Exhibit 10.1

 

FORM OF CONTINGENT VALUE RIGHTS AGREEMENT

 

THIS CONTINGENT VALUE RIGHTS AGREEMENT, dated as of [●], 2017, (this
“Agreement”), is entered into by and between Lough Ree Technologies Limited, an
Irish private limited company (the “Buyer”) and [●], a [●], as Rights Agent.

 

RECITALS

 

WHEREAS, Gurnet Point L.P., a Delaware limited partnership, the Buyer and
Innocoll Holdings plc, an Irish public limited company (the “Company”), have
entered into the Transaction Agreement, dated as of April 4, 2017 (as it may be
amended or supplemented from time to time pursuant to the terms thereof, the
“Transaction Agreement”), relating to a recommended offer to be made by the
Buyer for the entire issued and to be issued ordinary share capital of the
Company to be implemented by means of a scheme of arrangement under Irish law
(the “Acquisition”);

 

WHEREAS, pursuant to the Acquisition, in accordance with the terms and
conditions thereof, the consideration to be paid for the Innocoll Shares (as
defined in the Scheme Document) includes CVRs (as defined herein);

 

WHEREAS, if Completion (as defined in the Transaction Agreement) occurs, then on
the Effective Date (as defined in the Transaction Agreement) each [Innocoll
Shareholder] (as defined in the Scheme Document) will be entitled to receive one
CVR for each Innocoll Share; and

 

WHEREAS, pursuant to the Acquisition, the maximum potential amount payable per
CVR (as defined herein) is $4.90 in cash, without interest.

 

NOW, THEREFORE, in consideration of the foregoing and the consummation of the
transactions referred to above, the Buyer and Rights Agent agree, for the equal
and proportionate benefit of all Holders, as follows:

 

ARTICLE I

DEFINITIONS; CERTAIN RULES OF CONSTRUCTION

 

Section 1.1           Definitions. All capitalized terms used in this Agreement
without definition shall have the respective meanings ascribed to them in the
Transaction Agreement. As used in this Agreement, the following terms will have
the following meanings:

 

“Acting Holders” means, at the time of determination, Holders of not less than a
majority of the outstanding CVRs as set forth in the CVR Register.

 

“Affiliate” means in relation to any person, another person that, directly or
indirectly, controls, is controlled by, or is under common control with, such
first person (as used in this definition, “control” (including, with its
correlative meanings, “controlled by” and “under common control with”) shall
mean the possession, directly or indirectly, of the power to direct or

 

 

 

 

cause the direction of management or policies of a person, whether through the
ownership of securities or partnership or other ownership interests, by Contract
or otherwise).

 

“Affiliate End User” has the meaning set forth in the definition of Net Sales.

 

“Assignee” has the meaning set forth in Section 7.3.

 

“Board of Directors” means the board of directors of the Buyer.

 

“Board Resolution” means a copy of a resolution certified by a duly authorized
officer of the Buyer to have been duly adopted by the Board of Directors and to
be in full force and effect on the date of such certification, and delivered to
the Rights Agent.

 

“Business Day” means any day other than a Saturday, Sunday or a day on which
banking institutions in Dublin, Ireland or New York, New York are authorized or
obligated by Law or executive order to remain closed.

 

“Calendar Quarter” means the three month period ending on any of March 31, June
30, September 30 or December 31 of a given calendar year.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended and the rules
and regulations promulgated thereunder.

 

“CVRs” means the rights of Holders to receive contingent cash payments pursuant
to the terms of this Agreement, collectively the “CVRs” and each a “CVR”.

 

“CVR Payment” means any of the First CVR Payment, Second CVR Payment, Third CVR
Payment 2019, Third CVR Payment 2020, Fourth CVR Payment 2019 or Fourth CVR
Payment 2020 and “CVR Payments” shall mean all of the CVR Payments together.

 

“CVR Payment Amount” means, in respect of a CVR Payment, for a given Holder, the
product of (a) the CVR Payment in respect of such CVR Payment Event and (b) the
number of CVRs held by such Holder as reflected on the CVR Register as of the
close of business on the date of the applicable CVR Payment Event Notice.

 

“CVR Payment Date” means, (a) in the case of the First CVR Payment Event, the
Second CVR Payment Event or the Third CVR Payment Event, the date that is ninety
(90) days following the achievement of such CVR Payment Event, (b) in the case
of the Fourth CVR Payment Event 2019, March 31, 2020 and (c) in the case of the
Fourth CVR Payment Event 2020, June 30, 2020.

 

“CVR Payment Event” means any of the First CVR Payment Event, Second CVR Payment
Event, Third CVR Payment Event or Fourth CVR Payment Event.

 

“CVR Payment Event Notice” has the meaning set forth in Section 2.4(a).

 

“CVR Register” has the meaning set forth in Section 2.3(b).

 

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“Default Interest Rate” means a rate equal to the sum of four percent (4%) plus
the “prime rate” of interest quoted in the Money Rates section of The Wall
Street Journal (New York Edition) or similar reputable data source, calculated
daily on the basis of a three hundred sixty five (365) day year.

 

“Delaware Courts” has the meaning set forth in Section 7.5(b).

 

“Diligent Efforts” means, with respect to the Product, the efforts that a Person
within the pharmaceutical industry of comparable size to the Company and its
subsidiaries and reasonably capitalized for an early stage pharmaceutical
product development company, would devote to a product, that is of similar
market potential at a similar stage in its development or product life and using
such effort and employing such resources in the exercise of its reasonable
business discretion relating to the research, development or commercialization
of such product, taking into account issues of market exclusivity (including
patent coverage, regulatory and other exclusivity), safety and efficacy, product
profile, the competitiveness of alternate products in the marketplace or under
development, the launch or sales of a generic or biosimilar product, the
regulatory structure involved, and the profitability of the applicable product
(including pricing and reimbursement status achieved), and other relevant
factors, including technical, commercial, legal, scientific, and/or medical
factors; provided that the cost of potential CVR Payments hereunder shall be
ignored in the Buyer’s analysis. Subject to the foregoing, “Diligent Efforts”
shall include, but shall not be limited to, the following: (a) refraining from
entering into agreements with employees of the Company that would be
contradictory to the achievement of, or would otherwise disincentivize such
employees from seeking to achieve, any of the CVR Payment Events, (b) initiating
and completing FDA-mandated post-marketing approval commitments; (c) seeking
pricing approvals and/or minimally restrictive payer coverage decisions; and (d)
setting a commercial price for the Product that is consistent with the profile
of the Product. For clarity, “Diligent Efforts” will not mean that the Buyer
guarantees that it will actually accomplish any CVR Payment Event, nor that it
will accomplish the applicable CVR Payment Event by a specific date.

 

“DTC” means The Depository Trust Company or any successor thereto.

 

“Entity” means any corporation (including any non-profit corporation), general
partnership, limited partnership, limited liability partnership, joint venture,
estate, trust, company (including any company limited by shares, limited
liability company or joint stock company), firm, society or other enterprise,
association, organization or entity.

 

“Expanded Soft Tissue” means Soft Tissue that is not limited to Hernia.

 

“Failed Fourth CVR Payment” has the meaning set forth in Section 4.4(b).

 

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

 

“Finance Contract” has the meaning set forth in Section 4.8.

 

“First CVR Payment” means $0.70 per CVR.

 

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“First CVR Payment Event” means the FDA’s approval, on or prior to December 31,
2018, of the Product with a label covering indications for the treatment of
postsurgical pain following open abdominal Hernia repair.

 

“Fourth CVR Payment 2019” means $1.87 per CVR.

 

“Fourth CVR Payment 2020” means $1.00 per CVR; provided that in no event shall
the Fourth CVR Payment 2020 become payable if the Fourth CVR Payment 2019 has
been paid by the Buyer.

 

“Fourth CVR Payment Event” means the first achievement in any Fourth CVR Payment
Event Measurement Period of worldwide Net Sales of the Product, exceeding
$60,000,000.

 

“Fourth CVR Payment Event Measurement Period” means the Fourth CVR Payment Event
Measurement Period 2019 or the Fourth CVR Payment Event Measurement Period 2020,
as applicable.

 

“Fourth CVR Payment Event Measurement Period 2019” means any four (4)
consecutive Calendar Quarters ending on or prior to December 31, 2019.

 

“Fourth CVR Payment Event Measurement Period 2020” means any four (4)
consecutive Calendar Quarters ending on or prior to March 31, 2020.

 

“Fourth CVR Payment Event 2019” means the achievement of the Fourth CVR Payment
Event on or prior to December 31, 2019.

 

“Fourth CVR Payment Event 2020” means the achievement of the Fourth CVR Payment
Event after December 31, 2019 but on or prior to March 31, 2020; provided that
in no event shall the Fourth CVR Payment Event 2020 occur if the Fourth CVR
Payment Event 2019 has occurred.

 

“Hard Tissue” means mineralized tissue, including but not limited to orthopedic
tissue, with a firm consistency such as bone.

 

“Hernia” means the indication for which the patient population for the two Phase
III registration trials conducted by the Company were treated.

 

“Holder” means a Person in whose name a CVR is registered in the CVR Register at
the applicable time.

 

“Independent Accountant” has the meaning set forth in Section 4.4(a).

 

“Independent Accountant Report” has the meaning set forth in Section 4.4(b).

 

“Law” means any foreign, federal, state, local or municipal laws, rules,
judgments orders, regulations, statutes, ordinances, codes, decisions,
injunctions, orders, decrees or requirements of any Relevant Authority.

 

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“Net Sales” means the gross amount received by the relevant Selling Entity for
the Product sold to third parties other than any other Selling Entity, less the
Permitted Deductions, all as determined in accordance with the Selling Entity’s
usual and customary accounting methods consistent with the treatment of other
branded prescription products commercialized by the applicable Selling Entity,
which shall be in accordance with generally accepted accounting principles,
including the accounting methods for translating activity denominated in foreign
currencies into United States dollar amounts. In the case of any sale of the
Product between or among Selling Entities for resale, Net Sales will be
calculated as above only on the value charged or invoiced on the first
arm’s-length sale thereafter to a third party. For the avoidance of doubt, in
the case of any sale of the Product between or among Selling Entities where a
Selling Entity is an end-user of (in such capacity, an “Affiliate End User”),
and does not further sell, the Product, Net Sales will be calculated on the
value charged or invoiced to such Affiliate End User; provided that use of the
Product for clinical testing in which the cost of the Product is not reimbursed
shall not make a Selling Entity or licensee an Affiliate End User. If a Product
is sold or otherwise commercially disposed of for consideration other than cash
or in a transaction that is not at arm’s length between the buyer of such
Product and the applicable Selling Entity (other than with respect to Product
supplied expressly for sampling purposes), then the gross amount to be included
in the calculation of Net Sales shall be the amount that would have been
received had the transaction been conducted at arm’s length and for cash. Such
amount that would have been received shall be determined, wherever possible, by
reference to the average selling price of such Product in arm’s length
transactions in the relevant jurisdiction. Notwithstanding the foregoing, the
following shall not be included in Net Sales: (i) Product provided for
administration to patients enrolled in clinical trials or for other research
purposes, or (ii) commercially reasonable quantities of Product used as samples
to promote additional sales.

 

“Officer’s Certificate” means a certificate signed by an authorized officer of
the Buyer, in his or her capacity as such an officer, and delivered to the
Rights Agent.

 

“Outstanding” when used with respect to CVRs means, as of the date of
determination, all CVRs theretofore authenticated and delivered under this
Agreement, except CVRs theretofore cancelled by the Rights Agent or delivered to
the Rights Agent for cancellation; provided, however, that in determining
whether the Holders of the requisite Outstanding CVRs have given any request,
demand, direction, consent or waiver hereunder, CVRs owned by the Buyer or any
Affiliate of the Buyer, whether held as treasury securities or otherwise, shall
be disregarded and deemed not to be Outstanding.

 

“Permitted Deductions” means, to the extent not already excluded from Net Sales:

 

(1)normal and customary trade, quantity and prompt settlement discounts;

 

(2)amounts repaid or credited by reasons of defects, recalls, returns, rebates
or allowances of goods;

 

(3)normal and customary chargebacks, rebates (or the equivalent thereof) and
other amounts paid on sale of the Product, including such payments mandated by
programs of Relevant Authorities;

 

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(4)normal and customary rebates (or the equivalent thereof) and administrative
fees paid to medical healthcare organizations, to group purchasing organizations
or to trade customers in line with approved contract terms or other
understandings and arrangements;

 

(5)tariffs, duties, excise, sales, value-added and other taxes (other than taxes
based on net income);

 

(6)any government mandated manufacturing tax, including the brand manufacturer’s
tax imposed pursuant to the Patient Protection and Affordable Care Act (Pub. L.
No. 111-149);

 

(7)reasonable deductions for uncollectible amounts on previously sold products
(which adjustment shall be based on actual bad debts incurred and written off as
uncollectible by the Selling Entity in a fiscal period);

 

(8)discounts pursuant to indigent patient programs and patient discount programs
and coupon discounts;

 

(9)normal and customary distribution commissions and fees (including fees
related to services provided pursuant to distribution service agreements with
wholesalers, fee-for-service wholesaler fees and inventory management fees)
payable to any third party providing distribution services to the Selling
Entities; and

 

(10)a reasonable allowance for transportation, freight, postage, importation,
shipping insurance and other handling expenses.

 

For the avoidance of doubt, if a single item falls into more than one of the
categories set forth in clauses (1) through (10) above, such item may not be
deducted more than once.

 

“Permitted Transfer” means: a transfer of CVRs (a) upon the death of a Holder by
will or intestacy; (b) pursuant to a court order; (c) by operation of law
(including by consolidation or merger) or without consideration in connection
with the dissolution, liquidation or termination of any corporation, limited
liability company, partnership or other entity; (d) in the case of CVRs held in
book-entry or other similar nominee form, from a nominee to a beneficial owner
and, if applicable, through an intermediary, to the extent allowable by DTC; or
(e) to the Buyer as provided in Section 2.6.

 

“Person” means an individual, group (including a “group” under Section 13(d) of
the Exchange Act), corporation, partnership, limited liability company, joint
venture, association, trust, unincorporated organization or other entity or any
Relevant Authority or any department, agency or political subdivision thereof.

 

“Product” means the product originally submitted by the Company to the FDA under
a New Drug Application dated October 31, 2016 having New Drug Application number
209511.

 

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“Regulatory Approval” means all approvals from the FDA or other U.S. regulatory
authority necessary for the commercial manufacture, marketing and sale of a
product in the United States in accordance with applicable Law.

 

“Relevant Authority”, any Irish, United States, foreign or supranational,
federal, state or local governmental commission, board, body, bureau,
arbitrator, arbitration panel, or other regulatory authority or agency,
including courts and other judicial bodies, or any competition, antitrust,
foreign investment review or supervisory body, central bank or other
governmental, trade or regulatory agency or body, securities exchange or any
self-regulatory body or authority, including any instrumentality or entity
designed to act for or on behalf of the foregoing, in each case, in any
jurisdiction, including the Panel, the High Court and the SEC;

 

“Rights Agent” means the Rights Agent named in the first paragraph of this
Agreement, until a successor Rights Agent will have become such pursuant to the
applicable provisions of this Agreement, and thereafter “Rights Agent” will mean
such successor Rights Agent.

 

“Scheme Document” has the meaning given to that term in the Transaction
Agreement.

 

“Second CVR Payment” means $1.33 per CVR.

 

“Second CVR Payment Event” means the FDA’s approval, on or prior to December 31,
2018, of the Product with a label covering indications for the treatment of
postsurgical pain immediately following Expanded Soft Tissue repair. For the
avoidance of any doubt if the FDA approves the Product with a label covering
indications for the treatment of postsurgical pain following both (x) open
abdominal Hernia repair and (y) Expanded Soft Tissue repair on or prior to
December 31, 2018, both the First CVR Payment Event and the Second CVR Payment
Event shall have occurred.

 

“Selling Entity” means the Buyer, the Company, any Assignee and each of their
respective Affiliates, licensees and sublicensees with respect to rights to
develop or commercialize the Product, and any direct or indirect transferee,
successor or assignee (including through any change of control) of the rights to
sell the Product of any of the foregoing (but not a distributor of the Product
acting solely in the capacity of a distributor and not otherwise an Assignee,
licensee or sublicensee with respect to development or commercialization rights
as to the Product or transferee, successor or assignee of the rights to sell the
Product).

 

“Soft Tissue” means body tissue that is not hardened or calcified, such as
tendon, muscle, skin, fat, and fascia, that connects, supports or surrounds bone
and internal organs, and shall include abdominal and visceral tissue and
excludes Hard Tissue.

 

“Tax” shall mean all national, federal, state, local or other taxes imposed by
the United States, Ireland, and any other Relevant Authority, including income,
gain, profits, windfall profits, franchise, gross receipts, environmental,
customs duty, capital stock, severances, stamp, payroll, universal social
charge, pay related social insurance and other similar contributions, sales,
employment, unemployment, disability, use, property, gift tax, inheritance tax,
unclaimed property, escheat, withholding, excise, production, value added, goods
and services, trading, occupancy and other taxes, duties or assessments of any
nature whatsoever, together with all

 

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interest, penalties, surcharges and additions imposed with respect to such
amounts and any interest in respect of such penalties and additions, whether
disputed or not.

 

“Third CVR Payment 2019” means $1.00 per CVR if the Third CVR Payment Event 2019
occurs.

 

“Third CVR Payment 2020” means $0.60 per CVR if the Third CVR Payment Event 2020
occurs; provided that in no event shall the Third CVR Payment 2020 become
payable if the Third CVR Payment 2019 has been paid by the Buyer.

 

“Third CVR Payment Event” means the FDA’s approval of the Product with a label
covering indications for the treatment of postsurgical pain immediately
following Hard Tissue repair.

 

“Third CVR Payment Event 2019” means the achievement of the Third CVR Payment
Event on or prior to December 31, 2019.

 

“Third CVR Payment Event 2020” means the achievement of the Third CVR Payment
Event after December 31, 2019, but on or prior to June 30, 2020.

 

“Treasury Regulations” means the rules and regulations promulgated by the U.S.
Treasury Department under the Code.

 

Section 1.2           Rules of Construction. Except as otherwise explicitly
specified to the contrary, (a) references to a Section means a Section of this
Agreement unless another agreement is specified, (b) the word “including” (in
its various forms) means “including without limitation,” (c) references to a
particular statute or regulation include all rules and regulations thereunder
and any successor statute, rules or regulation, in each case as amended or
otherwise modified from time to time, (d) words in the singular or plural form
include the plural and singular form, respectively, (e) references to a
particular Person include such Person’s successors and assigns to the extent not
prohibited by this Agreement and (f) all references to dollars or “$” refer to
United States dollars.

 

ARTICLE II

CONTINGENT VALUE RIGHTS

 

Section 2.1           CVRs. The CVRs represent the rights of Holders to receive
contingent cash payments pursuant to this Agreement. The CVRs shall be issued
pursuant to the Acquisition at the time and in the manner set forth in the
Scheme Document.

 

Section 2.2           Nontransferable. The CVRs may not be sold, assigned,
transferred, pledged, encumbered or in any other manner transferred or disposed
of, in whole or in part, other than through a Permitted Transfer. Any attempted
sale, assignment, transfer, pledge, encumbrance or disposition of CVRs, in whole
or in part, in violation of this Section 2.2 shall be void ab initio and of no
effect. The CVRs have not been registered under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, and will not be
listed for trading on any securities exchange.

 

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Section 2.3           No Certificate; Registration; Registration of Transfer;
Change of Address.

 

(a)          The CVRs will not be evidenced by a certificate or other
instrument.

 

(b)          The Rights Agent will keep a register (the “CVR Register”) for the
purpose of registering CVRs and Permitted Transfers thereof. The CVR Register
will initially show one position for Cede & Co. representing all of the Innocoll
Shares held by DTC on behalf of the street holders of the Innocoll Shares held
by such holders as of immediately prior to the [Voting Record Time (as defined
in the Scheme Document)]. The Rights Agent will have no responsibility
whatsoever directly to the street name holders with respect to transfers of
CVRs. With respect to any payments to be made under Section 2.4 below, the
Rights Agent will accomplish the payment to any former street name holders of
the Innocoll Shares by sending a lump payment to DTC. The Rights Agent will have
no responsibilities whatsoever with regard to the distribution of payments by
DTC to such street name holders.

 

(c)          Subject to the restrictions on transferability set forth in Section
2.2, every request made to transfer a CVR must be in writing and accompanied by
a written instrument of transfer in a form reasonably satisfactory to the Rights
Agent pursuant to its guidelines, duly executed by the Holder thereof, the
Holder’s attorney duly authorized in writing, the Holder’s personal
representative or the Holder’s survivor, and setting forth in reasonable detail
the circumstances relating to the transfer. Upon receipt of such written notice,
the Rights Agent shall, subject to its reasonable determination that the
transfer instrument is in proper form and the transfer otherwise complies with
the other terms and conditions of this Agreement (including the provisions of
Section 2.2), register the transfer of the CVRs in the CVR Register. The Buyer
and Rights Agent may require payment, from such transferee, of a sum sufficient
to cover any stamp or other Tax or governmental charge that is imposed in
connection with any such registration of transfer. The Rights Agent shall have
no duty or obligation to take any action under any section of this Agreement
that requires the payment by a Holder of a CVR of applicable Taxes or charges
unless and until the Rights Agent is satisfied that all such Taxes or charges
have been paid. All duly transferred CVRs registered in the CVR Register will be
the valid obligations of the Buyer and will entitle the transferee to the same
benefits and rights under this Agreement as those held immediately prior to the
transfer by the transferor. No transfer of a CVR will be valid until registered
in the CVR Register in accordance with this Agreement.

 

(d)          A Holder may make a written request to the Rights Agent to change
such Holder’s address of record in the CVR Register. The written request must be
duly executed by the Holder. Upon receipt of such written notice, the Rights
Agent will promptly record the change of address in the CVR Register.

 

Section 2.4           Payment Procedures; Notices.

 

(a)          If a CVR Payment Event is attained, then, on or prior to the CVR
Payment Date, the Buyer shall deliver to the Rights Agent (i) written notice
indicating that a CVR Payment Event has been achieved and specifying such CVR
Payment Event (a “CVR Payment Event Notice”), (ii) an Officer’s Certificate
certifying the date of such achievement and that the Holders are entitled to
receive the applicable CVR Payment Event and (iii) the payment required by
Section 4.2.

 

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(b)          The Rights Agent will promptly, and in any event within five (5)
Business Days of receipt of a CVR Payment Event Notice, send each Holder at its
registered address a copy of such CVR Payment Event Notice and pay the
applicable CVR Payment Amount to each of the Holders by check mailed to the
address of each Holder as reflected in the CVR Register as of the close of
business on the date of the CVR Payment Event Notice.

 

(c)          Except to the extent any portion of a CVR Payment is required to be
treated as imputed interest pursuant to applicable Law, the parties hereto
intend to treat CVR Payments for all Tax purposes as additional consideration
for the Innocoll Shares and Innocoll Share Awards (as defined in the Transaction
Agreement) pursuant to the Scheme Document. Except to the extent otherwise
required pursuant to a “determination” within the meaning of Section 1313(a) of
the Code (or any comparable provision of applicable Law), the Buyer or its
Affiliate shall (or shall cause the Rights Agent to) determine the portion of
any CVR Payment required to be treated as interest pursuant to Section 483 of
the Code and the Treasury Regulations promulgated thereunder (or any comparable
provision of applicable Law). The Buyer shall report imputed interest on the
CVRs as required by applicable Law.

 

(d)          The Buyer or its Affiliate shall (or shall cause the Rights Agent
to) deduct and withhold from any CVR Payment Amount or any other amounts
otherwise payable pursuant to this Agreement such amounts as may be required to
be deducted and withheld therefrom under applicable Tax Law, as may reasonably
be determined by the Buyer. Any such withholding may be made, or caused to be
made, at the request of the Buyer or its Affiliate, through making payments with
respect to Holders who received CVRs in consideration of Innocoll Share Awards
through the Company’s or any of its Affiliates’ payroll system or any successor
payroll system. Prior to making any CVR Payment, the Buyer or its Affiliate
shall (or shall cause the Rights Agent to) solicit IRS Form W-9s or W-8s, or any
other appropriate forms or information, from Holders in order to provide a
reasonable opportunity for the Holder to timely provide any necessary Tax forms
(including an IRS Form W-9 or an applicable IRS Form W-8) in order to mitigate
or reduce such withholding, and such CVR Payment may be reasonably delayed in
order to gather such necessary Tax forms. The Buyer, its Affiliates and the
Rights Agent may assume all such forms in their possession or provided by any
Holder are valid under applicable Law until subsequently notified by such
Holder. The Buyer or its Affiliate shall (or shall cause the Rights Agent to)
take all action that may be necessary to ensure that any amounts withheld in
respect of Taxes are promptly remitted to the appropriate Relevant Authority. To
the extent any amounts are so deducted and withheld and properly remitted to the
appropriate Relevant Authority, such amounts shall be treated for all purposes
of this Agreement as having been paid to the person in respect of whom such
deduction and withholding was made, and as required by applicable Law, the Buyer
or its Affiliate shall (or shall cause the Rights Agent to) deliver to the
person to whom such amounts would otherwise have been paid an original IRS Form
1099 or other reasonably acceptable evidence of such withholding.

 

(e)          Any portion of any CVR Payment Amount that remains undistributed to
a Holder six (6) months after the date of the delivery of the CVR Payment Event
Notice will be delivered by the Rights Agent to the Buyer, upon demand, and any
Holder will thereafter look only to the Buyer for payment of such CVR Payment
Amount, without interest, but such Holder will have no greater rights against
the Buyer than those accorded to general unsecured creditors of the Buyer under
applicable Law.

 

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(f)          Neither the Buyer nor the Rights Agent will be liable to any person
in respect of any CVR Payment Amount delivered to a public official pursuant to
any applicable abandoned property, escheat or similar law. If, despite the
Buyer’s and/or the Rights Agent’s commercially reasonable efforts to deliver a
CVR Payment Amount to the applicable Holder, such CVR Payment Amount has not
been paid prior to two (2) years after the applicable CVR Payment Date (or
immediately prior to such earlier date on which such CVR Payment Amount would
otherwise escheat to or become the property of any Relevant Authority), any such
CVR Payment Amount will, to the extent permitted by applicable Law, become the
property of the Buyer, free and clear of all claims or interest of any person
previously entitled thereto. In addition to and not in limitation of any other
indemnity obligation herein, the Buyer agrees to indemnify and hold harmless the
Rights Agent with respect to any liability, penalty, cost or expense the Rights
Agent may incur or be subject to in connection with transferring such property
to the Buyer.

 

Section 2.5           No Voting, Dividends or Interest; No Equity or Ownership
Interest in the Buyer.

 

(a)          The CVRs will not have any voting or dividend rights, and interest
will not accrue on any amounts payable on the CVRs to any Holder.

 

(b)          The CVRs will not represent any equity or ownership interest in the
Buyer, the Company, any constituent company to the Acquisition or any of their
respective Affiliates.

 

Section 2.6           Ability to Abandon CVR. A Holder may at any time, at such
Holder’s option, abandon all of such Holder’s remaining rights in a CVR by
transferring such CVR to the Buyer without consideration therefor. Nothing in
this Agreement shall prohibit the Buyer or any of its Affiliates from offering
to acquire or acquiring any CVRs for consideration from the Holders, in private
transactions or otherwise, in its sole discretion. Any CVRs acquired by the
Buyer or any of its Affiliates shall be automatically deemed extinguished and no
longer outstanding for purposes of the definition of Acting Holders and Article
V and Section 6.3 hereunder.

 

ARTICLE III

THE RIGHTS AGENT

 

Section 3.1           Certain Duties and Responsibilities. The Rights Agent will
not have any liability for any actions taken or not taken in connection with
this Agreement, except to the extent of its willful misconduct, bad faith, fraud
or gross negligence.

 

Section 3.2           Certain Rights of Rights Agent. The Rights Agent
undertakes to perform such duties and only such duties as are specifically set
forth in this Agreement, and no implied covenants or obligations will be read
into this Agreement against the Rights Agent. In addition:

 

(a)          the Rights Agent may rely and will be protected and held harmless
by the Buyer in acting or refraining from acting upon any resolution,
certificate, statement, instrument,

 

11 

 

 

opinion, report, notice, request, direction, consent, order or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties;

 

(b)          whenever the Rights Agent will deem it desirable that a matter be
proved or established prior to taking, suffering or omitting any action
hereunder, the Rights Agent may rely upon an Officer’s Certificate, which
certificate shall be full authorization and protection to the Rights Agent, and
the Rights Agent shall, in the absence of bad faith, fraud, gross negligence or
willful misconduct on its part, incur no liability and be held harmless by the
Buyer for or in respect of any action taken, suffered or omitted to be taken by
it under the provisions of this Agreement in reliance upon such certificate;

 

(c)          the Rights Agent may engage and consult with counsel of its
selection and the written advice of such counsel or any opinion of counsel will
be full and complete authorization and protection to the Rights Agent and the
Rights Agent shall be held harmless by the Buyer in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon;

 

(d)          the permissive rights of the Rights Agent to do things enumerated
in this Agreement will not be construed as a duty;

 

(e)          the Rights Agent will not be required to give any note or surety in
respect of the execution of such powers or otherwise in respect of the premises;

 

(f)           the Rights Agent shall not be liable for or by reason of, and
shall be held harmless by the Buyer with respect to, any of the statements of
fact or recitals contained in this Agreement or be required to verify the same,
but all such statements and recitals are and shall be deemed to have been made
by the Buyer only;

 

(g)          the Rights Agent will have no liability and shall be held harmless
by the Buyer in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution and delivery hereof by the Rights
Agent and the enforceability of this Agreement against the Rights Agent assuming
the due execution and delivery hereof by the Buyer); nor shall it be responsible
for any breach by the Buyer of any covenant or condition contained in this
Agreement;

 

(h)          the Buyer agrees to indemnify the Rights Agent for, and hold the
Rights Agent harmless against, any loss, liability, claim, demands, suits or
expense arising out of or in connection with the Rights Agent’s duties under
this Agreement, including the reasonable costs and expenses of defending the
Rights Agent against any claims, charges, demands, suits or loss, unless such
loss has been determined by a court of competent jurisdiction to be a result of
the Rights Agent’s gross negligence, bad faith or willful or intentional
misconduct;

 

(i)           the Buyer agrees (i) to pay the fees and expenses of the Rights
Agent in connection with this Agreement as agreed upon in writing by the Rights
Agent and the Buyer on or prior to the date hereof and (ii) to reimburse the
Rights Agent for all Taxes and governmental charges, reasonable and documented
out-of-pocket expenses incurred by the Rights Agent in the execution of this
Agreement (other than Taxes imposed on or measured by the Rights Agent’s net
income and franchise or similar Taxes imposed on it (in lieu of net income
Taxes)). The

 

12 

 

 

Rights Agent will also be entitled to reimbursement from the Buyer for all
reasonable and necessary out-of-pocket expenses paid or incurred by it in
connection with the administration and enforcement by the Rights Agent of its
duties hereunder;

 

(j)           No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it; and

 

(k)          No Holder shall be obliged to indemnify the Rights Agent for any
services or actions under this Agreement and the Rights Agent shall not be
entitled to deduct any sums from a CVR Payment Amount in any circumstance except
as provided in Section 2.4(d).

 

Section 3.3           Resignation and Removal; Appointment of Successor.

 

(a)          The Rights Agent may resign at any time by giving written notice
thereof to the Buyer specifying a date when such resignation will take effect,
which notice will be sent at least sixty (60) days prior to the date so
specified but in no event will such resignation become effective until a
successor Rights Agent has been appointed. The Buyer has the right to remove
Rights Agent at any time by a Board Resolution specifying a date when such
removal will take effect but no such removal will become effective until a
successor Rights Agent has been appointed. Notice of such removal will be given
by the Buyer to the Rights Agent, which notice will be sent at least sixty (60)
days prior to the date so specified.

 

(b)          If the Rights Agent provides notice of its intent to resign, is
removed pursuant to Section 3.3(a) or becomes incapable of acting, the Buyer, by
a Board Resolution, will as soon as is reasonably possible appoint a qualified
successor Rights Agent who, unless otherwise consented to in writing by the
Acting Holders, shall be a stock transfer agent of national reputation or the
corporate trust department of a commercial bank. The successor Rights Agent so
appointed will, forthwith upon its acceptance of such appointment in accordance
with Section 3.4, become the successor Rights Agent.

 

(c)          The Buyer will give notice of each resignation and each removal of
a Rights Agent and each appointment of a successor Rights Agent by mailing
written notice of such event by first-class mail to the Holders as their names
and addresses appear in the CVR Register. Each notice will include the name and
address of the successor Rights Agent. If the Buyer fails to send such notice
within ten (10) days after acceptance of appointment by a successor Rights Agent
in accordance with Section 3.4, the successor Rights Agent will cause the notice
to be mailed at the expense of the Buyer.

 

Section 3.4           Acceptance of Appointment by Successor. Every successor
Rights Agent appointed pursuant to Section 3.3(b) hereunder will execute,
acknowledge and deliver to the Buyer and to the retiring Rights Agent an
instrument accepting such appointment and a counterpart of this Agreement, and
thereupon such successor Rights Agent, without any further act, deed or
conveyance, will become vested with all the rights, powers, trusts and duties of
the retiring Rights Agent. On request of the Buyer or the successor Rights
Agent, the retiring Rights

 

13 

 

 

Agent will execute and deliver an instrument transferring to the successor
Rights Agent all the rights, powers and trusts of the retiring Rights Agent.

 

ARTICLE IV

COVENANTS

 

Section 4.1           List of Holders. The Buyer will furnish or cause to be
furnished to the Rights Agent in such form as the Buyer receives from the
Company’s transfer agent (or other agent performing similar services for the
Company), the names and addresses of the Holders within seven (7) calendar days
of the Effective Date. The Rights Agent will reflect such names and addresses on
the CVR Register and confirm the write up of the CVR Register to the Buyer
promptly thereafter and, in any event, within five (5) calendar days of the
receipt of such names and addresses from the Buyer or the Company’s transfer
agent, as the case may be.

 

Section 4.2           Payment of CVR Payment Amounts. If a CVR Payment Event has
occurred, the Buyer will, within ten (10) Business Days following the delivery
of the applicable CVR Payment Event Notice to the Rights Agent, deposit with the
Rights Agent, for payment to the Holders in accordance with Section 2.4, the
aggregate amount necessary to pay the CVR Payment Amount to each Holder. For the
avoidance of doubt, the CVR Payment Amount shall only be paid in respect of a
given CVR Payment Event, if at all, one time under this Agreement.

 

Section 4.3           Books and Records. The Buyer shall, and shall cause its
Affiliates to, keep, true, complete and accurate records in sufficient detail to
enable the amounts payable under this Agreement for a period of two (2) years
following the end of the Fourth CVR Payment Event Measurement Period 2020.

 

Section 4.4           Audits.

 

(a)          Upon the written request of the Acting Holders and no more than
once during any calendar year, and upon thirty (30) days’ prior written notice,
the Company shall provide an independent certified public accounting firm of
nationally recognized standing selected jointly by the Acting Holders and the
Buyer (the “Independent Accountant”) with access during normal business hours to
such of the records of the Buyer as may be reasonably necessary to verify the
accuracy of the Buyer calculation of Net Sales and the figures underlying the
calculations set forth therein for any period within the preceding three (3)
years that has not previously been audited in accordance with this Section 4.4.
The Buyer shall pay for the fees charged by the Independent Accountant in the
event that the Independent Accountant determines that the amount of Net Sales
calculated by the Buyer is more than five percent (5%) below the actual amount
of Net Sales calculated in accordance with the manner in which “Net Sales” is
defined pursuant to this Agreement; provided, however, that the Acting Holders
shall pay for the fees charged by such Independent Accountant in the event that
the Independent Accountant determines that the amount of Net Sales calculated by
the Buyer is equal to or less than five percent (5%) below the actual amount of
Net Sales calculated in accordance with the manner in which “Net Sales” is
defined pursuant to this Agreement, which amount the Buyer may deduct from any
future CVR Payments payable pursuant to this Agreement as its sole recourse for
obtaining reimbursement for this fee. This covenant shall survive the
termination of this

 

14 

 

 

Agreement for a period of two (2) years; provided that the Holders shall only be
entitled to one audit following termination of this Agreement.

 

(b)          If the Independent Accountant concludes that the Buyer did not
properly calculate Net Sales and as a result the Holders were entitled to
receive either the Fourth CVR Payment 2019 or Fourth CVR Payment 2020 (the
“Failed Fourth CVR Payment”), the Buyer shall pay the Failed Fourth CVR Payment,
within three (3) months of the date the Acting Holders deliver to the Buyer the
Independent Accountant’s written report (the “Independent Accountant Report”);
provided that the respective amount due under the Failed Fourth CVR Payment
shall bear interest at the Default Interest Rate beginning from thirty (30) days
after the date the Acting Holders deliver to the Buyer the Independent
Accountant Report until payment is made to the Rights Agent. The decision of
such Independent Accountant shall be final, conclusive and binding on the Buyer
and the Holders, shall be non-appealable and shall not be subject to further
review.

 

(c)          Each Person seeking to receive information from the Buyer in
connection with a review or audit shall enter into, and shall cause its
accounting firm to enter into, a reasonable and mutually satisfactory
confidentiality agreement with the Buyer obligating such party to retain all
such financial information disclosed to such party in confidence pursuant to
such confidentiality agreement.

 

(d)          The Buyer shall not, and shall cause its Affiliates not to, enter
into any license or distribution agreement with any third party (other than the
Buyer or its Affiliates) with respect to any Product unless such agreement
contains provisions that would allow any Independent Accountant appointed
pursuant to this Section 4.4 such access to the records of the other party to
such license or distribution agreement as may be reasonably necessary to perform
its duties pursuant to this Section 4.4; provided, that the Buyer and its
Affiliates may redact documents and information not relevant for such evaluation
pursuant to this Section 4.4. The Parties agree that, if the Buyer or its
Affiliates have exercised audit rights under any license or distribution
agreement prior to the Acting Holders’ request for an audit under this Section
4.4 and under such license or distribution agreement the Buyer and its
Affiliates cannot request another audit, the results of the Buyer’s prior audit
of such licensee or distributor will be used for purposes of the audit requested
by the Acting Holders under this Section 4.4 and that the Buyer shall not have
any further obligation to provide access to an Independent Accountant with
respect to such licensee until such time as the Buyer may again exercise its
rights of audit under the license agreement with such licensee.

 

Section 4.5           Product Transfer. Subject to Section 7.3 of this
Agreement, so long as the CVRs remain Outstanding, the Buyer and its Affiliates
may not, directly or indirectly, by a sale or swap of assets, merger,
reorganization, joint venture, lease, license or any other transaction or
arrangement, sell, transfer, convey or otherwise dispose of their respective
rights in and to the Product to a third party (other than the Buyer or its
Affiliates), unless at all times after any such sale, transfer, conveyance or
other disposition, the gross amounts invoiced for the Product by the applicable
transferee will be reflected in Net Sales in accordance with the terms hereunder
as if such transferee was the Buyer, and the contract for such sale, transfer,
conveyance or other disposition (which the Buyer shall take all reasonable
actions necessary to enforce in all material respects) shall provide for such
treatment and shall require the transferee to comply with the

 

15 

 

 

covenants in this Section 4.5 and Sections 4.4, 4.6 and 4.7 hereof to the same
extent as the Buyer.

 

Section 4.6           Regulatory based CVR Payment Events. The Buyer shall use
Diligent Efforts to achieve the First CVR Payment Event and the Second CVR
Payment Event on or prior to December 31, 2018, and the Buyer shall use Diligent
Efforts to achieve the Third CVR Payment Event.

 

Section 4.7           Revenue based CVR Payment Event. The Buyer shall use
Diligent Efforts to commercialize the Product in the U.S. following receipt of
Regulatory Approval and to achieve the Fourth CVR Payment Event on or prior to
December 31, 2019.

 

Section 4.8           No Conflicting Agreements. So long as any of the CVRs
remain Outstanding, the Buyer shall not, and shall not permit the Company to,
enter into any stockholder agreement, member agreement or similar agreement or
credit, loan or similar agreement which would prohibit, materially delay or
condition payment of any CVR Payment that becomes due under this Agreement or
which would prohibit, materially delay or condition the transfer of funds by the
Company to the Buyer (by way of dividend, loan or otherwise) to provide a
payment source to fund any CVR Payment that becomes due under this Agreement;
provided, that any agreement entered into by the Company prior to the Effective
Date, including that certain Finance Contract, dated as of March 27, 2015, among
European Investment Bank, Innocoll Pharmaceuticals Limited and Innocoll AG (as
amended prior to the Effective Date, the “Finance Contract”), shall not be
considered for purposes of determining the Buyer’s compliance with this Section
4.8; provided that the Finance Contract shall not be amended, revised or
restated after the Effective Date in any manner that would prohibit, materially
delay or condition the transfer of funds by the Company to the Buyer (by way of
dividend, loan or otherwise) to provide a payment source to fund any CVR Payment
that becomes due under this Agreement (other than as provided in the Finance
Contract as of the Effective Date).

 

ARTICLE V

AMENDMENTS

 

Section 5.1           Amendments without Consent of Holders.

 

(a)          Without the consent of any Holders or the Rights Agent, the Buyer,
when authorized by a Board Resolution, at any time and from time to time, may
enter into one or more amendments hereto, for any of the following purposes:

 

(i)          to evidence the succession of another Person to the Buyer and the
assumption by any such successor of the covenants of the Buyer herein as
provided in and subject to conformity with Section 7.3;

 

(ii)         to add to the covenants of the Buyer such further covenants,
restrictions, conditions or provisions as the Buyer and the Rights Agent will
consider to be for the protection of the Holders; provided that, in each case,
such provisions do not adversely affect the interests of the Holders;

 

16 

 

 

(iii)        to cure any ambiguity, to correct or supplement any provision
herein that may be defective or inconsistent with any other provision herein, or
to make any other provisions with respect to matters or questions arising under
this Agreement; provided that, in each case, such provisions do not adversely
affect the interests of the Holders;

 

(iv)        as may be necessary or appropriate to ensure that the CVRs are not
subject to registration under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder;

 

(v)         to evidence the succession of another Person as a successor Rights
Agent and the assumption by any such successor of the covenants and obligations
of the Rights Agent herein in accordance with Sections 3.3 and 3.4; or

 

(vi)        any other amendments hereto for the purpose of adding, eliminating
or changing any provisions of this Agreement, unless such addition, elimination
or change is adverse to the interests of the Holders.

 

(b)          Without the consent of any Holders, the Buyer, when authorized by a
Board Resolution, and the Rights Agent, in the Rights Agent’s sole and absolute
discretion, at any time and from time to time, may enter into one or more
amendments hereto, to reduce the number of CVRs, in the event any Holder agrees
to renounce such Holder’s rights under this Agreement in accordance with Section
7.4.

 

(c)          Promptly after the execution by the Buyer and the Rights Agent of
any amendment pursuant to the provisions of this Section 5.1, the Buyer will
mail (or cause the Rights Agent to mail) a notice thereof by first class mail to
the Holders at their addresses as they appear on the CVR Register, setting forth
such amendment.

 

Section 5.2           Amendments with Consent of Holders.

 

(a)          Subject to Section 5.1 (which amendments pursuant to Section 5.1
may be made without the consent of the Holders), with the prior written consent
of the Acting Holders, whether evidenced in writing or taken at a meeting of the
Holders, the Buyer, when authorized by a Board Resolution, and the Rights Agent
may enter into one or more amendments hereto for the purpose of adding,
eliminating or changing any provisions of this Agreement, even if such addition,
elimination or change is materially adverse to the interest of the Holders;
provided, however, that no such amendment shall, without the consent of the
Acting Holders be materially adverse to the interest of the Holders.

 

(b)          Promptly after the execution by the Buyer and the Rights Agent of
any amendment pursuant to the provisions of this Section 5.2, the Buyer will
mail (or cause the Rights Agent to mail) a notice thereof by first class mail to
the Holders at their addresses as they appear on the CVR Register, setting forth
such amendment.

 

Section 5.3           Execution of Amendments. In executing any amendment
permitted by this Article V, the Rights Agent will be entitled to receive, and
will be fully protected in relying

 

17 

 

 

upon, an opinion of counsel selected by the Buyer stating that the execution of
such amendment is authorized or permitted by this Agreement. The Rights Agent
may, but is not obligated to, enter into any such amendment that affects the
Rights Agent’s own rights, privileges, covenants or duties under this Agreement
or otherwise.

 

Section 5.4           Effect of Amendments. Upon the execution of any amendment
under this Article V, this Agreement will be modified in accordance therewith,
such amendment will form a part of this Agreement for all purposes and every
Holder will be bound thereby.

 

ARTICLE VI

 

REMEDIES OF THE RIGHTS AGENT ON EVENT OF DEFAULT

 

Section 6.1           Event of Default Defined; Waiver of Default.

 

(a)          “Event of Default” with respect to the CVRs, means each one of the
following events which shall have occurred and be continuing (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of Law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

 

(i)          default in the payment of all or any part of any CVR Payment after
a period of thirty (30) days after such CVR Payment shall become due and payable
on a CVR Payment Date or otherwise;

 

(ii)         material default in the performance, or breach in any material
respect, of any covenant or warranty of the Buyer in respect of the CVRs, and
continuance of such default or breach for a period of ninety (90) days after
there has been given, by registered or certified mail, to the Buyer by the
Rights Agent or to the Buyer and the Rights Agent by the Acting Holders, a
written notice specifying such default or breach and requiring it to be remedied
and stating that such notice is a “Notice of Default” hereunder;

 

(iii)        a court having jurisdiction in the premises shall enter a decree or
order for relief in respect of the Buyer in an involuntary case under any
applicable bankruptcy, insolvency or other similar Law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian, trustee or
sequestrator (or similar official) of the Buyer or for any substantial part of
its property or ordering the winding up or liquidation of its affairs, and such
decree or order shall remain unstayed and in effect for a period of ninety (90)
consecutive days; or

 

(iv)        the Buyer shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar Law now or hereafter in effect, or
consent to the entry of an order for relief in an involuntary case under any
such Law, or consent to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee or sequestrator (or similar official)
of the Buyer or for any substantial part of its property, or make any general
assignment for the benefit of creditors.

 

18 

 

 

(b)          If an Event of Default described above occurs and is continuing,
then, and in each and every such case, either the Rights Agent or the Rights
Agent upon the written request of the Acting Holders by notice in writing to the
Buyer (and to the Rights Agent if given by the Acting Holders), shall bring suit
to protect the rights of the Holders, including to obtain payment for any
amounts then due and payable, which amounts shall bear interest at the Default
Interest Rate until payment is made to the Rights Agent.

 

Section 6.2           Collection by the Rights Agent; Payment Obligations.

 

(a)          The Buyer covenants that in case default shall be made in the
payment of all or any part of the CVRs when the same shall have become due and
payable, whether at a CVR Payment Date or otherwise, then upon demand of the
Rights Agent, the Buyer will pay to the Rights Agent for the benefit of the
Holders of the CVRs the whole amount that then shall have become due and payable
on all CVRs (with interest from the date due and payable to the date of such
payment upon the overdue amount at the Default Interest Rate); and in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including reasonable compensation to the Rights Agent
and each predecessor Rights Agent, their respective agents, attorneys and
counsel, and any expenses and liabilities incurred, and all advances made, by
the Rights Agent and each predecessor Rights Agent, except as a result of its
willful misconduct, bad faith, fraud or gross negligence.

 

(b)          The Rights Agent may in its discretion proceed to protect and
enforce its rights and the rights of the Holders by such appropriate judicial
proceedings as the Rights Agent shall deem most effectual to protect and enforce
any such rights, whether for the specific enforcement of any covenant or
agreement in this Agreement or in aid of the exercise of any power granted
herein, or to enforce any other remedy.

 

(c)          In case the Buyer shall fail forthwith to pay such amounts upon
such demand, the Rights Agent, in its own name and as trustee of an express
trust, shall be entitled and empowered to institute any action or proceedings at
Law or in equity for the collection of the sums so due and unpaid, and may
prosecute any such action or proceedings to judgment or final decree, and may
enforce any such judgment or final decree against the Buyer or other obligor
upon such CVRs and collect in the manner provided by Law out of the property of
the Buyer or other obligor upon such CVRs, wherever situated, the moneys
adjudged or decreed to be payable.

 

(d)          Nothing herein contained shall be deemed to authorize the Rights
Agent to authorize or consent to or vote for or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the CVRs, or the rights of any Holder thereof, or to authorize the
Rights Agent to vote in respect of the claim of any Holder in any such
proceeding except, as aforesaid, to vote for the election of a trustee in
bankruptcy or similar person.

 

(e)          All rights of action and of asserting claims under this Agreement,
or under any of the CVRs, may be enforced by the Rights Agent without the
possession of any of the CVRs or the production thereof and any trial or other
proceedings instituted by the Rights Agent shall be brought in its own name as
trustee of an express trust, and any recovery of judgment,

 

19 

 

 

subject to the payment of the expenses, disbursements and compensation of the
Rights Agent, each predecessor Rights Agent and their respective agents and
attorneys, shall be for the ratable benefit of the Holders.

 

(f)          In any proceedings brought by the Rights Agent (and also any
proceedings involving the interpretation of any provision of this Agreement to
which the Rights Agent shall be a party) the Rights Agent shall be held to
represent all the Holders, and it shall not be necessary to make any Holders
parties to any such proceedings.

 

Section 6.3           Application of Proceeds. Any monies collected by the
Rights Agent pursuant to this Article in respect of any CVRs shall be applied in
the following order at the date or dates fixed by the Rights Agent in connection
therewith:

 

FIRST: To the payment of costs and expenses in respect of which monies have been
collected, including reasonable compensation to the Rights Agent and each
predecessor Rights Agent and their respective agents and attorneys and of all
expenses and liabilities incurred, and all advances made, by the Rights Agent
and each predecessor Rights Agent, except as a result of its willful misconduct,
bad faith, fraud or gross negligence, and all other amounts due to the Rights
Agent or any predecessor Rights Agent;

 

SECOND: To the payment of the whole amount then owing and unpaid upon all the
CVRs, with interest at the Default Interest Rate on all such amounts, and in
case such monies shall be insufficient to pay in full the whole amount so due
and unpaid upon the CVRs, then to the payment of such amounts without preference
or priority of any CVR over any other CVR, ratably to the aggregate of such
amounts due and payable.

 

Section 6.4           Delay or Omission Not Waiver of Default. No delay or
omission of the Rights Agent or of any Holder to exercise any right or power
accruing upon any Event of Default occurring and continuing as aforesaid shall
impair any such right or power or shall be construed to be a waiver of any such
Event of Default or an acquiescence therein; and every power and remedy given by
this Agreement to the Rights Agent or to the Holders may be exercised from time
to time, and as often as shall be deemed expedient, by the Rights Agent or by
the Holders in accordance with the terms of this Agreement.

 

ARTICLE VII

OTHER PROVISIONS OF GENERAL APPLICATION

 

Section 7.1           Notices to Rights Agent and the Buyer. Any notice or other
communication required or permitted hereunder shall be in writing and shall be
deemed given when delivered in person, by overnight courier, by facsimile
transmission (with receipt confirmed by telephone or by automatic transmission
report) or by electronic mail, or two (2) Business Days after being sent by
registered or certified mail (postage prepaid, return receipt requested), as
follows:

 

If to the Rights Agent, to it at:

 

[●]

 

20 

 

 

With a copy to:

 

[●]

 

If to the Buyer, to it at:

 

c/o Gurnet Point, L.P.

c/o Waypoint International GP LLC

55 Cambridge Parkway, Suite 401

Cambridge, MA 02142

United States

Attention: James Singleton

Facsimile: (617) 588-4901

 

with a copy to:

 

Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Attention: Michael Aiello
Facsimile: (212) 310-8007

 

The Rights Agent or the Buyer may specify a different address or facsimile
number by giving notice in accordance with this Section 7.1.

 

Section 7.2           Notice to Holders. Where this Agreement provides for
notice to Holders, such notice will be sufficiently given (unless otherwise
herein expressly provided) if in writing and mailed, first-class postage
prepaid, to each Holder affected by such event, at the Holder’s address as it
appears in the CVR Register, not later than the latest date, and not earlier
than the earliest date, if any, prescribed for the giving of such notice. In any
case where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder will
affect the sufficiency of such notice with respect to other Holders.

 

Section 7.3           Buyer Successors and Assigns. The Buyer may assign, in its
sole discretion and without the consent of any other party, any or all of its
rights, interests and obligations hereunder to one or more direct or indirect
wholly-owned subsidiaries of the Buyer or to any purchaser or licensee of
substantial rights to the Product (each, an “Assignee”) provided that the
Assignee agrees to assume and be bound by all of the terms of this Agreement.
Any such Assignee may thereafter assign, in its sole discretion and without the
consent of any other party, any or all of its rights, interests and obligations
hereunder to one or more additional Assignees who agree to assume and be bound
by all of the terms of this Agreement; provided, however, that in connection
with any assignment to an Assignee, the Buyer (or the other assignor) shall
agree to remain liable for the performance by each Assignee (and such other
assignor, if applicable) of all obligations of the Buyer hereunder, with such
Assignee substituted for the Buyer under this Agreement. This Agreement will be
binding upon, inure to the benefit of and be enforceable by the Buyer’s
successors and each Assignee, and this Agreement shall not restrict the Buyer’s,
any Assignee’s or any of their respective successors’ ability to merge or
consolidate. Each of the Buyer’s successors and assigns shall expressly assume
by an instrument

 

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supplemental hereto, executed and delivered to the Rights Agent, the due and
punctual payment of the CVRs and the due and punctual performance and observance
of all of the covenants and obligations of this Agreement to be performed or
observed by the Buyer. The Rights Agent may not assign this Agreement without
the Buyer’s written consent. Any attempted assignment of this Agreement or any
such rights in violation of this Section 7.3 shall be void and of no effect.
Notwithstanding anything to the contrary herein, so long as the CVRs remain
Outstanding, the Buyer may not sell, transfer or otherwise convey the Company to
an Affiliate of the Buyer (including by way of a merger, consolidation, sale or
other disposition of all or substantially all of the assets of the Company on a
consolidated basis or any other transaction involving the Company in which the
Buyer and its direct and indirect subsidiaries ceases to hold one hundred
percent (100%) of the Company’s voting power immediately after such transaction)
unless (i) such Affiliate assumes and agrees to be bound by all of Buyer’s
obligations, duties and covenants under this Agreement and (ii) Buyer and such
Affiliate or Affiliates who are bound by all of Buyer’s obligations, duties and
covenants under this Agreement (with their direct and indirect subsidiaries) own
one hundred percent (100%) of the Company’s voting power immediately after such
transaction.

 

Section 7.4           Benefits of Agreement. Nothing in this Agreement, express
or implied, will give to any Person (other than the Rights Agent, the Buyer, the
Buyer’s successors and Assignees, the Holders and the Holders’ successors and
assigns pursuant to a Permitted Transfer) any benefit or any legal or equitable
right, remedy or claim under this Agreement or under any covenant or provision
herein contained, all such covenants and provisions being for the sole benefit
of the foregoing. The rights of Holders and their successors and assigns
pursuant to Permitted Transfers are limited to those expressly provided in this
Agreement. Notwithstanding anything to the contrary contained herein, any Holder
or Holder’s successor or assign pursuant to a Permitted Transfer may agree to
renounce, in whole or in part, its rights under this Agreement by written notice
to the Rights Agent and the Buyer, which notice, if given, shall be irrevocable.

 

Section 7.5           Governing Law; Jurisdiction; Waiver of Jury Trial.

 

(a)          This Agreement, the CVRs and all actions arising under or in
connection therewith shall be governed by and construed in accordance with the
laws of the State of Delaware, regardless of the laws that might otherwise
govern under applicable principles of conflicts of law thereof.

 

(b)          Each of the parties hereto (i) irrevocably and unconditionally
consents and submits to the exclusive jurisdiction and venue of the Chancery
Court of the State of Delaware and any state appellate court therefrom or, if
(but only if) such court lacks subject matter jurisdiction, the United States
District Court sitting in New Castle County in the State of Delaware and any
appellate court therefrom (collectively, the “Delaware Courts”); and (ii)
consents to service of process by first class certified mail, return receipt
requested, postage prepaid, to the address at which such party is to receive
notice in accordance with Section 7.1. Each of the parties irrevocably and
unconditionally (1) agrees not to commence any such action or proceeding except
in the Delaware Courts, (2) agrees that any claim in respect of any such action
or proceeding may be heard and determined in the Delaware Courts, (3) waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the jurisdiction or laying of venue of any such
action or proceeding in the Delaware Courts

 

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and (4) waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in the
Delaware Courts.

 

(c)          EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING BETWEEN THE PARTIES (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE), INCLUDING ANY COUNTERCLAIM, ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THE
ACTIONS OF ANY PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND
ENFORCEMENT THEREOF. EACH PARTY HERETO (A) MAKES THIS WAIVER VOLUNTARILY AND (B)
ACKNOWLEDGES THAT SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS CONTAINED IN THIS SECTION 7.5(c).

 

Section 7.6           Severability. If any provision of this Agreement is held
invalid or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement shall remain in full force and effect. Any
provision of this Agreement held invalid or unenforceable only in part or degree
shall remain in full force and effect to the extent not held invalid or
unenforceable. The parties further agree to replace such invalid or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business and other
purposes of such invalid or unenforceable provision.

 

Section 7.7           Counterparts and Signature. This Agreement may be executed
in two or more counterparts (including by facsimile or by an electronic scan
delivered by electronic mail), each of which shall be deemed an original but all
of which together shall be considered one and the same agreement and shall
become effective when counterparts have been signed by each of the parties
hereto and delivered to the other party, it being understood that the parties
need not sign the same counterpart.

 

Section 7.8           Termination. This Agreement will be terminated and of no
force or effect, the parties hereto will have no liability hereunder (other than
with respect to monies due and owing by the Buyer to the Rights Agent), and no
payments will be required to be made, upon the earliest to occur of (a) the
mailing by the Rights Agent to the address of each Holder as reflected in the
CVR Register the full amount of all potential CVR Payment Amounts (if any)
required to be paid under the terms of this Agreement, (b) the delivery of a
written notice of termination duly executed by the Buyer and the Acting Holders
and (c) March 31, 2020, with respect to the Buyer’s obligation to pay the Fourth
CVR Payment Event 2020 if not then achieved.

 

Section 7.9           Entire Agreement. This Agreement and the Scheme Document
(including the schedules, annexes and exhibits thereto and the documents and
instruments referred to therein) contain the entire understanding of the parties
hereto and thereto with reference to the transactions and matters contemplated
hereby and thereby and supersedes all prior agreements, written or oral, among
the parties with respect hereto and thereto.

 

Section 7.10         Legal Holiday. In the event that a CVR Payment Date shall
not be a Business Day, then, notwithstanding any provision of this Agreement to
the contrary, any

 

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payment required to be made in respect of the CVRs on such date need not be made
on such date, but may be made on the next succeeding Business Day with the same
force and effect as if made on the applicable CVR Payment Date.

 

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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
on its behalf by its duly authorized officers as of the day and year first above
written.

 

  LOUGH REE TECHNOLOGIES LIMITED         By:                    Name:   Title:  
      [RIGHTS AGENT]         By:     Name:   Title: