposed as part of or in connection with any sale, transfer
or other disposition (other than any sale to an Obligor; provided, however that
the Purchaser Agent may make any filings necessary to reflect the transfer of
Collateral from one Obligor to another) permitted hereunder or otherwise becomes
an Excluded Property (as defined in the Security Agreement), (C) subject to
Section 8.08, if approved, authorized or ratified in writing by the Required
Purchasers or (D) to the extent such property is owned by

 

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a Subsidiary Guarantor upon the release of such Subsidiary Guarantor from its
obligations under its Guaranty pursuant to clause (c) below;

 

(b)                                 to subordinate any Lien on any property
granted to or held by the Purchaser Agent under any Transaction Document to the
holder of any Lien on such property that is permitted by Section 5.10(a)(ii);

 

(c)                                  to release any Subsidiary Guarantor from
its obligations under the Guaranty Agreement if such Person ceases to be a
Subsidiary as a result of a transaction permitted hereunder; and

 

(d)                                 to enter into non-disturbance and similar
agreements in connection with the licensing of Intellectual Property permitted
pursuant to the terms of this Agreement in form and substance reasonably
satisfactory to the Purchaser Agent and the applicable licensor.

 

Upon request by the Purchaser Agent at any time, the Required Purchasers will
confirm in writing the Purchaser Agent’s authority to release or subordinate its
interest in particular types or items of property, or to release any Subsidiary
Guarantor from its obligations under the Guaranty pursuant to this Section 7.08.

 

In each case as specified in this Section 7.08, the Purchaser Agent will (and
each Purchaser irrevocably authorizes the Purchaser Agent to), at the Company’s
expense, execute and deliver to the applicable Obligor such documents as such
Obligor may reasonably request (i) to evidence the release or subordination of
such item of collateral from the assignment and security interest granted under
the Transaction Documents, (ii) to enter into non-disturbance or similar
agreements in connection with the licensing of Intellectual Property, (iii) to
evidence the release of such Subsidiary Guarantor from its obligations under the
Guaranty, in each case in accordance with the terms of the Transaction Documents
and this Section 7.08 and in form and substance reasonably acceptable to the
Purchaser Agent.

 

The Purchaser Agent shall deliver to the Purchasers notice of any action taken
by it under this Section 7.08 as soon as reasonably practicable after the taking
thereof; provided, that delivery of or failure to deliver any such notice shall
not affect the Purchaser Agent’s rights, powers, privileges and protections
under this Article VII.

 

Section 7.09                            Reimbursement by Purchasers.  To the
extent that the Company for any reason fails to indefeasibly pay any amount
required under Section 8.04 or Section 8.13 to be paid by it to the Purchaser
Agent (or any sub-agent thereof) or any Related Party of any of the foregoing,
each Purchaser severally agrees to pay to the Purchaser Agent (or any such
sub-agent) or such Related Party, as the case may be, such Purchaser’s pro rata
share (based upon the percentages as used in determining the Required Purchasers
as of the time that the applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount; provided that the unreimbursed expense or
indemnified loss, damage, liability or related expense, as the case may be, was
incurred by or asserted against the Purchaser Agent (or any such sub-agent) in
its capacity as such or against any Related Party of any of the foregoing acting
for the Purchaser Agent (or any sub-agent) in connection with such capacity.

 

ARTICLE VIII

 

MISCELLANEOUS

 

Section 8.01                            Limitations on Damages.

 

Notwithstanding anything to the contrary in this Agreement, in no event shall
either party be liable for special, indirect, incidental, punitive or
consequential damages of the other party, whether or not caused

 

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by or resulting from the actions of such party or the breach of its covenants,
agreements, representations or warranties hereunder, even if such party has been
advised of the possibility of such damages; provided, that nothing contained in
this Section 8.01 shall limit the Company’s indemnification obligations
hereunder to the extent such special, indirect, consequential or punitive
damages are included in any third party claim in connection with which such
Indemnitee is entitled to indemnification hereunder.

 

Section 8.02                            Notices.

 

All notices, consents, waivers and communications hereunder given by any party
to the other shall be in writing (including facsimile transmission) and
delivered personally, by telegraph, telecopy, telex or facsimile, by a
recognized overnight courier, or by dispatching the same by certified or
registered mail, return receipt requested, with postage prepaid, in each case
addressed (with a copy by email):

 

If to the Purchaser Agent to:

 

c/o Oberland Capital Management LLC

1700 Broadway, 37th Floor

New York, NY 10019

Attn: Dave Dubinsky

Fax: (212) 257-5851

Telephone: (212) 257-5800

Email: ddubinsky@oberlandcapital.com

 

If to any Purchaser to:

 

c/o Oberland Capital Management LLC

1700 Broadway, 37th Floor

New York, NY 10019

Attn: Dave Dubinsky

Fax: (212) 257-5851

Telephone: (212) 257-5800

Email: ddubinsky@oberlandcapital.com

 

If to the Company to:

 

Esperion Therapeutics, Inc.

3891 Ranchero Drive, Suite 150

Ann Arbor, Michigan 48108

Attn: Richard B. Bartram

Telephone: 734-887-3913

Email: rbartram@esperion.com

 

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

 

Goodwin Procter LLP

100 Northern Avenue

Boston, Massachusetts 02210

Attn: Mitchell S. Bloom; Arthur R. McGivern

Email: mbloom@goodwinlaw.com; amcgivern@goodwinlaw.com

 

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or to such other address or addresses as the Purchaser Agent, any Purchaser or
the Company may from time to time designate by notice as provided herein, except
that notices of changes of address shall be effective only upon receipt. All
such notices, consents, waivers and communications shall: (a) when posted by
certified or registered mail, postage prepaid, return receipt requested, be
effective three (3) Business Days after dispatch, unless such communication is
sent trans-Atlantic, in which case they shall be deemed effective five
(5) Business Days after dispatch, (b) when telegraphed, telecopied, telexed or
facsimiled, be effective upon receipt by the transmitting party of confirmation
of complete transmission, or (c) when delivered by a recognized overnight
courier or in person, be effective upon receipt when hand delivered.

 

Section 8.03                            Successors and Assigns.

 

The provisions of this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns.  The Company
shall not be entitled to assign any of its obligations and rights under the
Transaction Documents without the prior written consent of the Purchaser Agent
and the Required Purchasers.  Any Purchaser may assign any of its rights under
the Transaction Documents without restriction to any Eligible Assignee;
provided, however, that, except to the extent such Purchaser retains its
obligations to make its Pro Rata Portion of future Purchaser Payments, such
Eligible Assignee shall assume in writing all such Purchaser’s obligation to
make future Purchaser Payments; provided, further, that the Purchaser shall
provide the Company with written notice of any assignment. The Company shall
maintain a “register” for the recordation of the names and addresses of, and the
Purchaser Commitments of, and amounts owing to, each Purchaser and assignee
owning Revenue Interest Payments. Notwithstanding anything to the contrary
contained in this Agreement, the Revenue Interest Payments are registered
obligations for U.S. federal income tax purposes and the right, title and
interest of the any Purchaser and its assignees in and to such Revenue Interest
Payments shall be transferable only upon notation of such transfer in the
register. Notwithstanding the foregoing, unless a Put Option Event, or an event
that with the giving of notice or the passage of time would constitute a Put
Option Event, has occurred and is continuing, the Pro Rata Portion of Oberland
Capital LLC and its Affiliates shall at all times be greater than 50%.

 

Section 8.04                            Indemnification.

 

(a)                                 The Company hereby indemnifies and holds the
Purchaser Agent, each Purchaser and their respective Affiliates and any of their
respective partners, directors, managers, members, officers, employees and
agents (each, an “Indemnified Party”) harmless from and against any and all
Indemnified Liabilities, in all cases, arising, in whole or in part, out of or
relating to any claim, notice, suit or proceeding commenced or threatened in
writing (including, without limitation, by electronic means) by any Third Party
(including any Governmental Authority); provided the Company shall not have any
obligation to any Indemnified Party hereunder with respect to any such
Indemnified Liabilities to the extent such Indemnified Liabilities arise from
the bad faith, gross negligence or willful misconduct of such Indemnified Party
or the breach by such Indemnified Party of its obligations to pay its Purchaser
Payments hereunder.

 

(b)                                 In the event that any Purchaser, other than
at the direction or request of any Governmental Authority, defaults in its
obligation to make a Purchaser Payment, the Company shall be entitled, in
addition to any other remedies it may have against such Purchaser, to recover
its costs and expenses (including reasonable and documented out-of-pocket fees
and expenses of counsel) incurred in pursuing remedies against such Purchaser.

 

Section 8.05                            No Implied Representations and
Warranties; Survival of Representations and Warranties.

 

Each party acknowledges and agrees that, other than the representations and
warranties specifically contained in any of the Transaction Documents, there are
no representations or warranties of either party

 

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or any other Person either expressed or implied with respect to the Revenue
Interests or the transactions contemplated hereby.  Without limiting the
foregoing, the Purchaser Agent and each Purchasers acknowledges and agrees that
the Purchaser Agent, each Purchaser and their respective Affiliates, together
with their representatives, have made their own investigation of each Included
Product and are not relying on any implied warranties or upon any representation
or warranty whatsoever as to the future amount or potential amount of the
Revenue Interests or as to the creditworthiness of the Company.  All
representations and warranties by the Parties contained in this Agreement shall
survive the execution, delivery and acceptance thereof by the Parties and the
closing of the transactions described in this Agreement and continue in effect
until payment of all amounts due to the Purchasers under the Transaction
Documents and the termination of this Agreement pursuant to its terms.

 

Section 8.06                            Independent Nature of Relationship.

 

(a)                                 The relationship between the Company and its
Subsidiaries, on the one hand, and the Purchaser Agent and the Purchasers, on
the other, is solely that of seller and purchaser, and for U.S. federal income
tax purposes debtor and creditor, and neither the Purchaser Agent and the
Purchasers, on the one hand, nor the Company and its Subsidiaries, on the other,
has any fiduciary or other special relationship with the other or any of their
respective Affiliates. Nothing contained herein or in any other Transaction
Document shall be deemed to constitute the Company and its Subsidiaries and the
Purchaser Agent and the Purchasers as a partnership, an association, a joint
venture or other kind of entity or legal form for any purposes, including any
Tax purposes.

 

(b)                                 No officer or employee or agent of the
Purchaser Agent or any Purchaser will be located at the premises of the Company
or any of its Affiliates, except in connection with an audit performed pursuant
to Section 5.01 or in connection with the enforcement of remedies as
contemplated by the Transaction Documents. No officer, manager or employee of
the Purchaser Agent or any Purchaser shall engage in any commercial activity
with the Company or any of its Affiliates other than as contemplated herein and
in the other Transaction Documents.

 

Section 8.07                            Entire Agreement.

 

This Agreement, together with the Exhibits and Schedules hereto (which are
incorporated herein by reference), and the other Transaction Documents
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersede all prior agreements, understandings and
negotiations, both written and oral, between the parties with respect to the
subject matter of this Agreement. No representation, inducement, promise,
understanding, condition or warranty not set forth herein (or in the Exhibits,
Schedules or other Transaction Documents) has been made or relied upon by either
party hereto. None of this Agreement, nor any provision hereof, is intended to
confer upon any Person other than the parties hereto any rights or remedies
hereunder.

 

Section 8.08                            Amendments; No Waivers.

 

(a)                                 Subject to Section 8.08(b), this Agreement,
the other Transaction Documents or any term or provision hereof or thereof may
not be amended, changed or modified except with the written consent of the
Company, the Purchaser Agent and the Required Lenders.  No waiver of any right
hereunder shall be effective unless such waiver is signed in writing by the
party against whom such waiver is sought to be enforced.

 

(b)                                 Without the prior written consent of each
Purchaser that would be affected thereby, no amendment, modification,
termination, or consent shall be effective if the effect thereof would:

 

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(i)                                     waive, reduce or postpone any Revenue
Interest Payment;

 

(ii)                                  amend, modify, terminate or waive any
provision of this Section 8.08;

 

(iii)                               amend the definition of “Required
Purchasers” or “Pro Rata Portion”; or

 

(iv)                              release all or substantially all of the
Collateral or release any Obligor from any of its rights and obligations under
any Transaction Document (except as expressly provided in the Transaction
Documents).

 

(c)                                  No failure or delay by either party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not exclusive of
any rights or remedies provided by law.

 

Section 8.09                            Interpretation.

 

When a reference is made in this Agreement to Articles, Sections, Schedules or
Exhibits, such reference shall be to an Article, Section, Schedule or Exhibit to
this Agreement unless otherwise indicated. The words “include”, “includes” and
“including” when used herein shall be deemed in each case to be followed by the
words “without limitation”.  Neither party hereto shall be or be deemed to be
the drafter of this Agreement for the purposes of construing this Agreement
against one party or the other.

 

Section 8.10                            Headings and Captions.

 

The headings and captions in this Agreement are for convenience and reference
purposes only and shall not be considered a part of or affect the construction
or interpretation of any provision of this Agreement.

 

Section 8.11                            Counterparts; Effectiveness.

 

This Agreement may be executed in two or more counterparts, each of which shall
be an original, but all of which together shall constitute one and the same
instrument. This Agreement shall become effective when each party hereto shall
have received a counterpart hereof signed by the other parties hereto. Any
counterpart may be executed by facsimile or pdf signature and such facsimile or
pdf signature shall be deemed an original.

 

Section 8.12                            Severability.

 

If any provision of this Agreement is held to be invalid or unenforceable, the
remaining provisions shall nevertheless be given full force and effect.

 

Section 8.13                            Expenses.

 

The Company will pay all of its own fees and expenses in connection with
entering into and consummating the transactions contemplated by this Agreement.

 

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Section 8.14                            Governing Law; Jurisdiction.

 

(a)                                 This Agreement shall be governed by, and
construed, interpreted and enforced in accordance with, the laws of the state of
New York, without giving effect to the principles of conflicts of law thereof.

 

(b)                                 Any legal action or proceeding with respect
to this Agreement or any other Transaction Document may be brought in any state
or federal court of competent jurisdiction in the State of New York, County of
New York. By execution and delivery of this Agreement, each party hereto hereby
irrevocably consents to and accepts, for itself and in respect of its property,
generally and unconditionally the non-exclusive jurisdiction of such courts.
Each party hereto hereby further irrevocably waives any objection, including any
objection to the laying of venue or based on the grounds of forum non
conveniens, which it may now or hereafter have to the bringing of any action or
proceeding in such jurisdiction in respect of any Transaction Document.

 

(c)                                  Each party hereto hereby irrevocably
consents to the service of process out of any of the courts referred to in
clause (b) of this Section 8.14 in any such suit, action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
it at its address set forth in this Agreement.  Each party hereto hereby
irrevocably waives any objection to such service of process and further
irrevocably waives and agrees not to plead or claim in any suit, action or
proceeding commenced hereunder or under any other Transaction Document that
service of process was in any way invalid or ineffective. Nothing herein shall
affect the right of a party to serve process on the other party in any other
manner permitted by law.

 

Section 8.15                            Waiver of Jury Trial.

 

EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING,
CLAIM OR COUNTERCLAIM ARISING OUT OF OR RELATING TO ANY TRANSACTION DOCUMENT OR
THE TRANSACTIONS CONTEMPLATED UNDER ANY TRANSACTION DOCUMENT. THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
ANY TRANSACTION DOCUMENT.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the date first above
written.

 

 

COMPANY

ESPERION THERAPEUTICS, INC.

 

 

 

 

By:

/s/ Richard B. Bartram

 

 

Name:

Richard B Bartram

 

 

Title:

Chief Financial Officer

 

 

 

 

PURCHASER AGENT:

EIGER III SA LLC

 

 

 

 

By:

/s/ David Dubinsky

 

 

Name:

David Dubinsky

 

 

Title:

Authorized Signatory

 

 

 

 

PURCHASERS:

EIGER PARTNERS II LP

 

 

 

 

By:

/s/ David Dubinsky

 

 

Name:

David Dubinsky

 

 

Title:

Authorized Signatory

 

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