Exhibit 10.1

 

Execution Version

 

 

 

AMENDED AND RESTATED

ASSET PURCHASE AGREEMENT

 

by and among

 

RISING PHARMACEUTICALS, INC.,

PACK PHARMACEUTICALS, LLC,

RISING HEALTH, LLC,
and
ACETRIS HEALTH, LLC,

 

collectively, as Sellers,

 

ACETO CORPORATION,

 

as Parent,

 

and

 

SHORE SUVEN PHARMA, INC.,

 

as Buyer

 

Dated as of March 31, 2019

 

 

 

 

 

 

TABLE OF CONTENTS

 

    Page       ARTICLE I PURCHASE AND SALE 2         1.1 Purchased Assets 2    
    1.2 Excluded Assets 3         1.3 Assumed Liabilities 5         1.4 Excluded
Liabilities 6         1.5 Assignments; Cure Amounts 8         1.6 Bulk Sales
Laws 9         1.7 Inventory 10       ARTICLE II PURCHASE PRICE 10         2.1
Purchase Price 10         2.2 Closing Date Payment 10         2.3 Good Faith
Deposit 11         2.4 Allocation of Purchase Price 12         2.5 Closing Date
13         2.6 Deliveries of Buyer 13         2.7 Deliveries of Sellers 13      
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLERS 15         3.1
Organization 15         3.2 Authority Relative to this Agreement; Consents and
Approvals; No Violation 15         3.3 Financial Statements 16         3.4
Compliance with Law; Permits 17         3.5 Environmental Matters 18         3.6
Employee Benefit Plans 18         3.7 Absence of Certain Changes or Events 19  
      3.8 Litigation 19         3.9 Tax Matters 19         3.10 Employment and
Labor Matters 20         3.11 Real Property 21         3.12 Intellectual
Property 21         3.13 Material Contracts 22         3.14 Suppliers and
Customers 24         3.15 Certain Regulatory Matters 24

 

 -i- 

 

 

  3.16 Products; Product Liability 25         3.17 Product Distribution
Practices 26         3.18 Product Registrations; Regulatory Compliance 26      
  3.19 Purchased Assets 27         3.20 Inventory 27         3.21 Receivables 27
        3.22 Finders or Brokers 28         3.23 No Other Representations or
Warranties 28       ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT 28      
  4.1 Organization 28         4.2 Authority Relative to this Agreement; Consents
and Approvals; No Violation 29         4.3 No Other Representations or
Warranties 29       ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER 30        
5.1 Organization 30         5.2 Authority Relative to this Agreement; Consents
and Approvals; No Violation 30         5.3 Litigation 31         5.4 Finders or
Brokers 31         5.5 Solvency 31         5.6 Adequate Assurances Regarding the
Buyer Assumed Agreements 31         5.7 Certain Arrangements; Ownership of
Parent 31         5.8 Investigation; No Other Representations or Warranties 32  
    ARTICLE VI COVENANTS AND AGREEMENTS 33         6.1 Conduct of Business 33  
      6.2 Access 35         6.3 Employees and Employee Benefit Plans 37        
6.4 Regulatory Approvals; Efforts 38         6.5 Notification of Certain Matters
40         6.6 Adequate Assurances Regarding the Buyer Assumed Agreements 41    
    6.7 Bankruptcy Court Approval 41         6.8 Auction; Bidding Procedures
Order 43         6.9 Taxes 43         6.10 Inventory 44         6.11 Public
Announcements 44         6.12 Consents; Notices 44

 

 -ii- 

 

 

  6.13 Further Assurances 45         6.14 Non-Enforcement of Certain Covenants
46         6.15 Insurance 46         6.16 Trade Notification 46         6.17
Transfer of Product Registrations, Related Applications and Dossiers 47        
6.18 Correspondence; Payments 47         6.19 Name Change 47       ARTICLE VII
CONDITIONS TO THE PURCHASE AND SALE 48         7.1 Conditions to Each Party’s
Obligation to Close 48         7.2 Conditions to Obligation of Sellers to Close
48         7.3 Conditions to Obligation of Buyer to Close 49         7.4
Frustration of Closing Conditions 49       ARTICLE VIII TERMINATION 50        
8.1 Termination 50         8.2 Effect of Termination 51         8.3 Break-Up
Fee; Expense Reimbursement 51         8.4 Return of Good Faith Deposit 52      
ARTICLE IX MISCELLANEOUS 52         9.1 No Survival 52         9.2 Expenses 52  
      9.3 Counterparts; Effectiveness 52         9.4 Governing Law; Jurisdiction
53         9.5 Remedies 53         9.6 WAIVER OF JURY TRIAL 54         9.7
Notices 54         9.8 Assignment; Binding Effect 55         9.9 Severability 55
        9.10 Entire Agreement 55         9.11 Amendments; Waivers 55        
9.12 Headings 56         9.13 No Third-Party Beneficiaries 56         9.14 No
Successor 56         9.15 Interpretation 56         9.16 Non-Recourse 56        
  9.17 Definitions 57           9.18 Sellers Disclosure Schedule 69          
9.19 Limitations on Good Faith Deposit Escrow Holder’s Liability 69

 

 -iii- 

 

 

SCHEDULES

 

Schedule 1.1(a) Accounts Receivable Schedule 1.1(b) Assumed Contracts Schedule
1.1(c) Assumed Real Property Leases Schedule 1.1(d) Products Schedule 1.1(f)
Tangible Personal Property Schedule 1.1(h) Intellectual Property Schedule 1.1(k)
Assumed Equipment Leases Schedule 1.1(m) Excluded Prepaid Assets Schedule 1.1(o)
Additional Purchased Assets Schedule 1.1(p) Assumed Proceedings Schedule 1.2(h)
Excluded Claims Schedule 1.2(t) Additional Excluded Assets Schedule 1.3(b)
Assumed Accounts Payable Schedule 1.3(c) Assumed Accrued Liabilities Schedule
1.4(h) Excluded Accrued Liabilities Schedule 1.4(i) Excluded Environmental
Liabilities Schedule 1.4(k) Existing Indebtedness Schedule 1.4(m) Excluded
Proceedings Schedule 1.5 Cure Costs Schedule 2.2(a) Seller Credit

 

Sellers Disclosure Schedule

Parent Disclosure Schedule

Buyer Disclosure Schedule

 

EXHIBITS

 

EXHIBIT A: Form of Assignment and Assumption Agreement EXHIBIT B: Form of
Bidding Procedures EXHIBIT C: Form of Bidding Procedures Order EXHIBIT D: Form
of Bill of Sale EXHIBIT E: Form of Sale Order

 

 -iv- 

 

 

AMENDED AND RESTATED ASSET PURCHASE AGREEMENT

 

This AMENDED AND RESTATED Asset Purchase Agreement (this “Agreement”), dated as
of March 31, 2019, amending and restating that certain Asset Purchase Agreement
(the “Original Agreement”), dated as of March 7, 2019 (the “Agreement Date”), is
by and among Rising Pharmaceuticals, Inc., a Delaware corporation (“Rising”),
and the wholly-owned subsidiaries of Rising, PACK Pharmaceuticals, LLC, an
Arizona limited liability company, Rising Health, LLC, a Delaware limited
liability company, and Acetris Health, LLC, a Delaware limited liability company
(collectively with Rising, “Sellers” and each, a “Seller”), Aceto Corporation, a
New York corporation (“Parent”), solely with respect to ARTICLE IV, Section
6.2(d), Section 6.13(a), Section 6.13(b), Section 6.13(c), Section 6.14, Section
6.18(a) and ARTICLE IX, and Shore Suven Pharma, Inc., a Delaware corporation
(“Buyer”). Capitalized terms used in this Agreement and not otherwise defined
above or in the text below have the meanings given to them in Section 9.17.

 

WITNESSETH:

 

Whereas, Parent, collectively with its direct and indirect wholly-owned
subsidiaries (including Sellers), is an international company engaged in the
development, marketing, sales and distribution of finished dosage form generic
pharmaceuticals, nutraceutical products, pharmaceutical active ingredients and
intermediates, specialty performance chemicals inclusive of agricultural
intermediates and agricultural protection products (collectively, the
“Business”);

 

Whereas, the Business is organized into three principal segments: (i) Human
Health; (ii) Pharmaceutical Ingredients; and (iii) Performance Chemicals;

 

WHEREAS, Parent, Sellers and certain other subsidiaries of Parent (the
“Debtors”), are debtors and debtors in possession under Title 11 of the United
States Code, 11 U.S.C. §§ 101, et seq. (the “Bankruptcy Code”), and filed
voluntary petitions for relief (the “Filing”) under Chapter 11 of the Bankruptcy
Code on February 19, 2019 (the “Petition Date”) in the United States Bankruptcy
Court for the District of New Jersey (the “Bankruptcy Court”), where such
bankruptcy cases are administered under Case No. 19-13448 (the “Bankruptcy
Case”);

 

Whereas, Sellers desire to sell to Buyer all of the Purchased Assets, subject to
the assumption by Buyer of the Assumed Liabilities (which Purchased Assets and
Assumed Liabilities generally comprise all or substantially all of the Pharma
Business), and Buyer desires to purchase from Sellers the Purchased Assets and
assume the Assumed Liabilities, in each case, upon the terms and conditions
hereinafter set forth;

 

WHEREAS, the Parties entered into the Original Agreement, dated as of the
Agreement Date, and now desire to amend and restate the terms and provisions of
the Original Agreement in its entirety in accordance with and subject to the
terms and conditions of this Agreement;

 

WHEREAS, the Parties intend to effectuate the transactions contemplated hereby,
including the purchase and sale of the Purchased Assets and the assumption of
the Assumed Liabilities (the “Asset Purchase”), pursuant to Section 363 of the
Bankruptcy Code;

 

WHEREAS, the execution and delivery of this Agreement and Sellers’ ability to
consummate the transactions contemplated hereby are subject, among other things,
to consideration of Alternative Bids (if any) and the entry of the Sale Order
pursuant to, inter alia, Sections 363 and 365 of the Bankruptcy Code;

 

WHEREAS, the Parties desire to consummate the transactions contemplated hereby
as promptly as practicable after the Bankruptcy Court enters the Sale Order; and

 

 

 

 

WHEREAS, the Parties desire to make certain representations, warranties,
covenants and agreements specified herein.

 

NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements contained herein, and intending to be
legally bound hereby, Buyer and Sellers hereby agree to amend and restate the
Original Agreement in its entirety as follows:

 

ARTICLE I
PURCHASE AND SALE

 

1.1          Purchased Assets. On the terms and subject to the conditions set
forth in this Agreement, at the Closing, Sellers shall sell, transfer, assign,
convey and deliver to Buyer, and Buyer shall purchase, free and clear of all
Liabilities and Liens (other than Liens created by Buyer and the Permitted
Liens), the right, title and interest of Sellers in, to or under the following
properties and assets of Sellers (herein collectively called the “Purchased
Assets”):

 

(a)       all Accounts Receivable of each Seller outstanding as of the Closing
Date, including as set forth on Schedule 1.1(a);

 

(b)       to the extent assignable pursuant to Sections 363 and 365 of the
Bankruptcy Code, all rights, benefits and interests under the Contracts listed
or described on Schedule 1.1(b) (the “Assumed Contracts”);

 

(c)       to the extent assignable pursuant to Sections 363 and 365 of the
Bankruptcy Code, the Real Property Leases, and rights thereunder, listed on
Schedule 1.1(c) (such Real Property Leases, the “Assumed Real Property Leases”);

 

(d)       all rights (including goodwill, if any) in and to the products that
Sellers own or have an interest in, including as set forth on Schedule 1.1(d)
(the “Products”);

 

(e)       all Product Registrations and the Regulatory Documentation (including
applications that are in the process of being prepared by any Sellers for
Product Registrations);

 

(f)       the equipment, machinery, forklifts, vehicles, fixtures, furniture,
furnishings, signage, leasehold improvements and other tangible personal
property owned by each Seller as of the Closing Date that are (A) located on or
at the Acquired Real Property and held for, or used in, the Acquired Business
and existing as of the Closing or (B) set forth on Schedule 1.1(f);

 

(g)       to the extent assignable pursuant to Sections 363 and 365 of the
Bankruptcy Code, all Governmental Authorizations (and all pending applications
therefor) of Sellers, including the Governmental Authorizations set forth on
Schedule 1.1(g);

 

(h)       to the extent assignable pursuant to Sections 363 and 365 of the
Bankruptcy Code, all Intellectual Property that is owned or licensed by each
Seller and (A) primarily held for, or used in, the Acquired Business and
existing as of the Closing, including all operating and financial software,
enterprise resource planning programming and licenses to use Sellers’ technology
infrastructure, or (B) set forth on Schedule 1.1(h), in each case, including all
goodwill associated therewith;

 

(i)        all Books and Records of the Acquired Business, except those:
(i) relating primarily to any Excluded Asset or Excluded Liability; (ii)
relating to employees of Sellers who are not Transferred Employees; (iii) in
connection with, to the extent not being assumed by Buyer, any Proceeding,
judgment or privilege of any nature available to or being pursued by or on
behalf of, asserted against, or otherwise involving any Seller, whether arising
by counterclaim or otherwise, assumed pursuant to this Agreement, or (iv) that
Sellers are not permitted to transfer under applicable Law;

 

 -2- 

 

 

(j)        all telephone and facsimile numbers, all rights to receive mail and
other communications addressed to Sellers, and other directory listings used in
connection with the Acquired Business, to the extent assignable;

 

(k)       to the extent assignable pursuant to Sections 363 and 365 of the
Bankruptcy Code, the equipment leases listed or described on Schedule 1.1(k)
(the “Assumed Equipment Leases” and together with the Assumed Contracts and
Assumed Real Property Leases, the “Buyer Assumed Agreements”);

 

(l)        all rights of each Seller under non-disclosure or confidentiality,
non-disparagement, non-compete, or non-solicitation agreements with (i) the
Transferred Employees or any employees of each Seller terminated within twelve
(12) months prior to the Closing Date, (ii) any agents of each Seller or with
third parties, (iii) any other Person, in each case, related to the Acquired
Business;

 

(m)      all Prepaid Assets;

 

(n)       all Inventory as of the Closing Date (including, for the avoidance of
doubt, Qualified Inventory and Short-Dated Inventory), other than as set forth
in Section 1.2(s);

 

(o)       the additional assets listed on Schedule 1.1(o);

 

(p)       all rights, claims, causes of action, choses in action, rights of
recovery and setoff rights relating to the Proceedings as set forth on Schedule
1.1(p) (the “Assumed Proceedings”); and

 

(q)       all goodwill associated with the Acquired Business as of the Closing
Date that is not expressly referenced in Sections 1.1(a) through 1.1(p).

 

1.2          Excluded Assets. Notwithstanding the provisions of Section 1.1,
nothing herein contained shall be deemed to sell, transfer, assign or convey the
Excluded Assets to Buyer, and Sellers shall retain all right, title and interest
to, in and under the Excluded Assets. For all purposes of and under this
Agreement, the term “Excluded Assets” shall mean any right, title or interest
in, to or under any of the following assets:

 

(a)       all Cash;

 

(b)       any Contracts not listed or described on Schedule 1.1(b) (the
“Excluded Contracts”);

 

(c)       any lease of Leased Real Property, and rights thereunder, that is not
a Buyer Assumed Agreement (the “Excluded Real Property Leases”);

 

(d)       any equipment leases not listed or described on Schedule 1.1(k) (the
“Excluded Equipment Leases”);

 

(e)       all shares of capital stock or other equity interest of each Seller or
any securities convertible into, exchangeable, or exercisable for shares of
capital stock or other equity interest of each Seller and their respective
Affiliates;

 

(f)       all Organizational Documents, minute books, stock ledgers, member
transfer books, corporate seals and stock certificates of each Seller and other
similar Books and Records that a Seller is required by Law to retain or that a
Seller determines are necessary or advisable to retain, including Tax Returns,
financial statements and corporate or other entity filings;

 

 -3- 

 

 

(g)       all Seller Benefit Plans and trusts or other assets attributable
thereto, including, any assets, reserves, credits and service agreements, and
all documents created, filed or maintained in connection with such Seller
Benefit Plans and any applicable insurance policies related to such Seller
Benefit Plans;

 

(h)       any rights, claims or causes of action of each Seller under this
Agreement or the Ancillary Documents, the Release and as set forth on Schedule
1.2(h);

 

(i)        all receivables (other than Accounts Receivables), claims or causes
of action related primarily to any Excluded Asset or Excluded Liability,
including any such item to the extent arising under any guarantee, warranty,
indemnity or similar right in favor of any Seller in respect of any Excluded
Asset or Excluded Liability;

 

(j)        all refunds, credits and rebates of Taxes of Sellers;

 

(k)       all insurance policies and binders, including any right, title and
interest in Sellers’ directors and officers liability policies;

 

(l)        all rights under insurance policies relating to claims for losses
pending as of the Closing Date, including claims relating to any Excluded Asset
or Excluded Liability to the extent applicable;

 

(m)      all rights, claims and causes of action relating to any Excluded Asset
or any Excluded Liability, and any proceeds thereof;

 

(n)       all post-petition adequate assurance deposits provided to utilities
and any deposits provided to suppliers or service providers to a Seller on a
prepetition or post-petition basis;

 

(o)       all avoidance actions (including any proceeds thereof), including, but
not limited to, all claims or causes of action arising under Sections 544
through 553 of the Bankruptcy Code or any analogous state law;

 

(p)       all rights of Sellers under Contracts related to the Acquired Business
that are not assigned to Buyer;

 

(q)       all Intellectual Property owned or licensed by Sellers that is neither
held for, nor used in, the Acquired Business, other than as set forth on
Schedule 1.1(h);

 

(r)        all Intracompany Receivables;

 

(s)       all Inventory that is expired as of the Agreement Date; and

 

(t)       all other assets set forth on Schedule 1.2(t).

 

For the avoidance of doubt, no goodwill or other intangible assets not expressly
set forth in this Section 1.2 shall constitute “Excluded Assets.”

 

 -4- 

 

 

1.3          Assumed Liabilities. Upon the terms and subject to the conditions
set forth in this Agreement, at the Closing Date, Buyer shall assume and agree
to pay, perform and discharge, when due (in accordance with its respective terms
and subject to the respective conditions thereof), the Assumed Liabilities.
NOTWITHSTANDING ANY PROVISION HEREIN TO THE CONTRARY, BUYER SHALL NOT ASSUME,
AND BUYER SHALL NOT IN ANY MANNER BECOME LIABLE FOR, ANY LIABILITIES OR
OBLIGATIONS OF SELLERS OF ANY KIND OR NATURE OTHER THAN THE ASSUMPTION BY BUYERS
OF THE ASSUMED LIABILITIES. The term “Assumed Liabilities” means, the
Liabilities described in clauses (a) through (h) of this Section 1.3, and only
the Liabilities described in such clauses:

 

(a)       any and all Liabilities of the Acquired Business arising under or to
be performed under the Buyer Assumed Agreements and assumed Governmental
Authorizations to be performed on or after, or in respect of periods following,
the Closing Date (including, for the avoidance of doubt, performance of all
executory obligations under the Buyer Assumed Agreements following the Closing
Date), except to the extent such Liabilities arise from the breach of or default
by any Seller under any Buyer Assumed Agreements or assumed Governmental
Authorizations prior to, but were not asserted until after, the Closing Date
(which Liabilities constitute Excluded Liabilities);

 

(b)       the obligation to pay all amounts owed (and no other Liabilities) for
goods or services received by each Seller in the Ordinary Course of Business in
respect of any trade, partner and vendor accounts payable due as of the Closing
Date, but only to the extent incurred in connection with the Buyer Assumed
Agreements and up to $250,000 of other accounts payable, and excluding any
amounts owed to professionals retained by an order of the Bankruptcy Court under
Section 327, 328, 1102 or 1103 of the Bankruptcy Code (such payables, the
“Assumed Accounts Payable”);

 

(c)       all Liabilities in the accounts set forth on Schedule 1.3(c) (the
“Assumed Accrued Liabilities”) as of the Closing Date;

 

(d)       all Taxes arising out of the conduct of the Acquired Business,
ownership of the Purchased Assets or associated with the Transferred Employees,
in each case, attributable to periods (or portions thereof) beginning after the
Closing Date as determined to be Buyer’s responsibility pursuant to Section
6.9(a);

 

(e)       all Liabilities arising on or after the Closing Date (except to the
extent that such Liabilities arose from events, facts or occurrences, that arose
or existed prior to the Closing) with respect to the operations of the Acquired
Business by Buyer, ownership of the Purchased Assets by Buyer, or associated
with the employment by Buyer of the Transferred Employees;

 

(f)       the Chartwell Liability;

 

(g)       all Liabilities with respect to the Assumed Proceedings; and

 

(h)       all Cure Costs.

 

To the extent any Assumed Liability described in clause (a) is allocable both to
a pre-Closing and post-Closing period, the Assumed Liability shall only consist
of the portion thereof asserted on or before, or existing after, the Closing
Date (and if such allocation is not readily subject to pro-rating by measure of
days, or other identifiable characteristic, Buyer and Sellers shall reasonably
determine the allocation in good faith).

 

 -5- 

 

 

1.4          Excluded Liabilities. Notwithstanding any provision in this
Agreement to the contrary, Buyer shall not assume and shall not be obligated to
assume or be obliged to pay, perform or otherwise discharge any Liability of any
Seller, and each Seller shall be solely and exclusively liable with respect to
all Liabilities of such Seller, other than the Assumed Liabilities
(collectively, the “Excluded Liabilities”). For the avoidance of doubt, the
Excluded Liabilities with respect to each Seller include, but are not limited
to, the following:

 

(a)       any Liability of such Seller, arising out of, or relating to, this
Agreement, the Ancillary Documents, the Release or the transactions contemplated
hereby, whether incurred prior to, at or subsequent to the Closing Date,
including all finder’s or broker’s fees and expenses and any and all fees and
expenses of any Representatives of such Seller;

 

(b)       other than any Liability identified as an Assumed Liability in
Sections 1.3(d), all Liabilities for (i) Taxes (or the non-payment thereof) of,
or imposed on, a Seller arising out of the conduct of the Acquired Business or
ownership of the Purchased Assets, or associated with the Transferred Employees,
in each case, attributable to any Pre-Closing Tax Period or the portion of any
Straddle Period ending on the Closing Date (as determined pursuant to Section
6.9(a)), (ii) Taxes of Sellers that arise out of the consummation of the
transactions contemplated hereby, including all Transfer Taxes that are the
responsibility of Sellers pursuant to Section 6.9(c), (iii) Taxes (or the
non-payment thereof) imposed on any Seller for all Tax periods, including, but
not limited to, (A) Taxes of any member of an affiliated, consolidated,
combined, or unitary group of which any Seller or any of its Affiliates (or any
predecessor of any of the foregoing) is or was a member on a day prior to the
Closing Date, including pursuant to Treasury Regulation Section 1.1502-6 or any
analogous or similar state, local or foreign Laws, and (B) any and all Taxes of
any Person imposed on any Seller as a transferee or successor, by Contract or
pursuant to any Law, and (iv) Taxes of any Seller arising from or in connection
with an Excluded Asset;

 

(c)       all Liabilities of any Seller and its Affiliates to the extent arising
out of, relating to or otherwise in respect of the ownership or use of the
Purchased Assets or the operation or the conduct of the Acquired Business prior
to the Closing Date;

 

(d)       any Liability incurred by such Seller or its respective directors,
officers, managers, stockholders, members, partners, agents or employees (acting
in such capacities) after the Closing Date and then only to the extent
attributable to the period of time after the Closing Date;

 

(e)       all Liabilities based on tortious or illegal conduct, regardless of
when made or asserted, which arise out of, relate to or are otherwise in respect
of any express or implied representation, warranty, agreement or guarantee made
by any Seller, or alleged to have been made by any Seller, or which are imposed
or asserted to be imposed by operation of any Law, in connection with any
service performed or product sold by or on behalf of any Seller, or any
Proceeding seeking recovery for consequential or special damages, lost revenue
or income or any other form of damages;

 

(f)       all Liabilities of any Seller arising out of (or in connection with)
the employment by any Seller or other provision of services to any Seller or the
termination of such employment or services of any Person by any Seller at any
time (including any such Liabilities of any Affiliate), including all
Liabilities related to any Seller Benefit Plans, programs, agreements and
arrangements sponsored or maintained by any Seller or any of their Affiliates or
ERISA Affiliates and any wages or commissions, severance (including statutory
severance and benefits related to any acquired rights or similar protections
under applicable Law), accrued payroll, paid-time-off, accrued vacation,
workers’ compensation, retention benefits, termination benefits, change in
control benefits, other benefits, and any other bonus or incentives, and all
Liabilities with respect to COBRA or applicable state continuation coverage
Laws;

 

(g)       any Liability of such Seller relating to or arising out of an Excluded
Asset;

 

 -6- 

 

 

(h)       the Excluded Accrued Liabilities of such Seller, including but not
limited to such accrued Liabilities as set forth on Schedule 1.4(h), but
excluding, for the avoidance of doubt, the Assumed Accounts Payable and the
Assumed Accrued Liabilities;

 

(i)        any Liabilities related to the Acquired Business arising under
Environmental Laws, including but not limited to such Liabilities as set forth
on Schedule 1.4(i);

 

(j)        all checks and drafts that have been written or submitted by such
Seller prior to the close of business on the Closing Date but have not yet
cleared;

 

(k)       other than as specifically set forth herein, any Liability of such
Seller under any Indebtedness, including Indebtedness under the Credit Facility,
any Indebtedness owed to any stockholder or other Affiliate of any such Seller,
and any Contract evidencing any such financing arrangement and the Indebtedness
set forth on Schedule 1.4(k) (collectively, the “Existing Indebtedness”);

 

(l)        unless asserted prior to Closing, all Liabilities under the Buyer
Assumed Agreements that arise out of, relate to or are otherwise in respect of
Liabilities incurred prior to the Closing Date, or any event, state of facts,
occurrence, non-occurrence, circumstance, development or change that arose or
existed, prior to the Closing Date, other than the Assumed Accounts Payable and
the Assumed Accrued Liabilities;

 

(m)      all Proceedings against any Seller or any Person arising out of or
caused by, directly or indirectly, any act or omission of any Seller, or any of
a Seller’s Representatives, occurring and asserted at any time on or before the
Closing, including such Proceedings listed or described on Schedule 1.4(m) and
all automobile liability, workers’ compensation and general liability claims
(whether reported or incurred but not yet reported) arising before or relating
to the period before, in either case asserted before, the Closing Date;

 

(n)       any and all claims relating to employee health and safety with respect
to the Acquired Business, including claims for injury, sickness, disease or
death of any Person relating to or arising from the period prior to the Closing
Date;

 

(o)       all Liabilities relating to the cessation of benefits for each
Transferred Employee under each Seller Benefit Plan, the termination of
participation in each Seller Benefit Plan and the distribution of all benefits
accrued or payable thereunder to such Transferred Employees, including any
payment or benefit that could reasonably be characterized as a “parachute
payment” within the meaning of Section 280G of the Code, and the satisfaction of
all obligations arising thereunder as contemplated by Section 6.3(a);

 

(p)       all Liabilities of any Seller to any of its respective Affiliates;

 

(q)       all Liabilities of any Seller to indemnify, reimburse or advance
amounts to any officer, director, manager, employee or any other agent of any
Seller;

 

(r)        all Liabilities for any distribution to any current or former, direct
or indirect, equity holder of a Seller, to be made (or to have been made) prior
to, at or following the Closing, including in respect of (i) any part of the
consideration received or to be received hereunder, (ii) any misallocations with
respect to the foregoing, (iii) operating profits or (iv) any matter or
proceeds, whether or not related to the foregoing;

 

(s)       any and all accrued or accruing Liabilities of any Seller to be paid
to any officer, director, manager, employee or other agent of any Seller;

 

 -7- 

 

 

(t)       all Liabilities arising out of or resulting from any Seller’s, or
their respective Affiliate’s, compliance or non-compliance with any Law or
Governmental Order;

 

(u)       all Liabilities of any Seller, that either (i) are existing on the
Closing Date (other than the Assumed Liabilities) or (ii) arise out of, or
result from or relate to, any transaction entered into prior to or at the
Closing Date which are imposed on Buyer or any of its Affiliates as a result of
or in connection with the transactions contemplated hereby;

 

(v)       all Liabilities arising out of, relating to or otherwise in respect of
claims by any customer of any Seller or any of their Affiliates (whether by
Contract or otherwise) based on any failure of a Seller or any of their
Affiliates to supply such customer any goods or services, provided, that for
purposes of this Section 1.4(v), the term “Affiliates” shall only include
Affiliates of Sellers prior to the Closing Date; and

 

(w)      all Intracompany Payables.

 

1.5          Assignments; Cure Amounts.

 

(a)       Notwithstanding anything to the contrary contained herein, Buyer
reserves the right, in consultation with Sellers, to amend or supplement
Schedules 1.1(b), 1.1(c) and 1.1(k) to add or delete any contracts or leases
that are to be assigned at any time prior to the later of (x) one (1) calendar
day prior to the Auction and (y) if the Auction is canceled in accordance with
the Bidding Procedures Order, April 1, 2019 (such later date, the “Assumption
Deadline”), so long as (i) any such contract or lease to be added to such
schedules is not to be assumed or available to be assumed pursuant to any other
sale or transaction previously approved by the Bankruptcy Court in connection
with the Bankruptcy Case, and is added to such schedule(s) prior to the entry of
any Order of the Bankruptcy Court approving the rejection of such contract or
lease, and subject to the party to such contract or lease receiving information
evidencing Buyer’s adequate assurance of future performance and having an
opportunity to object within seven (7) calendar days or such other period of
time set forth in an Order of the Bankruptcy Court of the receipt of such
information to the assignment of such contract or lease on the ground that Buyer
has not demonstrated adequate assurance of future performance of such contract
or lease pursuant to Section 365 of the Bankruptcy Code, (ii) with respect to
any such contract or lease to be removed from such schedule, the Cure Cost for
such contract as of the date Buyer proposes to remove such contract, together
with the Cure Costs for all other contracts and leases removed from Schedule 1.5
(in each case, whether as set forth in Schedule 1.5 or as may be determined by
the Bankruptcy Court prior to the Assumption Deadline) is not more than 13.25%
of the aggregate Cure Costs set forth in the Cure Notices (as defined below) and
(iii) with respect to any such contract to be removed from Schedule 1.1(b), the
counterparty to any such contract is not a direct or indirect customer of
Sellers. Buyer intends to assume the Federal Acquisition Contracts and HHS
Contracts (as each term is defined in the Sale Order), but the Parties
acknowledge that the counterparties to such contracts have opposed any
assumption and/or assignment through the Sale Order and require that any
transfer and/or substitution of such contracts only occur through a separate
novation or substitution process. Sellers and Buyer agree to use commercially
reasonable efforts to seek the novation or substitution of the Federal
Acquisition Contracts and HHS Contracts; provided, that the failure of any
counterparty to such contracts to permit such novation or substitution will not
constitute a failure of Sellers to deliver such contract hereunder or a removal
by Buyer of such contracts under this Agreement and all Liabilities related to
such Federal Acquisition Contracts and HHS Contracts shall remain Excluded
Liabilities unless and until formal novation or substitution to Buyer is
effected. Notwithstanding the prior sentence, to the extent that following the
Closing (a) Sellers continue to perform under the Federal Acquisition Contracts
and HHS Contracts at the request of Buyer (whether through a transition services
agreement or otherwise) or (b) Buyer performs (or is permitted to perform) under
the Federal Acquisition Contracts and HHS Contracts while the novation or
substitution process is ongoing, whether or not formal novation or substitution
to Buyer is effected, Buyer shall be responsible for Liabilities related to the
Federal Acquisition Contracts and HHS Contracts arising with respect to such
post-Closing performance (and such Liabilities shall constitute Assumed
Liabilities). Buyer further reserves the right, in consultation with Sellers, to
amend or supplement Schedules 1.1(d), 1.1(f), 1.1(g), 1.1(h), 1.1(m) and 1.1(o)
to add or delete any assets that are to be assigned at any time prior to fifteen
(15) calendar days after the Agreement Date, so long as any such assets to be
added to such schedules is not to be assumed or available to be assumed pursuant
to any other sale or transaction previously approved by the Bankruptcy Court in
connection with the Bankruptcy Case and so long as any such assets to be deleted
from such schedules is subject to clause (ii) and clause (iii) of the first
sentence of this Section 1.5(a). Buyer acknowledges and agrees that there shall
be no reduction in the Purchase Price if it elects to remove any Purchased
Assets from Schedules 1.1(b), 1.1(c), 1.1(d), 1.1(f), 1.1(g), 1.1(h), 1.1(k).
1.1(m) and/or 1.1(o).  As of the Assumption Deadline, and regardless of whether
any such agreements appeared on the relevant schedules at any time prior
thereto, any contracts (and only such contracts) listed on Schedule 1.1(b) as of
the Assumption Deadline (to the extent consistent with the prior sentence) shall
be deemed an Assumed Contract, any leases (and only such leases) listed on
Schedule 1.1(c) as of the Assumption Deadline (to the extent consistent with the
prior sentence) shall be deemed an Assumed Real Property Lease, and any
equipment leases (and only such equipment leases) listed on Schedule 1.1(k) as
of the Assumption Deadline (to the extent consistent with the prior sentence)
shall be deemed an Assumed Equipment Lease.  For the avoidance of doubt, to the
extent any contract, real property lease, or equipment lease that was listed on
one of the relevant schedules is not listed thereon as of the Assumption
Deadline in accordance with this Section 1.5(a), such agreement shall not
constitute an Assumed Contract, Assumed Real Property Lease or Assumed Equipment
Lease, respectively. Each Seller shall transfer and assign all Buyer Assumed
Agreements (that such Seller is a party thereto and to the extent assignable
pursuant to Sections 363 and 365 of the Bankruptcy Code) to Buyer, and Buyer
shall assume all Buyer Assumed Agreements from a Seller that is a party thereto,
as of the Assumption Deadline pursuant to Section 365 of the Bankruptcy Code and
the Sale Order.  In connection with and as a prerequisite to such assignment and
assumption, Buyer shall pay in full all costs (as determined by such Seller that
is party thereto (i) based on the Books and Records of such Seller, (ii) based
on a written agreement between Buyer and a counterparty to a Buyer Assumed
Agreement or (iii) as otherwise determined by the Bankruptcy Court) to cure all
defaults under such Buyer Assumed Agreements to the extent required by Section
365(b) of the Bankruptcy Code (such amounts, the “Cure Costs”) and Sellers and
their Affiliates shall have no Liability therefor. The Cure Costs for each Buyer
Assumed Agreement are set forth opposite the name of each Buyer Assumed
Agreement set forth on Schedule 1.5 (as amended by any Schedule supplements
pursuant to the first sentence of this Section 1.5(a)). Buyer shall have the
right to negotiate all Cure Costs; provided, that, Buyer keeps Sellers
reasonably informed of the progress and substance of all such negotiations. To
the extent that the Cure Costs for any Buyer Assumed Agreement are determined by
the Bankruptcy Court to be amounts higher than the amounts listed on Schedule
1.5, Buyer shall be fully responsible to pay such higher Cure Costs; provided
that with respect to any Buyer Assumed Agreement, unless otherwise ordered by
the Bankruptcy Court as part of the Sale Order, Buyer shall pay undisputed
amounts listed in the Notice of Potential Assumption and Assignment of Executory
Contracts and Unexpired Leases in Connection with Proposed Sale of Certain
Assets of the Debtors Relating to the Pharma Business [Bankr. Docket No. 199]
filed with the Bankruptcy Court (the “Cure Notices”) at Closing and escrow the
amount equal to the portion of any Cure Costs asserted by the counterparty to
any Buyer Assumed Agreement and disputed in good faith by Buyer (which shall be
calculated as the difference between the Cure Costs asserted by the applicable
counterparty to a Buyer Assumed Agreement minus the Cure Costs listed in the
applicable Cure Notice (or such smaller amount as may be fixed or estimated by
the Bankruptcy Court)) pending further order of the Bankruptcy Court or
agreement between Buyer and the counterparty to such Buyer Assumed Agreement
and, so long as such disputed portion of Cure Costs remains in escrow, Buyer may
assume such Buyer Assumed Agreements at the Closing.

 

 -8- 

 

 

(b)       The Sale Order shall provide that as of the Closing, each Seller shall
assign to Buyer the Buyer Assumed Agreements to which it is a party, with each
Buyer Assumed Agreement identified by its name and date (if available), the
other party to such Buyer Assumed Agreement and the address of such party for
notice purposes, all included on one or more exhibit(s) attached to either the
motion filed in connection with the Sale Order or one or more motion(s) or
notice(s) regarding such Seller’s intention to have such Buyer Assumed Agreement
assumed by and assigned to Buyer. Such exhibit(s) shall also (i) set forth the
Cure Costs (if any) necessary to cure any defaults under each Buyer Assumed
Agreement, and (ii) delineate a procedure for transferring to Buyer the rights
to any Prepaid Assets in the form of cash or letters of credit on deposit with
the other party to any Assumed Real Property Lease.

 

(c)       In the case of licenses, certificates, approvals, authorizations,
leases, Contracts and other commitments included in the Purchased Assets that
cannot be transferred or assigned effectively without the consent of third
parties (after giving effect to the Sale Order and the Bankruptcy Code), Sellers
shall, at Buyer’s sole cost and expense, paid in advance, subject to any
approval of the Bankruptcy Court that may be required and the terms set forth in
Section 6.4, cooperate with Buyer in endeavoring to obtain such consent and this
Agreement shall not operate as an assignment thereof in violation of any such
license, certificate, approval, authorization, Real Property Lease, Contract or
other commitment. For the avoidance of doubt, Sellers shall not be obligated to
pay any consideration to any third party from whom consent or approval is
requested or otherwise incur any out of pocket costs or expenses, or to initiate
any litigation or Proceedings to obtain any such consent or approval.

 

1.6          Bulk Sales Laws.

 

(a)       Pursuant to Section 363(f) of the Bankruptcy Code, the transfer of the
Purchased Assets shall be free and clear of any and all Liens and Liabilities in
the Purchased Assets (other than Permitted Liens), including any Lien or claims
arising out of any bulk transfer Laws and the Parties shall take such steps as
may be necessary or appropriate to so provide in the Sale Order. Notwithstanding
the foregoing, provided, that, Sellers’ representations and warranties in
Section 3.11 are true and correct and subject to Section 1.6(b), Buyer and
Sellers hereby agree to waive compliance with the requirements and provisions of
Article 6 of the Uniform Commercial Code as adopted in any jurisdiction that may
be applicable with respect to the sale to Buyer of any or all of the Acquired
Business, the Products or the Purchased Assets.

 

(b)       Notwithstanding Section 1.6(a), within five (5) calendar days after
the Agreement Date, Buyer shall provide Rising with a copy of its proposed New
Jersey Form C-9600 – Notification of Sale, Transfer, or Assignment in Bulk (the
“Form C-9600”) for Rising’s review and approval. Buyer shall incorporate any
reasonable comments received from Rising within five (5) calendar days from
Buyer’s delivery of its proposed Form C-9600 to Rising; provided, however, the
Parties agree that such Form C-9600 shall include and specifically identify each
Seller and each Seller’s New Jersey tax identification number (if any). Buyer
shall be responsible for filing such Form C-9600, together with an executed copy
of this Agreement, with the New Jersey Department of Treasury, Division of
Taxation, Bulk Sales Unit (the “Department”) within three (3) calendar days
after receiving Sellers’ comments. Subsequent to such filing, Sellers shall have
the right to negotiate directly with the Department as to the amount of the Tax
Escrow (as defined below), as well as the ultimate tax liability of any Seller
to the State of New Jersey, including right to file a New Jersey Form TTD –
Asset Transfer Tax Declaration (the “Declaration”). The parties shall cooperate
in good faith to respond to any inquiries from, or requests for information from
the Department arising in connection with the filing of the Form C-9600 or the
Declaration. If the Department notifies Buyer that an amount of the Purchase
Price, including a Seller’s estimated New Jersey tax liability in connection
with the transactions contemplated by this Agreement, is required by the
Department to be escrowed at the Closing by Buyer (the “Tax Escrow”), such
amount shall be withheld from the Purchase Price at Closing by Buyer. After the
Closing, any portion of the Tax Escrow that is finally determined to be properly
due and owed by a Seller to the Department shall be paid by Buyer to the
Department from the Tax Escrow, and all other remaining funds in the Tax Escrow
shall be promptly disbursed by Buyer to such Seller in accordance with written
allocation instructions theretofore received from and executed by such Seller.
In the event that the Department determines that the Tax Escrow is not
sufficient to satisfy all outstanding amounts required to be paid to such
Department pursuant to the applicable jurisdiction’s bulk sale law, Sellers
agree, jointly and severally, to pay to the Department any further amount
necessary to satisfy the Department’s determination.

 

 -9- 

 

 

1.7          Inventory. No earlier than four (4) Business Days and no later than
two (2) Business Days prior to the Closing, a physical count of the Inventory
that is in the possession of a Seller, including Qualified Inventory and
Short-Dated Inventory, and a count of the Inventory that is in transit to or
from a Seller, vendor, customer or supplier, in each case, as of the Closing
Date (the “Inventory Count”), will be taken and completed by the employees of
Sellers in accordance with past practices and commercially reasonable
procedures, subject to the supervision of Buyer and its accountants (such date
of completion, the “Inventory Count Date”). A list of such Inventory, including
the location, the expiration date, the amount thereof and the aggregate value of
the amount of such Qualified Inventory, calculated in accordance with the
immediately preceding sentence (the “Qualified Inventory Amount”), shall be
acknowledged in writing by Sellers and Buyer at the Closing (the “Inventory
Acknowledgment”).

 

ARTICLE II
PURCHASE PRICE

 

2.1          Purchase Price. The aggregate consideration for the Purchased
Assets (the “Purchase Price”) shall be the sum of the following:

 

(a)       the Good Faith Deposit; plus

 

(b)       the sum of $12,306,304.36 (the “Cash Balance”); plus

 

(c)       the Seller Credit as set forth on Schedule 2.2(a); plus

 

(d)       a reduction of the Deferred Payment Amount (as defined in that certain
Product Purchase Agreement, dated as of November 2, 2016, by and among Parent
and the other parties thereto (the “Citron PPA”)) due and owing from Sellers
equal to $2,000,000 (the “Deferred Payment Reduction”); plus

 

(e)       the assumption by Buyer of the Assumed Liabilities.

 

2.2          Closing Date Payment. At the Closing, Buyer shall satisfy the
Purchase Price as follows:

 

(a)       Buyer shall cause Sellers to receive a waiver (the “Seller Credits
Waiver”) (i) of such amounts due and owing from Sellers as set forth on Schedule
2.2(a) (the “Seller Credit”) and (ii) in respect of the Deferred Payment
Reduction;

 

(b)       Buyer shall assume the Assumed Liabilities (for the avoidance of
doubt, including the Cure Costs); provided, that to the extent any such Assumed
Liabilities are able to be satisfied at Closing, without preventing the transfer
of the Purchased Assets or the assumption of the Assumed Liabilities, Buyer
shall satisfy such Assumed Liabilities either at Closing or, in Buyer’s sole
discretion, in the Ordinary Course of Business (with any deferral at Closing
that is made with the consent of the counter-party and that results in a
reduction of payment after Closing inuring to the benefit of Buyer, subject to
Section 1.5(a)); provided, further, Buyer shall pay directly to the obligees
identified on Schedule 1.5 the Cure Costs (subject to Section 1.5(a)) required
to be paid at Closing;

 

 -10- 

 

 

(c)       Buyer shall take any actions necessary to ensure that the Good Faith
Deposit is paid over to Sellers pursuant to Section 2.3, including providing a
written instruction to the Good Faith Deposit Escrow Holder to transfer to
Sellers the Good Faith Deposit by wire transfer of immediately available funds
into the account(s) designated in writing by Rising;

 

(d)       Buyer shall pay the Tax Escrow to the Escrow Agent, by wire transfer
of immediately available funds, as security for any amounts owed pursuant to
Section 1.6, and such amount shall be held by the Escrow Agent pursuant to the
terms and conditions of the Escrow Agreement; and

 

(e)       Buyer shall deliver, via wire transfer of immediately available funds
into the account(s) designated in writing by Rising, an amount equal to the Cash
Balance, as reduced by the amount paid by Buyer pursuant to Section 2.2(d).

 

2.3          Good Faith Deposit. Contemporaneously with the execution of the
Original Agreement, but in no event later than 4:00 p.m. New York City Time on
March 7, 2019, Buyer shall deposit into an escrow account (the “Good Faith
Deposit Escrow”) at Bank of America, N.A. maintained by Lowenstein Sandler LLP,
counsel to Sellers (the “Good Faith Deposit Escrow Holder”), an amount equal to
$2,690,000 (the “Good Faith Deposit”) in immediately available funds. Following
the execution of the Original Agreement by the Parties, other than upon
termination of this Agreement by Sellers pursuant to Section 8.1(b) (in the
event that the Closing does not occur on or prior to the End Date solely as a
result of Buyer’s material breach of its obligations under this Agreement) or
Section 8.1(d), in which cases, the Good Faith Deposit shall be nonrefundable
and paid to Sellers pursuant to the terms of this Section 2.3, the Good Faith
Deposit shall be refunded to Buyer upon the termination of this Agreement for
any reason, including pursuant to Section 8.1. At the Closing, the Good Faith
Deposit (and any interest or income accrued thereon) shall be paid over to
Sellers by the Good Faith Deposit Escrow Holder and upon such payment, the Good
Faith Deposit shall be credited and applied toward payment of the Purchase Price
(and such interest thereon shall reduce the amount of the Cash Balance). In the
event the Good Faith Deposit becomes nonrefundable as provided herein before the
Closing by reason of Sellers terminating this Agreement pursuant to Section
8.1(b) (in the event that the Closing does not occur on or prior to the End Date
solely as a result of Buyer’s material breach of its obligations under this
Agreement) or Section 8.1(d), the Good Faith Deposit Escrow Holder shall
immediately disburse the Good Faith Deposit and all interest or income accrued
thereon to Sellers to be retained by Sellers for their own account. Sellers’
retention of the Good Faith Deposit pursuant to the preceding sentence shall
constitute liquidated damages and shall be the exclusive remedies available to
Sellers in the event of such termination by Sellers. If the transactions
contemplated by this Agreement terminate in accordance with the termination
provisions hereof for any reason other than by Sellers pursuant to Section
8.1(b) (in the event that the Closing does not occur on or prior to the End Date
as a result of Buyer’s material breach of its obligations under this Agreement)
or Section 8.1(d) before the Sale Order is entered by the Bankruptcy Court, the
Good Faith Deposit Escrow Holder shall, subject to Section 8.1, return to Buyer
the Good Faith Deposit (together with all income or interest accrued thereon),
within three (3) Business Days after this Agreement is so terminated. The
Parties hereto agree that, prior to the earliest of (i) application of the Good
Faith Deposit against the payment of the Purchase Price, (ii) the Good Faith
Deposit becoming nonrefundable as provided herein before the Closing by reason
of Sellers terminating this Agreement pursuant to Section 8.1(b) (in the event
that the Closing does not occur on or prior to the End Date as a result of
Buyer’s material breach of its obligations under this Agreement) or Section
8.1(d) or (iii) the return of the Good Faith Deposit to Buyer under the
provisions of this Section 2.3, the Good Faith Deposit shall be treated for
federal, and applicable state and local, income Tax purposes as owned by Buyer.

 

 -11- 

 

 

2.4          Allocation of Purchase Price.

 

(a)       Within one hundred and twenty (120) calendar days following the
Closing, Buyer shall provide to Rising an allocation of the Purchase Price (and
all other capitalized costs) and any other amounts treated as purchase price for
tax purposes, among the Purchased Assets (the “Allocation Statement”). Such
allocation shall be made pursuant to Code Section 1060 and the Treasury
Regulations thereunder (and any similar provision of state, local or non-U.S.
Law, as appropriate). If, within thirty (30) calendar days of Rising’s receipt
of Buyer’s proposed allocation, Rising does not deliver to Buyer a written
notice (an “Allocation Objection Notice”) of any objections that it has to such
allocation, Buyer’s proposed allocation on such Allocation Statement shall be
deemed to have been accepted and agreed upon, and final and conclusive, for all
purposes of this Agreement; provided, that the Allocation Statement shall be
subject to amendment as a result of any adjustment to the Purchase Price under
this Agreement in a manner consistent with the allocation agreed upon and the
“residual method” of allocation as described in Section 1060 of the Code and the
Treasury Regulations thereunder. If Rising timely delivers to Buyer within such
thirty (30) calendar day period an Allocation Objection Notice, then Rising and
Buyer shall work together in good faith to resolve the disputed items. If Rising
and Buyer are unable to resolve all of the disputed items within thirty (30)
calendar days of Buyer’s receipt of the Allocation Objection Notice (or such
later date as Rising and Buyer may agree), then Rising and Buyer shall refer the
disputed items for resolution by the Accounting Firm. Promptly, but no later
than twenty (20) calendar days after acceptance of its appointment, the
Accounting Firm shall determine (it being understood that in making such
determination, the Accounting Firm shall be functioning as an expert and not as
an arbitrator) only those issues in dispute and shall render a written report as
to the resolution of those issues in dispute, which shall be conclusive and
binding on the Parties. In resolving any disputed item, the Accounting Firm (x)
shall be bound by the provisions of this Section 2.4 and (y) may not assign a
value to any item greater than the greatest value for such items claimed by
either Party or less than the smallest value for such items claimed by either
Party or include in its computation any item not included in the computation
provided by either Party. The Party (either Buyer, on the one hand, or Rising on
behalf of Sellers, on the other hand) whose determination of the amount of the
disputed items (in the aggregate) was farthest from the final determination of
such disputed items by the Accounting Firm shall bear the fees and expenses of
the Accounting Firm plus any out-of-pocket expenses (including attorneys’ and
accountants’ fees) of the Party whose determination of such items was closest to
the final determination by the Accounting Firm. If the determination of such
items by the Accounting Firm is equidistant between the determinations of the
parties, the fees of the Accounting Firm shall be borne equally by Buyer, on the
one hand, and Sellers, on the other hand, and each of Buyer, on the one hand,
and Sellers, on the other hand, shall bear the cost of their own out-of-pocket
expenses.

 

(b)       Sellers and Buyer agree that the allocation of Purchase Price (and all
other capitalized costs) and any other amounts treated as purchase price for tax
purposes as finally determined under this Section 2.4 shall be binding on all
Parties, and that Sellers and Buyer shall (and shall cause their Affiliates to)
report, act and file Tax Returns (including, but not limited to Internal Revenue
Service Form 8594) in all respects and for all purposes consistent with such
allocation.  In the event that any allocations set forth in this Section 2.4 are
disputed by any Taxing Authority, the Party receiving notice of such dispute
shall promptly notify and consult with the other Party concerning the resolution
of such dispute, and shall use reasonable best efforts to contest such dispute
in a manner consistent with the allocations as finally determined pursuant to
this Section 2.4. Neither Sellers nor Buyer shall take any position (whether in
audits, Tax Returns or otherwise) that is inconsistent with such allocations
unless otherwise required by a final “determination” (within the meaning of
Section 1313(a) of the Code).

 

 -12- 

 

 

2.5          Closing Date. Upon the terms and conditions set forth in this
Agreement, the consummation of the transactions contemplated by this Agreement
(the “Closing”) shall take place at the offices of Lowenstein Sandler LLP, 1251
Avenue of the Americas, New York, New York 10020, at 10:00 a.m. local time on
the second Business Day following the calendar day on which the last of the
conditions set forth in ARTICLE VII are satisfied or waived (other than those
conditions that by their nature are to be satisfied at the Closing, but subject
to the satisfaction or waiver of such conditions in accordance with this
Agreement), or at such other place or time as Buyer and Rising may agree in
writing. The close of business on the date on which the Closing actually occurs
is referred to as the “Closing Date.”

 

2.6          Deliveries of Buyer.

 

At or prior to the Closing, Buyer shall:

 

(a)       satisfy the Purchase Price in accordance with Section 2.2; and

 

(b)       deliver to Sellers:

 

(i)       the Assignment and Assumption Agreement, the Assignment and Assumption
of Leases, the Escrow Agreement and each other Ancillary Document to which Buyer
is a party, each dated as of the Closing Date and duly executed by Buyer (and in
the case of the Escrow Agreement, duly executed by the Escrow Agent);

 

(ii)      letters to the FDA acknowledging acceptance of the Product
Registrations, and related FDA Forms 356h;

 

(iii)     the Seller Credits Waiver, dated as of the Closing Date and duly
executed by Vimal Kavuru, in his capacity as agent pursuant to the Citron PPA;

 

(iv)     the following resale certificates for sales tax purposes: (A) New
Jersey ST-3 Resale Certificate, (B) Ohio STEC U Sales and Use Tax Unit Exemption
Certificate and (C) Tennessee Rv-F1300701, Tennessee Sales and Use Tax Blanket
Certificate of Resale;

 

(v)      the executed restrictive covenant agreements with certain employees of
Sellers pursuant to Section 6.3(e);

 

(vi)     to the extent not delivered as of the Agreement Date, a mutual release
of certain claims (the “Release”), duly executed and delivered by Buyer’s
Affiliates, as applicable, dated as of the Agreement Date and effective in
accordance with its terms;

 

(vii)    the termination of that certain transition services agreement and
administrative services agreement, each pursuant to the Citron PPA (the “Citron
Agreements”), delivered by Buyer’s Affiliates, as applicable; and

 

(viii)   the officer’s certificate required to be delivered pursuant to Section
7.2(c).

 

2.7          Deliveries of Sellers.

 

At or prior to the Closing, Sellers shall deliver to Buyer the following:

 

(a)       the Bill of Sale, the Assignment and Assumption Agreement, the Escrow
Agreement and each other Ancillary Document to which a Seller is a party, dated
as of the Closing Date and duly executed by each Seller, as applicable (and in
the case of the Escrow Agreement, duly executed by the Escrow Agent);

 

 -13- 

 

 

(b)       instruments of assignment of the Registered Intellectual Property (the
“Assignment of Intellectual Property”) that are owned by a Seller, as applicable
and included in the Purchased Assets, if any, dated as of the Closing Date, duly
executed by such Seller, in form reasonably acceptable to Buyer;

 

(c)       a copy of the final Sale Order;

 

(d)       the officer’s certificates required to be delivered pursuant to
Section 7.3(c);

 

(e)       each Seller will have delivered to Buyer a certificate dated as of the
Closing Date executed by the Secretary of such Person certifying (a) the
Organizational Documents of such Person, (b) resolutions duly adopted by the
board of directors (or committee thereof, as applicable) or similar governing
body (the “Board”) of such Person approving the execution, delivery and
performance of this Agreement and the instruments required to be executed and
delivered pursuant hereto, including the Escrow Agreement and the Ancillary
Documents to which it is a party, and the consummation of the transactions
contemplated by this Agreement, and that such resolutions have not been amended
and remain in full force and effect and (c) as to the incumbency of each
signatory of such Person to this Agreement and the instruments required to be
executed and delivered pursuant hereto;

 

(f)        letters to the FDA and related FDA Forms 356h with respect to the
Product Registrations owned by Sellers, in form and substance acceptable to
Buyer;

 

(g)       a good standing certificate or the equivalent for each Seller, dated
no earlier than ten (10) calendar days before the Closing Date, from the
applicable jurisdiction of incorporation or formation and from each other
jurisdiction in which each Seller is qualified to do business as a foreign
entity;

 

(h)       (i) with respect to each Seller that is not a disregarded entity (as
defined for purposes of Treasury Regulations Section 1.1445-2(b)(2)(iii)), a
statement from such Seller, dated as of the Closing Date prepared in accordance
with Treasury Regulations Section 1.1445-2(b)(2) of the Code certifying such
Seller’s non-foreign status for purposes of Section 1445 of the Code; and (ii)
with respect to each Seller that is a disregarded entity (as defined for
purposes of Treasury Regulations Section 1.1445-2(b)(2)(iii)), a statement from
the Person treated for federal income Tax purposes as the owner of such Seller,
dated as of the Closing Date and in form reasonably satisfactory to Buyer,
certifying (A) such Seller’s status as a disregarded entity (as defined for
purposes of Treasury Regulations Section 1.1445-2(b)(2)(iii)) whose separate
existence from such Person is disregarded and (B) such Person’s non-foreign
status for purposes of Section 1445 of the Code;

 

(i)        instruments of assignment and assumption of the Assumed Real Property
Leases, dated as of the Closing Date, in form reasonably acceptable to the
Parties (the “Assignment and Assumption of Leases”), duly executed by the
applicable Seller, in form reasonably acceptable to Buyer, and any other related
documentation or instruments necessary for the conveyance of any Assumed Real
Property Lease;

 

(j)        the release and assignment with respect to the Transferred Employees
contemplated by Section 6.3(a);

 

(k)       the executed Inventory Acknowledgement, certifying the Inventory Count
shall have taken place in accordance with Section 1.7;

 

(l)        a written acknowledgment of Sellers receipt of the Sellers Credits
Waiver duly executed by Sellers;

 

 -14- 

 

 

(m)      to the extent not delivered as of the Agreement Date, the Release, duly
executed and delivered by Parent and certain Sellers dated as of the Agreement
Date and effective in accordance with its terms;

 

(n)       the termination of the Citron Agreements, duly executed by Parent and
Sellers, as applicable;

 

(o)       possession of the Books and Records and Regulatory Documentation, in
each case, that is included in the Purchased Assets, and the other Purchased
Assets, provided that delivery to Buyer shall not be required of any Purchased
Assets already located at any of the premises covered by the Real Property
Leases included in the Purchased Assets; and

 

(p)       such other bills of sale, deeds, endorsements, assignments and
instruments of conveyance and transfer, dated as of the Closing Date and in form
reasonably satisfactory to Buyer, as Buyer may reasonably request to vest in
Buyer all the right, title and interest of Sellers in, to or under any or all of
the Purchased Assets.

 

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS

 

As an inducement to Buyer to enter into this Agreement and to consummate the
transactions contemplated hereby, except (a) as disclosed in any form, document
or report publicly filed with or publicly furnished to the U.S. Securities and
Exchange Commission (the “SEC”) by Parent or any of its Subsidiaries, during the
period from July 1, 2016 to the Agreement Date (excluding any disclosures set
forth in any “risk factors,” “forward-looking statements” or “market risk”
sections to the extent they are cautionary, predictive or forward-looking in
nature) (collectively, the “Parent SEC Disclosures”), (b) as disclosed in any
Bankruptcy Court filings by Parent or any of its Subsidiaries or (b) as
disclosed in the disclosure schedule delivered by Sellers to Buyer concurrently
with the execution of this Agreement (the “Sellers Disclosure Schedule”) each
Seller, jointly and severally, represents and warrants to Buyer as follows:

 

3.1          Organization. Such Seller is a legal entity duly formed, validly
existing and in good standing under the laws of the jurisdiction in which it was
formed. Section 3.1 of the Sellers Disclosure Schedule sets forth the name of
such Seller, and the jurisdiction in which it is formed, the jurisdictions, if
any, in which it is qualified to do business as of the Agreement Date. Subject
to the limitations imposed on such Seller as a result of having filed a petition
for relief under the Bankruptcy Code, such Seller has full power and authority
to own, lease and operate its properties and assets and to carry on its business
as presently conducted in the Acquired Business, except where the failure to
have such power or authority would not reasonably be expected to be material to
the Acquired Business, taken as a whole. Such Seller has delivered or made
available to Buyer true, correct and complete copies of its Organizational
Documents, in each case, as amended and or restated and in effect on the
Agreement Date. Such Seller is not in violation of any of the provisions of its
Organizational Documents.

 

3.2          Authority Relative to this Agreement; Consents and Approvals; No
Violation.

 

(a)       Such Seller has the full power and authority to execute and deliver
this Agreement and the Ancillary Documents and, subject to the entry of the Sale
Order and such other authorization as is required by the Bankruptcy Code,
perform its obligations under and consummate the transactions contemplated by
this Agreement, including the Asset Purchase. The execution, delivery and
performance by such Seller of this Agreement and the Ancillary Documents and the
consummation of the transactions contemplated by this Agreement, including the
Asset Purchase, have been duly and validly authorized by such Seller’s Board (or
a committee thereof) and no other actions on the part of such Seller, subject to
the entry of the Sale Order and such other authorization as is required by the
Bankruptcy Code, are necessary to authorize the execution and delivery by such
Seller of this Agreement and the Ancillary Documents or the consummation of the
transactions contemplated by this Agreement, including the Asset Purchase. This
Agreement and the Ancillary Documents have been duly and validly executed and
delivered by such Seller and, assuming this Agreement and the Ancillary
Documents constitute the legal, valid and binding agreement of Buyer, this
Agreement and the Ancillary Documents constitute, subject to Alternative Bids
(if any), the entry of the Sale Order and such other authorization as is
required by the Bankruptcy Code, the legal, valid and binding agreement of such
Seller and are enforceable against such Seller in accordance with their terms,
except as and to the extent that such validity and enforceability may be limited
by equitable principles of general applicability (whether considered in a
proceeding at law or in equity) (the “Enforceability Exceptions”).

 

 -15- 

 

 

(b)       Other than in connection with or in compliance with (i) the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules
and regulations promulgated thereunder (the “HSR Act”), (ii) the approvals set
forth in Section 3.2(b) of the Sellers Disclosure Schedule (covering the
applicable Laws or other legal restraints of foreign countries designed to
govern competition or trade regulation or to prohibit, restrict or regulate
actions with the purpose or effect of monopolization or restraint of trade
(collectively, “Antitrust Laws”)) and (iii) the Sale Order (clauses (i) through
(iii), collectively, the “Transaction Approvals”), and subject to the accuracy
of Buyer’s representations and warranties set forth in Section 5.2(b), no
authorization, consent, order, license, permit or approval of, or registration,
declaration, notice or filing with, any Governmental Entity is required to be
made or obtained under applicable Law for the consummation by such Seller of the
transactions contemplated hereby, except for such authorizations, consents,
orders, licenses, permits, approvals, registrations, declarations, notices and
filings that are not required to be made or obtained prior to the consummation
of such transactions or that the failure to make or obtain would not, in the
case of this Section 3.2(b), reasonably be expected to be material to the
Acquired Business, taken as a whole.

 

(c)       Except as set forth in Section 3.2(c) of the Sellers Disclosure
Schedule (the “Consents”), the execution and delivery by such Seller of this
Agreement and the Ancillary Documents do not, and (assuming the Transaction
Approvals are obtained and after giving effect to the Sale Order and such other
authorization as is required by the Bankruptcy Code) the consummation of the
transactions contemplated hereby and compliance with the provisions hereof will
not, (i) require any consent or approval under, violate, conflict with, result
in any breach of or any Loss of any benefit under, constitute an impermissible
change of control or default under, or result in termination or give to others
any right of termination, vesting, amendment, acceleration or cancellation of,
or result in the creation of a Lien (other than Permitted Liens) upon any of the
Purchased Assets pursuant to, any Contract to which such Seller is a party or by
which such Seller or any of the Purchased Assets are bound, (ii) conflict with
or result in any violation of any provision of the Organizational Documents of
such Seller or (iii) conflict with or violate any applicable Laws.

 

3.3          Financial Statements. Sellers have made available to Buyer copies
of (a) the audited balance sheet of the Acquired Business as of June 30, 2018
(the “Most Recent Balance Sheet”), and the related audited income statement and
audited statement of cash flows for the twelve month period ended June 30, 2018,
together with the accompanying notes thereto, and (b) the unaudited balance
sheet of the Acquired Business as of December 31, 2018 and the related unaudited
income statement and statement of cash flows for the six (6) month period ended
December 31, 2018, together with the accompanying notes thereto (collectively,
the “Financial Statements”). Each of the Financial Statements has been prepared
in all material respects in conformity with U.S. generally accepted accounting
principles (“GAAP”) (except as permitted by the SEC in connection with financial
statements prepared on a carve-out basis) applied on a consistent basis during
the periods involved (except as may be indicated therein or in the notes
thereto), and presents fairly in all material respects the consolidated
financial position, results of operations and cash flows of the Acquired
Business as at the dates and for the periods indicated therein.

 

 -16- 

 

 

3.4          Compliance with Law; Permits.

 

(a)       Except as would not reasonably be expected to be material to the
Acquired Business, taken as a whole, or as set forth in Section 3.4(a) of the
Sellers Disclosure Schedule, such Seller is, and since January 1, 2016 has been,
in compliance with all applicable federal, state, local and foreign laws,
statutes, ordinances, rules, regulations, judgments, orders, injunctions,
decrees or agency requirements of Governmental Entities (collectively, “Laws”
and each, a “Law”) applicable to the Purchased Assets or the operation of the
Acquired Business. Except as would not reasonably be expected to be material to
the Acquired Business, taken as a whole, since January 1, 2016, such Seller has
not received any written notice from any Governmental Entity regarding any
actual or alleged failure to comply with any Law applicable to the Purchased
Assets or the operation of the Acquired Business.

 

(b)       Except as would not reasonably be expected to be material to the
Acquired Business, taken as a whole and subject to the limitations imposed on
Sellers as a result of having filed a petition for relief under the Bankruptcy
Code, such Seller holds or licenses all Governmental Authorizations necessary
for such Seller to own, lease and operate its applicable Purchased Assets, and
to carry on and operate the Acquired Business as currently conducted. Section
3.4(b) of the Sellers Disclosure Schedule sets forth a true, correct and
complete list of all material Governmental Authorizations held by each Seller.

 

(c)       Such Seller (i) has instituted policies and procedures designed to
ensure compliance with the Bribery Legislation Laws in each jurisdiction in
which such Seller operates, and (ii) has maintained such policies and procedures
in force. Such Seller, and to the knowledge of such Seller, its Representatives
are in, and have for the past three (3) years been in compliance, in all
material respects with the Bribery Legislation Laws of any jurisdictions that
are applicable to such Seller and its Representatives, in connection with the
Acquired Business. Such Seller and, to the knowledge of such Seller, its
Representatives have not paid, offered or promised to pay, or authorized or
ratified the payment, directly or indirectly, of any monies or anything of value
to any national, provincial, municipal or other government official or any
political party or candidate for political office for the purpose of corruptly
influencing any act or decision of such official or of any government to obtain
or retain business, or direct business to any Person or to secure any other
improper benefit or advantage, in each case, in violation in any material
respect of the Bribery Legislation Laws of any jurisdictions that are applicable
to such Seller and its Representatives in connection with the Acquired Business.

 

(d)       Such Seller has instituted policies and procedures designed to ensure
compliance with all International Trade Laws and Foreign International Trade
Laws applicable to such Seller and the Acquired Business and has maintained such
policies and procedures in force. Such Seller is and for the past three (3)
years has been in compliance in all material respects with all International
Trade Laws and Foreign International Trade Laws applicable to such Seller and
the Acquired Business. Such Seller has not, within the last year, received any
written notice from any Governmental Entity of any actual or potential violation
or failure to comply with any International Trade Laws and Foreign International
Trade Laws. No licenses or other authorizations are required under any
International Trade Laws or Foreign International Trade Laws for the operation
of the Acquired Business as currently conducted, except for such licenses or
other authorizations that the failure to obtain would not reasonably be expected
to be material to the Acquired Business, taken as a whole.

 

 -17- 

 

 

3.5          Environmental Matters. Except as would not reasonably be expected
to be material to the Acquired Business, taken as a whole, or as set forth in
Section 3.5 of the Sellers Disclosure Schedule, (a) such Seller is, to such
Seller’s knowledge, in compliance with applicable Environmental Laws, and each
has currently and at all relevant times had, all Environmental Permits necessary
for the conduct and operation of the Acquired Business and (b) all such
Environmental Permits are in full force and effect, (c) since January 1, 2016,
such Seller has not received any written notice, demand, letter or claim
alleging that such Seller is in violation of, or liable under, any Environmental
Law and any past noncompliance with Environmental Laws or Environmental Permits
has been resolved without any pending, ongoing or future obligation, cost or
liability, (d) to the knowledge of such Seller, no portion of any Real Property
formerly owned by such Seller, any Leased Real Property or any Real Property
formerly leased by such Seller, is listed on the National Priorities List under
CERCLA, the Comprehensive Environmental Response, Compensation and Liability
Information System List or any similar state or foreign list of sites requiring
environmental investigation or remediation under any Environmental Law, (e) such
Seller, nor to the knowledge of such Seller, any other Person, has generated,
disposed of, released or placed any Hazardous Materials on, under or at any
Leased Real Property or any Real Property formerly owned or leased by such
Seller, (f) such Seller has not disposed of, released, placed or arranged for
the transportation or disposal of any Hazardous Materials on, under or at any
other location, including third party disposal facilities and locations used or
operated by such Seller, and (g) such Seller is not subject to any judgment,
decree or judicial order relating to compliance with Environmental Laws,
Environmental Permits or the investigation, sampling, monitoring, treatment,
remediation, removal or cleanup of Hazardous Materials. As used in this Section
3.5, the term “release” or “released” means any spilling, leaking, pumping,
pouring, emitting, emptying, discharging, migrating, injecting, escaping,
leaching, dumping or disposing of Hazardous Material into the environment.

 

3.6          Employee Benefit Plans.

 

(a)       Section 3.6(a) of the Sellers Disclosure Schedule sets forth a correct
and complete list, as of the Agreement Date, of each Seller Benefit Plan. With
respect to each Seller Benefit Plan, to the extent applicable, correct and
complete copies of the following have been delivered or made available to Buyer
by Sellers: (i) the most recent plan document (which, for the avoidance of
doubt, with respect to any Seller Benefit Plan for which a form agreement is
used, shall consist of a copy of such form), including all amendments, or if no
such documentation exists, a description of such Seller Benefit Plan; (ii) the
most recent related trust documents, custodial agreements, insurance policies,
or other funding arrangements; (iii) the most recent annual report (Form 5500)
filed with the IRS; (iv) the most recent determination, opinion or advisory
letter from the IRS for any Seller Benefit Plan that is intended to qualify
under Section 401(a) of the Code; (v) the most recent summary plan description,
including any summaries of material modifications and summaries of benefits and
coverage, and (vi) copies of any material written notices, letters, or other
correspondence from the IRS, Department of Labor, Pension Benefit Guaranty
Corporation, or other Governmental Entity relating to any Seller Benefit Plan
within the last six (6) years.

 

(b)       Except as set forth in Section 3.6(b) of the Sellers Disclosure
Schedule or as would not reasonably be expected to be material to the Acquired
Business, taken as a whole, (x) each U.S. Seller Benefit Plan has been
established, operated and administered in accordance with its terms and the
requirements of all applicable Laws, including ERISA and the Code, and (y) there
are no pending or, to such Seller’s knowledge, threatened in writing claims
(other than claims for benefits in the Ordinary Course of Business) with respect
to any Seller Benefit Plan, which have been asserted or instituted. Each Seller
Benefit Plan that is or has been in the last six (6) years a “nonqualified
deferred compensation plan” within the meaning of Section 409A of the Code and
associated Treasury Department guidance, if any, is, and has always been, in
operational and documentary compliance in all material respects with Section
409A of the Code.

 

 -18- 

 

 

(c)       Except as set forth in Section 3.6(c) of the Sellers Disclosure
Schedule, neither such Seller nor any of its ERISA Affiliates, sponsor,
maintain, or contribute to, or have within the last six (6) years sponsored,
maintained or contributed to, any employee benefit plan that is or within the
last six (6) years was (i) subject to Title IV of ERISA or Section 412 of the
Code, (ii) a “multiple employer plan” within the meaning of Sections 4063 or
4064 of ERISA, or (iii) a “multiemployer plan” as defined in Section 4001(a)(3)
of ERISA (a “Multiemployer Plan”). Except as set forth in Section 3.6(c) of the
Sellers Disclosure Schedule, other than as required by Law, no Seller Benefit
Plan provides post-termination or retiree health benefits to any individual for
any reason.

 

(d)       Except as would not reasonably be expected to be material to the
Acquired Business, taken as a whole, each Non-U.S. Seller Benefit Plan (i) if
intended to qualify for special tax treatment, meets all the requirements for
such treatment, (ii) if required to be funded, book-reserved or secured by an
insurance policy, is funded, book-reserved, or secured by an insurance policy,
as applicable, based on reasonable actuarial assumptions in accordance with
applicable accounting principles, and (iii) has been maintained in compliance
with all applicable Laws.

 

(e)       Except as set forth in Section 3.6(e) of the Sellers Disclosure
Schedule, neither the execution of this Agreement nor the completion of the
transactions contemplated by this Agreement (either alone or in conjunction with
any other event) will result in (i) any severance or compensation payment
becoming due to any employee of such Seller, (ii) the acceleration of vesting or
payment to any employee of such Seller or (iii) any increase to the compensation
or benefits otherwise payable under any Seller Benefit Plan.

 

3.7          Absence of Certain Changes or Events. Except for the Bankruptcy
Case and the entry of the Sale Order pursuant to, inter alia, Sections 363 and
365 of the Bankruptcy Code:

 

(a)       Except as set forth in Section 3.7(a) of the Sellers Disclosure
Schedule, since June 30, 2018, the Acquired Business has been conducted in all
material respects in the Ordinary Course of Business;

 

(b)       since June 30, 2018, there has not been any fact, change,
circumstance, event, occurrence, condition or development that has had,
individually or in the aggregate, a Material Adverse Effect; and

 

(c)       there has not been any physical damage, destruction or other Losses
(whether or not covered by insurance) affecting any of the Purchased Assets or
Leased Real Property, in each case, in excess of $50,000 individually or
$150,000 in the aggregate.

 

3.8          Litigation. Except as set forth in Section 3.8 of the Sellers
Disclosure Schedule, as of the Agreement Date, (a) there is no civil, criminal
or administrative Proceeding pending or, to the knowledge of such Seller,
threatened in writing against such Seller (or to the knowledge of such Seller,
pending or threatened against any owners, managers, officers or employees of
Sellers with respect to their business activities on behalf of such Seller), in
each case, related to the Acquired Business, (b) there are no unsatisfied
judgments against such Seller or any of their respective assets or properties
or, to the knowledge of such Seller, past or present owners, managers, officers
or employees (in their respective capacity as such), in each case, related to
the Acquired Business, and (c) neither such Seller (in respect of the Acquired
Business) nor any of the Purchased Assets are subject to any Governmental Order,
other than Governmental Orders of general applicability which are not material
to such Seller or the Purchased Assets, taken as a whole.

 

3.9          Tax Matters. Except as set forth in Section 3.9 of the Sellers
Disclosure Schedule:

 

(a)       Parent (solely in respect of the Acquired Business) and such Seller
have timely filed (taking into account any extension of time within which to
file) all income, sales and use and other material Tax Returns required to be
filed by any of them and all such filed Tax Returns are complete and accurate in
all material respects.

 

 -19- 

 

 

(b)       Parent (solely in respect of the Acquired Business) and such Seller
have paid all income, sales and use and other material Taxes that are required
to be paid by any of them (whether or not shown on any Tax Return), except, in
each case of Section 3.9(a) and this Section 3.9(b), with respect to matters
being contested in good faith and for which adequate reserves have been
established in the Financial Statements accordance with GAAP.

 

(c)       There are no claims, assessments, deficiencies or other adjustments,
audits, examinations, investigations or other administrative or judicial
Proceedings in respect of material Taxes that are ongoing, pending, or to
Sellers’ knowledge, threatened in writing, which, if not satisfied or resolved,
would result in a Lien on the Purchased Assets that would survive the Closing
Date.

 

(d)       There are no Liens for Taxes (and no Taxing Authority has proposed in
writing any Liens for Taxes) on any of the Purchased Assets other than Permitted
Liens.

 

(e)       Such Seller has not participated in, and has not been a party to, any
“listed transaction” within the meaning of Section 6707A(c)(2) of the Code and
Treasury Regulations Section 1.6011-4(b)(2).

 

(f)        Parent (solely in respect of the Acquired Business) and such Seller
have not waived any statute of limitations in respect of Taxes or agreed to any
extension of time with respect to a Tax assessment or deficiency which waiver or
extension remains outstanding.

 

(g)       In the past three (3) years, (i) no claim has been made in writing by
a Taxing Authority in a jurisdiction where Parent (solely in respect of the
Acquired Business) or such Seller does not file Tax Returns that Parent (solely
in respect of the Acquired Business) or such Seller, as applicable, is or may be
subject to taxation by that jurisdiction, and (ii) such Seller has not recorded
a reserve for Tax Liabilities for financial accounting purposes due to (A)
possible nexus in a jurisdiction in the United States, or (B) possible permanent
establishment in a jurisdiction outside the United States, in each case, in
which such Seller has not filed Tax Returns as a result of the operation,
ownership or use of the Purchased Assets or the Acquired Business.

 

(h)       None of the Purchased Assets is an interest (other than indebtedness
within the meaning of Section 163 of the Code) in an entity taxable as a
corporation, partnership, disregarded entity, trust or real estate mortgage
investment conduit for U.S. federal income tax purposes.

 

(i)        None of Sellers nor any of its Affiliates (i) has executed or entered
into any agreement with, or obtained any consents or clearances from, any Taxing
Authority, or (ii) has been subject to any ruling guidance specific to such
Seller that would be binding on Buyer for any Tax period (or portion of any Tax
period) beginning after the Closing Date.

 

(j)        Notwithstanding anything herein to the contrary, the representations
and warranties contained in this Section 3.9 and, to the extent expressly
referring to Code sections, Section 3.6, are the sole and exclusive
representations of such Seller with respect to Taxes and Tax matters.

 

3.10        Employment and Labor Matters.

 

(a)       Such Seller is not a party to any collective bargaining agreement,
labor union contract, or trade union agreement covering employees in the United
States.

 

 -20- 

 

 

(b)       Except as would not reasonably be expected to be material to the
Acquired Business, taken as a whole, or as set forth in Section 3.10(b) of the
Sellers Disclosure Schedule, (i) there is no strike, lockout, slowdown, or work
stoppage against such Seller pending or, to such Seller’s knowledge, threatened
in writing; (ii) there is no pending charge or complaint against such Seller by
the National Labor Relations Board or any comparable Governmental Entity; and
(iii) such Seller has complied with all Laws regarding employment and employment
practices (including anti-discrimination), terms and conditions of employment
and wages and hours (including classification of employees and equitable pay
practices) and other Laws in respect of any reduction in force (including
notice, information and consultation requirements), and no claims against such
Seller relating to non-compliance with the foregoing are pending or, to such
Seller’s knowledge, threatened in writing.

 

3.11        Real Property. Such Seller (a) has a good and valid leasehold
interest in each Leased Real Property subject to an Assumed Real Property Lease,
(b) has not received written notice of any material default under any agreement
evidencing any Lien or other agreement, in each case, affecting any Assumed Real
Property Lease, which default continues on the Agreement Date, and (c) has never
held and does not currently hold title to or any ownership interest in, other
than a leasehold, license, use or occupancy interest and a purchase option
pursuant to the Assumed Real Property Lease, any Real Property.

 

3.12        Intellectual Property.

 

(a)       Section 3.12(a) of the Sellers Disclosure Schedule sets forth a
complete list of all Registered Intellectual Property (setting forth, for each
item, the name of the owner of each such registration or application, the
applicable jurisdiction, application or registration number, and date of
application, registration or issuance, as applicable) used in the Acquired
Business.

 

(b)       Except as would not reasonably be expected to be material to the
Acquired Business, taken as a whole, or as set forth in Section 3.12(b) of the
Sellers Disclosure Schedule, none of the Registered Intellectual Property has
expired or been cancelled or expressly abandoned.

 

(c)       Such Seller owns all right, title, and interest, free and clear of all
Liens (except for Permitted Liens) to all of its respective Registered
Intellectual Property, except as would not reasonably be expected to be material
to the Acquired Business, taken as a whole, or as set forth in Section 3.12(c)
of the Sellers Disclosure Schedule.

 

(d)       Except as would not reasonably be expected to be material to the
Acquired Business, taken as a whole, or as set forth in Section 3.12(d) of the
Sellers Disclosure Schedule, to such Seller’s knowledge, as of the Agreement
Date, (i) the conduct of the Acquired Business does not infringe, violate or
constitute misappropriation of any Intellectual Property of any third Person,
(ii) no third Person is infringing, violating, or misappropriating any
Intellectual Property owned by such Seller and primarily used or held for use in
the Acquired Business, and (iii) as of the Agreement Date, there is no pending
claim asserted in writing against such Seller (including any “cease and desist”
letters and invitations to license) asserting that such Seller’s conduct of the
Acquired Business has infringed, violated or misappropriated, or is infringing,
violating or misappropriating, any Intellectual Property rights of any third
Person.

 

(e)       Except as would not reasonably be expected to be material to the
Acquired Business, taken as a whole, each Seller complies with its internal
policies and procedures and any other legal requirements, to the extent
applicable, relating to privacy, data protection, and the collection, retention,
protection and use of personal information collected, used, or held for use by
or on behalf of such Seller and there are no claims pending or, to such Seller’s
knowledge, threatened against such Seller alleging a violation of any third
Person’s privacy or personal information or data rights. To such Seller’s
knowledge, such Seller has not been subject to any breaches of internal networks
or servers by any third party or any complaints based thereon.

 

 -21- 

 

 

(f)       Except as set forth in Section 3.12(f) of the Sellers Disclosure
Schedule, there are no material Proceedings pending or, to the knowledge of such
Seller, that have been threatened by any Person, challenging the ownership,
validity or enforceability of any Intellectual Property (or, to the knowledge of
such Seller, any Intellectual Property licensed to any Seller pursuant to any
Intellectual Property license used or held for use in the Acquired Business (the
“Licensed Intellectual Property”)). To the knowledge of such Seller, no
Intellectual Property used or held for use in the Acquired Business has been
developed or created in conjunction with any funding provided by a Governmental
Entity which would grant any Governmental Entity any present or contingent
intellectual property rights with respect thereto.

 

(g)       To such Seller’s knowledge, such Seller is in material compliance with
the terms and conditions of all Intellectual Property licenses pursuant to which
such Licensed Intellectual Property is licensed. To the knowledge of such
Seller, no licensor–party to any Intellectual Property license is in material
breach of any of its obligations to such Seller thereunder.

 

(h)       Except as set forth in Section 3.12(h) of the Sellers Disclosure
Schedule, the Intellectual Property and the Licensed Intellectual Property
included in the Purchased Assets, collectively, constitute all of the
Intellectual Property owned or used by such Seller that is material to the
conduct of the Acquired Business as currently conducted.

 

(i)        Since July 1, 2016, such Seller has obtained from all consultants,
advisors, employees and independent contractors who are authors or inventors
under the law of any Intellectual Property that is included in the Purchased
Assets (each a “Creator”), exclusive ownership of all of the Creators’
intellectual property rights in such contribution that such Seller does not
already own by operation of Law, except as set forth in Section 3.12(i) of the
Sellers Disclosure Schedule. No Creator has retained any rights, licenses,
claims or interest with respect to any such Intellectual Property which are
material to the Products or the Acquired Business. Such Seller has provided or
made available to Buyer copies of all assignment forms currently used by such
Seller with respect to Creators.

 

(j)        Such Seller has taken commercially reasonable steps to protect and
preserve the confidentiality of all Trade Secret Rights of such Seller or any of
its Subsidiaries or provided by any third party to such Seller or any of its
Subsidiaries. Except as set forth in Section 3.12(j) of the Sellers Disclosure
Schedule, all current and former employees and contractors of such Seller and
its Affiliates and third parties having access to any such Trade Secret Rights
have executed and delivered to such Seller a written agreement regarding the
protection of such Trade Secret Rights. Such Seller has taken commercially
reasonable steps to implement and maintain a reasonable security plan consistent
with industry practices of companies offering similar products or services. To
the knowledge of such Seller, neither Seller nor any of its Subsidiaries have
experienced any breach of security or otherwise unauthorized access by third
parties to the Trade Secret Rights in the possession, custody or control of such
Seller or any of its Subsidiaries.

 

3.13        Material Contracts.

 

(a)       As of the Agreement Date, except as set forth in Section 3.13(a) of
the Sellers Disclosure Schedule, such Seller is not a party to nor bound by any
of the following Contracts (other than the Seller Benefit Plans) (collectively,
the “Material Contracts”):

 

(i)       any “material contract” (as such term is defined in Item 601(b)(10) of
Regulation S-K promulgated by the SEC) (other than any Seller Benefit Plan);

 

 -22- 

 

 

(ii)      any Contract that contains any non-competition or exclusivity
provisions (or that obligates Buyer or any of its Affiliates to enter into any
non-compete or exclusivity arrangements following the Closing) binding upon such
Seller with respect to any line of business or geographic area, or that contain
any non-solicitation provisions restricting such Seller’s ability to solicit,
hire or engage any Person as an employee or consultant (or that obligates Buyer
or any of its Affiliates to enter into any such non-solicitation arrangements
following the Closing);

 

(iii)     any Contract that requires (or would require upon the happening of a
contingency) the disposition of any material Purchased Assets or any portion of
the Acquired Business of such Seller prior to Closing, or by Buyer or its
Affiliates following the Closing, other than dispositions in the Ordinary Course
of Business;

 

(iv)     any material Contract with each of (A) the fifteen (15) largest
customers, and (B) the ten (10) largest suppliers or service providers (measured
by dollar volume of purchases or sales, respectively) for the eight (8) month
period ended December 31, 2018;

 

(v)      any material Contract with a customer that expressly obligates such
Seller to conduct business with any third party on an exclusive basis or that
contains “most favored nation” or similar covenants;

 

(vi)     any Contract evidencing Indebtedness for borrowed money (other than
intercompany Indebtedness owed by such Seller to any Affiliate thereof) of such
Seller (in respect of the Acquired Business), in any such case having an
outstanding principal amount in excess of $2,000,000;

 

(vii)    any Contract that grants any right of first refusal, right of first
offer or similar right to any other Person with respect to any material
Purchased Assets;

 

(viii)   any Contract that could reasonably be expected to account for aggregate
revenue of $2,000,000 or more during the fiscal year ending June 30, 2019;

 

(ix)      any executory Contract relating to the acquisition (by merger,
purchase of stock or assets or otherwise) by Sellers with respect to any
operating business or material assets (other than routine purchase orders in the
Ordinary Course of Business) or the capital stock or other equity securities of
any other Person;

 

(x)       any Intellectual Property license, and any Contract pursuant to which
such Seller grants a license, covenant not to sue, option or other right with
respect to any Licensed Intellectual Property;

 

(xi)      any Contract with or issued by any Governmental Entity;

 

(xii)     any Contract involving the payment of royalties or otherwise providing
for profit sharing;

 

(xiii)    any Contract relating to customer rebates, credits and allowances;

 

(xiv)   any material joint venture or limited liability company agreement
relating to the formation, creation, operation, management or control of any
joint venture or limited liability company, other than any such Contract solely
between or among such Seller and any other Seller; and

 

 -23- 

 

 

(xv)    any Contract with an affiliate or other Person that would be required to
be disclosed, and has not been disclosed, by Parent under Item 404(a) of
Regulation S-K promulgated under the Exchange Act.

 

(b)       All contracts of the types referred to in clauses (i) through (xii)
above are referred to herein as “Material Contracts.”

 

(c)       Except as set forth in Section 3.13(c) of the Sellers Disclosure
Schedule, each Material Contract listed on Section 3.13(a) of the Sellers
Disclosure Schedule is a valid and binding obligation of Seller(s) party thereto
and, to the knowledge of Sellers, the other party or parties thereto in
accordance with its terms and conditions, except as and to the extent that such
validity and enforceability may be limited by (i) bankruptcy, insolvency, or
other similar laws affecting the enforcement of creditors’ rights generally,
(ii) the Enforceability Exceptions and (iii) the obligation to pay Cure Costs
under Section 365 of the Bankruptcy Code and Section 1.5.

 

(d)       With respect to any Material Contract, no event has occurred or not
occurred through such Seller’s action or inaction or, to such Seller’s
knowledge, prior to the Agreement Date through the action or inaction of any
third party which, with notice or the lapse of time or both, would constitute a
default or result in the termination of or a right of termination or cancelation
under any Material Contract, accelerate the performance or obligations required
thereby, or result in the loss of any benefit under the terms of any Material
Contract to which such Seller is a party, except for the obligation to pay Cure
Costs.

 

3.14         Suppliers and Customers. Section 3.14 of the Sellers Disclosure
Schedule lists the fifteen (15) largest customers of the Acquired Business and
the ten (10) largest suppliers of goods and services to the Acquired Business
(measured, in each case, by dollar volume of purchases or sales) for the eight
(8) month period ended December 31, 2018, and the dollar amount of purchases or
sales which each listed customer or supplier represented during such period.

 

3.15        Certain Regulatory Matters.

 

(a)       Such Seller’s facilities used in the operation of the Acquired
Business are in compliance, in all material respects, with the FDCA, to the
extent applicable, and with the Law enforced by the Drug Enforcement
Administration, and such Seller has paid all establishment fees required by any
Governmental Entity applicable to the facilities, in all material respects;

 

(b)       except as set forth in Section 3.15(b) of the Sellers Disclosure
Schedule, as of the Agreement Date, (x) all of the Products have been developed,
manufactured, stored, packaged, Labeled, distributed, imported, exported,
offered for sale, sold, promoted, and disposed of in material compliance with
the FDCA and all applicable Laws, and (y) none of the Products have been subject
to any material recall or market withdrawal and no material recall or market
withdrawal is currently under consideration by such Seller;

 

(c)       since July 1, 2016, such Seller has not been the subject of any
material enforcement action by the FDA in respect of the Acquired Business;

 

(d)       such Seller has not been (based on a conviction by the courts or a
finding of fault by a regulatory authority): (i) debarred pursuant to the
Generic Drug Enforcement Act of 1992 (21 U.S.C. 335a), as amended from time to
time, (ii) disqualified from participating in clinical trials pursuant to 21
C.F.R. §312.70, as amended from time to time, (iii) disqualified as a testing
facility under 21 C.F.R. Part 58, Subpart K, as amended from time to time,
(iv) excluded, debarred or suspended from or otherwise ineligible to participate
in a “Federal Health Care Program” as defined in 42 U.S.C. 1320a-7b(f), as
amended from time to time, or any other governmental payment, procurement or
non-procurement program, or (v) included on the HHS/OIG List of Excluded
Individuals/Entities, the General Services Administration’s List of Parties
Excluded from Federal Programs, or the FDA Debarment List;

 

 -24- 

 

 

(e)       to such Seller’s knowledge, no officer, employee or agent of any
Seller, in their capacity as such, has made an untrue statement of a material
fact or fraudulent statement to the FDA, failed to disclose a material fact
required to be disclosed to the FDA, or committed an act, made a statement, or
failed to make a statement that, at the time such disclosure was made, would
reasonably be expected to provide a basis for the FDA to invoke its policy
respecting “Fraud, Untrue Statements of Material Facts, Bribery, and Illegal
Gratuities”, set forth in 56 Fed. Reg. 46191 (September 10, 1991); and

 

(f)       except as set forth in Section 3.15(f) of the Sellers Disclosure
Schedule as of the Agreement Date, (i) such Seller has timely paid in all
material respects: (A) all Medicaid rebates invoiced or to be invoiced (based
upon utilization reports submitted by Sellers to Governmental Authorities on or
before the Agreement Date) by applicable State Medicaid Programs, and (B) all
invoiced or to be invoiced (based upon utilization reports submitted by Sellers
to Governmental Authorities on or before the Agreement Date) supplemental
rebates due any State based upon such Seller’s participation in a Supplemental
State Medicaid Rebate Program, (ii) no State Medicaid Program is pursuing
collection from any Seller of any unpaid or untimely paid Medicaid or
Supplemental State rebates, and (iii) no Seller is engaged in a Medicaid rebate
dispute resolution process with the federal government or any State.

 

3.16        Products; Product Liability.

 

(a)       The Products listed on Schedule 1.1(d), together with the Excluded
Assets, constitute all products that Sellers own or have an interest in, with
respect to the Acquired Assets.

 

(b)       Each Product developed, manufactured, licensed, marketed, produced,
distributed or sold by or on behalf of such Seller is, as of the date of this
Agreement, in compliance in all material respects with all applicable Laws,
including Health Care Laws, and with the specifications and standards contained
in the Product Registrations, was fit for its intended purpose and is and has
been in material conformity with all applicable Contracts of such Seller. Such
Seller has no material Liability for repair or replacement of any of the
Products manufactured, licensed, marketed, produced, distributed or sold by or
on behalf of Sellers, other than the reserve for product warranty claims (if
any) set forth on the face of the Most Recent Balance Sheet and replacement in
the Ordinary Course of Business. For the last three (3) years, the Labeling for
each Product (including all content of such Labeling) is and has been, in all
material respects, in accordance with applicable Law, the specifications for the
Product, and the relevant provisions of the applicable Product Registration. The
labeling of all products are in compliance with 21 CFR 201. No Product is
subject to any guaranty, warranty or other indemnity beyond what has been made
available to Buyer.

 

(c)       Except as set forth in Section 3.16(c) of the Sellers Disclosure
Schedule, such Seller has not, in the past three (3) years, voluntarily or
involuntarily initiated, conducted or issued, or caused to be initiated,
conducted or issued, nor is such Seller as of the date of this Agreement
investigating any material recall, field alerts, field corrections, market
withdrawal or replacement (other than replacement in the Ordinary Course of
Business), safety alert, warning, “dear doctor” letter, investigator notice, or
other written notice or action due to an alleged lack of safety, efficacy or
regulatory compliance of any Product.

 

(d)       Except as set forth in Section 3.16(d) of the Sellers Disclosure
Schedule, such Seller has not, in the past three (3) years, received any written
notice that any Governmental Entity has (i) commenced or initiated the material
recall of any Product sold by or on behalf of Sellers or alleging any material
violations of any federal, state or local or any payor “fraud and abuse,”
consumer protection or false claims statutes or regulations or any pricing or
rebate reporting requirements, (ii) commenced, threatened to initiate or is
investigating, any material action to enjoin the manufacture or distribution of
any Product sold or intended to be sold by or on behalf of Sellers, or (iii)
issued any demand letter, finding of deficiency or non-compliance, in any
material respect, with respect to any Product or the Acquired Business.

 

 -25- 

 

 

3.17        Product Distribution Practices. Except as would not reasonably be
expected to be material to the Acquired Business, taken as a whole, since July
1, 2016, to the knowledge of such Seller, such Seller has (a) shipped and sold
the Products in quantities that are substantially consistent with then-current
market demand, and (b) priced all Products in the Ordinary Course of Business.

 

3.18        Product Registrations; Regulatory Compliance.

 

(a)       A true, correct and complete list of the Product Registrations is set
forth in Section 3.18(a) of the Sellers Disclosure Schedule. Except as set forth
in Section 3.18(a) of the Sellers Disclosure Schedule, Sellers are the sole and
exclusive owner of the Product Registrations, free and clear of any Liens, and
no right of reference has been granted to any Person with respect to any of the
Product Registrations. Sellers hold or license the Product Registrations
required for the commercial sale of the Products in the countries where such
Products are sold as of the date of this Agreement and such Product
Registrations are valid and in full force and effect, in all material respects.

 

(b)       Such Seller has not received any written notice, letters or other
correspondence from the FDA, or any other Governmental Entity or Person
threatening revocation, cancellation, suspension, non-renewal or adverse
modification or contesting any of their Product Registrations.

 

(c)       Since July 1, 2016, such Seller has not received written notice from
the FDA that the clinical and pre-clinical studies, whether or not conducted
under an IND, submitted to the FDA in support of the Product Registrations were
not conducted in all material respects in accordance with standard medical and
scientific research procedures and all applicable Health Care Laws, including
the FDCA and its applicable implementing regulations at 21 C.F.R. Parts 50, 54,
56, 58 and 312.

 

(d)       Since July 1, 2016, such Seller has not received any written notice
from the FDA which would reasonably be expected to lead to the denial of an
application for marketing approval or other Product Registration currently
pending before the FDA.

 

(e)       Such Seller, in all material respects, has (i) submitted the
applications to the FDA and applicable Governmental Entity in the countries
where the Products are commercially marketed to maintain the Product
Registrations, including drug registration and listing submissions to the FDA,
(ii) paid and is current with respect to all filings or other fees due to any
Governmental Entity with respect thereto, except as set forth in Section 3.18(e)
of the Sellers Disclosure Schedule, or (iii) license rights to the appropriate
Governmental Authorizations which license rights remain in full force and
effect. To the knowledge of such Seller, no director, officer, manager, employee
or owner of such Seller has received a written notice that he or she is under
investigation for conduct that could result in debarments under 21 U.S.C. §
335a(a). With respect to the Acquired Business, such Seller nor any of its
respective officers, employees, owners, agents or, to the knowledge of such
Seller, distributors, has been convicted of any crime or engaged in any conduct
for which such Person could be excluded from participating in any federal health
care programs under Section 1128 of the Social Security Act of 1935, as amended,
or any similar Law or program. With respect to the Acquired Business, none of
the directors, officers, managers or, to the knowledge of such Seller, employees
or, to the actual knowledge, without due inquiry, of such Seller, independent
contractors of such Seller (i) has been or is currently excluded pursuant to 42
U.S.C. §1320a-7 or similar exclusion authority, or has been or is currently
debarred, suspended, or otherwise ineligible to participate in any federal
health care program as that term is defined in 42 U.S.C. §1320a-7b(f) or from
any comparable state or private insurance programs, (ii) has been convicted of a
criminal offense or been fined in relation to the provision of health care items
or services or any other offense that may lead to exclusion under 42 U.S.C.
§1320a-7 or similar exclusion authorities, or may result in suspension or
debarment from any health care program (federal, state, or private), or (iii) is
under investigation or subject to any type of judicial or administrative process
for any health care fraud, or is otherwise aware of any circumstances which may
result in criminal or civil liability, including conviction, fine, exclusion,
debarment, suspension, or other ineligibility to participate in any health care
program (federal, state, or private).

 

 -26- 

 

 

(f)       For each Product, Section 3.18(f) of Sellers Disclosure Schedule sets
forth a complete and accurate listing of the following information with respect
to such Product’s calculation of “Average Manufacturer Price” or “AMP” and “Best
Price” or “BP” (as defined in 42 U.S.C. § 1396r-8 and 42 C.F.R. § 447.500 et
seq., as may be amended from time to time): (a) the most recent AMP for such
Product reported to the Medicaid drug rebate program; (b) the most recent BP for
such Product reported to the Medicaid drug rebate program; (c) the date on which
such Product was originally marketed; (d) the calendar quarter in which the base
or baseline AMP for such Product was established; (e) the base or baseline AMP
for such Product; and (f) all other baseline product information submitted by a
Seller or any of its licensees to the Centers for Medicare & Medicaid Services
in connection with the Medicaid drug rebate program (including units per package
size and market start date).

 

3.19         Purchased Assets. Except as set forth in Section 3.19 of the
Sellers Disclosure Schedule, Sellers have good and marketable title to (or valid
leasehold or contractual interests in or right to use) all of the Purchased
Assets free and clear of any and all Liens, other than Permitted Liens. Except
for the Excluded Assets, the Purchased Assets constitute all of the business,
rights, assets, properties, licenses, contractual rights, going concern value,
goodwill, rights and claims of whatever kind and nature, real or personal,
tangible or intangible that are material to the Acquired Business and are
sufficient to conduct the Acquired Business as currently conducted in all
material respects. There are no assets or properties used in the operation of
the Acquired Business and owned by any Person other than Sellers that will not
be leased or licensed to Buyer under valid, current leases or license
arrangements, except for certain transitional services as contemplated by
Section 6.2. No Affiliate of any such Seller owns any assets that are necessary
to the Acquired Business.

 

3.20         Inventory. All Qualified Inventory is merchantable and fit for the
purposes for which it was intended and usable in the Ordinary Course of
Business, salable at prevailing market prices and in material compliance with
any applicable quality agreement between Seller(s) and the supplier thereof,
and, to Sellers’ knowledge, has been manufactured, handled, maintained, packaged
and stored in accordance with all applicable Laws. The values at which such
Inventory was carried and set forth in the balance sheets included in the
Financial Statements were computed in accordance with GAAP and consistent with
past practice. Sellers do not have any consigned Inventory and such Inventory
includes no damaged or defective items (other than immaterial amounts of damaged
or defective Inventory being processed in the Ordinary Course of Business).

 

3.21         Receivables. All existing Accounts Receivable of such Seller
(including those Accounts Receivable reflected on the Financial Statements that
have not yet been collected and any Accounts Receivable that have arisen since
the date of the Most Recent Balance Sheets and have not yet been collected) (a)
represent valid obligations of customers of such Seller arising from bona fide
transactions entered into in the Ordinary Course of Business, and (b) are or
will be in all material respects valid and enforceable receivables collectible
at the aggregate recorded amount thereof, subject to the reserve for
uncollectible accounts set forth in the Most Recent Balance Sheet and customary
chargebacks, rebates and set-offs. To the knowledge of such Seller, except as
set forth in Section 3.21 of the Sellers Disclosure Schedule, no voluntary or
involuntary bankruptcy Proceedings have been commenced against any of the
suppliers or customers of any Seller to which any Seller made aggregate
payments, or from which any Seller received aggregate payments, in excess of
$5,000,000 in the past twelve (12) months.

 

 -27- 

 

 

3.22         Finders or Brokers. Other than PJT Partners, Inc. and AP Services
LLC, no broker, finder or investment banker is entitled to any broker’s,
finder’s or financial advisor’s fee or commission in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf of
such Seller or such Seller’s Board.

 

3.23         No Other Representations or Warranties. THE PURCHASED ASSETS SOLD
PURSUANT TO THIS AGREEMENT ARE SOLD, CONVEYED, TRANSFERRED, AND ASSIGNED ON AN
“AS IS, WHERE IS” BASIS “WITH ALL FAULTS”, NOTWITHSTANDING ANYTHING SET FORTH
HEREIN (OTHER THAN AS EXPRESSLY SET FORTH IN THIS ARTICLE III, AS QUALIFIED BY
THE SELLERS DISCLOSURE SCHEDULE AND THE PARENT SEC DISCLOSURES AND BANKRUPTCY
COURT FILINGS) OR IN ANY OTHER ANCILLARY DOCUMENT TO THE CONTRARY. Except for
the representations and warranties expressly set forth in this ARTICLE III (as
qualified by the Sellers Disclosure Schedule, THE PARENT SEC DISCLOSURES AND
BANKRUPTCY COURT FILINGS) AND in ARTICLE IV (as qualified by the parent
disclosure schedule, THE PARENT SEC DISCLOSURES and BANKRUPTCY COURT FILINGS) OR
IN ANY ANCILLARY DOCUMENT, none of Sellers, any of their Affiliates or any other
Person on behalf of Sellers or their Affiliates makes any representations or
warranties (including, without limitation, ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WHICH WARRANTIES ARE ALSO
HEREBY EXPRESSLY DISCLAIMED), terms, conditions, understandings OR COLLATERAL
ASSIGNMENTS of any nature or kind, express or implied, by statute or otherwise
with respect to the Purchased Assets, the Acquired Business, Parent, Sellers, or
its and their respective businesses, to Buyer or its Affiliates or their
Representatives in connection with the transactions contemplated hereby,
INCLUDING THE ACCURACY OR COMPLETENESS THEREOF, OR THE CONDITION OF ANY REAL
PROPERTY OWNED, LEASED OR USED IN THE ACQUIRED BUSINESS OR WITH REGARD TO THE
USE, EXISTENCE OR RELEASE OF ANY HAZARDOUS MATERIALS AT, ON, UNDER OR AROUND ANY
REAL PROPERTY OWNED, LEASED OR USED IN THE ACQUIRED BUSINESS. NOTWITHSTANDING
THE FOREGOING, NOTHING CONTAINED IN THIS SECTION SHALL LIMIT OR OTHERWISE IMPAIR
IN ANY MANNER BUYER’S RIGHT TO MAKE A CLAIM FOR ACTUAL FRAUD.

 

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT

 

As an inducement to Buyer to enter into this Agreement and to consummate the
transactions contemplated hereby, except as disclosed (a) in the Parent SEC
Disclosures, (b) in any Bankruptcy Court filings by Parent or any of its
Subsidiaries or (c) in the disclosure schedule delivered by Parent to Buyer
concurrently with the execution of this Agreement (the “Parent Disclosure
Schedule”), Parent represents and warrants to Buyer as follows:

 

4.1          Organization. Parent is a corporation duly formed, validly existing
and in good standing under the laws of the State of New York. Subject to the
limitations imposed on Parent as a result of having filed a petition for relief
under the Bankruptcy Code, Parent has full power and authority to own, lease and
operate its properties and assets and to carry on its business as presently
conducted in the Acquired Business. Parent is not in violation of any of the
provisions of its Organizational Documents.

 

 -28- 

 

 

4.2          Authority Relative to this Agreement; Consents and Approvals; No
Violation.

 

(a)       Parent has the full power and authority to execute and deliver this
Agreement and the Ancillary Documents to which it is a party and, subject to the
entry of the Sale Order and such other authorization as is required by the
Bankruptcy Code, perform its obligations under and consummate the transactions
contemplated by this Agreement.  The execution, delivery and performance by
Parent of this Agreement and the Ancillary Documents to which it is a party and
the consummation of the transactions contemplated by this Agreement, have been
duly and validly authorized by the Parent’s Board (or a committee thereof) and
no other actions on the part of Parent, subject to the entry of the Sale Order
and such other authorization as is required by the Bankruptcy Code, are
necessary to authorize the execution and delivery by Parent of this Agreement
and the Ancillary Documents to which it is a party or the consummation of the
transactions contemplated by this Agreement.  This Agreement and the Ancillary
Documents to which it is a party have been duly and validly executed and
delivered by Parent and, assuming this Agreement and the Ancillary Documents
constitute the legal, valid and binding agreement of Buyer, this Agreement and
the Ancillary Documents to which it is a party constitute, subject to
Alternative Bids (if any), the entry of the Sale Order and such other
authorization as is required by the Bankruptcy Code, the legal, valid and
binding agreement of Parent and are enforceable against Parent in accordance
with their terms, except as and to the extent that such validity and
enforceability may be subject to the Enforceability Exceptions.

 

(b)       Except as set forth in Section 4.2(b) of the Parent Disclosure
Schedule, other than in connection with or in compliance with the Transaction
Approvals, and subject to the accuracy of Buyer’s representations and warranties
set forth in Section 5.2(b), no authorization, consent, order, license, permit
or approval of, or registration, declaration, notice or filing with, any
Governmental Entity is required to be made or obtained under applicable Law for
the consummation by Parent of the transactions contemplated hereby, except for
such authorizations, consents, orders, licenses, permits, approvals,
registrations, declarations, notices and filings that are not required to be
made or obtained prior to the consummation of such transactions.

 

(c)       Except as set forth in Section 4.2(c) of the Parent Disclosure
Schedule, the execution and delivery by Parent of this Agreement and the
Ancillary Documents to which it is a party do not, and (assuming the Transaction
Approvals are obtained and after giving effect to the Sale Order and such other
authorization as is required by the Bankruptcy Code) the consummation of the
transactions contemplated hereby and compliance with the provisions hereof will
not, (i) require any consent or approval under, violate, conflict with, result
in any breach of or any Loss of any benefit under, constitute a change of
control or default under, or result in termination or give to others any right
of termination, vesting, amendment, acceleration or cancellation of, or result
in the creation of a Lien (other than Permitted Liens) upon any of the Purchased
Assets pursuant to, any Contract to which Parent is a party or by which Parent
or any of the Purchased Assets are bound, (ii) conflict with or result in any
violation of any provision of the Organizational Documents of Parent or (iii)
conflict with or violate any applicable Laws.

 

4.3          No Other Representations or Warranties. Except for the
representations and warranties expressly set forth in ARTICLE III (as qualified
by the Sellers Disclosure Schedule, THE PARENT SEC DISCLOSURES AND BANKRUPTCY
COURT FILINGS) AND in THIS ARTICLE IV (as qualified by the parent disclosure
schedule, THE PARENT SEC DISCLOSURES and BANKRUPTCY COURT FILINGS) OR IN ANY
ANCILLARY DOCUMENT, none of Sellers, any of their Affiliates or any other Person
on behalf of Sellers or their Affiliates makes any representations or warranties
(including, without limitation, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, WHICH WARRANTIES ARE ALSO HEREBY EXPRESSLY
DISCLAIMED), terms, conditions, understandings OR COLLATERAL ASSIGNMENTS of any
nature or kind, express or implied, by statute or otherwise with respect to the
Purchased Assets, the Acquired Business, Parent, Sellers, or its and their
respective businesses, to Buyer or its Affiliates or their Representatives in
connection with the transactions contemplated hereby, INCLUDING THE ACCURACY OR
COMPLETENESS THEREOF, OR THE CONDITION OF ANY REAL PROPERTY OWNED, LEASED OR
USED IN THE ACQUIRED BUSINESS OR WITH REGARD TO THE USE, EXISTENCE OR RELEASE OF
ANY HAZARDOUS MATERIALS AT, ON, UNDER OR AROUND ANY REAL PROPERTY OWNED, LEASED
OR USED IN THE ACQUIRED BUSINESS. NOTWITHSTANDING THE FOREGOING, NOTHING
CONTAINED IN THIS SECTION SHALL LIMIT OR OTHERWISE IMPAIR IN ANY MANNER BUYER’S
RIGHT TO MAKE A CLAIM FOR ACTUAL FRAUD.

 

 -29- 

 

 

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER

 

As an inducement to Sellers to enter into this Agreement and to consummate the
transactions contemplated hereby, except as disclosed in the disclosure schedule
delivered by Buyer to Sellers concurrently with the execution of this Agreement
(the “Buyer Disclosure Schedule”), Buyer represents and warrants to Sellers as
follows:

 

5.1          Organization. Buyer is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware. Buyer has
all requisite corporate power and authority to own, lease and operate its
properties and assets and to carry on its business as presently conducted.

 

5.2          Authority Relative to this Agreement; Consents and Approvals; No
Violation.

 

(a)       Buyer has the requisite corporate power and authority to execute and
deliver this Agreement and the Ancillary Documents and to consummate the
transactions contemplated hereby, including the Asset Purchase. The execution,
delivery and performance by Buyer of this Agreement and the Ancillary Documents
and the consummation by Buyer of the transactions contemplated hereby, including
the Asset Purchase, have been duly and validly authorized by the Board of Buyer
and, no other corporate action or proceedings on the part of Buyer, or vote of
Buyer’s stockholders, are necessary to authorize the execution and delivery by
Buyer of this Agreement and the Ancillary Documents and the consummation of the
transactions contemplated hereby, including the Asset Purchase. The Board of
Buyer has (i) determined that the transactions contemplated hereby, including
the Asset Purchase, are advisable and fair to and in the best interests of Buyer
and its stockholders, and (ii) approved the execution, delivery and performance
of this Agreement and the Ancillary Documents and the consummation of the
transactions contemplated hereby, including the Asset Purchase. This Agreement
and the Ancillary Documents have been duly and validly executed and delivered by
Buyer and, assuming this Agreement and the Ancillary Documents constitute the
legal, valid and binding agreement of Sellers, this Agreement and the Ancillary
Documents constitute the legal, valid and binding agreement of Buyer and are
enforceable against Buyer in accordance with its terms, except as such
enforcement may be subject to the Enforceability Exceptions.

 

(b)       Other than in connection with or in compliance with the Transaction
Approvals, no authorization, consent, order, license, permit or approval of, or
registration, declaration, notice or filing with, any Governmental Entity or
other third party, is required to be made or obtained, under applicable Law, for
the consummation by Buyer of the transactions contemplated by this Agreement,
except for such authorizations, consents, orders, licenses, permits, approvals,
registrations, declarations, notices and filings that are not required to be
made or obtained prior to the consummation of such transactions.

 

 -30- 

 

 

(c)       The execution and delivery by Buyer of this Agreement and the
Ancillary Documents do not, and (assuming the Transaction Approvals are
obtained) the consummation of the transactions contemplated hereby and
compliance with the provisions hereof will not, (i) require the making by Buyer
of any declaration, filing or registration with, any Person, other than filings
with the Bankruptcy Court, (ii) conflict with or result in any violation of any
provision of the Organizational Documents of Buyer or (iii) conflict with or
violate any applicable Laws.

 

5.3          Litigation. There is no Proceeding to which Buyer or any of its
Subsidiaries is a party pending or, to Buyer’s knowledge, threatened, and Buyer
is not subject to any outstanding Order, in each case, that would reasonably be
expected to have, individually or in the aggregate, a material adverse effect on
the ability of Buyer to perform its obligations under this Agreement and the
Ancillary Documents to which it is a party, for Buyer to assume and perform the
Assumed Liabilities or for Buyer to consummate on a timely basis the
transactions contemplated hereby or thereby.

 

5.4          Finders or Brokers. No broker, finder or investment banker is
entitled to any broker’s, finder’s or financial advisor’s fee or commission in
connection with the transactions contemplated hereby based upon arrangements
made by or on behalf of Buyer or Buyer’s Board.

 

5.5          Solvency. Each of Buyer and the parties named as “Investors” under
that certain equity commitment letter provided to Buyer and Sellers, dated as of
the Agreement Date, collectively, have sufficient immediately available funds or
have immediate access (not subject to any conditions that Buyer or such
Investor, as the case may be, has reason to believe would not be satisfied when
the payment required to be made in connection with the consummation of the Asset
Purchase is required to be made) to sufficient immediately available funds
through their respective existing credit facilities, or otherwise, with
sufficient withdrawal capacity, as of the Agreement Date, and will have, at and
as of the Closing Date, sufficient immediately available funds, in each case, to
consummate the Asset Purchase and to promptly make, when due, all payments
required to be made in connection with this Agreement, including payment of the
Cash Balance and satisfaction of all of the Assumed Liabilities. As of the
Agreement Date, Buyer has no reason to believe that the representations
contained in the immediately preceding sentence will not be true at and as of
the Closing Date. Immediately after giving effect to the transactions
contemplated hereby, (a) Buyer and its Subsidiaries, taken as a whole, will not
(i) be insolvent as defined in Section 101 of the Bankruptcy Code, (ii) have
incurred Indebtedness beyond their ability to pay such Indebtedness as it
matures or becomes due and (iii) have unreasonably small capital to carry on
their businesses as presently conducted or as proposed to be conducted, (b) the
then present fair saleable value of the assets of Buyer and its Subsidiaries,
taken as a whole, will exceed the amount that will be required to pay their
Liabilities (including the amount of all contingent Liabilities) and
Indebtedness as it becomes absolute or matured, and (c) the assets of Buyer and
its Subsidiaries, taken as a whole, at a fair valuation, will exceed their
Liabilities (including the amount of all contingent Liabilities) and
Indebtedness.

 

5.6          Adequate Assurances Regarding the Buyer Assumed Agreements. As of
the Closing, Buyer will be capable of satisfying the conditions contained in
Sections 365(b)(1)(C) and 365(c) of the Bankruptcy Code with respect to the
Buyer Assumed Agreements.

 

5.7          Certain Arrangements; Ownership of Parent. Except as set forth on
Section 5.7 of the Buyer Disclosure Schedule, there are no contracts,
undertakings, commitments, agreements, obligations or understandings, whether
written or oral, between Buyer or any of its Affiliates, on the one hand, and
any member of Sellers’ management or any Seller’s Board, on the other hand,
relating in any way to Sellers (including with respect to the management or
control of Sellers), the transactions contemplated hereby or to the operations
of Sellers after the Closing. Except for the right to receive the Stock
Consideration (as defined in the Citron PPA), Buyer does not hold, directly or
indirectly, any, or any right to, beneficial or other ownership interest in any
of Parent or its Subsidiaries or any of their respective securities.

 

 -31- 

 

 

5.8          Investigation; No Other Representations or Warranties.

 

(a)       BUYER HAS CONDUCTED ITS OWN INDEPENDENT REVIEW AND ANALYSIS OF THE
BUSINESS, OPERATIONS, ASSETS, CONTRACTS, INTELLECTUAL PROPERTY, REAL ESTATE,
TECHNOLOGY, LIABILITIES (CONTINGENT, PRESENT AND OTHERWISE), RESULTS OF
OPERATIONS, FINANCIAL CONDITION AND PROSPECTS OF SELLERS AND THE ACQUIRED
BUSINESS, AND ACKNOWLEDGES THAT IT AND ITS REPRESENTATIVES HAVE RECEIVED ACCESS
TO SUCH BOOKS AND RECORDS, FACILITIES, EQUIPMENT, CONTRACTS AND OTHER ASSETS AND
PROPERTIES OF SELLERS THAT IT AND ITS REPRESENTATIVES HAVE REQUESTED TO REVIEW
AND THAT IT AND ITS REPRESENTATIVES HAVE HAD THE OPPORTUNITY TO MEET WITH THE
MANAGEMENT OF SELLERS AND TO DISCUSS THE RESPECTIVE BUSINESSES AND ASSETS OF
SELLERS.

 

(b)       WITHOUT LIMITING THE FOREGOING, BUYER, ON BEHALF OF ITSELF AND ON
BEHALF OF ITS RESPECTIVE AFFILIATES AND REPRESENTATIVES, ACKNOWLEDGES THAT, THE
PURCHASED ASSETS SOLD PURSUANT TO THIS AGREEMENT ARE SOLD, CONVEYED,
TRANSFERRED, AND ASSIGNED ON AN “AS IS, WHERE IS” BASIS “WITH ALL FAULTS” AND
THAT, NOTWITHSTANDING ANYTHING SET FORTH HEREIN OR IN ANY OTHER ANCILLARY
DOCUMENT TO THE CONTRARY, OTHER THAN THE REPRESENTATIONS AND WARRANTIES
EXPRESSLY SET FORTH IN ARTICLE III (AS QUALIFIED BY THE SELLERS DISCLOSURE
SCHEDULE, THE PARENT SEC DISCLOSURES AND BANKRUPTCY COURT FILINGS) AND IN
ARTICLE IV (AS QUALIFIED BY THE PARENT DISCLOSURE SCHEDULE, THE PARENT SEC
DISCLOSURES AND BANKRUPTCY COURT FILINGS), NONE OF PARENT, SELLERS, ANY OF THEIR
AFFILIATES OR ANY OTHER PERSON ON BEHALF OF PARENT, SELLERS OR THEIR AFFILIATES
MAKES ANY REPRESENTATIONS OR WARRANTIES (INCLUDING, WITHOUT LIMITATION, ANY
IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WHICH
WARRANTIES ARE ALSO HEREBY EXPRESSLY DISCLAIMED), TERMS, CONDITIONS,
UNDERSTANDINGS OR COLLATERAL ASSIGNMENTS OF ANY NATURE OR KIND, EXPRESS OR
IMPLIED, BY STATUTE OR OTHERWISE WITH RESPECT TO (A) THE PURCHASED ASSETS, THE
ACQUIRED BUSINESS, PARENT, SELLERS, OR ITS AND THEIR RESPECTIVE BUSINESSES, OR
WITH RESPECT TO ANY OTHER INFORMATION PROVIDED, OR MADE AVAILABLE, TO BUYER OR
ITS AFFILIATES OR REPRESENTATIVES IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED HEREBY, INCLUDING THE ACCURACY OR COMPLETENESS THEREOF, OR (B) THE
CONDITION OF ANY REAL PROPERTY, LEASED OR USED IN THE ACQUIRED BUSINESS OR WITH
REGARD TO THE USE, EXISTENCE OR RELEASE OF ANY HAZARDOUS MATERIALS AT, ON, UNDER
OR AROUND ANY REAL PROPERTY, LEASED OR USED IN THE ACQUIRED BUSINESS.

 

 -32- 

 

 

ARTICLE VI
COVENANTS AND AGREEMENTS

 

6.1          Conduct of Business.

 

(a)       During the period from the Agreement Date until the earlier of the
termination of this Agreement in accordance with its terms or the Closing,
Sellers shall use commercially reasonable efforts to maintain the Purchased
Assets and conduct the Acquired Business in all material respects in the
Ordinary Course of Business, including to (i) preserve intact the Acquired
Business and the current relationships and goodwill of the Acquired Business
with employees (except in the case of termination for cause), customers and
suppliers, (ii) maintain the Books and Records and all Tax Returns relevant to
the Purchased Assets or the Acquired Business, and (iii) comply in all material
respects with applicable Law, except (1) as may be required by applicable Law,
(2) with the prior written consent of Buyer (which shall not be unreasonably
withheld, conditioned or delayed), (3) with the approval of the Bankruptcy
Court, (4) as permitted, contemplated or required by this Agreement (including
Section 6.9(d)), (5) as set forth in Section 6.1(a) of the Sellers Disclosure
Schedule or (6) the extent the effects of being a party to the Bankruptcy
Proceeding may have on the Acquired Business. To the extent Sellers encounter
significant issues or critical decisions during their conduct of the Acquired
Business in accordance with this Section 6.1(a) and Section 6.1(b), the impact
of which may have a material, adverse impact on the transactions contemplated
hereby, the Acquired Business, the Purchased Assets, or the relationships with
Sellers’ employees, customers or suppliers, Sellers shall use their commercially
reasonable efforts to consult with Buyer as reasonably necessary in order to
ensure Sellers’ compliance with the covenants and agreements set forth in this
Section 6.1.

 

(b)       In addition to and without limiting the generality of Section 6.1(a),
during the period from the Agreement Date until the earlier of the termination
of this Agreement in accordance with its terms and the Closing Date, except (i)
as may be required by applicable Law, (ii) with the prior written consent of
Buyer (which shall not be unreasonably withheld, conditioned or delayed),
(iii) with the approval of the Bankruptcy Court, (iv) as permitted, contemplated
or required by this Agreement or (v) as set forth in Section 6.1(a) of the
Sellers Disclosure Schedule, no Seller shall:

 

(i)       amend any Seller’s Organizational Documents;

 

(ii)      split, combine or reclassify any of its capital stock, voting
securities or other equity interests;

 

(iii)     grant any individual, corporation or other entity any right to acquire
any of its shares of capital stock;

 

(iv)     issue, sell or otherwise permit to become outstanding any additional
shares of its capital stock or securities convertible or exchangeable into, or
exercisable for, any shares of such capital stock or any options, warrants, or
other rights of any kind to acquire any shares of such capital stock;

 

(v)      except in connection with the Filing or the Bankruptcy Case, adopt a
plan of complete or partial liquidation, dissolution, merger, consolidation or
other reorganization;

 

(vi)     divest, sell, assign, license, transfer, abandon, cancel, convey, lease
or otherwise dispose of, whether or not for value, any assets, rights or
properties that would constitute Purchased Assets, except for sales of Inventory
in the Ordinary Course of Business and obsolete furniture, fixtures and
equipment;

 

(vii)    acquire for cash consideration any material assets that would be
Purchased Assets or any other Person or business of any other Person (whether by
merger or consolidation, acquisition of stock or assets or by formation of a
joint venture or otherwise) or make any investment in any Person (in each case
other than another Seller or any assets thereof) in excess of $250,000
individually or $500,000 in the aggregate, except (A) for purchases of Inventory
in the Ordinary Course of Business, or (B) as approved in the approved in the
approved Debtor-in-Possession credit facility to which Sellers are a party (the
“DIP Financing”);

 

 -33- 

 

 

(viii)   make any capital expenditures and/or research and development
expenditures outside of the Ordinary Course of Business or in excess of $250,000
individually, or $500,000 in the aggregate, or incur any Liabilities in respect
thereof, except as approved in the DIP Financing;

 

(ix)      amend or modify any term of, or waive any right under, any Material
Contract, or terminate, or fail to use reasonable efforts to renew, any Material
Contract that is a Buyer Assumed Agreement;

 

(x)       enter into any Contracts with suppliers, vendors or customers that
would constitute Material Contracts if such Contracts were in effect as of the
Agreement Date, and which Contracts, taken together with any other Contract with
an affiliated party, could require aggregate payments by Sellers in excess of
$250,000;

 

(xi)      engage in (A) any trade loading practices, (B) any activity with any
customers or distributors with the effect of accelerating to pre-Closing periods
sales to the trade or otherwise that would otherwise be expected (based on past
practice) to occur in post-Closing periods, (C) accelerating collections of any
Accounts Receivable, (D) postponing payments by any Seller that would otherwise
be expected (based on past practice) to be made in pre-Closing periods, or (E)
any other deferred revenue activity or inventory overstocking or understocking
activity;

 

(xii)     make any material change in the manner of billing of, or the credit
lines made available to, any customers of the Acquired Business;

 

(xiii)    settle any, or enter into any Contract to settle any, Proceedings that
are Assumed Liabilities;

 

(xiv)   dispose of or permit to expire, terminate or otherwise lapse any rights
in, to or for the use of any of Sellers’ Intellectual Property or Intellectual
Property rights included in the Purchased Assets, or disclose to any Person any
of Sellers’ Intellectual Property or Intellectual Property rights included in
the Purchased Assets not heretofore a matter of public knowledge, except
pursuant to judicial or administrative process;

 

(xv)    grant any license, covenant not to sue or other right under any of
Sellers’ Intellectual Property or Intellectual Property rights, or cancel,
abandon or allow to lapse or expire any of Sellers’ Intellectual Property, or
Intellectual Property rights, in each case that are solely included in the
Purchased Assets;

 

(xvi)    withdraw, amend, cancel, modify, neglect or terminate any existing or
pending Product Registrations or any Governmental Authorizations of any Seller;

 

(xvii)   change the accounting policies or procedures or the financial
accounting or actuarial methods, principles, practices or reporting of the
Pharma Business except to the extent required to conform with GAAP or applicable
Law;

 

(xviii)  increase the compensation (including paying any severance,
change-in-control and retention compensation) or benefits of any employee of any
Seller (who is or was primarily employed in respect of the Acquired Business)
who Buyer has notified in writing will be a Transferred Employee, except (A) as
required by applicable Law, (B) in connection with annual promotion-related or
merit-based increases for employees that are not executive officers of any
Seller, or (C) increases in compensation not to exceed, in the aggregate in the
case of this clause (C), $250,000;

 

 -34- 

 

 

(xix)     cancel or fail to renew any insurance policy or fail to give all
notices and present all claims (if any) under all such policies in a timely
fashion;

 

(xx)      do any other act which would cause a failure of any of the conditions
to Closing set forth in Section 7.1, Section 7.2 or Section 7.3;

 

(xxi)     enter into any new line of business;

 

(xxii)     settle or compromise any material Liability for Taxes, change or make
any material Tax election, change or adopt any Tax method of accounting, or
amend any material Tax Return that would, in each case, affect the Tax treatment
of any Purchased Assets or the Acquired Business after the Closing Date;

 

(xxiii)    make, declare, set aside or pay any dividend, or make any other
distribution on, redeem, purchase or otherwise acquire, any shares of its
capital stock, other than to Rising, as applicable, and except to the extent the
proceeds of which are exclusively used to repay the DIP Financing; or

 

(xxiv)    authorize, agree or resolve or consent to do any of the foregoing.

 

(c)        During the period beginning on the Agreement Date through but not
including the Closing Date, Sellers, collectively, shall use no less than, in
the aggregate, $12,200,000 of the proceeds of the DIP Financing, together with
any other cash funds available to Sellers during such period, to satisfy
Liabilities that are, on the Agreement Date, either accrued or included in
accounts payable under the following trial balance accounts in their Books and
Records: 211150, 211130, 211125 and 200000 (but only to the extent such amount
is applicable to customer or government rebates); provided, that Sellers shall
have no obligation to spend more than $12,200,000 in the aggregate pursuant to
this Section 6.1(c); provided, further, that Sellers shall provide reasonable
documentation to Buyer confirming Sellers’ proof of payment in compliance with
the foregoing as Buyer may reasonably request.

 

6.2         Access; Confidentiality.

 

(a)        For purposes of furthering the transactions contemplated hereby,
Sellers shall use commercially reasonable efforts to afford Buyer and its
Representatives reasonable access during normal business hours upon reasonable
advance notice to Sellers (and for the avoidance of doubt, Buyer may have direct
communications, upon prior written notice (email being sufficient) to Sellers,
whether or not Sellers’ Representatives are in attendance during such
communications), throughout the period from the Agreement Date until the earlier
of the termination of this Agreement and the Closing, to Sellers’ personnel,
properties, contracts, suppliers, customers, vendors, commitments, Books and
Records and such other information concerning such entities’ respective
business, properties and personnel of the Acquired Business as Buyer may
reasonably request; provided that Sellers shall not be obligated to provide or
give access to any minutes of meetings or resolutions of Parent’s or a Seller’s
Board or any committees thereof or any other business records or reports of or
communication with any of its advisors relating to the evaluation or negotiation
of this Agreement or the transactions contemplated hereby or any alternatives
thereto. Notwithstanding anything to the contrary contained in this Section
6.2(a), any document, correspondence or information or other access provided
pursuant to this Section 6.2(a) may be redacted or otherwise limited to prevent
disclosure of information concerning any aspect of the Chemicals Plus Business,
the valuation of Sellers and/or the Acquired Business and the purchase of the
Purchased Assets or other similarly confidential or competitively sensitive
information. All access pursuant to this Section 6.2(a) shall be (i) conducted
in such a manner as not to interfere unreasonably with the normal operations of
Sellers and (ii) coordinated exclusively through the designated Representatives
of Sellers.

 

 -35- 

 

 

(b)        If either Party determines that any transition services are
reasonably necessary, both shall negotiate in good faith the providing of such
services, including the terms and payments thereof, as shall be mutually agreed;
provided, that, to the extent the Parties agree that Sellers shall provide such
transition services to Buyer, Buyer shall pay the actual, reasonable and
documented costs, fees and expenses incurred by Sellers in providing such
transition services. Sellers shall cooperate in good faith to provide
transitional payroll services that are customary and consistent with the past
practice of the Acquired Business for any Transferred Employees transferred
pursuant to Section 6.3 upon the Closing. Such transitional payroll services
shall be provided by Sellers for up to sixty (60) calendar days after the
Closing Date (unless Buyer notify in writing the discontinuation of such
services); provided that Buyer agrees to make payment in advance for such
services and pay the actual, reasonable and documented costs, fees and expenses
incurred by Sellers in providing such services, and to provide Sellers with all
necessary employee and payroll information required for such services.

 

(c)        Notwithstanding anything to the contrary contained in this Section
6.2(c), a Seller shall not be required to provide any access, or make available
any document, correspondence or information, if doing so would, in the
reasonable judgment of such Seller’s legal counsel, (i) jeopardize the
attorney-client privilege of a Seller or (ii) conflict with any (A) Law
applicable to a Seller or the assets or operation of the Acquired Business or
(B) Contract to which a Seller is a party or by which any of Sellers’ assets or
properties are bound; provided that in such instances, such Seller shall inform
Buyer of the general nature of the information being withheld and, upon Buyer’s
request, reasonably cooperate with the other party to provide such information,
in whole or in part, in a manner that would not result in any of the outcomes
described in the foregoing clauses (i) and (ii).

 

(d)        The Parties hereto hereby agree that all information provided to them
or their respective Representatives in connection with this Agreement and the
consummation of the transactions contemplated hereby shall be governed in
accordance with the Confidentiality Agreement, dated as of November 15, 2018,
between Parent and Shore Pharma LLC, and the Confidentiality Agreement, dated as
of February 27, 2019, between Parent and Suven Life Sciences Ltd. (together, the
“Confidentiality Agreement”), which shall continue in full force and effect in
accordance with its terms.

 

(e)        Each Party agrees that it shall promptly generate and provide, to the
extent in compliance with all applicable Laws, all data, reports and other
information, in such forms as reasonably requested by the other Parties, from
the computer systems, information technology, internal networks and servers
included in the Purchased Assets, for a period commencing on the Agreement Date
and ending eighteen (18) months following the Closing Date.

 

(f)         In order to facilitate Sellers’ efforts to (i) administer and close
the Bankruptcy Case (including reconcile claims, wind down benefit plans and
attend to other pending litigation), and (ii) prepare Tax Returns (together, the
“Post-Close Filings”), for a period of eighteen (18) months following the
Closing, as applicable, Buyer shall permit Sellers and Sellers’ counsel,
accountants and other Representatives and successors in interest, as well as the
Official Committee of Unsecured Creditors appointed in the Bankruptcy Cases and
its professional advisors (collectively, “Permitted Access Parties”) during
regular business hours, with reasonable notice, and subject to reasonable rules
and regulations, reasonable access to the financial and other Books and Records
which comprised part of the Purchased Assets (prior to the Closing Date) that
are required to complete the Post-Close Filings, which access shall include (A)
the right of such Permitted Access Parties to copy, at such Permitted Access
Parties’ expense, such required documents and records and (B) Buyer’s copying
and delivering to the relevant Permitted Access Parties such documents or
records as they require, but only to the extent such Permitted Access Parties
furnish Buyer with reasonably detailed written descriptions of the materials to
be so copied and applicable Permitted Access Party reimburses Buyer for the
reasonable costs and expenses thereof; provided, that the foregoing rights of
access shall not be exercisable in such a manner as to interfere with the normal
operations of any of Buyer’s business after the Closing Date. Notwithstanding
anything contained in this Section 6.2(f) to the contrary, in no event shall
such Permitted Access Parties have access to any information that, based on
advice of Buyer’s counsel, could (i) reasonably be expected to create liability
under applicable Law, or waive any legal privilege, (ii) result in the discharge
of any Trade Secrets of Buyer, its affiliates or any third parties,
(iii) violate any obligation of Buyer with respect to confidentiality or (iv)
relate to the post-Closing operations of the Acquired Business or use of the
Purchased Assets.

 

 -36- 

 

 

6.3          Employees and Employee Benefit Plans.

 

(a)        Transferred Employees. No later than five (5) calendar days after the
Agreement Date, Sellers shall deliver to Buyer a list of individuals primarily
employed in respect of the Acquired Business (the “Business Employees”),
including the following information, to the extent such information is permitted
to be disclosed under applicable Law: (i) title or job/position, (ii) job
designation (i.e., salaried or hourly), (iii) location of employment, (iv)
employment status (active or on leave), (v) rate of pay and most recent bonus
amount, and (vi) accrued and unused paid time off. No later than five (5)
calendar days after Buyer receives such list from Sellers, Buyer shall deliver
to Sellers a list of each Seller’s Business Employees whom either Buyer or an
Affiliate of Buyer intends to interview for employment as of the Closing Date. 
No later than twenty (20) calendar days after delivering such list to Sellers,
Buyer shall offer employment to the Business Employees, in Buyer’s sole
discretion. Those Business Employees who accept Buyer’s offer of employment and
commence working for Buyer on the Closing Date (or upon return to work from
approved leave of absence) shall hereafter be referred to as “Transferred
Employees.” To the extent not prohibited by applicable Law, Sellers shall
terminate the employment of all of such Transferred Employees effective as of
the Closing Date. Each Seller shall, effective as of the Closing Date, release
all Transferred Employees from and, if requested by Buyer, assign to Buyer or an
Affiliate of Buyer its rights under any non-competition, non-solicitation,
confidentiality and similar restrictive covenants or agreements and any
assignment of inventions agreements previously entered into between such Seller
and such Transferred Employees, to the extent transferable in accordance with
their terms; provided, however, Seller shall not be required to assign any such
non-competition, non-solicitation, confidentiality and similar restrictive
covenants or agreements or any assignment of inventions agreements previously
entered into between such Seller and such Transferred Employees to the extent
any such covenants or agreements are contained in any Seller Benefit Plan
providing for severance and Buyer is not assuming such severance obligations
hereunder. Each Seller shall deliver to Buyer, at or before the Closing Date,
written evidence, in form and substance satisfactory to Buyer, of the release
and assignment described in the immediately preceding sentence. Without limiting
the generality of the foregoing, such employee benefits shall include immediate
eligibility to participate in medical insurance plans and other welfare benefit
plans generally made available to employees by Buyer.

 

(b)        Employment Tax Reporting. With respect to Transferred Employees,
Buyer and Sellers shall use the standard procedure set forth in Revenue
Procedure 2004-53, 2004-34 I.R.B. 320.

 

(c)        No Obligation. Other than as expressly set forth herein, nothing
contained in this Agreement shall be construed to require the employment of (or
prevent the termination of employment of) any individual, require minimum
benefit levels or prevent any change in the employee benefits provided to any
individual Transferred Employee. No provision of this Agreement shall create any
third party beneficiary rights in any employee or former employee of any Seller
or any other Person (including any beneficiary or dependent thereof) of any
nature or kind whatsoever, including without limitation, in respect of continued
employment (or resumed employment) for any specified period. Nothing contained
herein, express or implied shall (i) be construed to establish, amend or modify
any Seller Benefit Plan or other benefit plan, program, agreement or
arrangement, or (ii) alter or limit the ability of Sellers, Buyer or any of
their respective Affiliates to amend, modify, or terminate any benefit plan,
program, agreement or arrangement at any time assumed, established, sponsored or
maintained by any of them. Nothing in this Section 6.3(c) is intended to
interfere with Buyer’s right from and after the Closing to terminate the
employment of, or change the compensation and benefits available to, any
Transferred Employee.

 

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(d)       WARN Act. Sellers shall remain solely responsible for any and all
Liabilities and obligations that could arise under the WARN Act as a result of
or relating to this Agreement or the transactions contemplated hereby, in
connection with any employment losses occurring on or prior to the Closing Date
(or after the Closing Date with respect to any Business Employee who does not
become a Transferred Employee), and Sellers shall take all actions that are
necessary or proper to comply with the WARN Act with respect to any such losses.
Buyer shall provide any required notice under and to otherwise comply with, the
WARN Act with respect to any event affecting the Transferred Employees on or
after the Closing Date. Seller shall cooperate with Buyer in determining whether
any event affecting the Transferred Employees on or after the Closing Date
requires notification under the WARN Act. Buyer shall not take any action on or
after the Closing that would cause Seller or any of its Affiliates to incur
liability under the WARN Act.

 

(e)        Restrictive Covenant Agreements. No later than thirty (30) calendar
days following the Agreement Date, Buyer shall enter into restrictive covenant
agreements, in form and substance mutually and reasonably agreed to by all
Parties, with certain Business Employees designated by Sellers, in consideration
for compensation by Buyer, on the expiry thereof, to such employees as
determined by Sellers (provided that in no event shall the aggregate
compensation pursuant to such restrictive covenant agreements for all such
designated employees exceed $3,000,000), with terms expiring on September 13,
2019.

 

6.4          Regulatory Approvals; Efforts.

 

(a)        Prior to the Closing, Buyer and Sellers shall, and shall cause their
respective Affiliates to, use their respective reasonable best efforts to take,
or cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper or advisable under any applicable Laws to consummate the Asset
Purchase as promptly as practicable, including (i) preparing and filing all
forms, registrations and notifications with any Governmental Entities or third
parties required to be filed to consummate the Asset Purchase, (ii) using
reasonable best efforts to satisfy the conditions to consummating the Asset
Purchase, (iii) using reasonable best efforts to obtain (and to cooperate with
each other in obtaining) any consent, authorization, expiration or termination
of a waiting period, permit, Order or approval of, waiver or any exemption by,
any Governmental Entity (including furnishing all information and documentary
material required under the HSR Act) required to be obtained or made by Buyer,
Sellers or any of their respective Affiliates in connection with the Asset
Purchase or the taking of any action contemplated hereby, (iv) defending any
lawsuits or other legal Proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the Asset Purchase, and
(v) using reasonable best efforts with respect to the execution and delivery of
all such instruments, deeds, assignments or assurances and do all other things
reasonably necessary or desirable to consummate the Asset Purchase and to fully
carry out the purposes or intent of this Agreement; provided, that neither Buyer
nor its Affiliates shall be required to agree to: (i) sell, hold, divest,
discontinue or limit, before or after the Closing Date, any material assets,
businesses or interests of Buyer or any of its Affiliates; (ii) any conditions
related to, or changes or restrictions in, the operations of any such assets,
business or interests which, in either case, would reasonably be expected to
materially and adversely impact the economic or business benefits to Buyer or
any of its Affiliates of the transactions contemplated hereby; or (iii) any
material modification or waiver of the terms and conditions of this Agreement.

 

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Without limitation of the above, promptly following the execution of the
Original Agreement, each of the parties hereto shall cooperate with one another
to ensure (i) the transfer of all Governmental Authorizations to Buyer, or (ii)
in the case of such Governmental Authorizations that cannot be transferred, the
reissuance promptly after the Closing Date of the Governmental Authorizations
necessary for the continued conduct of the Acquired Business.

 

(b)       Buyer, on the one hand, and Sellers, on the other hand, shall each
keep the other apprised of the status of matters relating to the consummation of
the Closing and work cooperatively in connection with obtaining all required
consents, authorizations, Orders or approvals of, or any exemptions by, any
Governmental Entity undertaken pursuant to the provisions of this Section 6.4.
In that regard, prior to the Closing, each party shall promptly consult with the
other parties to this Agreement with respect to and provide any necessary
information and assistance as the other parties may reasonably request with
respect to (and, in the case of correspondence, provide the other parties (or
their counsel and, if reasonably determined necessary, advisable or convenient
to protect attorney-client privilege or competitively sensitive information,
outside counsel only basis) with copies of) all notices, submissions or filings
made by or on behalf of such party or any of its Affiliates with any
Governmental Entity or any other information supplied by or on behalf of such
party or any of its Affiliates to, or correspondence with, a Governmental Entity
in connection with this Agreement and the Asset Purchase. Each party to this
Agreement shall promptly inform the other parties to this Agreement, and if in
writing, furnish the other parties with copies of (or, in the case of oral
communications, advise the other parties orally of) any communication from or to
any Governmental Entity regarding the Asset Purchase, and permit the other
parties to review and discuss in advance, and consider in good faith the views
of the other parties in connection with, any proposed communication or
submission with any such Governmental Entity. No party or any of its Affiliates
shall participate in any meeting or teleconference with any Governmental Entity
in connection with this Agreement and the Asset Purchase unless it consults with
the other parties in advance and, to the extent not prohibited by such
Governmental Entity, gives the other parties the opportunity to attend and
participate thereat. Notwithstanding the foregoing, Buyer and Sellers may, as
each deems advisable and necessary, reasonably designate any competitively
sensitive material provided to the other under this Section 6.4(b) as “Antitrust
Counsel Only Material.” Such materials and the information contained therein
shall be given only to the outside counsel of the recipient and will not be
disclosed by such outside counsel to employees, officers or directors of the
recipient unless express permission is obtained in advance from the source of
the materials (Buyer or Sellers, as the case may be) or its legal counsel.
Notwithstanding anything to the contrary contained in this Section 6.4,
materials provided pursuant to this Section 6.4 may be redacted (i) to remove
references concerning the valuation of the Acquired Business and the purchase of
the Purchased Assets, (ii) as necessary to comply with contractual arrangements
and (iii) as necessary to address reasonable privilege concerns.

 

(c)        To the extent the HSR Act or any other Antitrust Law is applicable,
Sellers and Buyer shall make or file, as promptly as practicable, with the
appropriate Governmental Entity all filings, forms, registrations and
notifications required to be filed to consummate the purchase of the Purchased
Assets under the HSR Act and such other applicable Antitrust Law, if any, and
subsequent to such filings, Sellers and Buyer shall, and shall cause their
respective Affiliates to, use their respective reasonable best efforts to
respond to inquiries from Governmental Entities, or provide any supplemental
information that may be requested by Governmental Entities, in connection with
filings made with such Governmental Entities. Sellers and Buyer shall file their
notification and report forms under the HSR Act no later than ten (10) Business
Days after the Agreement Date. In the event that the parties receive a request
for information or documentary material pursuant to the HSR Act (a “Second
Request”), the parties will use their respective reasonable best efforts to
submit an appropriate response to, and to certify compliance with, such Second
Request, and counsel for both parties will closely cooperate during the entirety
of any such Second Request review process.

 

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(d)       In furtherance and not in limitation of the covenants of the parties
contained in this Section 6.4, the Parties will use their respective reasonable
best efforts to resolve objections, if any, as may be asserted by any
Governmental Entity with respect to the transactions contemplated by this
Agreement under the HSR Act or any other applicable Antitrust Law. If, in
connection therewith, an administrative or judicial action or Proceeding,
including any Proceeding by a private party, is instituted (or threatened to be
instituted) challenging the Asset Purchase or any other transaction contemplated
hereby as violative of any Antitrust Law, each of Sellers and Buyer shall use
reasonable best efforts to contest and resist any such action or Proceeding and
to have vacated, lifted, reversed or overturned any decree, judgment, injunction
or other order, whether temporary, preliminary or permanent, that is in effect
and that prohibits, prevents or restricts consummation of the Asset Purchase;
provided, that neither Buyer nor its Affiliates shall be required to agree to:
(i) sell, hold, divest, discontinue or limit, before or after the Closing Date,
any material assets, businesses or interests of Buyer or any of its Affiliates;
(ii) any conditions related to, or changes or restrictions in, the operations of
any such assets, business or interests which, in either case, would reasonably
be expected to materially and adversely impact the economic or business benefits
to Buyer or any of its Affiliates of the transactions contemplated hereby; or
(iii) any material modification or waiver of the terms and conditions of this
Agreement. Notwithstanding the foregoing or any other provision of this
Agreement, nothing in this Section 6.4(d) will limit the right of any party to
terminate this Agreement pursuant to ARTICLE VIII, so long as such party has, up
to the time of termination, complied in all material respects with its
obligations under this Section 6.4 and the rest of this Agreement.

 

(e)        Except as specifically required by this Agreement, Buyer shall not,
and shall not permit any of its Affiliates to, knowingly take any action, or
knowingly refrain from taking any action, the effect of which would be
reasonably expected to delay or impede the ability of the Parties to consummate
the transactions contemplated hereby.

 

(f)        The filing fee required under the HSR Act (the “HSR Fees”) shall be
split evenly between Buyer and Sellers, with Buyer responsible for fifty percent
(50%) of such fees and Sellers, jointly and severally, responsible for fifty
percent (50%) of such fees, as and when due and any other necessary filings or
submissions to any Governmental Entity pursuant to this Section 6.4 shall be
borne in full by Sellers, jointly and severally.

 

6.5         Notification of Certain Matters.

 

(a)        Except for litigation or other Proceedings commenced, filed or
pending in the Bankruptcy Court, each Party shall promptly (and in any event,
within two (2) Business Days) notify the other Parties in writing of (i) receipt
of any notice from any third party alleging that the consent of the third party
is or may be required in connection with the transactions contemplated by this
Agreement, (ii) any Material Adverse Effect with respect to Sellers, the
Acquired Business or the Purchased Assets, (iii) any event, state of facts,
occurrence, non-occurrence, circumstance, development or change that would
reasonably be expected to cause a failure of any of the conditions to Closing
set forth in Section 7.1, Section 7.2 or Section 7.3, (iv) any litigation or
other Proceeding brought or threatened in writing against it or its directors or
executive officers or other Representatives relating to this Agreement, the
Asset Purchase and/or the other transactions contemplated hereby or (v) any
violation, or alleged violation, of Law by Sellers (or any of their employees,
directors or officers) or otherwise relating to the Acquired Business or the
Purchased Assets. The applicable Party shall keep the other Parties informed on
a reasonably current basis with respect to the status thereof (including by
promptly furnishing to the other Parties and their respective Representatives
such information relating to such litigation or other Proceeding as may be
reasonably requested). Each Party shall, subject to the preservation of the
attorney-client and similar privileges and confidential information, give the
other Parties the opportunity to participate in (but not control) the defense or
settlement of any litigation or other Proceeding against it and/or its directors
or executive officers or other Representatives relating to this Agreement, the
Asset Purchase or the other transactions contemplated hereby and shall give due
consideration to such other Parties’ advice with respect to such litigation or
other Proceeding. Notwithstanding the foregoing, the delivery of any notice
pursuant to this Section 6.5(a) shall not (x) be deemed to amend or supplement
any of the Sellers Disclosure Schedules contemplated hereby, or (y) be deemed to
cure any breach of any representation, warranty, covenant or agreement or to
satisfy any condition.

 

 -40- 

 

 

(b)       From the Agreement Date until ten (10) calendar days prior to the Sale
Hearing, Sellers shall promptly (and in no event later than ten (10) calendar
days prior to the Sale Hearing) provide written notice to Buyer of any new
Contract to which any Seller becomes a party which (i) was not set forth on
Schedule 1.1(b) as of the Agreement Date and (ii) exclusively or primarily
relates to the Acquired Business or any Purchased Asset or is otherwise material
to the operation of the Acquired Business following the Closing in substantially
the same manner as conducted as of the Agreement Date, and Buyer shall
thereafter have the option, in its sole discretion, of supplementing Schedule
1.1(b) to include such Contract, subject to the limitations of Section 1.5(a).

 

6.6          Adequate Assurances Regarding the Buyer Assumed Agreements. With
respect to each Buyer Assumed Agreement, Buyer will use commercially reasonable
efforts to provide adequate assurance as required under the Bankruptcy Code of
the future performance by Buyer of each such Buyer Assumed Agreement and with
the consent of the other party to the Buyer Assumed Agreement, otherwise provide
adequate assurance of prompt payment of, all Cure Costs related to such Buyer
Assumed Agreements. Sellers and Buyer agree that they will promptly take all
actions reasonably required to assist in obtaining a Bankruptcy Court finding
that there has been an adequate demonstration of adequate assurance of prompt
cure and future performance under the Buyer Assumed Agreements, such as
furnishing affidavits, non-confidential financial information or other documents
or information for filing with the Bankruptcy Court and making Sellers’ and
Buyer’s employees and representatives available to testify before the Bankruptcy
Court, provided that in no event shall Buyer be required to agree to any
amendment to this Agreement.

 

6.7          Bankruptcy Court Approval.

 

(a)        Sellers and Buyer acknowledge that this Agreement, the Ancillary
Documents, the Release and the sale of the Purchased Assets are subject to
Bankruptcy Court approval and the consideration by Sellers of Alternative Bids
(if any). Sellers and Buyer acknowledge that (i) to obtain such approval,
Sellers must demonstrate that they have taken reasonable steps to obtain the
highest or otherwise best offer possible for the Purchased Assets, including,
but not limited to, giving notice of the transactions contemplated hereby to
creditors and certain other interested parties as ordered by the Bankruptcy
Court, and, if sufficient alternative Qualifying Bids (as defined in the Bidding
Procedures) are received, conducting an auction in respect of the Purchased
Assets pursuant to the Bidding Procedures Order (the “Auction”), and (ii) Buyer
must provide adequate assurance of future performance under the Buyer Assumed
Agreements.

 

(b)       Sellers shall use commercially reasonable efforts to pursue the entry
of the Sale Order and the Bidding Procedures Order, which shall be sought
pursuant to the Sale Motion, and such other relief from the Bankruptcy Court as
may be necessary or appropriate in connection with this Agreement and the
consummation of the transactions contemplated hereby.  Sellers shall use
commercially reasonable efforts to comply (or obtain an order or orders from the
Bankruptcy Court waiving compliance) with all requirements under the applicable
provisions of the Bankruptcy Code in connection with obtaining entry of the Sale
Order and the Bidding Procedures Order.  Sellers shall consult with Buyer and
its Representatives concerning the Sale Order, the Bidding Procedures Order, and
any other orders of the Bankruptcy Court relating to the transactions
contemplated hereby, and all Proceedings in connection therewith, and provide
Buyer with copies of all applications, pleadings, notices, proposed orders and
other documents relating to Proceedings relating to the transactions
contemplated hereby, as soon as reasonably practicable, and consider in good
faith any reasonable comments of Buyer in connection with any such applications,
pleadings, notices, proposed orders and other documents. 

 

 -41- 

 

 

(c)        Without limiting the generality of the foregoing, no later than five
(5) Business Days after the Agreement Date, Sellers shall file the Sale Motion
with the Bankruptcy Court, and shall use its commercially reasonable efforts to
have the Bankruptcy Court enter the Bidding Procedures Order no later than
twenty-one (21) calendar days after the Agreement Date and the Sale Order as
promptly as possible after the entry of such Bidding Procedures Order. Subject
to Section 8.1(f)(iii), Sellers may withdraw the Sale Motion after filing if,
following consultation with their legal and financial advisors, the Board has
determined that proceeding with the Sale Motion would be inconsistent with its
members’ fiduciary duties.

 

(d)       The Sale Order will provide, among other things, that pursuant to
Sections 105, 363 and 365 of the Bankruptcy Code:

 

(i)      the Purchased Assets shall be sold and transferred to Buyer, free and
clear of all Liens (except for Permitted Liens), and the Assumed Liabilities
shall be assumed by Buyer, in each case, pursuant to this Agreement;

 

(ii)      Sellers shall assign to Buyer, and Buyer shall assume, all of the
Buyer Assumed Agreements as of the Closing Date;

 

(iii)     on or before the Closing Date and in accordance with Section 1.5, all
Cure Costs shall be paid to the appropriate parties or with the consent of the
other party to the Buyer Assumed Agreement, otherwise provide adequate assurance
of prompt payment of, all Cure Costs as ordered by the Bankruptcy Court so as to
permit the assumption and assignment of each applicable Buyer Assumed Agreement;

 

(iv)     Buyer shall be found to have demonstrated and established any adequate
assurance of future performance before the Bankruptcy Court with respect to the
Buyer Assumed Agreements;

 

(v)      Buyer shall be found to be a “good faith” purchaser within the meaning
of Section 363(m) of the Bankruptcy Code;

 

(vi)     Buyer shall have no liability or responsibility for any Liability or
other obligation of any Seller arising under or related to the Purchased Assets
other than as expressly set forth in this Agreement, including successor or
vicarious liabilities of any kind or character, including, but not limited to,
any theory of antitrust, environmental, successor or transferee liability, labor
law, de facto merger or substantial continuity, and, for the avoidance of doubt,
Buyer shall have no successor liability under any collective bargaining
agreement, contract with any union or under any pension plan or other Seller
Benefit Plan under which Seller or any Affiliate thereof is or was an obligor or
a party; and

 

(vii)     Buyer shall have no Liability for any Excluded Liabilities or Excluded
Assets.

 

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(e)        In the event an appeal is taken or a stay pending appeal is
requested, from the Bidding Procedures Order or the Sale Order, Sellers shall
immediately notify Buyer thereof and shall provide Buyer with a copy of the
related notice of appeal or order of stay.  Sellers and Buyer shall use their
respective commercially reasonable efforts to defend such appeal or stay request
at their own cost and expense and obtain an expedited resolution thereof.

 

(f)        Sellers agree that, after the entry of the Sale Order, the terms of
any reorganization or liquidation plan it submits to the Bankruptcy Court, or
any other Governmental Entity for confirmation or sanction, shall not conflict
with, supersede, abrogate, nullify or restrict the terms of this Agreement, or
in any way prevent or interfere with the consummation or performance of the
transactions contemplated hereby.

 

6.8         Auction; Bidding Procedures Order. This Agreement is subject to
approval by the Bankruptcy Court and the consideration by Sellers and the
Bankruptcy Court of competing bids during the Auction in accordance with, and to
the extent permitted or required by, the Bidding Procedures Order.  Each Seller
acknowledges and agrees that Sellers agreement to pay any Break-Up Fee and
Expense Reimbursement hereunder is subject to Bankruptcy Court approval of the
Break-Up Fee and Expense Reimbursement, which approval shall be requested in the
Sale Motion so that such approval of the Break-Up Fee and Expense Reimbursement
shall be provided in the Bidding Procedures Order and prior to the Auction.

 

6.9         Taxes.

 

(a)        Without limiting the obligations of the Parties contained elsewhere
in this Agreement, (i) Sellers shall be liable for and shall pay, and pursuant
to Section 6.9(b) shall reimburse Buyer for, all Taxes (whether assessed or
unassessed) applicable to the Acquired Business and the Purchased Assets, in
each case, attributable to periods (or portions thereof) ending on or prior to
the Closing Date (except for any Taxes resulting from any transactions occurring
on the Closing Date after the Closing outside the Ordinary Course of Business)
and (ii) Buyer shall be liable for and shall pay, and pursuant to Section 6.9(b)
shall reimburse the applicable Seller for, all Taxes (whether assessed or
unassessed) applicable to the Acquired Business, the Purchased Assets and the
Assumed Liabilities, in each case, attributable to periods (or portions thereof)
beginning after the Closing Date. For purposes of determining the liability of
the Parties for Taxes under this Agreement, in the case of any Straddle Period,
(i) any real, personal and intangible property Taxes, ad valorem Taxes and
similar Taxes imposed with respect to the Purchased Assets or the Acquired
Business shall be calculated by allocating to the periods before and after the
Closing Date pro rata, based on (A) the number of days of the Straddle Period in
the period before and ending on the Closing Date, on the one hand, and (B) the
number of days in the Straddle Period in the period after the Closing Date, on
the other hand, and (ii) all other Taxes imposed with respect to the Purchased
Assets or the Acquired Business (other than Transfer Taxes which shall be borne
by Sellers as provided in Section 6.9(c)) shall be calculated by assuming that
the Straddle Period consisted of two taxable periods, one which ended at the
close of the Closing Date and the other which began at the beginning of the day
following the Closing Date, and such Taxes shall be allocated between such two
taxable periods on a “closing of the books basis” by assuming that the books of
each of Sellers were closed at the end of the Closing Date; provided that for
these purposes any event occurring on the Closing Date following the Closing
which is outside the Ordinary Course of Business shall be treated as occurring
on the day after the Closing Date to the extent such event is not provided for
in this Agreement.

 

(b)        The applicable Seller or Buyer, as the case may be, shall provide
reimbursement for any Tax paid by one Party which is the responsibility of the
other Party in accordance with the terms of this Section 6.9. Within a
reasonable time prior to the payment of any such Tax, the Party paying such Tax
shall give notice to the other of the Tax payable and each Party’s respective
liability therefor, although failure to do so will not relieve the other Party
from its liability hereunder. The provisions of this Section 6.9(b) shall
expressly survive Closing.

 

 -43- 

 

 

(c)        Transfer Taxes. Notwithstanding anything to the contrary in this
Agreement, any sales Tax, use Tax, real property transfer or gains Tax, real
property records recordation fees, documentary stamp Tax or similar Tax
attributable to the sale or transfer of the Purchased Assets pursuant to this
Agreement which are not exempted under the Sale Order (“Transfer Taxes”) shall
be borne solely by Sellers. Sellers and Buyer shall cooperate as reasonably
requested to minimize any such Transfer Taxes, including providing applicable
resale certificates or exemption certificates not delivered to Sellers at or
prior to Closing pursuant to Section 2.6(b). Sellers shall be responsible for
preparing and filing all Tax Returns or other applicable documents in connection
therewith and Buyer shall cooperate with Sellers in the preparation, execution
and filing of all Tax Returns or other applicable documents for or with respect
to Transfer Taxes at the reasonable request of Sellers. The provisions of this
Section 6.9(c) shall expressly survive Closing.

 

(d)        It is intended by Sellers that, prior to Closing, Rising will convert
to a limited liability company under the Delaware conversion statute. The
Parties agree that nothing in this Agreement, including Section 6.1, shall
prevent such merger or conversion or impose any Liability upon any Seller as a
result of such conversion.

 

6.10        Inventory.

 

(a)        Between the Agreement Date and the Closing Date, the Qualified
Inventory maintained by Sellers shall be merchantable and fit for the purposes
for which it was intended and usable or salable in the Ordinary Course of
Business, shall conform to the specifications established therefor, shall be in
compliance with the applicable quality agreement between Seller(s) and the
supplier thereof, shall have been manufactured, handled, maintained, packaged
and stored in accordance with all applicable Laws, shall not be misbranded or
adulterated, within the meaning of the FDCA and shall include no damaged or
defective items.

 

(b)       Subject to Bankruptcy Court approval, Sellers shall dispose of the
Inventory that is expired as of the Agreement Date reasonably promptly after
such approval.

 

6.11        Public Announcements. Neither Sellers, on the one hand, nor Buyer,
on the other hand, shall, without the approval of Rising (in the case of a
disclosure by Buyer) or Buyer (in the case of a disclosure by Sellers), make any
press release or other public announcement concerning the transactions
contemplated hereby, except as and to the extent that any such Party shall be so
obligated by Law, including as may be required by the Bankruptcy Case,
securities laws, or the rules of any stock exchange, in which case, each Party
shall be advised prior to such disclosure, consult with each other before
issuing such press release or public announcement and consider in good faith any
comments received from the other Party at least two (2) Business Days, to the
extent reasonably practicable, prior to such issuance. The provisions of this
Section 6.11 shall expressly survive Closing or any earlier termination of this
Agreement.

 

6.12        Consents; Notices. At or prior to the Closing, Sellers shall use
commercially reasonable efforts to obtain all Consents and give all notices
required for Sellers to assign the Buyer Assumed Agreements to which they are a
party to Buyer to the extent not assignable without any such approval, consent,
or notice pursuant to Section 363 or Section 365 of the Bankruptcy Code. If any
Consent is not obtained prior to the Closing, then, subject to Sellers having
appropriate levels of resources and personnel, Sellers, at the sole cost of
Sellers, shall continue to use commercially reasonable efforts during the three
(3) months following the Closing to obtain the Consents and, to the extent
permitted by applicable Law, will establish an agency type or other similar
arrangement reasonably satisfactory to Sellers and Buyer under which Buyer would
obtain, to the extent practicable, all rights under the Buyer Assumed Agreements
and assume the corresponding Assumed Liabilities for the period of time that the
Consents are not obtained and the Buyer Assumed Agreements are not assigned. For
the avoidance of doubt, the Parties agree and acknowledge that (a) the failure
by Sellers to obtain any Consents not considered material to the Acquired
Business shall not relieve any party of its obligations to consummate the
transactions contemplated hereby, (b) there will not be any adjustment to the
Purchase Price if any such Consents are not obtained or certain non-material
Buyer Assumed Agreements are not assigned, and (c) Buyer shall not have any
claim against Sellers after the Closing in respect of any such Consents not
being obtained or non-material Buyer Assumed Agreements not being assigned.

 

 -44- 

 

 

6.13        Further Assurances.

 

(a)       At the Closing, and at all times thereafter as necessary, and without
further consideration, Parent and each Seller, on the one hand, and Buyer, on
the other hand, shall execute and deliver to such requesting Person such further
instruments of transfer and assignment as such requesting Person may reasonably
request in order to more effectively convey and transfer the Purchased Assets to
Buyer, in all cases at Sellers sole cost and expense. Parent and each Seller
shall execute any and all documents and perform such other acts as may be
necessary or expedient to further the purposes of this Agreement and the
transactions contemplated hereby.

 

(b)        To the extent that, during the twelve (12) months following the
Closing, any of Buyer, Parent or Sellers discovers that (i) any Purchased Assets
have not been transferred to Buyer or (ii) that any of the Excluded Assets have
been transferred to Buyer, it shall promptly notify the other Parties, and the
Parties shall, as soon as reasonably practicable, ensure that such property or
asset is transferred, at the expense of Sellers and with any necessary prior
third party consent or approval, to (A) Buyer or its designated assignee, in the
case of any Purchased Assets which were not transferred to Buyer at Closing, or
(B) Parent or Sellers, as the case may be, or their respective designated
assignee, in the case of any Excluded Assets which were transferred to Buyer at
Closing. Pending such transfer, at Sellers’ expense, Buyer, Parent or Sellers,
as applicable, shall hold in trust such Purchased Assets or Excluded Assets, as
applicable, and provide to the applicable other Party or its designated assignee
all of the benefits associated with the ownership of such Purchased Assets or
Excluded Assets, as applicable, and cause such Purchased Assets or Excluded
Assets, as applicable, to be used or retained as may be reasonably instructed by
the other Party.

 

(c)        If during the twelve (12) months following the Closing, any of Buyer,
Parent or Sellers discovers that Parent or any of its Affiliates (other than
Sellers) possesses, owns or holds any right, title or interest in, to or under
any properties or assets used in connection with the Pharma Business as
conducted at any time prior to the Closing, but excluding any property or assets
primarily related to the Chemicals Plus Business, and such property or assets,
if owned, held or possessed by any Seller as of the Agreement Date or the
Closing Date would have been Purchased Assets but for such property or assets
being owned, held or possessed by Parent or such Affiliate, such Party shall
promptly notify the other Parties, and the Parties shall, as soon as reasonably
practicable, ensure that such property or asset is transferred, at the expense
of Parent and with any necessary prior third party consent or approval, to Buyer
or its designated assignee. Pending such transfer, at Parent’s expense, Parent
or its Affiliate, as applicable, shall hold in trust such property or asset and
provide to the applicable other Party or its designated assignee all of the
benefits associated with the ownership of such property or asset and cause such
property or asset to be used or retained as may be reasonably instructed by
Buyer or its designated assignee.

 

 -45- 

 

 

(d)        To the extent permitted by applicable Law, for Tax purposes, any
Excluded Assets referred to in Section 6.13(b) shall be considered to have never
been transferred, and any Purchased Assets referred to in Section 6.13(b) and
any property or assets referred to in Section 6.13(c) shall be considered to
have been transferred as of the Closing Date.

 

6.14        Non-Enforcement of Certain Covenants. Parent and Sellers shall not,
and shall cause their respective Affiliates not to, enforce, or pursue any
claims with respect to, any of the restrictive covenants set forth in (a) that
certain Restrictive Covenants Agreement dated November 2, 2016, by and among
Citgen Pharma Holding LLC, a New Jersey limited liability company, Gensource
Pharma LLC, a Delaware limited liability company, SS Pharma LLC, a New Jersey
limited liability company, Shore Pharma LLC, a New Jersey limited liability
company, Pharma Reach LLC, a New Jersey limited liability company, Vimal Kavuru,
Sudha Kavuru, Subha Sri Thogarchedu, Ashok Mayya (collectively, the “Released
Parties”), Parent and Sellers party thereto and (b) that certain Employment
Agreement dated November 2, 2016, by and between Rising and Vimal Kavuru, and
the Released Parties are hereby released from any and all obligations arising
under such restrictive covenants.

 

6.15       Insurance.

 

(a)        Contemporaneously with the Closing, Sellers shall purchase, at
Buyer’s sole expense, “run-off” coverage for their respective product liability
insurance policies for a period of six (6) years from the date of Closing with
terms and conditions that are no less advantageous than the current product
liability insurance policies with respect to claims arising from or related to
facts or events that occurred at or before the Closing. The premium for such
“run-off” product liability policies shall not exceed 200% of the current annual
premium of each such policy (the “Run-Off Premium”); provided, however, that if
the quoted premium for each of the “run-off” insurance policies exceeds the
Run-Off Premium, then such “run-off” insurance policies will be obtained on the
most favorable terms available at the Run-Off Premium.

 

(b)        Sellers shall use commercially reasonable efforts to cause their
product liability insurance carriers, to expressly name Buyer as additional
insured on their respective product liability insurance policies, with respect
to any matters or claims arising from or related to the Purchased Assets and the
Acquired Business to the extent arising from or related to facts or events that
occurred at or prior to the Closing. Buyer shall be solely and fully responsible
for any (i) deductibles, retentions, or co-insurance in such product liability
insurance policies with respect to any claims made by Buyer under such policies
and (ii) any additional premium charged by the product liability insurance
carriers to add Buyer as an additional insured to the product liability
insurance policies.

 

(c)        If Buyer is not named as an additional insured on Sellers’ product
liability insurance policy, then to the extent that the Purchased Assets were
insured under product liability insurance policies of Sellers prior to the
Closing Date, for a period not to exceed six (6) months following the Closing,
(i) at Buyer’s written request Sellers shall make claims under such product
liability policies with respect to occurrences, events, conditions, or
circumstances relating to the Purchased Assets that occurred or existed prior to
the Closing and (ii) if Sellers receive any amounts under any such insurance
policy with respect to any occurrence, event, condition, or circumstance
relating to the Purchased Assets that occurred or existed prior to the Closing,
for which Buyer is held liable, Sellers shall promptly forward such amounts to
Buyer (net of reasonable costs of recovery of Sellers or their respective
Affiliates). In the event of any dispute regarding the date of any loss or
occurrence, the terms of the applicable insurance policies shall govern.

 

6.16       Trade Notification. Sellers and Buyer shall mutually agree on the
method, content, form and timing of notifications to manufacturers,
distributors, suppliers, customers and other third parties of the Acquired
Business or the sale of the Purchased Assets to Buyer, such agreement not to be
unreasonably withheld, conditioned or delayed by any of the Parties. Sellers and
Buyer agree to provide sufficient advance notice prior to Closing to such
Persons of the transactions contemplated hereby and the plans associated
therewith, so as to facilitate the transition of the Acquired Business from
Sellers to Buyer.

 

 -46- 

 

 

6.17      Transfer of Product Registrations, Related Applications and Dossiers.
On or promptly after the Closing Date (but in any event within five (5) Business
Days), each Seller shall deliver a letter to the FDA transferring the rights to
the Product Registrations to Buyer (or their designee). Within five (5) Business
Days of such delivery by Sellers, Buyer shall deliver a letter to the FDA
assuming and acknowledging responsibility for the Product Registrations from
Sellers. On the Closing Date or promptly thereafter (but in any event within
five (5) Business Days), each Seller shall deliver to Buyer, or its Affiliate as
directed by Buyer, in physical and electronic form, the Registration Information
and Regulatory Documentation. Following the transfer of the Product
Registrations, Sellers shall retain no rights in the Product Registrations or
Registration Information, including any rights to use or reference.

 

6.18        Correspondence; Payments.

 

(a)        Parent and each Seller authorize Buyer on and after the Closing Date
to receive and open all mail and other communications received by Buyer relating
to the Purchased Assets and the Assumed Liabilities and to deal with the
contents of such communications in good faith and in a proper manner. Parent and
each Seller shall use commercially reasonable efforts to promptly deliver, or
cause to be delivered, to Buyer any mail or other communications received by any
Parent, Seller or its respective Affiliates from (x) any Governmental Entity
(including the FDA), customer, supplier or manufacturer intended for Buyer
(including any mail or other communications in respect of the Purchased Assets,
the subject matter of this Agreement, the Ancillary Documents and the Release)
within two (2) Business Days following receipt thereof, and (y) any other Person
intended for Buyer (including any mail or other communications in respect of the
Purchased Assets, the subject matter of this Agreement, the Ancillary Documents
and the Release) within five (5) Business Days following receipt thereof.

 

(b)        Sellers agree that, from and after the Closing Date, Buyer has the
right and authority to endorse, without recourse, any check or other evidence of
indebtedness received by Buyer in respect of any Account Receivable which are
included within the Purchased Assets transferred to Buyer pursuant to this
Agreement and Sellers shall furnish Buyer such evidence of this authority as
Buyer may reasonably request.

 

(c)        Following the Closing, to the extent such amounts constitute
Purchased Assets hereunder, each Seller shall promptly remit to Buyer all
accounts receivable and other similar payments received by it relating to the
post-Closing operation of the Acquired Business and, until such payment is made,
such Seller shall hold such amounts in trust for Buyer. Following the Closing,
to the extent such amounts constitute Excluded Assets hereunder, Buyer shall
promptly remit to Sellers all accounts receivable and other similar payments
received by it relating to any such Excluded Asset and, until such payment is
made, Buyer shall hold such amounts in trust for Sellers.

 

6.19         Name Change. Sellers shall, as promptly as practicable (but in no
event later than twenty (20) Business Days) after the Closing, cease using and
displaying any trademarks that are included in the Purchased Assets, and in
accordance with such requirement, Sellers shall use commercially reasonable
efforts to, no later than twenty (20) Business Days after the Closing, legally
change their respective corporate and business names (to the extent such names
include such trademarks or a confusingly similar trademarks) to names that are
not confusingly similar to such trademarks, and file notices of such name
changes with the Bankruptcy Court. Subject to the approval of the Bankruptcy
Court to change Sellers’ name for purposes of the Bankruptcy Case (which
approval Sellers shall seek and use commercially reasonable efforts to obtain
promptly following the Closing), under no circumstance shall Sellers, after the
Closing, use or otherwise exploit the trademarks included in the Purchased
Assets or any other indicia confusingly similar to the trademarks included in
the Purchased Assets, copyrights included in the Purchased Assets, or any work
substantially similar to the copyrights included in the Purchased Assets, as a
source identifier in connection with any Seller product, service or corporate,
business or domain name.

 

 -47- 

 

 

ARTICLE VII
CONDITIONS TO THE PURCHASE AND SALE

 

7.1          Conditions to Each Party’s Obligation to Close. The respective
obligations of each Party to effect the Asset Purchase shall be subject to the
fulfillment (or waiver in a writing signed by the waiving party, to the extent
permissible under applicable Law and provided that such waiver shall only be
effective as to the conditions of the waiving party) at or prior to the Closing
of the following conditions:

 

(a)         no injunction by any court or other tribunal of competent
jurisdiction shall have been entered and shall continue to be in effect and no
Law shall have been adopted that remains in effect or be effective, in each
case, that prevents, enjoins, prohibits or makes illegal the consummation of the
Asset Purchase;

 

(b)         any waiting periods applicable to the Asset Purchase under the HSR
Act and any other Antitrust Laws have expired or been terminated and/or the
relevant approvals under such Laws have been acquired, and all material
consents, licenses, registrations, or declarations of, or filings with, any
Governmental Entities in any such jurisdictions required under any Laws for the
Asset Purchase to be completed have been obtained or made on a basis acceptable
to Sellers and Buyer, such acceptance not to be unreasonably withheld, delayed
or conditioned; and

 

(c)        the Sale Order is not subject to any stay and is in effect.

 

7.2          Conditions to Obligation of Sellers to Close. The obligation of
Sellers to sell the Purchased Assets at Closing is further subject to the
fulfillment (or waiver in a writing signed by Sellers, to the extent permissible
under applicable Law) at or prior to the Closing of the following conditions:

 

(a)         the representations and warranties of Buyer contained herein shall
be true and correct in all material respects as of the Agreement Date and as of
the Closing Date as though made on and as of such date (except to the extent
such representations and warranties speak as of an earlier date, in which case,
such representations and warranties shall be true and correct in all material
respects as of such earlier date);

 

(b)        Buyer shall have performed and complied in all material respects with
all covenants required by this Agreement to be performed or complied with by
Buyer prior to Closing;

 

(c)        Buyer shall have delivered to Sellers a certificate, dated the
Closing Date and signed by a duly authorized executive officer (in such
officer’s capacity as such and not individually) of Buyer, certifying to the
effect that the conditions set forth in Section 7.2(a) and Section 7.2(b) have
been satisfied;

 

(d)        Buyer shall have paid the Purchase Price in accordance with Section
2.2;

 

(e)        the Sale Order shall have been entered and not be subject to any
stay;

 

(f)         Buyer shall be prepared to deliver, or cause to be delivered, to
Sellers the items set forth in Section 2.6; and

 

(g)        the sale of the Chemicals Plus Business pursuant to Section 363 of
the Bankruptcy Code shall have been consummated, or shall be consummated
substantially concurrently with, the Closing, unless such sale has not occurred
within five (5) Business Days following satisfaction of the closing conditions
set forth in Sections 7.2(a) through (f).

 

 -48- 

 

 

7.3           Conditions to Obligation of Buyer to Close. The obligation of
Buyer to purchase the Purchased Assets at Closing is further subject to the
fulfillment (or the waiver in a writing signed by Buyer, to the extent
permissible under applicable Law) at or prior to the Closing of the following
conditions:

 

(a)        the representations and warranties of Sellers contained herein shall
be true and correct as of the Closing Date as though made on and as of such date
(except to the extent such representations and warranties speak as of an earlier
date, in which case, such representations and warranties shall be true and
correct in all respects as of such earlier date), interpreted without giving
effect to any Material Adverse Effect or materiality qualifications, except
where all failures of such representations and warranties to be true and
correct, in the aggregate, do not have or would not reasonably be expected to
have, a Material Adverse Effect;

 

(b)        Sellers shall have performed and complied in all material respects
with all covenants required by this Agreement to be performed or complied with
by them prior to the Closing (which, for the avoidance of doubt, shall not
include the transactions referred to in Section 6.9(d));

 

(c)        each Seller shall have delivered to Buyer a certificate, dated the
Closing Date and signed by a duly authorized executive officer (in such
officer’s capacity as such and not individually) of such Seller, certifying to
the effect that the conditions set forth in Section 7.3(a) and Section 7.3(b)
have been satisfied;

 

(d)        Sellers shall have delivered, or caused to be delivered, to Buyer all
of the items set forth in Section 2.7; provided, however, that (i) provision of
the certifications referenced in Section 2.7(h) shall not be a condition to
Closing and (ii) the sole remedy for failure to provide such certifications
shall be that Buyer shall be entitled to withhold any amount required to be
withheld pursuant to applicable Law;

 

(e)       since the Agreement Date, there shall not have occurred and be
continuing any event, change, effect or circumstance constituting, or which
would reasonably be likely to result in, individually or in the aggregate, a
Material Adverse Effect;

 

(f)        the Sale Order shall have been entered and deemed a Final Order;

 

(g)       the Qualified Inventory Amount shall be not less than $60,000,000;

 

(h)       the Release shall have been approved by Final Order of the Bankruptcy
Court; and

 

(i)         Buyer shall have received a notification from the Department
pursuant to Section 1.6(b), setting forth the amount of the Purchase Price to be
set aside in the Tax Escrow, or stating that no Tax Escrow is required.

 

7.4          Frustration of Closing Conditions. Neither Buyer nor Sellers may
rely on the failure of any condition set forth in this ARTICLE VII to be
satisfied if such failure was caused by a material breach of this Agreement by
such Party.

 

 -49- 

 

 

ARTICLE VIII
TERMINATION

 

8.1          Termination. Notwithstanding anything in this Agreement to the
contrary, this Agreement may be terminated, and the transactions contemplated
hereby may be abandoned, at any time prior to the Closing, as follows:

 

(a)        by the mutual written consent of Sellers and Buyer;

 

(b)        by either Sellers or Buyer, if the transactions contemplated hereby
(other than the transactions referred to in Section 6.9(d)), including the Asset
Purchase, shall not have been consummated on or prior to 5:00 p.m. New York City
Time, on May 31, 2019 (the “End Date”); provided that, if as of the End Date any
of the conditions set forth in Section 7.1(a) (solely to the extent such
condition has not been satisfied due to an order or injunction arising under any
Antitrust Law), Section 7.1(b) shall not have been satisfied or waived, the End
Date may be extended on one occasion by either Buyer or Sellers for a period of
up to thirty (30) calendar days by written notice to the other Party, and such
date, as so extended, shall be the End Date; provided, further, that the right
to terminate this Agreement pursuant to this Section 8.1(b) shall not be
available to a Party, if the failure of the transactions contemplated hereby to
be consummated by such date shall be due to the breach by such Party of any
covenant or other agreement of such Party set forth in this Agreement;

 

(c)        by either Sellers or Buyer, if an Order by a Governmental Entity of
competent jurisdiction shall have been issued permanently restraining, enjoining
or otherwise prohibiting the consummation of the transactions contemplated
hereby and such order shall have become final and nonappealable; provided that
the right to terminate this Agreement pursuant to this Section 8.1(c) shall not
be available to a Party if such Order resulted from, or could have been avoided
but for, the breach by such Party of any covenant or other agreement of such
Party set forth in this Agreement;

 

(d)        by Sellers, if Buyer shall have breached or there is any inaccuracy
in any of its representations or warranties, or shall have breached or failed to
perform any of its covenants or other agreements contained in this Agreement,
which breach, inaccuracy or failure to perform (i) if it occurred or was
continuing to occur on the Closing Date, would result in a failure of a
condition set forth in Section 7.2(a) or Section 7.2(b) (except for any
conditions that by their nature can only be satisfied on the Closing Date, but
subject to the satisfaction of such conditions on the Closing Date or waiver by
the Party entitled to waive such conditions in accordance with the terms
thereof) and (ii) is either not curable or is not cured by the later of (A) the
End Date and (B) the date that is thirty (30) calendar days following written
notice from Sellers to Buyer of such breach, inaccuracy or failure; provided,
that Sellers may not terminate this Agreement pursuant to this Section 8.1(d) if
any Seller is in material breach or violation of its representations, warranties
or covenants contained in this Agreement;

 

(e)        by Buyer, if Sellers shall have breached or there is any inaccuracy
in any of their representations or warranties, or shall have breached or failed
to perform any of their covenants or other agreements contained in this
Agreement, which breach, inaccuracy or failure to perform (i) if it occurred or
was continuing to occur on the Closing Date, would result in a failure of a
condition set forth in Section 7.3(a) or Section 7.3(b) (except for any
conditions that by their nature can only be satisfied on the Closing Date, but
subject to the satisfaction of such conditions on the Closing Date or waiver by
the Party entitled to waive such conditions in accordance with the terms
thereof) and (ii) is either not curable or is not cured by the earlier of (A)
the End Date and (B) the date that is thirty (30) calendar days following
written notice from Buyer to Sellers of such breach, inaccuracy or failure;
provided, that Buyer may not terminate this Agreement pursuant to this Section
8.1(e) if Buyer is in material breach or violation of its representations,
warranties or covenants contained in this Agreement;

 

 -50- 

 

 

(f)        by either Sellers or Buyer, if (i) the Bidding Procedures Order has
not been entered by the Bankruptcy Court on or prior to the date that is
forty-five (45) calendar days after the Sale Motion is filed with the Bankruptcy
Court, (ii) the Sale Order has not been entered by the Bankruptcy Court on or
prior to the date that is sixty-seven (67) calendar days after the Agreement
Date (which, in no event, shall be later than the End Date), provided that, in
the case of a termination by Buyer, Buyer is not in material breach of any terms
of this Agreement prior to such termination, or, in the case of a termination by
Sellers, Sellers are not in material breach of any terms of this Agreement prior
to such termination, or (iii) Sellers withdraw the Sale Motion without Buyer’s
consent, with such termination to occur no earlier than three (3) Business Days
after such withdrawal;

 

(g)        by Buyer, if the Bankruptcy Case is dismissed or converted to a case
under Chapter 7 of the Bankruptcy Code for any reason;

 

(h)        by either Sellers or Buyer, if (i) the Bankruptcy Court approves and
Sellers consummate an Alternative Bid or (ii) Buyer is not the Successful Bidder
at the Auction; provided, that, if Buyer is not the Successful Bidder at the
Auction, but is the Back-Up Bidder, then Buyer shall not be permitted to
terminate this Agreement pursuant to this Section 8.1(h) until the Back-Up
Period End Date; provided, further, that Buyer shall not be permitted to
terminate this Agreement pursuant to this Section 8.1(h) if Buyer is then in
breach of the terms of this Agreement;

 

(i)         by Buyer, if Sellers or Parent (or a permitted third party) files a
proposed plan of reorganization or liquidation in the Chapter 11 Case which does
not provide for the consummation of the transactions with Buyer as set forth
herein;

 

(j)         by Buyer if there has been any event, change, effect or circumstance
constituting, or which would reasonably be likely to result in, individually or
in the aggregate, a Material Adverse Effect; or

 

(k)        by Sellers, if (x) the Bankruptcy Court takes any action that
precludes the satisfaction of the condition set forth in Section 7.3(h) or
declines to, or otherwise does not, approve the Release, (y) Sellers request in
writing that Buyer irrevocably and fully waive in writing such condition after
the Bankruptcy Court takes such action or fails to so approve the Release, and
(z) Buyer does not irrevocably and fully waive in writing the condition set
forth in Section 7.3(h) within thirty-six (36) hours after Sellers provide such
written request to Buyer.

 

8.2          Effect of Termination. In the event of termination of this
Agreement pursuant to Section 8.1, this Agreement shall terminate (except that
the Confidentiality Agreement, Section 2.3, this Section 8.2, Section 8.3,
Section 8.4 and ARTICLE IX shall survive any termination), and there shall be no
other Liability on the part of Parent, Sellers or Buyer to any other Party,
other than as set forth in Section 2.3, Section 8.3 and Section 8.4; provided
that nothing herein shall relieve any Party from Liability for fraud, willful
misconduct or a Willful Breach of its covenants or agreements set forth in this
Agreement prior to such termination. In the event of termination of this
Agreement, and regardless of the reason for the termination, the Confidentiality
Agreement shall continue in full force and effect in accordance with its terms
and any such termination shall not amend, modify, release, waive or otherwise
limit any rights or obligations under the Confidentiality Agreement.

 

8.3          Break-Up Fee; Expense Reimbursement.

 

(a)        Sellers acknowledge (i) that Buyer has made a substantial investment
in time and incurred substantial out-of-pocket expenses in connection with the
negotiation and execution of this Agreement, its due diligence with respect to
the Purchased Assets, and its efforts to consummate the transactions
contemplated hereby, and (ii) that Buyer’s efforts have substantially benefited
Sellers and will benefit Sellers and will benefit the bankruptcy estate of
Sellers, as actual and necessary costs of administration, through the submission
of the offer reflected in this Agreement which will serve as a minimum bid on
which other potentially interested bidders can rely. Therefore, as compensation
for entering into this Agreement, taking action to attempt to consummate the
transactions contemplated hereby and incurring the costs and expenses related
thereto and other losses and damages, including foregoing other opportunities,
Sellers agree, jointly and severally, to pay to Buyer promptly and in any event
within one (1) Business Day from when due and payable in accordance with the
provisions of Section8.3(b), an amount equal to $672,500 (the “Break-Up Fee”),
and/or the Expense Reimbursement.

 

 -51- 

 

 

(b)        Subject to limitations set forth in the Bidding Procedures, the
Break-Up Fee shall become due and payable to Buyer (and until paid shall
constitute an allowed administrative expense claim of Sellers’ bankruptcy estate
under §503(b) of the Bankruptcy Code (without need for further application,
motion or order)), if this Agreement is validly terminated by Buyer or Sellers
pursuant to (i) Section 8.1(f)(iii) or (ii) (A) Section 8.1(h) and (B) Sellers
receive the cash consideration in connection with the closing of the Alternative
Transaction. Subject to limitations set forth in the Bidding Procedures, the
Expense Reimbursement shall become due and payable to Buyer (and until paid
shall constitute an allowed administrative expense claim of Sellers’ bankruptcy
estate under §503(b) of the Bankruptcy Code (without need for further
application, motion or order)), if this Agreement is validly terminated by Buyer
pursuant to Section 8.1(b), Section 8.1(e), Section 8.1(f)(ii), 8.1(f)(iii),
Section 8.1(g), Section 8.1(h), Section 8.1(i) and Section 8.1(j). Upon such
termination, and in any event as soon as practicable following demand, Sellers
shall, jointly and severally, promptly pay Buyer the Expense Reimbursement by
wire transfer to the account designated by Buyer in immediately available funds.

 

8.4           Return of Good Faith Deposit. In the event that this Agreement is
validly terminated pursuant to Sections 8.1(a), Section 8.1(b), Section 8.1(c),
Section 8.1(e), Section 8.1(f), Section 8.1(g), Section 8.1(h), Section 8.1(i),
Section 8.1(j) or Section 8.1(k) and provided that Buyer is not in material
breach of any terms of this Agreement prior to such termination, the Good Faith
Deposit Escrow Holder shall disburse to Buyer any amounts held in the Good Faith
Deposit Escrow pursuant to the Bidding Procedures.

 

ARTICLE IX
MISCELLANEOUS

 

9.1           No Survival. The representations, warranties, covenants and
agreements in this Agreement or in any instrument delivered pursuant to this
Agreement shall not survive the Closing and shall be extinguished by the Closing
and the consummation of the transactions contemplated hereby, except for
covenants and agreements that, by their terms, contemplate performance after, or
otherwise expressly by their terms survive, the Closing.

 

9.2           Expenses. Except as otherwise provided in this Agreement, whether
or not the Asset Purchase is consummated, all costs and expenses incurred in
connection with the Asset Purchase, this Agreement and the transactions
contemplated hereby shall be paid by the Party incurring or required to incur
such expenses; provided that Buyer and Sellers shall equally share and pay all
fees and expenses of the Escrow Agent.

 

9.3           Counterparts; Effectiveness. This Agreement may be executed in
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument, and shall become
effective when one or more counterparts have been signed by each of the Parties
and delivered (by telecopy, electronic delivery or otherwise) to the other
Parties. Signatures to this Agreement transmitted by facsimile transmission, by
electronic mail in “portable document format” form, or by any other electronic
means intended to preserve the original graphic and pictorial appearance of a
document, will have the same effect as physical delivery of the paper document
bearing the original signature.

 

 -52- 

 

 

9.4         Governing Law; Jurisdiction.

 

(a)        This Agreement, and all claims or causes of action (whether at Law,
in contract, in tort or otherwise) that may be based upon, arise out of or
relate to this Agreement or the negotiation, execution or performance hereof,
shall be governed by and construed in accordance with the laws of the State of
New York, without giving effect to any choice or conflict of law provision or
rule (whether of the State of New York or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State of
New York.

 

(b)        All Proceedings arising out of or relating to this Agreement,
including the resolution of any and all disputes hereunder, shall be heard and
determined in the Bankruptcy Court, and the Parties irrevocably submit to the
exclusive jurisdiction of the Bankruptcy Court in any such Proceeding and
irrevocably waive the defense of an inconvenient forum to the maintenance of any
such Proceeding. The Parties consent to service of process by mail (in
accordance with Section 9.7) or any other manner permitted by law.

 

9.5          Remedies.

 

(a)        The Parties agree and acknowledge that if any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached, irreparable damage would occur, no adequate remedy at
law would exist and damages would be difficult to determine, and accordingly (i)
each of the Parties shall be entitled to, and may seek in the alternative, such
remedies as are available at law and in equity, and (ii) (A) except as otherwise
provided in Section 9.5(b) and Section 9.5(c), the Parties shall be entitled to
an injunction or injunctions to prevent breaches of this Agreement and shall be
entitled to specific performance of the terms hereof, in each case, in the
Bankruptcy Court (as set forth in Section 9.4(b)), this being in addition to any
other remedy to which they are entitled at law or in equity, (B) the Parties
waive any requirement for the securing or posting of any bond in connection with
the obtaining of any specific performance or injunctive relief and (C) the
Parties agree, in any action for specific performance, that there is no adequate
remedy at law. In circumstances where Buyer is obligated to consummate the Asset
Purchase and the Asset Purchase has not been consummated, Buyer expressly
acknowledges and agrees that Sellers shall have suffered irreparable harm, that
monetary damages will be inadequate to compensate Sellers, and that Sellers
shall be entitled (in addition to any other remedy that may be available to them
whether in law or equity, including monetary damages) to enforce specifically
Buyer’s obligations to consummate the Asset Purchase. Sellers’ pursuit of
specific performance at any time will not be deemed an election of remedies or
waiver of the right to pursue any other right or remedy to which Sellers may be
entitled. In no event shall the Parties be entitled to receive both a grant of
specific performance of the consummation of the Asset Purchase pursuant to
Section 9.5 and monetary damages to which it is entitled pursuant to this
Agreement with respect to termination of this Agreement. For the avoidance of
doubt, the Parties shall be entitled to seek the remedies provided herein, in
the alternative, and not be required to elect their remedies in any Proceeding
brought to seek redress for the failure of Buyer to consummate the Asset
Purchase pursuant to this Agreement.

 

(b)        Notwithstanding Section 9.5(a) or anything else to the contrary in
this Agreement, except as set forth in this Section 9.5(b) and Section 9.5(c),
Sellers shall not be entitled to seek to enforce specifically Buyer’s
obligations to consummate the Asset Purchase unless (i) all of the conditions
set forth in Section 7.1 and Section 7.3 (other than those conditions that by
their nature are to be satisfied at the Closing or the failure of which to be
satisfied is caused by a breach by Buyer of its representations, warranties,
covenants or agreements contained in this Agreement) shall have been satisfied
(or are capable of being satisfied at the Closing) or (to the extent permissible
under applicable Law) waived and (ii) Buyer has failed to complete the Closing
by the date the Closing is required to have occurred pursuant to this Agreement.

 

 -53- 

 

 

(c)        In the event of any breach prior to the Closing by Sellers or Parent
of any of their respective agreements, representations, or warranties contained
herein or in the Bidding Procedures Order or the Sale Order, including any
Willful Breach, Buyer’s sole and exclusive remedies shall be (i) to exercise
Buyer’s rights to terminate this Agreement pursuant to ARTICLE VIII, in
accordance with the terms of such ARTICLE VIII, (ii) the return of the Good
Faith Deposit as provided in Section 2.3, and (iii) to the Break-Up Fee and the
Expense Reimbursement, as applicable, if earned in accordance with Section 8.3,
and Buyer shall not have any further cause of action for damages, specific
performance, or any other legal or equitable relief against Sellers with respect
thereto.

 

(d)        In the event of any breach prior to the Closing by Buyer of any of
Buyer’s agreements, representations, or warranties contained herein, including
any Willful Breach, Parent and Sellers’ sole and exclusive remedies shall be (i)
to exercise Sellers’ rights to terminate this Agreement pursuant to ARTICLE
VIII, in accordance with the terms of such ARTICLE VIII, (ii) the payment of the
Good Faith Deposit as provided in Section 2.3, and (iii) to enforce any
provision of this Agreement pursuant to Section 9.5(a) (including the right to
such remedies as are available at law and in equity).

 

9.6         WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

9.7        Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given (a) upon personal delivery to the Party to be
notified; (b) when received when sent by email or facsimile by the Party to be
notified; provided that notice given by email or facsimile shall not be
effective unless either (i) a duplicate copy of such email or fax notice is
promptly given by one of the other methods described in this Section 9.7 or (ii)
the receiving Party delivers a written confirmation of receipt for such notice
either by email or fax or any other method described in this Section 9.7; or
(c) when delivered by a courier (with confirmation of delivery); in each case,
to the Party to be notified at the following address:

 

To Buyer:       Shore Suven Pharma, Inc. 1100 Cornwall Road, Suite 110 Monmouth
Junction, New Jersey 08852 Attention: Vimal Kavuru, Chief Executive Officer
Email: vkavuru@shorepharma.com     with a copy (which shall not constitute
notice) to:     Reed Smith LLP 599 Lexington Avenue, 22nd Floor New York, New
York 10022 Facsimile: (212) 521-5450 Attention: Niket Rele, Esq. Email:
nrele@reedsmith.com

 

 -54- 

 

 

To Sellers and Parent:   Aceto Corporation 4 Tri Harbor Ct. Port Washington, New
York 11050 Facsimile: (516) 478-9857 Attention: Steven S. Rogers, Chief Legal
Officer Email: srogers@aceto.com     with a copy (which shall not constitute
notice) to:   Lowenstein Sandler LLP 1251 Avenue of the Americas New York, New
York 10020 Facsimile: (973) 597-2507 Attention: Steven E. Siesser, Esq. Peter H.
Ehrenberg, Esq. Email: ssiesser@lowenstein.com   pehrenberg@lowenstein.com

 

or to such other address as any Party shall specify by written notice so given,
and such notice shall be deemed to have been delivered as of the date so
telecommunicated or personally delivered. Any Party may notify any other Party
of any changes to the address or any of the other details specified in this
Section 9.7; provided that such notification shall only be effective on the date
specified in such notice or five (5) Business Days after the notice is given,
whichever is later. Rejection or other refusal to accept or the inability to
deliver because of changed address of which no notice was given shall be deemed
to be receipt of the notice as of the date of such rejection, refusal or
inability to deliver.

 

9.8          Assignment; Binding Effect. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned or delegated by any
of the Parties without the prior written consent of the other Parties; provided,
however, that Buyer may assign this Agreement in whole or in part to a
controlled Affiliate of Buyer, but no such assignment shall relieve Buyer of its
obligations under this Agreement. Subject to the first sentence of this Section
9.8, this Agreement shall be binding upon and shall inure to the benefit of the
Parties and their respective successors and assigns. Any purported assignment
not permitted under this Section 9.8 shall be null and void.

 

9.9          Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement in any other jurisdiction. If any provision of this Agreement is as
broad as to be unenforceable, such provision shall be interpreted to be only so
broad as is enforceable.

 

9.10        Entire Agreement. This Agreement together with the exhibits hereto,
schedules hereto the Confidentiality Agreement, the Release and the Ancillary
Documents constitute the entire agreement, and supersede all other prior
agreements and understandings, both written and oral, between the Parties, or
any of them, with respect to the subject matter hereof and thereof, and this
Agreement is not intended to grant standing to any Person other than the
Parties.

 

9.11        Amendments; Waivers. Any provision of this Agreement may be amended
or waived if, and only if, such amendment or waiver is in writing and signed, in
the case of an amendment, by Sellers and Buyer or, in the case of a waiver, by
the Party against whom the waiver is to be effective. Notwithstanding the
foregoing, no failure or delay by any Party in exercising any right hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise
thereof preclude any other or further exercise of any other right hereunder.

 

 -55- 

 

 

9.12        Headings. Headings of the Articles and Sections of this Agreement
are for convenience of the Parties only and shall be given no substantive or
interpretive effect whatsoever. The table of contents to this Agreement is for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

 

9.13        No Third-Party Beneficiaries. Sellers and Buyer agree that (a) its
representations, warranties, covenants and agreements set forth herein are
solely for the benefit of the other Parties, in accordance with and subject to
the terms of this Agreement, and (b) this Agreement is not intended to, and does
not, confer upon any Person other than the Parties any rights or remedies
hereunder, including the right to rely upon the representations and warranties
set forth herein. Notwithstanding the foregoing, each of the Released Parties
shall be an express third party beneficiary of and shall be entitled to rely
upon Section 6.14 and this Section 9.13.

 

9.14        No Successor. Nothing in this Agreement, the Release or any
Ancillary Document shall create any implication, covenant, or commitment that
Buyer is a successor or successor-in-interest to any Seller or the Chemicals
Plus Business.

 

9.15         Interpretation. When a reference is made in this Agreement to an
Article or Section, such reference shall be to an Article or Section of this
Agreement unless otherwise indicated. Whenever the words “include,” “includes”
or “including” are used in this Agreement, they shall be deemed to be followed
by the words “without limitation.” The words “hereof,” “herein” and “hereunder”
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement,
unless the context otherwise requires. The word “or” shall not be deemed to be
exclusive. The word “extent” and the phrase “to the extent” when used in this
Agreement shall mean the degree to which a subject or other thing extends, and
such word or phrase shall not mean simply “if.” All terms defined in this
Agreement shall have the defined meanings when used in any certificate or other
document made or delivered pursuant thereto unless otherwise defined therein.
The definitions contained in this Agreement are applicable to the singular as
well as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such terms. References in this Agreement to
specific laws or to specific provisions of laws shall include all rules and
regulations promulgated thereunder. Each of the Parties has participated in the
drafting and negotiation of this Agreement. If an ambiguity or question of
intent or interpretation arises, this Agreement must be construed as if it is
drafted by all the Parties, and no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of authorship of any of the
provisions of this Agreement.

 

9.16        Non-Recourse. Notwithstanding anything herein to the contrary, no
Representative of, Affiliate (or Representative of an Affiliate) of, or direct
or indirect equity owner in, any Sellers shall have any personal liability to
either Buyer or any other Person as a result of the breach of any
representation, warranty, covenant, agreement or obligation of Sellers in this
Agreement, and no Representative of, Affiliate (or Representative of an
Affiliate) of, or direct or indirect equity owner in, Buyer shall have any
personal liability to Parent, Sellers or any other Person as a result of the
breach of any representation, warranty, covenant, agreement or obligation of
Buyer in this Agreement.

 

 -56- 

 

 

9.17        Definitions.

 

(a)        Certain Specified Definitions. As used in this Agreement:

 

“Accounts Receivable” means all accounts receivable and other rights to payment
of Sellers, and the full benefit of all security for such accounts receivable or
rights to payment, in respect of goods shipped or products sold or services
rendered to customers by Sellers, and any claim, remedy or other right of
Sellers related to any of the foregoing, including, for the avoidance of doubt,
the entries set forth on Schedule 1.1(a), net of the Assumed Accrued
Liabilities, but excluding any Intracompany Receivables.

 

“Acquired Business” means the Pharma Business as conducted by Sellers as of the
Agreement Date. For the avoidance of doubt, the Acquired Business excludes the
assets and liabilities related to the Chemicals Plus Business.

 

“Acquired Real Property” means real property subject to Assumed Real Property
Leases.

 

“Affiliate” means, as to any Person, any other Person which directly or
indirectly controls, or is under common control with, or is controlled by, such
Person. As used in this definition, “control” (including, with its correlative
meanings, “controlled by” and “under common control with”) shall mean
possession, directly or indirectly, of the power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise) of such
Person. Further, it is clarified that the holding of fifty percent (50%) or more
of the voting rights in any Person shall be deemed to constitute possession of
the power to direct or cause the direction of management or policies of such
Person.

 

“Alternative Bid” means a higher or better competing bid, including, in
consideration of any sale, transfer, liquidation, or disposition of the Acquired
Business or Purchased Assets or of a plan of reorganization or liquidation with
respect to the Acquired Business or Purchased Assets.

 

“Alternative Transaction” means one or more agreements to sell, transfer, or
otherwise dispose of any material portion of the Purchased Assets, either alone
or together with any other portion of the Business, in a transaction or series
of transactions (other than in the Ordinary Course of Business) with one or more
Persons, other than Buyer, pursuant to an Alternative Bid that actually closes.

 

“Ancillary Documents” means the Bill of Sale, the Assignment and Assumption
Agreement, the Assignment of Intellectual Property, the Assignment and
Assumption of Leases, the Escrow Agreement and each other agreement, document or
instrument (other than this Agreement) executed and delivered by the Parties in
connection with the consummation of the transactions contemplated hereby.

 

“ANDA” means an Abbreviated New Drug Application as defined in the FDCA.

 

“Assignment and Assumption Agreement” means an assignment and assumption
agreement in substantially the form of Exhibit A.

 

“Back-Up Bidder” has the meaning specified in the Bidding Procedures Order.

 

“Back-Up Period End Date” means the date upon which an Alternative Transaction
has been consummated following approval by the Bankruptcy Court.

 

“Bidding Procedures” means the bidding procedures in substantially the form
attached hereto as Exhibit B or otherwise in form and substance reasonably
acceptable to Buyer, together with any changes thereto reasonably approved by
Buyer, if any, as shall have been required by the Bankruptcy Court.

 

“Bidding Procedures Order” means an order of the Bankruptcy Court, in
substantially the form attached hereto as Exhibit C or otherwise in a form and
substance reasonably acceptable to Buyer.

 

“Bill of Sale” means a bill of sale in substantially the form attached hereto as
Exhibit D.

 

 -57- 

 

 

“Books and Records” means all books, records, files, invoices, inventory
records, product specifications, advertising, marketing, and promotional
materials, customer lists, cost and pricing information, supplier lists,
business plans, catalogs, customer literature, quality control records and
manuals, research and development files, records and laboratory books, credit
records of customers and audited financial statements (including all books of
accounts, ledgers, trial balances, etc. used in the preparation thereof) for the
six (6) fiscal years prior to the Closing Date (including all data and other
information stored on discs, tapes or other media).

 

“Bribery Legislation Laws” means all and any of the following: the FCPA; the
Organization For Economic Co-operation and Development Convention on Combating
Bribery of Foreign Public Officials in International Business Transactions and
related implementing legislation; the relevant common law or legislation in
England and Wales relating to bribery and/or corruption, including, the Public
Bodies Corrupt Practices Act 1889; the Prevention of Corruption Act 1906 as
supplemented by the Prevention of Corruption Act 1916 and the Anti-Terrorism,
Crime and Security Act 2001; the Bribery Act 2010; the Proceeds of Crime Act
2002; and any applicable anti-bribery or anti-corruption related provisions in
criminal and anti-competition Laws and/or anti-bribery, anti-corruption and/or
anti-money laundering Laws of any jurisdiction in which the Acquired Business
operates.

 

“Business Day” means any day other than a Saturday, Sunday or any other calendar
day on which commercial banks in New York, New York and in the State of Delaware
are authorized or required by Law to remain closed.

 

“Cash” means, as of 11:59 p.m. New York City Time on the Closing Date, all cash
and cash equivalents of the Acquired Business, as determined in accordance with
GAAP using the same accounting methods, policies, practices and procedures, with
consistent classifications, judgments and estimation methodology, as were used
in the preparation of the Most Recent Balance Sheet, excluding the effects of
transactions on the Closing Date after the Closing outside of the Ordinary
Course of Business. Notwithstanding the foregoing, “Cash” shall include uncashed
and uncleared checks and other deposits or transfers received or deposited for
the accounts of Sellers, including, without limitation, ACH transactions and
other wire transfers, but shall exclude all outbound ACH and issued but
uncleared checks, in each case, as of 11:59 p.m. New York City Time on the
Closing Date.

 

“CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. § 9601 et seq.

 

“Chartwell Liability” shall mean all Liabilities arising from and in connection
with the matter styled as Chartwell Therapeutics v. Citron Pharma LLC, No.
1:16-cv-03181 (E.D.N.Y.), and the related liabilities under the Citron PPA.

 

“Chemicals Plus Business” means the Nutritional Business Sub Segment, the
Performance Chemicals Segment and the Pharmaceutical Ingredients Segment of the
Business.

 

“Claim” has the meaning given that term in Section 101(5) of the Bankruptcy Code
and includes, inter alia, all rights, claims, causes of action, defenses, debts,
demands, damages, offset rights, setoff rights, recoupment rights, obligations
and liabilities of any kind or nature under contract, at law or in equity, known
or unknown, contingent or matured, liquidated or unliquidated, and all rights
and remedies with respect thereto.

 

“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended.

 

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

 

 -58- 

 

 

“Contract” means any written contract, note, bond, mortgage, indenture, deed of
trust, license, lease, agreement, arrangement, commitment or other instrument or
obligation that is legally binding.

 

“Credit Facility” means that certain Second Amended and Restated Credit
Agreement, dated as of December 21, 2016 (as it may be amended or modified from
time to time), among Parent, as borrower, the other loan parties party thereto,
the lenders party thereto and Wells Fargo Bank, National Association, as
administrative agent.

 

“Environmental Law” means any Law (i) relating to pollution, protection of
public health and safety, or the protection, preservation or restoration of the
environment (including air, surface water, groundwater, drinking water supply,
surface land, subsurface land, plant and animal life or any other natural
resource), or any exposure to or release of, or the management of (including the
use, storage, recycling, treatment, generation, transportation, processing,
handling, labeling, production or disposal of) any Hazardous Materials, or (ii)
that regulates, imposes liability (including for enforcement, investigatory
costs, cleanup, removal or response costs, natural resource damages,
contribution, injunctive relief, personal injury or property damage) or
establishes standards of care with respect to any of the foregoing. Without
limiting the generality of the foregoing, Environmental Law shall include
CERCLA; the Solid Waste Disposal Act, as amended by the Resource Conservation
and Recovery Act, 42 U.S.C. § 6901 et seq.; the Federal Water Pollution Control
Act, 33 U.S.C. § 1251 et seq.; the Clean Air Act, 42 U.S.C. § 7401 et seq.; the
Toxic Substances Control Act, 15 U.S.C. § 2601 et seq.; the Safe Drinking Water
Act, 42 U.S.C. § 300f et seq.; the Oil Pollution Act of 1990, 33 U.S.C. § 2701
et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. § 1801 et seq.;
the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. § 136 et seq.;
New Jersey Industrial Site Recovery Act, N.J.S.A. 13:1k-6 et seq.; N.J.S.A.
13:1k-6 et seq.; the New Jersey Site Remediation Reform Act, N.J.S.A. 58:10C-1
et seq.; the New Jersey Spill Compensation and Control Act, N.J.S.A. 58:10-23.11
et seq.; the New Jersey Water Pollution Control Act, N.J.S.A. 58:10A-1 et seq.;
the New Jersey Air Pollution Control Act, N.J.S.A. 26:2C-1 et seq.; the New
Jersey Solid Waste Management Act, N.J.S.A. 13:1E-1 et seq.; the New Jersey
Underground Storage of Hazardous Substances Act, N.J.S.A. 58:10A-21 et seq.; and
the New Jersey Brownfield and Contaminated Site Remediation Act, N.J.S.A.
58:10B-1.1 et seq., each as amended, together with the regulations promulgated
and guidance issued thereunder.

 

“Environmental Permit” means any permit, certificate, registration, notice,
approval, identification number, license or other authorization required under
any applicable Environmental Law.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

“ERISA Affiliate” means, with respect to any entity, trade or business, any
other entity, trade or business that is a member of a group described in Section
414(b), (c), (m) or (o) of the Code that includes or included the first entity,
trade or business.

 

“Expense Reimbursement” means the actual, reasonable out-of-pocket legal,
accounting and other third party advisory or service costs and expenses of Buyer
and its Affiliates in connection with the transactions contemplated hereby, as
evidenced by invoice(s) provided to Sellers, in an aggregate amount not to
exceed $750,000.

 

“Escrow Account” means the escrow account established to govern the Tax Escrow.

 

“Escrow Agent” means Citibank, N.A. or such other financial institution as shall
be satisfactory to Sellers and Buyer.

 

“Escrow Agreement” means an escrow agreement dated as on or before the Closing
Date, by and among the Parties and the Escrow Agent to establish an Escrow
Account governing the Tax Escrow.

 

 -59- 

 

 

“Excluded Accrued Liabilities” means, without duplication, any Liabilities of
any Seller for: (i) deferred income; (ii) accrued payroll (including, for the
avoidance of any doubt, both the employee and employer portions of accrued
payroll Taxes, Assumed Plan contributions and premium payments and unemployment
contributions), excluding overdue amounts; (iii) accrued (to the extent not paid
by Sellers) and unused vacation and paid time off (“PTO”) to which the employees
of the Acquired Business are entitled pursuant to the PTO policies of Sellers
applicable to such employees immediately prior to the Closing Date (the “PTO
Policies”); (iv) retention bonus and key employee incentive obligations,
severance obligations, enhanced executive severance arrangements and change of
control payments; (v) accrued and unpaid property, public utility commission and
sales Taxes; and (vi) any other expenses that have been incurred, but for which
there is not yet any disbursement in the Books and Records of the applicable
Seller.

 

“FCPA” means the U.S. Foreign Corrupt Practices Act of 1977, as amended.

 

“FDA” means the U.S. Food and Drug Administration or a successor thereto.

 

“FDCA” means the Federal Food, Drug and Cosmetic Act of 1938, as amended.

 

“Final Order” means an action taken or Order issued by the applicable
Governmental Entity as to which: (i) no request for stay of the action or Order
is pending, no such stay is in effect, and, if any deadline for filing any such
request is designated by statute or regulation, it is passed, including any
extensions thereof; (ii) no petition for rehearing or reconsideration of the
action or Order, or protest of any kind, is pending before the Governmental
Entity and the time for filing any such petition or protest is passed; (iii) the
Governmental Entity does not have the action or Order under reconsideration or
review on its own motion and the time for such reconsideration or review has
passed; and (iv) the action or Order is not then under judicial review, there is
no notice of appeal or other application for judicial review pending, and the
deadline for filing such notice of appeal or other application for judicial
review has passed, including any extensions thereof.

 

“Foreign International Trade Law” means foreign Laws: (i) to the extent
governing the import or export of commodities, software or technology into any
country or from any country in which the Acquired Business is conducted and the
payment of required duties and tariffs in connection with same, and (ii) to the
extent that compliance with such Laws is permissible under U.S. Laws.

 

“Governmental Authorizations” means all licenses, permits, certificates,
franchises, consents, orders, clearances, registrations and other authorizations
and approvals granted or otherwise made available by or under the applicable
Laws of any Governmental Entity.

 

“Governmental Entity” means any federal, state, local or foreign governmental
entity, transnational governmental organization or any subdivision, court of
competent jurisdiction, judicial authority, court, tribunal, arbitral,
self-regulatory organization, agency, authority, department, board, bureau,
official or commission or instrumentality, in each case, whether domestic or
foreign.

 

“Governmental Order” means any order, writ, judgment, injunction, decree,
stipulation, determination, restriction or award enacted, issued, promulgated,
enforced or entered by or with any Governmental Entity.

 

“Hazardous Materials” means all substances defined or regulated as hazardous, a
pollutant or a contaminant under any Environmental Law, including any regulated
pollutant or contaminant (including any constituent, raw material, product or
by-product thereof), petroleum or natural gas hydrocarbons or any liquid or
fraction thereof, asbestos or asbestos-containing material, polychlorinated
biphenyls, any hazardous or solid waste, and any toxic, radioactive, infectious
or hazardous substance, material or agent.

 

 -60- 

 

 

“Health Care Laws” means all applicable health care Laws and Governmental
Orders, including the federal Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b),
the federal False Claims Act, 31 U.S.C. §§ 3729 et seq., the federal Civil
Monetary Penalties Law, 42 U.S.C. § 1320a-7b(a), the Health Insurance
Portability and Accountability Act of 1996, 42 U.S.C. §§ 1320d et seq., as
amended by the Health Information Technology for Economic and Clinical Health
Act, 42 U.S.C. §§ 17921 et seq., the exclusion Laws, 42 U.S.C. § 1320a-7, the
FDCA and related FDA regulations, the Public Health Service Act, the Controlled
Substances Act, Medicare, Title XVIII of the Social Security Act, and Medicaid,
Title XIX of the Social Security Act.

 

“Human Health” means the business segment of Sellers historically identified as
“Human Health” and comprised of: (i) finished dosage form generic drugs and
nutraceutical products, including the sale of generic prescription products and
over-the-counter pharmaceutical products to leading wholesalers, chain drug
stores, distributors and mass merchandisers; and (ii) the Nutritional Business
Sub Segment.

 

“IND” means an Investigational New Drug Application pursuant to 21 C.F.R. Part
312.

 

“Indebtedness” means, as to any Person, without duplication, as of the date of
determination (i) all obligations of such Person for borrowed money, including
accrued and unpaid interest, and any prepayment fees or penalties, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, (iii) all lease obligations of such Person capitalized on the Books
and Records of such Person, (iv) all Indebtedness of others secured by a Lien on
property or assets owned or acquired by such Person, whether or not the
Indebtedness secured thereby has been assumed, (v) all letters of credit or
performance bonds issued for the account of such Person, to the extent drawn
upon, and (vi) all guarantees of such Person of any Indebtedness of any other
Person other than a wholly owned subsidiary of such Person.

 

“Intellectual Property” means all intellectual property and similar proprietary
rights existing anywhere in the world associated with (i) patents and patent
applications, including continuations, divisionals, continuations-in-part,
reissues or reexaminations and patents issuing thereon (collectively,
“Patents”), (ii) trademarks, service marks, trade dress, logos, corporate names,
trade names and Internet domain names, and all applications and registrations
therefor (collectively, “Marks”), (iii) copyrights (including such rights in
software) and registrations and applications therefor, and works of authorship
(collectively, “Copyrights”), (iv) designs, databases and data compilations, and
(v) trade secrets and other proprietary and confidential information, including
know-how, inventions (whether or not patentable), processes, formulations,
technical data and designs, in each case, excluding any rights in respect of any
of the foregoing that comprise or are protected by Patents (collectively, “Trade
Secret Rights”); in each case, used solely for the operation of the Acquired
Business.

 

“International Trade Law” means the sanctions and export control Laws and
regulations, including the Export Administration Regulations, the Arms Export
Control Act, the International Traffic in Arms Regulations, the International
Emergency Economic Powers Act, the Trading with the Enemy Act, the U.S. Customs
Laws, the Foreign Asset Control Regulations, U.S. sanctions Laws, and any
regulations or Governmental Orders issued thereunder, including the regulations
administered by the Department of the Treasury’s Office of Foreign Assets
Control.

 

“Intracompany Payables” means all accounts, notes or loans payable recorded or
required by GAAP to be recorded on the books of any Seller or any Affiliate of
any Seller for goods or services purchased by or provided to the Acquired
Business, or advances (cash or otherwise) or any other extensions of credit to
the Acquired Business from a Seller, or any Affiliate thereof, including amounts
recorded on the Financial Statements as “due to affiliates”, whether current or
non-current, except to the extent included in the Assumed Accounts Payable.

 

 -61- 

 

 

“Intracompany Receivables” means all accounts, notes or loans receivable
recorded or required by GAAP to be recorded on the books of Sellers or any of
their respective Affiliates for goods or services sold or provided by the
Acquired Business to a Seller, or any Affiliate thereof, or advances (cash or
otherwise) or any other extensions of credit made by the Acquired Business to a
Seller, or any Affiliate thereof, including amounts recorded on the Financial
Statements as “due from affiliates”, whether current or non-current.

 

“Inventory” means inventories of materials, parts, raw materials, excipients,
active pharmaceutical ingredients, packaging materials, supplies, spare parts,
work-in-process and finished goods and products of Sellers, whether imported,
procured from contract manufacturers, or otherwise, that are in the possession
of a Seller or in transit to or from a Seller, vendor, customer or supplier,
whether or not title and risk of loss have passed to or from a Seller, in each
case, as of the Closing Date.

 

“knowledge” means (i) with respect to Buyer, the actual knowledge, following due
inquiry, of the individuals listed in Section 9.17(a) of the Buyer Disclosure
Schedule, and (ii) with respect to Sellers, the actual knowledge, following due
inquiry, of the individuals listed on Section 9.17(a) of the Sellers Disclosure
Schedule.

 

“Labeling” (and the correlative terms “Label” and “Labeled”) shall have the
meaning ascribed to such term in Section 201(m) of the FDCA (21 U.S.C. § 321(m))
relating to the subject matter thereof, including, with respect to each Product,
such Product’s label, the packaging and package inserts accompanying such
Product, and any other written, printed, or graphic materials accompanying such
Product, including patient instructions or patient indication guides.

 

“Leased Real Property” means real property leased by one or more Seller with
respect to the Acquired Business.

 

“Liability” means any debt, loss, Claim, damage, demand, fine, judgment,
penalty, liability or obligation (whether direct or indirect, known or unknown,
absolute, fixed or contingent, asserted or unasserted, accrued or unaccrued,
matured or unmatured, secured or unsecured, disputed or undisputed, subordinated
or unsubordinated, determined or determinable, liquidated or unliquidated, or
due or to become due, and whether in contract, tort, strict liability, successor
liability or otherwise), including all costs and expenses relating thereto
(including fees, discounts and expenses of legal counsel, experts, engineers and
consultants and costs of investigations).

 

“Lien” means any “Interest” as that term is used in Section 363(f) of the
Bankruptcy Code, lien (including any mechanics lien), encumbrance, pledge,
mortgage, indenture, deed of trust, security interest, pledge, hypothecation,
claim, lease, charge, escrow, option, right of first offer, right of first
refusal, preemptive right, easement, servitude, reservation, covenant,
encroachment, right of use, right of way, security agreement or other similar
agreement, arrangement, contract, commitment, understanding or obligation
(whether written or oral and whether or not relating in any way to credit or the
borrowing of money) of any kind with respect to any Person, or any proxy, voting
trust or agreement, transfer restriction under any shareholder or similar
agreement or encumbrance or any other right of a third party in respect of an
asset of such Person.

 

“Loss” or “Losses” means all claims, losses, Liabilities, damages, actions,
causes of action, awards, Proceedings, payments, judgments, settlements,
assessments, deficiencies, interest, penalties, costs and expenses, including
reasonable attorneys’ fees and disbursements; provided, that in no event will
Losses include any indirect, incidental, consequential, punitive, remote,
special, multiples of earnings or exemplary damages, opportunity costs, damages
for, measured by or based on lost profits, loss of revenue, diminution in value,
or loss of income, or other similar measures or for any loss of business
reputation or opportunity that arises out of or relates to this Agreement,
except in connection with any third party claim.

 

 -62- 

 

 

“Material Adverse Effect” means, with respect to Sellers (but solely with
respect to the Acquired Business), any change, effect, event, occurrence or
development that (a) has a material adverse effect on the business, operations
or financial condition of Sellers, taken as a whole, or (b) prevents or
materially impairs the consummation of the transactions contemplated by this
Agreement, excluding, however, the impact of (i) the filing of the Bankruptcy
Case, (ii) any changes or developments in domestic, foreign or global markets or
domestic, foreign or global economic conditions generally, including (A) any
changes or developments in or affecting the domestic or any foreign securities,
equity, credit or financial markets or (B) any changes or developments in or
affecting domestic or any foreign interest or exchange rates, (iii) changes in
GAAP or any official interpretation or enforcement thereof, (iv) changes in Law
or any changes or developments in the official interpretation or enforcement
thereof by Governmental Entities, (v) changes in domestic, foreign or global
political conditions (including the outbreak or escalation of war, military
actions, or acts of terrorism), including any worsening of such conditions
threatened or existing on the Agreement Date, (vi) changes or developments in
the business or regulatory conditions affecting the industries in which the
Acquired Business operates, (vii) the announcement or the existence of,
compliance with or performance under, this Agreement or the transactions
contemplated hereby (including the impact thereof on the relationships,
contractual or otherwise, of a Seller with employees, labor unions, financing
sources, customers, suppliers or partners), (viii) weather conditions or other
acts of God (including storms, earthquakes, tornados, floods or other natural
disasters), (ix) any matter set forth in the Seller Disclosure Schedule, (x) a
decline in the trading price or trading volume of Parent’s common stock or any
change in the ratings or ratings outlook for Parent, (xi) the failure to meet
any projections, guidance, budgets, forecasts or estimates (provided that the
underlying causes thereof may be considered in determining whether a Material
Adverse Effect has occurred if not otherwise excluded hereunder), (xii) any
action taken or omitted to be taken by a Seller at the written request of Buyer
or that is not prohibited by this Agreement, (xiii) any Proceeding threatened,
made or brought by any of the current or former shareholders of Parent (or on
their behalf or on behalf of Parent) against Parent or any of its directors,
officers or employees (and not against Sellers) arising out of this Agreement or
the transactions contemplated hereby, (xiv) provided that, from and after the
Agreement Date, Sellers continue paying in accordance with the payment terms in
effect on the Agreement Date (or such more favorable terms as may be available),
any fact, circumstance, event, action, change or development (including any
impact on the Acquired Business, operations or prospects of the Acquired
Business as a result thereof) by or with respect to the Acquired Business,
arising out of or relating to the relationship, contractual or otherwise of
Sellers with the largest supplier of goods and services to the Acquired Business
(measured by dollar volume of purchases) for the eight (8) month period ended on
December 31, 2018, or any Affiliates thereof, (xv) the failure to obtain any
approvals or consents from any Governmental Entity in connection with the
transactions contemplated hereby and (xvi) changes in legislation or Law that
directly or indirectly affect the purchasing or selling of products or services
sold or provided by a Seller; except, with respect to clauses (ii), (iii), (iv),
(v), (vi), (viii) and (xvi), to the extent that such impact is
disproportionately adverse to the business, operations or financial condition of
Sellers, taken as a whole and solely in respect of the Acquired Business,
relative to others in the industry or industries in which the Acquired Business
operates.

 

“NDA” means any new drug application filed pursuant to the requirements of the
FDA, as more fully defined in 21 C.F.R. Part 314 et seq., and any foreign
equivalent application filed with any Governmental Entity.

 

“Non-U.S. Seller Benefit Plan” means each Seller Benefit Plan that is maintained
outside the jurisdiction of the United States.

 

 -63- 

 

 

“Nutritional Business Sub Segment” means the supply of ingredients and raw
materials used in the production of food, nutritional and packaged dietary
supplements, including vitamins, supplements, botanical extracts, amino acids,
minerals, iron compounds and biochemicals used in pharmaceutical and nutritional
preparations.

 

“Order” means any order, injunction, judgment, decree, ruling, writ, assessment
or arbitration award of a Governmental Entity.

 

“Ordinary Course of Business” means the ordinary and usual course of day-to-day
operations of the Acquired Business (including acts and omissions of a Seller in
the ordinary and usual course) through the Agreement Date, consistent with past
practice or operations in or pending a bankruptcy.

 

“Organizational Documents” means (a) the articles or certificates of
incorporation and the by-laws of a corporation, (b) the partnership agreement
and any statement of partnership of a general partnership, (c) the limited
partnership agreement and the certificate of limited partnership of a limited
partnership, (d) the operating or limited liability company agreement and the
certificate of formation of a limited liability company, (e) any charter, joint
venture agreement or similar document adopted or filed in connection with the
creation, formation or organization of a Person not described in clauses (a)
through (d), and (f) any amendment to or equivalent of any of the foregoing.

 

“Party” or “Parties” means, individually or collectively, Buyer, Parent and each
Seller.

 

“Performance Chemicals” means the business segment of Sellers historically
identified as “Performance Chemicals” and consisting of the sourcing and
distribution of specialty chemicals, including the supply to various industrial
segments of chemicals used in the manufacture of plastics, surface coatings,
cosmetics and personal care, textiles, fuels and lubricants, and agricultural
protection products.

 

“Permitted Liens” means (i) any Lien for (A) current Taxes not yet due, or (B)
Taxes that are being contested in good faith by appropriate Proceedings or for
which appropriate reserves under GAAP have been established in the Financial
Statements, (ii) nonexclusive Intellectual Property licenses and
(iii) mechanics’, materialmens’, carriers’, workmens’, warehousemens’,
repairmens’, landlords’ or other like Liens and security obligations that are
incurred in the Ordinary Course of Business and are not delinquent, and any
statutory Liens arising by operation of Law with respect to a Liability incurred
in the Ordinary Course of Business and that is not delinquent, in each case,
that do not, and would not reasonably be expected to, individually or in the
aggregate, materially adversely affect the value, or the continued use, of the
Purchased Assets in the same or similar manner as currently, and as of the
Closing Date, being used by, or materially impairs the operations of, Sellers.

 

“Person” means any individual, corporation, partnership, joint venture, limited
liability company, association, joint-stock company, trust, unincorporated
organization, Governmental Entity or other entity.

 

“Pharma Business” means the Human Health Segment, excluding the Nutritional
Business Sub Segment, of the Business.

 

“Pharmaceutical Ingredients” means the business segment of Sellers historically
identified as “Pharmaceutical Ingredients” and comprised of the following two
product groups: Active Pharmaceutical Ingredients (APIs) and Pharmaceutical
Intermediates.

 

“Pre-Closing Tax Period” means any Tax period ending on or before the Closing
Date.

 

 -64- 

 

 

“Prepaid Assets” means, to the extent primarily related to the Acquired
Business, all credits, deferred charges, refunds, rights of set-off, rights of
recovery, deposits (including customer deposits and security deposits for rent
(including such deposits made by a Seller, as lessee, or to a Seller, as lessor,
in connection with the Assumed Real Property Leases)) and prepaid charges and
expenses of, and advance payments made by, a Seller, including, without
limitation, prepaid FDA establishment fees and prepaid FDA product fees, other
than (i) any deposits or prepaid charges and expenses paid primarily in
connection with or relating to any Excluded Assets or any Excluded Liabilities,
(ii) with respect to any rights to any refunds, credits or rebates for Taxes
paid by Sellers, and any deposits made by Sellers with any Taxing Authority, for
or relating to Taxes, in each case, for any period and (iii) as set forth on
Schedule 1.1(m).

 

“Proceeding” means any action, suit, claim, hearing, arbitration, litigation or
other proceeding, in each case, by or before any Governmental Entity.

 

“Product Registrations” means, with respect to the Acquired Business, all
Governmental Authorizations (including ANDAs, NDAs, drug master files and INDs)
and comparable regulatory filings granted to Sellers by, or applications
therefor pending with, any Governmental Entity (including applications that are
in the process of being prepared by Sellers) required to manufacture,
commercialize, develop, package, Label, store, use, market, import, export,
distribute and/or sell any of the Products.

 

“Qualified Inventory” means any Inventory that has an expiration date that is on
or after fifteen (15) months after the Inventory Count Date, which is either
fully paid or paid by Sellers on or before the Closing Date.

 

“Real Property” means all property considered real property under applicable
state Law, including estates in land, leasehold interests, easements and
licenses to utilize any of the foregoing.

 

“Real Property Lease” means any lease, sublease, license or other agreement
under which a Seller leases, subleases, licenses, uses or occupies (in each
case, whether as landlord, tenant, sublandlord, subtenant or by other occupancy
arrangement), or has the right to use or occupy, now or in the future, any real
property, in each case, used solely for the operation of the Acquired Business.

 

“Registered Intellectual Property” means all registered Marks, pending
applications for registration of Marks, registered Copyrights and applications
for copyright registration, and issued Patents and applications for Patents
owned by any Seller and material to or useful in the Acquired Business.

 

“Registration Information” means any and all original Product Registrations,
together with copies of related correspondence between any of the manufacturers
or marketers of the Products and the applicable Governmental Entity, current
approved packaging relating to any of the Products and any other existing files
and dossiers relating to any of the Products, including the underlying data or
information used to support, maintain or obtain marketing authorization with
respect to any of the Products.

 

“Regulated Substances” means pollutants, contaminants, hazardous or toxic
substances, compounds or related materials or chemicals, hazardous materials,
hazardous waste, flammable explosives, radon, radioactive materials, asbestos,
urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum and
petroleum products (including, but not limited to, waste petroleum and petroleum
products) as regulated under applicable Environmental Laws.

 

“Regulatory Documentation” means, to the extent related to the Products, (a) all
Registration Information, (b) regulatory filings and supporting documents,
chemistry, manufacturing and controls data and documentation, preclinical and
clinical studies and tests, (c) any ANDA, any NDA and all regulatory files and
foreign equivalents related thereto, (d) all records maintained under record
keeping or reporting Laws of the FDA or any other Governmental Entity, including
all IND applications, IND annual and safety reports, drug master files, FDA
warning letters, FDA notices of adverse finding letters, FDA audit reports
(including any responses to such reports), any correspondence with the Office of
Prescription Drug Promotion, periodic safety update reports, complaint files,
and annual product quality reviews, (e) the complete complaint, adverse event
and medical inquiry filings with respect to the Products as required by
applicable Laws and related to the Acquired Business, including the Product
Registrations, and (f) all equivalent, comparable or analogous documentation
with respect to any other country outside the United States.

 

 -65- 

 

 

“Representatives” means officers, directors, employees, accountants,
consultants, legal counsel, investment bankers, advisors, representatives or
authorized agents.

 

“Sale Hearing” means the hearing conducted by the Bankruptcy Court to approve
the transactions contemplated hereby or a competing transaction.

 

“Sale Motion” means one or more motions, in form and substance satisfactory to
Buyer, filed by Sellers pursuant to, inter alia, Sections 363 and 365 of the
Bankruptcy Code to secure entry of the Bidding Procedures Order and the Sale
Order by the Bankruptcy Court.

 

“Sale Order” means an Order of the Bankruptcy Court in substantially the form
attached hereto as Exhibit E or otherwise in a form and substance reasonably
acceptable to Buyer, pursuant to, inter alia, Sections 105, 363 and 365 of the
Bankruptcy Code (i) approving this Agreement and the terms and conditions
hereof, (ii) authorizing and approving, inter alia, the sale of the Purchased
Assets to Buyer on the terms and conditions set forth herein free and clear of
all Liabilities and Liens (other than Permitted Liens), the assignment to Buyer
of, and the assumption by Buyer of, the Assumed Liabilities, and the assignment
to Buyer of, and the assumption by Buyer of, the Buyer Assumed Agreements and
(iii) containing certain findings of facts, including, without limitation, a
finding that Buyer is a good faith purchaser pursuant to Section 363(m) of the
Bankruptcy Code.

 

“SEC” means the U.S. Securities and Exchange Commission.

 

“Seller Benefit Plan” means any material “employee benefit plan” (within the
meaning of Section 3(3) of ERISA) and any other material pension, retirement,
profit-sharing, deferred compensation, stock option, change in control,
retention, equity or equity-based compensation, stock purchase, employee stock
ownership, severance pay, vacation, bonus or other incentive plans, medical,
retiree medical, vision, dental or other health plans, or life insurance plan,
program, agreement, or arrangement, funded or unfunded, or insured or
self-insured, (i) that is maintained by a Seller for the benefit of any current
or former employee, officer or director of Sellers (who are or were primarily
employed in respect of the Acquired Business), or (ii) to which a Seller (in
respect of the Acquired Business) contributes or is obligated to contribute or
has any material Liability, other than a Multiemployer Plan and other than any
plan or program maintained by a Governmental Entity to which a Seller (in
respect of the Acquired Business) contributes pursuant to applicable Law.

 

“Short-Dated Inventory” means any Inventory that has an expiration date that is
between the Inventory Count Date and fifteen (15) months after the Inventory
Count Date.

 

“Straddle Period” means any Tax period beginning on or before, and ending after,
the Closing Date.

 

“Subsidiaries” means, as to any Person, any corporation, partnership,
association, trust or other form of legal entity of which (i) 50% or more of the
voting power of the outstanding voting securities are directly or indirectly
owned by such Person or (ii) such Person or any Subsidiary of such Person is a
general partner.

 

 -66- 

 

 

“Successful Bidder” means the bidder who shall have submitted the highest or
otherwise best bid at the conclusion of the Auction in accordance with the
Bidding Procedures and Bidding Procedures Order.

 

“Tax” or “Taxes” means (a) any and all federal, state, provincial, county,
municipal, local or foreign taxes or other charges of any kind in the nature of
taxes, imposed by any Taxing Authority, however denominated, including all net
income, alternative minimum or add-on minimum tax, gross income, gross receipts,
capital, paid-up capital, sales, use, ad valorem, value added, transfer,
franchise, profits, inventory, capital stock, shares, license, services,
withholding, payroll, employment, social security, unemployment, worker’s
compensation, healthcare, disability, excise, severance, stamp, occupation,
registration, net worth, property, estimated, environmental, windfall profits,
and (b) any and all interest, penalties, fines, additions to tax or additional
amounts imposed by any Taxing Authority in connection with any item described in
clause (a), and (c) any Liability in respect of any items described in clauses
(a) and/or (b) payable by reason of Contract, assumption, Treasury Regulations
Section 1.1502-6(a) (or any predecessor or successor thereof of any analogous or
similar provision under Law), transferee, successor or similar Liability, or
operation of Law.

 

“Tax Return” or “Tax Returns” means any return, report, declaration, election,
notice, form, designation, information return, statement or other document filed
or required to be filed with any Taxing Authority with respect to Taxes,
including any schedule or attachment thereto, claim for refund, amended return,
or declaration of estimated Tax.

 

“Taxing Authority” means any Governmental Entity responsible for the
administration or the imposition of any Tax.

 

“Trademark Rights” means all rights, anywhere in the world, in or to trademarks,
service marks, brand names, certification marks, collective marks, (including
fictitious, assumed, and d/b/a names), internet domain names, e-mail addresses,
social media handles and accounts, social media pages and other websites, logos,
symbols, trade dress, trade names, and other indicia of origin, all
registrations and applications for any of the foregoing, including extensions,
modifications, divisions or renewals of such registrations or applications, and
including the goodwill associated with or symbolized by any of the foregoing.

 

“U.S. Seller Benefit Plan” means, each Seller Benefit Plan that is not a
Non-U.S. Seller Benefit Plan.

 

“WARN Act” means, collectively, the Worker Adjustment and Retraining
Notification Act of 1988, as amended, and any other similar state, local, or
foreign Law.

 

“Willful Breach” means, with respect to any representation, warranty, agreement
or covenant, an action or omission where the breaching party knows such action
or omission is a breach of such representation, warranty, agreement or covenant.

 

(b)       The following terms are defined elsewhere in this Agreement, as
indicated below:

 

 -67- 

 

 

Defined Term   Section   Defined Term    Section               Agreement  
Preamble   Agreement Date   Preamble Allocation Objection Notice   2.4(a)  
Excluded Real Property Leases   1.2(c) Allocation Statement   2.4(a)   Existing
Indebtedness   1.4(k) Antitrust Laws   3.2(b)   Financial Statements   3.3 Asset
Purchase   Recitals   GAAP   3.3 Assignment and Assumption of Leases   2.7(i)  
Good Faith Deposit   2.3 Assignment of Intellectual Property   2.7(b)   Good
Faith Deposit Escrow   2.3 Assumed Accounts Payable   1.3(b)   Good Faith
Deposit Escrow Holder   2.3 Assumed Accrued Liabilities   1.3(c)   HSR Act  
3.2(b) Assumed Contracts   1.1(b)   HSR Fees   6.4(f) Assumed Equipment Leases  
1.1(k)   Inventory Acknowledgment   1.7 Assumed Liabilities   1.3   Inventory
Count   1.7 Assumed Proceedings   1.1(p)   Inventory Count Date   1.7 Assumed
Real Property Leases   1.1(c)   Law   3.4(a) Assumption Deadline   1.5(a)   Laws
  3.4(a) Auction   6.7(a)   Licensed Intellectual Property   3.12(f) Bankruptcy
Case   Recitals   Material Contracts   3.13 Bankruptcy Code   Recitals   Most
Recent Balance Sheet   3.3 Bankruptcy Court   Recitals   Multiemployer Plan  
3.6(c) Break-Up Fee   8.3(a)   Original Agreement   Preamble Business   Recitals
  Parent   Recitals Business Employees   6.3(a)   Parent SEC Disclosures  
ARTICLE III Buyer   Preamble   Permitted Access Parties   6.2(f)(ii) Buyer
Assumed Agreements   1.1(k)   Petition Date   Recitals Buyer Disclosure Schedule
  ARTICLE V   Post-Close Filings   6.2(f)(ii) Cash Balance   2.1(b)   Products  
1.1(d) Citron Agreements   2.6(b)(vii)   Purchase Price   2.1 Citron PPA  
2.1(d)   Purchased Assets   1.1 Closing   2.5   Qualified Inventory Amount   1.7
Closing Date   2.5   Registered Intellectual Property   3.12(a) Confidentiality
Agreement   6.2(d)   Release   2.6(b)(vi) Consents   3.2(c)   Released Parties  
6.14 Creator   3.12(i)   Rising   Preamble Cure Costs   1.5(a)   Run-Off Premium
  6.15(a) Debtors   Recitals   SEC   ARTICLE III Declaration   1.6(b)   Second
Request   6.4(c) Deferred Payment Reduction   2.1(d)   Seller Credit   2.2(a)
Department   1.6(b)   Seller Credits Waiver   2.2(a) DIP Financing   6.1(b)(vii)
  Sellers   Preamble End Date   8.1(b)   Sellers Disclosure Schedule   ARTICLE
III Enforceability Exceptions   3.2(a)   Tax Escrow   1.6(b) Excluded Assets  
1.2   Transaction Approvals   3.2(b) Excluded Contracts   1.2(b)   Transfer
Taxes   6.9(c) Excluded Equipment Leases   1.2(d)   Transferred Employees  
6.3(a) Excluded Liabilities   1.4        

 

 -68- 

 

 

(c)        Other Definitional and Interpretive Matters. Unless otherwise
expressly provided, for purposes of this Agreement, the following rules of
interpretation shall apply:

 

(i)        Calculation of Time Period. When calculating the period of time
before which, within which or following which any act is to be done or step
taken pursuant to this Agreement, the date that is the reference date in
calculating such period shall be excluded. If the last day of such period is a
non-Business Day, the period in question shall end on the next succeeding
Business Day.

 

(ii)        Dollars. Any reference in this Agreement to $ shall mean U.S.
dollars.

 

(iii)       Exhibits/Schedules. All Exhibits and Schedules annexed 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 any Schedule or
Exhibit but not otherwise defined therein shall be defined as set forth in this
Agreement.

 

9.18         Sellers Disclosure Schedule. The Sellers Disclosure Schedule is
qualified in its entirety by reference to specific provisions of this Agreement
and is not intended to constitute, and shall not be construed as constituting,
representations, warranties and covenants of Sellers, except as and to the
extent expressly provided in this Agreement. Each section or subsection
referenced in the Sellers Disclosure Schedule corresponds to the section or
subsection set forth in this Agreement; provided, that any matter set forth in
any section or subsection of the Sellers Disclosure Schedule shall be deemed to
be referred to and incorporated in all other sections or subsections of the
Sellers Disclosure Schedule to which the relevance of such matter is reasonably
apparent on its face to inform Buyer that such information is relevant to such
other section or subsection. The inclusion of any information or reference in
the Sellers Disclosure Schedule shall not be deemed to be an admission,
acknowledgment or representation, in and of itself, that such information is
required by the terms hereof to be disclosed, is material, has resulted in a
Material Adverse Effect, is outside the Ordinary Course of Business or defines
further the meaning of such terms for purposes of this Agreement. Nothing in
this Agreement or in the Sellers Disclosure Schedule constitutes an admission
(i) to any third party of any liability or obligation of Sellers to any
third-party or (ii) that any information disclosed, set forth or incorporated by
reference in the Sellers Disclosure Schedule or in this Agreement is material or
has (or may result in) a Material Adverse Effect.

 

9.19       Limitations on Good Faith Deposit Escrow Holder’s Liability 

 

9.20        The Good Faith Deposit Escrow Holder’s responsibilities and
liabilities shall be limited as follows:

 

(a)        The Good Faith Deposit Escrow Holder shall not be responsible for or
be required to enforce any of the terms or conditions of this Agreement or any
other agreement between Sellers and Buyer. The Good Faith Deposit Escrow Holder
shall not be responsible or liable in any manner whatsoever for the performance
by Sellers or Buyer or any other party for their respective obligations under
this Agreement, nor shall the Good Faith Deposit Escrow Holder be responsible or
liable in any manner whatsoever for the failure of the other parties to this
Agreement or of any third party to honor any of the provisions of this
Agreement.

 

(b)        The duties and obligations of the Good Faith Deposit Escrow Holder
shall be limited to and determined solely by the express provisions of this
Agreement and no implied duties or obligations shall be read into this Agreement
against the Good Faith Deposit Escrow Holder. The Good Faith Deposit Escrow
Holder is not bound by and is under no duty to inquire into the terms or
validity of any other agreements or documents, including any agreements which
may be related to, referred to in or deposited with the Good Faith Deposit
Escrow Holder in connection with this Agreement.

 

(c)        The Good Faith Deposit Escrow Holder shall be entitled to rely upon
and shall be protected in acting in reliance upon any instruction, notice,
information, certificate, instrument or other document which is submitted to it
in connection with its duties under this Agreement and which the Good Faith
Deposit Escrow Holder in good faith believes to have been signed or presented by
the proper party or parties. The Good Faith Deposit Escrow Holder shall have no
liability with respect to the form, execution, validity or authenticity thereof.

 

 -69- 

 

 

(d)        The Good Faith Deposit Escrow Holder shall not be liable for any act
which the Good Faith Deposit Escrow Holder may do or omit to do hereunder, or
for any mistake of fact or law, or for any error of judgment, or for the
misconduct of any employee, agent or attorney appointed by it, while acting in
good faith, unless caused by or arising from its own willful misconduct.

 

(e)        The Good Faith Deposit Escrow Holder shall be entitled to consult
with counsel of its own selection and the opinion of such counsel shall be full
and complete authorization and protection to the Good Faith Deposit Escrow
Holder in respect of any action taken or omitted by the Good Faith Deposit
Escrow Holder hereunder in good faith and in accordance with the opinion of such
counsel.

 

(f)        The Good Faith Deposit Escrow Holder shall have the right at any time
to resign for any reason and be discharged of its duties as Good Faith Deposit
Escrow Holder hereunder by giving written notice of its resignation to the
parties hereto prior to the date specified for such resignation to take effect.
All obligations of the Good Faith Deposit Escrow Holder hereunder shall cease
and terminate on the effective date of its resignation and its sole
responsibility thereafter shall be to hold the Good Faith Deposit, for a period
of no more than thirty (30) calendar days following the effective date of
resignation, at which time:

 

(i)        if a successor holder of the Good Faith Deposit shall have been
appointed, by the mutual consent of Buyer and Sellers, and written notice
thereof shall have been given to the resigning Good Faith Deposit Escrow Holder
by the parties hereto and such successor holder, then the resigning Good Faith
Deposit Escrow Holder shall deliver the Good Faith Deposit to such successor
holder; or

 

(ii)        if a successor holder of the Good Faith Deposit shall not have been
appointed, for any reason whatsoever, the resigning holder of the Good Faith
Deposit shall deliver the Good Faith Deposit to a court of competent
jurisdiction in the county in which the Good Faith Deposit is then being held
and give written notice of the same to the parties hereto.

 

The resigning Good Faith Deposit Holder shall be reimbursed by Buyer and Sellers
for any expenses incurred in connection with its resignation and transfer of the
Good Faith Deposit Holder pursuant to and in accordance with the provisions of
this Section 9.19.

 

(g)        Buyers and Seller, jointly and severally, agree to indemnify and hold
the Good Faith Deposit Holder harmless from and against any and all liabilities,
causes of action, claims, demands, judgments, damages, costs and expenses
(including reasonable attorneys’ fees and expenses) that may arise out of or in
connection with the Good Faith Deposit Holder’s acceptance of or performance of
its duties and obligations under this Agreement. The Good Faith Deposit Holder
shall be under no duty to institute any suit, or to take any remedial procedures
under this Agreement, or to enter any appearance or in any way defend any suit
in which it may be made a defendant hereunder until it shall be indemnified as
provided above.

 

(h)        If the Good Faith Deposit Holder shall be uncertain as to its duties
or rights hereunder or shall receive instructions with respect to the Good Faith
Deposit which, in its sole discretion, are in conflict either with other
instructions received by it or with any provision of this Agreement, the Good
Faith Deposit Holder shall have the absolute right to suspend all further
performance under this Agreement (except for the safekeeping of the Good Faith
Deposit) until such uncertainty or conflicting instructions have been resolved
to the Good Faith Deposit Holder’s sole satisfaction by final judgment of a
court of competent jurisdiction, joint written instructions from all of the
other parties hereto, or otherwise.

 

 -70- 

 

 

(i)         The parties acknowledge that Lowenstein Sandler LLP, as Good Faith
Deposit Holder, has agreed to serve in such capacity as an accommodation to the
parties on the condition that it be allowed to continue to act as legal counsel
to Sellers. Buyer acknowledges that Lowenstein Sandler LLP has acted as legal
counsel to Sellers in connection with this Agreement, the transactions
contemplated hereby and other matters relating thereto and that Lowenstein
Sandler LLP shall continue such representation of Sellers, including with
respect to Sellers’ rights and obligations under this Agreement, and all other
matters. Nothing in this Agreement, nor Lowenstein Sandler LLP’s serving as Good
Faith Deposit Holder hereunder, shall prevent or inhibit Lowenstein Sandler LLP
from continuing to serve as legal counsel to Sellers and Buyer hereby consents
to the continued representation of Sellers by Lowenstein Sandler LLP as its
legal counsel.

 

[SIGNATURE PAGE FOLLOWS]

 

 -71- 

 

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed the
day and year first above written.

 

  BUYER: .       SHORE SUVEN PHARMA, INC.       By: /s/ Vimal Kavuru     Name:
Vimal Kavuru     Title: President and Chief Executive Officer

 

[Signature Page to Amended and Restated Asset Purchase Agreement]

 

  

 

 

  SELLERS:       RISING PHARMACEUTICALS, INC.         By: /s/ William C.
Kennally, III     Name: William C. Kennally, III     Title: Chief Executive
Officer         PACK PHARMACEUTICALS, LLC         By: /s/ William C. Kennally,
III     Name: William C. Kennally, III     Title: Chief Executive Officer      
  RISING HEALTH, LLC         By: /s/ William C. Kennally, III     Name: William
C. Kennally, III     Title: Chief Executive Officer         ACETRIS HEALTH, LLC
        By: /s/ William C. Kennally, III     Name: William C. Kennally, III    
Title: Chief Executive Officer         PARENT:         ACETO CORPORATION        
By: /s/ William C. Kennally, III     Name: William C. Kennally, III     Title:
Chief Executive Officer

 

[Signature Page to Amended and Restated Asset Purchase Agreement]

 

  

 

 

 

Execution Version

 

EXHIBIT A

  

ASSIGNMENT AND ASSUMPTION AGREEMENT

 

THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Agreement”), dated as of [●],
2019, is made and entered into by and among Rising Pharmaceuticals, Inc., a
Delaware corporation (“Rising”), and the wholly-owned subsidiaries of Rising,
PACK Pharmaceuticals, LLC, an Arizona limited liability company, Rising Health,
LLC, a Delaware limited liability company, and Acetris Health, LLC, a Delaware
limited liability company (collectively with Rising, “Sellers” and each, a
“Seller”), each a debtor and debtor in possession under Case No. 19-13448
pending in the United States Bankruptcy Court for the District of New Jersey, on
the one hand, and Shore Suven Pharma, Inc., a Delaware corporation (“Buyer”), on
the other hand. As used in this Agreement, “Party” or “Parties” means,
individually or collectively, Sellers and Buyer. Unless otherwise defined
herein, all capitalized terms used in this Agreement shall have the meanings
ascribed to such terms in that certain Asset Purchase Agreement dated as of
March 7, 2019 (the “Purchase Agreement”), by and among Aceto Corporation, a New
York corporation (“Parent”), Sellers and Buyer.

 

WHEREAS, concurrently with the execution and delivery of this Agreement, Parent,
Sellers and Buyer are consummating the transactions contemplated by the Purchase
Agreement.

 

NOW, THEREFORE, in consideration of the premises and the mutual promises herein
made, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and as contemplated by the Purchase Agreement,
Sellers and Buyer hereby agree as follows:

 

1.            Assignment.   Each Seller hereby sells, transfers, assigns,
conveys and delivers to Buyer all of such Seller’s right, title and interest in,
to or under the Purchased Assets (which shall not include, and Buyer is not
acquiring from Sellers, any of the Excluded Assets, and each Seller shall retain
ownership of all right, title and interest in and to its respective Excluded
Assets). Notwithstanding the foregoing, the Parties acknowledge that the
Purchased Assets constituting the Assumed Real Property Leases are being
assigned to, and assumed by, Buyer pursuant to the Assignment and Assumption of
Leases and not pursuant this Agreement.

 

2.            Assumption.   (a) Each Seller hereby delegates to Buyer such
Seller’s Assumed Liabilities (to the extent assumed by Buyer in the Purchase
Agreement), and (b) Buyer hereby assumes and agrees to discharge when due (in
accordance with its respective terms and subject to the respective conditions of
the Purchase Agreement) only the Assumed Liabilities and no others.
Notwithstanding any provision in this Agreement to the contrary, Buyer shall not
assume and shall not be obligated to assume or be obligated to pay, perform or
otherwise discharge any Excluded Liability, and Sellers shall be solely and
exclusively liable with respect to all Excluded Liabilities.

 

3.            Delivery Pursuant to Purchase Agreement.   Notwithstanding
anything to the contrary herein, Sellers and Buyer are executing and delivering
this Agreement in accordance with and subject to all of the terms and provisions
of the Purchase Agreement, including, without limitation, the provisions of
Section 3.23 thereof. To the extent of any conflict between the terms and
conditions of this Agreement and the terms and conditions of the Purchase
Agreement, the terms and conditions of the Purchase Agreement shall govern,
supersede and prevail.

 

   

 

 

4.            Successors and Assigns; Binding Effect.

 

(a)         Except as expressly permitted in this Agreement, the rights and
obligations of the Parties under this Agreement shall not be assignable by such
Parties without the written consent of the other Parties hereto; provided,
however, that Buyer shall be entitled to assign any or all of its rights under
this Agreement to one or more of its Affiliates; provided that Buyer is not
relieved of any of its obligations hereunder by virtue of any such assignment.

 

(b)         This Agreement shall be binding upon and inure to the benefit of the
Parties and their successors and permitted assigns. The successors and permitted
assigns hereunder shall include any permitted assignee as well as the successors
in interest to such permitted assignee (whether by merger, consolidation,
liquidation (including successive mergers, consolidations or liquidations) or
otherwise). Nothing in this Agreement, expressed or implied, is intended or
shall be construed to confer upon any Person other than the Parties and
successors and assigns permitted by this Section 4 any right, remedy or claim
under or by reason of this Agreement.

 

5.            Amendments.   Any provision of this Agreement may be amended or
waived if, and only if, such amendment or waiver is in writing and signed, in
the case of an amendment, by the Parties or, in the case of a waiver, by the
Party against whom the waiver is to be effective. Notwithstanding the foregoing,
no failure or delay by any Party in exercising any right hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise thereof preclude
any other or further exercise of any other right hereunder.

 

6.            Governing Law.

 

(a)         This Agreement, and all claims or causes of action (whether at Law,
in contract, in tort or otherwise) that may be based upon, arise out of or
relate to this Agreement or the negotiation, execution or performance hereof,
shall be governed by and construed in accordance with the laws of the State of
New York, without giving effect to any choice or conflict of law provision or
rule (whether of the State of New York or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State of
New York.

 

(b)         All Proceedings arising out of or relating to this Agreement,
including the resolution of any and all disputes hereunder, shall be heard and
determined in the Bankruptcy Court, and the Parties hereby irrevocably submit to
the exclusive jurisdiction of the Bankruptcy Court in any such Proceeding and
irrevocably waive the defense of an inconvenient forum to the maintenance of any
such Proceeding. The Parties hereby consent to service of process by mail (in
accordance with Section 9.7 of the Purchase Agreement) or any other manner
permitted by Law.

 

(c)         THE PARTIES HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED IN CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF
SELLERS, BUYER OR THEIR RESPECTIVE REPRESENTATIVES IN THE NEGOTIATION OR
PERFORMANCE HEREOF.

 

 -2- 

 

 

7.            Further Assurances.   From time to time after the date hereof,
Sellers and Buyer agree to execute and deliver, or cause to be executed and
delivered, such instruments and documents as may be reasonably requested in
order to carry out the purposes of this Agreement, and to do all other things
and execute and deliver all other instruments and documents as may be required
under the Purchase Agreement to carry out the purposes of this Agreement.

 

8.            Headings.   The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.

 

9.            Execution in Counterparts.   This Agreement may be executed in
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument, and shall become
effective when one or more counterparts have been signed by each of the Parties
hereto and delivered (by telecopy, electronic delivery or otherwise) to the
other Parties. Signatures to this Agreement transmitted by facsimile
transmission, by electronic mail in “portable document format” form, or by any
other electronic means intended to preserve the original graphic and pictorial
appearance of a document, will have the same effect as physical delivery of the
paper document bearing the original signature.

 

[SIGNATURE PAGE FOLLOWS]

 

 -3- 

 

 

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
Parties as of the date first above written.

 

  SELLERS:       RISING PHARMACEUTICALS, INC.         By:       Name:     Title:
        PACK PHARMACEUTICALS, LLC       By:       Name:     Title:        
RISING HEALTH, LLC         By:       Name:     Title:         ACETRIS HEALTH,
LLC         By:                      Name:     Title:         BUYER:       SHORE
SUVEN PHARMA, INC.         By:       Name:     Title:

 

[Signature Page to Assignment and Assumption Agreement]

 

   

 

 

EXHIBIT B

 

Form of Bidding Procedures 

 

BIDDING PROCEDURES

 

Set forth below are the bidding procedures (the “Bidding Procedures”) to be used
by Rising Pharmaceuticals, Inc. and the wholly-owned subsidiaries of Rising
Pharmaceuticals, Inc., each as listed as “Sellers” (together, the “Sellers” and
each a “Seller”) on the signature pages to that certain Asset Purchase
Agreement, dated as of March [●], 2019 (together with the schedules thereto and
related documents, and as may be amended, supplemented or otherwise modified
from time to time, the “Stalking Horse Agreement”), by and among the Sellers,
Aceto Corporation, as Parent, and Shore Suven Pharma, Inc. (the “Buyer” or
“Stalking Horse Bidder”), for the proposed sale of substantially all assets (as
defined in the Stalking Horse Agreement, the “Purchased Assets”) comprising the
Debtors’ Pharma Business and assumption of certain related liabilities, in the
Sellers’ jointly administered chapter 11 cases pending in the United States
Bankruptcy Court for the District of New Jersey (the “Bankruptcy Court”), case
number 19-13448 (VFP).

 

The Buyer has submitted a Qualified Bid (as defined below) for the Purchased
Assets pursuant to the terms of the Stalking Horse Agreement (the “Stalking
Horse Bid”).

 

On March 15, 2019, the Bankruptcy Court entered an order, which, among other
things, authorized the Sellers to determine the highest or otherwise best offer
for the Purchased Assets through the Bidding Procedures (the “Bidding Procedures
Order”).

 

The sale transaction pursuant to the Stalking Horse Agreement is subject to
competitive bidding as set forth herein.

 

A.ASSETS TO BE SOLD

 

The Sellers seek to complete the sale of the Purchased Assets and the assumption
of the Assumed Liabilities described in the Stalking Horse Agreement.

 

Except as otherwise provided in the Stalking Horse Agreement or such other
approved purchase agreement of the Successful Bidder (as defined below), all of
each Seller’s respective right, title and interest in and to the Purchased
Assets to be acquired shall be sold free and clear of all Liens, Claims and
Interests (each as defined in the Stalking Horse Agreement), except for
Permitted Liens and Assumed Liabilities (each as defined in the Stalking Horse
Agreement) as may be specified in the Stalking Horse Agreement, and with any
such Liens, Claims and Interests to attach solely to the net proceeds of the
sale of each applicable Purchased Asset.

 

A party may participate in the bidding process by submitting a Qualified Bid for
any or all of the Purchased Assets.

 

   

 

 

B.THE BIDding PROCEDURES

 

To ensure that the Sellers receive the maximum value for the Purchased Assets,
the Stalking Horse Agreement is subject to higher or otherwise better offers at
the Auction (if any) in accordance with these Bidding Procedures, and, as such,
the Stalking Horse Agreement will serve as the “stalking horse” bid for the
Purchased Assets.

 

1.Key Dates

 

The key dates for the process contemplated herein are as follows:1

 

Sale Dates and Deadlines

Bid Deadline

March 29, 2019 at 5:00 p.m. prevailing ET

   

Deadline to Notify Qualified Bidders

April 1, 2019     Deadline to Select Starting Bid

April 1, 2019

    Auction (if required)

April 2, 2019 at 10:00 a.m. prevailing ET

    Notice of Successful Bidder to be Filed

One (1) business day after conclusion of the Auction

    Sale Hearing

April 4, 2019 at 10:00 a.m. prevailing ET

 

2.Confidentiality

 

In order to participate in the bidding process, each person other than the
Stalking Horse Bidder who wishes to participate in the bidding process (a
“Potential Bidder”) must (to the extent not previously provided) provide an
executed confidentiality agreement (to be delivered prior to the distribution of
any confidential information by the Sellers to any Potential Bidder) in form and
substance satisfactory to the Sellers, on terms not less favorable in the
aggregate to the Sellers than the confidentiality agreement signed by the
Stalking Horse Bidder, as determined by the Sellers, and without limiting the
foregoing, each confidentiality agreement executed by a Potential Bidder shall
contain standard non-solicitation provisions, as determined by the Sellers.

 

 

1 These dates are subject to extension or adjournment as provided for herein or
in the Stalking Horse Agreement and in consultation with the Consultation
Parties (as defined below).

 

   

 

 

3.Due Diligence

 

The Sellers will afford any Potential Bidder that has executed or that will
execute a confidentiality agreement in accordance with paragraph 2 above such
due diligence access or additional information as the Sellers, in consultation
with their advisors, deem appropriate, in their discretion and within their
reasonable business judgment. The Sellers will use good faith efforts to provide
to the Stalking Horse Bidder access to written information made available to any
Qualified Bidder (as defined below) if not previously made available to the
Stalking Horse Bidder.

 

The due diligence period shall end on the Bid Deadline, and none of the Sellers
nor any of their representatives shall be obligated to furnish any due diligence
information to any Qualified Bidder after the Bid Deadline, provided that the
Sellers shall continue to provide due diligence to the Stalking Horse Bidder.

 

4.Provisions Governing Qualified Bids

 

A bid submitted will be considered a “Qualified Bid” only if the bid complies
with all of the following, in which case the party submitting the bid shall be a
“Qualified Bidder”; provided that, if the Debtors receive a bid prior to the Bid
Deadline that is not a Qualified Bid, the Debtors may provide the bidder with
the opportunity to remedy any deficiencies until one (1) day prior to the
Auction:

 

a.it expressly discloses whether the bid is for some or all of the Purchased
Assets;

 

b.it fully discloses the identity of each entity that will be bidding for or
purchasing some or all of the Purchased Assets, including any equity holders in
the case of a Potential Bidder which is an entity specially formed for the
purpose of effectuating the contemplated transaction, or otherwise participating
in connection with such bid (including any co-bidder or team bidder), and the
complete terms of any such participation, including any agreements, arrangements
or understandings concerning a collaborative or joint bid or any other
combination concerning the proposed bid. A bid must also fully disclose any
connections, relationships (business or otherwise), whether or not known, to the
Sellers or agreements or understandings with the Sellers, the Stalking Horse
Bidder or any other known bidders, Potential Bidder or Qualified Bidder, and/or
any officer, director or equity security holder of the Sellers;

 

c.it states that the Qualified Bidder offers to purchase, in cash, some or all
of the Purchased Assets upon terms and conditions that the Sellers reasonably
determine are at least as favorable to the Sellers as those terms and conditions
set forth in the Stalking Horse Agreement (or pursuant to an alternative
structure that the Sellers reasonably determine is no less favorable to the
Sellers than the terms and conditions of the Stalking Horse Agreement). For the
avoidance of doubt, any Qualified Bid must, either on its own or when considered
together with other Qualified Bid(s), provide value in excess of the Stalking
Horse Agreement plus the Break-Up Fee, Expense Reimbursement and minimum overbid
requirements detailed below in Section 4(k);

 

   

 

 

d.it provides a detailed description of any anticipated regulatory or
governmental approvals necessary to consummate the bid including, but not
limited to, all foreign antitrust or anti-competition approvals required;

 

e.it includes a commitment to close the transactions within the timeframe
contemplated by the Stalking Horse Agreement;

 

f.it includes a binding and enforceable signed writing that the Qualified
Bidder’s offer is irrevocable unless and until the Sellers accept a higher or
otherwise better bid and such Qualified Bidder is not selected as a Back-Up
Bidder (as defined below); provided that if such Qualified Bidder is selected as
the Successful Bidder, its offer shall remain irrevocable until four (4) months
after the execution of the applicable Proposed Asset Purchase Agreement (as
defined herein). Such writing shall guarantee performance of the Qualified
Bidder by its parent entities, if any, or provide such other guarantee of
performance requested by and acceptable to the Sellers;

 

g.it shall be accompanied by a deposit into escrow with the Sellers of an amount
in cash equal to ten percent (10%) of the aggregate purchase price in the
Proposed Asset Purchase Agreement (the “Good Faith Deposit”);

 

h.it includes confirmation that all necessary internal and shareholder or
similar approvals have been obtained prior to the bid;

 

i.it includes a duly authorized and executed copy of an asset purchase
agreement, including the purchase price for the Purchased Assets expressed in
U.S. Dollars, together with all exhibits and schedules thereto, together with
copies marked to show any amendments and modifications to the Stalking Horse
Agreement (collectively, the “Proposed Asset Purchase Agreement”) and a proposed
form of order to approve the sale, together with a copy marked to show
amendments and modifications to the proposed form of sale approval order
attached to the motion to approve the sale of the Purchased Assets to the
Stalking Horse Bidder; provided, however, that such Proposed Asset Purchase
Agreement shall not include any financing or diligence conditions, or any other
conditions that are less favorable to the Sellers than the conditions in the
Stalking Horse Agreement;

 

   

 

 

j.it includes written evidence of (i) sufficient cash on hand to fund the
purchase price or (ii) sources of immediately available funds that are not
conditioned on third-party approvals or commitments, in each case, that will
allow the Sellers to make a reasonable determination as to the Qualified
Bidder’s financial and other capabilities to consummate the transaction
contemplated by the Proposed Asset Purchase Agreement. Such written evidence
shall include the most current audited and the most current unaudited financial
statements, or such other financial information of the Qualified Bidder as may
be requested by and acceptable to the Sellers (collectively, the “Financials”),
or, if the Qualified Bidder is an entity formed for the purpose of acquiring
some or all of the Purchased Assets, the Financials of the Qualified Bidder’s
equity holder(s) or other financial backer(s) that are guaranteeing the
Qualified Bidder’s performance; provided that if a Potential Bidder is unable to
provide Financials, the Sellers may accept such other information sufficient to
demonstrate to each Seller’s reasonable satisfaction that such Potential Bidder
has the financial wherewithal to consummate the applicable sale transaction. The
Potential Bidder also must establish to the Sellers’ satisfaction that it has
the financial ability to consummate its proposed transaction within the
timeframe contemplated for consummation of the Stalking Horse Agreement;

 

k.it (in combination with any other bids for some or all of such assets)
provides for a cash purchase price that exceeds the aggregate cash consideration
to be paid to or for the benefit of the Sellers’ estates set forth in the
Stalking Horse Agreement by at least $2,422,500, which represents the sum of:
(i) the Break-Up Fee of $672,500, plus (ii) the maximum amount of the Expense
Reimbursement of $750,000, plus (iii) an overbid of $1,000,000, and otherwise
has a value to the Sellers, in their exercise of their reasonable business
judgment, after consultation with their advisors, that is greater or otherwise
better than the value offered under the Stalking Horse Agreement (including
taking into account the impact of any liabilities assumed in the Stalking Horse
Agreement);

 

l.it identifies with particularity which executory contracts and unexpired
leases the Qualified Bidder wishes to assume and provides details of the
Qualified Bidder’s proposal for the treatment of related Cure Costs (as defined
in the Bidding Procedures Order), and contains sufficient information concerning
the Qualified Bidder’s ability to provide adequate assurance of performance with
respect to executory contracts and unexpired leases to be assumed and assigned;

 

m.it includes an express acknowledgement and representation that the Qualified
Bidder: (i) has had an opportunity to conduct any and all required due diligence
regarding acquiring the Purchased Assets prior to making its offer; (ii) has
relied solely upon its own independent review, investigation and/or inspection
of any documents and/or the Purchased Assets in making its bid; (iii) did not
rely upon any written or oral statements, representations, promises, warranties
or guaranties whatsoever, whether express or implied (by operation of law or
otherwise), regarding the Purchased Assets or the completeness of any
information provided in connection therewith or with the Auction, except as
expressly stated in the Proposed Asset Purchase Agreement; and (iv) is not
entitled to any expense reimbursement, break-up fee, termination fee, or similar
type of payment in connection with its bid;

 

   

 

 

n.it includes evidence, in form and substance satisfactory to the Sellers, of
authorization and approval from the Qualified Bidder’s board of directors (or
comparable governing body) or, if required, the equity holders of the Qualified
Bidder, with respect to the submission, execution, delivery, performance and
closing of the Proposed Asset Purchase Agreement;

 

o.it provides an irrevocable undertaking by the Qualified Bidder to execute and
deliver to the Sellers such other guarantee of performance or assurance
acceptable to the Sellers in their discretion;

 

p.it states that the Qualified Bidder consents to the jurisdiction of the
Bankruptcy Court, as applicable;

 

q.it contains such other information reasonably requested by the Sellers;

 

r.it contains written confirmation that the bidder has not engaged in any
collusion with respect to the bidding or the sale process; and

 

s.it is received by the applicable Notice Parties (as defined in, and in
accordance with, Section B.5) on or prior to 5:00 p.m. (prevailing Eastern Time)
on March 29, 2019 (the “Bid Deadline”).

 

Non-Conforming Bids. Notwithstanding anything to the contrary in these Bidding
Procedures, the Sellers in consultation with the Consultation Parties (as
defined below), shall have the right to entertain any bid that does not conform
to one or more of the requirements herein and deem such bid a Qualified Bid (a
“Non-Conforming Bid”); provided, however, that such Non-Conforming Bid so
entertained by the Sellers must nevertheless meet each of the following
requirements: (a) the Stalking Horse Bidder is provided the right to modify its
Stalking Horse Bid to also revise its bid to provide similar non-conforming
requirements; (b) the Good Faith Deposit must be made in the amount specified
above; (c) the bid must meet the minimum overbid requirements set forth in
Section B.4(k) above; (d) any Subsequent Bid (as defined below) must meet the
requirements set forth in Section B.8(g) below; and (e) any condition to closing
set forth in the applicable Proposed Asset Purchase Agreement cannot be more
onerous (in any material respect) to the Sellers than any similar conditions set
forth Stalking Horse Agreement.

 

Notwithstanding anything in these Bidding Procedures to the contrary, the Buyer
is deemed to be a Qualified Bidder with respect to the Purchased Assets and the
Stalking Horse Bid is deemed to be a Qualified Bid for all purposes in
connection with the Bidding Procedures, the Auction, and the Sale, and the
Stalking Horse Bidder shall not be required to take any further action in order
to attend and participate in the Auction (if any) or, if the Stalking Horse
Bidder is the Successful Bidder, to be named the Successful Bidder at the Sale
Hearing.

 

   

 

 

The Sellers shall promptly notify each Qualified Bidder in writing (including
via email) as to whether or not its bid constitutes a Qualified Bid. If any bid
is determined by the Sellers not to be a Qualified Bid, the Debtors will refund
such bidder’s Good Faith Deposit and all accumulated interest thereon within ten
(10) business days after the Bid Deadline. The Sellers shall also notify the
Stalking Horse Bidder and all other Qualified Bidders in writing (including via
email) as to whether or not any bids constitute Qualified Bids no later than one
(1) business day after the notification to any Qualified Bidder that its bid
constitutes a Qualified Bid and provide a copy of Qualified Bids (excluding the
Stalking Horse Agreement) to the Stalking Horse Bidder. The notices described in
this paragraph shall not be given later than one (1) business day following the
expiration of the Bid Deadline.

 

Consultation Parties. The “Consultation Parties” are (a) the DIP Agent and its
counsel and advisors with respect to the Purchased Assets, and (b) counsel and
any other retained advisors to the creditors’ committee appointed in the
Sellers’ bankruptcy cases. Notwithstanding anything herein to the contrary, the
Sellers shall not be required to consult with any Consultation Party during the
bidding and Auction process to the extent such Consultation Party is a Potential
Bidder, a Qualified Bidder, or a financing source for a bidder, including, if
the Sellers determine, in their reasonable business judgment, that consulting
with such Consultation Party regarding any issue, selection or determination
would be likely to have a chilling effect on potential bidding or otherwise be
contrary to goal of maximizing value for the Sellers’ estates from the sale
process.

 

Subject to the terms of any orders entered by the Bankruptcy Court, after
consultation with the Consultation Parties, the Sellers shall have the right and
obligation to make all decisions regarding bids and the Auction as provided
herein as the Sellers determine to be in the best interest of their estates,
whether or not the Consultation Parties agree with that decision.

 

5.Submission of Bids

 

A Qualified Bidder that desires to make a bid regarding some or all of the
Purchased Assets must deliver written copies of its bid, so as to be received on
or before the Bid Deadline, to each of the following parties (the “Notice
Parties”):

 

a.counsel to the Sellers: Lowenstein Sandler LLP, 1251 Avenue of the Americas,
New York, New York 10020 (Attn: Steven E. Siesser, Esq.
(ssiesser@lowenstein.com), Paul Kizel, Esq. (pkizel@lowenstein.com), Kenneth A.
Rosen, Esq. (krosen@lowenstein.com), and Philip J. Gross, Esq.
(pgross@lowenstein.com));

 

b.counsel to the DIP Agent: McGuireWoods LLP, 1251 Avenue of the Americas, 20th
Floor, New York, New York 10020-1104 (Attn: Kenneth Noble, Esq.
(knoble@mcguirewoods.com ) and Benjamin B. Iselin, Esq.
(biselin@mcguirewoods.com)); and

 

c.proposed counsel to the Official Committee of Unsecured Creditors, Stroock &
Stroock & Lavan LLP, 180 Maiden Lane, New York, New York, 10038-4982 (Attn:
Jayme T. Goldstein, Esq. (jgoldstein@stroock.com) and Erez E. Gilad, Esq.
(egilad@stroock.com)).

 

   

 

 

6.Evaluation of Competing Bids

 

A Qualified Bid will be valued based upon several factors including, without
limitation: (a) the amount of such bid (including value provided by the
assumption of liabilities); (b) the risks and timing associated with
consummating such bid; (c) any proposed revisions to the Stalking Horse
Agreement (including any additional conditions to closing); and (d) any other
factors deemed relevant by the Sellers.

 

7.No Qualified Bids

 

If the Sellers do not receive a Qualified Bid with respect to the Purchased
Assets other than the Stalking Horse Bid, the Sellers will not hold an Auction
(as defined below) and the Stalking Horse Bidder will be deemed the Successful
Bidder upon the Bid Deadline with respect to the Purchased Assets.

 

8.Auction Process

 

If the Sellers receive one or more Qualified Bids with respect to the Purchased
Assets in addition to the Stalking Horse Bid, the Sellers will conduct an
auction (the “Auction”) for the Purchased Assets (which the Sellers intend to
transcribe) at 10:00 a.m. (prevailing Eastern Time) on April 2, 2019, at the
offices of Lowenstein Sandler LLP, 1251 Avenue of the Americas, New York, New
York 10020, or such other location as shall be timely communicated by the
Sellers to all entities entitled to attend the Auction. The Auction shall be
conducted in accordance with the following procedures:

 

a.only the Sellers, the Notice Parties, the Stalking Horse Bidder, and any other
Qualified Bidders, in each case along with their representatives and advisors,
shall be entitled to attend the Auction (such attendance to be in person);

 

b.only the Stalking Horse Bidder and such other Qualified Bidders will be
entitled to participate as bidders in, or make any Subsequent Bids at, the
Auction; provided that all such Qualified Bidders wishing to attend the Auction
must have at least one individual representative with authority to bind such
Qualified Bidder attending the Auction in person;

 

c.each Qualified Bidder shall be required to confirm in a manner acceptable to
the Sellers that it has not engaged in any collusion with respect to the bidding
or the sale (including communicating with other Bidders during the Auction
(concerning any aspect of the Auction or bidding) without the consent of the
Debtors on the record of the Auction;

 

   

 

 

d.at least one (1) business day prior to the Auction, each Qualified Bidder
(other than a Stalking Horse Bidder) must inform the Sellers whether it intends
to attend the Auction; provided that in the event a Qualified Bidder elects not
to attend the Auction, such Qualified Bidder’s Qualified Bid shall, subject to
the terms of the Stalking Horse Agreement, nevertheless remain fully enforceable
against such Qualified Bidder until (i) the date of the selection of the
Successful Bidder at the conclusion of the Auction, or (ii) if selected as the
Successful Bidder, four (4) months after the execution of the applicable
Proposed Asset Purchase Agreement. No later than one business day prior to the
start of the Auction, the Sellers will provide copies of the Qualified Bid (or
combination of Qualified Bids, if applicable) which the Sellers believe, in
their discretion, is the highest or otherwise best offer for the Purchased
Assets (the “Starting Bid”) to the Stalking Horse Bidder and all other Qualified
Bidders;

 

e.all Qualified Bidders who have timely submitted Qualified Bids will be
entitled to be present for all Subsequent Bids at the Auction and the actual
identity of each Qualified Bidder will be disclosed on the record at the
Auction;

 

f.the Sellers, after consultation with their advisors, may employ and announce
at the Auction additional procedural rules that are reasonable under the
circumstances for conducting the Auction, provided that such rules: (i) are not
inconsistent with these Bidding Procedures, title 11 of the United States Code
(the “Bankruptcy Code”), any order of the Bankruptcy Court entered in connection
herewith or the Stalking Horse Agreement; (ii) provide that bids be made and
received on an open basis, with all material terms of each bid to be fully
disclosed to all other Qualified Bidders at the Auction; and (iii) are disclosed
to each Qualified Bidder at the Auction;

 

g.bidding at the Auction will begin with the Starting Bid and continue in
bidding increments (each a “Subsequent Bid”) providing a net value to the
Sellers’ estates of at least an additional $1,000,000 above the prior bid for
the Purchased Assets. After the first round of bidding and between each
subsequent round of bidding, the Sellers shall announce the bid (including the
identity of the bidder or bidders and the value of such bid(s)) that they
believe to be the highest or otherwise best offer for the Purchased Assets (the
“Highest Bid”). A round of bidding will conclude after each participating
Qualified Bidder has had the opportunity, as determined by the Sellers, to
submit a Subsequent Bid with full knowledge of the then Highest Bid. The failure
of the Stalking Horse Bidder to bid in a particular round of bidding shall not
preclude the applicable Stalking Horse Bidder from bidding in subsequent rounds,
if any. For the purpose of evaluating the value of the consideration provided by
the Subsequent Bids (including any Subsequent Bid by the Stalking Horse Bidder),
the Sellers will give effect (on a dollar for dollar basis) to the Break-Up Fee
and the maximum amount of the Expense Reimbursement payable to the Stalking
Horse Bidder under the Stalking Horse Agreement as well as any additional
liabilities to be assumed by a Qualified Bidder and any additional costs which
may be imposed on the Sellers, as well as any other items of value included in
such Subsequent Bid. If the Stalking Horse Bidder bids at the Auction, the
Stalking Horse Bidder will be entitled to credit bid on a dollar for dollar
basis the amount of the Break-Up Fee and the maximum amount of the Expense
Reimbursement. To the extent a Subsequent Bid has been accepted entirely or in
part because of the addition, deletion or modification of a provision or
provisions in the applicable Proposed Asset Purchase Agreement or Stalking Horse
Agreement, the Sellers will identify such added, deleted or modified provision
or provisions and the Qualified Bidders shall be given the opportunity to modify
the applicable Proposed Asset Purchase Agreement or Stalking Horse Agreement in
a manner that materially provides any additional value that factored into
selecting a Subsequent Bid from another Qualified Bidder. The Sellers shall, in
consultation with the Consultation Parties, determine whether an addition,
deletion or modification of the applicable Proposed Asset Purchase Agreement or
Stalking Horse Agreement meets the standard of materially providing additional
value. For the avoidance of doubt, the Stalking Horse Bidder shall be entitled
to submit additional bids and make modifications to the Stalking Horse Agreement
at the Auction consistent with these Bidding Procedures;

 

   

 

 

h.No participant (including but not limited to any counterparty to an executory
contract or unexpired lease) during the Auction may lodge any objection during
the Auction to the proposed Sale or the assumption/assignment of an executory
contract or unexpired lease; objections to the Sale or any assumption/assignment
of any executory contract or unexpired lease shall only be preserved if filed as
a Sale Objection, Cure Costs Objection or Assignment Objection (as the case may
be) by the deadlines set forth in the Bidding Procedures Order;

 

i.the Sellers shall, in their reasonable discretion and after consultation with
the Consultation Parties, honor reasonable requests for breaks in the auction;
and

 

j.the Auction may be adjourned as the Sellers, in consultation with the
Consultation Parties, deem appropriate. Reasonable notice of such adjournment
and the time and place for the resumption of the Auction shall be given to the
Stalking Horse Bidder, all other Qualified Bidders, the United States Trustee
and the Consultation Parties.

 

9.Selection of Successful Bid

 

Prior to the conclusion of the Auction, the Sellers, in consultation with their
advisors and the Consultation Parties, will review and evaluate each Qualified
Bid in accordance with the procedures set forth herein and determine which offer
for the Purchased Assets is the highest or otherwise best offer from among the
Qualified Bidders (including the Stalking Horse Bidder) submitted at or prior to
the Auction by a Qualified Bidder (such bid, the “Successful Bid” and the bidder
making such bid, the “Successful Bidder”) and communicate to the Stalking Horse
Bidder and the other Qualified Bidders the identity of the Successful Bidder and
the material terms of the Successful Bid. Upon identification of the Successful
Bid at the conclusion of the Auction, the Sellers may not solicit, encourage or
accept any additional bids, except if, following consultation with their legal
and financial advisors, the Sellers determine that rejecting an additional
unsolicited bid submitted after the conclusion of the Auction would be
inconsistent with their fiduciary duties. The determination of the Successful
Bid by the Sellers at the conclusion of the Auction shall be final, subject only
to approval by the Bankruptcy Court.

 

   

 

 

By submitting a Qualified Bid, all Qualified Bidders and the Stalking Horse
Bidder expressly agree that they shall not submit additional bids or seek to
reopen the Auction after the Sellers have selected the Successful Bid and
Back-Up Bid, if any, and any such bid shall not be considered by the Sellers or
the Bankruptcy Court. As soon as reasonably practicable after conclusion of the
Auction, the Successful Bidder shall complete and execute all agreements,
contracts, instruments and other documents evidencing and containing the terms
and conditions upon which the Successful Bid was made. Within one (1) business
day after conclusion of the Auction, the Sellers shall file a notice identifying
the Successful Bidder with the Bankruptcy Court.

 

The Sellers will sell the Purchased Assets to the Successful Bidder pursuant to
the terms of the Successful Bid upon the approval of such Successful Bid by the
Bankruptcy Court.

 

10.Designation of Back-Up Bidder

 

Notwithstanding anything in these Bidding Procedures to the contrary, if an
Auction is conducted, the Qualified Bidder with the next highest or otherwise
best bid at the conclusion of the Auction for the Purchased Assets, as
determined by the Sellers, in the exercise of their business judgment, shall be
deemed to have submitted the next highest or otherwise best bid for such assets
(such bid, a “Back-Up Bid” and the Qualified Bidder submitting such bid, a
“Back-Up Bidder”) and shall be announced at the time to all Qualified Bidders
participating in the Auction.

 

If for any reason the Successful Bidder fails to consummate its Successful Bid
within the time permitted after the entry of the Sale Order, then the Sellers
may deem the Back-Up Bidder to be the new Successful Bidder and its Back-Up Bid
to be the new Successful Bid, and the Sellers will be authorized (but not
directed), without further order of the Bankruptcy Court, to consummate a sale
transaction with such Back-Up Bidder on the terms of its Back-Up Bid; provided,
that if the Sellers elect to do so, the Sellers, within their discretion, (i)
will file a written notice of such transaction with the Bankruptcy Court at
least 24 hours in advance of consummation thereof, and/or (ii) may (but shall
not be required to) seek approval for the consummation of such sale transaction
with such Back-Up Bidder pursuant to a separate order to be submitted at a later
date consistent with the terms of the Back-Up Bid.

 

Each Back-Up Bid must remain open until four (4) months after execution of the
applicable Stalking Horse Agreement or Proposed Asset Purchase Agreement (the
“Outside Back-Up Date”), except in the event the Stalking Horse Bidder is
designated as the Back-Up Bidder in which case the Stalking Horse Bidder shall
not be permitted to terminate the Stalking Horse Agreement until the earlier of
(a) the date upon which an Alternative Transaction has been consummated
following approval by the Bankruptcy Court, or (b) May 31, 2019 (as such date
may be extended pursuant to Section 8.1(b) of the Stalking Horse Agreement).

 

   

 

 

11.Good Faith Deposit

 

Except as otherwise provided in this paragraph with respect to the Successful
Bid and Back-Up Bid, if any, the Good Faith Deposits of all Qualified Bidders
that submitted such a deposit under the Bidding Procedures shall be returned
upon or within three (3) business days after the Auction. The Good Faith Deposit
of a Successful Bidder shall be held until the closing of the sale of the
Purchased Assets and applied in accordance with the Successful Bid. The Good
Faith Deposit of any Back-Up Bidder (other than the Stalking Horse Bidder) shall
be returned within three (3) business days after the Outside Back-Up Date. If
the Successful Bidder fails to consummate an approved sale because of a breach
or failure to perform on the part of such Successful Bidder, the Sellers will
not have any obligation to return the Good Faith Deposit deposited by such
Successful Bidder, which may be retained by the Sellers as liquidated damages,
in addition to any and all rights, remedies and/or causes of action that may be
available to the Sellers at law or in equity, and, the Sellers shall be free to
consummate the proposed transaction at the next highest or otherwise best bid at
the Auction by a Qualified Bidder, without the need for an additional hearing or
order of the Bankruptcy Court. Notwithstanding any provision hereof, the terms
pertaining to any Good Faith Deposit submitted by the Stalking Horse Bidder
pursuant to the Stalking Horse Agreement (including, without limitation, the
entitlements of the Stalking Horse Bidder and Sellers to such Good Faith Deposit
and the timing of return of any Good Faith Deposit to the Stalking Horse Bidder)
shall be governed by the terms of the Stalking Horse Agreement and the Bidding
Procedures Order.

 

12.Sale Is As Is/Where Is

 

Except as otherwise provided in the Stalking Horse Agreement, any Proposed Asset
Purchase Agreement, the Successful Bid or any order of the Bankruptcy Court
approving the sale of the Purchased Assets, the Purchased Assets sold pursuant
to these Bidding Procedures shall be conveyed at the closing of the sale in
their then-present condition, “AS IS, WITH ALL FAULTS, AND WITHOUT ANY WARRANTY
WHATSOEVER, EXPRESS OR IMPLIED.”

 

C.THE BID PROTECTIONS

 

In recognition of the expenditure of time, energy, and resources, and because
the agreement to make payment thereof is necessary to preserve the value of each
of the Sellers’ estates, the Sellers have agreed that, among other triggering
events, if the Buyer is not the Successful Bidder, then the Sellers will pay the
Buyer, pursuant to and in accordance with the terms of the Stalking Horse
Agreement, (a) an aggregate “break-up” fee of $672,500, as more fully described
in the Stalking Horse Agreement (as defined therein, the “Break-Up Fee”), and
(b) an amount in cash equal to the Expense Reimbursement (as such term is
defined in the Stalking Horse Agreement (the “Expense Reimbursement”), which is
not to exceed $750,000. The Break-Up Fee and Expense Reimbursement shall be
payable as provided for pursuant to the terms of the Stalking Horse Agreement,
and nothing herein shall be deemed to limit or otherwise modify the terms
thereof, including other circumstances pursuant to which the Break-Up Fee and
Expense Reimbursement may be payable.

 

   

 

 

Except for the Stalking Horse Bidder, no Qualified Bidder or other party
submitting a bid shall be entitled to any expense reimbursement, breakup fee,
termination or similar fee or payment.

 

D.SALE HEARING

 

The Sellers will seek entry of an order from the Bankruptcy Court, at a hearing
(the “Sale Hearing”) to begin at 10:00 a.m. (prevailing Eastern Time) on April
4, 2019 or as soon thereafter as counsel may be heard, to approve and authorize
the sale to the Successful Bidder (including, without limitation, the assumption
and assignment to the Successful Bidder of any executory contracts or unexpired
leases to be assigned to the Successful Bidder in accordance with the Stalking
Horse Agreement or Proposed Asset Purchase Agreement, as applicable, at the Sale
Hearing on terms and conditions determined in accordance with the Bidding
Procedures).

 

E.MISCELLANEOUS

 

The Auction and the Bidding Procedures are solely for the benefit of the Sellers
and the Stalking Horse Bidder, and nothing contained in the Bidding Procedures
Order, the Bidding Procedures or the Stalking Horse Agreement shall create any
rights in any other person or bidder (including, without limitation, rights as
third-party beneficiaries or otherwise) other than the rights expressly granted
to the Successful Bidder under the Bidding Procedures Order.

 

Without prejudice to the rights of the Stalking Horse Bidder under the terms of
the Stalking Horse Agreement and the Bidding Procedures Order, the Sellers may
modify the rules, procedures and deadlines set forth herein, or adopt new rules,
procedures and deadlines that, in their reasonable discretion, will better
promote the goals of these Bidding Procedures (namely, to maximize value for the
estates); provided, however, that the Sellers may not modify the Bid Protections
afforded to the Stalking Horse Bidder in accordance with the Stalking Horse
Agreement, unless agreed in writing by the Stalking Horse Bidder and Sellers.
For the avoidance of doubt, the Sellers may not modify the rules, procedures, or
deadlines set forth herein, or adopt new rules, procedures, or deadlines that
would impair in any material respect the Stalking Horse Bidder’s right to
payment of the Break-Up Fee or the Expense Reimbursement without the express
written consent of the Stalking Horse Bidder. All such modifications and
additional rules will be communicated to each of the Notice Parties, Potential
Bidders, and Qualified Bidders (including the Stalking Horse Bidder) or
announced at the Auction.

 

The Bankruptcy Court shall retain exclusive jurisdiction to hear and determine
all matters arising from or relating to implementation of the Bidding Procedures
Order.

 

   

 

 

EXHIBIT C

 

FORM OF BIDDING PROCEDURES ORDER 

  

UNITED STATES BANKRUPTCY COURT

DISTRICT OF NEW JERSEY

Caption in Compliance with D.N.J. LBR 9004-1

 

 

LOWENSTEIN SANDLER LLP

Kenneth A. Rosen, Esq. (krosen@lowenstein.com)

Michael S. Etkin, Esq. (metkin@lowenstein.com)

Paul Kizel, Esq. (pkizel@lowenstein.com)

Wojciech F. Jung, Esq. (wjung@lowenstein.com)

Philip J. Gross, Esq. (pgross@lowenstein.com)

One Lowenstein Drive

Roseland, New Jersey 07068

(973) 597-2500 (Telephone)

(973) 597-2400 (Facsimile)

 

Proposed Counsel to the Debtors and

Debtors-in-Possession

 

 

In re:

 

ACETO CORPORATION, et al.,1

 

Debtors.

 

 

Chapter 11

 

Case No. 19-13448 (VFP)

 

(Jointly Administered)

 

ORDER (A) AUTHORIZING AND APPROVING BIDDING PROCEDURES IN CONNECTION WITH THE
SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING THE DEBTORS’ PHARMA BUSINESS; (B)
AUTHORIZING AND APPROVING BID PROTECTIONS; (C) APPROVING PROCEDURES FOR THE
ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES;
(D) SCHEDULING A SALE HEARING; (E) APPROVING THE FORM AND MANNER OF NOTICE
THEREOF;

AND (F) GRANTING RELATED RELIEF

 

The relief set forth on the following pages, numbered two (2) through ________
(__), is hereby ORDERED.

 

 

1 The Debtors in these chapter 11 cases and the last four digits of each
Debtor’s taxpayer identification number are as follows: Aceto Corporation
(0520); Aceto Agricultural Chemicals Corporation (3948); Aceto Realty LLC
(7634); Rising Pharmaceuticals, Inc. (7959); Rising Health, LLC (1562); Acetris
Health, LLC (3236); PACK Pharmaceuticals, LLC (2525); Arsynco, Inc. (7392); and
Acci Realty Corp. (4433).

 

   

 

 

Page:2 Debtors:ACETO CORPORATION, et al. Case No.:Case No. 19-13448 (VFP)
Caption:ORDER (A) AUTHORIZING AND APPROVING BIDDING PROCEDURES IN CONNECTION
WITH THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING THE DEBTORS’ PHARMA
BUSINESS; (B) AUTHORIZING AND APPROVING BID PROTECTIONS; (C) APPROVING
PROCEDURES FOR THE ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND
UNEXPIRED LEASES; (D) SCHEDULING A SALE HEARING; (E) APPROVING THE FORM AND
MANNER OF NOTICE THEREOF; AND (F) GRANTING RELATED RELIEF

 

 

 

Upon the motion (the “Motion”)2 of the above-captioned debtors and
debtors-in-possession (collectively, the “Debtors”), seeking entry of an order
(this “Order”), pursuant to sections 105, 363, 365 and 503 of title 11 of the
United States Code (the “Bankruptcy Code”), Rules 2002, 6004 and 6006 of the
Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), and Rules
6004-1, 6004-2 and 6004-3 of the Local Rules of the United States Bankruptcy
Court for the District of New Jersey (the “Local Rules”):

 

(i) (a) authorizing and approving certain bidding procedures (as attached hereto
as Exhibit 1, the “Bidding Procedures”) in connection with the sale (the “Sale”)
of substantially all assets (as defined in the Stalking Horse Agreement (defined
below), the “Purchased Assets”) comprising the Debtors’ Pharma Business (as
defined in the Motion) pursuant to that certain Asset Purchase Agreement, dated
as of March [●], 2019 (together with the schedules thereto and related
documents, and as may be amended, supplemented or otherwise modified from time
to time, the “Stalking Horse Agreement”), substantially in the form attached to
the Motion as Exhibit B, by and among Rising Pharmaceuticals, Inc., Pack
Pharmaceuticals, LLC, Rising Health, LLC, and Acetris Health, LLC (together, the
“Sellers” and each a “Seller”), Aceto Corporation, as Parent, and Shore Suven
Pharma, Inc. (the “Buyer” or “Stalking Horse Bidder”), subject to the outcome of
an auction (the “Auction”) if the Sellers receive one or more timely and
acceptable Qualified Bids (as defined in the Bidding Procedures); (b)
authorizing and approving the Break-Up Fee and Expense Reimbursement (each as
defined in the Bidding Procedures, and together, the “Bid Protections”) for the
Stalking Horse Bidder; (c) scheduling the Auction and a hearing (the “Sale
Hearing”) to consider approval of the Sale; (d) approving procedures related to
the assumption and assignment of certain of the Sellers’ executory contracts and
unexpired leases (the “Assumption and Assignment Procedures”); (e) approving the
form and manner of notice thereof; and (f) granting related relief
(collectively, the “Bidding Procedures Relief”); and (ii) (a) authorizing the
Sale of the Purchased Assets free and clear of Liens and Claims (each as defined
in the Stalking Horse Agreement) and Interests,3 except as provided in the
Stalking Horse Agreement or other Proposed Asset Purchase Agreement of the
Successful Bidder (each as defined in the Bidding Procedures); (b) approving the
assumption and assignment of certain of the Sellers’ executory contracts (each,
an “Executory Contract”) and unexpired leases (each, an “Unexpired Lease”)
related thereto (any such Executory Contract or Unexpired Lease designated by
the Successful Bidder to be assumed and assigned pursuant to the Sale, a “Buyer
Assumed Agreement” and collectively, the “Buyer Assumed Agreements”); and (c)
granting related relief; and upon the First Day Declaration; and this Court
having jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334; and
this Court having the power to enter a final order consistent with Article III
of the United States Constitution; and this Court having found that venue of
this proceeding and the Motion in this district is proper pursuant to 28 U.S.C.
§§ 1408 and 1409; and this Court having found that notice of the Motion and
opportunity for a hearing on the Motion were appropriate under the circumstances
and no other notice need be provided; and this Court having reviewed the Motion
and heard the statements in support of the relief requested therein at a hearing
before this Court; and this Court having determined that the legal and factual
bases set forth in the Motion and at the hearing establish just cause for the
relief granted herein; and this Court having determined that the relief
requested by the Motion is in the best interests of the Debtors, their estates,
their creditors, and other parties in interest; and upon all of the proceedings
in these Chapter 11 Cases had before this Court; and after due deliberation and
sufficient cause appearing therefor, it is hereby

 

 

2 Capitalized terms not otherwise defined herein shall have the meanings
ascribed to such terms in the Motion or the Bidding Procedures attached hereto
as Exhibit 1.

 

3 As used herein, “Interests” means all encumbrances and other interests,
including, but not limited to: (1) those that purport to give to any party a
right or option to effect any forfeiture, modification, right of first refusal
or termination of the Debtors’ interest in the Purchased Assets, or any similar
rights, including rights under section 365(h) of the Bankruptcy Code; (2) those
relating to taxes arising under or out of in connection with, or in any way
relating to the operation of the Purchased Assets prior to the Closing; and (3)
(a) those arising under all mortgages, deeds of trust, security interests,
conditional sale or other title retention agreements, pledges, liens, judgments,
demands, rights of setoff or recoupment, encumbrances, rights of first refusal
or charges of any kind or nature, if any, including, but not limited to, any
restriction on the use, voting, transfer, receipt of income or other exercise of
any attributes of ownership, and (b) all debts arising in any way in connection
with any agreements, acts or failures to act of any of the Debtors or any of the
Debtors’ predecessors or affiliates, Claims, obligations, liabilities, rights of
set off or recoupment, demands, guaranties, options, rights, contractual or
other commitments, restrictions, interests and matters of any kind and nature,
whether known or unknown, contingent or otherwise, whether arising prior to or
subsequent to the commencement of the Debtors’ bankruptcy cases, and whether
imposed by agreement, understanding, law, equity or otherwise, including, but
not limited to, Claims otherwise arising under doctrines of successor liability
to the greatest extent permitted by applicable law.

 

 -2- 

 

 

Page:3 Debtors:ACETO CORPORATION, et al. Case No.:Case No. 19-13448 (VFP)
Caption:ORDER (A) AUTHORIZING AND APPROVING BIDDING PROCEDURES IN CONNECTION
WITH THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING THE DEBTORS’ PHARMA
BUSINESS; (B) AUTHORIZING AND APPROVING BID PROTECTIONS; (C) APPROVING
PROCEDURES FOR THE ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND
UNEXPIRED LEASES; (D) SCHEDULING A SALE HEARING; (E) APPROVING THE FORM AND
MANNER OF NOTICE THEREOF; AND (F) GRANTING RELATED RELIEF

 

 

 

FOUND, CONCLUDED, AND DETERMINED THAT:

 

A.       The Debtors have demonstrated good and sufficient reasons for, and the
best interests of their estates, creditors, and other parties in interest will
be served by, this Court granting, to the extent provided herein, the relief
requested in the Motion relating to the bidding process, including approval of
(1) the Bidding Procedures, (2) the Bid Protections, (3) the Assumption and
Assignment Procedures, and (4) the forms of the Cure Notice (as defined below)
and Sale Notice (as defined below) attached to the Motion as Exhibit C and
Exhibit D, respectively.

 

B.       Good and sufficient business reasons exist for the Court to authorize
the Debtors to enter into Stalking Horse Agreement in accordance with the terms
of this Order and the Bidding Procedures.

 

C.       The Debtors have demonstrated good and sufficient reasons for, and the
best interests of their estates will be served by, this Court scheduling the
Sale Hearing to consider granting the other relief requested in the Motion,
including approval of the Sale and the transfer of the Purchased Assets (and the
assumption and assignment of the Buyer Assumed Agreements) to the Successful
Bidder free and clear of all Liens, Claims and Interests, except those expressly
assumed as set forth in the Stalking Horse Agreement, pursuant to sections
363(f) and 365 of the Bankruptcy Code.

 

 -3- 

 

 

Page:4 Debtors:ACETO CORPORATION, et al. Case No.:Case No. 19-13448 (VFP)
Caption:ORDER (A) AUTHORIZING AND APPROVING BIDDING PROCEDURES IN CONNECTION
WITH THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING THE DEBTORS’ PHARMA
BUSINESS; (B) AUTHORIZING AND APPROVING BID PROTECTIONS; (C) APPROVING
PROCEDURES FOR THE ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND
UNEXPIRED LEASES; (D) SCHEDULING A SALE HEARING; (E) APPROVING THE FORM AND
MANNER OF NOTICE THEREOF; AND (F) GRANTING RELATED RELIEF

 

 

 

D.       The Bid Protections as set forth in Section 8.3 of the Stalking Horse
Agreement to be paid under the circumstances described therein to the Stalking
Horse Bidder are: (1) an actual and necessary cost of preserving the value of
the respective Debtors’ estates within the meaning of section 503(b) of the
Bankruptcy Code; (2) commensurate to the real and substantial benefits conferred
upon the Debtors’ estates by the Stalking Horse Bidder; and (3) reasonable and
appropriate in light of the size and nature of the proposed Sale and comparable
transactions, the commitments and accommodations of the Stalking Horse Bidder
that have been made for the benefit of the Debtors’ estates, and the efforts
that have been and will be expended by the Stalking Horse Bidder.

 

E.       The Bid Protections are the product of negotiations between the Debtors
and the Stalking Horse Bidder conducted in good faith and at arm’s length, and
the Stalking Horse Agreement (including the Bid Protections) is the culmination
of a process undertaken by the Debtors and their professionals to negotiate a
transaction with a bidder who was prepared to pay the highest or otherwise best
purchase price for the Purchased Assets to maximize the value of the Debtors’
estates.

 

 -4- 

 

 

Page:5 Debtors:ACETO CORPORATION, et al. Case No.:Case No. 19-13448 (VFP)
Caption:ORDER (A) AUTHORIZING AND APPROVING BIDDING PROCEDURES IN CONNECTION
WITH THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING THE DEBTORS’ PHARMA
BUSINESS; (B) AUTHORIZING AND APPROVING BID PROTECTIONS; (C) APPROVING
PROCEDURES FOR THE ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND
UNEXPIRED LEASES; (D) SCHEDULING A SALE HEARING; (E) APPROVING THE FORM AND
MANNER OF NOTICE THEREOF; AND (F) GRANTING RELATED RELIEF

 

 

 

F.       Moreover, the Bid Protections are an essential and material inducement
and express condition of the Stalking Horse Bidder’s entry into, and continuing
obligations under, the Stalking Horse Agreement. Unless it is assured that the
Bid Protections will be available, the Stalking Horse Bidder is unwilling to
remain obligated to consummate the Sale or otherwise be bound under the Stalking
Horse Agreement (including the Stalking Horse Bidder’s obligation to maintain
its committed offer while such offer is subject to higher or otherwise better
offers as contemplated by the Bidding Procedures). The Bid Protections have
induced the Stalking Horse Bidder to submit a bid that will serve as a minimum
or floor bid for the Purchased Assets on which the Debtors, their creditors and
other bidders can rely, and which encourages and facilitates the Auction
process. The Stalking Horse Bidder has thus provided a material benefit to the
Debtors, their estates and creditors by increasing the likelihood that the best
possible purchase price for the Purchased Assets will be realized. Accordingly,
the Bid Protections are fair, reasonable and appropriate, and necessary to
facilitate a competitive, value-maximizing Sale for the benefit of the Debtors’
estates.

 

G.       The Stalking Horse Bidder is not an “insider” or “affiliate” of any of
the Debtors, as those terms are defined in section 101 of the Bankruptcy Code,
and except as set for in the [Declaration(s) of [l]], no common identity of
directors, officers or controlling stockholders exists among the Stalking Horse
Bidder and the Debtors. The Stalking Horse Bidder and its counsel and advisors
have acted in “good faith” within the meaning of section 363(m) of the
Bankruptcy Code in connection with the Stalking Horse Bidder’s negotiations of
the Bid Protections and the Bidding Procedures and entry into the Stalking Horse
Agreement.

 

 -5- 

 

 

Page:6 Debtors:ACETO CORPORATION, et al. Case No.:Case No. 19-13448 (VFP)
Caption:ORDER (A) AUTHORIZING AND APPROVING BIDDING PROCEDURES IN CONNECTION
WITH THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING THE DEBTORS’ PHARMA
BUSINESS; (B) AUTHORIZING AND APPROVING BID PROTECTIONS; (C) APPROVING
PROCEDURES FOR THE ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND
UNEXPIRED LEASES; (D) SCHEDULING A SALE HEARING; (E) APPROVING THE FORM AND
MANNER OF NOTICE THEREOF; AND (F) GRANTING RELATED RELIEF

 

 

 

H.       The Bidding Procedures are fair, reasonable, and appropriate and are
designed to maximize the recovery from the Sale of the Purchased Assets.

 

I.        The process for submitting Qualified Bids is fair, reasonable, and
appropriate and is designed to maximize recoveries for the benefit of the
Debtors’ estates, creditors, and parties in interest.

 

J.        Good and sufficient notice of the relief sought in the Motion has been
provided under the circumstances, and no other or further notice is required
except as set forth in the Bidding Procedures and the Assumption and Assignment
Procedures. A reasonable opportunity to object or be heard regarding the relief
requested in the Motion has been afforded to all parties in interest.

 

K.       The Sale Notice, the Cure Notice, and the Supplemental Cure Notice
(each as defined below) are appropriate and reasonably calculated to provide all
interested parties with timely and proper notice of this Order, the Bidding
Procedures, the Sale, the Sale Hearing, and any and all objection deadlines
related thereto, including with respect to cure amounts and the assumption and
assignment of Executory Contracts and Unexpired Leases, and no other or further
notice is required of the foregoing.

 

L.       The findings and conclusions set forth herein constitute the Court’s
findings of fact and conclusions of law pursuant to Bankruptcy Rule 7052 made
applicable to this proceeding pursuant to Bankruptcy Rule 9014. To the extent
any of the foregoing findings of fact constitute conclusions of law, they are
adopted as such. To the extent any of the following conclusions of law
constitute findings of fact, they are adopted as such.

 

 -6- 

 

 

Page:7 Debtors:ACETO CORPORATION, et al. Case No.:Case No. 19-13448 (VFP)
Caption:ORDER (A) AUTHORIZING AND APPROVING BIDDING PROCEDURES IN CONNECTION
WITH THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING THE DEBTORS’ PHARMA
BUSINESS; (B) AUTHORIZING AND APPROVING BID PROTECTIONS; (C) APPROVING
PROCEDURES FOR THE ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND
UNEXPIRED LEASES; (D) SCHEDULING A SALE HEARING; (E) APPROVING THE FORM AND
MANNER OF NOTICE THEREOF; AND (F) GRANTING RELATED RELIEF

 

 

 

IT IS HEREBY ORDERED THAT:

 

1.       The Motion and Bidding Procedures Relief is GRANTED as set forth
herein.

 

2.       All objections or reservations of rights to the Motion or the Bidding
Procedures Relief requested therein that have not been withdrawn, waived or
settled are hereby overruled.

 

I.Sales Dates and Deadlines

 

3.       The Debtors are authorized to proceed with the Sale in accordance with
the Bidding Procedures and are authorized to take any and all actions necessary
or appropriate to implement the Bidding Procedures (subject to the terms
thereof) in accordance with the following dates and deadlines:

 

Sale Dates and Deadlines

Deadline to Serve Sale Notice and Cure Notice

 

No later than two (2) business days after entry of the Bidding Procedures Order
Cure Objection Deadline and Assignment Objection Deadline

No later than ten (10) days after service of the Cure Notice or Supplemental
Cure Notice, as applicable

 

Sale Objection Deadline

 

March 28, 2019 at 5:00 p.m. prevailing ET

 

Bid Deadline

March 29, 2019 at 5:00 p.m. prevailing ET

 

Deadline to Notify Qualified Bidders

 

April 1, 2019 Deadline to Select Starting Bid

April 1, 2019

 

Auction (if required)

April 2, 2019 at 10:00 a.m. prevailing ET

 

Notice of Successful Bidder to be Filed

One (1) business day after conclusion of the Auction

 

Deadline for Reply Pleadings in Support of Sale

 

April 3, 2019 at 12:00 p.m. prevailing ET Sale Hearing

April 4, 2019 at 10:00 a.m. prevailing ET

 

 

 -7- 

 

 

Page:8 Debtors:ACETO CORPORATION, et al. Case No.:Case No. 19-13448 (VFP)
Caption:ORDER (A) AUTHORIZING AND APPROVING BIDDING PROCEDURES IN CONNECTION
WITH THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING THE DEBTORS’ PHARMA
BUSINESS; (B) AUTHORIZING AND APPROVING BID PROTECTIONS; (C) APPROVING
PROCEDURES FOR THE ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND
UNEXPIRED LEASES; (D) SCHEDULING A SALE HEARING; (E) APPROVING THE FORM AND
MANNER OF NOTICE THEREOF; AND (F) GRANTING RELATED RELIEF

 

 

 

II.The Bidding Procedures

 

4.       The Bidding Procedures attached hereto as Exhibit 1 are approved and
shall govern all bids and bid proceedings relating to the sale of the Purchased
Assets.

 

5.       If the Sellers do not receive a Qualified Bid with respect to the
Purchased Assets other than the Stalking Horse Bid (as defined in the Bidding
Procedures) in accordance with the Bidding Procedures, the Sellers will not hold
the Auction and the Stalking Horse Bidder shall be deemed the Successful Bidder
with respect to the Purchased Assets in accordance with the Bidding Procedures.
Only if the Sellers receive one or more Qualified Bids with respect to the
Purchased Assets in addition to the Stalking Horse Bid in accordance with the
Bidding Procedures, the Sellers will conduct the Auction for the Purchased
Assets.

 

 -8- 

 

 

Page:9 Debtors:ACETO CORPORATION, et al. Case No.:Case No. 19-13448 (VFP)
Caption:ORDER (A) AUTHORIZING AND APPROVING BIDDING PROCEDURES IN CONNECTION
WITH THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING THE DEBTORS’ PHARMA
BUSINESS; (B) AUTHORIZING AND APPROVING BID PROTECTIONS; (C) APPROVING
PROCEDURES FOR THE ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND
UNEXPIRED LEASES; (D) SCHEDULING A SALE HEARING; (E) APPROVING THE FORM AND
MANNER OF NOTICE THEREOF; AND (F) GRANTING RELATED RELIEF

 

 

 

6.       In the event of a competing Qualified Bid with respect to the Purchased
Assets, the Stalking Horse Bidder shall be entitled, but not obligated, to
submit Subsequent Bids (as defined in the Bidding Procedures) and shall be
entitled, but not obligated, in any and all such Subsequent Bids to credit bid
the full amount of the Bid Protections in lieu of cash, and for purposes of
evaluating the Subsequent Bid, the full amount of such Bid Protections shall be
treated as equal to cash in the same amount.

 

III.Stalking Horse Bidder, Bid Protections, and Stalking Horse Agreement

 

7.       The Debtors’ entry into the Stalking Horse Agreement is authorized and
approved, subject to higher and better offers at the Auction regarding the
Purchased Assets in accordance with the Bidding Procedures.

 

8.       The Debtors are authorized to perform all obligations of the Debtors
set forth in the Stalking Horse Agreement that are intended to be performed
prior to the Sale Hearing and prior to the entry of the Sale Order, subject to
the terms of the Bidding Procedures.

 

9.       The Bid Protections for the Stalking Horse Bidder are approved in their
entirety. The Debtors are authorized to pay any amounts that may become due to
the Stalking Horse Bidder on account of the Bid Protections on the terms set
forth in the Stalking Horse Agreement. The Stalking Horse Bidder shall be
granted an allowed administrative expense claim under sections 503(b)(1) and
507(a)(2) of the Bankruptcy Code in an amount equal to the Break-Up Fee and
Expense Reimbursement to the extent they become due in accordance with the terms
of the Stalking Horse Agreement, which (if triggered) shall be payable in
accordance with the terms of the Stalking Horse Agreement, without further order
of or proceedings before this Court. Nothing in this Order shall be construed as
authorizing and directing the payment of any Bid Protections to the Stalking
Horse Bidder in the event the Stalking Horse Bidder becomes the Successful
Bidder with respect to the Purchased Assets.

 

 -9- 

 

 

Page:10 Debtors:ACETO CORPORATION, et al. Case No.:Case No. 19-13448 (VFP)
Caption:ORDER (A) AUTHORIZING AND APPROVING BIDDING PROCEDURES IN CONNECTION
WITH THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING THE DEBTORS’ PHARMA
BUSINESS; (B) AUTHORIZING AND APPROVING BID PROTECTIONS; (C) APPROVING
PROCEDURES FOR THE ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND
UNEXPIRED LEASES; (D) SCHEDULING A SALE HEARING; (E) APPROVING THE FORM AND
MANNER OF NOTICE THEREOF; AND (F) GRANTING RELATED RELIEF

 

 

 

10.       No person or entity, other than the Stalking Horse Bidder, shall be
entitled to any expense reimbursement, break-up fee, “topping,” or other similar
fee or payment.

 

11.       Any deposit provided by the Stalking Horse Bidder and all other
Qualified Bidders shall be held in escrow by the Debtors or their agent, and
shall not become property of the Debtors’ bankruptcy estates unless and until
released from escrow to the Debtors pursuant to the terms of the applicable
escrow agreement or order of this Court.

 

12.       The Stalking Horse Bidder shall not be required to seek or obtain
relief from the automatic stay under section 362 of the Bankruptcy Code to take
any action necessary or required under the Stalking Horse Agreement or any other
sale-related document. The automatic stay imposed by section 362 of the
Bankruptcy Code is modified solely to the extent necessary to implement the
preceding sentence, provided, however, that this Court shall retain exclusive
jurisdiction over any and all disputes with respect thereto.

 

 -10- 

 

 

Page:11 Debtors:ACETO CORPORATION, et al. Case No.:Case No. 19-13448 (VFP)
Caption:ORDER (A) AUTHORIZING AND APPROVING BIDDING PROCEDURES IN CONNECTION
WITH THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING THE DEBTORS’ PHARMA
BUSINESS; (B) AUTHORIZING AND APPROVING BID PROTECTIONS; (C) APPROVING
PROCEDURES FOR THE ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND
UNEXPIRED LEASES; (D) SCHEDULING A SALE HEARING; (E) APPROVING THE FORM AND
MANNER OF NOTICE THEREOF; AND (F) GRANTING RELATED RELIEF

 

 

 

IV.Sale Hearing

 

13.       The Sale Hearing shall be held on April 4, 2019 at 10:00 a.m.
(prevailing Eastern Time) before this Court, the United States Bankruptcy Court
for the District of New Jersey, Martin Luther King, Jr. Federal Building, 50
Walnut Street, 3rd Floor, Newark, New Jersey 07102. Any objections to the Sale
(a “Sale Objection”) must (a) be in writing, (b) state the basis of such
objection with specificity, (c) conform to the Bankruptcy Rules and the Local
Rules and (d) be filed with the Bankruptcy Court and served upon the Notice
Parties (as defined below) so as to be received not later than 5:00 p.m.
prevailing Eastern Time on March 28, 2019 (the “Sale Objection Deadline”). Any
party failing to timely file a Sale Objection by the Sale Objection Deadline
shall be forever barred from objecting and shall be deemed to have consented to
the Sale, including the transfer of the Debtors’ right, title and interest in,
to, and under the Purchased Assets free and clear of any and all Liens, Claims
and Interests (each as defined in the Stalking Horse Agreement) in accordance
with the Stalking Horse Agreement or other definitive agreement with respect to
the Sale.

 

14.       The Sale Hearing may be adjourned by the Debtors from time to time
without further notice to creditors or parties in interest other than by
announcement of the adjournment in open court on the date scheduled for the Sale
Hearing.

 

 -11- 

 

 

Page:12 Debtors:ACETO CORPORATION, et al. Case No.:Case No. 19-13448 (VFP)
Caption:ORDER (A) AUTHORIZING AND APPROVING BIDDING PROCEDURES IN CONNECTION
WITH THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING THE DEBTORS’ PHARMA
BUSINESS; (B) AUTHORIZING AND APPROVING BID PROTECTIONS; (C) APPROVING
PROCEDURES FOR THE ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND
UNEXPIRED LEASES; (D) SCHEDULING A SALE HEARING; (E) APPROVING THE FORM AND
MANNER OF NOTICE THEREOF; AND (F) GRANTING RELATED RELIEF

 

 

 

V.Notice Procedures

 

15.       The Notice of Proposed Sale, Auction Date, Objection Deadline and Sale
Hearing (Pharma Business), in the form substantially similar to that attached to
the Motion as Exhibit D (the “Sale Notice”), is approved.

 

16.       The Debtors shall, within two (2) business days after entry of this
Order, serve a copy of the Sale Notice by first class mail, postage prepaid to:
(a) the Office of The United States Trustee for the District of New Jersey; (b)
McGuireWoods LLP, c/o Kenneth Noble, Esq., as counsel for the DIP Agent and
Prepetition Agent; (c) the Indenture Trustee for the Noteholders; (d) any
proposed counsel to the Official Committee of Unsecured Creditors; (e) the U.S.
Securities and Exchange Commission, New York Regional Office; (f) the Internal
Revenue Service; (g) the U.S. Food and Drug Administration; (h) the Assistant
Attorney General in charge of the Antitrust Division of the U.S. Department of
Justice; (i) all applicable state and local taxing authorities; (j) all persons
known by the Debtors to have expressed an interest to the Debtors in a
transaction with respect to the Purchased Assets during the previous six months;
(k) all entities known by the Debtors that may have a lien, claim, encumbrance,
or other interest in the Purchased Assets (for which identifying information and
addresses are available to the Debtors); (l) all non-Debtor parties to the
Executory Contracts and Unexpired Leases; (m) all of the Debtors’ known
creditors; (n) the Office of the Attorneys General of the States of New York and
New Jersey; (o) the United States Attorney’s Office for the District of New
Jersey; (p) the United States Attorney’s Office for the Eastern District of New
York; and (q) all parties that have requested to receive notice in these cases
under Bankruptcy Rule 2002.

 

 -12- 

 

 

Page:13 Debtors:ACETO CORPORATION, et al. Case No.:Case No. 19-13448 (VFP)
Caption:ORDER (A) AUTHORIZING AND APPROVING BIDDING PROCEDURES IN CONNECTION
WITH THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING THE DEBTORS’ PHARMA
BUSINESS; (B) AUTHORIZING AND APPROVING BID PROTECTIONS; (C) APPROVING
PROCEDURES FOR THE ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND
UNEXPIRED LEASES; (D) SCHEDULING A SALE HEARING; (E) APPROVING THE FORM AND
MANNER OF NOTICE THEREOF; AND (F) GRANTING RELATED RELIEF

 

 

 

17.       Additionally, within seven days after entry of this Order, or as soon
as reasonably practicable thereafter, the Debtors shall publish a notice,
setting forth the information contained in the Sale Notice, on one occasion, in
either The New York Times, Wall Street Journal or USA Today. Such publication
notice shall be deemed sufficient and proper notice of the Sale to any other
interested parties whose identities are unknown to the Debtors.

 

VI.Assumption and Assignment Procedures

 

18.       The Notice of Assumption and Assignment of Executory Contracts and
Unexpired Leases in Connection with Proposed Sale of Certain Assets of the
Debtors Relating to the Pharma Business, in the form substantially similar to
that attached to the Motion as Exhibit C (the “Cure Notice”), is approved.

 

19.       The Debtors shall, within two (2) business days of the entry of this
Order, serve the Cure Notice upon each non-Debtor counterparty4 to each
Executory Contract or Unexpired Lease to which a Seller is a party that may be
assumed and assigned to the Stalking Horse Bidder, regardless of whether, at
that time, the Executory Contract or Unexpired Lease is listed as being proposed
to be assumed and assigned to the Stalking Horse Bidder. The Cure Notice shall
state the date, time and place of the Sale Hearing and the date by which any
objection to the assumption and assignment of such Executory Contract or
Unexpired Lease must be filed and served. The Cure Notice shall also identify
the amounts, if any, that the Debtors believe are owed to each counterparty to
an Executory Contract or Unexpired Lease to cure any defaults that exist under
such contract or lease (such amounts, the “Cure Costs”) pursuant to section 365
of the Bankruptcy Code. The Cure Notice does not constitute an admission that an
Executory Contract or Unexpired Lease is in fact an executory contract or
unexpired lease for the purposes of section 365 of the Bankruptcy Code, and the
Debtors reserve any and all rights with respect to the Executory Contracts and
Unexpired Leases. The inclusion of an Executory Contract or Unexpired Lease on
the Cure Notice shall not obligate the Successful Bidder to take assignment of
such Executory Contract or Unexpired Lease. Only those contracts that constitute
(a) Buyer Assumed Agreements pursuant to the Stalking Horse Agreement or (b) if
the Successful Bidder is not the Stalking Horse Bidder, Buyer Assumed Agreements
identified in the Successful Bidder’s Proposed Asset Purchase Agreement, shall
be assumed, assigned and sold to such Successful Bidder.

 

 

4 The Cure Notice served upon each non-Debtor counterparty may, in the Debtors’
discretion, include an individualized Exhibit 1 that lists only the recipient
counterparty’s Executory Contract(s) and/or Unexpired Lease(s).

 

 -13- 

 

 

Page:14 Debtors:ACETO CORPORATION, et al. Case No.:Case No. 19-13448 (VFP)
Caption:ORDER (A) AUTHORIZING AND APPROVING BIDDING PROCEDURES IN CONNECTION
WITH THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING THE DEBTORS’ PHARMA
BUSINESS; (B) AUTHORIZING AND APPROVING BID PROTECTIONS; (C) APPROVING
PROCEDURES FOR THE ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND
UNEXPIRED LEASES; (D) SCHEDULING A SALE HEARING; (E) APPROVING THE FORM AND
MANNER OF NOTICE THEREOF; AND (F) GRANTING RELATED RELIEF

 

 

 

20.       If any counterparty to an Executory Contract or Unexpired Lease
objects for any reason to any proposed Cure Costs set forth in the Cure Notice
or any Supplemental Cure Notice, such counterparty must (a) file with the Court
a written objection (a “Cure Costs Objection”) and (b) serve such Cure Costs
Objection, so as to be received no later than ten (10) days after service of the
Cure Notice or Supplemental Cure Notice, as applicable (the “Cure Objection
Deadline”), on: (i) counsel to the Debtors, Lowenstein Sandler LLP, 1251 Avenue
of the Americas, New York, NY 10020 (Attn: Steven E. Siesser, Esq.
(ssiesser@lowenstein.com), Paul Kizel, Esq. (pkizel@lowenstein.com) and Philip
J. Gross, Esq. (pgross@lowenstein.com)); (ii) counsel to the Buyer, Reed Smith
LLP, 599 Lexington Ave, New York, New York 10036 (Attn: Niket Rele, Esq.
(nrele@reedsmith.com), John Algie, Esq. (jalgie@reedsmith.com) and Derek J.
Baker, Esq. (dbaker@reedsmith.com)); (iii) the Office of The United States
Trustee, One Newark Center, 1085 Raymond Boulevard, Suite 2100, Newark, New
Jersey 07102 (Attn: Fran B. Steele (Fran.B.Steele@usdoj.gov) and David Gerardi,
Esq. (David.Gerardi@usdoj.gov)); and (iv) proposed counsel to the Official
Committee of Unsecured Creditors, Stroock & Stroock & Lavan LLP, 180 Maiden
Lane, New York, New York, 10038-4982 (Attn: Jayme T. Goldstein, Esq.
(jgoldstein@stroock.com) and Erez E. Gilad, Esq. (egilad@stroock.com))
(collectively, the “Notice Parties”).

 

21.       If, at any time and from time to time after the entry of this Order,
the Debtors or the Stalking Horse Bidder or other Successful Bidder identify
additional Executory Contracts or Unexpired Leases to be assumed and assigned as
Buyer Assumed Agreements in accordance with the terms of the Stalking Horse
Agreement or Successful Bidder’s Proposed Asset Purchase Agreement, the Debtors
shall serve a supplemental Cure Notice (each, a “Supplemental Cure Notice”) by
facsimile, electronic transmission, hand delivery or overnight mail on the
applicable non-debtor counterparty and its counsel (if known) no later than ten
(10) days before the closing (“Closing”) of the Sale, or, if such Executory
Contract or Unexpired Lease is identified less than ten (10) days prior to the
Closing, by the date set forth on the Supplemental Cure Notice. Each
Supplemental Cure Notice shall: (a) state the date, time and place of the Sale
Hearing (or later hearing, if applicable); (b) state the date by which any
objection to the assumption and assignment of such Buyer Assumed Agreement must
be filed and served; and (c) identify the proposed Cure Costs, if any.

 

 -14- 

 

 

Page:15 Debtors:ACETO CORPORATION, et al. Case No.:Case No. 19-13448 (VFP)
Caption:ORDER (A) AUTHORIZING AND APPROVING BIDDING PROCEDURES IN CONNECTION
WITH THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING THE DEBTORS’ PHARMA
BUSINESS; (B) AUTHORIZING AND APPROVING BID PROTECTIONS; (C) APPROVING
PROCEDURES FOR THE ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND
UNEXPIRED LEASES; (D) SCHEDULING A SALE HEARING; (E) APPROVING THE FORM AND
MANNER OF NOTICE THEREOF; AND (F) GRANTING RELATED RELIEF

 

 

 

22.       Each Cure Costs Objection must set forth with specificity each and
every asserted default in any Executory Contract or Unexpired Lease and the
monetary cure amount asserted by such counterparty to the extent it differs from
the Cure Costs, if any, specified by the Debtors in the Cure Notice or
Supplemental Cure Notice, as applicable.

 

23.       In the event that the Debtors and the non-debtor party cannot resolve
a Cure Costs Objection, disputed Cure Costs shall not be paid until the
resolution of any such disputes by the Court or mutual agreement of the Debtors,
with the consent of the Stalking Horse Bidder to the extent required in the
Stalking Horse Agreement, and the objecting party. Cure Costs Objections may be
resolved by the Court at the Sale Hearing, or at a separate hearing either
before or after the Sale Hearing. Any resolution of an objection to a Cure Cost
occurring after the Sale Hearing shall nevertheless remain subject to the
rights, obligations and duties of the Debtors and the Stalking Horse Bidder
under the Stalking Horse Agreement.

 

 -15- 

 

 

Page:16 Debtors:ACETO CORPORATION, et al. Case No.:Case No. 19-13448 (VFP)
Caption:ORDER (A) AUTHORIZING AND APPROVING BIDDING PROCEDURES IN CONNECTION
WITH THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING THE DEBTORS’ PHARMA
BUSINESS; (B) AUTHORIZING AND APPROVING BID PROTECTIONS; (C) APPROVING
PROCEDURES FOR THE ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND
UNEXPIRED LEASES; (D) SCHEDULING A SALE HEARING; (E) APPROVING THE FORM AND
MANNER OF NOTICE THEREOF; AND (F) GRANTING RELATED RELIEF

 

 

 

24.       Any counterparty to an Executory Contract or Unexpired Lease that
fails to timely file and serve a Cure Costs Objection shall be forever barred
from asserting that Cure Costs are owed in an amount in excess of that set forth
in the Cure Notice or Supplemental Cure Notice. If no Cure Costs Objection is
timely filed and served by the Cure Objection Deadline with respect to a Buyer
Assumed Agreement, the Cure Costs identified in the Cure Notice or Supplemental
Cure Notice, as applicable, with respect to the applicable Executory Contract(s)
and/or Unexpired Lease(s) shall be the only amounts necessary to be paid to cure
all monetary defaults pursuant to section 365(b) of the Bankruptcy Code under
such Buyer Assumed Agreement(s), to the extent the Stalking Horse Bidder (or
other Successful Bidder) ultimately decides to have the applicable Buyer Assumed
Agreement(s) assumed and assigned to it. Any party failing to timely file a Cure
Costs Objection shall be deemed to have consented and forever barred from
objecting to the Cure Costs and from asserting any additional cure or other
amounts against the Debtors, their estates or the Successful Bidder,
notwithstanding anything to the contrary in any Executory Contract or Unexpired
Lease, or any other document. To the extent a Cure Costs Objection is resolved
or determined unfavorably to the applicable Debtor, such Debtor may, with the
prior written consent of the Successful Bidder, seek to instead reject the
applicable Executory Contract or Unexpired Lease after such determination.

 

 -16- 

 

 

Page:17 Debtors:ACETO CORPORATION, et al. Case No.:Case No. 19-13448 (VFP)
Caption:ORDER (A) AUTHORIZING AND APPROVING BIDDING PROCEDURES IN CONNECTION
WITH THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING THE DEBTORS’ PHARMA
BUSINESS; (B) AUTHORIZING AND APPROVING BID PROTECTIONS; (C) APPROVING
PROCEDURES FOR THE ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND
UNEXPIRED LEASES; (D) SCHEDULING A SALE HEARING; (E) APPROVING THE FORM AND
MANNER OF NOTICE THEREOF; AND (F) GRANTING RELATED RELIEF

 

 

 

25.       If any counterparty to an Executory Contract or Unexpired Lease
objects to the assumption and assignment of such Executory Contract or Unexpired
Lease for any reason (including with respect to adequate assurance of future
performance) other than the amount of the proposed Cure Costs (an “Assignment
Objection”), such counterparty must file and serve such Assignment Objection so
as to be received by the Notice Parties by no later than ten (10) days after
service of the Cure Notice or Supplemental Cure Notice, as applicable (the
“Assignment Objection Deadline”). The Court shall make any and all
determinations concerning an Assignment Objection, including adequate assurance
of future performance under the Buyer Assumed Agreements pursuant to sections
365(b) and (f)(2) of the Bankruptcy Code, at the Sale Hearing (or such later
hearing as may be requested by the Debtors).

 

26.       If no Assignment Objection is timely filed and served by the
Assignment Objection Deadline, the counterparty to an Executory Contract or
Unexpired Lease shall be deemed to have consented (including deemed consent
under section 365(c)(1) of the Bankruptcy Code), to the assumption, assignment
and sale of the Executory Contract or Unexpired Lease to the Successful Bidder
if such Executory Contract or Unexpired Lease is elected by the Successful
Bidder as a Buyer Assumed Agreement and shall be forever barred from asserting
any objection with regard to such assumption, assignment and sale; provided,
however, in the event that the Successful Bidder is not the Stalking Horse
Bidder, the non-debtor parties to the Executory Contracts and Unexpired Leases
to be assumed and assigned to such Successful Bidder shall have until 4:00 p.m.
on the date that is one (1) business day prior to the Sale Hearing to object to
the assumption, assignment and/or sale of their Executory Contracts and
Unexpired Leases to such Successful Bidder; provided further, however, any such
objection may relate solely to adequate assurance of future performance by such
Successful Bidder pursuant to sections 365(b) and (f)(2) of the Bankruptcy Code.

 

 -17- 

 

 

Page:18 Debtors:ACETO CORPORATION, et al. Case No.:Case No. 19-13448 (VFP)
Caption:ORDER (A) AUTHORIZING AND APPROVING BIDDING PROCEDURES IN CONNECTION
WITH THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING THE DEBTORS’ PHARMA
BUSINESS; (B) AUTHORIZING AND APPROVING BID PROTECTIONS; (C) APPROVING
PROCEDURES FOR THE ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND
UNEXPIRED LEASES; (D) SCHEDULING A SALE HEARING; (E) APPROVING THE FORM AND
MANNER OF NOTICE THEREOF; AND (F) GRANTING RELATED RELIEF

 

 

 

27.       The Stalking Horse Bidder may add or remove any Buyer Assumed
Agreement to be assumed by the Debtors and assigned to the Stalking Horse Bidder
at any time prior to five (5) days prior to the Sale Hearing in accordance with
the terms of the Stalking Horse Agreement.

 

28.       Pursuant to section 365(k) of the Bankruptcy Code, the Debtors and the
Debtors’ estates shall be relieved of all liability accruing or arising after
the assumption and assignment of the Buyer Assumed Agreements.

 

VII.Miscellaneous

 

29.       The Debtors are authorized to take such actions as may be necessary or
appropriate to implement and effectuate the terms of this Order, including, but
not limited to, expending such funds or taking such actions as may be necessary
or appropriate to comply with the Bidding Procedures.

 

 -18- 

 

 

Page:19 Debtors:ACETO CORPORATION, et al. Case No.:Case No. 19-13448 (VFP)
Caption:ORDER (A) AUTHORIZING AND APPROVING BIDDING PROCEDURES IN CONNECTION
WITH THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING THE DEBTORS’ PHARMA
BUSINESS; (B) AUTHORIZING AND APPROVING BID PROTECTIONS; (C) APPROVING
PROCEDURES FOR THE ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND
UNEXPIRED LEASES; (D) SCHEDULING A SALE HEARING; (E) APPROVING THE FORM AND
MANNER OF NOTICE THEREOF; AND (F) GRANTING RELATED RELIEF

 

 

 

30.       In the event of any inconsistency between the provisions of this Order
and any Exhibit referenced herein or in the Motion, the provisions of this Order
shall control.

 

31.       The Court shall retain exclusive jurisdiction to interpret, implement,
and enforce the terms and provisions of this Order, the Bidding Procedures, and
the Stalking Horse Agreement and decide any issues or disputes concerning this
Order, the Bidding Procedures and the Stalking Horse Agreement and the rights
and duties of the parties hereunder and/or thereunder, including the
interpretation of the terms, conditions, and provisions hereof and/or thereof.

 

32.       All persons and entities that participate in the bidding process or
the Auction shall be deemed to have knowingly and voluntarily submitted to the
exclusive jurisdiction of this Court with respect to all matters related to the
terms and conditions of the transfer of the Purchased Assets, the Auction, and
any Sale.

 

33.       Notwithstanding the possible applicability of Bankruptcy Rules 6004(h)
or 6006(d), or otherwise, the terms and conditions of this Order shall be
immediately effective and enforceable upon entry.

 

 -19- 

 

 

EXHIBIT D

 

FORM OF BILL OF SALE 

 

BILL OF SALE

 

[•], 2019

 

Pursuant to that certain Asset Purchase Agreement, dated as of March 7, 2019
(the “Purchase Agreement”), by and among Aceto Corporation, a New York
corporation (“Parent”), Rising Pharmaceuticals, Inc., a Delaware corporation
(“Rising”), and the wholly-owned subsidiaries of Rising, PACK Pharmaceuticals,
LLC, an Arizona limited liability company, Rising Health, LLC, a Delaware
limited liability company, and Acetris Health, LLC, a Delaware limited liability
company (collectively with Rising, “Sellers” and each, a “Seller”), each a
debtor and debtor in possession under Case No. 19-13448 pending in the United
States Bankruptcy Court for the District of New Jersey, and Shore Suven Pharma,
Inc., a Delaware corporation (“Buyer”), on the other hand, and for good and
valuable consideration, the receipt and sufficiency of which Sellers hereby
expressly acknowledge, each Seller hereby sells, transfers, assigns, conveys and
delivers to Buyer and Buyer’s successors and assigns, to have and to hold
forever, all of its right, title and interest in and to each of the Purchased
Assets (which shall not include, and Buyer is not acquiring from Sellers, any of
the Excluded Assets, and each Seller shall retain ownership of all right, title
and interest in and to its respective Excluded Assets), free and clear of all
Liens (other than Permitted Liens).

 

Except for terms specifically defined in this Bill of Sale, all capitalized
terms used herein shall have the meanings ascribed to such terms in the Purchase
Agreement.

 

Each Seller does hereby irrevocably constitute and appoint Buyer and Buyer’s
successors and assigns, such Person’s true and lawful attorney, with full power
of substitution, in its name or otherwise, and on behalf of such Person, or for
its own use, to claim, demand, collect and receive at any time and from time to
time any and all of the Purchased Assets, and to prosecute the same at Law or in
equity and, upon discharge thereof, to complete, execute and deliver any and all
necessary instruments of satisfaction and release.

 

From time to time after the date hereof, Sellers and Buyer agree to execute and
deliver, or cause to be executed and delivered, such instruments and documents
as may be reasonably requested in order to carry out the purposes of this Bill
of Sale, and to do all other things and execute and deliver all other
instruments and documents as may be required under the Purchase Agreement to
carry out the purposes of this Bill of Sale.

 

Notwithstanding anything to the contrary herein, each Seller is executing and
delivering this Bill of Sale in accordance with and subject to all of the terms
and provisions of the Purchase Agreement, including, without limitation, the
provisions of Section 3.23 thereof, and Buyer accepts this Bill of Sale on such
basis. To the extent of any conflict between the terms and conditions of this
Bill of Sale and the terms and conditions of the Purchase Agreement, the terms
and conditions of the Purchase Agreement shall govern, supersede and prevail.
This Bill of Sale shall not be amended, modified or supplemented except by a
written instrument signed by an authorized representative of each of the
Parties. This Bill of Sale shall be governed by, and construed in accordance
with, the laws of the State of New York applicable to contracts executed in and
to be performed in that State. This Bill of Sale is for the sole benefit of
Buyer and nothing herein, express or implied, is intended to or shall confer
upon any other person any legal or equitable benefit, claim, cause of action,
remedy or right of any kind. This Bill of Sale may be executed in counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument, and shall become effective
when one or more counterparts have been signed by each of the Parties hereto and
delivered (by telecopy, electronic delivery or otherwise) to the other Parties.
Signatures to this Bill of Sale transmitted by facsimile transmission, by
electronic mail in “portable document format” form, or by any other electronic
means intended to preserve the original graphic and pictorial appearance of a
document, will have the same effect as physical delivery of the paper document
bearing the original signature.

 

[SIGNATURE PAGE FOLLOWS]

 

   

 

 

IN WITNESS WHEREOF, Sellers have caused this Bill of Sale to be executed as of
the date first above written.

 

  SELLERS:       RISING PHARMACEUTICALS, INC.         By:       Name:     Title:
        PACK PHARMACEUTICALS, LLC         By:       Name:     Title:        
RISING HEALTH, LLC         By:       Name:     Title:         ACETRIS HEALTH,
LLC         By:                          Name:     Title:

 

[Signature Page to Bill of Sale]

 

   

 

 

EXHIBIT E

 

FORM OF SALE ORDER

 

UNITED STATES BANKRUPTCY COURT

DISTRICT OF NEW JERSEY

Caption in Compliance with D.N.J. LBR 9004-1

 

 

 

LOWENSTEIN SANDLER LLP

Kenneth A. Rosen, Esq. (krosen@lowenstein.com)

Michael S. Etkin, Esq. (metkin@lowenstein.com)

Paul Kizel, Esq. (pkizel@lowenstein.com)

Wojciech F. Jung, Esq. (wjung@lowenstein.com)

Philip J. Gross, Esq. (pgross@lowenstein.com)

One Lowenstein Drive

Roseland, New Jersey 07068

(973) 597-2500 (Telephone)

(973) 597-2400 (Facsimile)

 

Counsel to the Debtors and

Debtors-in-Possession

 

 

In re:

 

ACETO CORPORATION, et al.,1

 

Debtors.

 

 

Chapter 11

 

Case No. 19-13448 (VFP)

 

(Jointly Administered)

 

ORDER (A) AUTHORIZING AND APPROVING THE SALE OF SUBSTANTIALLY ALL ASSETS
COMPRISING THE DEBTORS’ PHARMA BUSINESS FREE AND CLEAR OF ALL CLAIMS, LIENS,
RIGHTS, INTERESTS, AND ENCUMBRANCES, (B) AUTHORIZING AND APPROVING THE
ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES
RELATED
THERETO, AND (C) GRANTING RELATED RELIEF

 

The relief set forth on the following pages, numbered two (2) through ________
(__), is hereby ORDERED.

 

 

1 The Debtors in these chapter 11 cases and the last four digits of each
Debtor’s taxpayer identification number are as follows: Aceto Corporation
(0520); Aceto Agricultural Chemicals Corporation (3948); Aceto Realty LLC
(7634); Rising Pharmaceuticals, Inc. (7959); Rising Health, LLC (1562); Acetris
Health, LLC (3236); PACK Pharmaceuticals, LLC (2525); Arsynco, Inc. (7392); and
Acci Realty Corp. (4433).

 

   

 

 

Page:

2 Debtors: ACETO CORPORATION, et al. Case No.: 19-13448 (VFP) Caption: ORDER (A)
AUTHORIZING AND APPROVING THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING THE
DEBTORS’ PHARMA BUSINESS FREE AND CLEAR OF ALL CLAIMS, LIENS, RIGHTS, INTERESTS,
AND ENCUMBRANCES, (B) AUTHORIZING AND APPROVING THE ASSUMPTION AND ASSIGNMENT OF
CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES RELATED THERETO, AND (C)
GRANTING RELATED RELIEF

 

 

 

Upon the motion (the “Sale Motion”), of the above-captioned debtors and debtors
in possession (collectively, the “Debtors”), seeking entry of an order (this
“Sale Order”), pursuant to sections 105, 363 and 365 of title 11 of the United
States Code (the “Bankruptcy Code”), Rules 2002, 6004 and 6006 of the Federal
Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), and Rules 6004-1, 6004-2
and 6004-3 of the Local Rules of the United States Bankruptcy Court for the
District of New Jersey (the “Local Rules”), (a) authorizing and approving the
Debtors’ entry into and performance under the terms and conditions of that
certain Asset Purchase Agreement, dated as of March [●], 2019 (together with the
schedules and/or exhibits thereto and all related documents, and as may be
amended, supplemented or otherwise modified from time to time, the “Purchase
Agreement”),2 substantially in the form attached hereto as Exhibit 1, by and
among Rising Pharmaceuticals, Inc., Pack Pharmaceuticals, LLC, Rising Health,
LLC, and Acetris Health, LLC (each a “Seller”, and together, the “Sellers”),
Aceto Corporation, as Parent, and Shore Suven Pharma, Inc. (the “Buyer”), and
all other Ancillary Documents (as defined in the Purchase Agreement) (together
with the Purchase Agreement, the “Transaction Documents”), (b) authorizing and
approving the sale (collectively, and including all actions taken or required to
be taken in connection with the implementation and consummation of the Purchase
Agreement, the “Sale”) of the Purchased Assets (as defined in the Purchase
Agreement) free and clear of all Liens, Claims and Interests (each as defined
herein) and the assumption of the Assumed Liabilities to the extent set forth in
the Purchase Agreement upon the closing of the Sale (the “Closing”), (c)
authorizing the assumption and assignment of certain of the Sellers’ (as
applicable) executory contracts and unexpired leases related thereto as set
forth on the applicable schedules of the Purchase Agreement (each, a “Buyer
Assumed Agreement,” and, collectively, the “Buyer Assumed Agreements”), upon the
Closing, subject to payment by the Buyer of all costs necessary to cure any
defaults arising under any Buyer Assumed Agreement to the extent required by
section 365(b) of the Bankruptcy Code (such amounts, the “Cure Costs”), and (d)
granting related relief, all as more fully set forth in the Sale Motion; and
this Court having entered the Order (A) Authorizing and Approving Bidding
Procedures in Connection with the Sale of Substantially All Assets Comprising
the Debtors’ Pharma Business; (B) Authorizing and Approving Bid Protections; (C)
Approving Procedures for the Assumption and Assignment of Certain Executory
Contracts and Unexpired Leases; (D) Scheduling a Sale Hearing; (E) Approving the
Form and Manner of Notice Thereof; and (F) Granting Related Relief [Docket No.
[l]] (the “Bidding Procedures Order”)[; and the Debtors having conducted an
auction (the “Auction”) for the Purchased Assets]; and the Debtors having
determined that the Buyer has submitted the highest or otherwise best bid for
the Purchased Assets and determined that the Buyer is the Successful Bidder [and
that [l] is the Back-Up Bidder] (as defined in the Bidding Procedures), in
accordance with the Bidding Procedures; and the Court having conducted a hearing
on the Sale Motion (the “Sale Hearing”), at which time all interested parties
were offered an opportunity to be heard with respect to the Sale Motion; and the
Court having reviewed and considered the Sale Motion, the Purchase Agreement,
and any and all objections to the Sale, the Purchase Agreement and the other
Transaction Documents filed in accordance with the Bidding Procedures Order; and
the Court having heard statements of counsel and the evidence presented in
support of the relief requested in the Sale Motion at the Sale Hearing [and in
the Declaration(s) of [l]]; and it appearing that due notice of the Sale Motion,
the Sale Hearing, the Purchase Agreement, and the Sale has been provided; and it
appearing that the relief requested in the Sale Motion is in the best interests
of the Debtors, their estates, their stakeholders, and all other parties in
interest; and it appearing that the Court has jurisdiction over this matter; and
it appearing that the legal and factual bases set forth in the Sale Motion and
at the Sale Hearing establish just cause for the relief granted herein; and
after due deliberation, it is hereby

 

 

2 Capitalized terms used but not otherwise defined herein have the meaning given
to such terms in the Purchase Agreement or Bidding Procedures Order (as defined
herein), as applicable.

 

 -2- 

 

 

Page:

3 Debtors: ACETO CORPORATION, et al. Case No.: 19-13448 (VFP) Caption: ORDER (A)
AUTHORIZING AND APPROVING THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING THE
DEBTORS’ PHARMA BUSINESS FREE AND CLEAR OF ALL CLAIMS, LIENS, RIGHTS, INTERESTS,
AND ENCUMBRANCES, (B) AUTHORIZING AND APPROVING THE ASSUMPTION AND ASSIGNMENT OF
CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES RELATED THERETO, AND (C)
GRANTING RELATED RELIEF

 

 

 

FOUND, CONCLUDED, AND DETERMINED THAT:

 

Jurisdiction, Venue, and Final Order

 

A.       This Court has jurisdiction to hear and determine the Sale Motion
pursuant to 28 U.S.C. §§ 157 and 1334. This is a core proceeding pursuant to 28
U.S.C. § 157(b). Venue is proper in this District and in this Court pursuant to
28 U.S.C. §§ 1408 and 1409.

 

B.       This Sale Order constitutes a final and appealable order within the
meaning of 28 U.S.C. § 158(a). Notwithstanding Bankruptcy Rules 6004(h) and
6006(d), and to any extent necessary under Bankruptcy Rule 9014 and Federal Rule
of Civil Procedure 54(b), as made applicable by Bankruptcy Rule 7054, the Court
expressly finds that there is no just reason for delay in the implementation of
this Sale Order and the terms and conditions of this Sale Order should be
immediately effective and enforceable upon its entry, and expressly directs
entry of judgment as set forth herein.

 

C.       The findings and conclusions set forth herein constitute the Court’s
findings of fact and conclusions of law pursuant to Bankruptcy Rule 7052 made
applicable to this proceeding pursuant to Bankruptcy Rule 9014. To the extent
any of the following findings of fact constitute conclusions of law, they are
adopted as such. To the extent any of the following conclusions of law
constitute findings of fact, they are adopted as such.

 

Notice of the Sale Motion, Auction, Sale Hearing, Purchase Agreement and Sale
and the Cure Costs

 

D.       As evidenced by declarations and/or affidavits of service and
publication previously filed with this Court, proper, timely, adequate, and
sufficient notice of the Sale Motion, the Auction, the Sale Hearing, the
Purchase Agreement, and the Sale has been provided in accordance with sections
102(1), 363, and 365 of the Bankruptcy Code and Bankruptcy Rules 2002, 6004,
6006, 9007 and 9014. The Debtors have complied with all obligations to provide
notice of the Sale Motion, the Auction, the Sale Hearing, the Purchase
Agreement, and the Sale as required by the Bidding Procedures Order. The
foregoing notice was good, sufficient, and appropriate under the circumstances,
and no other or further notice of the Sale Motion, the Auction, the Sale
Hearing, the Purchase Agreement, or the Sale is required. With respect to
entities whose identities are not reasonably ascertained by the Debtors,
publication of the Sale Notice (as defined in the Sale Motion) in [the New York
Times] on [l], 2019 was sufficient and reasonably calculated under the
circumstances to reach such entities.

 

 -3- 

 

 

Page:

4 Debtors: ACETO CORPORATION, et al. Case No.: 19-13448 (VFP) Caption: ORDER (A)
AUTHORIZING AND APPROVING THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING THE
DEBTORS’ PHARMA BUSINESS FREE AND CLEAR OF ALL CLAIMS, LIENS, RIGHTS, INTERESTS,
AND ENCUMBRANCES, (B) AUTHORIZING AND APPROVING THE ASSUMPTION AND ASSIGNMENT OF
CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES RELATED THERETO, AND (C)
GRANTING RELATED RELIEF

 

 

 

E.       A reasonable opportunity to object or to be heard regarding the relief
requested in the Sale Motion was afforded to all interested persons and
entities.

 

F.       In accordance with the Bidding Procedures Order, the Debtors have
served a notice of their intent to assume and assign the Buyer Assumed
Agreements and of the Cure Costs upon each counterparty to a Buyer Assumed
Agreement. The service and provision of such notice was good, sufficient, and
appropriate under the circumstances and no further notice need be given in
respect of assumption and assignment of the Buyer Assumed Agreements or
establishing a Cure Cost for the respective Buyer Assumed Agreements.
Counterparties to the Buyer Assumed Agreements have had an adequate opportunity
to object to assumption and assignment of the applicable Buyer Assumed
Agreements and the Cure Costs set forth in the notice (including objections
related to the adequate assurance of future performance and objections based on
whether applicable law excuses the counterparty from accepting performance by,
or rendering performance to, the Buyer for purposes of section 365(c)(1) of the
Bankruptcy Code). All objections, responses, or requests for adequate assurance,
if any, have been resolved, overruled, or denied, as applicable.

 

 -4- 

 

 

Page:

5 Debtors: ACETO CORPORATION, et al. Case No.: 19-13448 (VFP) Caption: ORDER (A)
AUTHORIZING AND APPROVING THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING THE
DEBTORS’ PHARMA BUSINESS FREE AND CLEAR OF ALL CLAIMS, LIENS, RIGHTS, INTERESTS,
AND ENCUMBRANCES, (B) AUTHORIZING AND APPROVING THE ASSUMPTION AND ASSIGNMENT OF
CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES RELATED THERETO, AND (C)
GRANTING RELATED RELIEF

 

 

 

Highest and Best Offer

 

G.       As demonstrated by the [Declaration(s) of [l], the] evidence proffered
or adduced at the Sale Hearing, and the representations of counsel made on the
record at the Sale Hearing, the Debtors conducted a sale process in accordance
with, and have, along with the Buyer, complied in all material respects with,
the Bidding Procedures Order and afforded a full, fair, and reasonable
opportunity for any interested party to make a higher or otherwise better offer
to purchase the Purchased Assets and assume the Assumed Liabilities.

 

H.       (i) The Debtors and their advisors engaged in a robust and extensive
marketing and sale process, both prior to the commencement of these Chapter 11
Cases and through the post-petition sale process in accordance with the Bidding
Procedures Order and the sound exercise of the Debtors’ business judgment; (ii)
the Debtors conducted a fair and open sale process; (iii) the sale process, the
Bidding Procedures, and the Auction were non-collusive, duly noticed, and
provided a full, fair, reasonable, and adequate opportunity for any entity that
either expressed an interest in acquiring the Purchased Assets, or who the
Debtors believed may have had an interest in acquiring the Purchased Assets, to
make an offer to purchase the Debtors’ assets, including, without limitation the
Purchased Assets; (iv) the Debtors and the Buyer have negotiated and undertaken
their roles leading to the entry into the Purchase Agreement in a diligent,
non-collusive, fair, reasonable, and good faith manner; and (v) the sale process
conducted by the Debtors pursuant to the Bidding Procedures Order and the
Bidding Procedures resulted in the highest or otherwise best value for the
Purchased Assets for the Debtors and their estates, was in the best interests of
the Debtors, their creditors, and all parties in interest. There is no legal or
equitable reason to delay consummation of the Purchase Agreement and the
transactions contemplated therein.

 

 -5- 

 

 

Page:

6 Debtors: ACETO CORPORATION, et al. Case No.: 19-13448 (VFP) Caption: ORDER (A)
AUTHORIZING AND APPROVING THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING THE
DEBTORS’ PHARMA BUSINESS FREE AND CLEAR OF ALL CLAIMS, LIENS, RIGHTS, INTERESTS,
AND ENCUMBRANCES, (B) AUTHORIZING AND APPROVING THE ASSUMPTION AND ASSIGNMENT OF
CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES RELATED THERETO, AND (C)
GRANTING RELATED RELIEF

 

 

 

I.       [The Debtors have also determined, in a valid and sound exercise of
their business judgment and in consultation with their advisors and the
Consultation Parties (as defined in the Bidding Procedures), that the next
highest or otherwise best Qualified Bid (as defined in the Bidding Procedures)
(the “Designated Back-Up Bid”) for the Purchased Assets was that of [l] (the
“Designated Back-Up Bidder”)].

 

J.       Approval of the Sale Motion and the Purchase Agreement, and the
consummation of the Sale contemplated thereby, is in the best interests of the
Debtors, their respective creditors, estates, and other parties in interest. The
Debtors have demonstrated good, sufficient, and sound business reasons and
justifications for entering into the Sale and the performance of their
obligations under the Purchase Agreement.

 

K.       The consummation of the Sale outside a plan of reorganization pursuant
to the Purchase Agreement neither impermissibly restructures the rights of the
Debtors’ creditors nor impermissibly dictates the terms of a plan of
reorganization or liquidation for the Debtors. The Sale does not constitute a
sub rosa chapter 11 plan.

 

 -6- 

 

 

Page:

7 Debtors: ACETO CORPORATION, et al. Case No.: 19-13448 (VFP) Caption: ORDER (A)
AUTHORIZING AND APPROVING THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING THE
DEBTORS’ PHARMA BUSINESS FREE AND CLEAR OF ALL CLAIMS, LIENS, RIGHTS, INTERESTS,
AND ENCUMBRANCES, (B) AUTHORIZING AND APPROVING THE ASSUMPTION AND ASSIGNMENT OF
CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES RELATED THERETO, AND (C)
GRANTING RELATED RELIEF

 

 

 

L.       Entry of an order approving the Purchase Agreement and all the
provisions thereof is a necessary condition precedent to Buyer’s consummation of
the Sale, as set forth in the Purchase Agreement.

Good Faith of Buyer

 

M.       The consideration to be paid by the Buyer under the Purchase Agreement
was negotiated at arm’s-length, in good faith and without collusion pursuant to
section 363(m) of the Bankruptcy Code and constitutes reasonably equivalent
value and fair and adequate consideration for the Purchased Assets.
Specifically: (i) the Buyer recognized that the Debtors were free to deal with
any other party interested in purchasing the Purchased Assets; (ii) the Buyer
complied in all respects with the applicable provisions of the Bidding
Procedures Order in negotiating and entering into the Purchase Agreement and the
other Transaction Documents, and the Purchase Agreement, the other Transaction
Documents and the transactions described therein comply with the Bidding
Procedures Order; (iii) the Buyer agreed to subject its bid to the competitive
bid procedures set forth in the Bidding Procedures Order; (iv) all payments made
or to be made by the Buyer in connection with the Sale have been disclosed in
the Purchase Agreement; (v) except as set for in the [Declaration(s) of [l],
there is no common identity of directors, officers or controlling stockholders
exists among the Buyer and the Debtors and Buyer is not an “insider” or
“affiliate” of the Debtors, as those terms are defined in the Bankruptcy Code;
(vi) the negotiation and execution of the Purchase Agreement and the other
Transaction Documents were at arm’s-length by parties not affiliated with one
another and via the Debtor’s independent committee and in good faith, and at all
times each of the Buyer and the Debtors were represented by competent counsel of
their choosing; and (vii) the Buyer has not acted in a collusive manner with any
person. The Buyer and all affiliates thereof has at all times acted in good
faith within the meaning of section 363(m) of the Bankruptcy Code in negotiating
the transactions contemplated by the Purchase Agreement and the other
Transaction Documents, in submitting the Stalking Horse Bid (as defined in the
Bidding Procedures Order), and in bidding at the auction and presenting the
Purchase Agreement and the other Transaction Documents to the Court for
approval. The Buyer and all affiliates thereof will be acting in good faith
within the meaning of section 363(m) of the Bankruptcy Code in closing the
transactions contemplated by the Purchase Agreement and the other Transaction
Documents. The terms and conditions set forth in the Purchase Agreement are fair
and reasonable under the circumstances and were not entered into for the purpose
of, nor do they have the effect of, hindering, delaying, or defrauding the
Debtors or their creditors under any applicable laws.

 

 -7- 

 

 

Page:

8 Debtors: ACETO CORPORATION, et al. Case No.: 19-13448 (VFP) Caption: ORDER (A)
AUTHORIZING AND APPROVING THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING THE
DEBTORS’ PHARMA BUSINESS FREE AND CLEAR OF ALL CLAIMS, LIENS, RIGHTS, INTERESTS,
AND ENCUMBRANCES, (B) AUTHORIZING AND APPROVING THE ASSUMPTION AND ASSIGNMENT OF
CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES RELATED THERETO, AND (C)
GRANTING RELATED RELIEF

 

 

 

N.       The Debtors and the Buyer, and each of their respective management,
boards of directors, members, officers, directors, employees, agents, and
representatives, have acted in good faith in connection with negotiations and
entry into the Purchase Agreement. The Purchase Agreement and the other
Transaction Documents, and each of the transactions contemplated therein, were
negotiated, proposed, and entered into by the Debtors and the Buyer in good
faith, without collusion or fraud, and from arm’s-length bargaining positions.
The Buyer is a “good faith purchaser” within the meaning of section 363(m) of
the Bankruptcy Code, and, as such, is entitled to all the protections afforded
thereby.

 

No Fraudulent Transfer

 

O.       The consideration provided by the Buyer pursuant to the Purchase
Agreement for its purchase of the Purchased Assets and the assumption of the
Assumed Liabilities constitutes reasonably equivalent value and fair
consideration under the Bankruptcy Code, the Uniform Fraudulent Conveyance Act,
the Uniform Fraudulent Transfer Act, and under the laws of the United States,
any state, territory, possession, or the District of Columbia.

 

P.       Neither the Buyer nor its past, present and future subsidiaries,
parents, divisions, affiliates, agents, representatives, insurers, attorneys,
successors and assigns, nor any of its nor their respective directors, managers,
officers, employees, shareholders, members, agents, representatives, attorneys,
contractors, subcontractors, independent contractors, owners, insurance
companies or partners (each, a “Buyer Party”) is a continuation of the Debtors
or their respective estates and no Buyer Party is holding itself out to the
public as a continuation of the Debtors or their respective estates and the Sale
does not amount to a consolidation, merger, or de facto merger of the Buyer (or
any other Buyer Party) and the Debtors.

 

 -8- 

 

 

Page:

9 Debtors: ACETO CORPORATION, et al. Case No.: 19-13448 (VFP) Caption: ORDER (A)
AUTHORIZING AND APPROVING THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING THE
DEBTORS’ PHARMA BUSINESS FREE AND CLEAR OF ALL CLAIMS, LIENS, RIGHTS, INTERESTS,
AND ENCUMBRANCES, (B) AUTHORIZING AND APPROVING THE ASSUMPTION AND ASSIGNMENT OF
CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES RELATED THERETO, AND (C)
GRANTING RELATED RELIEF

 

 

 

Validity of Transfer

 

Q.       Parent’s and each Seller’s board of directors has authorized the
execution and delivery of the Purchase Agreement and the Sale of the Purchased
Assets to the Buyer. The Debtors (i) have full corporate power and authority to
execute and deliver the Purchase Agreement and all other documents contemplated
thereby, as applicable, (ii) have all of the power and authority necessary to
consummate the Sale, and (iii) have taken all action necessary to authorize and
approve the Purchase Agreement and to consummate the Sale, and no further
consents or approvals, other than those expressly provided for in the Purchase
Agreement, are required for the Debtors to consummate the transactions
contemplated by the Purchase Agreement, except as otherwise set forth in the
Purchase Agreement. The Purchased Assets constitute property of the Debtors’
estates within the meaning of section 541(a) of the Bankruptcy Code and title
thereto is presently vested in the Debtors’ estates.

 

Section 363(f) Is Satisfied

 

R.       The Sale of the Purchased Assets to the Buyer and the assumption and
assignment to the Buyer of the Buyer Assumed Agreements under the terms of the
Purchase Agreement meets the applicable provisions of section 363(f) of the
Bankruptcy Code such that the Sale of the Purchased Assets will be free and
clear of all Liens, Claims and Interests, and will not subject any Buyer Party
to any liability for any Liens, Claims or Interests whatsoever (including,
without limitation, under any theory of equitable law, antitrust, or successor
or transferee liability), except as expressly provided in the Purchase
Agreement. All holders of Liens, Claims or Interests who did not object, or
withdrew their objections to the Sale, are deemed to have consented to the Sale
pursuant to section 363(f)(2) of the Bankruptcy Code, and all holders of Liens,
Claims or Interests are adequately protected—thus satisfying section 363(e) of
the Bankruptcy Code—by having their Liens, Claims or Interests, if any, attach
to the proceeds of the Sale ultimately attributable to the property against or
in which they assert Liens, Claims or Interests, in the same order of priority
and with the same validity, force, and effect that such holder had prior to the
Sale, subject to any rights, claims, and defenses of the Debtors or their
estates, as applicable. Those holders of Liens, Claims or Interests who did
object and that have an interest in the Purchased Assets fall within one or more
of the other subsections of section 363(f) of the Bankruptcy Code.

 

 -9- 

 

 

Page:

10 Debtors: ACETO CORPORATION, et al. Case No.: 19-13448 (VFP) Caption: ORDER
(A) AUTHORIZING AND APPROVING THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING
THE DEBTORS’ PHARMA BUSINESS FREE AND CLEAR OF ALL CLAIMS, LIENS, RIGHTS,
INTERESTS, AND ENCUMBRANCES, (B) AUTHORIZING AND APPROVING THE ASSUMPTION AND
ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES RELATED THERETO,
AND (C) GRANTING RELATED RELIEF

 

 

 

S.       Except for the Assumed Liabilities and other obligations of the Buyer
to the extent set forth in the Purchase Agreement, the transfer of the Purchased
Assets to the Buyer shall be a legal, valid and effective transfer of the
Purchased Assets and shall vest the Buyer at Closing with all right, title and
interest of the Debtors in and to the Purchased Assets, free and clear of all
claims (as defined in Section 101(5) of the Bankruptcy Code, “Claims”), liens
(as defined in Section 101(37) of the Bankruptcy Code, “Liens”), encumbrances
and all other interests (collectively including each of the foregoing,
“Interests”), including, but not limited to: (1) those that purport to give to
any party a right or option to effect any forfeiture, modification, right of
first refusal or termination of the Debtors’ interest in the Purchased Assets,
or any similar rights, including rights under section 365(h) of the Bankruptcy
Code; (2) those relating to taxes arising under or out of in connection with, or
in any way relating to the operation of the Purchased Assets prior to the
Closing; and (3) (a) those arising under all mortgages, deeds of trust, security
interests, conditional sale or other title retention agreements, pledges, liens,
judgments, demands, rights of setoff or recoupment, encumbrances, rights of
first refusal or charges of any kind or nature, if any, including, but not
limited to, any restriction on the use, voting, transfer, receipt of income or
other exercise of any attributes of ownership, and (b) all debts arising in any
way in connection with any agreements, acts or failures to act of any of the
Debtors or any of the Debtors’ predecessors or affiliates, Claims, obligations,
liabilities, rights of set off or recoupment, demands, guaranties, options,
rights, contractual or other commitments, restrictions, interests and matters of
any kind and nature, whether known or unknown, contingent or otherwise, whether
arising prior to or subsequent to the commencement of this bankruptcy case, and
whether imposed by agreement, understanding, law, equity or otherwise,
including, but not limited to, Claims otherwise arising under doctrines of
successor liability to the greatest extent permitted by applicable law.

 

 -10- 

 

 

Page:

11 Debtors: ACETO CORPORATION, et al. Case No.: 19-13448 (VFP) Caption: ORDER
(A) AUTHORIZING AND APPROVING THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING
THE DEBTORS’ PHARMA BUSINESS FREE AND CLEAR OF ALL CLAIMS, LIENS, RIGHTS,
INTERESTS, AND ENCUMBRANCES, (B) AUTHORIZING AND APPROVING THE ASSUMPTION AND
ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES RELATED THERETO,
AND (C) GRANTING RELATED RELIEF

 

 

 

T.       The Buyer would not have entered into the Purchase Agreement and would
not consummate the transactions, thus adversely purchased affecting the Debtors,
their estates and their creditors and other stakeholders, if the transfer of the
Purchase Assets to the Buyer and the assumption of the Assumed Liabilities by
Buyer were not, except as otherwise expressly provided in the Purchase Agreement
with respect to the Assumed Liabilities, free and clear of all Interests of any
kind or nature whatsoever, or if the Buyer would, or in the future could, be
liable for any of such Interests including, but not limited to: (1) any
employment or labor agreements; (2) any pension, welfare, compensation or other
employee benefit plans, agreements, practices and programs, including, without
limitation, any pension plan of the Debtors; (3) any other employee, worker’s
compensation, occupational disease or unemployment or temporary disability
related Claim, including, without limitation, Claims that might otherwise arise
under or pursuant to: (a) the Employee Retirement, Income, Security Act of 1974,
as amended. (b) the Fair Labor Standards Act, (c) Title VII of the Civil Rights
Act of 1964, (d) the Federal Rehabilitation Act of 1973, the National Labor
Relations Act, (f) the Worker Adjustment and Retraining Act of 1988, (g) the Age
Discrimination and Employee Act of 1967, (h) the Consolidated Omnibus Budget
Reconciliation Act of 1985, (i) the Jones Act; (4) any products liability,
personal injury or similar Claims, whether pursuant to any state or federal laws
or otherwise, including, without limitation, asbestos-related Claims; (5)
environmental Claims or Liens arising from conditions or emissions first
existing on or prior to the Closing (including, without limitation, the presence
of hazardous, toxic, polluting or contaminating substances or waste) that may be
asserted on any basis, including, without limitation, under the Comprehensive
Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601, et
seq., or similar state or local statutes or ordinances; (6) any bulk sales or
similar law; (7) any tax statutes or ordinances, including, without limitation,
the Internal Revenue Code of 1986, as amended; and (8) any theories of successor
liability.

 

 -11- 

 

 

Page:

12 Debtors: ACETO CORPORATION, et al. Case No.: 19-13448 (VFP) Caption: ORDER
(A) AUTHORIZING AND APPROVING THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING
THE DEBTORS’ PHARMA BUSINESS FREE AND CLEAR OF ALL CLAIMS, LIENS, RIGHTS,
INTERESTS, AND ENCUMBRANCES, (B) AUTHORIZING AND APPROVING THE ASSUMPTION AND
ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES RELATED THERETO,
AND (C) GRANTING RELATED RELIEF

 

 

 

Assumption and Assignment of the Buyer Assumed Agreements

 

U.       The assumption and assignment of the Buyer Assumed Agreements pursuant
to the terms of this Sale Order are integral to the Purchase Agreement, are in
the best interests of the Debtors and their respective estates, creditors, and
other parties in interest, and represent the reasonable exercise of sound and
prudent business judgment by the Debtors.

 

V.       The Debtors have met all requirements of section 365(b) of the
Bankruptcy Code for each of the Buyer Assumed Agreements. As provided for in the
Purchase Agreement, the Buyer and/or the Debtors have (i) cured and/or provided
adequate assurance of cure of any default existing prior to the Closing under
all of the Buyer Assumed Agreements, within the meaning of section 365(b)(1)(A)
of the Bankruptcy Code, (ii) provided compensation or adequate assurance of
compensation to any counterparty for actual pecuniary loss to such party
resulting from a default prior to the Closing under any of the Buyer Assumed
Agreements within the meaning of section 365(b)(1)(B) of the Bankruptcy Code,
and (iii) provided adequate assurance of future performance within the meaning
of section 365(b)(1)(C) of the Bankruptcy Code. The Buyer has provided adequate
assurance of future performance within the meaning of sections 365(b)(1)(C) and
365(f)(2)(B) and in accordance with the Bidding Procedures to the extent that
any such assurance is required and not waived by the counterparties to such
Buyer Assumed Agreements.

 

 -12- 

 

 

Page:

13 Debtors: ACETO CORPORATION, et al. Case No.: 19-13448 (VFP) Caption: ORDER
(A) AUTHORIZING AND APPROVING THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING
THE DEBTORS’ PHARMA BUSINESS FREE AND CLEAR OF ALL CLAIMS, LIENS, RIGHTS,
INTERESTS, AND ENCUMBRANCES, (B) AUTHORIZING AND APPROVING THE ASSUMPTION AND
ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES RELATED THERETO,
AND (C) GRANTING RELATED RELIEF

 

 

 

W.       At any time prior to the Closing and prior to the rejection of an
executory contract or unexpired lease, the Debtors shall have the right, upon
request of the Buyer and in accordance with the Bidding Procedures Order, to
serve a Supplemental Cure Notice upon any non-Debtor counterparty thereto
indicating the Debtors’ intent to assume and assign such executory contract or
unexpired lease. The objection deadline for all Buyer Assumed Agreements, other
than those subject to a Supplemental Cure Notice, lapsed on [l], 2019.
Objections, if any, to the proposed assumption and assignment or the Cure Cost
proposed in any Supplemental Cure Notice with respect thereto, must (i) be in
writing, (ii) comply with the applicable provisions of the Bankruptcy Rules and
the Local Rules, (iii) state with specificity the nature of the objection and,
if the objection pertains to the proposed Cure Cost, the correct Cure Cost
alleged by the objecting counterparty, together with any applicable and
appropriate documentation in support thereof, and (iv) be filed with the Court
and served upon counsel to the Debtors and counsel to the Buyer so as to be
actually received on or before the deadline set forth in the applicable
Supplemental Cure Notice, which shall be no earlier than seven (7) calendar days
after service thereof. If the parties cannot agree on a resolution of any such
objection, the Debtors will seek an expedited hearing before the Court to
determine the Cure Cost or other matter in dispute and approve the assumption
and assignment of such executory contract or unexpired lease to Buyer. If no
objection is filed prior to the applicable objection deadline, then the
counterparties will be deemed to have consented (including consent under Section
365(c)(1) of the Bankruptcy Code) to the assumption and assignment to Buyer and
the Cure Cost, and such assumption and assignment to Buyer and the Cure Cost
shall be deemed approved by this Sale Order without further order of this Court.

 

 -13- 

 

 

Page:

14 Debtors: ACETO CORPORATION, et al. Case No.: 19-13448 (VFP) Caption: ORDER
(A) AUTHORIZING AND APPROVING THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING
THE DEBTORS’ PHARMA BUSINESS FREE AND CLEAR OF ALL CLAIMS, LIENS, RIGHTS,
INTERESTS, AND ENCUMBRANCES, (B) AUTHORIZING AND APPROVING THE ASSUMPTION AND
ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES RELATED THERETO,
AND (C) GRANTING RELATED RELIEF

 

 

 

X.       The (i) transfer of the Purchased Assets to the Buyer and (ii)
assignment to the Buyer of the Buyer Assumed Agreements, will not subject the
Buyer to any liability whatsoever that arises prior to the Closing or by reason
of such transfer under the laws of the United States, any state, territory, or
possession thereof, or the District of Columbia, based, in whole or in part,
directly or indirectly, on any theory of law or equity, including, without
limitation, any theory of equitable law, any theory of antitrust, successor,
transferee, derivative, or vicarious liability or any similar theory and/or
applicable state or federal law or otherwise.

 

Prompt Consummation

 

Y.       Based on the record of the Sale Hearing, and for the reasons stated on
the record at the Sale Hearing, the sale of the Purchased Assets must be
approved and consummated promptly to preserve the value of the Purchased Assets.
Time, therefore, is of the essence in effectuating the Purchase Agreement. As
such, the Debtors and the Buyer intend to close the sale of the Purchased Assets
as soon as reasonably practicable. The Debtors have demonstrated compelling
circumstances and a good, sufficient, and sound business purpose and
justification for the immediate approval and consummation of the Purchase
Agreement. Accordingly, there is sufficient cause to waive the stay provided in
Bankruptcy Rules 6004(h) and 6006(d).

 

 -14- 

 

 

Page:

15 Debtors: ACETO CORPORATION, et al. Case No.: 19-13448 (VFP) Caption: ORDER
(A) AUTHORIZING AND APPROVING THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING
THE DEBTORS’ PHARMA BUSINESS FREE AND CLEAR OF ALL CLAIMS, LIENS, RIGHTS,
INTERESTS, AND ENCUMBRANCES, (B) AUTHORIZING AND APPROVING THE ASSUMPTION AND
ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES RELATED THERETO,
AND (C) GRANTING RELATED RELIEF

 

 

 

NOW, THEREFORE, IT IS ORDERED, ADJUDGED, AND DECREED THAT:

 

General Provisions

 

1.       The Sale Motion is GRANTED to the extent set forth herein.

 

2.       All objections to or reservation of rights with respect to the Sale
Motion or the relief requested therein that have not been withdrawn or resolved
as stated on the record of the proceedings are overruled. All persons and
entities who did not object or withdraw their objections to the Sale Motion are
deemed to have consented pursuant to section 363(f)(2) of the Bankruptcy Code.

 

3.       The Purchase Agreement and the other Transaction Documents, and all
terms and conditions thereof, are hereby approved.

 

4.       [The Designated Back-Up Bidder is hereby approved as the Back-Up Bidder
(as defined in the Bidding Procedures), and the Designated Back-Up Bid is hereby
approved and authorized as the Back-Up Bid (as defined in the Bidding
Procedures) in accordance with the Bidding Procedures. To the extent necessary,
the terms and conditions of the Back-Up Bid will be approved pursuant to a
separate sale order to be submitted at a later date consistent with the terms of
the Back-Up Bid.]

 

 -15- 

 

 

Page:

16 Debtors: ACETO CORPORATION, et al. Case No.: 19-13448 (VFP) Caption: ORDER
(A) AUTHORIZING AND APPROVING THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING
THE DEBTORS’ PHARMA BUSINESS FREE AND CLEAR OF ALL CLAIMS, LIENS, RIGHTS,
INTERESTS, AND ENCUMBRANCES, (B) AUTHORIZING AND APPROVING THE ASSUMPTION AND
ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES RELATED THERETO,
AND (C) GRANTING RELATED RELIEF

 

 

 

Transfer of the Purchased Assets as set forth in the Purchase Agreement

 

5.       The Debtors are authorized and directed to (a) take any and all actions
necessary or appropriate to perform, consummate, implement, and close the Sale
in accordance with the terms and conditions set forth in the Transaction
Documents and this Sale Order, (b) assume and assign any and all Buyer Assumed
Agreements, and (c) take all further actions and execute and deliver the
Transaction Documents and any and all additional instruments and documents that
may be necessary or appropriate to implement the Purchase Agreement and the
other Transaction Documents and consummate the Sale in accordance with the terms
thereof, all without further order of the Court.

 

6.       The Buyer is not acquiring any of the Excluded Assets or assuming any
of the Excluded Liabilities (as defined in the Purchase Agreement).

 

7.       All persons and entities are prohibited and enjoined from taking any
action to adversely affect or interfere with, or which would be inconsistent
with, the ability of the Debtors to transfer the Purchased Assets to the Buyer
in accordance with the Purchase Agreement, the other Transaction Documents and
this Sale Order.

 

 -16- 

 

 

Page:

17 Debtors: ACETO CORPORATION, et al. Case No.: 19-13448 (VFP) Caption: ORDER
(A) AUTHORIZING AND APPROVING THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING
THE DEBTORS’ PHARMA BUSINESS FREE AND CLEAR OF ALL CLAIMS, LIENS, RIGHTS,
INTERESTS, AND ENCUMBRANCES, (B) AUTHORIZING AND APPROVING THE ASSUMPTION AND
ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES RELATED THERETO,
AND (C) GRANTING RELATED RELIEF

 

 

 

8.       At Closing, all of the Debtors’ right, title, and interest in and to,
and possession of, the Purchased Assets shall be immediately vested in the Buyer
pursuant to sections 105(a), 363(b), 363(f), and 365 of the Bankruptcy Code.
Such transfer shall constitute a legal, valid, enforceable, and effective
transfer of the Purchased Assets. All persons or entities, presently or at or
after the Closing, in possession of some or all of the Purchased Assets, are
directed to surrender possession of any and all portions of the Purchased Assets
to the Buyer on the Closing Date or at such time thereafter as the Buyer may
request.

 

9.       This Sale Order (a) shall be effective as a determination that, as of
the Closing, (i) the Purchased Assets shall have been transferred to the Buyer
free and clear of all Liens, Claims and Interests (including but not limited to
those described in Findings S and T hereof), except to the extent set forth in
the Purchase Agreement, and (ii) the conveyances described herein have been
effected, and (b) is and shall be binding upon and govern the acts of all
entities, including, without limitation, all filing agents, filing officers,
title agents, title companies, recorders of mortgages, recorders of deeds,
registrars of deeds, registrars of patents, trademarks, or other intellectual
property, administrative agencies, governmental departments, secretaries of
state, federal and local officials, and all other persons and entities who may
be required by operation of law, the duties of their office, or contract, to
accept, file, register, or otherwise record or release any documents or
instruments, or who may be required to report or insure any title or state of
title; and each of the foregoing persons and entities is hereby directed to
accept for filing any and all of the documents and instruments necessary and
appropriate to consummate the transactions contemplated by the Purchase
Agreement and the other Transaction Documents.

 

 -17- 

 

 

Page:

18 Debtors: ACETO CORPORATION, et al. Case No.: 19-13448 (VFP) Caption: ORDER
(A) AUTHORIZING AND APPROVING THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING
THE DEBTORS’ PHARMA BUSINESS FREE AND CLEAR OF ALL CLAIMS, LIENS, RIGHTS,
INTERESTS, AND ENCUMBRANCES, (B) AUTHORIZING AND APPROVING THE ASSUMPTION AND
ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES RELATED THERETO,
AND (C) GRANTING RELATED RELIEF

 

 

 

10.       All Liens, Claims and Interests with respect to the Purchased Assets
shall attach to the proceeds of the Sale ultimately attributable to the property
against which such Liens, Claims and Interests applied or other specifically
dedicated funds, in the same order of priority and with the same validity,
force, and effect that such Liens, Claims and Interests applied prior to the
Sale, subject to any rights, claims, and defenses of the Debtors or their
estates, as applicable, or as otherwise provided herein.

 

11.       Except as expressly permitted otherwise by this Sale Order, all
persons and entities, including, but not limited to, all debt security holders;
equity security holders; governmental, tax and regulatory authorities; lenders;
trade creditors; and other creditors holding Interests of any kind or nature
whatsoever against or in the Debtors or the Purchased Assets (whether legal or
equitable, secured or unsecured, matured or unmatured, contingent or
non-contingent, senior or subordinated), arising under or out of, in connection
with or in any way relating to the Debtors, the Purchased Assets, the operation
of the Purchased Assets prior to the Closing are forever barred, estopped and
permanently enjoined from asserting against the Buyer, its successors or
assigns, their property or the Purchased Assets such persons’ or entities’
Interests (including without limitation, any right of set-off or recoupment).

 

 -18- 

 

 

Page:

19 Debtors: ACETO CORPORATION, et al. Case No.: 19-13448 (VFP) Caption: ORDER
(A) AUTHORIZING AND APPROVING THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING
THE DEBTORS’ PHARMA BUSINESS FREE AND CLEAR OF ALL CLAIMS, LIENS, RIGHTS,
INTERESTS, AND ENCUMBRANCES, (B) AUTHORIZING AND APPROVING THE ASSUMPTION AND
ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES RELATED THERETO,
AND (C) GRANTING RELATED RELIEF

 

 

 

12.       If any person or entity that has filed financing statements,
mortgages, mechanic’s claims, lis pendens, or other documents or agreements
evidencing claims against the Debtors or in the Purchased Assets shall not have
delivered to the Debtors prior to the Closing of the Sale, in proper form for
filing and executed by the appropriate parties, termination statements,
instruments of satisfaction, and/or releases of all Liens, Claims and Interests
that the person or entity has with respect to the Debtors or the Purchased
Assets or otherwise, then only with regard to the Purchased Assets that are
purchased by the Buyer pursuant to the Purchase Agreement and this Sale Order,
(a) the Debtors are hereby authorized and directed to execute and file such
statements, instruments, releases, and other documents on behalf of the person
or entity with respect to the Purchased Assets, (b) the Buyer is hereby
authorized to file, register, or otherwise record a certified copy of this Sale
Order, which, once filed, registered, or otherwise recorded, shall constitute
conclusive evidence of the release of all Liens, Claims, and Interests against
each Buyer Party and the Purchased Assets, and (c) upon consummation of the
Sale, the Buyer may seek in this Court or any other court to compel appropriate
parties to execute termination statements, instruments of satisfaction, and
releases of all Liens, Claims and Interests that are extinguished or otherwise
released pursuant to this Sale Order under section 363 of the Bankruptcy Code,
and any other provisions of the Bankruptcy Code, with respect to the Purchased
Assets. This Sale Order is deemed to be in recordable form sufficient to be
placed in the filing or recording system of each and every federal, state, or
local government agency, department, or office. Notwithstanding the foregoing,
the provisions of this Sale Order authorizing the Sale and assignment of the
Purchased Assets free and clear of Liens, Claims and Interests shall be
self-executing and neither the Debtors nor the Buyer shall be required to
execute or file releases, termination statements, assignments, consents, or
other instruments to effectuate, consummate, and implement the provisions of
this Sale Order.

 

 -19- 

 

 

Page:

20 Debtors: ACETO CORPORATION, et al. Case No.: 19-13448 (VFP) Caption: ORDER
(A) AUTHORIZING AND APPROVING THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING
THE DEBTORS’ PHARMA BUSINESS FREE AND CLEAR OF ALL CLAIMS, LIENS, RIGHTS,
INTERESTS, AND ENCUMBRANCES, (B) AUTHORIZING AND APPROVING THE ASSUMPTION AND
ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES RELATED THERETO,
AND (C) GRANTING RELATED RELIEF

 

 

 

No Successor or Transferee Liability

 

13.       No Buyer Party shall be deemed, as a result of any action taken in
connection with the Purchase Agreement, the consummation of the Sale
contemplated by the Purchase Agreement, or the transfer, operation, or use of
the Purchased Assets to (a) be a legal successor, or otherwise be deemed a
successor to the Debtors (other than, for the Buyer, with respect to any Assumed
Liabilities), (b) have, de facto or otherwise, merged with or into the Debtors,
or (c) be an alter ego or a mere continuation or substantial continuation of the
Debtors or the enterprise of the Debtors including, without limitation, within
the meaning of any foreign, federal, state, or local revenue law, pension law,
the Employee Retirement Income Security Act of 1974 (“ERISA”), tax law, labor
law, products liability law, employment law, environmental law, or other law,
rule, or regulation (including, without limitation, filing requirements under
any such laws, rules or regulations).

 

 -20- 

 

 

Page:

21 Debtors: ACETO CORPORATION, et al. Case No.: 19-13448 (VFP) Caption: ORDER
(A) AUTHORIZING AND APPROVING THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING
THE DEBTORS’ PHARMA BUSINESS FREE AND CLEAR OF ALL CLAIMS, LIENS, RIGHTS,
INTERESTS, AND ENCUMBRANCES, (B) AUTHORIZING AND APPROVING THE ASSUMPTION AND
ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES RELATED THERETO,
AND (C) GRANTING RELATED RELIEF

 

 

 

14.       Other than as expressly set forth in the Purchase Agreement, no Buyer
Party shall have any responsibility for (a) any liability or other obligation of
the Debtors or (b) any claims against the Debtors or any of their predecessors
or affiliates. Except as expressly provided in the Purchase Agreement with
respect to the Buyer, no Buyer Party shall have any liability whatsoever with
respect to the Debtors’ (or their predecessors’ or affiliates’) respective
businesses or operations or any of the Debtors’ (or their predecessors’ or
affiliates’) obligations (as defined herein, “Successor or Transferee
Liability”) based, in whole or part, directly or indirectly, on any theory of
successor or vicarious liability of any kind or character, or based upon any
theory of antitrust, environmental, successor, or transferee liability, de facto
merger or substantial continuity, labor and employment or products liability,
whether known or unknown as of the Closing, now existing or hereafter arising,
asserted or unasserted, fixed or contingent, liquidated or unliquidated,
including, without limitation, liabilities on account of (a) any taxes arising,
accruing, or payable under, out of, in connection with, or in any way relating
to the Purchased Assets or the Assumed Liabilities prior to the Closing or in
respect of pre-Closing periods or (b) any plan, agreement, practice, policy, or
program, whether written or unwritten, providing for pension, retirement,
health, welfare, compensation or other employee benefits which is or has been
sponsored, maintained or contributed to by any Debtor or with respect to which
any Debtor has any liability, whether or not contingent, including, without
limitation, any “multiemployer plan” (as defined in Section 3(37) of ERISA) or
“pension plan” (as defined in Section 3(2) of ERISA) to which any Debtor has at
any time contributed, or had any obligation to contribute. Except to the extent
expressly included in the Assumed Liabilities with respect to the Buyer or as
otherwise expressly set forth in the Purchase Agreement, no Buyer Party shall
have any liability or obligation under any applicable law, including, without
limitation, (a) the WARN Act (29 U.S.C. §§ 2101 et seq.), (b) the Comprehensive
Environmental Response Compensation and Liability Act, (c) the Age
Discrimination and Employment Act of 1967 (as amended), (d) the Federal
Rehabilitation Act of 1973 (as amended), (e) the National Labor Relations Act,
29 U.S.C. § 151 et seq., (f) Section 1927 of the Social Security Act, 42 U.S.C.
§ 1396r-8 or (g) any foreign, federal, state, or local labor, employment or
environmental law, by virtue of the Buyer’s purchase of the Purchased Assets,
assumption of the Assumed Liabilities, or hiring of certain employees of the
Debtors pursuant to the terms of the Purchase Agreement. Without limiting the
foregoing, no Buyer Party shall have any liability or obligation with respect to
any environmental liabilities of the Debtors or any environmental liabilities
associated with the Purchased Assets except to the extent they are Assumed
Liabilities set forth in the Purchase Agreement.

 

 -21- 

 

 

Page:

22 Debtors: ACETO CORPORATION, et al. Case No.: 19-13448 (VFP) Caption: ORDER
(A) AUTHORIZING AND APPROVING THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING
THE DEBTORS’ PHARMA BUSINESS FREE AND CLEAR OF ALL CLAIMS, LIENS, RIGHTS,
INTERESTS, AND ENCUMBRANCES, (B) AUTHORIZING AND APPROVING THE ASSUMPTION AND
ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES RELATED THERETO,
AND (C) GRANTING RELATED RELIEF

 

 

 

15.       Effective upon the Closing, all persons and entities are forever
prohibited and enjoined from commencing or continuing in any matter any action
or other proceeding, whether in law or equity, in any judicial, administrative,
arbitral, or other proceeding against any Buyer Party or their respective assets
(including, without limitation, the Purchased Assets), with respect to any
Successor or Transferee Liability including, without limitation, the following
actions with respect to any such Successor or Transferee Liability: (i)
commencing or continuing any action or other proceeding pending or threatened;
(ii) enforcing, attaching, collecting, or recovering in any manner any judgment,
award, decree, or order; (iii) creating, perfecting, or enforcing any lien,
claim, interest, or encumbrance; (iv) asserting any setoff, right of
subrogation, or recoupment of any kind; (v) commencing or continuing any action,
in any manner or place, that does not comply with, or is inconsistent with, the
provisions of this Sale Order or other orders of this Court, or the agreements
or actions contemplated or taken in respect hereof; or (vi) revoking,
terminating, failing, or refusing to renew any license, permit, or authorization
to operate any business in connection with the Purchased Assets or conduct any
of the businesses operated with respect to such assets.

 

 -22- 

 

 

Page:

23 Debtors: ACETO CORPORATION, et al. Case No.: 19-13448 (VFP) Caption: ORDER
(A) AUTHORIZING AND APPROVING THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING
THE DEBTORS’ PHARMA BUSINESS FREE AND CLEAR OF ALL CLAIMS, LIENS, RIGHTS,
INTERESTS, AND ENCUMBRANCES, (B) AUTHORIZING AND APPROVING THE ASSUMPTION AND
ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES RELATED THERETO,
AND (C) GRANTING RELATED RELIEF

 

 

 

16.       Except as otherwise set forth in the Purchase Agreement, the Buyer
shall have no obligation to pay wages, bonuses, severance pay, benefits
(including, without limitation, contributions or payments on account of any
under- funding with respect to any and all pension plans) or any other payment
with respect to employees or former employees of the Debtors. Except to the
extent expressly provided in the Purchase Agreement, the Buyer shall have no
liability with respect to any collective bargaining agreement, employee pension
plan, employee welfare (including, without limitation, any retiree benefit
liabilities or obligations) or retention, benefit and/or incentive plan to which
the Debtors or any affiliate is a party and relating to the Purchased Assets
(including, without limitation, arising from or related to the rejection or
other termination of any such agreement), and the Buyer shall in no way be
deemed parties to or assignees of any such agreement, and no employee of the
Buyer shall be deemed in any way covered by or a party to any such agreement,
and, except for Assumed Liabilities, all parties to any such agreement are
hereby permanently enjoined from asserting against the Buyer any and all Claims
arising from or relating to such agreement. All notices, if any, required to be
given to the Debtor’s employees pursuant to the Workers Adjustment and
Retraining Notification Act, or any similar federal or state law, shall be the
sole responsibility and obligation of the Debts, and the Buyer shall have no
duties, responsibility or liability therefor.

 

 -23- 

 

 

Page:

24 Debtors: ACETO CORPORATION, et al. Case No.: 19-13448 (VFP) Caption: ORDER
(A) AUTHORIZING AND APPROVING THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING
THE DEBTORS’ PHARMA BUSINESS FREE AND CLEAR OF ALL CLAIMS, LIENS, RIGHTS,
INTERESTS, AND ENCUMBRANCES, (B) AUTHORIZING AND APPROVING THE ASSUMPTION AND
ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES RELATED THERETO,
AND (C) GRANTING RELATED RELIEF

 

 

 

17.       Except as otherwise set forth in the Purchase Agreement, the Buyer’s
purchase of the Purchased Assets under the Purchase Agreement is free and clear
with respect to all workers’ compensation obligations or liabilities, including,
without limitation, workers’ compensation claims or suits of any type, whether
now known or unknown, whenever incurred or filed, which have occurred or which
arise from work-related injuries, diseases, death, exposures, intentional torts,
acts of discrimination or other incidents, acts or injuries prior to the Closing
Date, including, but not limited to, any and all workers’ compensation claims
filed or to be filed, or reopenings of those claims, by or on behalf of any of
the Debtors or its affiliates’ current or former employees, persons on laid-off,
inactive or retired status, or their respective dependents, heirs or assigns, as
well as any and all premiums, assessments or other obligations of any nature
whatsoever of the Debtors relating in any way to workers’ compensation
liability.

 

Good Faith of Buyer

 

18.       The Sale contemplated by the Purchase Agreement is undertaken by the
Buyer without collusion and in good faith, as that term is defined in section
363(m) of the Bankruptcy Code, and accordingly, the reversal or modification on
appeal of the authorization provided herein to consummate the Sale shall not
affect the validity of the Sale (including, without limitation, the assumption
and assignment of the Buyer Assumed Agreements), unless such authorization and
consummation of such Sale are duly and properly stayed pending such appeal.

 

 -24- 

 

 

Page:

25 Debtors: ACETO CORPORATION, et al. Case No.: 19-13448 (VFP) Caption: ORDER
(A) AUTHORIZING AND APPROVING THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING
THE DEBTORS’ PHARMA BUSINESS FREE AND CLEAR OF ALL CLAIMS, LIENS, RIGHTS,
INTERESTS, AND ENCUMBRANCES, (B) AUTHORIZING AND APPROVING THE ASSUMPTION AND
ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES RELATED THERETO,
AND (C) GRANTING RELATED RELIEF

 

 

 

19.       Neither the Debtors nor the Buyer have engaged in any action or
inaction that would cause or permit the Sale to be avoided or costs or damages
to be imposed under section 363(n) of the Bankruptcy Code. The consideration
provided by the Buyer for the Purchased Assets under the Purchase Agreement is
fair and reasonable and the Sale may not be avoided, and costs and damages may
not be imposed, under section 363(n) of the Bankruptcy Code.

 

Assumption and Assignment of Buyer Assumed Agreements

 

20.       The Debtors are authorized and directed at the Closing to assume and
assign each of the Buyer Assumed Agreements to the Buyer pursuant to sections
105(a) and 365 of the Bankruptcy Code and to execute and deliver to the Buyer
such documents or other instruments as may be necessary to assign and transfer
the Buyer Assumed Agreements to the Buyer. The payment by the Buyer or the
Seller (as the case may be as provided for in the Purchase Agreement) or upon
such other provision as approved by the Bankruptcy Court on the record at the
Sale Hearing of the applicable Cure Costs (if any) under a Buyer Assumed
Agreement shall (a) effect a cure of all defaults existing thereunder as of the
Closing, and (b) compensate for any actual pecuniary loss to such counterparty
resulting from such default.

 -25- 

 

 

Page:

26 Debtors: ACETO CORPORATION, et al. Case No.: 19-13448 (VFP) Caption: ORDER
(A) AUTHORIZING AND APPROVING THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING
THE DEBTORS’ PHARMA BUSINESS FREE AND CLEAR OF ALL CLAIMS, LIENS, RIGHTS,
INTERESTS, AND ENCUMBRANCES, (B) AUTHORIZING AND APPROVING THE ASSUMPTION AND
ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES RELATED THERETO,
AND (C) GRANTING RELATED RELIEF

 

 

 

21.       Pursuant to section 365(f) of the Bankruptcy Code, subject to payment
by the Buyer of the applicable Cure Costs, the Buyer Assumed Agreements to be
assumed and assigned under the Purchase Agreement shall be assigned and
transferred to, and remain in full force and effect for the benefit of, the
Buyer notwithstanding any provision in the Buyer Assumed Agreements or other
restrictions prohibiting their assignment or transfer. Any provisions in any
Buyer Assumed Agreement that prohibit or condition the assignment of such Buyer
Assumed Agreement to the Buyer (including the invocation of Section 1927 of the
Social Security Act, 42 U.S.C. § 1396r-8) or allow the counterparty to such
Buyer Assumed Agreement to terminate, recapture, setoff or recoup impose any
penalty, condition on renewal or extension, or modify any term or condition upon
the assignment of such Buyer Assumed Agreement to the Buyer, constitute
unenforceable anti-assignment provisions that are void and of no force and
effect. All other requirements and conditions under sections 363 and 365 of the
Bankruptcy Code (including, without limitation, the satisfaction of the
requirement under Section 365(c)(1) of the Bankruptcy Code) for the assumption
by the Debtors and assignment to the Buyer of the Buyer Assumed Agreements have
been satisfied. Upon the Closing, in accordance with sections 363 and 365 of the
Bankruptcy Code, the Buyer shall be fully and irrevocably vested with all right,
title, and interest of the Debtors under the Buyer Assumed Agreements, and such
Buyer Assumed Agreements shall remain in full force and effect for the benefit
of the Buyer. Each counterparty to the Buyer Assumed Agreements shall be forever
barred, estopped, and permanently enjoined from (a) asserting against the
Debtors or any Buyer Party or their respective property any assignment fee,
acceleration, default, breach or claim or pecuniary loss, or condition to
assignment existing, arising or accruing as of the Closing or arising by reason
of the Closing, including, without limitation, any breach related to or arising
out of change-in-control provisions in such Buyer Assumed Agreements, or any
purported written or oral modification to the Buyer Assumed Agreements and (b)
asserting against any Buyer Party (or its respective property, including,
without limitation, the Purchased Assets) any claim, counterclaim, defense,
breach, condition, or setoff asserted, or assertable against the Debtors
existing as of the Closing or arising by reason of the Closing except for the
Assumed Liabilities.

 

 -26- 

 

 

Page:

27 Debtors: ACETO CORPORATION, et al. Case No.: 19-13448 (VFP) Caption: ORDER
(A) AUTHORIZING AND APPROVING THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING
THE DEBTORS’ PHARMA BUSINESS FREE AND CLEAR OF ALL CLAIMS, LIENS, RIGHTS,
INTERESTS, AND ENCUMBRANCES, (B) AUTHORIZING AND APPROVING THE ASSUMPTION AND
ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES RELATED THERETO,
AND (C) GRANTING RELATED RELIEF

 

 

 

22.       Upon the Closing and the payment of the relevant Cure Costs, if any,
the Buyer shall be deemed to be substituted for the Debtors as a party to the
applicable Buyer Assumed Agreements and the Debtors shall be released, pursuant
to section 365(k) of the Bankruptcy Code, from any liability under the Buyer
Assumed Agreements. There shall be no rent accelerations, assignment fees,
increases, or any other fees charged to the Buyer or the Debtors as a result of
the assumption and assignment of the Buyer Assumed Agreements. The failure of
the Debtors or the Buyer to enforce at any time one or more terms or conditions
of any Buyer Assumed Agreement shall not be a waiver of such terms or conditions
or of the right of the Debtors or the Buyer, as the case may be, to enforce
every term and condition of such Buyer Assumed Agreement. The validity of the
assumption and assignment of any Buyer Assumed Agreement to the Buyer shall not
be affected by any existing dispute between the Debtors and any counterparty to
such Buyer Assumed Agreement. Any party that may have had the right to consent
to the assignment of any Buyer Assumed Agreement is deemed to have consented for
the purposes of section 365(e)(2)(A) of the Bankruptcy Code.

 

 -27- 

 

 

Page:

28 Debtors: ACETO CORPORATION, et al. Case No.: 19-13448 (VFP) Caption: ORDER
(A) AUTHORIZING AND APPROVING THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING
THE DEBTORS’ PHARMA BUSINESS FREE AND CLEAR OF ALL CLAIMS, LIENS, RIGHTS,
INTERESTS, AND ENCUMBRANCES, (B) AUTHORIZING AND APPROVING THE ASSUMPTION AND
ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES RELATED THERETO,
AND (C) GRANTING RELATED RELIEF

 

 

 

23.       The assignments of each of the Buyer Assumed Agreements are made in
good faith under sections 363(b) and (m) of the Bankruptcy Code.

 

Other Provisions

 

24.       To the maximum extent permitted by applicable law, and in accordance
with the Purchase Agreement, the Buyer shall be authorized, as of the Closing,
to operate under any license, permit, registration, and governmental
authorization or approval (collectively, the “Licenses”) of the Debtors with
respect to the Purchased Assets. To the extent the Buyer cannot operate under
any Licenses in accordance with the previous sentence, such Licenses shall
remain in effect for a period not to exceed sixty (60) days from the Closing
while the Buyer works promptly and diligently to apply for and secure all
necessary government approvals for issuance of new Licenses to the Buyer;
provided, however, to the extent the Buyer operates under any Licenses of the
Sellers after the Closing, the Buyer shall reimburse the Sellers (within 5 days
of receiving an invoice) for any and all actual, reasonable and documented
costs, fees, charges, expenses or other obligations incurred by the Sellers
associated with the Buyer operating under any Licenses of the Sellers.

 

25.       To the extent provided by section 525 of the Bankruptcy Code, no
governmental unit (federal or state) may revoke or suspend any permit or License
relating to the Purchased Assets sold, transferred, or conveyed to the Buyer on
account of (i) the filing or pendency of these Chapter 11 Cases or (ii) the
consummation of the Sale contemplated by the Purchase Agreement or the failure
of the Debtors to pay any pre-petition claims of such governmental unit.

 

 -28- 

 

 

Page:

29 Debtors: ACETO CORPORATION, et al. Case No.: 19-13448 (VFP) Caption: ORDER
(A) AUTHORIZING AND APPROVING THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING
THE DEBTORS’ PHARMA BUSINESS FREE AND CLEAR OF ALL CLAIMS, LIENS, RIGHTS,
INTERESTS, AND ENCUMBRANCES, (B) AUTHORIZING AND APPROVING THE ASSUMPTION AND
ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES RELATED THERETO,
AND (C) GRANTING RELATED RELIEF

 

 

 

26.       The Buyer shall not be required to seek or obtain relief from the
automatic stay under section 362 of the Bankruptcy Code to enforce any of its
remedies under the Purchase Agreement or any other Sale-related document. The
automatic stay imposed by section 362 of the Bankruptcy Code is modified solely
to the extent necessary to implement the preceding sentence, provided, however,
that this Court shall retain exclusive jurisdiction over any and all disputes
with respect thereto.

 

27.       The terms and provisions of the Purchase Agreement, the other
Transaction Documents and this Sale Order shall be binding in all respects upon
the Debtors, their affiliates, their estates, all creditors of (whether known or
unknown) and holders of equity interests in any Debtor, any holders of claims
against or on all or any portion of the Purchased Assets, all counterparties to
the Buyer Assumed Agreements, the Buyer, and all of their respective successors
and assigns including, but not limited to, any subsequent trustee(s) appointed
in any of the Debtors’ Chapter 11 Cases or upon conversion of any of the Chapter
11 Cases to a case under chapter 7 of the Bankruptcy Code, as to which
trustee(s) such terms and provisions likewise shall be binding. The Purchase
Agreement shall not be subject to rejection or avoidance by the Debtors, their
estates, their creditors, their shareholders, or any trustee(s).

 

 -29- 

 

 

Page:

30 Debtors: ACETO CORPORATION, et al. Case No.: 19-13448 (VFP) Caption: ORDER
(A) AUTHORIZING AND APPROVING THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING
THE DEBTORS’ PHARMA BUSINESS FREE AND CLEAR OF ALL CLAIMS, LIENS, RIGHTS,
INTERESTS, AND ENCUMBRANCES, (B) AUTHORIZING AND APPROVING THE ASSUMPTION AND
ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES RELATED THERETO,
AND (C) GRANTING RELATED RELIEF

 

 

 

28.       The terms and provisions of this Sale Order and any actions taken
pursuant hereto shall survive entry of an order which may be entered: (a)
confirming any chapter 11 plan in any of these Chapter 11 Cases; (b) converting
any of the Chapter 11 Cases to a case under chapter 7 of the Bankruptcy Code;
(c) dismissing any of the Chapter 11 Cases; or (d) pursuant to which this Court
abstains from hearing any of the Chapter 11 Cases. The terms and provisions of
this Sale Order, notwithstanding the entry of any such orders described in
(a)-(d) above, shall continue in these Chapter 11 Cases, or following dismissal
of these Chapter 11 Cases and nothing contained in any Chapter 11 plan hereafter
confirmed or any order confirming such Chapter 11 plan or any other order of
this Court shall conflict with or derogate from the provisions of the Purchase
Agreement, any Transaction Document or the terms of this Sale Order.

 

29.       Each and every federal, state, and local governmental agency,
department, or official is hereby directed to accept any and all documents and
instruments necessary and appropriate to consummate the transactions
contemplated by the Purchase Agreement (including any document requesting a name
change or assignment thereof and regardless of whether such agency or department
has a Claim against the Debtors.

 

30.       The Purchase Agreement and the Sale contemplated hereunder shall not
be subject to any bulk sales laws or any similar law of any state or
jurisdiction.

 

 -30- 

 

 

Page:

31 Debtors: ACETO CORPORATION, et al. Case No.: 19-13448 (VFP) Caption: ORDER
(A) AUTHORIZING AND APPROVING THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING
THE DEBTORS’ PHARMA BUSINESS FREE AND CLEAR OF ALL CLAIMS, LIENS, RIGHTS,
INTERESTS, AND ENCUMBRANCES, (B) AUTHORIZING AND APPROVING THE ASSUMPTION AND
ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES RELATED THERETO,
AND (C) GRANTING RELATED RELIEF

 

 

 

31.       Pursuant to section 554(a) of the Bankruptcy Code, the Debtors are
authorized to abandon and dispose of the expired Inventory as of the Agreement
Date as provided for in section 6.10(b) of the Purchase Agreement and shall not
deliver such inventory to the Buyer at Closing.

 

32.       The Purchase Agreement may be modified, amended, or supplemented by
the parties thereto in accordance with the terms thereof, without further order
of the Court, provided that any such modification, amendment, or supplement does
not, based on the Debtors’ business judgment, and in consultation with the
Consultation Parties, have a material adverse effect on the Debtors’ estates or
their creditors. The Debtors shall provide the Consultation Parties with prior
notice of any such modification, amendment, or supplement of the Purchase
Agreement. For the avoidance of doubt, all other modifications, amendments, or
supplements to the Purchase Agreement shall require Court approval.

 

33.       All time periods set forth in this Sale Order shall be calculated in
accordance with Bankruptcy Rule 9006(a).

 

34.       Notwithstanding the possible applicability of Bankruptcy Rules
6004(h), 6006(d), 7062, and 9014 or otherwise, the terms and conditions of this
Sale Order shall be effective immediately upon entry and the Debtors and the
Buyer are authorized to close the Sale immediately upon entry of this Sale
Order.

 

35.       To the extent there is any conflict between the terms of this Sale
Order and the Purchase Agreement, the terms of this Sale Order shall control.

 

 -31- 

 

 

Page:

32 Debtors: ACETO CORPORATION, et al. Case No.: 19-13448 (VFP) Caption: ORDER
(A) AUTHORIZING AND APPROVING THE SALE OF SUBSTANTIALLY ALL ASSETS COMPRISING
THE DEBTORS’ PHARMA BUSINESS FREE AND CLEAR OF ALL CLAIMS, LIENS, RIGHTS,
INTERESTS, AND ENCUMBRANCES, (B) AUTHORIZING AND APPROVING THE ASSUMPTION AND
ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES RELATED THERETO,
AND (C) GRANTING RELATED RELIEF

 

 

 

36.       This Court retains exclusive jurisdiction to:

 

(a)Interpret, implement and enforce the terms and provisions of this Sale Order,
the Bidding Procedures Order, and the Purchase Agreement, all amendments
thereto, any waivers and consents thereunder, and each of the agreements
executed in connection therewith in all respects, and resolve any disputes
thereunder except as otherwise provided therein;

 

(b)Protect Buyer and the Buyer Assumed Agreements, or Purchased Assets against
any Interests or Excluded Liability, including, without limitation, to enjoin
the commencement or continuation of any action seeking to impose on the Buyer
successor liability;

 

(c)Enter orders in aid or furtherance of the transactions;

 

(d)Compel delivery of all Purchased Assets to the Buyer;

 

(e)Adjudicate any and all issues relating to the Buyer Assumed Agreements;

 

(f)Adjudicate all issues relating to any Liens or Interests: and

 

(g)Adjudicate any and all issues relating to the Purchased Assets, the proceeds
of the transactions provided for under the Purchase Agreement, the Sale Motion,
and the Purchase Agreement.

 

37.       After distribution on account of the Assumed Accounts Payable have
been made by Buyer, Buyer shall file with the Court a written report setting
forth the identities of those creditors to whom distributions were made and the
amount of their respective distributions. Buyer shall have no liability to (or
in amount in excess of) any trade vendors not designated on such report.

 

 -32- 

 

 

Exhibit 1

 

Purchase Agreement

 

[See Exhibit [●] to Sale Motion]