Exhibit 10.20


 


EXECUTION VERSION


MEMBERSHIP INTEREST PURCHASE AGREEMENT


by and among


FSC HOLDING COMPANY, LLC,


a Delaware limited liability company,


FSC THERAPEUTICS, LLC,


a Delaware limited liability company,


FSC LABORATORIES, INC.


a Delaware corporation,


Peter
Steelman,


JAMES FLYNN,


and


Deerfield
CSF, llc,


a Delaware limited liability company,
on the one hand


and


FLAMEL US HOLDINGS, INC., 


a Delaware corporation,


 


and


 


Flamel
Technologies SA,


a société anonyme organized
under the laws of the Republic of France,

solely for purposes of Section 1.7, on the other hand


Dated as of February 5, 2016




     


     


    

 


Table
of Contents


 


	 	 	 	Page
	 	 	 	 
	1.	DESCRIPTION OF TRANSACTION	1
	 	 	 
	 	1.1	Purchase and Sale	1
	 	1.2	Consideration	1
	 	1.3	Indebtedness; Transaction Expenses; Post-Closing Adjustment	2
	 	1.4	Purchase Price Allocation	3
	 	1.5	Closing; Effective Time; Closing Deliveries.	4
	 	1.6	Deferred Consideration	5
	 	1.7	Guarantees; Security Interest	8
	 	1.8	Withholding	10
	 	 	 	 
	2.	REPRESENTATIONS AND WARRANTIES OF THE COMPANY	10
	 	 	 
	 	2.1	Organization; Good Standing; Enforceability	11
	 	2.2	Consents and Approvals; No Violation	11
	 	2.3	Units; Subsidiaries.	12
	 	2.4	Financial Statements	13
	 	2.5	Absence of Changes	14
	 	2.6	Tax Matters	15
	 	2.7	Claims	17
	 	2.8	Compliance with Laws	17
	 	2.9	Employee and Labor Matters; Benefit Plans.	17
	 	2.10	Insurance	19
	 	2.11	Real Property	19
	 	2.12	Bank Accounts	19
	 	2.13	Regulatory Compliance	19
	 	2.14	Accounts Receivable	22
	 	2.15	Proprietary Rights	22
	 	2.16	Supply Arrangement	23
	 	2.17	Contracts	24
	 	2.18	Title to Assets	25
	 	2.19	Necessary Assets	25
	 	2.20	No State Antitakeover Statute	25
	 	2.21	Brokers	26
	 	2.22	Transaction Payments	26
	 	2.23	Related Party Transactions	26
	 	2.24	Distributions to Sellers	26
	 	2.25	No Other Representations or Warranties	26
	 	 	 	 
	3.	REPRESENTATIONS AND WARRANTIES OF THE sellers	26
	 	 	 
	 	3.1	Organization; Good Standing	26
	 	3.2	Authority; Enforceability	27
	 	3.3	Consents and Approvals; No Violation	27
	 	3.4	Title to Units	27
	 	3.5	Consents and Approvals; No Violation	27
	 	3.6	No Other Representations or Warranties	28


 




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Table
of Contents


(continued)


 


	 	 	 	Page
	 	 	 	 
	4.	REPRESENTATIONS AND WARRANTIES OF THE BUYER	28
	 	 	 	 
	 	4.1	Organization; Good Standing	28
	 	4.2	Authority; Enforceability	28
	 	4.3	Consents and Approvals; No Violation	28
	 	4.4	No Restrictions	28
	 	4.5	No Other Representations or Warranties	28
	 	 	 	 
	5.	ADDITIONAL AGREEMENTS OF THE PARTIES	28
	 	 	 	 
	 	5.1	Indemnification of Officers and Directors.	29
	 	5.2	Disclosure	29
	 	5.3	Maintenance of Books and Records	29
	 	5.4	Tax Return Matters	30
	 	5.5	FSC Name	32
	 	5.6	Further Assurances	32
	 	 	 	 
	6.	INDEMNIFICATION	32
	 	 	 	 
	 	6.1	Survival	32
	 	6.2	Seller Indemnification	33
	 	6.3	Buyer Indemnification	33
	 	6.4	Limitations	34
	 	6.5	Procedure for Indemnification – Third-Party Claims.	35
	 	6.6	Right of Set-Off	36
	 	6.7	Exclusive Remedy	37
	 	6.8	No Right of Contribution	37
	 	6.9	Effect of Investigation; Reliance	37
	 	 	 	 
	7.	MISCELLANEOUS PROVISIONS	37
	 	 	 	 
	 	7.1	Amendment	37
	 	7.2	Waiver.	37
	 	7.3	Entire Agreement; Counterparts; Exchanges by Facsimile	38
	 	7.4	Applicable Law; Jurisdiction	38
	 	7.5	Assignability; No Third Party Beneficiaries	38
	 	7.6	Notices	39
	 	7.7	Severability	40
	 	7.8	Other Remedies; Specific Performance	40
	 	7.9	Judgment Currency	40
	 	7.10	Construction.	41
	 	 	 	 
	Exhibits	 	 
	 	 	 
	Exhibit A	Capitalized Terms	 
	Exhibit B	Purchase Price Payment Instructions	 


 


 




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MEMBERSHIP INTEREST PURCHASE AGREEMENT


THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT
(this “Agreement”) is made and entered into as of February 5, 2016, by and among JAMES FLYNN,
PETER STEELMAN, Deerfield CSF, LLC,
a Delaware limited liability company (collectively, the “Sellers”), FSC HOLDING COMPANY, LLC,
a Delaware limited liability company (the “Company”),
FSC THERAPEUTICS, LLC, a Delaware limited liability company (“FSC Therapeutics”), FSC
LABORATORIES, INC., a Delaware corporation (“FSC Labs”), on the one hand and Flamel
Technologies SA, a société anonyme organized under the laws of the Republic of France (“Flamel
SA”), solely for purposes of Section 1.7, and FLAMEL US HOLDINGS, INC., a Delaware corporation (the “Buyer”),
on the other hand. Certain capitalized terms used in this Agreement are defined in Exhibit A.


 


RECITALS


The Sellers desires to sell, and the
Buyer desires to purchase, all of the issued and outstanding membership interests of the Company, consisting of 1,000 Preferred
Units and 1,000 Common Units (together the “Units”), for the consideration and on the terms and subject
to the conditions set forth herein.


AGREEMENT


The Parties to this Agreement, for good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, agree
as follows:


1.             DESCRIPTION
OF TRANSACTION


1.1           Purchase
and Sale.  On the terms and subject to the conditions of this Agreement, effective at the Effective Time, Sellers
shall sell and deliver to the Buyer, and the Buyer shall purchase and accept from Sellers, all of the Units, free and clear of
all Encumbrances, in exchange for the consideration set forth herein.1.2           Consideration. 
The Buyer shall make the following payments to the Sellers as consideration for the sale of the Units from Sellers to Buyer (all
such payments together, following all adjustments contemplated in this Agreement, the “Purchase Price”):


(a)          The
Buyer shall pay to the Sellers $262,500 on the last business day of each April, July, October and January starting with the last
business day of April 2016 and ending with the last business day of October 2020 and shall pay $15,262,500 to the Sellers on the
last business day of January 2021 for a total of $20,250,000 (all such payments together, the “Fixed Payments”);
and


(b)          The
Buyer shall pay the Deferred Consideration to the Sellers subject to and in accordance with Section 1.6.




     


     


    

  


All payments of the Purchase Price
shall be made among the Sellers in the amounts designated in Exhibit B by wire transfer of immediately available funds to the account(s)
designated in Exhibit B or otherwise designated by the Sellers in writing no later than five Business Days prior to the date such
payment shall be due. Each Seller acknowledges and agrees to such allocation notwithstanding the terms, conditions and allocations
set forth in the operating agreement or other governing documents of the Company.


1.3           Indebtedness;
Transaction Expenses; Post-Closing Adjustment.


(a)          Immediately
prior to the Closing: (1) Deerfield PDI Financing II, L.P. shall transfer to Deerfield Private Design International II, L.P. all
of its rights, title and interest in the Affiliated Company Indebtedness, (2) Deerfield Private Design International II, L.P. and
Deerfield Private Design Fund II, L.P. shall contribute to the Company all of their rights, title and interest in all of the Affiliated
Company Indebtedness and (iii) the Company shall contribute to FSC Labs and FSC Therapeutics as applicable, all of its rights,
title and interest in the Affiliated Company Indebtedness, with the effect that at Closing there shall be no outstanding Affiliated
Company Indebtedness (whether principal, interest or otherwise), all documents related to the Affiliated Company Indebtedness shall
be terminated with no residual Liability on the part of any Company Party and all Encumbrances thereunder shall be released (the
foregoing transactions, the “Affiliated Company Indebtedness Termination”). Immediately after the Affiliated
Company Indebtedness Termination but immediately prior to the Closing, Deerfield Private Design International II, L.P. and Deerfield
Private Design Fund II, L.P. shall contribute all of their Units to Deerfield CSF, LLC.


(b)          There
shall be no outstanding Company Indebtedness, including Affiliated Company Indebtedness, at the Effective Time and neither the
Buyer nor any of its Affiliates (including the Company Parties after the Closing) shall have any responsibility for any Company
Indebtedness. If there shall be any outstanding Company Indebtedness at the Effective Time, Sellers shall pay all such Company
Indebtedness at the Closing and, if the Sellers do not pay, Buyer shall be entitled to deduct such outstanding amount from the
amount of Fixed Payments payable pursuant to Section 1.2(a) and Buyer shall use such amount to directly repay such Company
Indebtedness.


(c)          There
shall be no outstanding Transaction Expenses at the Effective Time and neither the Buyer nor any of its Affiliates (including the
Company Parties after the Closing) shall have any responsibility for any Transaction Expenses. If there shall be any outstanding
Transaction Expenses at the Effective Time, Sellers shall pay all such Transaction Expenses at the Closing and, if the Sellers
do not pay, Buyer shall be entitled to deduct such outstanding amount from the amount of Fixed Payments payable pursuant to Section
1.2(a) and Buyer shall use such amount to directly pay the Transaction Expenses.


(d)          After
payment by the Company Parties of all Company Indebtedness, Transaction Expenses and other obligations of the Company Parties,
the Company shall be entitled to make a distribution to the Sellers of all freely available and unrestricted cash held by the Company
Parties as of immediately prior to the Closing, excluding cash needed to pay any checks or other drafts that are issued by the
Company Parties but not deposited by the recipient thereof as of the Closing Date, or any other obligations of the Company Parties
arising prior to the Closing for which such cash would be used as payment.




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(e)          Within
120 days after the Closing, Buyer shall notify the Sellers whether (i) the actual amount of outstanding Company Indebtedness and/or
Transaction Expenses at Closing exceeded the respective amounts determined pursuant to Sections 1.3(b) and 1.3(c)
and/or (ii) the Closing Working Capital was less than the Lower Target Amount or more than the Upper Target Amount. The Sellers
shall have twenty Business Days after delivery by Buyer of its notice to object in writing to the statements made in Buyer’s
notice. If the Sellers timely deliver such an objection notice, Buyer and the Sellers shall cooperate in good faith to resolve
such disputes as promptly as practicable. If no such resolution is achieved within 30 days after delivery by the Sellers of their
objection notice, Buyer and the Sellers shall be obligated to submit the remaining disputes to the Reviewing Accountant, which
shall be engaged only to resolve the remaining disputes. If the resolution of such disputes, whether by agreement of Buyer and
the Sellers or determination of the Reviewing Accountant, results in a determination that the actual amount of outstanding Company
Indebtedness and/or Transaction Expenses at Closing exceeded the respective amounts determined pursuant to Sections 1.3(b)
and 1.3(c) or that the Lower Target Amount exceeded the Closing Working Capital, or if the Sellers do not timely deliver
an objection notice under this Section 1.3(d), the Sellers shall, within five Business Days thereafter, pay to Buyer the
applicable amount owed to Buyer (which shall be equal to (x) the amount by which the outstanding Company Indebtedness at Closing
exceeds the amounts determined pursuant to Section 1.3(b), plus (y) the amounts by which the outstanding Transaction Expenses
at Closing exceeds the amount determined pursuant to Section 1.3(c), plus (z) the difference between the Closing Working
Capital, as finally determined pursuant to this Section 1.3(e), and $0). To the extent such amount owed by Sellers to Buyer
is not paid on or prior to the date Buyer is to make any Fixed Payment or Deferred Payment to Sellers, Buyer may deduct from such
Fixed Payment or Deferred Payment, as the case may be, and, to the extent necessary, any subsequent Fixed Payment or Deferred Payment,
the amount owed to it by Sellers pursuant to this Section 1.3(e). If the Closing Working Capital as finally determined hereunder
was more than the Upper Target Amount, the Buyer shall promptly pay to the Sellers the amount by which such finally determined
Closing Working Capital amount exceeds $0. The costs, fees and expenses charged by the Reviewing Accountant for its engagement
pursuant to this Section 1.3(e) shall be allocated equally amount Buyer and Sellers.


1.4           Purchase
Price Allocation. The consideration described in Section 1.2 shall be allocated 55.0% to FSC Labs and 45.0% to FSC Therapeutics
for U.S. income tax purposes according to Schedule 1.4 (the “Purchase Price Allocation Schedule”).
The portion of the consideration described in Section 1.2 allocated to FSC Therapeutics, LLC shall be further allocated
among its assets for U.S. income tax purposes in accordance with the methodology set forth on the Purchase Price Allocation Schedule.
The parties will follow the methodology set forth on the Purchase Price Allocation Schedule and shall not (and shall not permit
any Affiliates to) take any U.S. federal income tax position, or file any Tax Return for U.S. federal income tax purposes, inconsistent
therewith, unless otherwise required by a change of law after the date hereof, a closing agreement with the IRS, or a decision
of a court of competent jurisdiction. Each of the Buyer and the Sellers shall notify the other parties if the IRS challenges the
Purchase Price allocations and shall keep the other parties reasonably informed of the status and progress of such challenge.




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1.5           Closing;
Effective Time; Closing Deliveries.


(a)          Closing;
Effective Time.  The consummation of the transactions contemplated by this Agreement (the “Closing”)
shall take place remotely by the electronic or other exchange of documents and signature pages, on the date hereof, such date referred
to herein as the “Closing Date”. The Closing will be effective as of 12:01 a.m. on the Closing Date (the
“Effective Time”), and all actions scheduled in this Agreement to take place at the Closing shall be
deemed to occur simultaneously at such time.


(b)          Closing
Documents Delivered by the Sellers. At or prior to the Closing, the Sellers shall have delivered to the Buyer:


(i)          Resignation
letters, in form and substance reasonably acceptable to Buyer, of each of the directors, managers and certain officers of the Company
Parties specified by the Buyer, effective as of the Effective Time;


(ii)         A
certificate executed by the Secretary of each Company Party certifying that (A) attached thereto is a true and complete copy of
such Company Party’s certificate of formation or certificate of incorporation and all amendments thereto and then in effect,
in each case certified by the Secretary of State of the State of Delaware; (B) attached thereto are certificates of good standing
of such Company Party from its jurisdiction of organization and in each jurisdiction in which it is licensed or qualified to conduct
business; dated not more than five days before the Closing Date; (C) attached thereto is a true and complete copy of such Company
Party’s bylaws or limited liability company agreement and all amendments thereto and then in effect; (D) for just the Company,
attached thereto is a true and complete copy of the resolutions adopted by the members and managers of the Company authorizing
the execution, delivery and performance of the Transaction Agreements and the transactions contemplated hereby, and (E) for just
the Company, as to the incumbency and signatures of each individual who will execute documents at the Closing on behalf of the
Company;


(iii)        Documentation
from the Company evidencing the Affiliated Company Indebtedness Termination which provides that (A) after giving effect to the
contributions set forth in Section 1.5, (1) all agreements related to the Affiliated Company Indebtedness are terminated,
(2) all obligations related to the Affiliated Company Indebtedness are deemed paid in full, and (3) all Encumbrances related to
the Affiliated Company Indebtedness are released and (B) the Sellers which are lenders and the Company authorize the Buyer to file
any UCC termination statements deemed appropriate by the Buyer to effect the Affiliated Company Indebtedness Termination;


(iv)        Payoff
letters for all other Company Indebtedness outstanding as of the Closing Date, setting forth the amount required to pay off in
full all such Company Indebtedness and otherwise providing for the complete satisfaction and/or release as of the Closing Date
of all of such Company Indebtedness to the Persons to whom such Company Indebtedness is owed, and the complete release of any Encumbrances
or guarantees any such Person may have against any Company Party or any of their respective assets or properties, along with supporting
documentation, all in customary form reasonably satisfactory to the Buyer;




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(v)         (A)
a certificate executed by each Seller in accordance with the requirements of Treasury Regulation Section 1.1445-2(b)(2) certifying
that such Seller is not a foreign person (as such term is defined in the Code and the Treasury Regulations promulgated in connection
therewith) and (B) two (2) original copies of IRS Form W-9 from each Seller, each such copy duly executed by such Seller;


(vi)        Unit
transfer powers, each in form and substance reasonably acceptable to the Buyer, evidencing the transfer and assignment of the Units
from the applicable Seller to the Buyer hereunder, together with any other documents that are necessary to transfer to Buyer good
and valid title to the Units, free and clear of all Encumbrances;


(vii)       Copies
of all Company Approvals, duly executed by the applicable consenting party (if applicable), and, in the case of the Company Approvals
relating to the Leases, together with certificates of estoppel reasonably satisfactory to Buyer;


(viii)      Releases
from each of the Sellers, each in form and substance reasonably acceptable to the Buyer, of all claims such Seller may have against
any Company Party, Buyer or any of their respective Affiliates;


(ix)         Non-competition
and non-solicitation agreements from Peter Steelman and James Flynn, in form and substance reasonably acceptable to Buyer; and


(x)          The
contents of the electronic data room maintained by the Sellers in connection with the transactions contemplated by this Agreement.


1.6           Deferred
Consideration.


(a)          Deferred
Payments. The Buyer shall pay (or cause to be paid) to the Sellers (or their successors and assigns) quarterly deferred payments
(each, a “Deferred Payment”) equal to 15.0% of Net Sales of the Products in such quarter (collectively,
the “Deferred Consideration”), subject to Section 1.6(b).


(b)          Payment
of the Deferred Payments. The Deferred Payments described in Section 1.6(a) shall be paid quarterly in arrears and shall
accrue daily for each quarter from and after the Closing until the earlier of (i) the tenth anniversary of the Closing Date or
(ii) $12,500,000 in the aggregate of Deferred Payments have been paid to the Sellers. No later than three Business Days following
the date the Buyer files its Earnings Report (if a public filing) or has prepared its Earnings Report (if not a public filing)
for each calendar quarter (but in no event later than sixty days following the last day of each of the first three quarters and
one hundred twenty days following the last day of the fourth quarter of each calendar year), the Buyer shall pay to the Sellers
the Deferred Payment for such quarter. On the same day it makes a Deferred Payment, the Buyer shall deliver or cause to be delivered
to the Sellers a written statement showing all Net Sales of Products during such quarter and the corresponding Deferred Payment
(each a “Deferred Payment Calculation”). All Deferred Payments shall be made among the Sellers in the
amounts designated in Exhibit B by wire transfer of immediately available funds to the account(s) designated in Exhibit B or otherwise
designated by the Sellers in writing no later than five Business Days prior to the date such Deferred Payment shall be due. For
the avoidance of doubt, the accrual of Deferred Payments shall terminate on the tenth anniversary of the Closing Date even if less
than $12,500,000 of aggregate Deferred Payments shall have accrued as of such tenth anniversary.




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(c)          Delinquent
Deferred Payments. Any Deferred Payment not paid when due shall bear interest at the Default Rate, compounded daily, or the
highest rate then permitted by applicable law, whichever is less, from the date such payment was due until the date paid.


(d)          Audit
Right. Upon not less than ten Business Days written notice (the “Audit Notice”), the Sellers shall
have the right to audit the books and records of the Company Parties for the purpose of determining the correctness of their computation
and payment of any Deferred Payment for up to three years prior to the date of the Audit Notice and for the purposes of determining
compliance with the other covenants set forth in this Section 1.6. Such audit may not be conducted more than once in any
calendar year and shall be conducted during normal business hours at the Sellers’ cost, provided, that any accounting firm
or other Representative involved enters into a reasonable confidentiality agreement with the Company (to be approved by the Company
in its sole reasonable discretion) prior to commencing any such audit. The Buyer shall provide the Sellers and their advisors with
reasonable access to all pertinent books and records of the Company related to the Products and shall reasonably cooperate with
the Sellers’ and their advisors’ efforts to conduct such audits. The Sellers may object to any Deferred Payment Calculation
by delivering a written notice of objection (a “Deferred Payment Calculation Objection Notice”), which
shall specify the items in the applicable Deferred Payment Calculation disputed by the Sellers and shall describe in reasonable
detail the basis for such objection, as well as the amount in dispute. If the Sellers deliver a Deferred Payment Calculation Objection
Notice, Buyer and the Sellers shall negotiate in good faith for up to ten Business Days to resolve the disputed items and agree
upon the resulting amount of the Deferred Payment that is the subject of the Deferred Payment Calculation Objection Notice. If
Buyer and the Sellers are unable to reach agreement within ten Business Days after the Deferred Payment Calculation Objection Notice
has been delivered, all unresolved disputed items shall be promptly referred to the Reviewing Accountant. The Reviewing Accountant
shall be directed to render a written report on the unresolved disputed items with respect to the applicable Deferred Payment Calculation
as promptly as practicable, but in no event greater than 30 days after such submission to the Reviewing Accountant, and to resolve
only those unresolved disputed items set forth in the Deferred Payment Calculation Objection Notice. If unresolved disputed items
are submitted to the Reviewing Accountant, Buyer and the Sellers shall each furnish to the Reviewing Accountant such work papers,
schedules and other documents and information relating to the unresolved disputed items as the Reviewing Accountant may reasonably
request. The Reviewing Accountant shall resolve the disputed items based solely on the applicable definitions and other terms in
this Agreement and the presentations by Buyer and the Sellers, and not by independent review. The Reviewing Accountant will not
have the power to alter, modify, amend, add to or subtract from any term or provision of this Agreement. The resolution of the
dispute and the calculation of the Deferred Payment that is the subject of the Deferred Payment Calculation Objection Notice by
the Reviewing Accountant shall be final and binding on the parties hereto. If there has been an underpayment of the aggregate Deferred
Payment due for the period being audited of more than five percent (5%) of the amount due for the period, the Buyer shall reimburse
the Sellers for the reasonable out-of-pocket costs (including Reviewing Accountants’ fees) incurred by the Sellers pursuant
to this Section 1.6(d).




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(e)          Assignment
or Sublicense by the Buyer. The Buyer shall continue to be obligated to pay the Deferred Payments, subject to the aggregate
maximum amount and time period set forth in Section 1.6(b), on all sales by all direct or indirect licensees and assignees
of any rights to sell, market or otherwise distribute the Products, and the provisions of this Section 1.6 shall apply to
all such sales as if made directly by a Company Party.


(f)          Credit
Facility Restrictions. The Buyer represents and warrants that there are no restrictions or limitations on the Buyer’s
ability to make the payments that are or may be required to be paid to the Sellers under this Agreement in any Contract of the
Buyer or any of its Subsidiaries (excluding the Company Parties), including in any loan agreement, note debenture or other document
evidencing any indebtedness of the Buyer and any of its Subsidiaries (excluding the Company Parties). The Buyer shall not enter
into, or amend, any Contract of it or its Subsidiaries after the Closing the effect of which is to place any restrictions or limitations
on the Buyer’s or the Company Parties’ ability to make the payments that are or may be required to be paid to the Sellers
under this Agreement.


(g)          Acceleration.
Notwithstanding anything to the contrary contained in this Section 1.6 (including, without limitation, the quarterly structuring
of deferred payments set forth above), upon and at any time after the occurrence of any Acceleration Trigger Event, (x) an amount
equal to the Accelerated Value (together with any applicable interest accrued thereon) shall automatically become immediately due
and payable without presentment, demand, protest, notice of intent to accelerate or other notice or legal process of any kind (except
for any notice contemplated in the definition of Acceleration Trigger Event, if applicable), all of which are hereby knowingly
and expressly waived by the Buyer, and (y) the Sellers may exercise any and all other rights and remedies available to it under
this Agreement and applicable law to enforce its right to receive payment of the Accelerated Value (plus any applicable accrued
interest).


(h)          No
Security. The parties hereto understand and agree that (i) the contingent rights to receive any Deferred Payment shall
not be represented by any form of certificate or other instrument and do not constitute an equity or ownership interest in Buyer
or any Company Party, (ii) Sellers shall not have any rights as securityholders of Buyer or of any Company Party as a result of
Sellers’ contingent right to receive any Deferred Payment hereunder, and (iii) no interest is payable with respect to any
Deferred Payment except as provided in Section 1.6(c).


(i)          Tax
Treatment. The Sellers and the Buyer agree that the Deferred Payments represent part of the consideration for the sale of the
Units to the Buyer.  Buyer shall not claim, and shall not permit any of its Affiliates or any transferee that assumes the
obligation to make any Deferred Payment to claim, any deduction for income tax purposes under Section 162(a) of the U.S. Internal
Revenue Code of 1986, as amended (the “Code”), or any comparable provision of state or local Tax law,
or take any U.S. federal income tax position (or position under comparable state or local income tax law) inconsistent therewith,
on account of any Deferred Payment (or portion thereof) unless otherwise required by a change of law after the date hereof, a closing
agreement with an applicable Taxing authority or a decision of a court of competent jurisdiction. Each of the Buyer and the Sellers
shall notify the other parties if a Taxing authority challenges the tax treatment of the Deferred Consideration and shall keep
the other parties reasonably informed of the status and progress of such challenge.




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(j)          Other
Covenants. Until the Deferred Payments are paid in full:


(i)          Buyer
and the Company shall not, and shall cause the Company Parties after Closing not to, take any action or fail to take any action
that would waive, breach, terminate or materially amend any of the following contracts in a manner that would adversely affect
the sale of Products or the right of the Sellers to the Deferred Payments in connection therewith: (A) the Supply and Distribution
Agreement dated August 9, 2013 between FSC Laboratories, Inc. and Tris Pharma, Inc., (B) the License and Assignment Agreement between
Eisai Inc. and FSC Therapeutics, LLC dated June 12, 2014, (C) the Supply Agreement between Eisai Inc. and FSC Laboratories, Inc.
dated June 12, 2014 and (D) the License, Supply & Distribution Agreement dated March 17, 2015 by and among Yung Shin Pharm.
Ind. Co., Ltd., FSC Therapeutics, LLC, FSC Laboratories, Inc., and Rising Pharmaceuticals, Inc. In addition, Buyer and the Company
shall not, and shall cause the Company Parties after Closing not to, take any action or fail to take any action that would waive,
breach, terminate or materially amend in any way any of the following specific provisions of the following contracts: (A) Section
4.3 and/or the definition of “Minimum Unit Sales Commitment” in the Supply and Distribution Agreement dated August
9, 2013 between FSC Laboratories, Inc. and Tris Pharma, Inc., (B) Section 3.3(a)(ii) of the License and Assignment Agreement between
Eisai Inc. and FSC Therapeutics, LLC dated June 12, 2014, and (C) Section 2.7 and/or Section 3.2(d) of the License, Supply &
Distribution Agreement dated March 17, 2015 by and among Yung Shin Pharm. Ind. Co., Ltd., FSC Therapeutics, LLC, FSC Laboratories,
Inc., and Rising Pharmaceuticals, Inc.


(ii)         During
each calendar year beginning in 2016, Buyer and the Company shall, and shall cause the Company Parties after Closing to, cause
the sales representatives of the Company Parties to complete no fewer than 60,000 P1 Product Details and no fewer than 50,000 P2
Product Details for the Products; provided, however, that in the event that new generic products are launched after Closing that
compete with three or more of the Products, then the annual P1 Product Detail requirement shall be reduced to 45,000 and the annual
P2 Product Detail requirement shall be eliminated. For purposes of clarification, the Buyer and the Company Parties shall have
full and sole discretion to direct the required Product Details toward any Product.




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1.7           Guarantees;
Security Interest. 


(a)          Each
of the Company, FSC Labs, FSC Therapeutics and Flamel SA (such Persons in such capacity, “Guarantors”)
hereby, jointly and severally, unconditionally and irrevocably, as a primary obligor and not only a surety, guarantees to the Sellers
the prompt and complete payment and performance by Buyer when due of the Buyer’s obligations under this Agreement, including,
without limitation, the obligation to pay to the Sellers the Fixed Payments and the Deferred Payments (the “Guaranteed
Obligations”). Each of the Company, FSC Labs and FSC Therapeutics waives any and all notice of the creation, renewal,
extension or accrual of any of the Guaranteed Obligations and notice of or proof of reliance by any Seller upon the guarantee contained
in this Section 1.7(a) or acceptance of the guarantee contained in this Section 1.7(a); the Guaranteed Obligations,
and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived,
in reliance upon the guarantee contained in this Section 1.7(a). Each of the Company, FSC Labs and FSC Therapeutics waives
(a) diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon Buyer or any of the
them with respect to the Guaranteed Obligations, (b) notice of the existence or creation or non-payment of all or any of the
Guaranteed Obligations, and (c) all diligence in collection or protection of or realization upon any Guaranteed Obligations
or any guaranty of any Guaranteed Obligations.


(b)          Each
of FSC Labs and FSC Therapeutics hereby pledges, assigns, hypothecates, transfers and grants to Sellers, a first priority lien
upon and security interest in, all of their right, title and interest in and to the following property and assets, in each case
whether now owned or existing or hereafter acquired or arising and wherever located, but in each case only relating to the Products
(collectively, the “FSC Assets Collateral”): all inventory, all owned Proprietary Rights other than domain
names and websites and all owned Governmental Authorizations. The FSC Assets Collateral shall secure the full and prompt payment,
at any time and from time to time as and when due (whether at the stated payment date, by acceleration or otherwise), of the Guaranteed
Obligations.


(c)          If
Buyer defaults on any of the Guaranteed Obligations and does not cure such default within ten Business Days after the due date
thereof, Sellers shall be entitled to exercise in respect of the FSC Assets Collateral all of its rights, powers and remedies provided
for herein or otherwise available to it under any law, in equity or otherwise, including all rights and remedies of a secured party
under the Delaware Uniform Commercial Code. Buyer, FSC Labs and FSC Therapeutics to the greatest extent not prohibited by applicable
law, hereby (i) agrees that it will not invoke, claim or assert the benefit of any rule of law or statute now or hereafter
in effect (including, without limitation, any right to prior notice or judicial hearing in connection with Sellers’ possession,
custody or disposition of any FSC Assets Collateral or any appraisal, valuation, stay, extension, moratorium or redemption law),
or take or omit to take any other action, that would or could reasonably be expected to have the effect of delaying, impeding or
preventing the exercise of any rights and remedies in respect of the FSC Assets Collateral, the absolute sale of any of the FSC
Assets Collateral or the possession thereof by any purchaser at any sale thereof, and waives the benefit of all such laws and further
agrees that it will not hinder, delay or impede the execution of any power granted hereunder to the Sellers, but that it will permit
the execution of every such power as though no such laws were in effect, (ii) waives all rights that it has or may have under
any rule of law or statute now existing or hereafter adopted to require the Sellers to marshal any FSC Assets Collateral or any
other party or against or in payment of any or all of the obligations hereunder, and (iii) waives all rights that it has or
may have under any rule of law or statute now existing or hereafter adopted to demand, presentment, protest, advertisement or notice
of any kind (except notices expressly provided for herein). In addition, Buyer, FSC Labs and FSC Therapeutics waives any and all
rights of contribution or subrogation upon the sale or disposition of all or any portion of the FSC Assets Collateral. Buyer and
the Company Parties shall be permitted to transfer, sell and/or assign any of the FSC Assets Collateral to an Affiliate so long
as such Affiliate executes a joinder to this Section 1.7 of the Agreement in order to guarantee the Guaranteed Obligations
and grant a security interest in the FSC Assets Collateral on the same terms agreed to by the Company Parties set forth herein.
For purposes of clarification, nothing in this Agreement shall be interpreted to restrict Buyer’s or Guarantors’ right
to sell any inventory that is part of the FSC Assets Collateral or otherwise in the ordinary course of business.




    	 	9	 



     


    

  


(d)          In
the event that Flamel SA undertakes a “reincorporation” transaction under which either a new parent company is established
or any material assets are transferred from Flamel SA to an Affiliate, Flamel SA shall cause such new parent entity or transferee
to execute a joinder to this Section 1.7 of the Agreement in order to guarantee the Guaranteed Obligations on the same terms
as Flamel SA.


(e)          All
terms in this Section 1.7 that are not capitalized shall, unless the context otherwise requires, have the meanings provided
by the Delaware Uniform Commercial Code to the extent the same are used or defined therein.


1.8           Withholding.
Any and all payments due to Sellers pursuant to this Agreement shall be made free and clear of and without deduction for any Taxes
except as required by applicable Tax law.  If any Person (whether the Buyer, a Guarantor or an Affiliate to which the Buyer
elects to assign its rights and/or obligations under this Agreement) shall be required by Tax law to deduct any non-U.S. Taxes
from any payments due to any Seller hereunder (other than any such non-U.S. Taxes that are imposed as a result of (x) a present
or former connection between a Seller and the jurisdiction imposing such Tax (other than any such connection arising from such
Seller having executed, delivered, become a party to, performed its obligations under, received payments under, or enforced its
rights under, a Transaction Agreement), or (y) the failure (other than as a result of a change in law or because the requested
document is inconsistent with the Seller’s actual circumstances or Tax status when requested) of a Seller to provide the
Buyer with any Tax form, certification or information reasonably requested by the Buyer (any such Tax described in clause (x) or
(y), an “Excluded Tax”)), then notwithstanding any provisions to the contrary, (i) the sum payable hereunder by such
Person  shall be increased by as much as shall be necessary so that after making all required deductions (including deductions
for Taxes (other than Excluded Taxes) applicable to additional sums payable under this Section 1.8) for such non-U.S. Taxes, each
Seller shall receive an amount equal to the sum it would have received had no such deductions been made (any and all such additional
amounts payable shall hereafter be referred to as the “Additional Amounts”), (ii) such Person  shall
make such deductions, and (iii) such Person shall pay the full amount deducted to the relevant Governmental Body in accordance
with applicable Tax law and shall provide to the applicable Seller the original or a certified copy of a receipt evidencing payment
thereof or other reasonably satisfactory evidence of such payment. Except as otherwise provided in this Section 1.8, to
the extent that amounts are so deducted and withheld by the Buyer, such amounts shall be treated for all purposes of this Agreement
as having been paid to the Person in respect of which the Buyer made such deduction and withholding. The Buyer shall provide the
Sellers with five (5) Business Days’ advance notice of any such required withholding and shall reasonably cooperate with
the Sellers to mitigate or reduce such withholding. All payments of Additional Amounts, once made by Buyer pursuant to this Section
1.8, shall be treated as indemnification payments made pursuant to Section 6.3 for all purposes of this Agreement.




    	 	10	 



     


    

  


2.          REPRESENTATIONS
AND WARRANTIES OF THE COMPANY


Each Company Party and the Sellers, severally
and not jointly, represents and warrants to the Buyer:


2.1           Organization;
Good Standing; Enforceability.


(a)          Each
Company Party is a corporation or limited liability company, as applicable, duly organized, validly existing and in good standing
under the laws of the state of its incorporation or formation. Each Company Party has the requisite power and authority to own,
lease or use its properties and assets and to conduct its business as presently conducted. Schedule 2.1 sets forth each
jurisdiction in which each Company Party is licensed or qualified to do business, and each Company Party is duly licensed or qualified
to do business and is in good standing in each jurisdiction in which the assets or properties owned or leased by it or the operation
of its business as currently conducted makes such licensing or qualification necessary. Schedule 2.1 lists all of the officers
and directors of each Company Party.


(b)          Accurate
and complete copies of (i) the certificate of formation, certificate of incorporation or similar formation documents; (ii) bylaws,
operating agreement or other similar governance documents; (ii) minutes of meetings, or written consents in lieu of meetings,
of the members, boards of directors or managers (or similar governing bodies) and committees of the boards of directors or managers
(or similar governing bodies); (iii) equity transfer ledgers and (iv) other organizational documents (in each case, together
with all amendments thereto) of each Company Party have been delivered or made available to Buyer. None of the Company Parties
is in default under or in violation of any provision of its organizational documents. All transfer Taxes levied or payable with
respect to all transfers of securities of each Company Party prior to the date hereof have been paid and, if applicable, all applicable
transfer Tax stamps have been affixed.


(c)          The
Company and each Seller has all requisite power and authority to execute and deliver the Transaction Agreements to which the Company
and/or such Seller is a party, to perform its or his respective obligations thereunder and to consummate the transactions contemplated
thereby. The execution and delivery of the Transaction Agreements, the performance of its obligations thereunder and the consummation
of the transactions contemplated thereby have been duly and validly authorized by all necessary limited liability company or other
action on the part of the Company. The Transaction Agreements have been duly executed and delivered by the Company and each Seller
and (assuming due execution by the Buyer) constitute legal, valid and binding obligations of the Company and each Seller, enforceable
against them in accordance with their terms.


(d)          No
registrations, filings, applications, notices, consents, approvals, orders, qualifications, authorizations or waivers are required
to be made, filed, given or obtained by any Company Party or any Seller with, to or from any Person, including any Governmental
Body, in connection with the execution and delivery of the Transaction Agreements or the consummation of the transactions contemplated
hereby or thereby, except as set forth on Schedule 2.1(d) (the “Company Approvals”).




    	 	11	 



     


    

  


2.2           Consents
and Approvals; No Violation. Except as disclosed in Schedule 2.2, neither the execution and delivery of the Transaction
Agreements by the Sellers or the Company, nor the performance of their respective obligations hereunder or thereunder, nor the
consummation by the Sellers or the Company of the transactions contemplated hereby or thereby will: (a) conflict with or result
in a breach, violation, or default of or under the certificate of formation, certificate of incorporation or other governing or
organizational document of any Company Party, (b) conflict with, result in a violation or breach of, result in the creation of
any obligation or loss of any benefit under, constitute a default or an event that, with or without notice or lapse of time or
both, would constitute a default under, result in the acceleration of or create in any party the right to accelerate, terminate,
modify or cancel any Contract to which Sellers or any Company Party is a party or by which Sellers or any Company Party is bound
or to which any of their respective properties and assets are subject (including any Contract) or any Governmental Authorization
affecting the properties, assets or business of the Company Parties, (iii) result in the creation of any Encumbrance (other than
Permitted Encumbrances) on the assets or Equity Interests of any Company Party, or (iv) conflict with or result in a violation
or breach of any provision of any Legal Requirement applicable to the Sellers or the Company Parties.


2.3           Units;
Subsidiaries.


(a)          The
authorized, issued and outstanding membership interests of the Company consist of 1,000 Preferred Units and 1,000 Common Units.
The Units transferred to the Buyer pursuant to this Agreement represent 100% of the issued and outstanding Equity Interests
of the Company. The Sellers are the sole record and beneficial owners and holders, free and clear of all Encumbrances, of all of
the Units, as more particularly described in Schedule 2.3(a), and upon consummation of the transactions contemplated by
this Agreement, Buyer shall own all the Units, free and clear of all Encumbrances except those created by Buyer. All of the Units
were validly issued and are fully paid, and were issued in compliance with all applicable Legal Requirements and pursuant to an
exemption from registration under all applicable federal and state securities laws and regulations. None of the Units were issued
in violation of any agreement, arrangement or commitment to which Sellers or any Company Party is a party or is subject to or was
issued in violation of any preemptive, right of first refusal or offer, or similar rights of any Person. There are no outstanding
warrants, options, calls, rights of first refusal, convertible or exchangeable securities or other rights, agreements, arrangements
or commitments of any character pursuant to which the Company or any Seller is or may become obligated to issue, sell, transfer,
purchase, return or redeem, or cause to be done any of the foregoing, any Units, membership interests or any other securities or
interests, and there are no Equity Interests of the Company reserved for issuance for any purpose. The Company does not have any
Contract to acquire any capital stock of or other Equity Interest in any Person. There are no voting trusts, irrevocable proxies
or other Contracts or understandings to which the Company or any Seller is a party or is bound with respect to voting or consent
of any Units.




    	 	12	 



     


    

 


(b)          The
only Persons in which the Company or any Company Party owns or holds any Equity Interest are set forth on Schedule 2.3(b).
The record and beneficial owners and holders, free and clear of all Encumbrances, of all of the Subsidiaries of the Company are
set forth on Schedule 2.3(b). All of the Equity Interests set forth on Schedule 2.3(b) were validly
issued and fully paid, and were issued in compliance with all applicable Legal Requirements and pursuant to an exemption from registration
under all applicable federal and state securities laws and regulations. None of the Equity Interests of any Company Party were
issued in violation of any agreement, arrangement or commitment to which Sellers or any Company Party is a party or is subject
to or was issued in violation of any preemptive, right of first refusal or offer, or similar rights of any Person. There are no
outstanding warrants, options, calls, rights of first refusal, convertible or exchangeable securities or other rights, agreements,
arrangements or commitments of any character pursuant to which any Subsidiary is or may become obligated to issue, sell, transfer,
purchase, return or redeem, or cause to be done any of the foregoing, any Equity Interests, membership interests or any other securities
or interests, and there are no Equity Interests of any Subsidiary reserved for issuance for any purpose. No Subsidiary has any
Contract to acquire any capital stock of or other Equity Interest in any Person. Other than as set forth in the operating agreements
listed on Schedule 2.3(b), there are no voting trusts, irrevocable proxies or other Contracts or understandings to which
any Company Party or any Seller is a party or is bound with respect to voting or consent of any Equity Interests of any Subsidiary.


(c)          There
are no phantom equity rights, equity appreciation rights or other agreements or arrangements of any character that provide for
or grant any right to share in the equity, income, revenue or cash flow of any Company Party. No Company Party has ever adopted,
sponsored or maintained any equity option plan or any other plan or agreement providing for equity compensation to any person.


2.4           Financial
Statements.


(a)          Schedule
2.4 contains accurate and complete copies of (a) the consolidated, audited balance sheets of the Company Parties as of December
31, 2014 (the “Balance Sheet”, and such date the “Balance Sheet Date”); (b)
the consolidated, audited statement of income for the Company Parties for the year then ended; (c) the consolidated, unaudited
balance sheet of the Company Parties as of December 31, 2015 and (d) the consolidated, unaudited statement of income for the Company
Parties as of the fiscal years then ended (collectively, the “Financial Statements”). The Financial Statements
(i) fairly present in all material respects the results of operations and financial position of the Company Parties for the periods
and as of the dates referred to in the Financial Statements and (ii) have been prepared in a manner consistent with the books and
records of the Company Parties and in accordance with GAAP consistently applied throughout the periods covered thereby, subject,
in the case of the Financial Statements that are unaudited, to (x) the absence of notes, and (y) normal year-end audit adjustments,
none of which is material.


(b)          Schedule
2.4(b) sets forth an accurate and complete list of all Company Indebtedness. For the avoidance of doubt, none of the Company
Parties has any (i) obligations evidenced by notes, bonds, debentures or similar instruments, or pursuant to any guaranty or arrangements
having the economic effect of a guarantee (excluding trade payables), or that are secured by a lien on property or assets; (ii) obligations
under interest rate protection agreements; (iii) obligations under capital leases; (iv) obligations issued or assumed as the
deferred purchase price of property or services; (v) accrued but unpaid milestone or royalty obligations that are not accrued in
Closing Working Capital; (vi) obligations in respect of interest rate, currency or commodity derivatives, swaps, hedges or similar
arrangements; (vii) asset retirement obligations and similar obligations; or (viii) obligations evidenced by any securitization
or factoring arrangements.




    	 	13	 



     


    

  


(c)          None
of the Company Parties has any liability of any nature that would be required to be reflected or reserved against on a balance
sheet of the Company’s business prepared in accordance with GAAP, except for (i) liabilities reflected in or reserved against
the Balance Sheet or the notes thereto, (ii) liabilities incurred in the Ordinary Course of Business since the Balance Sheet Date,
and (iii) liabilities set forth on Schedule 2.4(c).


2.5           Absence
of Changes. Since the Balance Sheet Date, except as set forth on Schedule 2.5:


(a)          no
Company Party has declared, accrued, set aside or paid any dividend or made any other distribution in respect of any of its Equity
Interests or otherwise, and has not repurchased, redeemed or otherwise reacquired any of its Equity Interests.


(b)          there
has been no amendment to the certificate of incorporation, certificate of formation, bylaws, operating agreement or other governing
or organizational document of any Company Party, and no Company Party has adopted, effected or been a party to any merger or business
combination or recapitalization or reclassification of its Equity Interests;


(c)          no
Company Party has adopted any plan of consolidation, reorganization, liquidation or dissolution, applied for relief of debt or
moratorium on payments, filed a petition in bankruptcy or insolvency under any provisions of federal or state bankruptcy law, or
consented to the filing of any bankruptcy petition against it under any similar law, and, to the Knowledge of the Company, no third
party has done any of the foregoing with respect to any Company Party;


(d)          no
Company Party has formed any Subsidiary, made any equity or debt investment in or acquired any equity interest in any other Entity;


(e)          no
Company Party has made or committed to make capital expenditures that exceed $25,000 individually or $50,000 in the aggregate,
or $75,000 in the aggregate for all of the Company Parties;


(f)          no
Company Party has (i) entered into or permitted any of the assets owned or used by it to become bound by any Contract that contemplates
or involves (A) the payment or delivery of cash or other consideration by or to such Company Party in an amount or having a value
in excess of $50,000 in the aggregate or that involves obligations lasting longer than 12 months, or (B) the lease, purchase or
sale of any product, or performance of services by or to a Company Party having a value in excess of $50,000 in the aggregate,
or (ii) waived any right or remedy under any Contract other than in the Ordinary Course of Business, or amended or prematurely
terminated any Contract other than in the Ordinary Course of Business;


(g)          no
Company Party has (i) acquired, leased or licensed any right or other property or asset from any other Person, (ii) sold, transferred,
assigned or otherwise disposed of, or leased or licensed, any right, or other property or asset to any other Person, or (iii) waived
or relinquished any right, except, in each case, in the Ordinary Course of Business;




    	 	14	 



     


    

  


(h)          no
material damage, destruction or loss (whether or not covered by insurance) has occurred to any asset of any Company Party, and
there has been no Material Adverse Effect on any Company Party;


(i)          no
Company Party has made any pledge of any of its assets or otherwise permitted any of its assets to become subject to any Encumbrance
other than Permitted Encumbrances;


(j)          no
Company Party has (i) lent money to any Person, (ii) incurred, assumed or guaranteed any indebtedness for borrowed money or (iii)
issued or sold any debt securities or options, warrants, calls or similar rights to acquire any debt securities of any Company
Party;


(k)          no
Company Party has changed any of its personnel policies or other business policies in any material respect, or any of its methods
of collection, payment, accounting or accounting practices in any material respect, including accelerating collection of receivables
or payment of payables;


(l)          no
Company Party has (i) granted any bonuses, whether monetary or otherwise, or increase in any wages, salary, severance, pension
or other compensation or benefits in respect of its employees, officers, directors, independent contractors or consultants, (ii)
changed the terms of employment for any employee or any termination of any employees for which the aggregate costs and expenses
exceed $10,000, (iii) taken any action to grant, vest or pay, or accelerate the granting, vesting or payment of, any compensation
or benefit for any employee, officer, director, independent contractor or consultant, or (iv) entered into any employment, deferred
compensation, severance, special pay, consulting, non-competition or similar agreement (or amended any such agreement to which
a Company Party is a party);


(m)          no
Company Party has made any loan or advance to (or forgiven, canceled or compromised any loan to) any Person, other than ordinary
course expense advancements to its employees, and no Company Party has entered into any transaction with any of its stockholders,
directors, officers and employees;


(n)          no
Company Party has entered into a new line of business or abandoned or discontinued any existing line of business;


(o)          no
Company Party has (i) made any Tax election, or adopted or changed any accounting method in respect of Taxes, (ii) entered into
any closing agreement, settled or compromised any claim or assessment in respect of Taxes other than with respect to a claim or
assessment which existed on the date hereof and in an amount not greater than the liability or reserve that has been recorded with
respect thereto in the Financial Statements, (iii) consented to any extension or waiver of any limitation period with respect to
any claim or assessment for Taxes, or (iv) amended any Tax Return or filed any claim for a refund of Taxes;


(p)          no
Company Party has threatened, commenced or settled any Legal Proceeding; and




    	 	15	 



     


    

  


(q)          no
Company Party has agreed to take, or committed to take, any of the actions referred to in clauses “(a)” through “(p)”
above.


2.6           Tax
Matters. Except as set forth on Schedule 2.6, (a) the Company Parties have prepared and timely filed (taking into account
any extension of time within which to file) all Tax Returns required to be filed by any of them prior to the Closing Date and all
such filed Tax Returns are complete and accurate in all material respects, (b) the Company Parties have paid all income and other
material Taxes that are due and payable by any of them prior to the Closing Date (whether or not shown on any Tax Return) (c) all
income and other material Taxes not yet due and payable of the Company Parties for any Pre-Closing Period that are not accrued
as liabilities in the Financial Statements have been properly accrued on the books and records of the Company Parties, (d) with
respect to each Company Party, no claim has ever been made by a Tax Authority in writing in any jurisdiction where such Company
Party does not file Tax Returns claiming that such Company Party is or may be subject to taxation in that jurisdiction, (e) the
Company Parties have withheld and timely paid to the appropriate taxing authority all material Taxes required to be withheld and
paid in connection with amounts paid or owing to any employee, member, shareholder, independent contractor, creditor or other third
party, (f) there are no Liens for Taxes (other than Permitted Encumbrances) upon any assets of any Company Party, (g) no deficiencies
have been asserted in writing or assessed by any taxing authority against any Company Party, (h) the Company Parties have not received
written notice of any pending or threatened audits, examinations, investigations or other proceedings in respect of any Taxes or
Tax Returns of the Company Parties and there are no currently effective waivers (or requests for waivers) or extensions of the
time to assess any Taxes of the Company Parties, (i) no Company Party has participated in any “listed transaction”
within the meaning of Treasury Regulation Section 1.6011-4(b)(2) or, to the Sellers’ Knowledge any transaction that did not
have economic substance for purposes of Section 7701(o) of the Code or that, when entered into, was a “reportable transaction”
within the meaning of Treasury Regulation Section 1.6011-4(b)(1), (j) the Company is classified as a partnership and FSC Therapeutics,
LLC is classified as a disregarded entity of the Company, in each case, for U.S. federal income tax purposes, (k) no Company Party
is a party to any Tax allocation, Tax sharing, Tax indemnification or similar agreement or has been a member of an affiliated,
combined, consolidated or unitary group of companies of which a Company Party is not the common parent or has any liability for
the Taxes of any other person under Treasury Reg. Section 1.1502-6 (or any similar provision of any Tax law or regulation) as a
transferee or successor, by contract, or otherwise, (l) no Company Party will be required to include any item of income in, or
exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as
a result of (i) a change in method of accounting as described in Section 481 of the Code (or any similar provision of any Tax law
or regulation) occurring prior to the Closing, (ii) a “closing agreement” as described in Section 7121 of the Code
entered into prior to the Closing or (iii) an election under Section 108(i) of the Code made prior to the Closing or (iv) an installment
sale or open sale transaction occurring before the Closing Date, (m) no Company Party is a party to any agreement, contract, arrangement
or plan that has resulted or could result, separately or in the aggregate, in the payment of any “excess parachute payment”
within the meaning of IRC Section 280G, (n) no Company Party is a “United States real property holding corporation”
within the meaning of Section 897(c)(2) of the Code, (o) no Company Party has been the subject of an audit or other examination
in respect of Taxes, (p) no Company Party has granted a power of attorney relating to Tax matters that will be in effect after
Closing to any person, (q) no tax rulings or requests for rulings have been applied for or obtained by any Company Party, (r) the
Company has delivered or made available to Buyer copies of each of the Tax Returns filed by each Company Party since January 1,
2013, and (s) no entity has merged with or been liquidated into any Company Party.




    	 	16	 



     


    

  


Notwithstanding anything to the contrary in this Agreement,
(i) the representations and warranties set forth in this Section 2.6 and Section 2.9 shall be the only representations or warranties
in this Agreement with respect to Taxes, and (ii) the Sellers make no representations or warranties regarding the amount, value
or condition of, or any limitations on, any Tax asset or attribute (e.g., net operating losses) (each, a “Tax Attribute”)
of the Company Parties arising in any Pre-Closing Period, the ability of the Buyer or any Company Party to use any Tax Attributes
after the Closing or any Tax positions that Buyer or its Affiliates (including the Company Parties) may take in or in respect of
a taxable period (or portion thereof) beginning after the Closing Date.


2.7           Claims.
There are no claims or Legal Proceedings that are currently pending against any Company Party, or to the Company’s Knowledge
that are (a) threatened against any Company Party or (b) that challenge, or reasonably could be expected to prevent or delay the
transactions contemplated by this Agreement. To the Company’s Knowledge there are no claims or Legal Proceedings against
any director, officer or employee of any Company Party (in their capacities as such). There are no claims or Legal Proceedings
pending in which a Company Party is a plaintiff or in which a Company Party is otherwise seeking recovery. No Company Party is
subject to any Order, settlement agreement or stipulation, nor is any Company Party in breach or violation of any Order, settlement
agreement or stipulation.


2.8           Compliance
with Laws.


(a)          Each
Company Party has complied and is now in compliance with all Legal Requirements applicable to it or its business, properties or
assets. No Company Party has received in the last three years any written notice from any Governmental Body or any other Person
regarding (i) any actual, alleged or potential violation of or liability under any Legal Requirement, or (ii) any actual, alleged,
or potential obligation of such Company Party to undertake or pay for any response action required by any Legal Requirement. To
the Company’s Knowledge, no Company Party is under investigation or inquiry with respect to the violation of any Legal Requirement.


(b)          Schedule
2.8(b) sets forth all material Governmental Authorizations held by the Company Parties, which constitute all material Governmental
Authorizations required for each Company Party to conduct its business as currently conducted. All such Governmental Authorizations
are valid and in full force and effect and no Company Party is in default under or violation of (and no event has occurred that,
with notice or the lapse of time or both, would constitute a default under or violation of) any term, condition or provision of
any Permit held by it. All material fees and charges with respect to such Governmental Authorizations due and payable as of the
date hereof have been paid in full. No event has occurred that, with or without notice or lapse of time or both, would reasonably
be expected to result in the revocation, suspension, lapse or limitation of any Governmental Authorizations of the Company Parties.
No Company Party has received written notice in the last two years of any loss of or refusal to renew any Governmental Authorization
held by it.








    	 	17	 



     


    



 


2.9           Employee
and Labor Matters; Benefit Plans.


 


(a)          The
Company has delivered to the Buyer a complete and accurate list of the name, job title, current annual compensation and total compensation
in 2015 (including bonus), accrued vacation and severance pay of each officer, director and employee of the Company Parties. Schedule
2.9(a) lists each Contract (i) for the employment of any individual or (ii) relating to the payment of any severance
or termination payment to any current of former employee or independent contractor. Each Company Party has complied in all material
respects with all Legal Requirements relating to employment and terms and conditions of employment, immigration, wages, occupational
safety and health.


 


(b)          The
Company is not a party to any collective bargaining agreement or other labor Contract. There is no pending or, to the Company’s
Knowledge, threatened (i) strike, slowdown or work stoppage, or (ii) application for certification of a collective bargaining
agent for any of the Company’s employees. There is no lockout of any employees of the Company, and no such action is contemplated
by the Company.


 


(c)          Schedule
2.9(c) lists each independent contractor who currently provides services to any Company Party. Each Company Party has properly
classified for all purposes (including for all Tax purposes and for purposes of determining eligibility to participate in any Employee
Plan) all employees and independent contractors of the Company Party.


 


(d)          Since
January 1, 2014, no Company Party has effectuated (a) a “plant closing” as defined in the WARN Act affecting any
site of employment or one or more facilities or operating units within any site of employment or facility, or (b) a “mass
layoff” as defined in the WARN Act affecting any site of employment or facility.


 


(e)          Schedule
2.9(e) sets forth a list of each “employee benefit plan” (as defined in Section 3(3) of ERISA) and each bonus,
equity rights, deferred compensation, change in control, profit sharing, vacation, cafeteria, fringe benefit or welfare benefit
plan, program or arrangement (whether qualified or nonqualified) to which any Company Party is a party, with respect to which any
Company Party has or may reasonably be expected to have any obligation or liability, or which is maintained, contributed to or
sponsored by any Company Party (each of the foregoing, an “Employee Plan”). Except as required by Section
4980B of the Code, none of the Employee Plans provides welfare benefits following termination of employment of an employee of any
Company Party.


 


(f)          The
Company has made available to the Buyer with respect to each Employee Plan, to the extent applicable, (i) a true and complete copy
of each governing plan document, all amendments thereto, and each summary plan description, (ii) each trust agreement, insurance
Contract, the latest financial statements and documents governing funding of the Employee Plan, (iii) the most recent IRS Form
5500, and (iv) if the Employee Plan is unwritten, a written description of the material terms thereof. Each Employee Plan has been
operated in material compliance with its terms and the requirements of ERISA, the Code and other applicable Legal Requirements.
Each Employee Plan intended to be qualified under Code Section 401(a) is so qualified, and the Company has received a favorable
determination letter from the IRS or is entitled to rely on a favorable opinion letter from the IRS with respect to such Employee
Plan. All contributions with respect to each Employee Plan relating to the period prior to and including the Closing Date have
been made by the Company.


 




    	 	18	 



     


    

 


(g)          No
Company Party has maintained, established, sponsored, participated in, or contributed to any: (i) employee benefit pension plan
(as defined in Section 3(2) of ERISA) (“Pension Plan”) subject to Title IV of ERISA; (ii) multiple employer
plan subject to Section 413 of the Code; (iii) multiemployer plan within the meaning of Section (3)(37) of ERISA; (iv) multiple
employer welfare arrangement subject to Section 3(40) of ERISA, or (v) a program or arrangement subject to Section 419, 419A or
501(c)(9) of the Code. No Company Party has maintained a Pension Plan or multiemployer plan, or the equivalent thereof, in a foreign
jurisdiction (a “Foreign Plan”).


 


(h)          No
Company Party (i) has been required to be treated as a single employer with any other Person under Section 4001(b)(1) of ERISA
or Section 414(b), (c), (m) or (o) of the Code, (ii) has been a member of an “affiliated service group” within the
meaning of Section 414(m) of the Code, or (iii) has made a complete or partial withdrawal from a multiemployer plan, as such term
is defined in Section 3(37) of ERISA.


 


2.10         Insurance.
The Company Parties maintain the insurance coverage set forth on Schedule 2.10. Each insurance policy is in full force and
effect and provides coverage as may be required by applicable Legal Requirements or by the Contracts to which the Company Parties
are parties. All premiums due and payable under all policies have been paid, and the Company Parties are otherwise in compliance
with the terms and conditions of such policies. There is no claim pending under any such policy and no Company Party has received
any written notice or other communication regarding any actual or possible (a) cancellation or invalidation of any insurance policy,
(b) refusal of any coverage or rejection of any claim under any insurance policy, or (c) material adjustment in the amount of the
premiums payable with respect to any insurance policy.


 


2.11         Real
Property. Schedule 2.11 identifies all real property leased by any Company Party and the lease agreement related thereto,
copies of which have been made available to the Buyer (the “Leased Real Property”). No Company Party
owns or has ever owned any real property and no Company Party has ever been a lessor or sublessor of real property. The Leased
Real Property constitute all interests in real property and all facilities currently occupied, used or held for use in connection
with the businesses of the Company Parties. The Company Parties enjoy quiet and undisturbed possession of each applicable Leased
Real Property. No party to any Lease has exercised any right of termination, extension, renewal, purchase option, expansion or
right of first refusal with respect to any Lease. There is no Person other than the applicable Company Party that is in possession
of or uses or occupies any portion of any Leased Real Property. To the Knowledge of the Company, there is no condemnation, expropriation,
environmental, zoning or other land-use regulation proceeding pending or threatened with respect to any Leased Real Property.


 




    	 	19	 



     


    

 


2.12         Bank
Accounts. Schedule 2.12 lists each bank account or safety deposit box maintained by the Company Parties at any bank
or other financial institution, including the name of the bank or financial institution, the account number and the names of all
individuals authorized to draw on or make withdrawals from such accounts.


 


2.13         Regulatory
Compliance.


 


(a)          Each
of the Products is set forth on Schedule 2.13(a) and is subject to the Governmental Authorization set forth opposite the
name of such Product on Schedule 2.13(a). Each Product’s Drug Master Files, as defined in 21 C.F.R. Section 314.420
(“DMFs”), in the possession of the FDA, and each equivalent file in the possession of any other Governmental
Body, is complete, accurate and up to date in all material respects, and the subject of each such DMF and equivalent file can be
legally manufactured or utilized in compliance with the pertinent DMF or equivalent file. Each of the Products manufactured and
tested for use in a product whose regulatory submission references a DMF or equivalent file is being manufactured and tested in
compliance with the terms of the current version of such applicable file. To the Knowledge of the Company, all Persons involved
in the manufacturing, warehousing, distributing and testing of the Products on behalf of the Company Parties are and have been
for the last two years in compliance in all material respects with all applicable Legal Requirements, including the rules and regulations
of all applicable Governmental Bodies, including U.S. Current Good Manufacturing Practice Regulations and equivalent foreign rules
and regulations.


 


(b)          No
Company Party has received any notices or correspondence from the FDA or any Governmental Body exercising comparable authority
requiring the recall, withdrawal, termination or suspension of sale of the Products or otherwise alleging that any Company Party
or any Product is not in compliance in all material respects with all applicable Legal Requirements. No Legal Proceeding seeking
the recall, withdrawal, suspension or seizure of any of the Products has ever been pending or, to the Company’s Knowledge,
threatened. None of the Products has been (i) adulterated within the meaning of 21 U.S.C. Section 351 (or any equivalent Legal
Requirement); (ii) misbranded within the meaning of 21 U.S.C. Section 352 (or any equivalent Legal Requirement); or (iii) produced
in violation of 21 U.S.C. Section 355 (or any equivalent Legal Requirement).


 


(c)          None
of the Company Parties, nor any of their respective directors, managers, officers or employees, nor, to the Company’s Knowledge,
any of their respective agents or contractors is or has been the subject of any pending or threatened investigation by the FDA
pursuant to its “Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities” Final Policy set forth
in 56 Fed. Reg. 46191 (September 10, 1991) and any amendments thereto, or by any other comparable Governmental Body pursuant to
any similar policy. Neither the Company nor any of its officers and employees, nor, to the Company’s Knowledge, any of its
agents and contractors has (A) made any untrue statement of material fact or fraudulent statement to FDA, DEA, or any other Governmental
Body; (B) failed to disclose a material fact required to be disclosed to FDA, DEA, or any other Governmental Body, or (C) committed
an act, made a statement, or failed to make a statement that would reasonably be expected to provide the basis for the FDA or any
other Governmental Body to invoke its policies regarding such matters, such as the FDA’s “Fraud, Untrue Statements
of Material Facts, Bribery, and Illegal Gratuities” Final Policy.


 




    	 	20	 



     


    

 


(d)          None
of the Company Parties, nor any of their respective directors, managers, officers or employees, nor, to the Company’s Knowledge,
any of their respective agents or contractors has been debarred or convicted of any crime or engaged in any conduct that did or
could result in debarment under 21 U.S.C. § 335a, exclusion from federal healthcare programs under 42 U.S.C. § 1320a-7,
disqualification as a clinical investigator under 21 C.F.R. § 312.70 or similar consequence under any similar Legal Requirements,
and none of such Persons has engaged in any conduct that would reasonably be expected to result in debarment, exclusion, or disqualification
from U.S. federal health care programs.


 


(e)          None
of the Company Parties, nor any of their respective directors, managers, officers or employees has received any written notice
or communication from the FDA, DEA, or other Governmental Body relating to (i) adverse inspection, investigation or corrective
or remedial action with respect to the Persons engaged in manufacturing, warehousing, testing or distributing the Products; or
(ii) termination or suspension of sale of the Products or alleging noncompliance with any applicable FDA Law, DEA Law, or other
applicable Legal Requirements with regard to the Products. Neither the Company nor any of its officers has been or is subject to
any enforcement proceedings (including seizure or injunction) by the FDA, DEA, or other Governmental Body and, to the Company’s
Knowledge, no such proceedings have been threatened. None of the Company Parties has received any written notice in the last two
years that any Governmental Body has commenced, or threatened to commence, any Legal Proceeding to withdraw its approval, registration
or licensure of any Product.


 


(f)          Each
Company Party is duly authorized to sell the Products in each of the jurisdictions in which it is currently selling the Products.
To the extent that any of the Products is intended for export from the United States or import into any country, each Company Party
is in compliance in all material respects with the applicable Legal Requirements of such country.


 


(g)          The
Company Parties have provided to the Buyer all material documents in their possession or control concerning communications from
or to any Governmental Body in the last two years relating to (i) establishment inspection reports and (ii) warning letters
relating to the Products.


 


(h)          The
Company Parties have provided to the Buyer accurate and complete copies of all Periodic Adverse Experience Reports filed by or
on behalf of, and all Periodic Safety Update Reports generated by or on behalf of, the Company Parties for the last two years.


 


(i)           None
of the Company Parties nor any of their respective officers, directors or managers is a Prohibited Person. No Company Party has
engaged in a transaction involving, directly or indirectly, a Prohibited Person or Iran, Sudan, Syria or any other country against
which the United States imposes a trade embargo.


 




    	 	21	 



     


    

 


(j)           None
of the Company Parties nor any of their respective officers, directors, managers, employees, or to the Knowledge of the Company
its agents or consultants or any other Person acting for or on behalf of any Company Party has:


 


(i)          made,
undertaken, offered to make, promised to make or authorized the payment or giving of any bribe, rebate, payoff, influence payment,
kickback or other payment or gift of money or anything of value (including meals or entertainment), to any officer, employee or
ceremonial office holder of any government or instrumentality thereof, any political party or supra-national organization (such
as the United Nations), any political candidate, any royal family member or any other person who is connected or associated personally
with any of the foregoing for the purpose of influencing any act or decision of such payee in his official capacity, inducing such
payee to do or omit to do any act in violation of his lawful duty, securing any improper advantage or inducing such payee to use
his influence with a government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality
(“Prohibited Payments”);


 


(ii)          been
subject to any investigation by any Governmental Body with regard to any actual or alleged Prohibited Payment;


 


(iii)        used
funds or other assets, or made any promise or undertaking in such regard, for the establishment or maintenance of a secret or unrecorded
fund (a “Prohibited Fund”); or


 


(iv)         made
any false or fictitious entries in any books or records of any Company Party relating to any Prohibited Payment or Prohibited Fund.


 


2.14         Accounts
Receivable. All accounts receivable of the Company Parties represent valid, undisputed and bona fide claims of the Company
not subject to claims of set-off or other defenses or counterclaims other than normal cash discounts accrued in the Ordinary Course
of Business.


 


2.15         Proprietary
Rights.


 


(a)          Schedule
2.15(a) lists each registered Proprietary Right that the Company Parties use in their business. The Company Parties own or
have a valid and enforceable right to use (which right will remain in full force and effect immediately upon consummation of the
Transactions) all of the Proprietary Rights that the Company Parties use in their business as of the date hereof (the “Company
Proprietary Rights”). Except as disclosed in Schedule 2.15(a), the Company Parties have no obligation to pay
any royalty to any Person relating to any Proprietary Right used by the Company. The Company Parties have complied in all material
respects with their respective duties of disclosure to the U.S. Patent and Trademark Office regarding each applicable item of registered
Company Proprietary Rights. None of the Sellers nor any officer, director, manager, employee or independent contractor of any Company
Party, or any of their respective Affiliates (other than the Company Parties), has any ownership, royalty or other right to or
interest in any of the Company Proprietary Rights.


 




    	 	22	 



     


    

 


(b)          Schedule
2.15(b) sets forth a true and complete list or description of all Contracts under which a Company Party has licensed or assigned
any Company Proprietary Rights to a third party. Neither the applicable Company Party nor, to the Knowledge of the Company, the
applicable third party is in default in the performance, observance or fulfillment of any obligation, covenant or condition contained
in any Contract pursuant to which the Company Party licenses to or from a third party the right to use any Company Proprietary
Right.


 


(c)          To
the Knowledge of the Company: (i) no Company Party is infringing upon, violating or misappropriating any Proprietary Right of any
other Person, and (ii) no Person is infringing upon, violating or misappropriating any Company Proprietary Right. No Seller or
Company Party has received in the last two years any written claim of any infringement, violation, misappropriation or dilution
by, or other possible conflict with, any third party with respect to any of the Products, the Company Proprietary Rights, or activities
necessary to conduct the businesses of the Company Parties as currently conducted. No claims are pending or, to the Company’s
Knowledge, threatened against any Company Party by any Person: (A) contesting the validity, enforceability, use or ownership
of any Company Proprietary Right; (B) that such Person has any right, title or interest in or to any of the Company Proprietary
Rights; (B) that such Person has the right to use any of the Company Proprietary Rights; or (C) to the effect that any
action by any Company Party infringes any Proprietary Right of such Person. No loss, expiration, reexamination, reissue, opposition,
or declaratory judgment action pertaining to any Company Proprietary Right is pending or, to the Company’s Knowledge, threatened.


 


(d)          All
employees, contractors and consultants retained or hired by the Company Parties have executed and delivered to the applicable Company
Party (i) confidentiality, proprietary information, non-competition, non-use, non-disparagement, non-solicitation and non-disclosure
agreements and (ii) intellectual property assignment agreements, in each case in form and substance reasonably acceptable to the
Buyer, and no employee, contractor or consultant of any Company Party is in violation of any such agreement.


 


(e)          The
Company Parties have not developed any Proprietary Rights using any funding provided by any college or university or any Governmental
Body.


 


(f)          All
necessary registration, maintenance, renewal and other relevant filing fees in connection with any registered Company Proprietary
Rights have been timely paid, and all necessary documents, certificates and other relevant filings in connection with such Company
Proprietary Rights have been timely filed with the relevant Governmental Authorities in the United States or foreign jurisdictions,
as the case may be, for the purpose of maintaining such Company Proprietary Rights and all issuances, registrations and applications
therefor.


 


(g)          All
data, including personally identifiable information and other information relating to Persons that is protected by Legal Requirements,
that has been collected, imported, exported, stored, maintained, disclosed or otherwise used by the Company Parties have been collected,
imported, exported, stored, maintained, disclosed and used in accordance with all applicable Legal Requirements. To the Knowledge
of the Company, there have been no security breaches compromising the confidentiality or integrity of such information. No Company
Party has received in the last two years a written notice of noncompliance with applicable data protection Legal Requirements.


 




    	 	23	 



     


    

 


2.16         Supply
Arrangement. Schedule 2.17 sets forth a list of all supply agreements for goods or services related to the Products
(“Product Suppliers”). No Company Party has received any written notice that any of its Product Suppliers
has ceased, or intends to cease, to supply goods or services, to otherwise terminate or materially reduce its relationship with
such Company Party, or, except as set forth in a Contract of a Company Party, to increase its prices for such goods and services.


 


2.17         Contracts.


 


(a)          Schedule
2.17(a) sets forth a complete and accurate list of each Contract of any Company Party that falls into one or more of the following
categories:


 


(i)          is
a Contract that is or relates to the performance of services or sale or delivery of goods or materials by or to a Company Party
of an amount or value in excess of $25,000 per year or that has obligations that continue for longer than 12 months and,
in either case, is not cancelable without penalty on 30 days’ notice or less;


 


(ii)         is
a Contract that is or relates to the grant or receipt by a Company Party of any license of Proprietary Rights;


 


(iii)        is
a Contract that is a lease agreement with respect to real property (“Leases”);


 


(iv)         is
a Contract of any Company Party with any other Company Party, any Seller or any Affiliate of any Seller, or any officer, director
or employee of such Company Party or any other Company Party;


 


(v)          is
a Contract with investment bankers, financial advisors, attorneys, accountants or other advisors retained by any Company Party,
or that involves a sale or license of assets of a Company Party outside the Ordinary Course of Business;


 


(vi)         is
a Contract that provides for the indemnification by any Company Party of any person except for any such Contract that was entered
into in the Ordinary Course of Business;


 


(vii)        is
a Contract relating to any Company Indebtedness (excluding trade payables in the Ordinary Course of Business) or that grants any
Encumbrance on any of the assets of any Company Party;


 


(viii)      is
a partnership, joint venture agreement, strategic alliance agreement or other similar agreement involving co-investment with a
third party to which any Company Party is a party, or is a Contract involving a merger, business combination or other fundamental
business transaction involving a Company Party;


 


(ix)         is
a Contract with a Governmental Body; or


 




    	 	24	 



     


    

 


(x)          is
a Contract that (A) contains non-competition, exclusivity, or other covenants limiting or restricting the ability of a Company
Party or any Affiliate of a Company Party to engage directly or indirectly in any business, including with respect to geographic
areas. (B) grant rights of first refusal, rights of first negotiation or similar rights or terms to any Company Party or any
Person, (C) limits the ability of any Company Party or any Affiliate of a Company Party to solicit any customers, employees
or clients of any other Person, (D) requires a Company Party or any Affiliate of any Company Party to provide to any other
Person “most favored nation” pricing, or (F) requires a Company Party or an Affiliate of a Company Party to market
or co-market any products or services of a third party.


 


The contracts or instruments required to be set forth in Schedule
2.17(a) are referred to herein as the “Material Contracts.”


 


(b)          The
Company has heretofore delivered to the Buyer true and complete copies of all the Material Contracts, or detailed descriptions
of any oral Material Contracts.


 


(c)           Each
of the Material Contracts is in full force and effect, constitutes a valid and binding obligation of a Company Party and, to the
Company’s Knowledge, the other parties thereto, and is legally enforceable against such Company Party and, to the Company’s
Knowledge, the other parties thereto, in accordance with its terms, except as enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or other laws relating to or limiting creditor’s rights generally
or by general principles of equity.


 


(d)           No
Company Party is in breach or default in any material respect under any Material Contract and, to the Company’s Knowledge,
no other party to any of the Material Contracts is in breach or default in any material respect thereunder; and no event has occurred
that with the lapse of time or the giving of notice or both would constitute a breach or default by a Company Party or any other
party thereunder. No Company Party has received in the last two years written notice from a counterparty to any Material Contract
(i) alleging a breach or default under such Material Contract, (ii) alleging termination, rescission, invalidity or unenforceability
of such Material Contract, or (iii) of any intention to terminate such Material Contract or to exercise (other than in the
normal course of performance) any right or remedy exercisable on breach or default under such Material Contract.


 


2.18           Title
to Assets. Each Company Party has good and valid title to, or a valid leasehold interest in, all real property and personal
property used by it in connection with its business as presently conducted, in each case free and clear of any Encumbrance, and
all other assets reflected in the Financial Statements or acquired after the Balance Sheet Date, other than properties and assets
sold or otherwise disposed of in the Ordinary Course of Business since the Balance Sheet Date. The molds for production of the
Flexichamber are in satisfactory operating condition and free from material defects, in each case subject to ordinary wear and
tear, and are suitable for the purposes used.


 




    	 	25	 



     


    

 


2.19         Necessary
Assets. The Leased Real Property, the Proprietary Rights, the tangible personal property owned by the Company Parties and all
other assets owned, licensed or leased by the Company Parties constitute all of the assets that are necessary to operate the Company
Parties’ respective businesses as conducted on the date of this Agreement and to permit the Buyer to operate the Company
Parties’ business immediately after the Closing Date in substantially the same manner as it is operated immediately prior
to the Closing Date.


 


2.20         No
State Antitakeover Statute. There is no state business combination, control share or other antitakeover statute or similar
statute or regulation that is or becomes operative with respect to this Agreement or any of the transactions contemplated by this
Agreement. If any such state business combination, control share or other antitakeover statute or similar statute or regulation
is or becomes operative with respect to this Agreement or any of the transactions contemplated by this Agreement, the Company has
taken all actions necessary to ensure that this Agreement and any of the transactions contemplated by this Agreement may be consummated
as promptly as practicable on the terms contemplated by this Agreement and otherwise to minimize the effect of such statute or
regulation.


 


2.21         Brokers.
No broker, finder or other Person is or will be entitled to any brokerage fees, commissions or finder’s fees from any Seller
or any Company Party or by reason of any action taken by the Seller or any Company Party.


 


2.22         Transaction
Payments. There are no payments payable by the Company to any director, officer, employee or former director, officer or employee
of the Company arising at or prior to the Closing from or as a result of the consummation of the transactions contemplated by this
Agreement, including any payments for stock appreciation or similar rights, any severance or bonus plan payment, any payment of
deferred compensation, any transaction bonus or change in control payment, or any similar payment (“Company Transaction
Payments”). As of the Closing, there are no outstanding or unsatisfied Company Transaction Payments.


 


2.23         Related
Party Transactions. No employee, officer, director, manager or member of any Company Party, or any member of any such Person’s
immediate family (“Related Persons”), directly or indirectly, (a) owes any amount to any Company Party or is
owed any amount by a Company Party, (b) is involved in any business arrangement or other relationship with any Company Party
(whether written or oral), (c) owns any property or right, tangible or intangible, that is used by a Company Party, (d) has
any claim or cause of action against a Company Party or (e) owns or holds any direct or indirect interest of any kind in,
or controls or is a director, officer, employee or partner of, equity holder in, consultant to, or lender to or borrower from,
or otherwise has the right to participate in the profits of, any Person that is a competitor, supplier, customer, landlord, tenant,
creditor or debtor of a Company Party.


 


2.24         Distributions
to Sellers. Since the Balance Sheet Date, no Company Party has made any dividend or distribution of cash or other assets to
any Seller except for repayments of Company Indebtedness.


 


2.25         No
Other Representations or Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 2 AND SECTION 3, NEITHER THE SELLERS NOR
THE COMPANY MAKES, AND NO PARTY SHALL BE ENTITLED TO RELY UPON, ANY REPRESENTATION OR WARRANTY AS TO ANY FACT OR MATTER ABOUT THE
COMPANY PARTIES OR THE SELLERS.


 




    	 	26	 



     


    

 


3.          REPRESENTATIONS
AND WARRANTIES OF THE sellers


 


Each Seller severally represents and warrants
to the Buyer as follows.


 


3.1           Organization;
Good Standing. If not a natural person, such Seller is duly organized, validly existing and in good standing under the laws
of the state of its formation.


 


3.2           Authority;
Enforceability. Such Seller has the absolute and unrestricted right, authority, power and capacity to (i) execute and
deliver each certificate, document and agreement to be executed by such Seller in connection herewith (collectively, the “Seller
Documents”) and (ii) perform its obligations thereunder. The execution and delivery of the Seller Documents and the
consummation of the transactions contemplated thereby have been duly and validly authorized by such Seller. Each Seller Document
has been duly and validly executed and delivered by such Seller and constitutes the legal, valid and binding obligation of the
Seller, enforceable against it in accordance with its terms except (x) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and other similar Legal Requirements of general application affecting enforcement of creditors’
rights generally and (y) the availability of the remedy of specific performance or injunctive or other forms of equitable relief
may be subject to equitable defenses and would be subject to the discretion of the court before which any such proceeding may be
brought.


 


3.3           Consents
and Approvals; No Violation. Neither the execution and delivery of the Seller Documents by such Seller nor the performance
of its obligations thereunder nor the consummation by such Seller of the transactions contemplated thereby will: (i) conflict with
or result in a breach, violation, or default of or under, (ii) give any third party the right to modify, terminate or accelerate
any liability or obligations of, (iii) result in the creation of any Encumbrance (other than Permitted Encumbrances) on the Units,
or (iv) require any Consent by or declaration or notice to any third party or Governmental Body pursuant to (A) the certificate
of formation or other governing documents of the Seller or (B) any Legal Requirement.


 


3.4           Title
to Units. Such Seller is the sole owner of the Units reflected next to such Seller’s name on Schedule 2.3 and
has, and will have as of the Closing, good, valid and marketable title to such Units free and clear of any Encumbrances. Such Seller
represents that such Seller has full right, power and authority to sell, transfer and deliver such Units to Purchaser, and, at
the Closing, will transfer to Purchaser good, valid and marketable title thereto free and clear of any Encumbrances. Other than
the operating agreement of the Company, such Seller is not party to any voting trust agreement or arrangement affecting the exercise
of the voting rights of such Seller’s Units. There is no Legal Proceeding against such Seller or such Seller’s assets
or properties pending or, to such Seller’s knowledge, threatened, at law or in equity, or before any court, arbitrator or
other tribunal, or before any administrative law judge, hearing officer or administrative agency relating to or in any manner affecting
upon the Units held by such Seller.


 


3.5           Consents
and Approvals; No Violation. Neither the execution and delivery of the Seller Documents by such Seller nor the performance
of its obligations thereunder nor the consummation by the Seller of the transactions contemplated thereby will: (i) conflict with
or result in a breach, violation, or default of or under, (ii) give any third party the right to modify, terminate or accelerate
any liability or obligations of, (iii) result in the creation of any Encumbrance (other than Permitted Encumbrances) on the assets
of such Seller under or pursuant to, or (iv) require any Consent by or declaration or notice to any third party or Governmental
Body pursuant to (A) the governing documents of such Seller, if applicable, (B) any Contract to which such Seller is a party, or
(C) any Legal Requirement or Order.


 




    	 	27	 



     


    

 


3.6           No
Other Representations or Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 3 AND SECTION 2, NEITHER THE SELLERS NOR
THE COMPANY MAKES, AND NO PARTY SHALL BE ENTITLED TO RELY UPON, ANY REPRESENTATION OR WARRANTY AS TO ANY FACT OR MATTER ABOUT THE
COMPANY PARTIES OR THE SELLERS.


 


4.          REPRESENTATIONS
AND WARRANTIES OF THE BUYER


 


The Buyer represents and warrants to the
Sellers as follows.


 


4.1           Organization;
Good Standing. The Buyer is duly organized, validly existing and in good standing under the laws of France. The Buyer has the
requisite power and authority to own, lease or use its properties and assets and to conduct its business as presently conducted.


 


4.2           Authority;
Enforceability. The Buyer has the absolute and unrestricted right, authority, power and capacity to (i) execute and deliver
each certificate, document and agreement to be executed by them in connection herewith (collectively, the “Buyer Documents”)
and (ii) perform its obligations thereunder. The execution and delivery of the Buyer Documents and the consummation of the transactions
contemplated thereby have been duly and validly authorized by the Buyer. Each Buyer Document has been duly and validly executed
and delivered by the Buyer and constitutes the legal, valid and binding obligation of the Buyer, enforceable against it in accordance
with its terms except (x) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and
other similar Legal Requirements of general application affecting enforcement of creditors’ rights generally and (y) the
availability of the remedy of specific performance or injunctive or other forms of equitable relief may be subject to equitable
defenses and would be subject to the discretion of the court before which any such proceeding may be brought.


 


4.3           Consents
and Approvals; No Violation. Neither the execution and delivery of the Buyer Documents by the Buyer nor the performance of
its obligations thereunder nor the consummation by the Buyer of the transactions contemplated thereby will: (i) conflict with or
result in a breach, violation, or default of or under, (ii) give any third party the right to modify, terminate or accelerate any
liability or obligations of, (iii) result in the creation of any Encumbrance (other than Permitted Encumbrances) on the assets
of the Buyer under or pursuant to, or (iv) require any Consent by or declaration or notice to any third party or Governmental Body
pursuant to (A) the governing documents of the Buyer, (B) any Buyer Contracts, or (C) any Legal Requirement.


 


4.4           No
Restrictions. There are no restrictions on, or conditions to, the Buyer’s ability to make all of the payments contemplated
in this Agreement in any Contract of the Buyer (including any loan agreement, note, indenture or similar financing document).


 




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4.5           No
Other Representations or Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 4, THE BUYER DOES NOT MAKE, AND NO PARTY
SHALL BE ENTITLED TO RELY UPON, ANY REPRESENTATION OR WARRANTY AS TO ANY FACT OR MATTER ABOUT THE BUYER.


 


5.          ADDITIONAL
AGREEMENTS OF THE PARTIES


 


5.1        Indemnification
of Officers and Directors.


 


(a)          The
Company shall purchase, as a Company Transaction Expense, and pay all premiums under, a six-year tail insurance policy, with an
effective date as of the Closing Date, which maintains in effect for six years from the Closing Date the current directors’
and officers’ liability insurance policies maintained by the Company Parties on terms and conditions that are not materially
less favorable than those of such policy in effect as of the date hereof. Such policy shall cover only those persons who are currently
covered by the Company’s existing directors’ and officers’ liability policy in effect as of the Closing Date
and, in each case, only for matters occurring at or prior to the Closing.


 


(b)           Subject
to the Buyer’s rights to indemnification as provided in Section 6.2, which shall supersede this Section 5.1(b), from
and after the Closing Date for a period of six years, the Company shall fulfill and honor in all respects the obligations of the
Company pursuant to any required indemnification provisions of the Company under its certificate of formation and Operating Agreement
as are in effect on the date of this Agreement; provided that such indemnification shall be subject to any limitation
imposed from time to time under any Legal Requirements, including the DGCL.


 


5.2           Disclosure.
Without limiting any Party’s obligations under existing confidentiality agreements, each Party shall not, and shall not permit
any of its Subsidiaries or any Representative of such Party to, issue any press release or make any disclosure regarding the transactions
contemplated hereunder unless: (a) the other Parties shall have approved such press release or disclosure in writing; or (b) such
Party shall have determined in good faith, upon the advice of legal counsel, that such disclosure is required by applicable Legal
Requirements or stock exchange rule or regulation and, to the extent practicable, before such press release or disclosure is issued
or made, such Party advises the other Parties of, and consults with the other Parties regarding, the text of such press release
or disclosure. Notwithstanding the foregoing, nothing in this Section 5.2 shall prevent a Party from making disclosures:
(a) to Persons employed or engaged by such Party in evaluating, approving, structuring or administering this Agreement, so long
as such Persons are notified of, and agree to maintain, the confidential nature of such information; (b) to such Party’s
legal counsel, accountants or co-investors (including outside auditors and legal counsel of such Party’s accountants and
co-investors) or to such Party’s employees, officers, directors or affiliates, so long as such Persons are notified of, and
agree to maintain, the confidential nature of such information; (c) to any current investor of such Party, in connection with investment
decisions with respect to such Party or otherwise in connection with customary reports to such investors regarding such Party’s
portfolio and performance, so long as such Persons are notified of, and agree to maintain, the confidential nature of such information;
or (d) to any assignee or potential assignee that has agreed to comply with the covenant contained in this Section 5.2 (and
any such assignee or potential assignee may disclose such information to Persons employed or engaged by it as described in clauses
(a) - (c) above).


 




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5.3           Maintenance
of Books and Records. Each of the Buyer, Sellers and the Company Parties shall preserve all pre-Closing Date records possessed
by or under the control of such party relating to the Company Parties in accordance with the Company’s existing document
retention policies and procedures. During the five year period following the Closing Date, upon any reasonable request from the
Buyer or the Sellers or any of their respective Representatives, the party holding such records shall provide to the requesting
party or its Representatives reasonable access to such records during normal business hours at the cost of the requesting party
or its Representatives. Records may be sought under this Section 5.3 for any reasonable purpose, including to the extent
reasonably required in connection with the audit, accounting, Tax, litigation, federal securities disclosure or other similar proper
business purpose of the party seeking such records. Neither Buyer nor Sellers shall be obligated to provide the other party with
access to any books and records pursuant to this Section 5.3 where such access would violate any Legal Requirement, any
attorney-client or other privilege or any confidentiality undertaking by such party, or in connection with a dispute between the
requesting party and the providing party.


 


5.4           Tax
Return Matters.


 


(a)          The
Company Parties shall (and the Buyer shall cause the Company Parties to), at the Seller’s expense, engage and direct the
Company’s existing accounting firm, Susan S. Hooper, CPA, to prepare any and all Tax Returns for the Company Parties for
all Tax periods that end on or before the Closing Date. Such Tax Returns shall be prepared in a manner consistent with past practices
for Tax Returns (unless otherwise required by applicable Legal Requirements) for periods prior to the Closing.


 


(b)          The
Buyer shall prepare, at the Buyer’s expense, any and all Tax Returns for the Company Parties for all Straddle Periods. 
Such Tax Returns shall be prepared in a manner consistent with past practices of the Company Parties for Tax Returns (unless otherwise
required by applicable Legal Requirements) for periods prior to the Closing. At least 20 days prior to the due date for filing
any Tax Return for any Straddle Period, the Buyer shall deliver, or caused to be delivered, to the Sellers such Tax Return for
their review and approval (not to be unreasonably withheld, conditioned or delayed). Unless any Seller gives written notice to
the Buyer at least 5 days prior to the due date for filing any such Tax Return specifying in reasonable detail all disputed items
and the basis therefor, the Sellers shall be deemed to have accepted and agreed to such Tax Return. The Sellers shall be responsible
for paying, and shall pay to Buyer at least two (2) days prior to the due date for filing of any Straddle Period Tax Returns pursuant
to this Section 5.4(b), the Taxes shown on such Tax Returns that are attributable to the period ending on and including the Closing
Date (as determined pursuant to Section 5.4(d)), but excluding any such Taxes that were taken into account as liabilities in the
calculation of the Closing Working Capital, and the Buyer shall be responsible for paying the portion of the Taxes shown on such
Tax Returns that are attributable to the period beginning on the day after the Closing Date (as determined pursuant to Section
5.4(d)).


 




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(c)          If
any Seller timely notifies the Company of its objection to any Straddle Period Tax Return prepared hereunder for any taxable period
that includes (but does not end on) the Closing Date, the Buyer, the Company and the Sellers shall, within the next 5 days (the
“Tax Resolution Period”), attempt to resolve their differences and any resolution by them as to any disputed
amounts shall be final, binding and conclusive. If at the conclusion of the Tax Resolution Period amounts remain in dispute, then
all amounts remaining in dispute shall then be submitted, as soon as practicable, to the Reviewing Accountant. The parties agree
to execute a reasonable engagement letter if requested by the Reviewing Accountant. The Reviewing Accountant shall act as an arbitrator
to determine only those issues still in dispute. The Reviewing Accountant’s determination shall be made within 30 days after
their selection, shall be set forth in a written statement delivered to the Buyer, the Company and the Sellers and shall be final,
binding and conclusive. If a draft Straddle Period Tax Return is subject to an ongoing dispute under this Section 5.4(c)
at the time that it is required to be filed, then such Tax Return shall be filed as initially prepared by the filing party, with
an amended Tax Return reflecting the resolution by the Reviewing Accountant to be filed following the Reviewing Accountant’s
resolution of the dispute. All fees and expenses of the Reviewing Accountant in connection with any dispute submitted to the Reviewing
Accountant shall be allocated between the Buyer and the Sellers in the same proportion that such party’s aggregate dollar
amount of unsuccessfully disputed items submitted to the Reviewing Accountant bears to the total dollar amount of disputed items
so submitted. Any overpayment of Taxes by Sellers pursuant to Section 5.4(b) based on the revised Straddle Period Tax Return liability
shall be promptly refunded by Buyer to the Sellers.


 


(d)          If
the Parties are permitted to treat the Closing Date as the last day of a taxable period, the Sellers and the Buyer shall treat
(and cause their respective Affiliates to treat) the Closing Date as the last day of a taxable period. All Taxes of the Company
Parties for any Straddle Period shall be apportioned between the Pre-Closing Period and the period beginning on the day after the
Closing Date as follows: the portion of any such Tax that is allocable to the portion of the period ending on or before the Closing
Date shall be paid by the Sellers, and such portion shall (i) in the case of Taxes based upon or related to income, sales or receipts,
be the amount which would be payable if the taxable year ended on (and included) the Closing Date; and (ii) in the case of all
other Taxes, be the amount of such Taxes for the Straddle Period (or, in the case of such Taxes determined on an arrears basis,
the amount of such Taxes for the immediately preceding period) multiplied by a fraction the numerator of which is the number of
calendar days in the portion of the Straddle Period ending on (and including) the Closing Date and the denominator of which is
the number of calendar days in the entire Straddle Period. The federal (and, if applicable, state) income Tax Return for FSC Labs
shall include an election under Treas. Reg Section 1.382-6(b)(1) to close its books on the Closing Date and/or any prior ownership
change date occurring during the same taxable year as the Closing Date. Notwithstanding anything in this Section 5.4 to the contrary,
the Sellers will pay, or cause to be paid, one-half, and the Buyer will pay, or cause to be paid, one-half of all applicable transfer
Taxes, sales and/or use Taxes, real property transfer or excise Taxes, recording, deed, stamp, and other similar Taxes, fees and
duties under applicable law incurred in connection with the transfer of the Units to the Buyer. The Sellers and the Buyer agree
to jointly prepare or cause to be prepared and file or cause to be filed in a timely manner, all Tax Returns required to be filed
with respect to such Taxes.


 




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(e)          After
the Closing, upon reasonable written notice, the Buyer (or the Company Parties) and the Sellers shall furnish or cause to be furnished
to each other, as promptly as practicable, such information and assistance (to the extent within the control of such party) relating
to the Company Parties (including access to books, records and personnel) as is reasonably requested for the filing of all Tax
Returns (including any extensions thereof), the making of any election related to Taxes, the preparation for any audit, and the
prosecution or defense of any action related to any Tax Return. The Buyer and the Company Parties agree to retain all books and
records with respect to Tax matters and pertinent to the Company Parties relating to any taxable period for a period of at least
seven (7) years following the Closing Date, provided however, that the Buyer shall give the Sellers reasonable written
notice prior to transferring, destroying or discarding any such books and records and shall allow the Sellers to take possession
of such books and records.


 


(f)          Neither
the Buyer nor any Company Party may amend a Tax Return of any of the Company Parties with respect to a Pre-Closing Period, or file
or amend any tax election with respect to any of the Company Parties with respect to a Pre-Closing Period, in each case, without
the prior written consent of the Sellers (which consent may not be unreasonably withheld, conditioned or delayed).


 


(g)          Except
as otherwise provided in this Section 5.4, to the extent any determination of the Taxes of any of the Company Parties, whether
as a result of an audit, a claim for refund, the filing of an amended Tax Return, or otherwise, results in any refund or credit
of Taxes paid by the Company Parties for any Pre-Closing Period, the Buyer shall cause the applicable Company Parties to promptly
pay any such refund or credit, and any interest received thereon, to the Sellers upon receipt or realization thereof; provided,
that, except as otherwise provided in Section 6.4(i), no such refund shall be payable with respect to the carryback
of net operating losses, credits or other tax attributes generated in Tax periods or any portion thereof beginning after the Closing
Date.


 


5.5           FSC
Name. Sellers acknowledge and agree that as of the Effective Time, the
Sellers shall retain no right, title or interest in or to the “FSC” name and any associated trademarks, service marks,
trade names, brand names, logos, trade dress and other proprietary indicia of goods and services, whether registered or unregistered,
that from and after the Effective Time, Buyer and the Company Parties shall have the sole right to the name “FSC”
and all similar names and all such trademarks, service marks, etc. After the Closing Date, Sellers further acknowledge and agree
not to use the name “FSC” or any variation thereof or confusingly similar name or mark as or in a company or subsidiary
name or in connection with any of Sellers’ or their affiliates’ future products, services or businesses, and further
agree not to register or use any name, logo, or domain name that includes or is confusingly similar to any name, logo, or domain
name that was included in the Company Intellectual Property or Licensed Intellectual Property.


 


5.6           Further
Assurances. Following the Closing, each of the Parties hereto shall, and shall cause their respective affiliates to, execute
and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably
required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement.


 




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6.             INDEMNIFICATION


 


6.1           Survival.
Subject to the limitations and other provisions of this Agreement, the representations and warranties contained herein shall survive
the Closing and shall remain in full force and effect until the date that is three (3) years from the Closing Date; provided,
that the Fundamental Representations and the representations and warranties in Article 4 shall survive for twenty
years after the Closing Date and the representations and warranties in Section 2.6 (Tax Matters), Section 2.8 (Compliance
With Laws), Section 2.9 (Employee and Labor Matters; Benefit Plans), Section 2.13 (Regulatory Compliance) and Section
2.15 (Proprietary Rights) shall survive for the full period of all applicable statutes of limitations (giving effect to any
waiver, mitigation or extension thereof) plus 90 days. All covenants and agreements of the parties contained herein shall survive
the Closing indefinitely or for the period explicitly specified therein. Notwithstanding the foregoing, any claims asserted in
good faith with reasonable specificity (to the extent known at such time) and in writing by notice from the non-breaching party
to the breaching party prior to the expiration date of the applicable survival period shall not thereafter be barred by the expiration
of the relevant representation or warranty, and such claims shall survive until finally resolved.


 


6.2           Seller
Indemnification. Subject to the limitations and other provisions set forth in this Section 6, the Buyer and its Affiliates
(including the Company Parties from and after the Closing) and each of their respective officers, directors, managers, agents,
employees, successors and assigns (collectively, “Buyer Indemnified Parties”) shall be entitled to be
indemnified and held harmless, solely out of a right of set off against amounts due under the Deferred Payments in accordance with
Section 6.6, for any and all losses, damages, liabilities, deficiencies, judgments, interest, penalties, fines and costs
or expenses of whatever kind, including reasonable attorneys' fees (collectively, “Damages”), arising
out of, resulting from or relating to:


 


(a)          any
inaccuracy in or breach of any representation or warranty contained in Section 2 or Section 3 of this Agreement;


 


(b)          any
breach or non-fulfillment of any covenant, agreement or obligation to be performed by Sellers pursuant to this Agreement; and


 


(c)          without
duplication, (i) Pre-Closing Taxes (excluding Buyer’s share of any Transfer Taxes under Section 5.4(d)); (ii) Taxes for which
any Seller is liable under applicable U.S. federal, state or local Tax law that are imposed on any Buyer Indemnified Party as a
result of the Closing transactions (excluding Buyer’s share of any Transfer Taxes under Section 5.4(d)); and (iii) Taxes
imposed on the Buyer or any Company party as a result of any Company Party being or having been a member of an affiliated, combined,
consolidated or unitary group of companies of which a Company Party is not the common parent; provided, however,
that no Buyer Indemnified Party shall be entitled to indemnity under this clause for Taxes resulting from any action or event outside
the ordinary course of business occurring on the Closing Date but after the Closing or for Taxes taken into account as liabilities
in the calculation of the Closing Working Capital or for Taxes arising from any breach by Buyer or any of its Affiliates of any
covenant or agreement in this Agreement.


 




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6.3           Buyer
Indemnification. The Buyer shall indemnify and hold harmless the Sellers and their respective officers, directors, managers,
agents, employees, successors and assigns (collectively, “Seller Indemnified Parties”) for, and shall
pay to the Sellers, any and all Damages arising out of, resulting from or relating to:


 


(a)          any
inaccuracy in or breach of any representation or warranty contained in Section 4 of this Agreement;


 


(b)          any
breach or non-fulfillment of any covenant, agreement or obligation to be performed by Buyer pursuant to this Agreement;


 


(c)          without
duplication of any obligation of the Buyer or a Guarantor under Section 1.8, Taxes imposed on any Seller Indemnified Party
as a result of any assignment or other transfer of any payment obligations of the Buyer or any Guarantor; and


 


(d)          without
duplication of any obligation of the Buyer under Section 1.8, all present or future non-U.S.  stamp or documentary
Taxes or any other excise or property Taxes, duties, other charges or similar levies, arising from any payment due to any Seller
hereunder or from the execution, delivery, registration or enforcement of any Transaction Agreement or any security interest in
the FSC Assets Collateral (excluding any such Taxes, duties, other charges or levies incurred in connection with the transfer of
the Units to the Buyer, which are addressed in Section 5.4(d)).


 


6.4           Limitations.
Notwithstanding anything set forth in this Agreement to the contrary:


 


(a)          Subject
to Section 6.4(h) and Section 6.7, (i) the Sellers shall not have any liability under this Agreement other than in connection with
the right of the Buyer to set-off Damages against amounts due under the Deferred Payments in accordance with Section 6.6
and (ii) except in connection with any breach of a representation or warranty set forth in Section 2.22, Sellers shall not
have any liability in the aggregate in excess of the aggregate amount of Deferred Payments made by the Buyer hereunder.


 


(b)          Buyer
Indemnified Parties shall not be entitled to recovery under Section 6.2(a) unless the amount of Damages suffered or
incurred by the Buyer Indemnified Parties in connection with breaches of the representations and warranties exceeds $15,000.


 


(c)          Except
in connection with breaches of any Fundamental Representations or any representation or warranty contained in Section 2.6,
the Buyer Indemnified Parties shall not be entitled to recovery under Section 6.2(a) unless and until the aggregate
amount of the Damages suffered or incurred by the Buyer Indemnified Parties exceeds $150,000, in which event the Buyer Indemnified
Parties shall be entitled to recovery for the full amount of Damages from the first dollar.


 


(d)          For
purposes of this Section 6, any inaccuracy in or breach of any representation or warranty shall be determined without regard
to any materiality or other similar qualification contained in or otherwise applicable to such representation or warranty.


 




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(e)          All
Damages recoverable by the Buyer as a right of the Buyer to set-off against amounts due under the Deferred Payments in accordance
with Section 6.6 shall be net of any proceeds the Buyer actually recovers under any available insurance less any related
costs and expenses, including the aggregate cost of pursuing any related insurance claims and any related increases in insurance
premiums. Following the Closing, the Buyer and the Company Parties shall use commercially reasonable efforts to claim any damages
or losses under any insurance policies maintained by or for the benefit of the Buyer or the Company Parties or otherwise covering
the business of the Company Parties if and to the extent they are seeking indemnification for such damages or losses hereunder.


 


(f)          Notwithstanding
any other provision in this Agreement to the contrary, except in connection with Third Party Claims, the Buyer shall not be entitled
to a right of set-off against amounts due under the Deferred Payments in accordance with Section 6.6 for any for damage
to reputation, lost business opportunities, lost profits, mental or emotional distress, incidental, special, consequential, exemplary,
punitive, or indirect damages, interference with business operations or diminution in value of the business or the Units (but not
diminution in value of any particular asset of the business).


 


(g)          All
amounts recovered by the Buyer as a right of set-off against amounts due under the Deferred Payments in accordance with Section
6.6 shall be treated by the Parties as an adjustment to the Purchase Price.


 


(h)          Notwithstanding
the foregoing, none of the limitations set forth in this Section 6, whether time-based, monetary or otherwise, including
the survival periods set forth in Section 6.1 and the limitations in Section 6.4(a), shall apply to any Damages resulting
from the willful misconduct, criminal act or fraud of a Party hereto.


 


(i)          To
the extent that a Tax Benefit is actually realized by an Indemnified Party as a result of Damages recovered by such Indemnified
Party pursuant to Section 6.2 or Section 6.3, the Indemnified Party shall refund to the Indemnifying Party the amount of such Tax
Benefit promptly after the Tax Return reflecting such Tax Benefit is filed with the applicable Taxing authority. For purposes of
this Section 6.4(i), a “Tax Benefit” means an amount by which the Tax liability of an Indemnified Party is actually
reduced by a deduction, reduction of income or entitlement to refund (including through a carry back to a prior taxable period)
or credit. This Section 6.4(i) shall not be construed to require any Indemnified Party to (x) amend any Tax Return (y) pay any
amount to an Indemnifying Party the payment of which would place the Indemnified Party in a less favorable net after-Tax position
than the Indemnified Party would have been in if the Damages subject to indemnification and giving rise to the Tax Benefit had
not been incurred and the indemnification payments with respect to such Damages had never been paid, or (z) make available its
Tax returns (or any other information relating to its Taxes that it deems confidential) to the Indemnifying Party or any other
Person. The Indemnifying Party shall, upon the request of the Indemnified Party, repay to the Indemnified Party the amount paid
to such Indemnifying Party pursuant to this paragraph (i) (plus any penalties, interest or other charges imposed by the relevant
Taxing authority) in the event that the Indemnified Party is required to repay a related Tax Benefit to such Taxing authority


 




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6.5           Procedure
for Indemnification – Third-Party Claims.


 


(a)          If
the Buyer shall claim a right of set-off against amounts due under the Deferred Payments in accordance with Section 6.6
hereunder, or a Seller Indemnified Party shall make a claim for indemnification pursuant to Section 6.3, in each case, arising
from any claim or demand of a third party (a “Third Party Claim”), the Indemnified Party shall notify
the Indemnifying Party in writing of the basis for such claim or demand and such notice shall set forth the nature of the claim
or demand in reasonable detail.


 


(b)          If
any Legal Proceeding is brought by a third party against an Indemnified Party and the Indemnified Party gives notice to the Sellers
pursuant to Section 6.5(a), the Indemnifying Party shall be entitled to participate in such Legal Proceeding and, to the
extent that they wish, to assume the defense of such Legal Proceeding if (i) the Indemnifying Party provides written notice to
the Indemnified Party that the Indemnifying Party intends to undertake such defense and (ii) the Indemnifying Party conducts the
defense of the third-party claim diligently and with reputable counsel. The Indemnified Party shall, in its sole discretion, have
the right to employ separate counsel (who may be selected by the Indemnified Party in its sole discretion) in any such action and
to participate in the defense thereof, and the fees and expenses of such counsel shall be paid by the Indemnified Party, unless
the Indemnified Party has been advised by counsel that there exists a conflict of interest between the Indemnified Party and counsel
chosen by the Indemnifying Party, in which case the fees and expenses of one separate counsel engaged by the Indemnified Party
shall be paid by the Indemnifying Party. The Indemnified Party shall cooperate in all reasonable respects with the Indemnifying
Party and their counsel in the defense or compromise of such claim or demand. If the Indemnifying Party assumes the defense of
a Legal Proceeding, no compromise or settlement of such claims may be effected by the Indemnifying Party without the Indemnified
Party’s consent unless (A) there is no finding or admission of any violation of law or any violation of the rights of any
Person and no adverse effect on the Indemnified Party with respect to any other claims that may be made against it, and (B) the
sole relief provided is monetary damages that, in the case of a claim made in accordance with Section 6.6, are paid in full
as a right of set-off against amounts due under the Deferred Payments in accordance with Section 6.6.


 


(c)          If
(i) notice is given to the Indemnifying Party of the commencement of any third-party Legal Proceeding and the Indemnifying Party
does not, within thirty days after the Indemnified Party’s notice is given (or such shorter period as may be necessary to
respond to the relevant complaint), give notice to the Indemnified Party of its election to assume the defense of such Legal Proceeding
or (ii) any of the conditions set forth in clauses (i) - (ii) of Section 6.5(b) above become unsatisfied, the Indemnified
Party shall (upon notice to the Indemnifying Party) have the right to undertake the defense, compromise or settlement of such claim,
the costs of which shall be included in the calculation of Damages of the Indemnified Party; provided that no compromise
or settlement of such claim may be affected by the Indemnified Party without the Indemnifying Party’s consent, which shall
not be unreasonably withheld or delayed, if (A) the Indemnified Party will seek indemnification for any amounts to be paid to compromise
or settle the claim, (B) there is a finding or admission of any violation by the Indemnifying Party of any Legal Requirement or
the rights of any Person, or (C) the compromise or settlement would have a material adverse effect on the Indemnifying Party with
respect to any other claims that may be made against it.


 




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(d)          For
the avoidance of doubt, this Section 6.5 shall not prevent any Indemnified Person from making a claim for indemnification
or recovering Damages in connection with any event or occurrence that does not involve a claim by a third party.


 


(e)          Notwithstanding
the foregoing provisions of this Section 6.5, any non-U.S. Taxes described in Section 6.3(d) shall be paid when due
without any right of contest if the non-payment of such Taxes would involve any risk of the sale, forfeiture or loss of, or the
creation of any lien on all or any part of the FSC Assets Collateral or any risk of criminal liability to any Seller.


 


6.6           Right
of Set-Off. The Buyer shall be entitled to withhold from the amount to be paid under one or more Deferred Payments (but not
the Fixed Payments) any amount it in good faith believes a Buyer Indemnified Party is or may be entitled to recover under Section
1.3(e) or Section 6.2 (subject to the limitations set forth in this Section 6). If Buyer elects to exercise such
right hereunder, it shall promptly notify Sellers specifying in reasonable detail the basis of its claim and such withholding.
Upon final determination of the claim made by the Buyer Indemnified Parties hereunder, whether by a court order or final settlement
of the dispute, Buyer shall be entitled to retain that portion of the withheld amount required to satisfy the claim in full and
shall pay the remainder of amounts that were withheld but not due to Buyer, if any, together with interest at 7.0% per annum, to
the Sellers.  Neither the exercise of nor the failure to exercise such right of set off shall limit the right of Buyer to
exercise any other remedies that may be available to it.


 


6.7           Exclusive
Remedy. Except with respect to claims of fraud, criminal activity or willful misconduct, the right of the Buyer to indemnification
in accordance with Section 6.2 and the right of Buyer to set-off in accordance with Section 6.6 shall constitute
the Buyer’s sole and exclusive remedies with respect to any and all claims arising under or relating to this Agreement whether
for breach of contract, in tort or otherwise (including for breach of any representation, warranty, covenant or agreement), any
agreement or document executed and delivered pursuant to this Agreement and the transactions contemplated by this Agreement.


 


6.8           No
Right of Contribution. No Seller shall make any claim for contribution from any Company Party or any Company Party’s
current or former Affiliates, officers, directors, managers or employees with respect to any indemnity claims arising under or
in connection with this Agreement, and the Sellers hereby waive any such right of contribution from the Company Parties and their
respective current and former Affiliates, officers, directors, managers and employees.


 


6.9           Effect
of Investigation; Reliance. The right to indemnification, recovery of Damages or any other remedy will not be affected by any
investigation conducted with respect to, or any knowledge acquired (or capable of being acquired) at any time, whether before or
after the execution and delivery of this Agreement or the Closing Date, with respect to the accuracy or inaccuracy of or compliance
with any representation, warranty, covenant or agreement made by the party seeking indemnification or recovery. The waiver of any
condition based on the accuracy of any such representation or warranty, or on the performance of or compliance with any such covenant
or agreement, will not affect the right to indemnification, recovery of Damages or any other remedy based on any such representation,
warranty, covenant or agreement. No party seeking indemnification or recovery under this Agreement shall be required to show reliance
on any representation, warranty, certificate or other agreement in order for such party to be entitled to indemnification or recovery
hereunder.


 




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7.            MISCELLANEOUS
PROVISIONS


 


7.1           Amendment.
This Agreement may not be amended except by an instrument in writing signed on behalf of each Party.


 


7.2           Waiver.


 


(a)          No
failure on the part of any Party to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part
of any Party in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver of such power,
right, privilege or remedy; and no single or partial exercise of any such power, right, privilege or remedy shall preclude any
other or further exercise thereof or of any other power, right, privilege or remedy.


 


(b)          No
Party shall be deemed to have waived any claim arising out of this Agreement, or any power, right, privilege or remedy under this
Agreement, unless the waiver of such claim, power, right, privilege or remedy is expressly set forth in a written instrument duly
executed and delivered on behalf of such Party; and any such waiver shall not be applicable or have any effect except in the specific
instance in which it is given.


 


7.3           Entire
Agreement; Counterparts; Exchanges by Facsimile. This Agreement, and the other agreements referred to in this Agreement constitute
the entire agreement and supersede all prior agreements and understandings, both written and oral, among or between any of the
Parties with respect to the subject matter hereof and thereof; provided, however, that any existing confidentiality
agreements shall not be superseded and shall remain in full force and effect in accordance with its terms. This Agreement may be
executed in several counterparts, each of which shall be deemed an original and all of which shall constitute one and the same
instrument. The exchange of a fully executed Agreement (in counterparts or otherwise) by all Parties by facsimile or portable document
format (PDF) shall be sufficient to bind the Parties to the terms and conditions of this Agreement.


 


7.4           Applicable
Law; Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware,
regardless of the laws that might otherwise govern under applicable principles of conflicts of laws. The Buyer hereby irrevocably
waives its rights under Article 14 and Article 15 of the French Civil Code. Each of the Parties to this Agreement (a) consents
to submit itself to the personal jurisdiction of the Court of Chancery of the State of Delaware in any action or proceeding arising
out of or relating to this Agreement or any of the transactions contemplated hereunder, (b) agrees that all claims in respect of
such action or proceeding may be heard and determined in such court, (c) agrees that it shall not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court, and (d) agrees not to bring any action or proceeding
(including counter-claims) arising out of or relating to this Agreement or any of the transactions contemplated hereunder in any
other court. Each of the Parties waives any defense of inconvenient forum to the maintenance of any action or proceeding so brought
and waives any bond, surety or other security that might be required of any other Party with respect thereto. Each Party waives
any right it may have to trial by jury in any Legal Proceeding commenced in connection with this Agreement, whether such Party
is a plaintiff or defendant in such Legal Proceeding. Any Party may make service on another Party by sending or delivering a copy
of the process to the Party to be served at the address and in the manner provided for the giving of notices in Section 7.6.
Nothing in this Section 7.4, however, shall affect the right of any Party to serve legal process in any other manner permitted
by law.


 




    	 	38	 



     


    

 


7.5           Assignability;
No Third Party Beneficiaries. This Agreement shall be binding upon, and shall be enforceable by and inure solely to the benefit
of, the Parties and their respective successors and assigns. No Party may assign any of its rights or obligations hereunder without
the prior written consent of the other Party (which consent shall not be unreasonably withheld, conditioned or delayed), and any
attempted assignment or delegation of this Agreement or any of such rights or obligations by such Party without the other Party’s
prior written consent shall be void and of no effect; provided that the Seller may assign its rights to payments under Section
1.6 of this Agreement to any other Person without the prior written consent of the Buyer or any other Party; and provided that
the Buyer may assign its rights and/or obligations under this Agreement to an Affiliate without the prior written consent of the
Sellers or the Company so long as it remains directly liable for all of its obligations under this Agreement. Nothing in this Agreement,
express or implied, is intended to or shall confer upon any Person any right, benefit or remedy of any nature whatsoever under
or by reason of this Agreement.


 


7.6           Notices.
Any notice or other communication required or permitted to be delivered to a Party under this Agreement shall be in writing and
shall be deemed properly delivered, given and received when delivered by hand, by registered mail, by courier or express delivery
service, by facsimile or by e-mail to the address, facsimile telephone number or e-mail address set forth beneath the name of such
Party below (or to such other address, facsimile telephone number or e-mail address as such Party shall have specified in a written
notice given to the other Parties):


 


if to the Sellers:


 


780 Third Avenue


37th Floor


New York, NY 10017


Fax: (212) 573-8111


E-mail:


Attention: James E. Flynn




Peter Steelman


David J. Clark


 


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


 


Robinson, Bradshaw & Hinson, P.A.


101 North Tryon Street, Suite 1900


 




    	 	39	 



     


    

 


Charlotte, NC 28246


Fax: (704) 339-3428


E-mail:


Attention: Mark O. Henry


 


if to the Buyer or the Company:


 


Flamel Technologies S.A.


Parc club du Moulin a Vent


33, avenue du Docteur Georges Levy


69693 Vennissieux Cedex France


Attention:


 


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


 


Orrick, Herrington & Sutcliffe LLP


51 W. 52nd St.


New York, NY 10019


Fax: (212) 506-5151


Email: 
kmilling@orrick.com




thacohen@orrick.com


Attention: R. King Milling, Jr.


Tal Hacohen


 


7.7           Severability.
Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions of this Agreement or the validity or enforceability of the
offending term or provision in any other situation or in any other jurisdiction. If a final judgment of a court of competent jurisdiction
declares that any term or provision of this Agreement is invalid or unenforceable, the Parties agree that the court making such
determination shall have the power to limit such term or provision, to delete specific words or phrases or to replace such term
or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid
or unenforceable term or provision, and this Agreement shall be valid and enforceable as so modified. In the event such court does
not exercise the power granted to it in the prior sentence, the Parties agree to replace such invalid or unenforceable term or
provision with a valid and enforceable term or provision that will achieve, to the extent possible, the economic, business and
other purposes of such invalid or unenforceable term or provision.


 


7.8           Other
Remedies; Specific Performance. Except as otherwise provided herein, any and all remedies herein expressly conferred upon a
Party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such Party,
and the exercise by a Party of any one remedy will not preclude the exercise of any other remedy. The Parties agree that irreparable
damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific
terms or were otherwise breached. It is accordingly agreed that the Parties shall be entitled to seek an injunction or injunctions
to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof, this being in addition to any
other remedy to which they are entitled at law or in equity.


 




    	 	40	 



     


    

 


7.9           Judgment
Currency.


 


(a)          If,
for the purpose of obtaining or enforcing judgment against any Party in any court in any jurisdiction with respect to this Agreement
it becomes necessary to convert into any other currency (such other currency being hereinafter referred to as the “Judgment
Currency”) an amount due in United States dollars, the conversion shall be made at the last exchange rate published in
the Wall Street Journal on the business day immediately preceding (the “Exchange Rate”):


 


(i)          the
date actual payment of the amount is due, in the case of any proceeding in the courts of Delaware or in the courts of any other
jurisdiction that will give effect to payment being due on such date; or


 


(ii)         the
date on which the French or any other non U.S. court determines, in the case of any proceeding in the courts of any other jurisdiction
(the date as of which such payment is made being hereinafter referred to as the "Judgment Payment Date").


 


(b)          If
in the case of any proceeding in the court of any jurisdiction referred to above, there is a change in the Exchange Rate on the
date of calculation prevailing between the Judgment Payment Date and the date of actual payment of the amount due, the applicable
Party shall pay such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted
at the Exchange Rate prevailing on the date of payment, will produce the amount of United States dollars which could have been
purchased with the amount of Judgment Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing on
the Judgment Payment Date.


 


(c)          Any
amount due from Buyer under this Section 7.9 shall be due as a separate debt and shall not be affected by judgment being
obtained for any other amount due under or in respect of this Agreement.


 


7.10         Construction.


 


(a)          For
purposes of this Agreement, whenever the context requires: the singular number shall include the plural, and vice versa; and any
gender shall include all genders.


 


(b)          The
Parties agree that any rule of construction to the effect that ambiguities are to be resolved against the drafting Party shall
not be applied in the construction or interpretation of this Agreement.


 


(c)          As
used in this Agreement, the words “include” and “including,” and variations thereof, shall not be deemed
to be terms of limitation, but rather shall be deemed to be followed by the words “without limitation.”


 




    	 	41	 



     


    

 


(d)          Except
as otherwise indicated, all references in this Agreement to “Sections,” “Exhibits” and “Schedules”
are intended to refer to Sections of this Agreement and Exhibits and Schedules to this Agreement.


 


(e)          The
headings contained in this Agreement are for convenience of reference only, shall not be deemed to be a part of this Agreement
and shall not be referred to in connection with the construction or interpretation of this Agreement.


 


[Remainder of page intentionally left
blank; signature pages follow.]


 




    	 	42	 



     


    

 


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


 


	 	FSC HOLDING COMPANY, LLC
	 	 	 
	 	By:	/s/  Peter Steelman
	 	Name: Peter Steelman
	 	Title:   President and CEO
	 	 
	 	FSC THERAPEUTICS, LLC
	 	 	 
	 	By:	/s/  Peter Steelman 
	 	Name: Peter Steelman
	 	Title:   President and CEO
	 	 
	 	FSC LABORATORIES, INC.
	 	 	 
	 	By:	/s/  Peter Steelman
	 	Name: Peter Steelman
	 	Title:   President and CEO
	 	 
	 	DEERFIELD CSF, LLC
	 	 	 
	 	By:	/s/  David J. Clark
	 	Name: David J. Clark
	 	Title:    Authorized Signatory
	 	 
	 	/s/  Peter Steelman
	 	Peter Steelman
	 	 
	 	/s/ James Flynn
	 	James Flynn


 





SIGNATURE PAGE TO MEMBERSHIP INTEREST PURCHASE
AGREEMENT




 




     


     


    

 


	 	Flamel Technologies SA, 
	 	solely for purposes of Section 1.7
	 	 	 
	 	By:	/s/ Michael S. Anderson
	 	Name: Michael S. Anderson
	 	Title: Chief Executive Officer
	 	 
	 	FLAMEL US HOLDINGS, INC.
	 	 	 
	 	By:	 
	 	Name:
	 	Title: Authorized Signatory


 





SIGNATURE PAGE TO MEMBERSHIP INTEREST PURCHASE
AGREEMENT




 




     


     


    

 


EXHIBIT A


 


CAPITALIZED TERMS


 


For purposes of the Agreement (including this Exhibit A):


 


“Accelerated Value”
shall mean as of any date of determination, (i) all of the remaining unpaid Fixed Payments plus (ii) $12,500,000 minus
(iii) the amount of Deferred Payments paid by the Buyer to the date of determination.


 


“Acceleration Trigger Event”
shall mean the occurrence of any one or more of the following events:


 


(a)          The
Buyer shall, on its own behalf, (i) file a voluntary petition or commence a voluntary case seeking liquidation, winding-up, reorganization,
dissolution, arrangement, readjustment of debts or any other relief under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, (ii) apply for or consent to the appointment of or taking possession
by a custodian, trustee, receiver or similar official for or of itself or all or a substantial part of its properties or assets,
(iii) fail generally, or admit in writing its inability, to pay its debts generally as they become due, (iv) make a general assignment
for the benefit of creditors or (v) take any corporate action to authorize or approve any of the foregoing; or


 


(b)          Any
involuntary petition or case shall be filed or commenced against the Buyer seeking liquidation, winding-up, reorganization, dissolution,
arrangement, readjustment of debts, the appointment of a custodian, trustee, receiver or similar official for it or all or a substantial
part of its properties or any other relief under the Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, and such petition or case shall continue undismissed and unstayed for a period of 60 days; or an
order, judgment or decree approving or ordering any of the foregoing shall be entered in any such proceeding;


 


(c)          The
Company transfers (whether by sale, assignment, merger, change of control, conveyance of rights, deed of trust, lien, license,
sublicense, seizure or other transfer of any sort, voluntary or involuntary, including by operation of law) any of its right, title
or interest in or to the Product Intellectual Property or Product Regulatory Rights other than in a Reincorporation Transaction
(in which case this provision shall apply thereafter to New Subsidiary); provided, however, such requirement shall
not apply to (i) the direct or indirect license of Product Intellectual Property or Product Regulatory Rights to make, have made,
use, promote, import, offer to sell or sell Products solely on behalf of, or for the benefit of, the Company or (ii) the direct
or indirect license of Product Intellectual Property or Product Regulatory Rights for any reason other than to make, have made,
use, promote, import, offer to sell or sell Products; or


 


(d)          The
material breach of any of the covenants set forth in Section 1.6(j), which breach is not cured within ten Business Days
after notice of such breach is delivered to Buyer.


 




    	 	A-1	 



     


    

 


“Affiliated Company Indebtedness”
means all Company Indebtedness owed by the Company Parties to Deerfield PDI Financing II, L.P. and/or Deerfield Private Design
Fund II, L.P. that remains outstanding as of the Closing Date.


 


“Bankruptcy Code”
means 11 U.S.C. §§ 101 et seq., as amended from time to time, and any successor statute, and all regulations from time
to time promulgated thereunder.


 


“Business Day”
shall mean any day other than a day on which banks in New York, NY or Paris, France are authorized or obligated to be closed.


 


“Closing Working Capital”
means the consolidated current assets of the Company Parties less the consolidated current liabilities of the Company Parties,
prepared from the books and records of the Company and calculated in accordance with GAAP and the Company’s accounting policies
and procedures, consistently applied.


 


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


 


“Company Indebtedness”
means all obligations for borrowed money owed by the Company Parties immediately prior to the Effective Time and any liens
on the assets of the Company Parties securing such obligations, or pursuant to any guaranty or arrangements having the economic
effect and interest (including default interest), premiums, penalties (including prepayment and early termination penalties and
default penalties or judgments), breakage fees and other amounts owing in respect of such obligations or guarantees.


 


“Company Party”
means the Company or any of its Subsidiaries and “Company Parties” means the Company and all of its Subsidiaries
collectively.


 


“Consent” shall
mean any approval, consent, ratification, permission, waiver or authorization (including any Governmental Authorization).


 


“Contract” shall,
with respect to any Person, mean any written, oral or other agreement, contract, subcontract, lease (whether real or personal property),
mortgage, understanding, arrangement, instrument, note, option, warranty, purchase order, license, sublicense, insurance policy,
benefit plan or legally binding commitment or undertaking of any nature to which such Person is a party or by which such Person
or any of its assets are bound or affected under applicable law, and shall include all amendments and modifications thereto.


 


“Copyright” means
all copyrights and moral rights, including the legal right provided by the Copyright Act of 1976, as amended, to the expression
contained in any work of authorship fixed in any tangible medium of expression together with any similar rights arising in any
other country as a result of statute or treaty, and all registrations, applications, renewals, extensions and reversions thereof.


 


“DEA” means the
United States Drug Enforcement Administration or any successor agency thereto.


 


“Default Rate”
shall mean 15%, or, if lower, the highest maximum rate permitted by law.


 




    	 	A-2	 



     


    

 


“DGCL” shall mean
the General Corporation Law of the State of Delaware.


 


“D&O Indemnified Parties”
means each Person who was at any time prior the Effective Time a director or officer of any Company Party.


 


“Earnings Report”
means, (i) during any period when the Buyer is obligated to file reports under the provisions of the Securities Exchange Act of
1934, the Form 6-K filed by the Buyer containing its financial information for such quarter and (ii) during any period when the
Buyer is not obligated to file reports under the provisions of the Securities Exchange Act of 1934, the internal financial statements
prepared by Buyer.


 


“Encumbrance”
shall mean any lien, pledge, hypothecation, charge, mortgage, security interest, encumbrance, easement, condition, preemptive right,
community property interest, right of first refusal or right of first offer, or similar restriction of any kind, including any
restriction on the voting of any security or Equity Interest, any restriction on the transfer of any security, Equity Interest
or other asset, and any restriction on the receipt of any income or exercise of any other attribute of ownership, under any Legal
Requirement.


 


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


 


“Equity Interests”
means, with respect to any Person, the capital stock, limited liability company interests, membership interests, partnership interests,
profits interests or other equity interests of such Person.


 


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


 


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


 


“Fundamental Representations”
means those representations and warranties set forth in Sections 2.1 (Organization; Good Standing; Enforceability), 2.2
(Consents and Approvals; No Violation), 2.3 (Capital Stock; Subsidiaries), 2.5(a) (No Distributions), 2.18 (Title
to Assets), 2.21 (Brokers), 2.22 (Transaction Payments), 2.24 (Distributions to Sellers) and all of Article 3.


 


“GAAP” means generally
accepted accounting principles as recognized by the American Institute of Certified Public Accountants.


 


“Governmental Authorization”
shall mean any: (a) permit, license, certificate, franchise, permission, variance, exceptions, orders, clearance, registration,
qualification or authorization issued, granted, given or otherwise made available by or under the authority of any Governmental
Body or pursuant to any Legal Requirement; or (b) right under any Contract with any Governmental Body.


 




    	 	A-3	 



     


    

 


“Governmental Body”
shall mean any: (a) nation, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any
nature; (b) federal, state, local, municipal, foreign or other government; (c) governmental or quasi-governmental authority of
any nature (including any governmental division, department, agency, commission, instrumentality, official, ministry, fund, foundation,
center, organization, unit, body or Entity and any court or other tribunal, and for the avoidance of doubt, any Taxing authority);
or (d) self-regulatory organization (including the NASDAQ Global Market).


 


“Indemnified Party”
shall mean a Seller Indemnified Party or a Buyer Indemnified Party, as the case may be.


 


“Indemnifying Party”
shall mean the Sellers pursuant to Section 6.2 or the Buyer pursuant to Section 6.3, as the case may be.


 


“IRS” shall mean
the United States Internal Revenue Service or any successor agency thereto.


 


“Know-How” means
ideas, designs, concepts, compilations of information methods, techniques, methodologies, procedures and processes, compositions,
specifications, techniques, technical data and information, designs, drawings, customer lists, supplier lists, pricing and financial
information, plans and proposals, algorithms and formulas, whether or not patentable.


 


“Knowledge of the Company”
means the knowledge, after due inquiry, of Peter Steelman or Bryan Sendrowski.


 


“Legal Proceeding”
shall mean any action, suit, litigation, arbitration, proceeding (including any civil, criminal, administrative, investigative
or appellate proceeding), hearing, inquiry, audit, examination or investigation commenced, brought, conducted or heard by or before,
or otherwise involving, any court or other Governmental Body or any arbitrator or arbitration panel, whether at law or in equity.


 


“Legal Requirement”
shall mean any federal, state, foreign, local or municipal or other law, statute, constitution, principle of common law, resolution,
ordinance, code, Order, rule, regulation or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into
effect by or under the authority of any Governmental Body.


 


“Licensed Professional”
means a health care practitioner who has pharmaceutical product prescribing authority in the United States and includes medical
doctors, doctors of osteopathy, nurse practitioners and physician assistants.


 


“Lower Target Amount”
means -$50,000 (negative fifty thousand dollars).


 


“Mark” means any
word, name, symbol, logos or device used by a Person to identify its goods or services, whether or not registered, all goodwill
associated therewith, and any right that may exist to obtain a registration with respect thereto from any Governmental Authority
and any rights arising under any such application, together with all registrations, renewals, extensions and reversions thereof.
As used in this Agreement, the term “Mark” includes all of the foregoing, including trademarks and service marks.


 




    	 	A-4	 



     


    

 


“Net Sales” shall
mean, without duplication, the gross amount invoiced by or on behalf of the Buyer, the Company Parties or any of their Affiliates
or any direct or indirect assignee or licensee of the Buyer or the Company Parties or any of their Affiliates for Products, sold
globally in bona fide, arm’s length transactions, less customary deductions determined without duplication in accordance
with the selling Person’s customary accounting methods as generally and consistently applied for: (i) cash or terms discounts,
(ii) sales, use and value added taxes (if and only to the extent included in the gross invoice amount), (iii) reasonable and customary
accruals for third party rebates and chargebacks, (iv) returns, and (v) recalls.


 


“New Parent” shall
mean an entity organized under the Laws of the Republic of Ireland which is the surviving or resulting entity of a Reincorporation
Transaction.


 


“New Subsidiary”
means a wholly-owned subsidiary of the New Parent that owns all of the FSC Assets.


 


“NPA” shall mean
the Note Purchase Agreement substantially in the form attached hereto as Exhibit B.


 


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


 


“Ordinary Course of Business”
shall mean, in the case of each of the Company and its Subsidiaries, such actions taken in the ordinary course of its normal operations
and consistent with its past practices.


 


“P1” means a Product
Detail where the presentation of a Product during the Product Detail is the first presentation made or is the presentation that
lasts longer than any other presentation during a meeting with a Licensed Professional.


 


“P2” means a Product
Detail where the presentation of a Product during the Product Detail is the second presentation made or is the presentation that
is shorter than the P1 Product Detail but lasts longer than any other presentation during a meeting with a Licensed Professional.


 


“Party” or “Parties”
shall mean the Buyer, the Company and the Sellers.


 


“Patent” means
any patent granted by the United States Patent and Trademark Office or by the comparable agency of any other country, and any renewal,
thereof, and any rights arising under any patent application filed with the United States Patent and Trademark Office or the comparable
agency of any other country and any rights that may exist to file any such application, including all continuations, divisional,
continuations-in-part and provisionals and patents issuing thereon, and all reissues, reexaminations, substitutions, renewals and
extensions thereof.


 


“Permitted Encumbrances”
means (a) statutory liens for Taxes that are not yet due and payable or Taxes that are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves have been established in the Company’s financial statements in accordance
with GAAP; (b) statutory, common law or civil law liens to secure obligations to landlords, lessors or renters under leases or
rental agreements confined to the premises rented pursuant to which the applicable Company Party is not in default in any material
respect, and which are not, individually or in the aggregate, material to the business of the Company; (c) deposits or pledges
made in connection with, or to secure payment of, workers’ compensation, unemployment insurance, old age pension or other
social security programs mandated under Legal Requirements, which are not, individually or in the aggregate, material to the business
of the Company; (d) statutory, common or civil law liens in favor of carriers, warehousemen, mechanics and materialmen to secure
claims for labor, materials or supplies and other like liens with respect to amounts not yet due and payable, which are not, individually
or in the aggregate, material to the business of the Company.


 




    	 	A-5	 



     


    

 


“Person” shall
mean any individual, Entity or Governmental Body.


 


“Person” shall
mean any individual, Entity or Governmental Body.


 


“Pre-Closing Period”
shall mean any taxable year or other taxable period of a Company Party ending on or prior to the Closing Date (including the portion
of any Straddle Period ending on and including the Closing Date).


 


“Pre-Closing Taxes”
shall mean all Taxes imposed on the Company Parties for any Pre-Closing Period.


 


“Products” means
the products set forth on Schedule A-1(whether sold under the brand name set forth on Schedule A-1 or otherwise under the Governmental
Authorization set forth on Schedule A-1).


 


“Product Detail”
means a face-to-face meeting between a professional, trained, and qualified representative of a Company Party and a health care
professional, during which a presentation of one or more of the Products is orally presented.


 


“Product Intellectual Property”
shall mean all Proprietary Rights held or licensed by the Company Parties that is, or may hereafter be, necessary to develop, make,
have made, promote, market or sell the Products.


 


“Product Regulatory Rights”
shall mean each and every investigational new drug application or new drug application and/or state license or registration that
is held or obtained (if any) that is necessary to develop, conduct clinical trials relating to, manufacture, have manufactured,
distribute, promote, market or sell the Products.


 


“Prohibited Person”
means (i) a Person on the List of Specially Designated Nationals and Blocked Persons administered by the U.S. Department of the
Treasury or the Denied Persons List or Entity List administered by the U.S. Department of Commerce; (ii) a Person on any list of
sanctioned Persons administered by the European Union or Member of the European Union; (iii) the government of any nation against
which the United States imposes a trade embargo, including any agency or instrumentality thereof; or (iv) a Person acting or purporting
to act, directly or indirectly, on behalf of, or an entity that is majority owned or controlled by, any of the Persons covered
by subparagraphs (i), (ii) or (iii).


 




    	 	A-6	 



     


    

 


“Proprietary Rights”
means, with respect to a Person, all Copyrights, Marks, Trade Names, Trade Secrets, Patents, intellectual property rights in inventions
and discoveries, intellectual property rights in internet web sites and internet domain names and subdomain names and intellectual
property rights in Know-How, owned or used by such Person.


 


“Representatives”
shall mean directors, officers, other employees, agents, attorneys, accountants, advisors and representatives.


 


“Reviewing Accountant”
means one of the “Big Four” accounting firms or another nationally-recognized accounting firm mutually agreeable to
the Buyer and the Sellers.


 


An Entity shall be deemed to be a “Subsidiary”
of another Person if such Person directly or indirectly owns or purports to own, beneficially or of record, (a) an amount of voting
securities of other interests in such Entity that is sufficient to enable such Person to elect at least a majority of the members
of such Entity’s board of directors or other governing body, or (b) at least 50% of the outstanding equity, voting, beneficial
or financial interests in such Entity.


 


“Straddle Period”
shall mean any taxable year or other taxable period beginning before and ending after the Closing Date.


 


“Tax” shall mean
(i) any federal, state, local, foreign or other taxes, levies, charges and fees or other similar governmental assessments or liabilities,
including, without limitation, any income tax, franchise tax, capital gains tax, gross receipts tax, value-added tax, surtax, estimated
tax, unemployment tax, national health insurance tax, excise tax, ad valorem tax, transfer tax, stamp tax, sales tax, use tax,
property tax, business tax, withholding tax, payroll tax, customs duty, alternative or add-on minimum or other tax of any kind
whatsoever, and including any fine, penalty, assessment, addition to tax or interest, whether disputed or not and (ii) any liability
in respect of items described in clause (i) by reason of contract, assumption, transferee liability, operation of law, U.S. Treasury
Regulations Section 1.1502-6 (or any predecessor or successor thereof or any analogous or similar provision under any law or regulation)
or otherwise.


 


“Tax Return” shall
mean any return (including any information return), report, statement, declaration, estimate, schedule, notice, disclosure, notification,
form, election, certificate or other document or information, and any amendment or supplement to any of the foregoing, filed with
or submitted to, or required to be filed with or submitted to, any Governmental Body in connection with the determination, assessment,
collection or payment of any Tax or in connection with the administration, implementation or enforcement of or compliance with
any Legal Requirement relating to any Tax.


 


“Trade Names”
means any words, name or symbol used by a Person to identify its business.


 


“Trade Secrets”
means business or technical information of any Person including, but not limited to, customer lists, marketing data and Know-How,
that is not generally known to other Persons who are not subject to an obligation of nondisclosure and that derives actual or potential
commercial value from not being generally known to other Persons.


 




    	 	A-7	 



     


    

 


“Transaction Agreements”
means this Agreement and each other agreement and document to be executed and delivered by a Party in connection with this Agreement.


 


“Transaction Expenses”
means all fees and expenses incurred by Sellers or any Company Party at or prior to the Closing in connection with the transactions
contemplated by this Agreement and the other Transaction Agreements (including preliminary discussions, term sheet negotiations
and discussions with third parties), including any legal, accounting, broker’s, investment banker, dataroom provider, financial
printer and any other third party service provider fees and expenses, and including any change of control, severance, transaction
bonus or similar payment committed to any officer, director or employee of a Company Party in connection with the execution of
this Agreement or the consummation of the transactions contemplated hereby.


 


“Upper Target Amount”
means $50,000 (fifty thousand dollars).


 


“WARN Act” means
the Worker Adjustment and Retraining Notification Act of 1988, as amended, and any similar federal, state or local law.


 




    	 	A-8	 



     


    

 


ADDITIONAL DEFINITIONS


 


Each of the following definitions is set forth in the section
of the Agreement indicated below:


 


	
        Definition
	 	
        Section

	 	 	 
	Audit Notice	 	1.6(d)
	Balance Sheet	 	2.4
	Balance Sheet Date	 	2.4
	Buyer	 	Preamble
	Buyer Documents	 	4.2
	Closing	 	1.5(a)
	Closing Date	 	1.5(a)
	Company	 	Recitals
	Company Transaction Payments	 	2.22
	Deferred Consideration	 	1.6(a)
	Deferred Payment	 	1.6(a)
	Disclosure Schedule	 	2
	Deferred Payment Calculation	 	1.6(b)
	Deferred Payment Calculation Objection Notice	 	1.6(d)
	Effective Time	 	1.5(a)
	Financial Statements	 	2.4
	Foreign Plan	 	2.9(d)
	Leased Real Property	 	2.11
	Material Contract	 	2.17(a)
	Pension Plan	 	2.9(d)
	Product Suppliers	 	2.16
	Sellers	 	Preamble
	Seller Documents	 	3.2
	Units	 	Recitals


 




    	 	A-9	 



     


    

 


Schedule A-1


 


	Brand Name	 	API	 	Governmental Authorization
	Flexichamber	 	NA	 	510(k) – K140062
	Karbinal ER	 	Cabinoxamine maleate	 	NDA – N022556
	 	 	Cefaclor	 	ANDAS – A065412 or A065146
	AcipHex Sprinkle	 	Rabeprazole sodium	 	NDA – N204736
	E-Z Spacer	 	NA	 	510(k) – K933090


 




    	 	A-10