Exhibit 10.34
*** Text Omitted and Filed Separately
Confidential Treatment Requested
Under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2

ASSET PURCHASE AGREEMENT

by and between

GALENA BIOPHARMA, INC.

and

SENTYNL THERAPEUTICS INC.

November 19, 2015

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TABLE OF CONTENTS
ARTICLE I DEFINITIONS4
Section 1.01.Definitions    4
Section 1.02.Interpretation    9
ARTICLE II PURCHASE AND SALE OF ACQUIRED ASSETS10
Section 2.01.Purchase and Sale    10
Section 2.02.Assumed Liabilities    11
Section 2.03.Consents of Third Parties    12
ARTICLE III CLOSING12
Section 3.01.Closing    12
Section 3.02.Purchase Price    14
ARTICLE IV CONDITIONS TO CLOSING15
Section 4.01.Conditions to Obligations of Purchaser    15
Section 4.02.Conditions to Obligation of Seller    16
Section 4.03.Frustration of Closing Conditions.    16

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ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER16
Section 5.01.Authority    16
Section 5.02.No Conflicts; Consents    17
Section 5.03.Acquired Assets    17
Section 5.04.Product Recall    18
Section 5.05.Intellectual Property    18
Section 5.06.Transferred Contracts    19
Section 5.07.Litigation    19
Section 5.08.Legal Compliance    19
Section 5.09.Sale Practices    20
Section 5.10.Financial Information    20
Section 5.11.Brokers or Finders    20
ARTICLE VI COVENANTS OF SELLER20
Section 6.01.Access    20
Section 6.02.Other Covenants    20

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Section 6.03.Non-Competition    21
Section 6.04.Use    21
Section 6.05.Rebates and Chargebacks; Medicaid Reimbursements    22
Section 6.06.Adverse Experience Reports and Complaints    23
Section 6.07.PDUFA Fee    23
Section 6.08.Outstanding Commitments to FDA    23
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF PURCHASER23
Section 7.01.Authority    23
Section 7.02.No Conflicts; Consents    24
Section 7.03.Litigation    24
Section 7.04.Availability of Funds    24
Section 7.05.Brokers or Finders    24
ARTICLE VIII COVENANTS OF PURCHASER25
Section 8.01.Advise Seller    25
Section 8.02.Access to Information    25

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Section 8.03.Records    25
Section 8.04.DISCLAIMER    26
ARTICLE IX MUTUAL COVENANTS26
Section 9.01.Efforts    26
Section 9.02.Bulk Transfer Laws    27
Section 9.03.Transfer Taxes    27
Section 9.04.Purchase Price Allocation    28
Section 9.05.Recordation of Transferred Intellectual Property    28
Section 9.06.Confidentiality and Confidential Information    28
ARTICLE X INDEMNIFICATION30
Section 10.01.Indemnification by Seller    30
Section 10.02.Indemnification by Purchaser    30
Section 10.03.Indemnification Procedure    31
Section 10.04.Procedures Related to Indemnification for Other Claims    31
Section 10.05.Losses Net of Insurance    32

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Section 10.06.Limitation on Indemnification    32
Section 10.07.Termination of Indemnification    33
Section 10.08.Tax Treatment of Indemnification Payments    33
Section 10.09.No Double Recovery    33
ARTICLE XI TERMINATION33
Section 11.01.Termination    34
ARTICLE XII MISCELLANEOUS34
Section 12.01.Assignment    34
Section 12.02.Non-Waiver    34
Section 12.03.No Third-Party Beneficiaries    34
Section 12.04.Severability    34
Section 12.05.Entire Agreement; Amendments    34
Section 12.06.Notices    35
Section 12.07.Public Announcements    35
Section 12.08.Governing Law; Forum.    36

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Section 12.09.WAIVER OF JURY TRIAL.    36
Section 12.10.Expenses    36
Section 12.11.Relationship of the Parties    36
Section 12.12.Counterparts    37
    

Exhibits
Exhibit 2.01(a)(i)    -    Transferred Intellectual Property
Exhibit 2.01(a)(ii)    -    Transferred FDA Permits
Exhibit 2.01(a)(iii)    -    Transferred Contracts
Exhibit 2.01(a)(iv)    -    Inventory
Exhibit 3.01(b)(ii)    -    Form of Bill of Sale
Exhibit 3.01(b)(iii)    -    Form of Assignment and Assumption Agreement
Exhibit 3.01(b)(iv)    -    Form of Trademark Assignment Agreement

Schedules
Schedule 2.02(b)    -    Channel Liabilities
Schedule 4.01(f)    -    Required Third Party Consents
Schedule 5.02(a)    -    Third Party Consents
Schedule 5.02(b)    -    Governmental or Regulatory Approvals
Schedule 5.03         -    Acquired Assets
Schedule 5.05         -    Intellectual Property
Schedule 5.06         -    Transferred Contracts
Schedule 5.07        -    Litigation
Schedule 5.10        -    Financial Information

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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this “Agreement”), dated as of November __, 2015,
is made by and between Galena Biopharma, Inc., a Delaware corporation
(“Seller”), and Sentynl Therapeutics, Inc., a Delaware corporation
(“Purchaser”). Seller and Purchaser are sometimes individually referred to
herein as a “Party” and are sometimes collectively referred to herein as the
“Parties”. Capitalized terms not otherwise defined in the text of this Agreement
shall have the meanings set forth in ARTICLE I of this Agreement.
WITNESSETH:
WHEREAS, Seller is the licensee of certain patents and know-how relating to the
proprietary product for pain treatment marketed as AbstralTM in the United
States that contains fentanyl as its sole active ingredient and is approved
under its product NDA, including all dosage strengths thereof (the “Product” or
“Abstral”); and
WHEREAS, Seller desires to sell, and Purchaser desires to purchase from Seller,
the Acquired Assets, upon the terms and subject to the conditions set forth in
this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein set forth, and
intending to be legally bound hereby, the Parties hereby agree as follows:
Article I
DEFINITIONS
Section 1.01.    Definitions.
(a)    For purposes of this Agreement, the following terms shall have the
corresponding meanings set forth below:
“Abstral NDA” means NDA No. 22-510 relating to Abstral in the Territory.
“Acquisition” means the consummation of the transactions contemplated by this
Agreement and the Ancillary Agreement.
“Affiliate” means, with respect to any specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person; and for the purposes of this
definition, “control” when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms “controlling” and “controlled” have meanings
correlative to the foregoing.
“Ancillary Agreement” means individually and collectively, each of the Other
Acquisition Documents (as and when executed and delivered).
“Branded Prescription Drug Fee” means the fees imposed by Section 9008 of the
Patient Protection and Affordable Care Act (ACA), Public Law 111-148 (124 Stat.
119 (2010)), as amended by section 1404 of the Health Care and Education
Reconciliation Act of 2010 (HCERA), Public Law 111-152 (124 Stat. 1029 (2010))
and regulations promulgated thereunder.
“Business Day” means a day other than Saturday or Sunday or a day on which banks
are required or authorized to close in the State of Delaware.
“Channel Products” means Abstral (i) with respect to which Seller has recognized
revenues (including Products which have been replaced by Seller, in Seller’s
discretion) on or before the Closing Date, and (ii) which have been shipped to
Seller’s customers prior to the Closing Date, but as of such date, have not yet
been purchased by consumers.
“Closing Consideration” means eight million dollars ($8,000,000).
“Code” means the United States Internal Revenue Code of 1986, as amended.
“Confidential Information” means all information provided by one Party to the
other Party in connection with this Agreement, including know-how, scientific
information, pre-clinical and clinical data, adverse event information,
formulas, methods and processes, pricing information (including discounts,
rebates and other price adjustments) and other terms and conditions of sales,
customer information, business plans, and all other intellectual property which
is not publicly available and is owned or controlled by a Party.
“Contracts” means all licenses, agreements, contracts, commitments and all other
legally binding arrangements, whether written or oral.
“Dollars” and “$” mean lawful currency of the United States of America.
“Excluded Trademarks” mean, whether registered or unregistered, all trademarks,
trade dress, service marks, service names, brand marks, trade names, brand
names, logos, business symbols, slogans or other designations of origin and all
registrations, registration applications and rights relating thereto, other than
the trademarks included in the Transferred Intellectual Property.
“FDA” means the United States Food and Drug Administration.
“GAAP” means generally accepted accounting principles in the United States of
America, consistently applied.
“Governmental or Regulatory Authority” means any court, tribunal, arbitrator,
agency, commission, official or other instrumentality of any country, federal,
state, county, city or other political subdivision, foreign or domestic,
including without limitation the FDA and any other governmental instrumentality
with responsibility for granting any licenses, registrations or regulatory
approvals.
“Intended Use” means the distribution, marketing, sale, and manufacture of
Abstral in the Territory.
“Law” means all laws, statutes, rules, regulations, ordinances and other
pronouncements or orders having the effect of law of any Governmental or
Regulatory Authority.
“Liabilities” means any and all assessments, losses, damages (compensatory,
punitive or other), liabilities, obligations, commitments, reimbursements, costs
and expenses of any kind or nature, actual, contingent, present or future.
“Licensed Intellectual Property” has the meaning defined in the Orexo License
Agreement License Agreement.
“Liens” means liens, claims, encumbrances, security interests, options or
charges.
“Material Adverse Effect” means any event that has a material, adverse effect on
the manufacture, distribution, marketing or sale by or on behalf of the
Purchaser of the Product in the Territory as contemplated by this Agreement and
the Ancillary Agreements, but excluding the events or effects of: (i) changes to
the pharmaceutical industry and markets in which Purchaser or Seller operate, to
the extent such changes do not have a disproportionately adverse effect on the
Intended Use of the Product in the Territory; (ii) changes in the United States
or world financial markets in general; (iii) changes arising in connection with
earthquakes, hostilities, acts of war, sabotage or terrorism or military actions
or any escalation or material worsening of any such hostilities, acts of war,
sabotage or terrorism or military actions existing or underway as of the date
hereof; or (iv) any action taken by Purchaser or its Affiliates with respect to
the transactions contemplated hereby or with respect to a Product or the
Intended Use of a Product in the Territory; or (v) any effect resulting from the
public announcement of this Agreement, compliance with terms of this Agreement
or the consummation of the transactions contemplated by this Agreement.
“NDA” means a New Drug Application or supplemental New Drug Application, as
defined in the United States Federal Food, Drug and Cosmetic Act.
“Net Sales” means, for any period, the aggregate of the gross amounts invoiced
or otherwise billed, charged or received by a Selling Person for the arms’
length sale or other commercial disposition to non-Affiliates of such Selling
Person of a Product (whether such Selling Person has the right to sell Abstral),
less the following deductions to the extent specifically related to a Product
and actually accrued, allowed, incurred or paid during such period: (i)
reasonable cash discounts, returns, allowances, rebates, patient assistance
benefits, or chargebacks; (ii) sales, value-added, excise taxes, tariffs and
duties, and other taxes directly related to the sale (but excluding income or
net profit taxes or franchise taxes of any kind); and (iii) amounts allowed or
credited on returns, provided that all of the foregoing deductions are incurred
in the ordinary course and calculated in accordance with GAAP during the
applicable calculation period throughout the Selling Person’s organization. All
such discounts, allowances, credits, rebates, patient assistance benefits and
other deductions shall be fairly and equitably allocated to the Product of a
Selling Person, such that a Product does not bear a disproportionate portion of
such deductions. Any disposal of a Product at no charge for, or use without
charge in, clinical or preclinical trials (but excluding post-approval clinical
trials for which compensation is received by the Selling Person), given as free
samples, or distributed at no charge to patients unable to purchase the same
shall not be included in Net Sales, in each case, except to the extent that a
Selling Person has received any consideration for such Product.
For sake of clarity and avoidance of doubt, the transfer of a Product by a
Selling Person or one of its Affiliates to another Affiliate of such Selling
Person or to a sub-licensee of such Selling Person for resale shall not be
considered a sale; in such cases, Net Sales shall be determined based on the
amount invoiced or otherwise billed by such Affiliate or sub-licensee to an
independent Third Party, less the Net Sales deductions allowed under this
definition.
In the case of any sale of a Product for value other than in an arm’s length
transaction exclusively for cash, such as barter or counter-trade, Net Sales
shall be calculated based on the fair market value of the non-cash consideration
received in connection with such sale and based on the full list price for
non-arm’s length transactions. If a Product is sold together with another
product and not separately invoiced or billed, the Parties shall agree upon the
appropriate allocation of the amount received in consideration for the
applicable Product, which allocation shall reflect the fair market value of the
applicable Product and the other product.
“Orexo Asset Purchase Agreement” means that certain Asset Purchase Agreement by
and between Seller and Orexo AB dated March 15, 2013, assigned to Purchaser as
one of the Transferred Contracts hereunder subject to the terms and conditions
described herein.
“Orexo License Agreement” means that certain License Agreement by and between
Seller and Orexo AB dated March 18, 2013, assigned to Purchaser as one of the
Transferred Contracts hereunder.
“Other Acquisition Documents” means (i) the Bill of Sale, (ii) the Assignment
and Assumption Agreement, and (iii) the Trademark Assignment Agreement.
“Person” means an individual, corporation, partnership, limited liability
company, trust, business trust, association, joint stock company, joint venture,
pool, syndicate, sole proprietorship, unincorporated organization, Governmental
or Regulatory Authority, or any other form of legal entity not specifically
listed herein.
“Seller’s Knowledge” means the knowledge, after a reasonable investigation, of
the following individuals: Mark Schwartz, Joseph Lasaga, Ryan Dunlap,
Christopher Lento, and Patricia Murphy.
“Selling Person” means the Purchaser, each of its Affiliates and each (i)
licensee, sub-licensee, assignee or other grantee of rights from Purchaser or
any of its Affiliates or another Selling Person to develop, market or sell
Abstral, (ii) buyer, transferee or assignee of any Transferred Intellectual
Property or Licensed Intellectual Property from Purchaser or its Affiliates or
another Selling Person, or (iii) any Affiliate of the foregoing.
“Tax” or “Taxes” means all federal, state, local and foreign income, payroll,
withholding, excise, value added, sales, use, personal property, use and
occupancy, business and occupation, mercantile, real estate, gross receipts,
license, employment, severance, stamp, premium, windfall profits, social
security (or unemployment), disability, transfer, registration, alternative or
add-on minimum, estimated or capital stock and franchise and other taxes and
assessments of any kind whatsoever, including all interest, penalties and
additions imposed with respect to such amounts, whether disputed or not.
“Taxing Authority” means any Governmental or Regulatory Authority exercising any
authority to impose, regulate or administer the imposition of Taxes.
“Tax Return” means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
“Territory” means the United States of America including its territories and
possessions.
“Third Party” means any Person other than Purchaser or Seller and their
respective Affiliates.
(b)    The following terms have the meanings given to such terms in the Sections
set forth below:
Term
Section
Abstral
Recitals
Acquired Assets
2.01(a)
Additional Assumption Documents
3.01(b)(v)
Additional Transfer Documents
3.01(c)(vi)
Agreement
Preamble
Allocation
9.04
Annual Sales Milestone
3.02(b)
Assignment and Assumption Agreement
3.01(b)(iii)
Assumed Liabilities
2.02(a)
Bill of Sale
3.01(b)(ii)
Channel Liabilities Schedule
2.02(a)(ii)
Chargebacks
Schedule 2.02
Claim Dispute Notice
10.04
Closing
3.01(a)
Closing Date
3.01(a)
Confidentiality Agreement
9.06
Continuation Period
Schedule 5.03
Continued Agreements
Schedule 5.03
Direct Claim Notice
10.04
Excluded Assets
2.01(b)
Excluded Liabilities
2.02(b)
Fixed Assets
2.01(a)(iv)
Indemnitee
10.03(a)
Indemnitor
10.03(a)(i)
Independent Auditor
8.03
Inventory
2.01(a)(iv)
Losses
10.01
Milestone Audit
8.03
NDC
6.04
Party or Parties
Preamble
Product
Recitals
Purchase Price
3.02(a)
Purchaser
Preamble
Purchaser Indemnitees
10.01
Rebates
Schedule 2.02
Seller
Preamble
Seller Indemnitees
10.02
Seller Names
6.04
Short Dated Lots
Schedule 2.02
Termination Date
11.01(b)
Third Party Claim
10.03(a)
Trademark Assignment Agreement
3.01(b)(iv)
Transfer Taxes
9.03
Transferred Contracts
2.01(a)(iii)
Transferred FDA Permits
2.01(a)(ii)
Transferred Intellectual Property
2.01(a)(i)
UPC
6.04

Section 1.02.    Interpretation. The definitions of the terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “will”
shall be construed to have the same meaning and effect as the word “shall”.
Unless the context requires otherwise, (i) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth therein); (ii) the words
“herein”, “hereof” and “hereunder”, and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof; (iii) the word “extent” in the phrase “to the extent” means
the degree to which a subject or other thing extends and such phrase does not
mean simply “if”; (iv) all references herein to Articles, Sections, Exhibits or
Schedules shall be construed to refer to Articles, Sections, Exhibits and
Schedules of this Agreement; and (v) the headings contained in this Agreement or
any Exhibit or Schedule and in the table of contents to this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Any matter set forth in any provision,
sub-provision, section or subsection of the Schedules to this Agreement shall be
deemed set forth for all purposes of the Schedules hereto to the extent
reasonably apparent that such matter is relevant to another provision,
sub-provision, section or subsection of the Schedules hereto. All Schedules
attached hereto or referred to herein are hereby incorporated in and made a part
of this Agreement as if set forth in full herein. Any capitalized terms used in
the Exhibits and Schedules attached hereto but not otherwise defined therein,
shall have the meaning as defined in this Agreement. In the event of an
ambiguity or a question of intent or interpretation, this Agreement shall be
construed as if drafted jointly by the Parties and no presumption or burden of
proof shall arise favoring or disfavoring either Party by virtue of the
authorship of any provisions of this Agreement.
Article II    
PURCHASE AND SALE OF ACQUIRED ASSETS
Section 2.01.    Purchase and Sale.
(a)    Upon the terms and subject to the conditions set forth in this Agreement,
at the Closing, Seller shall sell, assign, transfer, convey and deliver to
Purchaser, and Purchaser shall purchase from Seller, free and clear of all
Liens, all right, title and interest of Seller in, to and under the following
assets, properties and rights of Seller (collectively, the “Acquired Assets”):
(i)    the trademark, domain name and copyrights of Seller which are related
exclusively to the Product and are set forth on Exhibit 2.01(a)(i) (the
“Transferred Intellectual Property”);
(ii)    the governmental, regulatory filings, correspondence, submissions,
marketing authorizations, permits, licenses, registrations (including Product
registration data), regulatory clearances, certificates, approvals, variances,
consents and similar items of Seller with the FDA exclusively related to the
Intended Use of Abstral in the Territory as set forth on Exhibit 2.01(a)(ii)
(the “Transferred FDA Permits”) (which, for the avoidance of doubt, includes the
Abstral NDA);
(iii)    the Contracts set forth on Exhibit 2.01(a)(iii) (the “Transferred
Contracts”) (which, for the avoidance of doubt, includes the Orexo Asset
Purchase Agreement as amended on November 18, 2015 (which amendment,
automatically terminates the Marketing Period defined in Section 8.04 (b)(ii)
thereof as of the Closing Date of this Agreement) and the Orexo License
Agreement) and all rights and claims of Seller arising under or with respect to
the Transferred Contracts;
(iv)    (A) the inventory of Abstral owned by Seller as set forth on Exhibit
2.01(a)(iv) (the “Inventory”) and (B) the manufacturing equipment for Abstral as
set forth on Exhibit 2.01(a)(iv) (the “Fixed Assets”);
(v)    copies of (A) all current marketing and sales assets that relate
exclusively to Abstral and (B) all books, ledgers, files, reports, data, plans
and records that relate exclusively to Abstral; and
(vi)    all claims, causes of action or other rights of the Seller, if any,
arising out of any of the Acquired Assets arising before, on or after the
Closing Date.
(b)    Purchaser is not purchasing or acquiring, and Seller is not selling or
assigning, any assets or properties of Seller or any of its Affiliates that are
not specifically listed above, and all such other assets and properties shall be
excluded from the Acquired Assets (the “Excluded Assets”).
Section 2.02.    Assumed Liabilities and Excluded Liabilities.
(a)    Purchaser shall assume, effective as of the Closing, and from and after
the Closing, Purchaser shall pay, perform and discharge when due, all
Liabilities of Seller arising under or related to the Acquired Assets accruing
on or after the Closing, including without limitation, (i) Liabilities arising
out of Purchaser’s use of the Seller Names, Excluded Trademarks, UPC, NDC and
the activities contemplated by Section 6.04 hereof, (ii) those Liabilities which
are allocated to Purchaser with respect to the Channel Liabilities, as defined
and set forth in Exhibit 2.02 hereof (the “Channel Liabilities Schedule”), and
(iii) any Liabilities arising from or relating to the development, testing,
manufacture, distribution, marketing, promotion or sale of Abstral in the
Territory on or after the Closing (including, without limitation, any product
recalls and any product liability claim for any sale by Purchaser of Abstral on
or after to the Closing Date) (collectively, and subject to the Excluded
Liabilities, the “Assumed Liabilities”).
(b)    Purchaser shall not assume any other Liabilities of Seller or its
Affiliates other than the Assumed Liabilities, including without limitation, (i)
any Liabilities of Seller for monies due but not yet payable as of the Closing
Date under any Transferred Contract, (ii) any Liabilities resulting from (1) any
breach or violation of any Transferred Contract by Seller occurring prior to the
Closing or (2) any act or omission of Seller prior to the Closing that would
have constituted a breach or violation upon notice or passage of time under any
Transferred Contract, (iii) any Liabilities with respect to the Branded
Prescription Drug Fee due for the Product prior to Closing, (iv) any Liabilities
arising from or relating to the development, testing, manufacture, distribution,
marketing, promotion or sale of Abstral in the Territory prior to the Closing
(including, without limitation, any product recalls and any product liability
claim for any sale by Seller of Abstral prior to the Closing Date), and (v)
those Liabilities which are allocated to Seller with respect to the Channel
Liabilities as set forth in the Channel Liabilities Schedule (collectively, the
“Excluded Liabilities”). Seller shall remain responsible for, and from and after
the Closing Seller shall pay, perform and discharge when due, the Excluded
Liabilities.
(c)    Each of Purchaser’s and Seller’s obligations under this Section 2.02 will
not be subject to offset or reduction by reason of any actual or alleged breach
of any representation, warranty, covenant or agreement contained in this
Agreement, any Ancillary Agreement or any right or alleged right to
indemnification hereunder.
Section 2.03.    Consents of Third Parties
(a)    Other than with respect to consents from third parties required as a
condition to Closing pursuant to Section 4.01(f), if any transfer or assignment
by Seller to, or any assumption by Purchaser of, any interest in, or liability,
obligation or commitment under, any asset (including any Contract), or any
claim, right or benefit requires the consent of a Third Party and if any such
consent is not obtained prior to the Closing, for a period of one-hundred eighty
(180) days from and after the Closing Date, (i) Seller shall use commercially
reasonable efforts following the Closing to obtain such consents, and (ii)
Seller and Purchaser shall cooperate (each at their own expense) in any lawful
and reasonable arrangement reasonably proposed by Purchaser under which
Purchaser shall obtain the economic claims, rights and benefits under the asset
(including any Contract) or related claim, right or benefit with respect to
which the consent has not been obtained in accordance with this Agreement. Such
reasonable arrangement may include (x) the subcontracting, sublicensing or
subleasing to Purchaser of any and all rights of Seller against the other party
to such Contract arising out of a breach or cancellation thereof by the other
party, and (y) the enforcement by Seller of such rights. None of Seller,
Purchaser or their respective Affiliates shall be required to commence, defend
or participate in any litigation, incur any obligation in favor of, or offer or
grant any accommodation (financial or otherwise) to, any Third Party in
connection with entering into or implementing such arrangement unless Purchaser
and Seller mutually agree to pursue such litigation or accommodation, and in any
such case, Seller and Purchaser shall equally share the costs associated
therewith.
Article III    
CLOSING
Section 3.01.    Closing.
(d)    The closing of the Acquisition (the “Closing”) shall be held remotely by
exchange of electronic copies of the agreements, documents, certificates and
other instruments set forth in Section 3.01(b) and Section 3.01(c) at 10:00 a.m.
on the date hereof or any later date agreed upon by the Parties after the
conditions to the Closing set forth in Section 4.01 and Section 4.02 have been
satisfied or waived (other than those conditions which by their nature are to be
fulfilled at the Closing, but subject to the fulfillment or waiver of such
conditions). The date on which the Closing shall occur is hereinafter referred
to as the “Closing Date”. The Closing shall be deemed to be effective as of
12:00:01 a.m. eastern standard time on the Closing Date.
(e)    At the Closing, Purchaser shall deliver or cause to be delivered to
Seller:
(i)    an amount equal to the Closing Consideration by wire transfer of
immediately available funds denominated in Dollars to a bank account designated
in writing by Seller at least two (2) Business Days prior to the Closing Date;
(ii)    an executed counterpart of the Bill of Sale, in the form attached hereto
as Exhibit 3.01(b)(ii) (the “Bill of Sale”);
(iii)    an executed counterpart of the Assumption Agreement, in the form
attached hereto as Exhibit 3.01(b)(iii) (the “Assignment and Assumption
Agreement”);
(iv)    an executed counterpart of the Trademark Assignment Agreement, in the
form attached hereto as Exhibit 3.01(b)(iv) (the “Trademark Assignment
Agreement”);
(v)    such other executed instruments of transfer, conveyance, assignment, and
assumption as the Seller may reasonably request in order to effect the sale,
transfer, conveyance and assignment to the Purchaser of all obligations,
liabilities, right, title and interest in and to the Assumed Liabilities (the
“Additional Assumption Documents”); and
(vi)    a certificate, dated as of the Closing Date, executed by an authorized
officer of Purchaser, in his or her capacity as such, confirming the
satisfaction of the conditions specified in Section 4.01(b) and Section 4.01(c).
(f)    At the Closing, Seller shall deliver or cause to be delivered to
Purchaser:
(i)    an executed counterpart of the Bill of Sale;
(ii)    an executed counterpart of the Assignment and Assumption Agreement;
(iii)    an executed counterpart of the Trademark Assignment Agreement;
(iv)    an executed consent by a duly authorized officer of Orexo (a) accepting
Seller’s assignment of the Orexo Asset Purchase Agreement and Orexo License
Agreement to Purchaser and (b) amending the Orexo Asset Purchase Agreement to
provide that the Marketing Period set forth in Section 8.04(b)(ii) thereof is
automatically terminated as of the Closing Date of this Agreement;
(v)    written response from Caremark that PharmaWare utilization should not
have been submitted for rebates to Seller in the second calendar quarter of 2015
and there was no utilization by PharmaWare for rebates to Seller in the third
calendar quarter of 2015;
(vi)    copies of Seller’s insurance carrier’s endorsement evidencing Seller’s
product liability insurance for Abstral continuing through any applicable
statute of limitations period for product sold by Seller prior to the Closing
Date;
(vii)    such other executed instruments of transfer, conveyance and assignment
as the Purchaser may reasonably request in order to effect the sale, transfer,
conveyance and assignment to the Purchaser of all right, title and interest in
and to the Acquired Assets (the “Additional Transfer Documents”); and
(viii)    a certificate, dated as of the Closing Date, executed by an authorized
officer of Seller, in his or her capacity as such, confirming the satisfaction
of the conditions specified in Section 4.02(b) and Section 4.02(c).
Section 3.02.    Purchase Price.
(b)    In addition to the assumption of all of the payment obligations under the
Orexo Asset Purchase Agreement, which Purchaser shall pay directly to Orexo, the
aggregate consideration Purchaser shall pay to Seller hereunder shall be (i) the
Closing Consideration and the assumption of the Assumed Liabilities, and (ii)
the Annual Sales Milestones (collectively, the “Purchase Price”).
(c)    Purchaser shall pay to Seller each of the following one-time only,
non-refundable, non-creditable sales milestone(s) (the “Annual Sales
Milestone(s)”) within sixty (60) days following the end of the calendar year, if
any, in which Product Net Sales equal or exceed the respective thresholds
referenced below, Purchaser shall make payment by wire transfer in immediately
available funds to an account or accounts designated in writing by Seller.
Purchaser shall provide Seller with written notice upon achievement of any
Annual Sales Milestone(s), along with reasonable supporting written
documentation and calculations supporting the payment. Purchaser’s obligation
under this Section 3.02(b) shall terminate upon the earlier of (i) entry of a
generic equivalent to the Product (including an authorized generic to the
Product) into the Territory by a third-party or (ii) expiration of the latest
Product patent.
Each Annual Sales Milestone shall be payable only once. For avoidance of doubt
and by way of example, if Purchaser’s Net Sales for the Product is equal to
[…***…] in […***…], is equal to […***…] in […***…] and is equal to […***…] in
[…***…], Purchaser would be obligated to provide the following Annual Sales
Milestones: following Year […***…]:[…***…]; following Year […***…]:[…***…]; and
following Year […***…]:[…***…]. No further Annual Sales Milestone payments would
be owed by Purchaser to Seller.
Annual Net Sales equal or exceed:
Annual Sales Milestone:
[…***…]
[…***…] 
[…***…]
[…***…]

Article IV    
CONDITIONS TO CLOSING
Section 4.01.    Conditions to Obligations of Purchaser. The obligation of
Purchaser to effect the closing of the Acquisition is subject to the
satisfaction (or written waiver by Purchaser) as of the Closing of the following
conditions:
(d)    No Injunctions or Restraints. No Law, temporary restraining order,
preliminary or permanent injunction or other order enacted, entered,
promulgated, enforced or issued by any Governmental or Regulatory Authority or
other legal restraint or prohibition by a Governmental or Regulatory Authority
shall be pending or in effect seeking to prevent or preventing the Acquisition.
(e)    Accuracy of Representations and Warranties. All of the representations
and warranties made by Seller in ARTICLE V that are qualified by any reference
to any materiality qualifications shall each be true and correct as of the
Closing Date as though such representations and warranties were made at such
date (except that any representations and warranties that are made only as of a
specified date shall be true and correct only as of such date), and all other
representations and warranties made by the Seller shall each be true and correct
in all material respects as of the Closing Date as though such representations
and warranties were made at such date (except that any representations and
warranties that are made only as of a specified date shall be true and correct
only as of such date).
(f)    Performance of Covenants. The covenants and obligations that Seller is
required to perform or comply with under this Agreement on or before the Closing
Date shall have been duly performed and complied with by Seller in all material
respects.
(g)    Deliverables. Purchaser shall have received each of the items set forth
in Section 3.01(c).
(h)    No Material Adverse Effect. No Material Adverse Effect shall have
occurred and be continuing.
(i)    Receipt of Third Party Consents. Written consents from the applicable
Third Parties identified on Schedule 4.01(f) with respect to the assignment and
assumption pursuant to the Acquisition of the applicable Transferred Contracts,
each in form and substance reasonably acceptable to Purchaser, shall have been
obtained and remain in full force and effect.
Section 4.02.    Conditions to Obligation of Seller. The obligation of Seller
to, and to cause its Affiliates to, effect the closing of the Acquisition is
subject to the satisfaction (or written waiver by Seller) as of the Closing of
the following conditions:
(a)    No Injunctions or Restraints. No Law, temporary restraining order,
preliminary or permanent injunction or other order enacted, entered,
promulgated, enforced or issued by any Governmental or Regulatory Authority or
other legal restraint or prohibition by a Governmental or Regulatory Authority
shall be pending or in effect seeking to prevent or preventing the Acquisition.
(b)    Accuracy of Representations and Warranties. All of the representations
and warranties made by Purchaser in ARTICLE VII that are qualified by any
materiality qualifications shall each be true and correct as of the Closing Date
as though such representations and warranties were made at such date (except
that any representations and warranties that are made only as of a specified
date shall be true and correct only as of such date), and all other
representations and warranties of the Purchaser shall each be true and correct
in all material respects as of the Closing Date as though such representations
and warranties were made at such date (except that any representations and
warranties that are made only as of a specified date shall be true and correct
only as of such date).
(c)    Performance of Covenants. The covenants and obligations that Purchaser is
required to perform or comply with under this Agreement on or before the Closing
Date shall have been duly performed and complied with by Purchaser in all
material respects.
(d)    Deliverables. Seller shall have received each of the items set forth in
Section 3.01(b).
Section 4.03.    Frustration of Closing Conditions. Neither Purchaser nor Seller
may rely on the failure of any condition set forth in this ARTICLE IV to be
satisfied if such failure was caused by such Party’s failure to act in good
faith or to comply with its obligations under Section 9.01 to cause the Closing
to occur.
Article V    
REPRESENTATIONS AND WARRANTIES OF SELLER
Except as set forth in the Schedules attached hereto, Seller hereby represents
and warrants to Purchaser as follows:
Section 5.01.    Authority. Seller is a corporation duly organized, validly
existing and in good standing under the laws of Delaware. Seller has the
requisite power and authority to enter into this Agreement, and Seller has the
requisite power and authority to enter into the Ancillary Agreements to which it
is, or is specified to be, a party and to consummate the transactions
contemplated hereby and thereby. All acts and other proceedings required to be
taken by Seller to authorize the execution, delivery and performance of this
Agreement and the Ancillary Agreements to which it is, or is specified to be, a
party and to consummate the transactions contemplated hereby and thereby have
been duly and properly taken. This Agreement has been duly executed and
delivered by Seller and, assuming this Agreement has been duly authorized,
executed and delivered by Purchaser, constitutes, and the Other Acquisition
Documents on the Closing Date will be duly executed and delivered by Seller and
upon the due authorization, execution and delivery by each other party to the
Other Acquisition Documents will constitute, a legal, valid and binding
obligation of Seller, enforceable against Seller in accordance with its terms,
subject, as to enforcement, to applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting creditors’ rights generally and to
general equitable principles.
Section 5.02.    No Conflicts; Consents.
(a)    Except as set forth on Schedule 5.02, the execution and delivery of this
Agreement by Seller does not, and the execution and delivery by Seller of each
other Ancillary Agreement to which it is, or is specified to be, a party will
not, and the consummation of the transactions contemplated hereby and thereby
and compliance with the terms hereof and thereof will not, conflict with, or
result in any violation of or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation, or result in the creation of any Lien upon any
of the Acquired Assets under, any provision of (i) Seller’s certificate of
incorporation or by-laws (or the comparable governing instruments), (ii) any
Contract to which Seller is a party and by which any of Acquired Assets are
bound, or (iii) any judgment, order, or decree, or, subject to the matters
referred to in Section 5.02(b) below, any Law applicable to Seller or its
properties or assets, other than, in the case of clauses (i) and (ii) above, any
such items that would not be reasonably likely, individually or in the
aggregate, to have a material adverse effect on the ability of Seller to
consummate the Acquisition.
(b)    No consent, approval, license, permit, order or authorization of, or
registration, declaration or filing with, any Governmental or Regulatory
Authority is required to be obtained or made by or with respect to Seller in
connection with the execution, delivery and performance of this Agreement, the
Ancillary Agreements or the consummation of the transactions contemplated hereby
or thereby, other than such consents, approvals, licenses, permits, orders,
authorizations, registrations, declarations and filings the absence of which, or
the failure to make which, individually or in the aggregate, (i) would not be
reasonably likely to have a material adverse effect on the ability of Seller to
consummate the Acquisition or perform its obligations under this Agreement or
the Ancillary Agreements, and (ii) would not give rise to any liability of
Purchaser as a result of the consummation of the Acquisition.
Section 5.03.    Acquired Assets. Except as set forth in Schedule 5.03, the
Acquired Assets and the Licensed Intellectual Property constitute all of the
material assets, rights or property (other than (x) any intellectual property
that are licenses for commercial “off-the-shelf” or “shrink-wrap” software, and
(y) administrative, finance and other infrastructure and back office information
technology systems, networks and software) owned or controlled by Seller or its
Affiliates and primarily related to the Intended Use of the Product in the
Territory. Seller has good and valid title to all of the owned Acquired Assets
free and clear of all Liens such that, on the Closing Date, Purchaser will
receive legal and beneficial title to all of the owned Acquired Assets free and
clear of all Liens.
Section 5.04.    Product Recall. Neither Seller nor any of its Affiliates have
been subject to any recall initiated or requested by any Governmental or
Regulatory Authority with respect to Abstral.
Section 5.05.    Intellectual Property.
(a)    Except as set forth in Schedule 5.05(a), Seller owns free and clear of
all Liens the Transferred Intellectual Property and the consummation of the
Acquisition will not conflict with, alter or impair any such rights in any
material respect.
(b)    Except as set forth in Schedule 5.05(b), as of the date hereof, no claims
are pending before any court, arbitrator or other tribunal, or before any
administrative law judge, hearing officer or administrative agency or, to
Seller’s Knowledge, threatened in writing against Seller or any of its
Affiliates by any Third Party with respect to the ownership, validity or
enforceability of any Transferred Intellectual Property or Licensed Intellectual
Property.
(c)    Except as set forth in Schedule 5.05(c), Seller has not granted any
options, licenses or agreements relating to the Transferred Intellectual
Property or, with respect to Abstral in the Territory, relating to the Licensed
Intellectual Property, except non-exclusive implied licenses to end-users in the
ordinary course of business. Except as set forth in Schedule 5.05(c), as of the
date hereof, Seller is not bound by or a party to any material options, licenses
or agreements of any kind for intellectual property of any Third Party relating
to Abstral in the Territory, except for the Transferred Contracts.
(d)    To Seller’s Knowledge, no Third Party is infringing or violating or
misappropriating any of the Transferred Intellectual Property or has made any
claim of ownership or right to any Transferred Intellectual Property, except as
set forth in Schedule 5.05(d). Seller has neither asserted nor threatened in
writing any action or claim against any Third Party involving or relating to any
Transferred Intellectual Property, except as set forth in Schedule 5.05(d).
Except as set forth in Schedule 5.05(d), Seller has not received any written
request from any Third Party that Seller enter into a license with respect to
any Third Party Intellectual Property right in relation to Abstral, the Acquired
Assets or the Intended Use of Abstral in the Territory.
(e)    To Seller’s Knowledge, the Intended Use of each of Abstral in the
Territory does not infringe or violate or constitute a material misappropriation
of any intellectual property of any Third Party. Except as set forth in Schedule
5.05(e), Seller has not received any written claim or notice alleging any such
infringement, violation or misappropriation.
(f)    There is no pending or, to Seller’s Knowledge, threatened claim,
interference, opposition or demand of any Third Party challenging the ownership,
validity or scope of any Transferred Intellectual Property.
Section 5.06.    Transferred Contracts. Each Transferred Contract is valid,
binding and in full force and effect and is enforceable by Seller in accordance
with its terms, subject to applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other laws affecting creditors’ rights
generally, general principles of equity and the discretion of courts in granting
equitable remedies. Except as set forth on Schedule 5.06, as of the date hereof
and as of the Closing Date, Seller has performed in all material respects all
material obligations required to be performed by it under the Transferred
Contracts and is not (with or without the lapse of time or the giving of notice,
or both) in breach or default in any material respect thereunder and, to
Seller’s Knowledge, as of the date hereof, no other party to any of the
Transferred Contracts is (with or without the lapse of time or the giving of
notice, or both) in breach or default in any material respect thereunder.
Section 5.07.    Litigation. Except as set forth in Schedule 5.07, as of the
date hereof, there are no (i) outstanding judgments, orders, injunctions or
decrees of any Governmental or Regulatory Authority or arbitration tribunal
against Seller, (ii) lawsuits, actions or proceedings pending or, to Seller’s
Knowledge, threatened against Seller, or (iii) investigations by any
Governmental or Regulatory Authority which are pending or, to Seller’s
Knowledge, threatened against Seller, which, in the case of each of clauses (a),
(b) and (c), relating to the Intended Use of Abstral in the Territory and have
had or would be reasonably likely to have a Material Adverse Effect or a
material adverse effect on the ability of Seller to consummate the Acquisition
and the other transaction contemplated by this Agreement and the Ancillary
Agreements.
Section 5.08.    Legal Compliance. Seller and its Affiliates are, and have been
from the date of execution of the Orexo License Agreement and Orexo Asset
Purchase Agreement, in material compliance with the Abstral NDA and all
applicable Laws relating to the development, testing, manufacture, distribution,
marketing, promotion or sale of Abstral in the Territory. Except as set forth in
Schedule 5.08, since the date of execution of the Orexo License Agreement and
Orexo Asset Purchase Agreement to the Closing Date, (i) neither Seller nor its
Affiliates have received any notification, written or oral, from any
Governmental Authority, Regulatory Authority or Third Party with respect to any
alleged or possible violation with respect to the Abstral NDA for such Laws,
(ii) no event has occurred or notification been received by Seller or its
Affiliates from any Governmental Authority, Regulatory Authority or Third Party
that would materially adversely affect the Abstral NDA or other Governmental
Authority or Regulatory Authority approval status of the Product in the
Territory or the renewal thereof, and (iii) no Governmental Authority or
Regulatory Authority has commenced, or, to Seller’s Knowledge, threatened to
initiate any action to withdraw its approval with respect to, or request the
recall of, the Product, or commenced or threatened to initiate any action to
enjoin the development, testing, manufacture, distribution, marketing, promotion
or sale of Abstral in the Territory.
Section 5.09.    Sale Practices. Seller and its Affiliates have materially
complied with applicable Law and not engaged in trade practices that are
inconsistent with the terms and conditions of the Transferred Contracts that
concern customer orders for the Product. Seller and its Affiliates have
processed all customer returns or chargebacks of Product consistent with the
terms and conditions of the applicable Transferred Contracts for six (6) months
prior to the Closing Date and are otherwise not in breach of the material terms
of such Transferred Contracts.
Section 5.10.    Financial Information. Attached as Schedule 5.10 is certain
financial information of Seller concerning the Product and its business related
thereto. Such financial information is true, correct and complete in all
material respects, has been prepared in accordance with the books and records of
Seller (which books and records are true, correct and complete in all material
respects) and is derived from Seller’s financial statements prepared in
accordance with GAAP for the applicable period.
Section 5.11.    Brokers or Finders. Except for Mizuho Securities USA Inc., no
agent, broker, investment banker or other firm or Person is or will be entitled
to any broker’s or finder’s fee or any other commission or similar fee in
connection with any of the transactions contemplated by this Agreement or the
Ancillary Agreements based upon arrangement made by or on behalf of Seller or
any of its Affiliates for which Purchaser will have any Liability.
Article VI    
COVENANTS OF SELLER
Seller hereby covenants and agrees as follows:
Section 6.01.    Access. From the date hereof until the Closing, Seller shall
give Purchaser and its representatives, employees, counsel and accountants
reasonable access, during normal business hours and upon reasonable advance
notice, to the Acquired Assets for purposes of conducting due diligence or
otherwise in connection with the transactions contemplated hereby; provided,
however, that such access (i) does not unreasonably disrupt the normal
operations of Seller or a Third Party, (ii) would not reasonably be expected to
violate any attorney-client privilege of Seller or violate any applicable Law,
and (iii) would not reasonably be expected to breach any duty of confidentiality
owed to any Person whether the duty arises contractually, statutorily or
otherwise.
Section 6.02.    Other Covenants. From the date hereof until the Closing, except
as otherwise contemplated by the terms of this Agreement or any Ancillary
Agreement, Seller will not without the prior written consent of Purchaser (such
consent not to be unreasonably withheld):
(a)    sell, assign, lease, license, transfer, hypothecate or otherwise dispose
of any of the Acquired Assets or, with respect to Abstral in the Territory, the
Licensed Intellectual Property;
(b)    amend, terminate, renew, extend or waive in writing any right under any
Transferred Contract if such amendment, termination, renewal, extension or
waiver would adversely affect the rights to be transferred to Purchaser at the
Closing; or
(c)    authorize, commit, or agree to take any of the foregoing actions.
Section 6.03.    Non-Competition. After the Closing, Seller shall not, and shall
cause its Affiliates to not, either directly or indirectly, for a period of five
(5) years after the Closing Date, (i) market, sell, distribute, export or import
a product containing the active pharmaceutical ingredient used in the Product
for any indication whatsoever in the Territory, whether branded or generic
(i.e., Seller and its Affiliates are prohibited from marketing, selling,
distributing, exporting or importing any AA or AB rated, therapeutically
equivalent product to the Product in the Territory) or (ii) supply the active
pharmaceutical ingredient used in the Product to a Third Party in order to allow
such Third Party to do any activity that would be prohibited for Seller or
Seller’s Affiliates under clause (i) above. The Parties recognize that the laws
and public policies of the various jurisdictions may differ as to the validity
and enforceability of covenants similar to the foregoing. It is the intention of
the Parties that the provisions of this Section 6.03 be enforced to the fullest
extent permissible under the laws and policies of each jurisdiction in which
enforcement may be sought and that the unenforceability (or the modification to
conform to such laws or policies) of any provisions of this Section shall not
render unenforceable or otherwise impair the remainder of the provisions of this
Section. Accordingly, if any provision of this Section is determined to be
invalid or unenforceable by a court of competent jurisdiction, then (x) such
invalidity or unenforceability shall be deemed to apply only with respect to the
operation of such provision in the particular jurisdiction of such court and not
with respect to any other provision or jurisdiction and, (y) with respect to
invalidity or unenforceability in the particular jurisdiction of such court,
such court shall have the power to either (A) reduce the scope, duration or
coverage of such provision or (B) replace such provision with a provision that
is valid and enforceable and that comes closest to expressing the intention of
the invalid or unenforceable provision. The Parties acknowledge and agree that
any remedy at law for any breach of the provisions of this Section would be
inadequate and, and such, Purchaser may enforce such provisions through
equitable relief and specific performance.
Section 6.04.    Use of Seller Names, NDC, UPC and Excluded Trademarks.
(a)    Seller grants a non-exclusive right and license to Purchaser for a period
of twenty (20) months following the Closing Date to use the names and logos of
Seller (the “Seller Names”), the Universal Product Code (“UPC”) for the Product,
Seller’s National Drug Code for the Product (the “NDC”), and the Excluded
Trademarks to the extent necessary to allow Purchaser and its Affiliates and
their designees to market, distribute and sell the Products in the Territory,
utilizing the labels and packaging, advertising, marketing, sales and
promotional materials, in each case, existing on the Closing Date. Subject to
the terms and conditions of this Section 6.04, the Parties agree that, promptly
following the Closing Date, Seller shall make commercially reasonable efforts to
assist Purchaser in establishing and listing Purchaser’s NDC for the Product.
(b)    Promptly upon the expiration of the period set forth in Section 6.04(a),
Purchaser shall, and shall cause its Affiliates to, destroy and dispose of all
labels and all packaging, advertising, marketing, sales and promotional
materials, in each case in its possession or subject to its control, bearing any
Seller Names, UPC, NDC or Excluded Trademarks.
(c)    In no event shall Purchaser use any Seller Names, UPC, NDC or Excluded
Trademarks in any manner or for any purpose different from the use of such
Seller Names, UPC, NDC and Excluded Trademarks by Seller and its Affiliates
immediately prior to the Closing Date to package, market, distribute and sell
the Product in the Territory, and at all times shall comply in all material
respects with Laws applicable thereto. Without limiting the foregoing, Purchaser
shall not: (i) take any action that may interfere with any of Seller’s rights in
the Seller Names, UPC, NDC and Excluded Trademarks; (ii) register or apply for
registrations, anywhere in the world, for the Seller Names or Excluded
Trademarks or any other similar trademark; or (iii) engage in any action which
disparages, dilutes the value of, or reflects negatively on the Seller Names or
the Excluded Trademarks, or take any other action which is detrimental to
Seller’s interest in the Seller Names or Excluded Trademarks.
(d)    Notwithstanding the foregoing, the Parties acknowledge that this
Agreement does not, and shall not, convey, transfer or assign any right, title
or interest in any trademark, name or logo of any third party or to Purchaser in
any Excluded Trademark, Seller Names, or any other intellectual property of
Seller except as specifically provided for herein.
Section 6.05.    Rebates and Chargebacks; Medicaid Reimbursements.
(a)    Subject to the obligations set forth in the Channel Liabilities Schedule,
(i) from and after the Closing Date and with respect to Abstral sold prior to
the Closing Date, Seller shall be responsible for any payments, rebates,
administrative fees or chargebacks due to customers under any managed care
contracts or under any other contract or program of any nature whatsoever with
private parties or under any state or federal program and (ii) rom and after the
Closing Date and with respect to Abstral sold on or after the Closing Date,
Purchaser shall be responsible for any payments, rebates, administrative fees or
chargebacks due to customers under any managed care contracts or under any other
contract or program of any nature whatsoever with private parties or under any
state or federal program.
(b)    Subject to the obligations set forth in the Channel Liabilities Schedule,
(i) Seller shall bear the cost of all Medicaid reimbursements and rebates for
Abstral sold prior to the Closing Date and (ii) Purchaser shall bear the cost of
all Medicaid reimbursements and rebates for Abstral sold on or after the Closing
Date. For the avoidance of doubt, Seller shall be entitled to any and all
Medicaid refunds, credits and other positive adjustments relating to the sale of
Abstral prior to the Closing Date, and Purchaser shall be entitled to any and
all Medicaid refunds, credits and other positive adjustments relating to the
sale of Abstral on or after the Closing Date.
Section 6.06.    Adverse Experience Reports and Complaints. As soon as
reasonably possible after the Closing Date, Seller shall deliver to Purchaser
electronic or other copies of Seller’s record of reportable adverse experiences
regarding Abstral. After the Closing Date, Seller shall promptly submit to
Purchaser all adverse drug experience information or customer complaints brought
to the attention of Seller in respect of Abstral, as well as any material events
and matters concerning or affecting the safety or efficacy of Abstral.
Notwithstanding the foregoing, from and after the Closing Date, Purchaser shall
have all responsibility for required reporting of adverse experiences for
Abstral and for responding to any medical inquiries or customer complaints about
Abstral.
Section 6.07.    PDUFA Fee. With respect to the fee paid by Seller pursuant to
the Prescription Drug User Fee Act (PDUFA) in respect of Abstral in the
aggregate amount of $803,740 which was paid by Seller prior to the Closing (the
“PDUFA Fee”), Purchaser shall reimburse Seller a pro-rata amount equal to
fifty-percent (50%) of the PDUFA Fee at the Closing totaling $351,636.
Section 6.08.    Outstanding Commitments to FDA. From and after the Closing,
Seller shall complete any outstanding commitments that Seller made to FDA prior
to Closing with respect to Abstral, namely providing a Final Response to FDA on
the issues identified in FDA Form 483 issued August 25, 2015 and a reconciled
Periodic Adverse Drug Experience Report (PADER) for the period ending January
2015.
Article VII    
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as follows:
Section 7.01.    Authority. Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the state of Delaware. Purchaser
has all requisite corporate power and authority to enter into this Agreement and
the Ancillary Agreements to which it is, or is specified to be, a party and to
consummate the transactions contemplated hereby and thereby. All corporate acts
and other proceedings required to be taken by Purchaser to authorize the
execution, delivery and performance of this Agreement and the Ancillary
Agreements to which it is, or is specified to be, a party and to consummate the
transactions contemplated hereby and thereby have been duly and properly taken.
This Agreement has been duly executed and delivered by Purchaser and, assuming
this Agreement has been duly authorized, executed and delivered by Seller,
constitutes, and the Other Acquisition Documents on the Closing Date will be
duly executed by Purchaser, and upon the due authorization, execution and
delivery by each other party to the Other Acquisition Documents, will constitute
a legal, valid and binding obligation of Purchaser, enforceable against
Purchaser in accordance with its terms, subject, as to enforcement, to
applicable bankruptcy, insolvency, moratorium, reorganization or similar laws
affecting creditors’ rights generally and to general equitable principles.
Section 7.02.    No Conflicts; Consents.
(a)    The execution and delivery of this Agreement by Purchaser does not, and
the execution and delivery by Purchaser of each other Ancillary Agreement to
which it is, or is specified to be, a party will not, and the consummation of
the transactions contemplated hereby and thereby and compliance with the terms
hereof and thereof will not, conflict with, or result in any violation of or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of any obligation, or
result in the creation of any Lien upon any of the properties or assets of
Purchaser under, any provision of (i) its certificate of incorporation or
by-laws (or the comparable governing instruments), (ii) any Contract to which
Purchaser is a party or by which any of its properties or assets are bound, or
(iii) any judgment, order, or decree, or, subject to the matters referred to in
Section 7.02(b) below, any Law applicable to Purchaser or its properties or
assets, other than, in the case of clause (i) and (ii) above, any such items
that would not be reasonably likely, individually or in the aggregate, to have a
material adverse effect on the ability of Purchaser to consummate the
Acquisition.
(b)    No consent, approval, license, permit, order or authorization of, or
registration, declaration or filing with, any Governmental or Regulatory
Authority is required to be obtained or made by or with respect to Purchaser in
connection with the execution, delivery and performance of this Agreement, the
Ancillary Agreements or the consummation of the transactions contemplated hereby
or thereby, other than such consents, approvals, licenses, permits, orders,
authorizations, registrations, declarations and filings the absence of which, or
the failure to make which, individually or in the aggregate, (i) would not be
reasonably likely to have a material adverse effect on the ability of Purchaser
to consummate the Acquisition or perform its obligations under this Agreement or
the Ancillary Agreements, and (ii) would not give rise to any liability of
Seller or any of its Affiliates as a result of the consummation of the
Acquisition.
Section 7.03.    Litigation. As of the date hereof, there are no (a) outstanding
judgments, orders, injunctions or decrees of any Governmental or Regulatory
Authority or arbitration tribunal against Purchaser, (b) lawsuits, actions or
proceedings pending or, to the knowledge of Purchaser, threatened against
Purchaser, or (c) investigations by any Governmental or Regulatory Authority
which are pending or, to the knowledge of Purchaser, threatened against
Purchaser, which, in the case of each of clauses (a), (b) and (c), have had or
would be reasonably likely to have a material adverse effect on the ability of
Purchaser to consummate the Acquisition and the other transaction contemplated
by this Agreement and the Ancillary Agreements.
Section 7.04.    Availability of Funds. Purchaser has, and will have at the
Closing, cash available or has existing committed borrowing facilities, which
together are sufficient to enable it to consummate the Acquisition.
Section 7.05.    Brokers or Finders. Except for Velocity Health Securities,
Inc., no agent, broker, investment banker or other firm or Person is or will be
entitled to any broker’s or finder’s fee or any other commission or similar fee
in connection with any of the transactions contemplated by this Agreement or the
Ancillary Agreements based upon arrangement made by or on behalf of Purchaser or
any of its Affiliates.
Article VIII    
COVENANTS OF PURCHASER
Purchaser hereby covenants and agrees as follows:
Section 8.01.    Advise Seller. Purchaser shall promptly advise Seller in
writing of any change or event occurring between the date hereof and the Closing
Date which Purchaser believes (i) would be reasonably likely to result in the
failure of any of the conditions to the Closing set forth in ARTICLE IV to be
satisfied as of the Closing Date, or (ii) would be reasonably likely,
individually or in the aggregate, to have a material adverse effect on the
ability of Purchaser to consummate the Acquisition or the other transactions
contemplated by this Agreement and the Ancillary Agreements.
Section 8.02.    Access to Information. Purchaser acknowledges that it and its
representatives have received or been afforded the opportunity to review prior
to the date hereof all written materials which Seller was required to deliver or
make available, as the case may be, to Purchaser pursuant to this Agreement on
or prior to the date hereof. Purchaser acknowledges that it and its
representatives have been permitted full and complete access to the books and
records, facilities, equipment, Contracts and other properties and assets of
Seller and its Affiliates to the extent relating to the Products, the Acquired
Assets or the Assumed Liabilities in the Territory that it and its
representatives have desired or requested to see or review, and that it and its
representatives have had a full opportunity to meet with the officers and
employees of Seller and its Affiliates to discuss Abstral, the Acquired Assets
and the Assumed Liabilities.
Section 8.03.    Records. Purchaser shall, from the date hereof until the date
that is five (5) years following the Closing Date, keep full and accurate books
of all accounts and other records in sufficient detail so that the Annual Sales
Milestones payable hereunder can be properly and fully ascertained. Purchaser
shall, at the request of Seller, permit a nationally recognized independent
certified public accountant mutually agreed to by Seller and Purchaser (the
“Independent Auditor”) to have access during ordinary business hours, to such
books and records as may be necessary to determine the accuracy of any payment
made under this Agreement or to obtain information as to Annual Sales Milestones
payable in case of failure to pay pursuant to the terms of this Agreement
(“Milestone Audit”). The Independent Auditor shall be bound by a confidentiality
agreement to keep all information acquired from Purchaser confidential, and
shall be permitted to disclose to Seller only the amount and accuracy of the
Annual Sales Milestones actually paid or otherwise payable under this Agreement.
At all times during the Milestone Audit, the Independent Auditor will (i) not
communicate with either Party without both Parties being present, and (ii) send
copies of its written reports, whether interim or final, to both Parties at the
same time. Seller shall be responsible for the fees and expenses of the
Independent Auditor; provided, however, that Purchaser shall reimburse Seller in
full for all such documented costs and expenses of the Independent Auditor if
the Independent Auditor determines that an Annual Sales Milestone was not paid
accurately or timely, as applicable.
Section 8.04.    DISCLAIMER. PURCHASER ACKNOWLEDGES THAT (A) EXCEPT AS EXPRESSLY
SET FORTH IN ARTICLE V OR IN ANY ANCILLARY AGREEMENT, NEITHER SELLER NOR ANY
OTHER PERSON HAS MADE ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO
ABSTRAL, THE ACQUIRED ASSETS OR THE ASSUMED LIABILITIES, THE MANUFACTURE,
DISTRIBUTION, MARKETING OR SALE OF ABSTRAL BY SELLER AND ITS AFFILIATES, ANY
OTHER ASPECT OF THE RESPECTIVE BUSINESSES OF SELLER OR ITS AFFILIATES OR THE
ACCURACY OR COMPLETENESS OF ANY INFORMATION REGARDING ABSTRAL, THE ACQUIRED
ASSETS OR THE ASSUMED LIABILITIES FURNISHED OR MADE AVAILABLE TO PURCHASER AND
ITS REPRESENTATIVES, AND (B) PURCHASER HAS NOT RELIED ON ANY REPRESENTATION OR
WARRANTY FROM SELLER OR ANY OTHER PERSON WITH RESPECT TO ABSTRAL, THE ACQUIRED
ASSETS OR THE ASSUMED LIABILITIES, ANY OTHER ASPECT OF THE RESPECTIVE BUSINESSES
OF SELLER OR ITS AFFILIATES OR THE ACCURACY OR COMPLETENESS OF ANY INFORMATION
REGARDING ABSTRAL, THE ACQUIRED ASSETS OR THE ASSUMED LIABILITIES FURNISHED OR
MADE AVAILABLE TO PURCHASER AND ITS REPRESENTATIVES IN DETERMINING TO ENTER INTO
THIS AGREEMENT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET
FORTH IN ARTICLE V AND IN THE ANCILLARY AGREEMENT, AND PURCHASER ACKNOWLEDGES
THAT NONE OF SELLER OR ANY OTHER PERSON SHALL HAVE OR BE SUBJECT TO ANY
LIABILITY TO PURCHASER OR ANY OTHER PERSON RESULTING FROM THE DISTRIBUTION TO
PURCHASER, OR PURCHASER’S USE OF, ANY SUCH INFORMATION, OR OF ANY INFORMATION,
DOCUMENTS OR MATERIAL MADE AVAILABLE TO PURCHASER AND ITS REPRESENTATIVES IN
CERTAIN VIRTUAL OR PHYSICAL “DATA ROOMS”, VISITS TO PHYSICAL PREMISES INCLUDING
THOSE OF THIRD PARTY MANUFACTURERS, OR IN ANY OTHER FORM IN EXPECTATION OF THE
TRANSACTIONS CONTEMPLATED HEREBY. PURCHASER ACKNOWLEDGES THAT, SHOULD THE
CLOSING OCCUR, EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT OR IN ANY OTHER
ANCILLARY AGREEMENT, PURCHASER SHALL ACQUIRE THE ACQUIRED ASSETS WITHOUT ANY
REPRESENTATION OR WARRANTY AS TO MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE, IN AN “AS IS” CONDITION AND ON A “WHERE IS” BASIS.
Article IX    
MUTUAL COVENANTS
Section 9.01.    Efforts.
(g)    Subject to the terms and conditions of this Agreement, following the date
hereof, each Party shall use its commercially reasonable efforts to cause the
Closing to occur as soon as practicable thereafter. Following the date hereof,
each of Seller and Purchaser shall not, and shall not permit any of their
respective Affiliates to, take any action that would, or that would reasonably
be expected to, result in any of the conditions set forth in ARTICLE IV not
being satisfied. This Section 9.01 shall not, and shall not be deemed to,
restrict or prohibit Seller or Purchaser in any way whatsoever from exercising
any and all rights and remedies available to it under this Agreement or any of
the Ancillary Agreements.
(h)    Each of Seller and Purchaser shall cooperate with the other Party and its
employees, legal counsel, accountants and other representatives and advisers in
connection with the steps required to be taken as part of their respective
obligations under this Agreement; and each of them shall, at any time and from
time to time after the Closing, upon the reasonable request of the other, do,
execute, acknowledge and deliver, or cause to be done, executed, acknowledged
and delivered, all such further acts, deeds, assignments, transfers,
conveyances, receipts, acknowledgments, acceptances and assurances as may be
reasonably required (without incurring unreimbursed expense) to satisfy and
perform the obligations of such party hereunder, and to allow Purchaser to
accomplish the Intended Use of Abstral in the Territory after the Closing.
(i)    In the event Purchaser, on the one hand, makes a payment in respect of an
Excluded Liability, or Seller, on the other hand, makes a payment in respect of
an Assumed Liability as set forth in Section 2.02 of this Agreement, which
ultimately is determined to be the responsibility of the other Party in
accordance with Section 2.02 hereof, the other Party shall reimburse the Party
which made the erroneous payment within fifteen (15) days after the receipt of
an invoice containing supporting detail for such payment. In the event
Purchaser, on the one hand, received a payment in respect of an Acquired Asset,
or Seller, on the other hand, receives a payment in respect of an asset of
Seller which is not an Acquired Asset as set forth in Section 2.01 of this
Agreement, which ultimately is determined to be a receivable of the other Party
in accordance with Section 2.01 hereof, the Party which received the erroneous
payment shall remit such amount to the other Party within fifteen (15) days
after the receipt of such payment.
Section 9.02.    Bulk Transfer Laws. Purchaser hereby waives compliance by
Seller and its Affiliates with the provisions of any so-called “bulk transfer
law” of any jurisdiction in connection with the sale of the Acquired Assets to
Purchaser.
Section 9.03.    Transfer Taxes. All transfer, documentary, sales, use, stamp,
registration and other such Taxes, applicable to the Acquisition and to the use,
sale and manufacture of the Product on or after the Closing Date (such Taxes,
together with any interest, penalties and additions thereto, collectively,
“Transfer Taxes”), shall be paid by Purchaser. Purchaser shall file all
necessary Tax Returns and other documentation required to be filed by it under
applicable Law with respect to all Transfer Taxes, and, if required by
applicable Law, Seller will, and will cause its Affiliates to, join in the
execution of any such Tax Returns and other documentation. Purchaser and Seller
shall cooperate in providing each other with any appropriate resale exemption
certifications and other similar documentation required to obtain any exemption
from (or reduction in) Transfer Taxes, and shall cooperate in taking any
commercially reasonable steps to minimize the Parties’ liability for Transfer
Taxes.
Section 9.04.    Purchase Price Allocation.
(a)    The Parties agree that the Purchase Price and Assumed Liabilities shall
be allocated among the Acquired Assets sold by Seller and each Selling Affiliate
and purchased by Purchaser in a manner consistent with Section 1060 of the Code
and the Treasury Regulations promulgated thereunder (and corresponding
provisions of applicable foreign Law) and in accordance with an allocation
schedule set forth by Seller and delivered to Purchaser within ninety (90) days
after Closing (the “Allocation”), which Allocation shall be reasonably
acceptable to Purchaser. In the event of a disagreement, a nationally recognized
independent accounting firm mutually acceptable to Purchaser and Seller shall
settle such dispute with the costs of such firm being borne equally by Seller
and Purchaser.
(b)    Purchaser and Seller agree to (i) be bound by the Allocation, (ii) act in
accordance with the Allocation in the preparation of financial statements and
filing of all Tax Returns (including filing Form 8594 with its federal income
Tax Return for the taxable year that includes the Closing Date), and (iii) take
no position inconsistent with the Allocation for all Tax purposes. In the event
that any Taxing Authority disputes the Allocation, Seller or Purchaser, as the
case may be, shall promptly notify the other Party of the nature of such
dispute.
Section 9.05.    Recordation of Transferred Intellectual Property. Purchaser
shall be responsible, at its sole cost and expense, for all applicable
recordations of the assignment of the Transferred Intellectual Property. Seller
agrees to execute and deliver to Purchaser, within a reasonable time after the
Closing, such assignments and other documents, certificates and instruments
reasonably requested by Purchaser for Purchaser’s filing with the applicable
registries and other recording authorities to record the transfer of the
Transferred Intellectual Property in accordance with applicable Law.
Section 9.06.    Confidentiality and Confidential Information.
(a)    Each Party acknowledges that it may receive Confidential Information of
the other Party in the performance of or in furtherance of this Agreement. Each
Party shall hold confidential and not, directly or indirectly, disclose or
publish to any Third Party or use for the benefit of a Third Party or, except in
carrying out its duties hereunder, itself or its Affiliates, any Confidential
Information of the other Party, without first having obtained the furnishing
Party’s written consent to such disclosure or use. Purchaser acknowledges that
it continues to remain bound by the terms of the Mutual Confidential Disclosure
Agreement between the Parties dated July 27, 2015 (“Confidentiality Agreement”),
and that Confidential Information received by it under or in connection with
this Agreement and the performance of its obligations hereunder shall be deemed
to be, and shall be treated as, Evaluation Materials under the Confidentiality
Agreement. These restrictions shall not apply to any Confidential Information
which:
(i)    is known to the receiving Party or its Affiliates prior to the time of
disclosure to it;
(ii)    is independently developed by employees, agents, or independent
contractors of the receiving Party or its Affiliates without aid or use of the
disclosing Party’s Confidential Information (and such independent development
can be demonstrated by the receiving Party);
(iii)    is disclosed, without restriction as to confidentiality, to the
receiving Party or its Affiliates by a Third Party that has a right to make such
disclosure; or
(iv)    becomes part of the public domain through no breach by the receiving
Party of its obligations under this Agreement or any Ancillary Agreement.
Each receiving Party shall disclose Confidential Information of the disclosing
Party only to those employees and contractors of such Party and of its
Affiliates who have reason to know such information in furtherance of a Party’s
duties under this Agreement and who are bound by an obligation of
confidentiality to the receiving Party (or its Affiliate) that is no less
stringent than the confidentiality obligations set forth in this Section 9.06.
(b)    The receiving Party shall also be entitled to disclose the other Party’s
Confidential Information that is required to be disclosed: (i) to or by any
Governmental or Regulatory Authorities; (ii) to comply with applicable Laws
(including, without limitation, to comply with SEC or any other stock exchange
disclosure requirements); (iii) to comply with judicial process or an order of
any Governmental or Regulatory Authority of competent jurisdiction; or (iv) to
defend or prosecute litigation; provided, however, that in each case the Party
required to disclose such Confidential Information shall use reasonable efforts
to notify the other Party in advance of such disclosure and shall provide the
disclosing Party with reasonable assistance to obtain a protective order and/or
confidential treatment of such Confidential Information, to the extent
available, and thereafter only discloses the minimum Confidential Information
required to be disclosed in order to ensure legal compliance.
(c)    This obligations set forth in this Section 9.06 shall survive the
termination of this Agreement or the Closing for five (5) years. Upon
termination of this Agreement, a receiving Party shall return to the disclosing
Party or destroy all Confidential Information provided to it by the disclosing
Party, including all copies, notes and extracts thereof or other written records
containing such Confidential Information, except for (x) one (1) copy that it
may keep for the sole purpose of verifying its continuing confidentiality
obligations hereunder and (y) archival copies residing on computers, servers or
other devices in the ordinary course of business; provided, however, that
Purchaser shall not be obligated hereby to return or destroy any Confidential
Information that constitutes Acquired Assets actually purchased by it hereunder
and, upon such purchase, such Acquired Assets shall be deemed the Confidential
Information of Purchaser notwithstanding the Confidentiality Agreement or any
obligations thereunder.

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Article X    
INDEMNIFICATION
Section 10.01.    Indemnification by Seller. From and after the Closing, Seller
shall defend, indemnify and hold harmless Purchaser, its Affiliates and their
respective employees, agents, officers and directors (collectively, the
“Purchaser Indemnitees”), from and against any and all losses, liabilities,
obligations, claims, fees (including, without limitation, reasonable documented
attorneys’ fees and documented fees of other professionals), expenses and
lawsuits (“Losses”) suffered or incurred by any Purchaser Indemnitee to the
extent arising from or relating to any of the following:
(c)    the breach of any representation or warranty of Seller contained in
ARTICLE V, any Ancillary Agreement or any certificate delivered hereunder;
(d)    the breach of or failure to comply with any covenant or obligation of
Seller under this Agreement or any Ancillary Agreement;
(a)    the development, testing, manufacture, distribution, marketing, promotion
or sale of Abstral in the Territory prior to the Closing (including, without
limitation, any product recalls and any product liability claim for any sale by
Seller of Abstral prior to the Closing Date); and
(b)    the Excluded Liabilities.
Section 10.02.    Indemnification by Purchaser. From and after the Closing,
Purchaser shall defend, indemnify and hold harmless Seller, its Affiliates and
their respective employees, agents, officers and directors (collectively, the
“Seller Indemnitees”), from and against any and all Losses suffered or incurred
by any Seller Indemnitee to the extent arising from or relating to any of the
following:
(a)    the breach of any representation or warranty of Purchaser contained in
ARTICLE VII, any Ancillary Agreement or any certificate delivered hereunder;
(b)    the breach of any covenant of Purchaser contained in this Agreement or
any Ancillary Agreement;
(c)    any Assumed Liability;
(d)    the development, testing, manufacture, distribution, marketing, promotion
or sale of Abstral in the Territory on or after the Closing (including, without
limitation, any product recalls and any product liability claim for any sale of
Abstral by Purchaser on or after the Closing Date);
(e)    any Transfer Taxes; and
(f)    any Liabilities accruing on or after the Closing Date and arising from
Purchaser’s ownership of the Acquired Assets related to any Continued Agreement
for the

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period between the Closing Date and the expiration of the applicable
Continuation Period, except to the extent otherwise specified in Schedule
2.02(b) (Channel Liabilities).
Section 10.03.    Indemnification Procedure.
(a)    Procedures Relating to Indemnification for Third Party Claims. In order
to receive the benefits of the indemnity under Section 10.01 or Section 10.02,
as applicable, in respect of, arising out of or involving a claim or demand made
by any Third Party (a “Third Party Claim”) against a Purchaser Indemnitee or
Seller Indemnitee (either, an “Indemnitee”), such Indemnitee must:
(i)    give the indemnifying Party (the “Indemnitor”) written notice of any
claim or potential claim promptly after the Indemnitee receives notice thereof;
provided, however, that failure of the Indemnitee to provide such notice shall
not constitute a waiver of, or result in the loss of, such Party’s right to
indemnification under this Agreement, except in the event that the Indemnitor’s
rights, and/or its ability to defend against or settle such claim or potential
claim, are materially prejudiced by such failure to notify;
(ii)    allow the Indemnitor to assume the control of the defense and settlement
(including all decisions relating to litigation, defense and appeal) of any
such claim, provided that: (A) no such settlement may materially adversely
affect the rights or obligations of the Indemnitee under this Agreement without
the Indemnitee’s prior written consent; and (B) any settlement reached without
the prior written consent of the Indemnitee shall be for monetary damages only
(which amount shall be fully indemnified hereunder by the Indemnitor) and not
for any equitable relief and shall not include any admission or ongoing
obligation or restriction on the part of the Indemnitee; and
(iii)    reasonably cooperate with the Indemnitor in its defense of the claim
(including, without limitation, making documents and records available for
review and copying and making persons within the Indemnitee’s control available
for pertinent interview and testimony), so long as such cooperation does not
vitiate any legal privilege to which such Indemnitee is entitled.
If the Indemnitor defends the claim, the Indemnitee may at its expense and using
attorneys of its choice, participate in, but shall not have any control of, the
defense of such claim. The Indemnitor shall have no liability under this ARTICLE
X as to any claim for which settlement or compromise of such claim, or an offer
of settlement or compromise of such claim, is made by an Indemnitee without the
prior written consent of the Indemnitor.
Section 10.04.    Procedures Related to Indemnification for Other Claims. An
Indemnitee seeking indemnification under Section 10.01 or Section 10.02, as
applicable, that does not involve a Third Party Claim shall, within as soon as
reasonably practicable deliver to the Indemnitor, written notice (a “Direct
Claim Notice”) describing in reasonable detail the facts giving rise to the
indemnification claim; provided, however, that the failure by any
Indemnitee to so notify the Indemnitor shall not relieve the Indemnitor from any
liability which it may have to such Indemnitee under Section 10.01 or Section
10.02, as applicable, except to the extent that the Indemnitor has been
materially prejudiced by such failure. The Indemnitor shall have thirty (30)
days after its receipt of a Direct Claim Notice to (i) agree to the amount set
forth in the Direct Claim Notice and pay such amount to such Indemnitee in
immediately available funds or (ii) provide such Indemnitee with written notice
that it disputes its obligation to provide the indemnification sought in the
Direct Claim Notice (a “Claim Dispute Notice”). If the Indemnitor does not
notify the Indemnitee within forty-five (45) days following its receipt of such
notice that Indemnitor disputes its liability to the Indemnitee with respect to
such claim, such claim specified in the Direct Claim Notice shall be
conclusively deemed a liability of the Indemnitor. If the Indemnitor delivers a
Claim Dispute Notice, the Indemnitee and the Indemnitor shall negotiate in good
faith to resolve the matter. In the event that the controversy is not resolved
within twenty (20) Business Days after the giving of the Claim Dispute Notice,
the Parties thereafter may pursue any and all available remedies at law (subject
to the limitations and conditions provided in this Agreement).
Section 10.05.    Losses Net of Insurance. The amount of any Loss for which
indemnification is provided under this ARTICLE X shall be net of any amounts
recovered by the Indemnitee under insurance policies or in respect of any
indemnity or contribution with respect to such Loss.
Section 10.06.    Limitation on Indemnification.
(a)    Notwithstanding anything to the contrary herein, except with respect to
fraud or intentional misrepresentation, (i) Seller shall not have any liability
under Section 10.01(a) unless the aggregate of all Losses for which Seller would
be liable under Section 10.01(a), but for this clause (i), exceeds on a
cumulative basis, an amount equal to fifty thousand dollars ($50,000), and then
only to the extent of any such excess, and (ii) Seller’s aggregate liability
under Section 10.01(a) shall in no event exceed, on a cumulative basis, an
amount equal to four million dollars ($4,000,000).
(b)    Following the Closing, the Parties’ rights to indemnification pursuant to
this ARTICLE X shall, except for equitable relief and specific performance of
covenants that survive Closing, be the sole and exclusive remedy available to
the Parties with respect to any matter arising under or in connection with this
Agreement or the transactions contemplated hereby, other than for claims of
fraud. Purchaser hereby waives, from and after the Closing Date, to the fullest
extent permitted under applicable Law, any and all rights, claims and causes of
action it or any of its Affiliates may have against Seller and its Affiliates
arising under or based upon this Agreement, the Ancillary Agreements, any
document or certificate delivered in connection herewith, the Products, the
Acquisition, the Acquired Assets and the Assumed Liabilities, or any federal,
state, local or foreign statute, law, ordinance, rule or regulation or otherwise
(except pursuant to the indemnification provisions set forth in this ARTICLE X).
(c)    NOTWITHSTANDING ANY PROVISION HEREIN, NEITHER SELLER NOR PURCHASER SHALL
IN ANY EVENT BE LIABLE TO THE OTHER PARTY OR ANY INDEMNITEE ON ACCOUNT OF ANY
INDEMNITY OBLIGATION SET FORTH IN SECTION 10.01 OR SECTION 10.02 FOR ANY
INDIRECT, CONSEQUENTIAL, SPECIAL, INCIDENTAL OR PUNITIVE DAMAGES (EXCEPT TO THE
EXTENT THE PARTY OR INDEMNITEE IS REQUIRED TO PAY SUCH TYPES OF DAMAGES TO A
THIRD PARTY), INCLUDING LOSS OF FUTURE REVENUE OR INCOME, LOSS OF BUSINESS
REPUTATION OR OPPORTUNITY RELATING TO THE BREACH OR ALLEGED BREACH OF THIS
AGREEMENT, OR DIMINUTION OF VALUE OR ANY DAMAGES BASED ON ANY TYPE OF MULTIPLE.
Section 10.07.    Termination of Indemnification.
(a)    The obligations to indemnify and hold harmless an Indemnitee pursuant to
(i) Section 10.01(a) and Section 10.02(a), shall terminate when the applicable
representation or warranty terminates pursuant to Section 10.07(b) below, and
(ii) the other clauses of Section 10.01 and Section 10.02, shall not terminate;
provided, however, that as to foregoing clause (i) such obligations to indemnify
and hold harmless shall not terminate with respect to any item as to which the
Indemnitee or the related Party thereto shall have, before the expiration of the
applicable period, previously made a claim by delivering a notice of such claim
(stating in reasonable detail the basis of such claim) to the indemnifying
Party.
(b)    The representations and warranties of Seller contained in ARTICLE V shall
survive the Closing solely for purposes of Section 10.01(a) and shall terminate
at the close of business on the date occurring eighteen (18) months following
the Closing Date (other than the representations and warranties of Seller
contained in Section 5.01, Section 5.02, Section 5.03, and Section 5.08, which
shall survive indefinitely), and the representations and warranties of Purchaser
contained in ARTICLE VII shall survive the Closing solely for purposes of
Section 10.02(a) and shall terminate at the close of business on the nine-month
anniversary following the Closing Date (other than with respect to those
representations and warranties of Purchaser contained in Section 7.01, Section
7.02 and Section 7.05, which shall survive indefinitely).
Section 10.08.    Tax Treatment of Indemnification Payments. For all Tax
purposes, each of Purchaser, Seller and their respective Affiliates agrees to
treat any indemnity payment under this Agreement as an adjustment to the
Purchase Price received by Seller for the transactions contemplated by this
Agreement unless a final determination (as defined in Section 1313 of the Code)
provides otherwise.
Section 10.09.    No Double Recovery. Neither Party shall be entitled to recover
the same or duplicative damages with respect to the same breach from the other
Party under more than one of this Agreement and the Ancillary Agreements. For
the purposes of this Section 10.10, each Party shall be deemed to have made and
received all payments made and received by its Affiliates.
Article XI    
TERMINATION
Section 11.01.    Termination. [Intentionally Omitted]
Article XII    
MISCELLANEOUS
Section 12.01.    Assignment. Except as otherwise expressly permitted by this
Agreement, neither Party shall assign or otherwise transfer this Agreement or
any interest herein or right hereunder without the prior written consent of the
other Party, and any such purported assignment, transfer or attempt to assign or
transfer any interest herein or right hereunder shall be void and of no effect;
provided, however, that, following the Closing, either Party shall have the
right, without such consent, on written notice to the other Party, to assign all
of its rights and obligations hereunder to a successor to all or substantially
all of such Party’s business or assets, or to a successor of that portion of
such Party’s business to which this Agreement relates, in each case whether by
way of merger, sale of stock, sale of assets or other transaction (or series of
related transactions), provided, further, that in the case of an assignment by
Purchaser in either of the foregoing cases, Purchaser shall provide notice to
Seller containing the name and contact information of the assignee, and any
assignee shall expressly agree to assume Purchaser’s obligations pursuant to
this Agreement, including, the applicable payment obligations under Section
3.02. Subject to the foregoing, this Agreement will be binding upon and inure to
the benefit of the Parties and their respective successors and permitted
assigns.
Section 12.02.    Non-Waiver. Any failure on the part of a Party to enforce at
any time or for any period of time any of the provisions of this Agreement shall
not be deemed or construed to be a waiver of such provisions or of any right of
such Party thereafter to enforce each and every such provision on any succeeding
occasion or breach thereof.
Section 12.03.    No Third-Party Beneficiaries. This Agreement is for the sole
benefit of the Parties and their successors and permitted assigns and the
Indemnitees, and nothing herein express or implied shall give or be construed to
give to any Person, other than the Parties and such successors and permitted
assigns and the Indemnitees, any legal or equitable rights hereunder.
Section 12.04.    Severability. If any term or other provision of this Agreement
is determined to be invalid, illegal or incapable of being enforced by any rule
of Law or public policy, all other terms and provisions of the Agreement shall
remain in full force and effect. Upon such determination, the Parties shall
negotiate in good faith to modify this Agreement so as to give effect to the
original intent of the Parties to the fullest extent permitted by applicable
Law.
Section 12.05.    Entire Agreement; Amendments. This Agreement, together with
the Ancillary Agreements (in each case, following execution and delivery
thereof), contains the entire understanding of the Parties with respect to the
subject matter hereof and thereof and supersedes all previous and
contemporaneous verbal and written understandings, agreements, representations
and warranties with respect to such subject matter or on which the Parties may
have relied. This Agreement may not be amended, supplemented or modified except
by an instrument in writing signed on behalf of each Party. No waiver of any
provision of this Agreement shall be valid unless the waiver is in writing and
signed by the waiving Party.
Section 12.06.    Notices. Unless otherwise explicitly set forth herein, any
notice required or permitted to be given hereunder shall be in writing and shall
be delivered personally by hand, or sent by reputable overnight courier,
signature required, to the addresses of each Party set forth below or to such
other address or addresses as shall be designated in writing in the same matter:
(a)    If to Purchaser:
Sentynl Therapeutics, Inc.
265 Santa Helena, Suite 208
Solana Beach, CA 92075
Attention: Chief Executive Officer
with a copy (which shall not constitute notice) to:
Pillsbury Winthrop Shaw Pittman LLP
12255 El Camino Real, Suite 300
San Diego, CA, 92130
Attention: Christian Salaman

(b)    If to Seller:
Galena Biopharma, Inc.
2000 Crow Canyon Place, Suite 380
San Ramon, CA 94583
Attention: Chief Executive Officer
Facsimile:
with a copy (which shall not constitute notice) to:
Fredrikson & Byron, P.A.
200 South Sixth Street, Suite 4000
Minneapolis, MN 55402
Attention:    Christopher J. Melsha
Facsimile:    (612) 492-7077
All notices shall be deemed given when received by the addressee.
Section 12.07.    Public Announcements. Neither Party shall make any public
announcement regarding this Agreement, or the subject matter contained herein,
without the prior written consent of the other Party (which consent will not be
unreasonably withheld, conditioned or delayed by such other Party), except to
the extent required to be disclosed (i) to or by any Governmental or Regulatory
Authorities; (ii) to comply with applicable Laws (including, without limitation,
to comply with SEC or stock exchange disclosure requirements), or (iii) to
comply with judicial process or an order of any Governmental or Regulatory
Authority of competent jurisdiction; provided, however, that in each case the
Party required to disclose such information shall endeavor to give the other
Party reasonable advance notice and review of any such disclosure.
Notwithstanding the foregoing, the Parties shall coordinate on a mutually
acceptable press release to be issued by Seller in connection with the execution
of this Agreement, which complies with applicable Laws (including, without
limitation, SEC and stock exchange disclosure requirements).
Section 12.08.    Governing Law; Forum. This Agreement will be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the principles of conflicts of law thereof. Any judicial proceeding brought
with respect to this Agreement must be brought in any court of competent
jurisdiction in the State of Delaware, and, by execution and delivery of this
Agreement, each Party (a) accepts, generally and unconditionally, the exclusive
jurisdiction of such courts and any related appellate court, and irrevocably
agrees to be bound by any judgment rendered thereby in connection with this
Agreement, and (b) irrevocably waives any objection it may now or hereafter have
as to the venue of any such suit, action or proceeding brought in such a court
or that such court is an inconvenient forum.
Section 12.09.    WAIVER OF JURY TRIAL. EACH PARTY ACKNOWLEDGES AND AGREES THAT
ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT OR THE OTHER TRANSACTION
DOCUMENTS IS LIKELY TO INVOLVE COMPLICATED ISSUES AND, THEREFORE BUT ONLY TO THE
EXTENT PERMITTED BY APPLICABLE LAW, EACH SUCH PARTY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER
TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH
PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF
ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION,
(B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY
MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO
THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 12.09.
Section 12.10.    Expenses. Whether or not the transactions contemplated hereby
are consummated, and except as otherwise specifically provided in this
Agreement, all costs and expenses incurred in connection with this Agreement and
the transactions contemplated hereby shall be paid by the Party incurring such
costs or expenses.
Section 12.11.    Relationship of the Parties. In making and performing this
Agreement, the Parties are acting, and intend to be treated, as independent
entities and nothing contained in this Agreement shall be construed or implied
to create an agency, partnership, joint venture, or employer and employee
relationship between Seller and Purchaser or any of their respective Affiliates.
Except as otherwise expressly provided herein, neither Party may act on behalf
of the other Party, and neither Party may make (or has any authority to make)
any representation, warranty or commitment, whether express or implied, on
behalf of the other Party or incur any charges or expenses for or in the name of
the other Party. No Party shall be liable for the act of any other Party unless
such act is expressly authorized in writing by both Parties. The relationship of
the Parties under this Agreement is, and is intended to be, one of independent
contractors hereunder.
Section 12.12.    Counterparts. This Agreement shall become binding when any one
or more counterparts hereof, individually or taken together, shall bear the
signatures of each of the Parties. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original as against the Party
whose signature appears thereon, but all of which taken together shall
constitute but one and the same instrument. A signed copy of this Agreement
delivered by facsimile, e-mail or other means of electronic transmission shall
be deemed to have the same legal effect as delivery of an original signed copy
of this Agreement.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Parties have caused this Asset Purchase Agreement to be
duly executed as of the date first written above.
SELLER:
GALENA BIOPHARMA, INC.

/S/ Mark W. Schwartz    
Name: Mark W. Schwartz
Title: President & CEO

PURCHASER:
SENTYNL THERAPEUTICS, INC.

/S/ Matt Heck    
Name: Matt Heck
Title: CEO

[Signature page to Asset Purchase Agreement]

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