Document:

tbuff_ex102.htm

Exhibit 10.2

 

FACILITY AGREEMENT

 

FACILITY AGREEMENT (this “Agreement”), dated as of June 8, 2015, between Borrower (hereinafter defined), POZEN Inc., a Delaware corporation (“Pozen”), Tribute Pharmaceuticals Canada Inc., an Ontario corporation (“Tribute”, and together with Borrower, Parent (hereinafter defined), to the extent that Irish Finco (hereinafter defined) is substituted for Parent as the Borrower and Pozen, each a “Credit Party” and collectively, the “Credit Parties”), and the lenders set forth on the signature page of this Agreement (together with their successors and assigns, the “Lenders” and, together with the Borrower, the “Parties”).

 

W I T N E S S E T H:

 

WHEREAS, the Borrower wishes to borrow from the Lenders up to Two Hundred Seventy Five Million Dollars ($275,000,000) for the purpose described in Section 2.1;

 

WHEREAS, pursuant to the Arrangement Agreement (defined below) Pozen and Tribute shall become wholly owned subsidiaries of Parent:

 

WHEREAS, Pozen, Tribute and each other Subsidiary of Parent shall guaranty the Obligations (defined below); and

 

WHEREAS, the Lenders desire to make loans to the Borrower for the purposes set forth in Section 2.1.

 

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

 

ARTICLE 1

 

DEFINITIONS

 

Section 1.1 General Definitions.  Wherever used in this Agreement, the Exhibits or the Schedules attached hereto, unless the context otherwise requires, the following terms have the following meanings:

 

“Acquisition Loans” shall have the meaning provided therefor in Section 2.3.

 

“Acquisition Notes” means the Secured Notes issued to the Lenders evidencing the Acquisition Loans in the form attached hereto as Exhibit A-2.

 

“Adjusted EBITDA” means, with respect to Parent for any Test Period, Parent’s EBITDA plus (i) to the extent deducted in determining Consolidated Net Income for such Test Period, (A) fees and expenses directly incurred or paid in connection with (x) the transactions contemplated by this Agreement, (y) any Permitted Acquisition and (z) to the extent permitted hereunder, issuances or incurrence of Indebtedness, issuances of equity interests or refinancing transactions and modifications of instruments of Indebtedness, (B) any non-recurring charges, costs, fees and expenses directly incurred or paid directly as a result of discontinued operations (other than such charges, costs, fees and expenses to the extent constituting losses arising from such discontinued operations), (C) restructuring charges or reserves, including write-downs and write-offs, including any one-time costs incurred in connection with Permitted Acquisitions and costs related to the closure, consolidation and integration of facilities, information technology infrastructure and legal entities, and severance and retention bonuses as reasonably approved by the Required Lenders, (D) the amount of cost savings and synergies projected by Parent in good faith to be realized as a result of a Permitted Acquisition, in each case within the four consecutive fiscal quarters following the consummation of a Permitted Acquisition (or following the consummation of the squeeze-out merger in the case of a Permitted Acquisition structured as a two-step transaction), as the case may be, calculated as though such cost savings and synergies had been realized on the first day of the Test Period and net of the amount of actual benefits received during such period from the Permitted Acquisition; provided that (1) no cost savings or synergies shall be added pursuant to this clause (D) to the extent duplicative of any expenses or charges otherwise added to Adjusted EBITDA, whether through a pro forma adjustment or otherwise, for such period, (2) subject to the last paragraph of Section 5.1, a duly completed certificate signed by an authorized officer of Parent shall be delivered to the Lenders, specifying such cost savings and synergies in reasonable detail and certifying that such cost savings and synergies are reasonably expected and factually supportable in the good faith judgment of Parent, and (3) the cost savings or synergies pursuant to this clause (D) shall not exceed the amount of such expected costs savings or synergies publicly disclosed by Parent or the public successor (if applicable) in any filings with the SEC with respect to such Permitted Acquisition, minus (ii) to the extent included in Consolidated Net Income for such Person for such Test Period, any non-recurring income or gains directly as a result of discontinued operations.

 

  

  

  

 

“Affiliate” shall have the meaning provided therefor in the Notes.

 

“Agreement Date” means the date of this Agreement.

 

“Applicable Laws” means all statutes, rules and regulations of Governmental Authorities in the United States or elsewhere applicable to the Borrower and its Subsidiaries.

 

“Arrangement Agreement” means that certain Agreement and Plan of Merger and Arrangement dated as of June 8, 2015 among Parent, Pozen, Tribute, Trafwell Limited, ARLZ US Acquisition Corp. and ARLZ CA Acquisition Corp.

 

“Authorizations” has the meaning set forth in Section 3.1(r).

 

“Borrower” means Parent, or if the conditions in Section 6.16 have occurred, Irish Finco.

 

“Business Day” means a day on which banks are required to be open for business in The City of New York.

 

“Canadian Security Documents” means the Security Agreement to be entered into between Tribute, all other Canadian Subsidiaries and the Lenders, substantially in the form of Exhibit B attached hereto, with such changes reasonably acceptable to Lenders, and all instruments, documents and agreements executed and delivered in connection therewith required to perfect Liens on the assets of Tribute.

 

“Code” means the Internal Revenue Code of 1986, as amended, and any Treasury Regulations promulgated thereunder.

 

  

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“Collateral” shall have the meaning provided therefor in the Security Documents.

 

“Commission” means the United States Securities and Exchange Commission.

 

“Common Shares” shall mean the ordinary shares, nominal value $0.001, of Parent.

 

“Common Share Equivalents” means any securities of Parent which would entitle the holder thereof to acquire at any time Common Shares, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Shares or other securities that entitle the holder to receive, directly or indirectly, Common Shares.

 

“Consolidated Net Income” means, with respect to Parent for any Test Period, net income (or loss) for Parent and its Subsidiaries for such Test Period, determined on a consolidated basis in accordance with GAAP (after deduction for minority interests); provided that, in making such determination, there shall be excluded (i) the net income of any other Person that is not a Subsidiary of Parent (or is accounted for by Parent by the equity method of accounting) except to the extent of actual payment of cash dividends or distributions by such Person to Parent or one of its Subsidiaries during such Test Period, (ii) the net income (or loss) of any other Person acquired by, or merged with, such Person or any of its Subsidiaries for any period prior to the date of such acquisition or merger, and (iii) the net income of any Subsidiary of Parent to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary of such net income is not at the time permitted by operation of the terms of its charter, certificate of incorporation or formation or other constituent document or any agreement or instrument or Applicable Laws.

 

“Conversion Failure” shall have the meaning provided therefor in the Conversion Notes.

 

“Conversion Notes” means the Senior Secured Convertible Notes issued to the Lenders evidencing the Initial Loans in the form attached hereto as Exhibit A-1.

 

“Conversion Shares” shall have the meaning provided therefor in the Conversion Notes.

 

“Default” means any event which, at the giving of notice, lapse of time or fulfillment of any other applicable condition (or any combination of the foregoing), would constitute an Event of Default.

 

“Disbursement Condition” means Parent shall have authorized and reserved for issuance a number of Common Shares sufficient to cover all shares issuable on conversion of the Conversion Notes (computed without regard to any limitations on the number of shares that may be issued on exercise).

 

“Dollars” and the “$” sign mean the lawful currency of the United States of America.

 

“EBITDA” means, with respect to Parent for any Test Period, Consolidated Net Income for such Person for such Test Period plus (i) to the extent deducted in determining Consolidated Net Income for such Person for such Test Period, (A) interest expense, (B) provision for taxes paid or accrued, (C) depreciation and amortization, (D) non-cash expenses related to stock based compensation, (E) extraordinary non-cash expenses or losses incurred other than in the ordinary course of business, (F) any unrealized losses in respect of any interest rate hedge agreements, and (G) adjustments relating to purchase price allocation accounting, minus (ii) to the extent included in Consolidated Net Income for such Person for such Test Period, (A) interest income (to the extent not netted against interest expense in the calculation of interest expense), (B) income tax credits and refunds (to the extent not netted from tax expenses), (C) extraordinary non-cash income or gains realized other than in the ordinary course of business, and (D) any unrealized income or gains in respect of any interest rate hedge agreements (to the extent not included in clause (i)(F)) above or netted against interest expense in the calculation of interest expense).

 

  

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“Employment Agreement” means each of the Employment Agreements dated as of May 31, 2015 between Pozen and each of Adrian Adams and Andrew Koven.

 

“Equity Agreement” means the Share Subscription Agreement dated as of June 8, 2015 among Lenders, Parent, Trafwell Limited and the other Persons party thereto.

 

“Equity Investment” means the investment by Lenders or their Affiliates and other Persons in the Common Shares pursuant to the Equity Agreement.

 

“Event of Default” has the meaning given to it in Section 5.4.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, including the rules and regulations promulgated thereunder.

 

“Excluded Taxes” means with respect to any Lender, (a) income Taxes imposed on (or measured by) such Lender’s net income, franchise Taxes and branch profit Taxes, in each case imposed by the United States of America, or by the jurisdiction (or any political subdivision thereof) under the laws of which such Lender is organized or incorporated or in which the applicable lending office of such Lender is located, (b) Other Connection Taxes, (c) Other Taxes that arise with respect to the onward transfer of the Conversion Shares by a Lender or (d) any U.S. federal withholding Taxes imposed under FATCA due to such Lender’s non-compliance with Section 2.6(e).

 

“Excluded Transaction” means any of the following transactions:

 

The entering into any collaborative arrangement, licensing, joint venture, partnership, royalty agreement or similar agreements or other research, development, manufacturing or other commercial exploitation arrangements relating to Parent or any Subsidiary’s Intellectual Property or other assets (provided, that Parent has a reasonable basis for believing that the downstream economics potentially to be received by Parent and its Subsidiaries in connection with such collaborative arrangement, licensing, joint venture, partnership, royalty agreement or similar agreements or other research, development, manufacturing or other commercial exploitation arrangements relating to the IP, when combined with the potential downstream economics of rights in the IP retained by Parent and its Subsidiaries are adequate to enable Borrower to timely satisfy all obligations of the Borrower and its Subsidiaries under this Agreement), including, without limitation, but subject to the conditions set forth above, (1) any grant to any entity engaged in, or owned by an entity engaged in, the pharmaceutical or biotechnology industry of a license or option to obtain a license to any of Parent’s or any Subsidiary’s Intellectual Property or other assets, provided that Parent or a Subsidiary (and not any third party or any of Parent’s equity holders) directly receives from such entity all consideration paid or payable by such entity in consideration of such grant, which consideration may, but need not, include (without limitation) upfront, milestone, royalty and profit-sharing payments, (2) any grant of a license or option to obtain a license to any entity that intends to research, develop, commercialize or manufacture products or services covered by such Intellectual Property or other assets whether directly or through Parent, any Subsidiary or another entity, and (3) any arrangement or transfers of assets for the manufacture, research, promotion and development of Parent’s or any Subsidiary’s products and clinical trial management, and data analysis and similar activities in support of Parent’s or any Subsidiary’s development programs.

 

  

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“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any intergovernmental agreements with respect thereto, any current or future regulations or official interpretations thereof, and any agreements entered into pursuant to Section 1471(b)(1) of the Code.

 

“Final Payment” means such amount as may be necessary to repay the outstanding principal amount of the Notes and any other Obligations owing by the Borrower to the Lenders pursuant to the Loan Documents.

 

“GAAP” means generally accepted accounting principles consistently applied as set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the accounting profession).

 

“Governmental Authority” means any government, quasi-governmental agency, governmental department, ministry, cabinet, commission, board, bureau, agency, court, tribunal, regulatory authority, instrumentality, judicial, legislative, fiscal, or administrative or public body or entity, whether domestic or foreign, federal, state or local, having jurisdiction over the matter or matters and Person or Persons in question.

 

“Guaranty” means the guaranty of the Obligations to be executed by each Guarantor in favor of Lenders substantially in the form of Exhibit C attached hereto, with such changes reasonably acceptable to Lenders.

 

“Guarantor” means Parent, if it is not the Borrower, each Subsidiary of Parent and each other Person that executes a Guaranty.

 

“Indebtedness” means the following:

 

(i) all indebtedness for borrowed money;

 

(ii) the deferred purchase price of assets or services (other than payables) which in accordance with GAAP would be shown to be a liability (or on the liability side of a balance sheet);

 

(iii) all guarantees of Indebtedness;

 

  

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(iv) all letters of credit issued or acceptance facilities established for the account of Parent and any of its Subsidiaries, including without duplication, all drafts drawn thereunder;

 

(v) all capitalized lease obligations;

 

(vi) all indebtedness of another Person secured by any Lien on any property of Parent or its Subsidiaries, whether or not such indebtedness has been assumed or is recourse (with the amount thereof, in the case of any such indebtedness that has not been assumed by Parent or its Subsidiaries, being measured as the lower of (x) fair market value of such property and (y) the amount of the indebtedness secured); and

 

(vii) indebtedness created or arising under any conditional sale or title retention agreement.

 

“Indemnified Person” has the meaning given to it in Section 6.11.

 

“Indemnified Taxes” means all Taxes including Other Taxes, other than Excluded Taxes.

 

“Indemnity” has the meaning given to it in Section 6.11.

 

“Initial Funding Date” shall have the meaning set forth in Section 2.2.

 

“Initial Loans” means the Loans made available by the Lenders to the Borrower pursuant to Section 2.2 in the aggregate principal amount of Seventy Five Million Dollars ($75,000,000) or, as the context may require, the principal amount thereof from time to time outstanding.

 

“Interest Rate” means 2.5% per annum with respect to the Initial Loans and 12.5% per annum with respect to the Acquisition Loans.

 

“IP” and “Intellectual Property” have the meaning given to it in Section 3.1(n).

 

“IRS” means the United States Internal Revenue Service.

 

“Irish Finco” means Stamridge Limited a limited liability company incorporated under the laws of the Republic of Ireland with company registration number 561897 being a wholly owned indirect Subsidiary of the Parent.

 

“Irish Security Document” means that certain Irish law debenture dated the date of the Initial Funding Date among the Borrower, the other companies from time to time party thereto and Lenders, substantially in the form of Exhibit D attached hereto, with such changes reasonably acceptable to Lenders.

 

“Lien” means any lien, pledge, preferential arrangement, mortgage, security interest, deed of trust, charge, assignment, hypothecation, title retention, or other encumbrance on or with respect to property or interest in property having the practical effect of constituting a security interest, in each case with respect to the payment of any obligation with, or from the proceeds of, any asset or revenue of any kind.

 

  

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“Loans” means the Initial Loans and the Acquisition Loans.

 

“Loan Documents” means this Agreement, the Notes, the Guaranties, the Pledge Agreement, the Security Documents, the Registration Rights Agreement, and any other document or instrument delivered in connection with any of the foregoing and dated the Agreement Date or subsequent thereto, whether or not specifically mentioned herein or therein.

 

“Loss” has the meaning given to it in Section 6.11.

 

“Major Transaction” has the meaning set forth in the Conversion Notes.

 

“Material Adverse Effect” means a material adverse effect on (a) the business, operations, condition (financial or otherwise), or assets of Parent or any of its Subsidiaries, (b) the validity or enforceability of any provision of any Loan Document, (c) the ability of Parent or any of its Subsidiaries to timely perform the Obligations or (d) the rights and remedies of the Lenders under any Loan Document; provided, however, any adverse effect that results directly or indirectly from general economic, business, financial or market conditions shall not be deemed to be a Material Adverse Effect.

 

“Material Contract” means any contract of any Credit Party that has been filed or was required to have been filed as an exhibit to the SEC Reports pursuant to Item 601(b)(4) or Item 601(b)(10) of Regulation S-K.

 

“Notes” means the Conversion Notes and the Acquisition Notes.

 

“Obligations” means all obligations and liabilities (monetary or otherwise) of Parent, Borrower and their Subsidiaries arising under or in connection with this Agreement and the other Loan Documents.

 

“Organizational Documents” means the Certificate of Incorporation, Bylaws, memorandum and articles of association or similar documents, each as amended to date, of Parent or any of its Subsidiaries, as the context may require.

 

“Other Connection Taxes” means with respect to any Lender, Taxes imposed as a result of a present or former connection between such Lender and the jurisdiction imposing such Tax (except a connection arising from such Lender having executed, delivered or performed its obligations under the Loan Documents).

 

“Other Taxes” means any and all present or future stamp or documentary taxes or any other excise or property taxes, duties, other charges or similar levies, and all liabilities with respect thereto, together with any interest, additions to tax or penalties applicable thereto (including by reason of any delay in payment) arising from any payment made hereunder or from the execution, delivery, registration or enforcement of, or otherwise with respect to, any Loan Document or the delivery to a Lender of the Conversion Shares, except any such Taxes imposed with respect to an assignment (other than an assignment made in connection with the exercise of remedies following an Event of Default).

 

  

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“Parent” means Aguono Limited a private limited company incorporated under the laws of the Republic of Ireland with company registration number 561617.

 

“Permitted Acquisition” means any transaction or series of related transaction by which Parent or any of its Subsidiaries acquires all or substantially all of the assets of a Person or going business, division, or line of business or product or acquires equity interests of any Person having at least a majority of combined voting power of the then outstanding equity interests of such Person; provided,

 

(i)           immediately prior to, and after giving effect thereto, no Default or Event of Default shall have occurred and be continuing or would result therefrom;

 

(ii)           all transactions in connection therewith shall be consummated, in all material respects, in accordance with all applicable laws and in conformity with all applicable Authorizations;

 

(iii)           Borrower shall have taken, or caused to be taken, as of the date such Person becomes a Subsidiary of Parent, each of the actions set forth in Section 5.1(ix);

 

(iv)           Subject to the last paragraph of Section 5.1, Borrower shall have delivered to Lenders at least ten (10) Business Days prior to such proposed acquisition, an executed term sheet and/or commitment letter (setting forth in reasonable detail the terms and conditions of such acquisition) and, at the request of any Lender, such other information and documents that any Lender may request, including, without limitation, executed counterparts of the respective agreements, instruments or other documents pursuant to which such acquisition is to be consummated, to the extent available (including, without limitation, any related management, non-compete, employment, option or other material agreements), any schedules to such agreements, instruments or other documents and all other material ancillary agreements, instruments or other documents to be executed or delivered in connection therewith;

 

(v)           any Person or assets or division acquired in accordance herewith shall be in same business or lines of business in which Parent and/or its Subsidiaries are engaged as of the Initial Funding Date or a business or line of business complimentary thereto;

 

(vi)           the acquisition shall have been approved by the board of directors or other governing body of the Person acquired or the Person from whom such assets or division is acquired; and

 

(vii)           the Adjusted EBITDA of Parent for the Test Period determined as of the date of the definitive documentation for such transaction or transactions on a pro forma basis as if such Permitted Acquisition had occurred at the beginning of such Test Period is greater than Adjusted EBITDA of Parent for such Test Period without giving such pro forma effect.

 

  

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“Permitted Indebtedness” means:

 

(i) The Obligations;

 

(ii) Indebtedness in respect of netting services, overdraft protections and other similar and customary services in connection with deposit accounts;

 

(iii) Performance bonds, surety bonds and similar instruments incurred in the ordinary course of business;

 

(iv) Guarantees with respect to any Permitted Indebtedness;

 

(v) Indebtedness in respect of purchase money financing, capital lease obligations and equipment financing facilities covering existing and newly-acquired equipment, including for the acquisition, installation, qualification and validation of such equipment up to the aggregate amount, together with Indebtedness permitted by clause (vi) below, not in excess of $5,000,000 outstanding at any time;

 

(vi) Indebtedness acquired pursuant to or incurred in connection with a Permitted Acquisition up to the aggregate amount, together with Indebtedness permitted by clause (v) above, not in excess of $5,000,000 outstanding at any time; provided that such Indebtedness has a rate of interest no greater than the market rate of interest for comparable Indebtedness and a maturity which is not less than 180 days after the latest maturity date of the Loans;

 

(vii) Unsecured Indebtedness up to an aggregate principal amount of $300,000,000 subordinated to the Obligations by written agreement in form and substance acceptable to Lenders, which has an interest rate no greater than the market rate of interest for comparable Indebtedness and a maturity which is not less than 180 days after the latest maturity date of the Loans; and

 

(viii) Unsecured convertible Indebtedness up to an aggregate principal amount of $300,000,000 subordinated to the Obligations by written agreement in form and substance acceptable to Lenders, which has a rate of interest no greater than the market rate of interest for comparable Indebtedness and a maturity which is not less than 180 days after the latest maturity date of the Loans.

 

“Permitted Liens” means:

 

(i) Liens in favor of the Lenders;

 

(ii) Statutory Liens created by operation of applicable law;

 

(iii) Liens arising in the ordinary course of business and securing obligations not in excess of the aggregate sum of $1,000,000 that are not more than 60 days past due or are being contested in good faith by appropriate proceedings diligently pursued;

 

  

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(iv) Liens for taxes, assessments or governmental charges or levies not past due and payable or that are being contested in good faith by appropriate proceedings;

 

(v) Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default;

 

(vi) Liens in favor of financial institutions arising in connection with any Credit Party’s or any of its Subsidiaries’ accounts maintained in the ordinary course held at such institutions to secure standard fees for services charged by, but not financing made available by, such institutions;

 

(vii) Pledges or deposits in connection with workers’ compensation, unemployment insurance and other social security legislation;

 

(viii) Easements, rights of way, restrictions and other similar encumbrances affecting real property which, in the aggregate, are not substantial in amount, and which do not in any case materially interfere with the conduct of the business of the applicable Person;

 

(ix) Liens of a collection bank arising under Section 4-210 of the Uniform Commercial Code (or equivalent in foreign jurisdictions) on items in the course of collection; and

 

(x) Liens securing Indebtedness pursuant to clause (v) of the definition of Permitted Indebtedness.

 

“Person” means and includes any natural person, individual, partnership, joint venture, corporation, trust, limited liability company, limited company, joint stock company, unincorporated organization, government entity or any political subdivision or agency thereof, or any other entity.

 

“Pledge Agreement” means the Pledge Agreement to be entered into as of the Initial Funding Date by the entity which holds the equity interests in Pozen and Tribute in favor of Lenders, substantially in the form of Exhibit E attached hereto, with such changes reasonably acceptable to Lenders.

 

“Principal Trading Markets” means the Trading Markets on which the Common Shares are listed on and quoted for trading, which, as of the date of this Agreement, shall be the NASDAQ Global Market and the Toronto Stock Exchange.

 

“Register” has the meaning set forth in Section 1.4 (b).

 

“Registration Rights Agreement” means the Registration Rights Agreement dated as of the Agreement Date between Lenders and Parent.

 

  

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“Registration Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and covering the resale by the Lenders of the Registrable Securities (as defined in the Registration Rights Agreement).

 

“Required Lenders” means, at any time, Lenders holding Loans representing more than 50% of the sum of the Loans outstanding.

 

“Restricted Lender” means the initial Lenders party to this Agreement and their Affiliates and any assignee of any interest in a Note that notifies the Borrower in writing that it wishes to be deemed a Restricted Lender.

 

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

“SEC Reports” shall have the meaning set forth in Section 5.1(v).

 

“Securities” means the Conversion Notes and the Conversion Shares.

 

“Securities Act” means the Securities Act of 1933, as amended, including the rules and regulations promulgated thereunder.

 

“Security Agreement” means that certain Security Agreement to be entered into as of the Initial Funding Date among Pozen, all other U.S. Subsidiaries of Parent, the other grantors from time to time party thereto and Lenders, substantially in the form of Exhibit F attached hereto, with such changes reasonably acceptable to Lenders.

 

“Security Documents” means the Security Agreement, the Irish Security Documents, the Canadian Security Documents and all other instruments, documents and agreements executed or delivered in connection therewith required to perfect Liens on the assets of Borrower and Guarantors.

 

“Subsidiary or Subsidiaries” means, as to any Person, any entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned or controlled  by such Person, or one or more of the Subsidiaries of the Person, or a combination thereof and a subsidiary within the meaning of Section 7 of the Companies Act 2014 of Ireland.

 

“Tax Affiliate” means (a) Parent and its Subsidiaries and (b) any Affiliate of the Parent with which Parent files or is required to file consolidated, combined or unitary tax returns.

 

“Taxes” means all present or future taxes, levies, imposts, stamp or other duties, deductions, charges or withholdings and all liabilities with respect thereto, (including by reason of any delay in payment).

 

“Test Period” means, at any date of determination, the period of four consecutive fiscal quarters of Parent then ended for which financial statements have been filed with the SEC.

 

  

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“Trading Market” means whichever of the New York Stock Exchange, the NYSE Alternext (formerly the American Stock Exchange), the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market, the Toronto Stock Exchange or the OTC Bulletin Board on which the Common Shares are listed or quoted for trading on the date in question.

 

“Transactions” shall mean the transactions contemplated by the Arrangement Agreement and the Equity Agreement, including, but not limited to the Equity Investment.

 

Section 1.2 Interpretation.  In this Agreement, unless the context otherwise requires, all words and personal pronouns relating thereto shall be read and construed as the number and gender of the party or parties requires and the verb shall be read and construed as agreeing with the required word and pronoun; the division of this Agreement into Articles and Sections and the use of headings and captions is for convenience of reference only and shall not modify or affect the interpretation or construction of this Agreement or any of its provisions; the words “herein,” “hereof,” “hereunder,” “hereinafter” and “hereto” and words of similar import refer to this Agreement as a whole and not to any particular Article or Section hereof; the words “include,” “including,” and derivations thereof shall be deemed to have the phrase “without limitation” attached thereto unless otherwise expressly stated; references to a specified Article, Exhibit, Section or Schedule shall be construed as a reference to that specified Article, Exhibit, Section or Schedule of this Agreement; and any reference to any of the Loan Documents means such document as the same shall be amended, supplemented or modified and from time to time in effect.

 

Section 1.3 Business Day Adjustment.  If the day by which any payment or other performance is due to be made is not a Business Day, that payment or performance shall be made by the next succeeding Business Day.

 

Section 1.4 Registration.

 

(a) The Borrower shall record on its books and records the amount of the Loans, the interest rate applicable, all payments of principal and interest thereon and the principal balance thereof from time to time outstanding.

 

(b) The Borrower shall establish and maintain at its address referred to in Section 6.1, a record of ownership (the “Register”) in which the Borrower agrees to register by book entry the interests (including any rights to receive payment hereunder) of each Lender in the Loan, and any assignment of any such interest, and (ii) accounts in the Register in accordance with its usual practice in which it shall record (1) the names and addresses of the Lenders (and any change thereto pursuant to this Agreement), (2) the amount of the Loan and each funding of any participation therein, (3) the amount of any principal or interest due and payable or paid, and (4) any other payment received by the Lenders from the Borrower and its application to the Loan.

 

(c) Notwithstanding anything to the contrary contained in this Agreement, the Loans (including any Notes evidencing the Loans) are a registered obligation, the right, title and interest of the Lenders and their assignees in and to the Loans shall be transferable only upon notation of such transfer in the Register and no assignment thereof shall be effective until recorded therein. This Section 1.4 shall be construed so that the Loans are at all times maintained in “registered form” within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code.

 

  

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(d) The Borrower and the Lenders shall treat each Person whose name is recorded in the Register as a Lender for all purposes of this Agreement. Information contained in the Register with respect to any Lender shall be available for access by the Borrower or such Lender at any reasonable time and from time to time upon reasonable prior notice.

 

ARTICLE 2

 

AGREEMENT FOR THE LOAN

 

Section 2.1 Use of Proceeds.  The proceeds of the Initial Loan shall be used for working capital and general corporate purposes and the proceeds of the Acquisition Loans shall be used solely to fund Permitted Acquisitions.

 

Section 2.2 Initial Loans.  Subject to the conditions set forth in Section 4.1 and this Section 2.2, the Lenders shall disburse Initial Loans in the amount of $75,000,000 to the Borrower on a date (“Initial Funding Date”) not less than three (3) Business Days following the satisfaction of the conditions set forth in Section 4.1.  Lenders shall fulfill the Initial Loans in accordance with their respective allocations set forth on Schedule 1 hereto.  In the event the conditions to the Initial Loan have not been satisfied by January 31, 2016, the Lenders shall not have any further obligations under this Agreement.

 

Section 2.3 Acquisition Loans.  Subject to the conditions set forth in Section 4.2 at any time and from time to time after the Initial Funding Date and prior to January 31, 2017; upon not less than three (3) Business Days’ written request (“Acquisition Loan Request”) by Borrower to Lenders, Borrower shall make additional advances to Borrower (each an “Acquisition Loan” and collectively the “Acquisition Loans”) up to the aggregate sum of $200,000,000 for the payment of the purchase price of any Permitted Acquisition.  Lenders shall fulfill the Acquisition Loans in accordance with their respective allocations set forth on Schedule 1 hereto.

 

Section 2.4 Payment.

 

(a) Borrower shall repay the outstanding principal amount of the Initial Loans, together with all accrued and unpaid interest thereon on the sixth anniversary of the Initial Funding Date.  Borrower shall repay the outstanding principal amount of each Acquisition Loan, together with all accrued and unpaid interest thereon on the sixth anniversary of the funding of each such Acquisition Loan.  Except as specifically provided herein, the Conversion Notes shall not be prepayable.  The Acquisition Notes shall be prepayable at any time following the end of the sixth month after the funding date of the applicable Acquisition Loan and prior to the maturity of such Acquisition Loan (provided that any Acquisition Loan incurred to refinance Indebtedness incurred before the Initial Funding Date with respect to a Permitted Acquisition may be prepaid at any time prior to maturity) at 101% of the outstanding principal amount of such Acquisition Loan, plus all accrued and unpaid interest on such Acquisition Loan prepaid.

 

  

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(b) Lenders shall have the right to convert all or any part of the principal amount of their Conversion Notes into Common Shares in accordance with the terms of the Conversion Notes.  Upon the Share Delivery Date (as defined in the Conversion Notes) Borrower shall pay to Lenders all accrued and unpaid interest on the principal amount of the Conversion Notes converted into Common Shares.

 

Section 2.5 Payments.  All payments by the Borrower under any of the Loan Documents shall be made without setoff or counterclaim.  Payments of any amounts due to the Lenders under this Agreement shall be made in Dollars in immediately available funds prior to 11:00 a.m. New York City time on such date that any such payment is due, at such bank or places as the Lenders shall from time to time designate in writing at least five (5) Business Days prior to the date such payment is due.  The Borrower shall pay all and any costs (administrative or otherwise) imposed by banks, clearing houses, or any other financial institution, in connection with making any payments under any of the Loan Documents, except for any costs imposed by the Lenders’ banking institutions.

 

Section 2.6 Taxes.

 

(a) Any and all payments hereunder or under any other Loan Document shall be made, in accordance with this Section 2.6, free and clear of and without deduction for any and all present or future Taxes except as required by applicable law. If Borrower (or another applicable Credit Party) shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder or under any other Loan Document and such Taxes are Indemnified Taxes, (i) the sum payable hereunder or thereunder shall be increased by as much as shall be necessary so that after making all required deductions (including deductions for Indemnified Taxes applicable to additional sums payable under this Section 2.6(a)),  each Lender 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) Borrower shall make such deductions, and (iii) Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law. Within thirty (30) days after the date of any payment of such Taxes, Borrower shall furnish to the applicable Lender the original or a certified copy of a receipt evidencing payment thereof or other evidence of such payment reasonably satisfactory to such Lender.

 

(b) Borrower agrees to pay and authorizes each Lender to pay in its name (but without duplication), all Other Taxes. Within 30 days after the date of any payment of Other Taxes, Borrower shall furnish to the applicable Lender the original or a certified copy of a receipt evidencing payment thereof or other evidence of such payment reasonably satisfactory to such Lender.

 

  

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(c) Without duplication of Section 2.6(a) or Section 2.6(b), Borrower shall reimburse and indemnify, within ten (10) days after receipt of demand therefor, each Lender for all Indemnified Taxes (including all Indemnified Taxes imposed on amounts payable under this Section 2.6(c)) paid by such Lender, whether or not such Indemnified Taxes were correctly or legally asserted. A certificate of the applicable Lender(s) setting forth the amounts to be paid thereunder and delivered to Borrower shall be conclusive, absent manifest error.

 

(d) If any Party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 2.6 (including by the payment of Additional Amounts), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund).  Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (d) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority.  Notwithstanding anything to the contrary in this paragraph (d), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (d) 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 Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid.  This paragraph shall not be construed to require any indemnified party to 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.

 

(e) If a payment made to a Lender under any Loan Document would be subject to withholding Tax under FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA, such Lender shall deliver to the Borrower or its designated agent at such time or times reasonably requested by the Borrower or its designated agent such U.S. tax forms and such additional documentation reasonably requested by the Borrower or its agent as may be necessary for the Borrower or its agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.

 

Section 2.7 Fee and Costs.  Notwithstanding anything to the contrary contained in the Equity Agreement, the Credit Parties (excluding Tribute prior to the closing of the transactions contemplated by the Arrangement Agreement), jointly and severally agree to reimburse the Lenders for reasonable, documented expenses for attorneys, accountants and other professional advisors, and other out-of-pocket expenses incurred by Lenders in connection with their due diligence, negotiation and documentation of the transactions contemplated by the Loan Documents and all amendments and modifications thereto, whether or not consummated; provided that Credit Parties’ obligation to reimburse Lenders for such fees and expenses in connection with the negotiation, documentation and closing of this Agreement and the other Loan Documents shall not exceed the aggregate amount of $300,000.  At Lender’s election, such reimbursed amounts may be deducted from the Initial Loans.

 

  

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Section 2.8 Interest.  The outstanding principal amount of the Loans shall bear interest at the Interest Rate (calculated on the basis of the actual number of days elapsed in each month).  Interest shall be paid quarterly in arrears commencing on October 1, 2015 and on the first Business Day of each January, April, July and October thereafter (each, an “Interest Payment Date”).

 

Section 2.9 Interest on Late Payments.  Without limiting the remedies available to the Lenders under the Loan Documents or otherwise, to the maximum extent permitted by applicable law, if the Borrower fails to make a required payment of principal or interest with respect to the Loan when due or to timely comply with Section 5.1(v) of this Agreement (regardless of any cure period provided in Section 5.4(b) of this Agreement), the Borrower shall pay interest, in respect of such principal and interest at the rate per annum equal to the Interest Rate plus ten percent (10%) for so long as such payment remains outstanding or such covenant is not timely cured.  Such interest shall be payable on demand.

 

ARTICLE 3

 

REPRESENTATIONS AND WARRANTIES

 

Section 3.1 Representations and Warranties of the Borrower.  Each Credit Party represents and warrants to the Lenders that, except as set forth in a Schedule to this Agreement:

 

(a) Each Credit Party and each of its Subsidiaries are conducting their business in compliance with their Organizational Documents, which are in full force and effect.

 

(b) No Default or Event of Default has occurred.

 

(c) Each Credit Party and each of its Subsidiaries (i) are capable of paying their debts as they fall due, have not admitted their inability to pay their debts as they fall due, (ii) are not bankrupt or insolvent or deemed to be bankrupt or insolvent under applicable and (iii) have not taken action, and no such action has been taken by a third party, for any Credit Parties’ or any of its Subsidiaries’ winding up, dissolution, or liquidation, examinership or similar executory or judicial proceeding or for the appointment of a liquidator, custodian, receiver, trustee, administrator, examinership or other similar officer for any Credit Party or any of its Subsidiaries or any or all of their assets or revenues.

 

(d) Except as disclosed on Schedule 3.1(d), which Liens shall be terminated on or prior to the Initial Funding Date, no Lien exists on any Credit Parties’ or any of its Subsidiaries’ assets, except for Permitted Liens.

 

  

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(e) The obligation of the Borrower to make any payment under this Agreement (together with all charges in connection therewith) is absolute and unconditional.

 

(f) Except as disclosed on Schedule 3.1(f), which Indebtedness will be repaid on or prior to the Initial Funding Date, no Indebtedness of any Credit Party or any of its Subsidiaries exists other than Permitted Indebtedness.

 

(g)          Irish Finco is validly existing as a limited liability company incorporated under the laws of the Republic of Ireland.  Parent is validly existing as a private limited company organized under the laws of the Republic of Ireland.  Pozen is validly existing as a corporation in good standing under the laws of the State of Delaware.  Tribute is validly existing as a corporation in good standing under the laws of the Province of Ontario.  Each Credit Party and each of its Subsidiaries have full power and authority to own their properties, conduct their business and enter into the Loan Documents and to consummate the transactions contemplated under the Loan Documents, and are duly qualified to do business as a foreign entity and are in good standing in each jurisdiction where the failure to be so qualified could reasonably be expected to result in a Material Adverse Effect.

 

(h)          There is not pending or, to the knowledge of any Credit Party, threatened, any action, suit, investigation, hearings or other proceeding before any Governmental Authority (a) to which any Credit Party or any of its Subsidiaries is a party or (b) which has as the subject thereof any assets owned by any Credit Party or any of its Subsidiaries, except, as would not reasonably be expected to have a Material Adverse Effect.  There are no current or, to the knowledge of any Credit Party, pending, legal, governmental or regulatory enforcement actions, suits or other proceedings to which any Credit Party or any of its Subsidiaries or any of their assets is subject, except, as would not reasonably be expected to have a Material Adverse Effect.

 

(i)          Each Credit Party has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Loan Documents to which it is a party and otherwise to carry out its obligations hereunder and thereunder.  Each Credit Parties’ execution and delivery of each of the Loan Documents to which it is a party and the consummation by it of the transactions contemplated hereby and thereby (including, but not limited to, the sale and delivery of the Notes and the reservation for issuance and the  subsequent issuance of the Conversion Shares upon exercise of the Conversion Notes) have been duly authorized by all necessary action on the part each Credit Party, and no further action is required by any Credit Party, its directors or its stockholders in connection therewith other than in connection with the Required Approvals (as defined below). Each of the Loan Documents to which it is 

 

  

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a party has been (or upon delivery will have been) duly executed by each Credit Party and each of its Subsidiaries and is, or when delivered by each Credit Party and each of its Subsidiaries a party thereto, in accordance with the terms hereof, will constitute the legal, valid and binding obligation of such Credit Party and its Subsidiaries party thereto enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, examinership, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application. The execution, delivery and performance of the Loan Documents by the Credit Parties and their Subsidiaries and the consummation of the transactions therein contemplated (including, but not limited to, the delivery of the Conversion Notes and the reservation for issuance and subsequent issuance of the Conversion Shares) will not (A) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any Lien (other than pursuant to the Loan Documents) upon any assets of any Credit Party or any of its Subsidiaries pursuant to, any agreement to which any Credit Party or any of its Subsidiaries is a party or by which any Credit Party or any of its Subsidiaries are bound or to which any of the assets of any Credit Party or any of its Subsidiaries is subject, (B) result in any violation of or conflict with the provisions of the Organizational Documents or (C) result in the violation of any Applicable Law or (D) result in the violation of any judgment, order, rule, regulation or decree of any Governmental Authority.  No consent, approval, authorization or order of, or registration or filing with any Governmental Authority is required for the execution, delivery and performance of any of the Loan Documents or for the consummation by any Credit Party and any of its Subsidiaries of the transactions contemplated thereby except for such registrations and filings in connection with (i) the filing with the Commission of one or more Registration Statements in accordance with the requirements of the Registration Rights Agreement, (ii) filings required by applicable state securities laws, (iii) the filing of a Notice of Sale of Securities on Form D with the Commission under Regulation D of the Securities Act, (iv) the filing of any requisite notices and/or application(s) to the Principal Trading Markets for the issuance and sale of the Securities and the listing of the Conversion Shares for trading or quotation, as the case may be, thereon in the time and manner required thereby, (v) filings contemplated by the Security Documents and (vi) those that are required to be obtained in connection with the Transactions or that have been made or obtained prior to the Initial Funding Date (the “Required Approvals”).

 

  

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(j)          As of their respective filing dates, or to the extent corrected by a subsequent restatement, the SEC Reports filed by any Credit Party comply in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and none of the SEC Reports, when filed, will contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.  No Credit Party has ever been an issuer subject to Rule 144(i) under the Securities Act.  Each of the Material Contracts to which any Credit Party is a party or to which the property or assets of any Credit Party are subject will be filed as an exhibit to the SEC Reports.

 

(k)          Other than the actions required under the Registration Rights Agreement with respect to the Registration Statement or with respect to the Transactions, no Authorization is required for (i) the execution and delivery of this Agreement, the other Loan Documents, or (ii) the consummation of the transactions contemplated hereby and thereby.

 

(l)          Each Credit Party and each of its Subsidiaries holds, and is operating in good standing (where applicable) and in compliance in all material respects with, all franchises, grants, authorizations, licenses, permits, easements, consents, certificates and orders of any Governmental Authority (collectively, “Necessary Documents”) required for the conduct of its business and all Necessary Documents are valid and in full force and effect; and neither any Credit Party nor any of its Subsidiaries has received written notice of any revocation or modification of any of the Necessary Documents and neither any Credit Party nor any of its Subsidiaries has any reason to believe that any of the Necessary Documents will not be renewed in the ordinary course of business, and each Credit Party and each of its Subsidiaries are in compliance in all material respects with all applicable federal, state, local and foreign laws, regulations, orders and decrees applicable to the conduct of its business.

 

(m)          Each Credit Party and each of its Subsidiaries have good and marketable title to all of their assets free and clear of all Liens except Permitted Liens.  The property held under lease by each Credit Party and each of its Subsidiaries is held under valid, subsisting and enforceable leases with only such exceptions with respect to any particular lease as do not interfere in any material respect with the conduct of the business of any Credit Party or any of its Subsidiaries.

 

(n)          Except as set forth on Schedule 3.1(n), each Credit Party and each of its Subsidiaries own or have the right to use pursuant to a valid and enforceable written license, implied license or other legally enforceable right, all of the Intellectual Property (as defined below) that is necessary for the conduct of their business as currently conducted and the manufacture, importation and sale of products being developed by such Credit Party or any of its Subsidiaries (the “IP”).  The IP that is registered with or issued by a Governmental Authority is valid and enforceable; there is no outstanding, pending, or threatened action, suit, other proceeding or claim by any third person challenging or contesting the validity, scope, use, ownership, enforceability, or other rights of any Credit Party or any of its Subsidiaries in or to any IP and neither any Credit Party nor any of its Subsidiaries has received any written notice regarding, any such action, suit, or other proceeding.  Neither any Credit Party nor any of its Subsidiaries has infringed or misappropriated any material rights of others.  There is no pending or threatened action, suit, other proceeding or claim by others that any Credit Party or any of its Subsidiaries infringes upon, violates or uses the Intellectual Property rights of others without authorization, and neither any Credit Party nor any of its Subsidiaries has received any written notice regarding, any such action, suit, other proceeding or claim.  Except as set forth on Schedule 3.1(n), neither any Credit Party nor any of its Subsidiaries is a party to or bound by any options, licenses, or agreements with respect to IP other than licenses for computer software acquired in the ordinary course of business.  The term “Intellectual Property” as used herein means (i) all patents, patent applications, patent disclosures and inventions (whether patentable or unpatentable and whether or not reduced to practice), (ii) all trademarks, service marks, trade dress, trade names, slogans, logos, and corporate names and Internet domain names, together with all of the goodwill associated with each of the foregoing, (iii) copyrights, copyrightable works, and licenses, (iv) registrations and applications for registration for any of the foregoing, (v) computer software (including but not limited to source code and object code), data, databases, and documentation thereof, (vi) trade secrets and other confidential information, (vii) other intellectual property, and (viii) copies and tangible embodiments of the foregoing (in whatever form and medium).

 

  

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(o)          Neither any Credit Party nor any of its Subsidiaries is in violation of the Organizational Documents, or in breach of or otherwise in default under, and no event has occurred which, with notice or lapse of time or both, would constitute such breach or other default in the performance of any agreement or condition contained in any agreement under which it may be bound, or to which any of its assets is subject.

 

(p)          All federal, state, local and foreign income and franchise and other material Tax returns, reports and statements (collectively, the “Tax Returns”) required to be filed by any Tax Affiliates have been filed with the appropriate Governmental Authorities, all such Tax Returns are true and correct in all material respects, and all Taxes, assessments and other governmental charges and impositions reflected therein and all other material Taxes, assessments and other governmental charges otherwise due and payable have been paid prior to the date on which any liability may be added thereto for non-payment thereof except for those contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves are maintained on the books of the appropriate Tax Affiliate in accordance with GAAP or other applicable accounting principles, standards and procedures that such Tax Affiliate uses to compile its financial statements.  As of the Agreement Date, no Tax Return is under audit or examination by any Governmental Authority, and no Tax Affiliate has received written notice from any Governmental Authority of any audit or examination or any assertion of any material claim for Taxes.  No Credit Party may be a party to any transaction which it is aware or ought reasonably to be aware requires a notification by that Credit Party under Chapter 3 of Part 33 of the Taxes Consolidation Act, 1997 of Ireland (Mandatory disclosure of certain transactions) and no Credit Party may enter into any tax arrangements which it is aware or ought reasonably to be aware constitutes a “tax avoidance transaction” for the purposes of Chapter 2 of Part 33 of the Taxes Consolidation Act, 1997 of Ireland without the prior written consent of the Lenders (acting reasonably).

 

  

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(q)          Other than as set forth in Schedule 3.1(q) neither any Credit Party nor any of its Subsidiaries has granted rights to market or sell its products or services to any other Person, and are not bound by any agreement that affects the exclusive right of any Credit Party or any of its Subsidiaries to develop, license, market or sell its products or services, in each case including rights relating to products under development by any Credit Party or any of its Subsidiaries.

 

(r)          Each Credit Party and each of its Subsidiaries:  (A) at all times has complied in all materials respects with all Applicable Laws; (B) has not received any warning letter or other correspondence or notice from any Governmental Authority alleging or asserting material noncompliance with any Applicable Laws or any licenses, certificates, approvals, clearances, authorizations, permits and supplements or amendments thereto reasonably required in connection with the business of any Credit Party or any of its Subsidiaries by any Applicable Laws (together, the “Authorizations”); (C) possesses and complies with the Authorizations, which are valid and in full force and effect; (D) has not received written notice that any Governmental Authority has taken, is taking or intends to take action to limit, suspend, modify or revoke any Authorization and has no knowledge that any Governmental Authority is considering such action; (E) has filed, obtained, maintained or submitted all reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments as reasonably required by any Applicable Laws or Authorizations.

 

(s)          Each of Pozen and Tribute maintains or, in the case of Parent, as of the Initial Funding Date will maintain a system of internal accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

 

  

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(t)          (i) To the knowledge of each Credit Party, no “prohibited transaction” as defined under Section 406 of ERISA or Section 4975 of the Code that is not exempt under ERISA Section 408 or Section 4975 of the Code, under any applicable regulations and published interpretations thereunder or under any applicable prohibited transaction, individual or class exemption issued by the Department of Labor, has occurred with respect to any Employee Benefit Plan, except for such transactions as would not have a Material Adverse Effect, (ii) at no time within the last seven (7) years has any Credit Party or any ERISA Affiliate maintained, sponsored, participated in, contributed to or has or had any liability or obligation in respect of any Employee Benefit Plan subject to Section 302 of ERISA, Title IV of ERISA, or Section 412 of the Code or any “multiemployer plan” as defined in Section 3(37) of ERISA or any multiple employer plan for which any Credit Party or any ERISA Affiliate has incurred or could incur liability under Section 4063 or 4064 of ERISA, (iii) no Employee Benefit Plan represents any current or future liability for retiree health, life insurance, or other retiree welfare benefits except as may be required by the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, or similar state law, (iv) each Employee Benefit Plan is and has been operated in compliance with its terms and all applicable laws, including but not limited to ERISA and the Code, except for such failures to comply that would not have a Material Adverse Effect, (v) no event has occurred (including a “reportable event” as such term is defined in Section 4043 of ERISA) and no condition exists that would subject any Credit Party or any ERISA Affiliate to any tax, fine, lien, penalty or liability imposed by ERISA, the Code or other applicable law, except for any such tax, fine, lien, penalty or liability that would not, individually or in the aggregate, have a Material Adverse Effect, (vi) no Credit Party maintains any Foreign Benefit Plan, (vii) no Credit Party has any obligations under any collective bargaining agreement.  As used in this clause (t), “Employee Benefit Plan” means any material “employee benefit plan” within the meaning of Section 3(3) of ERISA, and all stock purchase, stock option, stock-based severance, employment, change-in-control, medical, disability, fringe benefit, bonus, incentive, deferred compensation, employee loan and all other employee benefit plans, agreements, programs, policies or other arrangements, whether or not subject to ERISA, under which (A) any current or former employee, director or independent contractor of any Credit Party or any of its Subsidiaries has any present or future right to benefits and which are contributed to, sponsored by or maintained by any Credit Party or any of its respective Subsidiaries or (B) no Credit Party nor any of its Subsidiaries has had or has any present or future obligation or liability on behalf of any such employee, director or independent contractor; “ERISA” means the Employee Retirement Income Security Act of 1974, as amended; “ERISA Affiliate” means any member of any Credit Party’s controlled group as defined in Code Section 414 (b), (c), (m) or (o); and “Foreign Benefit Plan” means any Employee Benefit Plan mandated by a government other than the United States of America is subject to the laws or a jurisdiction outside of the United States.

 

  

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(u)          Each Credit Party’s Subsidiaries are set forth in Schedule 3.1(u).

 

(v)          All of the issued and outstanding shares of capital stock of each Credit Party are duly authorized and validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state and foreign securities laws, were not issued in violation of or subject to any preemptive rights or other rights to subscribe for or purchase securities that have not been waived in writing; the Conversion Notes and Conversion Shares have been duly authorized and, and the Conversion Shares, when issued and delivered in accordance with the terms of the Conversion Notes will have been validly issued and will be fully paid.  Parent has reserved from its duly authorized capital stock a sufficient number of Common Shares to issue the Conversion Shares, free and clear of all encumbrances and restrictions, except for restrictions on transfer set forth in the Loan Documents or imposed by applicable securities laws and except for those created by the Lenders.  Assuming the accuracy of the representations and warranties of the Lender in this Agreement, the Securities will be issued in compliance with all applicable federal and state securities laws.  Parent shall, so long as any of the Conversion Notes are outstanding, take all action necessary to reserve and keep available out of its authorized and unissued capital stock, solely for the purpose of effecting the conversion of the Conversion Notes, the number of Common Shares issuable upon such conversion and/or exercise (without taking into account any limitations on the conversion of the Conversion Notes as set forth therein).  There are no preemptive rights or other rights to subscribe for or to purchase, or any restriction upon the voting or transfer of any Common Shares pursuant to Parent’s Organizational Documents or any agreement to which Parent or any of its Subsidiaries is a party or by which Parent or any of its Subsidiaries is bound and all of the foregoing rights have been fully waived in respect of the issuance of the Notes and the Conversion Shares.  Upon completion of the Transactions, Parent’s outstanding shares of capital stock, options and warrants as set forth in Schedule 3.1(v) to this Agreement is accurate, and there are no other (i) except as set forth in such Schedule, options issuable or issued under Parent’s option plans, or (ii) any other options, warrants, agreements, contracts or other rights in existence to purchase or acquire from Parent or any Subsidiary of Parent any shares of the capital stock of Parent or any Subsidiary of Parent.

 

  

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(w)          The issuance of the Notes and the Conversion Shares will not obligate Parent to issue Common Shares or other securities to any Person (other than the Lenders) and will not result in a right of any holder of Parent securities to adjust the exercise, conversion, exchange or reset price or other right under any of such securities.  There are no stockholders’ agreements, voting agreements or other similar agreements with respect to the Borrower’s capital stock to which Parent is a party or, to Parent’s knowledge, between or among any of Parent’s stockholders.

 

(x)          Assuming the accuracy of the representations and warranties of the Lenders set forth in Section 3.3 of this Agreement, no registration under the Securities Act is required for the offer and sale of the Securities and the Acquisition Notes by the Borrower or the Parent, as applicable, to the Lenders under the Loan Documents.  The issuance and sale of the Securities and the Acquisition Notes hereunder complies and will comply in all material respect with and does not and will not contravene the rules and regulations of the Principal Trading Markets.

 

(y)          Neither Parent nor Borrower are, and immediately after issuance of any Notes will not be, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.  Parent and Borrower shall conduct their business in a manner so that it will not become subject to the Investment Company Act of 1940, as amended.

 

(z)          Other than the Lenders or pursuant to the Transactions, no Person has any right to cause Parent to effect the registration under the Securities Act of any securities of Parent other than those securities which are currently registered on an effective registration statement on file with the Commission.

 

(aa)          From and after the Initial Funding Date, Parent’s Common Shares shall be registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and Parent shall not have taken any action designed to terminate the registration of the Common Shares under the Exchange Act nor shall Parent have received any notification that the Commission is contemplating terminating such registration.  From and after the Initial Funding Date, Parent will be in compliance with all listing and maintenance requirements of the Principal Trading Markets.

 

(bb)          Neither Parent nor, to Parent’s knowledge, any person acting on behalf of Parent, has offered or sold any of the Securities by any form of general solicitation or general advertising.

 

  

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(cc)          Each Credit Party is in compliance in all material respects with all of the provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it. Each Credit Party other than Parent and Borrower has, and as of the Initial Funding Date Parent shall have established disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) for it and designed such disclosure controls and procedures to ensure that information required to be disclosed by it in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Each Credit Party’s other than Borrower’s and Parent’s certifying officers have, and as of the Initial Funding Date Parent’s certifying officers shall have evaluated the effectiveness of the its disclosure controls and procedures as of the end of the period covered by its most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”). Each Credit Party presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in Parent’s internal control over financial reporting (as such term is defined in the Exchange Act) that have materially affected, or are reasonably likely to materially affect, its internal controls over financial reporting.

 

(dd)          In the case of a Credit Party incorporated in Ireland, for the purposes of The Council of the European Union Regulation No. 1346/2000 on Insolvency Proceedings (the “Regulation”), its centre of main interest (as that term is used in Article 3(1) of the Regulation) is situated in Ireland and it does not have an establishment (as that term is used in Article 2(h) of the Regulation) outside of Ireland.

 

(ee)          The entry into by a Credit Party of the Transactions and the Loan Documents and the performance of its obligations thereunder will not breach the provisions of section 82 of the Companies Act 2014 of Ireland.

 

Section 3.2 Acknowledgment.  Each Credit Party acknowledges that it has made the representations and warranties referred to in Section 3.1 with the intention of persuading the Lenders to enter into the Loan Documents and that the Lenders have entered into the Loan Documents on the basis of, and in full reliance on, each of such representations and warranties, each of which shall survive the execution of this Agreement until the Obligations are paid in full and each representation or warranty related to the Conversion Shares shall be deemed to be continuously made at all times until the Obligations are paid in full.

 

Section 3.3 Representations and Warranties of the Lenders.  Each Lender, severally and not jointly, represents and warrants to Borrower and Parent as of the Agreement Date that:

 

  

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(a) Such Lender is duly organized and validly existing under the laws of the jurisdiction of its formation.

 

(b) Each Loan Document to which it is a party has been duly authorized, executed and delivered by such Lender and constitutes the valid and legally binding obligation of such Lender, enforceable in accordance with its terms, except as such enforceability may be limited by (i) applicable insolvency, bankruptcy, reorganization, moratorium or other similar laws affecting creditors’ rights generally, and (ii) applicable equitable principles (whether considered in a proceeding at law or in equity).

 

(c) Such Lender has full power and authority to make the Loans and to enter into and perform its other obligations under each of the Loan Documents and carry out the other transactions contemplated thereby.

 

(d) Each of the Conversion Notes and Conversion Shares to be received by such Lender hereunder will be acquired for such Lender’s own account, and not with a view to the resale or distribution of any part thereof in violation of the Securities Act, except pursuant to sales registered or exempted under the Securities Act, and such Lender has no present intention of selling, granting any participation in, or otherwise distributing the same in violation of the Securities Act without prejudice, however, to such Lender’s right at all times to sell or otherwise dispose of all or any part of such Securities in compliance with applicable federal and state securities laws.  Nothing contained herein shall be deemed a representation or warranty by such Lender to hold the Securities for any period of time and such Lender reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an exemption under the Securities Act.

 

(e) Such Lender can bear the economic risk and complete loss of its investment in the Securities and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment contemplated hereby.

 

(f) Such Lender understands that the Securities are characterized as “restricted securities” under the U.S. federal securities laws inasmuch as they are being acquired from Parent in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the Securities Act only in certain limited circumstances.

 

(g) Such Lender is an “accredited investor” as such term is defined in Regulation D promulgated under the Securities Act.

 

ARTICLE 4

 

CONDITIONS OF DISBURSEMENT OF LOANS

 

Section 4.1 Conditions to the Disbursement of Loans.  The obligation of the Lenders to make the Initial Loans shall be subject to the fulfillment of the following conditions:

 

  

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(a) The Lenders shall have received sufficient copies of each Loan Document originally executed and delivered by each Credit Party and its Subsidiaries party thereto for each Lender;

 

(b) The Lenders shall have received (i) sufficient copies of each Organization Document executed and delivered by each Credit Party and its Subsidiaries, as applicable, and, to the extent applicable, certified as of a recent date by the appropriate governmental official, for each Lender, each dated the Initial Funding Date or a recent date prior thereto; (ii) signature and incumbency certificates of the officers of such Person executing the Loan Documents to which it is a party; (iii) resolutions of the board of directors or other governing body of each Credit Party and its Subsidiaries approving and authorizing the execution, delivery and performance of this Agreement and the other Loan Documents to which it is a party or by which it or its assets may be bound , certified as of the Initial Funding Date by an authorized officer as being in full force and effect without modification or amendment; (iv) a good standing certificate (or appropriate comparable confirmation in the relevant jurisdiction) from the applicable Governmental Authority of each Credit Party and each of its Subsidiary’s jurisdiction of incorporation, organization or formation and in each jurisdiction in which it is qualified as a foreign corporation or other entity to do business, and (v) such other documents as Lenders may reasonably request;

 

(c) Each Credit Party and each of its Subsidiaries shall have obtained all Authorizations and all consents of other Persons, in each case that are necessary or advisable in connection with the transactions contemplated by the Arrangement Agreement, Loan Documents and the Equity Agreement and each of the foregoing shall be in full force and effect and in form and substance reasonably satisfactory to Lenders.  All applicable waiting periods shall have expired without any action being taken or threatened by any competent authority which would restrain, prevent or otherwise impose adverse conditions on the transactions contemplated by the Arrangement Agreement, Loan Documents or the Equity Agreement or the financing thereof and no action, request for stay, petition for review or rehearing, reconsideration, or appeal with respect to any of the foregoing shall be pending, and the time for any applicable agency to take action to set aside its consent on its own motion shall have expired;

 

(d) Lenders shall have received evidence of the compliance by Parent and its Subsidiaries  of their obligations under the Security Documents (including, without limitation, their obligations to authorize or execute, as the case may be, and deliver UCC financing statements or equivalent foreign filings, originals of securities, instruments and chattel paper and any agreements governing deposit and/or securities accounts as provided therein and a duly executed authorization to pre-file UCC-1 financing statements or foreign equivalents), together with other documents as may be necessary to perfect the security interests purported to be created by the Security Documents;

 

(e)  Lenders shall have received opinions of counsel with respect to the creation and perfection of the security interests in favor of Lenders in such Collateral and such other matters governed by the laws of each jurisdiction in which Parent or any Subsidiary or any Collateral is located as Lenders may reasonably request, in each case in form and substance reasonably satisfactory to Lenders;

 

  

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(f) Lenders shall have received a certificate from Parent and each Subsidiary’s insurance broker or other evidence satisfactory to it that all insurance required to be maintained pursuant to the Security Documents is in full force and effect, together with endorsements naming the Lenders as additional insured and loss payee thereunder;

 

(g) Lenders  shall have received originally executed copies of the favorable written opinions of counsel for Parent and its Subsidiaries as to such matters as Lenders may reasonably request and otherwise in form and substance reasonably satisfactory to Lenders;

 

(h) No Default or Event of Default shall have occurred;

 

(i) All of the representations and warranties set forth in Section 3.1 shall be true and correct as if made on the Initial Funding Date;

 

(j) The Disbursement Condition shall have been satisfied;

 

(k) The Common Shares shall have been listed on the Trading Market;

 

(l) All conditions precedent to the Transactions set forth in the Equity Agreement and Arrangement Agreement shall have been satisfied and the Transactions shall have been completed;

 

(m) No Material Adverse Effect shall have occurred; and

 

(n) Each of the Employment Agreements shall have been executed and shall be in full force and effect.

 

(o)           The Indebtedness of Tribute to SWK Funding LLC and any Indebtedness incurred by Tribute to fund the acquisition referred to in Schedule 3.1(f) (unless provided by Lenders or their Affiliates) shall be repaid in full out of the proceeds of the Initial Loans and Acquisition Loans on the Initial Funding Date (or shall have been otherwise repaid) and all Liens securing such Indebtedness released.

 

Section 4.2 Condition to the Disbursement of Acquisition Loans.  The obligation of the Lenders to make an Acquisition Loan shall be subject to the fulfillment of the following conditions:

 

(a)           Lenders shall have received an Acquisition Loan Request and a certification by an authorized officer of Borrower that the proposed acquisition is a Permitted Acquisition;

 

(b)           Lenders shall have received Acquisition Notes executed by Borrower in the aggregate principal amount of the Acquisition Loan;

 

  

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(c)           All conditions precedent to the closing of the Permitted Acquisition shall have been satisfied except for the funding of the purchase price with the proceeds of such Acquisition Loan;

 

(d)           No Default or Event of Default shall have occurred or would be created by such Permitted Acquisition and

 

(e)           All of the representations and warranties in Section 3.1 shall be true and correct as if made on the date of funding of each such Acquisition Loan.

 

ARTICLE 5

 

PARTICULAR COVENANTS AND EVENTS OF DEFAULT

 

Section 5.1 Affirmative Covenants.  Unless the Required Lenders shall otherwise agree:

 

(i)           Parent shall and shall cause its Subsidiaries to maintain their existence and qualify and remain qualified to do their business as currently conducted, except for any merger or dissolution of a Subsidiary in accordance with Section 5.2(i) or where the failure to maintain such qualification would not reasonably be expected to have a Material Adverse Effect.

 

(ii)           Parent shall and shall cause its Subsidiaries to comply in all material respects with all Applicable Laws.

 

(iii)           Parent shall obtain and shall cause its Subsidiaries to make and keep in full force and effect all Authorizations.

 

(iv)           Parent shall promptly notify the Lenders of the occurrence of (i) any Default or Event of Default and (ii) any claims, litigation, arbitration, mediation or administrative or regulatory proceedings that are instituted or threatened against Parent or any of its Subsidiaries concurrently with any public disclosure of any such event, and (iii) each event which, at the giving of notice, lapse of time, determination of materiality or fulfillment of any other applicable condition (or any combination of the foregoing), would constitute an event of default (however described) under any Loan Document.

 

(v)           Each Credit Party will timely file with the SEC (subject to appropriate extensions made under Rule 12b-25 of the Exchange Act) any annual reports, quarterly reports and other periodic reports required to be filed pursuant to Section 13 or 15(d) of the Exchange Act (“SEC Reports”).

 

(vi)           Parent shall, so long as any of the Conversion Notes are outstanding, take all action necessary to reserve and keep available out of its authorized and unissued capital stock, solely for the purpose of effecting the conversion of the Conversion Notes, the number of Common Shares issuable upon such conversion (without taking into account any limitations on the conversion of the Notes as set forth therein).

 

  

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(vii)           For so long as a Lender owns Notes or Common Shares, upon the request of such Lender Borrower shall furnish any information reasonably requested by such Lender (and not generally available by reference to Parent’s publicly available SEC filings) to confirm whether or not Borrower is a passive foreign investment company (“PFIC”) under the Code; provided, however, that Parent shall not be obligated to furnish any information that it has not already publicly disclosed.  In addition, for each taxable year of Borrower during any portion of which the Notes are outstanding or any Lender holds Common Shares, Borrower shall make due inquiry of its tax advisors on an annual basis regarding its status as a PFIC and, if Borrower’s tax advisors determine that Borrower became a PFIC for any such taxable year, shall notify each Lender in writing, of the determination that Borrower has become a PFIC for such taxable year by no later than 75 days following the close of such taxable year.  With respect to (a) any taxable year in respect of which Borrower was determined to be a PFIC and (b) each subsequent taxable year during any part of which the Notes are outstanding or any Lender holds Common Shares, the Borrower shall promptly provide each Lender with all information that is required by a United States person holding Common Shares in order to make a valid election to treat the Borrower as a “qualified electing fund” for the purposes of the Code, including a “PFIC Annual Information Statement” as described in Treasury Regulation section 1.1295-(1)(g)(1) (or any successor Treasury Regulation) and all representations and statements required by such Statement, and will take any other steps necessary to facilitate such election.  The Borrower understands and agrees that time is of the essence in complying with the foregoing deadlines, and that any failure by the Borrower to so comply will be materially adverse to each Lender.  Each Lender shall promptly respond to any written inquiry from the Borrower requesting the Lender to inform the Borrower whether it owns any Common Shares.

 

(viii)           In the event that any Person becomes a Subsidiary of Parent, Parent shall (a) concurrently with such Person becoming a Subsidiary cause such Subsidiary to become a Guarantor hereunder and a Grantor under the Security Agreement, and (b) take all such actions and execute and deliver, or cause to be executed and delivered, all such documents, instruments, agreements, and certificates as are necessary to grant and to perfect a first priority Lien in favor of Lenders in any assets owned by such Person and in all equity interests of Parent in such Subsidiary.

 

(ix)           Parent shall, in respect of itself and each Subsidiary incorporated in Ireland: (a) deliver to the Lenders at such times as those reports are prepared in order to comply with the then current statutory or auditing requirements (as applicable either to the trustees of any relevant schemes or to Parent), actuarial reports in relation to all pension schemes mentioned in all pension schemes operated by or maintained for the benefit of such entities and/or any of their employees; (b) promptly notify the Lenders of any material change in the rate of contributions to any pension schemes operated by or maintained for the benefit of such entities and/or any of their employees paid or recommended to be paid (whether by the scheme actuary or otherwise) or required (by law or otherwise); (c) ensure that no action is taken or omission is made by an such entity in relation to any defined benefit pension scheme which has or is reasonably likely to have a Material Adverse Effect; and (d) promptly notify the Lenders of any obligation on the trustees of any occupational pension scheme to which the Pension Act, 1990 of Ireland applies to submit to the Pensions Board established under that Act a funding proposal under section 49 of the Pensions Act, 1990 of Ireland.

 

(x)           Borrower shall comply in all respects with Section 82 of the Companies Act 2014 of Ireland and any equivalent legislation in other jurisdictions including, without limitation, in relation to the execution of the Loan Documents, the entry into of the Transactions and the payment of amounts due under this Agreement.

 

  

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Notwithstanding anything set forth in the definition of Permitted Acquisition or elsewhere in this Agreement to the contrary, if any notice or information required to be furnished contains material non-public information (any such notice or information, a “Public Notice”), the Borrower, instead of delivering such Public Notice to all the Lenders shall promptly deliver such Public Notice to each Lender that is not a Restricted Lender and promptly notify each Restricted Lender in writing or orally that Borrower desires to deliver to such Restricted Lender a Public Notice.  Within five Business Days of receipt of such notification the Restricted Lender may either (i) refuse the delivery of such Public Notice, in which case Borrower’s obligations with respect to such Public Notice and such Restricted Lender shall be deemed satisfied, or (ii) enter into good faith negotiations with the Parent to agree the time period within which the Borrower will make the material non-public information contained in such Pubic Notice publicly available by including such information in a filing with the SEC.  If Borrower and such Restricted Lender agree on such time period, the Borrower shall promptly deliver to such Restricted Lender such Public Notice and shall cause Parent to include the applicable material non-public information in a public filing with the SEC within such agreed to time period.  The failure to agree on such time period will be deemed to satisfy Borrower’s obligations with respect to such Public Notice and such Restricted Lender.

 

Section 5.2 Negative Covenants. Unless the Required Lenders shall otherwise agree:

 

(i) Parent shall not and shall not permit any Subsidiary to (a) liquidate, or be wound up provided that a Subsidiary may merge into Parent or any other Subsidiary, or (b) enter into any merger, consolidation or reorganization, unless (x) Parent or a Subsidiary is the surviving corporation or, (y) subject to Section 5.3 and the terms of the Notes, if the survivor is a Person other than Parent or a Subsidiary, such Person assumes the Obligations of Borrower under this Agreement and the other Loan Documents.  Parent shall not establish any Subsidiary unless such Subsidiary executes and delivers to the Lenders, a Guaranty and the Security Documents in form acceptable to the Lenders and takes all steps necessary to create and perfect a first priority Lien in favor of Lenders on all of its assets and Parent takes all steps necessary to create and perfect a first priority Lien in favor of Lenders in all equity interests in such Subsidiary;

 

(ii) Parent shall not and shall not permit any Subsidiary to (i) enter into any partnership, joint venture, syndicate, pool, profit-sharing or royalty agreement or other combination, or engage in any transaction with an Affiliate (other than a Subsidiary), whereby its income or profits are or might be, shared with another Person (other than a Subsidiary), (ii) enter into any management contract or similar agreement whereby a substantial part of its business is managed by another Person; or (iii) make any cash dividend or distribute, or permit the dividend or distribution of, any of its assets, including its intangibles, to any of its shareholders in such capacity or its Affiliates (other than a Subsidiary) (except for distributions in which Lenders participate  pursuant to the provisions of the Notes); provided, however, that Parent or any Subsidiary may enter into Excluded Transactions;

 

(iii) Parent shall not and shall not permit any Subsidiary to (a) create, incur or suffer any Lien upon any of its assets, except Permitted Liens, or (b) assign, sell, transfer or otherwise dispose of, any Loan Document or its rights and obligations thereunder;

 

  

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(iv) Parent shall not and shall not permit any Subsidiary to create, incur, assume, guarantee or be liable with respect to any Indebtedness, except for Permitted Indebtedness;

 

(v) Parent shall not and shall not permit any Subsidiary to acquire any assets (a) (other than Permitted Acquisitions (after disregarding, solely for purposes of this Section 5.2(v), the requirements set forth in clause (vii) of the definition of Permitted Acquisition) and (b) other than assets acquired in the ordinary course of business, directly or indirectly, in one or more related transactions, for a consideration, in cash or other property (valued at its fair market value) not greater than $1,000,000;

 

(vi) Parent shall not and shall not permit any Subsidiary to sell or otherwise transfer the products being developed or sold by Parent or any Subsidiary or any material assets associated therewith, other than in Excluded Transactions; and

 

(vii) Parent shall not issue any equity securities (i) senior to its Common Shares or (ii) convertible or exercisable for equity securities senior to its Common Shares.

 

Section 5.3 Major Transaction.  The Borrower shall give the Lenders notice of a Major Transaction at least thirty (30) days prior to the consummation thereof but in any event not later than five (5) business days following the first public announcement thereof.  Each Lender, within the Major Transaction Conversion Period (as defined in the Conversion Note), in the exercise of its sole discretion, may deliver a notice to the Borrower (the “Put Notice”) that either or both of the Conversion Notes and Acquisition Notes shall be due and payable in cash (collectively, the “Major Transaction Payment”).  If any of the Lenders deliver a Put Notice, then simultaneously with consummation of such Major Transaction, the Borrower shall make such Major Transaction Payment to each such Lender.  The Borrower shall not consummate any Major Transaction without complying with the provisions of this Section 5.3.

 

Section 5.4 General Acceleration Provision upon Events of Default.  If one or more of the events specified in this Section 5.4 shall have happened and be continuing beyond the applicable cure period (each, an “Event of Default”), the Required Lenders, by written notice to the Borrower (an “Acceleration Notice”), may declare the principal of, and accrued and unpaid interest on, all of the Notes or any part of any of them (together with any other amounts accrued or payable under the Loan Documents) to be, and the same shall thereupon become, immediately due and payable, without any further notice and without any presentment, demand, or protest of any kind, all of which are hereby expressly waived by the Borrower, and take any further action available at law or in equity, including, without limitation, the sale of the Loan and all other rights acquired in connection with the Loan:

 

(a) The Borrower shall have failed to make payment of (i) principal when due, or (ii) interest or any other amounts due under the Notes or any other Obligations within five (5) Business Days of their due date.

 

  

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(b) (i) Any Credit Party shall have failed to comply with the due observance or performance of any covenant contained in this Agreement (other than the covenant described in (a) above or as otherwise expressly provided in this Section 5.4) or in the other Loan Documents and such default is not remedied by the Borrower or waived by the Lenders within fifteen (15) days (inclusive of any extension periods or cure periods contained in any such covenant or provided by Applicable Laws) after the earlier of (A) receipt by any Credit Party of notice from the Lenders of such default, or (B) actual knowledge of any Credit Party of such default.

 

(c) Any representation or warranty made by any Credit Party or any of its Subsidiaries in any Loan Document shall be incorrect, false or misleading in any material respect (except to the extent that such representation or warranty is qualified by reference to materiality or Material Adverse Effect, to which extent it shall be incorrect, false or misleading in any respect) as of the date it was made or deemed made.

 

(d) (i)  Any Credit Party or any of its Subsidiaries shall generally be unable to pay its debts as such debts become due or be deemed to be unable to pay its debts, or shall admit in writing its inability to pay its debts as they come due or shall make a general assignment for the benefit of creditors; (ii) any Credit Party or any of its Subsidiaries shall declare a moratorium on the payment of its debts; (iii) the commencement by any Credit Party or any of its Subsidiaries of proceedings to be adjudicated bankrupt or insolvent, or the consent by it to the commencement of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization, examinership, intervention or other similar relief under any applicable law, or the consent by it to the filing of any such petition or to the appointment of an intervenor, receiver, liquidator, assignee, trustee, sequestrator, examiner (or other similar official) of all or substantially all of its assets; (iv) the commencement against any Credit Party or any of its Subsidiaries of a proceeding in any court of competent jurisdiction under any bankruptcy or other applicable law (as now or hereafter in effect) seeking its liquidation, winding up, dissolution, reorganization, examinership, arrangement, adjustment, or the appointment of an intervenor, receiver, liquidator, assignee, trustee, sequestrator, examiner (or other similar official), and any such proceeding shall continue undismissed, or any order, judgment or decree approving or ordering any of the foregoing shall continue unstayed or otherwise in effect, for a period of forty five (45) days; (v) the making by any Credit Party or any of its Subsidiaries of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debt generally as they become due; or (vi) any other event shall have occurred which under any applicable law would have an effect analogous to any of those events listed above in this subsection.

 

(e) One or more judgments against any Credit Party or any Subsidiary or attachments against any of their respective property, which in the aggregate exceed $1,000,000 (net of any anticipated insurance proceeds), and such judgment(s) remains unpaid, unstayed on appeal, undischarged, unbonded or undismissed for a period of thirty (30) days from the date of entry of such judgment.

 

  

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(f) Any Authorization held by any Credit Party or any of its Subsidiaries shall have been suspended, cancelled or revoked, and such suspension, cancellation or revocation would reasonably be expected to have a Material Adverse Effect.

 

(g) Any Authorization necessary for the execution, delivery or performance of any Loan Document or for the validity or enforceability of any of the Obligations is not given or is withdrawn or ceases to remain in full force or effect.

 

(h) There is a failure to perform under any agreement to which any Credit Party is a party resulting in the acceleration by a third party of the maturity of any Indebtedness in an amount in excess of $5,000,000.

 

(i) The validity of any Loan Document shall be contested by any Credit Party or any Subsidiary, or any Applicable Law shall purport to render any material provision of any Loan Document invalid or unenforceable or shall purport to prevent or materially delay the performance or observance by any Credit Party of the Obligations.

 

(j) The Common Shares of Parent cease to be listed on the Principal Trading Markets or the Common Shares cease to be registered under Section 12 of the Exchange Act.

 

(k) The occurrence of a Conversion Failure.

 

Section 5.5 Automatic Acceleration on Dissolution or Bankruptcy.  Notwithstanding any other provisions of this Agreement, if an Event of Default under Section 5.4(d) shall occur, the principal of the Notes (together with any other amounts accrued or payable under this Agreement) shall thereupon become immediately due and payable without any presentment, demand, protest or notice of any kind, all of which are hereby expressly waived by the Borrower.

 

Section 5.6 Recovery of Amounts Due.  If any amount payable hereunder is not paid as and when due, the Borrower hereby authorizes the Lenders to proceed, to the fullest extent permitted by applicable law, without prior notice, by right of set-off, banker’s lien or counterclaim, against any moneys or other assets of any Credit Party to the full extent of all amounts payable to the Lenders.

 

ARTICLE 6

 

MISCELLANEOUS

 

Section 6.1 Notices.  Any notices required or permitted to be given under the terms hereof shall be sent by certified or registered mail (return receipt requested) or delivered personally or by courier (including a recognized overnight delivery service) or by facsimile or by electronic mail and shall be effective five (5) days after being placed in the mail, if mailed by regular United States mail, or upon receipt, if delivered personally or by courier (including a recognized overnight delivery service) or by facsimile, or when received by electronic mail in each case addressed to a party.  The addresses for such communications shall be:

 

  

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If to Credit Parties:

 

Aguono Limited

c/o POZEN Inc.

1414 Raleigh Road, Suite 400

Chapel Hill, North Carolina

Fax:  (919) 490-5552

E-mail:  aadams@pozen.com

Attention:  Adrian Adams

 

With a copy to:

 

DLA Piper LLP (US)

51 John F. Kennedy Parkway

Short Hills, New Jersey  07078-2704

Fax:  (973) 520-2573

Email:  Andrew.gilbert@dlapiper.com

Attn:  Andrew Gilbert

 

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

 

Tribute

Tribute Pharmaceuticals Canada, Inc.

151 Steeles Ave. East

Milton, Ontario, Canada  L9T1Y1

Fax:  (519) 434-4382

Email:  rob.harris@tributepharma.com

Attn:  Robert Harris, President and Chief Executive Officer

 

If to the  Lenders:

 

Deerfield Management Company, L.P.

780 Third Avenue, 37th Floor

New York, NY 10017

Fax: (212) 599-3075

Email: dclark@deerfield.com

Attn: David J. Clark

With a copy to:

 

Katten Muchin Rosenman LLP

 

  

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575 Madison Avenue

New York, New York 10022

Fax:  (212) 940-8776

Email:  mark.fisher@kattenlaw.com

Attn:  Mark I. Fisher, Esq.

 

Section 6.2 Waiver of Notice.  Whenever any notice is required to be given to the Lenders or the Borrower under any of the Loan Documents, a waiver thereof in writing signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice.

 

Section 6.3 Reimbursement of Legal and Other Expenses.  If any amount owing to the Lenders under any Loan Document shall be collected through enforcement of this Agreement, any Loan Document or restructuring of the Loan in the nature of a work-out, settlement, negotiation, or any process of law, or shall be placed in the hands of third Persons for collection, the Borrower shall pay (in addition to all monies then due in respect of the Loan or otherwise payable under any Loan Document) all reasonable and documented external attorneys’ and other fees and out-of-pocket expenses incurred in respect of such collection.

 

Section 6.4 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware applicable to contracts made and to be performed in such State.  Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the State of Delaware.  Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the State of Delaware for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.  The parties hereby waive all rights to a trial by jury.

 

Section 6.5 Successors and Assigns.  This Agreement shall bind and inure to the respective successors and assigns of the Parties, except that (a) a Credit Party may not assign or otherwise transfer all or any part of its rights under the Loan Documents without the prior written consent of the Required Lenders, and (b) a Lender may assign its Notes upon three (3) days prior notice to Borrower.  Upon a Lender’s assignment of a Note such Lender shall provide notice of the transfer to Borrower for recordation in the Register pursuant to Section 1.4.  Upon receipt of a notice of a transfer of an interest in a Note, Borrower shall record the identity of the transferee and other relevant information in the Register and the transferee shall (to the extent of the interests transferred to such transferee) have all the rights and obligations of, and shall be deemed, a Lender hereunder.

 

  

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Section 6.6 Entire Agreement.  The Loan Documents contain the entire understanding of the Parties with respect to the matters covered thereby and supersede any and all other written and oral communications, negotiations, commitments and writings with respect thereto.  The provisions of this Agreement may be waived, modified, supplemented or amended only by an instrument in writing signed by the authorized officer of each Party.

 

Section 6.7 Severability.  If any provision of this Agreement shall be invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

Section 6.8 Counterparts.  This Agreement may be executed in several counterparts, and by each Party on separate counterparts, each of which and any photocopies and facsimile copies thereof shall be deemed an original, but all of which together shall constitute one and the same agreement.

 

Section 6.9 Survival.

 

(a) This Agreement and all agreements, representations and warranties made in the Loan Documents, and in any document, certificate or statement delivered pursuant thereto or in connection therewith shall be considered to have been relied upon by the other Parties and shall survive the execution and delivery of this Agreement and the making of the Loan hereunder regardless of any investigation made by any such other Party or on its behalf, and shall continue in force until all amounts payable under the Loan Documents shall have been fully paid in accordance with the provisions thereof, and the Lenders shall not be deemed to have waived, by reason of making the Loans, any Event of Default that may arise by reason of such representation or warranty proving to have been false or misleading, notwithstanding that the Lenders may have had notice or knowledge of any such Event of Default or may have had notice or knowledge that such representation or warranty was false or misleading at the time the Loans were made.

 

(b) The obligations of the Borrower under Sections 1.4 and 2.6 and the obligations of the Borrower and the Lenders under this Article 6 shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, or the termination of this Agreement or any provision hereof.

 

(c) Notwithstanding anything in this Agreement to the contrary, in the event that the Arrangement Agreement is terminated prior to completion of the transactions contemplated thereby, Tribute shall be released from all of its obligations under this Agreement and this Agreement shall terminate as to Tribute.

 

  

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Section 6.10 No Waiver.  Neither the failure of, nor any delay on the part of, any Party in exercising any right, power or privilege hereunder, or under any agreement, document or instrument mentioned herein, shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder, or under any agreement, document or instrument mentioned herein, preclude other or further exercise thereof or the exercise of any other right, power or privilege; nor shall any waiver of any right, power, privilege or default hereunder, or under any agreement, document or instrument mentioned herein, constitute a waiver of any other right, power, privilege or default or constitute a waiver of any default of the same or of any other term or provision.  No course of dealing and no delay in exercising, or omission to exercise, any right, power or remedy accruing to the Lenders upon any default under this Agreement, or any other agreement shall impair any such right, power or remedy or be construed to be a waiver thereof or an acquiescence therein; nor shall the action of the Lenders in respect of any such default, or any acquiescence by it therein, affect or impair any right, power or remedy of the Lenders in respect of any other default.  All rights and remedies herein provided are cumulative and not exclusive of any rights or remedies otherwise provided by law.

 

Section 6.11 Indemnity.

 

(a) Each Credit Party (excluding Tribute prior to the closing of the transactions contemplated by the Arrangement Agreement) shall, at all times, indemnify and hold each Lender harmless (the “Indemnity”) and each of their respective directors, partners, officers, employees, agents, counsel and advisors (each, an “Indemnified Person”) in connection with any losses, claims (including the reasonable attorneys’ fees incurred in defending against such claims), damages, liabilities, penalties, or other expenses arising out of, or relating to, the Loan Documents, the extension of credit hereunder or the Loans or the use or intended use of the Loans, which an Indemnified Person may incur or to which an Indemnified Person may become subject (each, a “Loss”).  The Indemnity shall not apply to the extent that a court or arbitral tribunal of competent jurisdiction issues a final judgment that such Loss resulted from the gross negligence or willful misconduct of the Indemnified Person.  The Indemnity is independent of and in addition to any other agreement of any Credit Party under any Loan Document to pay any amount to the Lenders, and any exclusion of any obligation to pay any amount under this subsection shall not affect the requirement to pay such amount under any other section hereof or under any other agreement. This Section 6.11 shall not apply with respect to Taxes (which are governed by Section 2.6) other than any Taxes that represent losses, claims or damages arising from any non-Tax claim.

 

(b) Promptly after receipt by an Indemnified Person under this Section 6.11 of notice of the commencement of any action (including any governmental action), such Indemnified Person shall, if a Loss in respect thereof is to be made against the indemnifying person under this Section 6.11, deliver to Borrower a written notice of the commencement thereof, and Borrower shall have the right to participate in, and, to the extent Borrower so desires, to assume control of the defense thereof with counsel mutually satisfactory to Borrower and the Indemnified Person, as the case may be.

 

(c) An Indemnified Person shall have the right to retain its own counsel with the documented reasonable fees and out-of-pocket expenses to be paid by the indemnifying person, if, in the reasonable opinion of counsel for the Indemnified Person, the representation by such counsel of the Indemnified Person and Borrower would be inappropriate due to actual or potential differing interests between such Indemnified Person and any other party represented by such counsel in such proceeding.  Credit Parties shall pay for only one separate legal counsel for the Indemnified Persons. The failure of an Indemnified Person to deliver written notice to the Borrower within a reasonable time of the commencement of any such action shall not relieve Credit Parties of any liability to the Indemnified Person under this Section 6.11, except to the extent that Credit Parties are actually prejudiced in its ability to defend such action.  The indemnification required by this Section 6.11 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as such expense, loss, damage or liability is incurred and is due and payable.

 

  

38

  

 

Section 6.12 No Usury.  The Loan Documents are hereby expressly limited so that in no contingency or event whatsoever, whether by reason of acceleration or otherwise, shall the amount paid or agreed to be paid to the Lenders for the Loan exceed the maximum amount permissible under applicable law.  If from any circumstance whatsoever fulfillment of any provision hereof, at the time performance of such provision shall be due, shall involve transcending the limit of validity prescribed by law, then, ipso facto, the obligation to be fulfilled shall be reduced to the limit of such validity, and if from any such circumstance the Lenders shall ever receive anything which might be deemed interest under applicable law, that would exceed the highest lawful rate, such amount that would be deemed excessive interest shall be applied to the reduction of the principal amount owing on account of the Loans, or if such deemed excessive interest exceeds the unpaid balance of principal of the Loans, such deemed excess shall be refunded to the Borrower.  All sums paid or agreed to be paid to the Lenders for the Loan shall, to the extent permitted by applicable law, be deemed to be amortized, prorated, allocated and spread throughout the full term of the Loans until payment in full so that the deemed rate of interest on account of the Loans is uniform throughout the term thereof.  The terms and provisions of this Section shall control and supersede every other provision of this Agreement and the Notes.

 

Section 6.13 Several Obligations.  The obligations of the Lenders under the Loan Documents shall be several and not joint.

 

Section 6.14 Further Assurances.  Each Credit Party covenants and agrees to take all necessary action to consummate the transactions contemplated by this Agreement and to fulfill all requirements to the Initial Loans set forth in Section 4.1, including the execution and delivery of the Conversion Notes, contemporaneous with the closing of the Transactions.  From time to time, the Borrower shall perform any and all acts and execute and deliver to the Lenders such additional documents as may be necessary or as requested by the Lenders to carry out the purposes of any Loan Document or any or to preserve and protect the Lenders’ rights as contemplated therein.

 

Section 6.15 Judgment Currency.  To the extent permitted by applicable law, the obligations of any Credit Party in respect of any amount due under this Agreement shall, notwithstanding any payment in any other currency (the “Other Currency”) (whether pursuant to a judgment or otherwise), be discharged only to the extent of the amount in the currency in which it is due (the “Agreed Currency”) that Lenders may purchase with the sum paid in the Other Currency (after any premium and costs of exchange) on the Business Day immediately after the day on which Lender receives the payment.  If the amount in the Agreed Currency that may be so purchased for any reason falls short of the amount originally due, the Credit Parties shall pay all additional amounts, in the Agreed Currency, as may be necessary to compensate for the shortfall.  Any obligation of a Credit Party not discharged by that payment shall, to the extent permitted by applicable law, be due as a separate and independent obligation and, until discharged as provided in this Section 6.15, continue in full force and effect.

 

  

39

  

 

Section 6.16 Amendment and Novation Further Assurances.  The Lenders agree to cooperate with the Credit Parties and take such action as the Borrower may reasonably request to effect prior to the completion of the Transactions, an amendment and novation of the Loan Documents and an assumption of any Initial Loans, Acquisition Loans, Acquisition Notes and Conversion Notes then in issue such that:

 

(i) the Irish Finco becomes the issuer of the Conversion Notes and the Acquisition Notes and the Borrower hereunder, in each case fully guaranteed by, inter alia, the Parent;

 

(ii) the Acquisition Notes and the Conversion Notes (when assumed by, or issued or re-issued, as applicable, by Irish Finco), are in a form capable of being listed on a recognised stock exchange for the purposes of Section 64 of the Irish Taxes Consolidation Act 1997;

 

(iii) the Conversion Notes as so amended and novated will include provision for the Conversion Notes to be physically settled for Ordinary Shares of the Parent or cash settled in an equivalent value amount at the election of the Parent following an exchange election by the Lenders; and

 

(iv) the Parent shall guarantee the exchange issuance obligations of the Irish Finco referred to in clause (iii) above.

 

Provided that:

 

(a) any such amendment, novation and assumption shall preserve the affirmative and negative covenants of the Credit Parties and the economic benefit for the Lenders of the provisions of this Agreement and the Acquisition Notes and Conversion Notes as contemplated by this Agreement on the date hereof.

 

(b) the legal rights of the holders of the Acquisition Notes and Conversion Notes (when assumed by, or issued or re-issued, as applicable, by Irish Finco) shall be equivalent to those provided to the Lenders hereunder.

 

(c) a stock exchange which is a recognised stock exchange for the purposes of Section 64 of the Irish Taxes Consolidation Act 1997 shall have confirmed that it will admit the Acquisition Notes and Conversion Notes (when assumed by, or issued or re-issued, as applicable, by Irish Finco) to listing.

 

  

40

  

 

(d) Parent and Irish Finco shall have confirmed in writing to the Lenders that, following such amendment, novation and assumption, and assuming the admission of the Conversion Notes and the Acquisition Notes to listing, payments to the Lenders under the Conversion Notes and the Acquisition Notes will not be subject to Irish withholding tax.

 

The costs and expenses of such amendment and novation, including all costs incurred by the Lenders in connection therewith, shall be the joint and several obligation of the Credit Parties, regardless of whether an amendment and novation occurs and shall be in addition to the obligation of the Credit Parties pursuant to Section 2.7. The provisions of this Section 6.15 are without prejudice to the obligations of the Credit Parties under Section 2.6.

 

Such amendment and novation shall be on terms reasonably acceptable to Lenders.

 

Should the amendment and novation of the Loan Documents and the listing of the Conversion Notes and the Acquisition Notes not be consummated as described above, the Loan Documents shall continue in full force and effect.

 

[SIGNATURE PAGE FOLLOWS]

 

  

41

  

IN WITNESS WHEREOF, the Lenders and the Credit Parties have caused this Agreement to be duly executed as of the 8th day of June, 2015.

 

	
CREDIT PARTIES:

	  
	
AGUONO LIMITED

	  
	
By:/s/ William L. Hodges                                                                

	
Name: William L. Hodges

	
Title: Director                      

 

POZEN INC.

 

By: /s/ Adrian Adams

Name: Adrian Adams

Title: Chief Executive Officer

 

TRIBUTE PHARMACEUTICALS CANADA INC.

 

By: /s/ Scott Langille

Name: Scott Langille

Title: Chief Financial Officer

	  
	  
	
LENDERS:

 

	
DEERFIELD PRIVATE DESIGN FUND III, L.P.

By: Deerfield Mgmt III, L.P., General Partner

By: J.E. Flynn Capital III, LLC, General Partner

 

By: /s/ David J. Clark

Name: David J. Clark

Title: Authorized Signatory

	
 

DEERFIELD INTERNATIONAL MASTER FUND, L.P.

By: Deerfield Mgmt, L.P., General Partner

By: J.E. Flynn Capital, LLC, General Partner

 

By: /s/ David J. Clark

Name: David J. Clark

Title: Authorized Signatory

  

42

  

	
 

DEERFIELD PARTNERS, L.P.

By: Deerfield Mgmt, L.P., General Partner

By: J.E. Flynn Capital, LLC, General Partner

 

By: /s/ David J. Clark

Name: David J. Clark

Title: Authorized Signatory

 

  

43

  

 

SCHEDULE 1

 

	
LENDER

	
ALLOCATION OF LOANS, PREPAYMENTS*

	
Deerfield Private Design Fund III, L.P.

	
50%

	
Deerfield International Master Fund, L.P.

	
28%

	
Deerfield Partners, L.P.

	
22%

 

*  Lenders may, from time to time reallocate the percentages among themselves without the consent of Credit Parties.

  

  

  

 

Exhibit A-1

 

See Attached

 

 

 

  

  

  

Exhibit A-2

See Attachedtbuff_ex103.htm

Exhibit 10.3

 

SHARE SUBSCRIPTION AGREEMENT

 

by and among

 

AGUONO LIMITED,

 

TRIBUTE PHARMACEUTICALS CANADA INC.,

 

POZEN INC.,

 

QLT INC.

 

and

 

THE OTHER CO-INVESTORS IDENTIFIED

 

ON SCHEDULE I HERETO

 

_______________

 

Dated as of June 8, 2015

 

  

  

  

 

TABLE OF CONTENTS

Page

	
ARTICLE I DEFINITIONS

	
2

	
1.1

	
Certain Definitions.

	
2

	
1.2

	
Terms Defined Elsewhere in this Agreement.

	
3

	
1.3

	
Other Definitional and Interpretive Matters.

	
4

	
ARTICLE II SUBSCRIPTION FOR SHARES; SUBSCRIPTION PRICE; INVESTMENT CLOSING

	
5

	
2.1

	
Subscription for Shares.

	
5

	
2.2

	
Payment of Subscription Price; Allotment of Shares.

	
6

	
2.3

	
Investment Closing.

	
6

	
2.4

	
Tribute Deliveries.

	
6

	
2.5

	
Pozen Deliveries.

	
6

	
2.6

	
Co-Investor Deliveries.

	
6

	
2.7

	
Company Deliveries.

	
7

	
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY; TRIBUTE; POZEN

	
7

	
3.1

	
Representations and Warranties of the Company.

	
7

	
3.2

	
Representations and Warranties of Pozen.

	
9

	
3.3

	
Representations and Warranties of Tribute.

	
11

	
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE co-investors

	
12

	
4.1

	
Representations and Warranties of the Co-Investors.

	
12

	
ARTICLE V COVENANTSAND AGREEMENTS

	
15

	
5.1

	
Furnishing Information.

	
15

	
5.2

	
Filings; Commercially Reasonable Efforts; Notification.

	
16

	
5.3

	
NASDAQ and TSX Listing.

	
16

	
5.4

	
Further Assurances.

	
17

 

  

i

  

 

TABLE OF CONTENTS

(continued)

Page

	
5.5

	
Advice of Changes.

	
17

	
5.6

	
Governance Matters.

	
18

	
5.7

	
Re-registration as a Public Limited Company..

	
18

	
5.8

	
Cooperation.

	
18

	
5.9

	
Equal Treatment of Purchaser and the Investors.

	
19

	
5.10

	
Investors’ Registration Rights.

	
19

	
5.11

	
Purchaser’s Registration Rights.

	
19

	
ARTICLE VI CONDITIONS TO INVESTMENT CLOSING

	
19

	
6.1

	
Mutual Conditions.

	
19

	
6.2

	
Co-Investor’s Conditions.

	
20

	
6.3

	
Company’s Conditions.

	
21

	
ARTICLE VII TERMINATION

	
21

	
7.1

	
Termination.

	
21

	
7.2

	
Procedure Upon Termination.

	
22

	
7.3

	
Effects of Termination.

	
23

	
ARTICLE VIII MISCELLANEOUS

	
23

	
8.1

	
Survival.

	
23

	
8.2

	
Expenses.

	
23

	
8.3

	
Counterparts; Effectiveness.

	
23

	
8.4

	
Governing Law.

	
24

	
8.5

	
Jurisdiction; Specific Enforcement.

	
24

	
8.6

	
WAIVER OF JURY TRIAL.

	
24

	
8.7

	
Notices.

	
24

	
8.8

	
Assignment; Binding Effect.

	
26

	
8.9

	
Severability.

	
27

 

  

ii

  

 

TABLE OF CONTENTS

(continued)

Page

	
8.10

	
Independent Legal and Investment Advice.

	
27

	
8.11

	
Entire Agreement.

	
27

	
8.12

	
Amendments; Waivers.

	
27

	
8.13

	
Headings.

	
27

	
8.14

	
No Third-Party Beneficiaries.

	
28

	
8.15

	
Obligations of the Co-Investors and the Company.

	
28

SCHEDULE I                           Schedule of Co-Investors

ANNEX A                                Investors’ Registration Rights

ANNEX B                                Purchaser’s Registration Rights

 

  

iii

  

 

SHARE SUBSCRIPTION AGREEMENT

 

This SHARE SUBSCRIPTION AGREEMENT, dated June 8, 2015 (the “Agreement”), is by and among QLT Inc., a corporation existing under the laws of the Province of British Columbia, Canada (“Purchaser”), Tribute Pharmaceuticals Canada Inc., a corporation existing under the laws of the Province of Ontario, Canada (“Tribute”), POZEN Inc., a Delaware corporation (“Pozen”), Aguono Limited, a private limited company incorporated in Ireland with registered number 561617 having its registered office at 25-28 North Wall Quay, Dublin 1, Ireland (the “Company”) and, other than Purchaser, the Persons identified on Schedule I hereto (each an “Investor” and together, the “Investors”).

 

W I T N E S S E T H:

 

WHEREAS, Tribute and Pozen wish to enter into a business combination transaction (the “Mergers”), pursuant to the terms of the Merger Agreement described below;

 

WHEREAS, the Mergers will be effected in accordance with that certain Agreement and Plan of Merger and Arrangement, dated as of the date hereof (the “Merger Agreement”), by and among Tribute, Pozen, ARLZ US Acquisition Corp., a Delaware corporation (“Merger Sub One”), ARLZ CA Acquisition Corp., an Ontario, Canada corporation (“Merger Sub Two”), Trafwell Limited, a private limited company incorporated in Ireland, and the Company, pursuant to which (i) Merger Sub One will merge with and into Pozen (the “Pozen Merger”), with Pozen continuing as the surviving corporation of the Pozen Merger and as a wholly-owned indirect subsidiary of the Company, and (ii) Merger Sub Two will acquire the outstanding shares of Tribute (the “Tribute Merger” and together with the Pozen Merger, the “Mergers”), with Tribute continuing as a wholly-owned indirect subsidiary of the Company;

 

WHEREAS, prior to the effective time of the Mergers the Company shall re-register as a public limited company incorporated in Ireland and be renamed as Aralez Pharmaceuticals Ltd.;

 

WHEREAS, Purchaser, together with the Investors (collectively, the “Co-Investors”), have agreed to provide capital to the Company in support of the Mergers;

 

WHEREAS, in furtherance of the foregoing, the Company desires to allot and issue to the Co-Investors, and the Co-Investors desire to subscribe for, 10,416,667 ordinary shares of the Company, par value $0.001 (the “Shares”) for the Subscription Price (as hereinafter defined) set forth in, and in accordance with the other provisions of, this Agreement;

 

WHEREAS, following its subscription for its portion of the Shares, Purchaser will cause such securities to be distributed to its shareholders pursuant to a special election distribution (allowing Purchaser’s shareholders to receive such securities or cash, subject to possible proration) (the “Distribution”) and the Company has agreed to register such Distribution under the Securities Act and to file and obtain a receipt for the Canadian Preliminary Prospectus and the Canadian Final Prospectus (all as defined below);

 

WHEREAS, the Company has agreed to grant the Investors and Purchaser the registration rights provided for herein;

 

  

  

  

 

WHEREAS, prior to the effectiveness of the Mergers, the Company will re-register as a public limited company;

 

WHEREAS, certain terms used in this Agreement are defined in Section 1.1;

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements hereinafter contained, the parties hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

1.1 Certain Definitions.  Capitalized terms used but not defined in this Agreement shall have the meanings set forth in the Merger Agreement.

 

In addition, for purposes of this Agreement, the following terms shall have the meanings specified in this Section 1.1:

 

“Canadian Securities Laws” means all applicable Canadian securities laws, rules, regulations, notices, instruments, blanket orders and policies in the Canadian Qualifying Provinces.

 

“Commission” means the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.

 

“Investor Shares” means the number of Shares set forth opposite each Investor’s name under the heading “Shares on Schedule I hereto.  For the avoidance of doubt, Investor Shares shall not include Purchaser Shares.

 

“Isotope” means InSite Vision Incorporated.

 

“NASDAQ” means the NASDAQ Global Select Market.

 

“Purchaser Common Shares” means the common shares, without par value, of Purchaser.

 

“Purchaser Isotope Merger” means the merger contemplated by the Purchaser Isotope Merger Agreement.

 

“Purchaser Isotope Merger Agreement” means that certain Agreement and Plan of Merger, dated as of the date hereof, by and among Purchaser, a newly formed, wholly-owned subsidiary of Purchaser and Isotope.

 

“Purchaser Meeting” means the meeting of the holders of the Purchaser Common Shares, and any postponement or adjournment thereof, at which the holders of the Purchaser Common Shares will be asked to vote, among other things, on the Distribution being effected by way of a reduction in paid-up capital of their Purchaser Common Shares, and/or a plan or arrangement regarding the same.

 

  

2

  

 

“Purchaser Proxy Statement” means the proxy statement of Purchaser to be furnished to the holders of the Purchaser Common Shares in connection with the Purchaser Meeting.

 

“Purchaser S-4” means the registration statement on Form S-4 of Purchaser that, among other things, effects the registration under the Securities Act of the Purchaser Common Shares to be issued in connection with the Purchaser/Isotope Merger.

 

“Purchaser Shares” means the number of Shares set forth opposite Purchaser’s name under the heading “Shares” on Schedule I hereto.  For the avoidance of doubt, Purchaser Shares shall not include Investor Shares.

 

“Securities Act” means the Securities Act of 1933, as amended, or any successor Law thereto, and the rules and regulations issued pursuant to that statute or any successor Law.

 

“TSX” means the Toronto Stock Exchange.

 

1.2 Terms Defined Elsewhere in this Agreement.  For purposes of this Agreement, the following terms have meanings set forth in the sections indicated:

 

	
Term

	
Section

	
Agreement

	
Preamble

	
Canadian Commissions

	
Annex B

	
Canadian Final Prospectus

	
Annex B

	
Canadian Final Receipt

	
Annex B

	
Canadian Passport System

	
Annex B

	
Canadian Preliminary Prospectus

	
Annex B

	
Canadian Preliminary Receipt

	
Annex B

	
Canadian Prospectus

	
Annex B

	
Canadian Prospectus Expenses

	
Annex B

	
Canadian Qualifying Provinces

	
Annex B

	
Co-Investors

	
Recitals

	
Co-Investors’ Disclosure Schedule

	
ARTICLE IV

	
Company

	
Preamble

	
Confidentiality Agreements

	
5.1(b)

	
Consents

	
5.2(a)

	
Distribution

	
Recitals

	
Investment Closing

	
2.3

	
Investment Closing Date

	
2.3

	
Investors

	
Preamble

	
Investor Prospectus

	
Annex A

	
Investor Registration Expenses

	
Annex A

	
Investor Registration

	
Annex A

	
Investor Registration Statement

	
Annex A

	
Losses

	
1.2(f)

	
Mergers

	
Recitals

 

  

3

  

 

 

	 
Term

	 
Section

	
Merger Agreement

	
Recitals

	
Merger Closing Conditions

	
6.1(d)

	
NewCo

	
Preamble

	
Pozen

	
Preamble

	
Pozen Merger

	
Recitals

	
Pozen SEC Documents

	
3.2(c)

	
Prospectus

	
Annex B

	
Purchaser

	
Preamble

	
register, registered, registration

	
Annex A

	
Registrable Securities

	
Annex A

	
Registration

	
Annex B

	
Registration Expenses

	
Annex B

	
Registration Statement

	
Annex B

	
Selling Expenses

	
Annex A

	
Share Price

	
2.1(b)

	
Shares

	
Recitals

	
Subscription Price

	
2.1(c)

	
Transfer Agent

	
2.2(b)

	
Tribute

	
Preamble

	
Tribute Merger

	
Recitals

	
Tribute SEC Documents

	
3.3(c)

1.3 Other Definitional and Interpretive Matters.

 

(a) Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation shall apply:

 

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

 

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

 

Schedules and Annexes.  The Schedules and Annexes to this Agreement are hereby incorporated and made a part hereof and are an integral part of this Agreement.  All Schedules and Annexes annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein.  Any capitalized terms used in any Schedule or Annex but not otherwise defined therein shall be defined as set forth in this Agreement.

 

Gender and Number.  Any reference in this Agreement to gender shall include all genders, and words imparting the singular number only shall include the plural and vice versa.

 

  

4

  

 

Headings.  The provision of a Table of Contents, the division of this Agreement into Articles, Sections and other subdivisions and the insertion of headings are for convenience of reference only and shall not affect or be utilized in construing or interpreting this Agreement.  All references in this Agreement to any “Section” are to the corresponding Section of this Agreement unless otherwise specified.

 

Herein.  The words such as “herein,” “hereinafter,” “hereof,” and “hereunder” refer to this Agreement as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires.

 

Including.  The word “including” or any variation thereof means “including, without limitation” and shall not be construed to limit any general statement that it follows to the specific or similar items or matters immediately following it.

 

(b) The parties hereto have participated jointly in the negotiation and drafting of this Agreement and, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as jointly drafted by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.

 

ARTICLE II

 

SUBSCRIPTION FOR SHARES; SUBSCRIPTION PRICE; INVESTMENT CLOSING

 

2.1 Subscription for Shares.

 

(a) Subject to the terms and conditions hereof, at the Investment Closing, each Co-Investor hereby agrees to subscribe for the Shares set forth opposite such Co-Investor’s name on Schedule I hereto.

 

(b) Subject to the terms and conditions hereof, at the Investment Closing, the Company will allot and issue to each Co-Investor the Shares set forth opposite such Co-Investor’s name on Schedule I hereto.

 

(c) Subject to the terms and conditions hereof, at the Investment Closing, the Board of the Company will approve the allotment and issue to each Co-Investor of the Shares set forth opposite such Co-Investor’s name on Schedule I hereto, procure that the Company's register of members is written up to reflect the allotment and issue share certificates to the Co-Investors.

 

(d) The aggregate amount that each Co-Investor will pay to the Company for the Shares it subscribes for hereunder shall be set forth opposite such Co-Investor’s name under the heading “Subscription Price” on Schedule I hereto (with respect to each Co-Investor, the “Subscription Price”).

 

  

5

  

 

2.2 Payment of Subscription Price; Allotment of Shares.

 

(a) At the Investment Closing, each Co-Investor shall pay its respective Subscription Price to the Company by wire transfer of immediately available funds into an account designated in writing by the Company not less than three Business Days prior to the Investment Closing Date.

 

(b) At the Investment Closing, the Company will instruct its transfer agent (the “Transfer Agent”) to deliver that number of the Shares set forth opposite each Co-Investor’s name on Schedule I to such Co-Investor in certificate form, in each case registered in the name of such Co-Investor.

 

2.3 Investment Closing.  Subject to the satisfaction or waiver of the conditions set forth in ARTICLE VI (other than conditions that by their nature are to be satisfied at the Investment Closing, but subject to the satisfaction or waiver of those conditions at such time), the consummation of the allotment and issue of the Shares provided for in Section 2.1 hereof (the “Investment Closing”) shall occur concurrently with and at the same location as the Closing under the Merger Agreement.  The date the Investment Closing occurs is referred to as the “Investment Closing Date”.

 

2.4 Tribute Deliveries.  At the Investment Closing, subject to the terms and conditions hereof, Tribute shall deliver, or cause to be delivered, to each Co-Investor:

 

(a) copies of resolutions, certified by the Secretary of Tribute, as to the authorization by Tribute of this Agreement and all of the transactions contemplated hereby;

 

(b) a certificate in form and substance reasonably satisfactory to each Co-Investor, dated the Investment Closing Date and signed by the Chief Executive Officer of Tribute, stating that the conditions set forth in Sections 6.2(a) and 6.2(b) hereof (as they relate to Tribute) and the conditions set forth in Sections 8.1 (as they relate to Tribute) and 8.2 of the Merger Agreement have been satisfied and/or complied with by Tribute; and

 

(c) such other documents as Purchaser shall reasonably request.

 

2.5 Pozen Deliveries.  At the Investment Closing, subject to the terms and conditions hereof, Pozen will deliver, or cause to be delivered, to each Co-Investor:

 

(a) copies of resolutions, certified by the Secretary of Pozen, as to the authorization by Pozen of this Agreement and all of the transactions contemplated hereby; and

 

(b) a certificate in form and substance reasonably satisfactory to each Co-Investor, dated the Investment Closing Date and signed by the Chief Executive Officer of Pozen, stating that the conditions set forth in Sections 6.2(a) and 6.2(b) hereof (as they relate to Pozen) and the conditions set forth in Sections 8.1 (as they relate to Pozen) and 8.3 of the Merger Agreement have been satisfied and/or complied with by Pozen.

 

2.6 Co-Investor Deliveries.  At the Investment Closing, subject to the terms and conditions hereof, each Co-Investor will deliver, or cause to be delivered, to the Company:

 

  

6

  

 

(a) payment to the Company of such Co-Investor’s respective Subscription Price by wire transfer of immediately available funds to an account designated by the Company in writing at least three Business Days prior to the Investment Closing Date;

 

(b) a cross-receipt executed by each Co-Investor and delivered to the Company certifying that it has received the Shares set forth opposite such Co-Investor’s name on Schedule I hereto as of the Investment Closing Date;

 

(c) copies of resolutions, certified by an authorized signatory of such Co-Investor, as to the authorization by such Co-Investor of this Agreement and all of the transactions contemplated hereby; and

 

(d) a certificate in form and substance reasonably satisfactory to the Company, dated the Investment Closing Date and signed by an authorized signatory of such Co-Investor, stating that the conditions in Sections 6.3(a) and 6.3(b) hereof have been satisfied and/or complied with by each Co-Investor.

 

2.7 Company Deliveries.  At the Investment Closing, subject to the terms and conditions hereof, the Company shall deliver, or cause to be delivered, to each Co-Investor:

 

(a) the Shares as set forth in Section 2.2(b) hereof, in certificate form, in each case registered in the name of such Co-Investor, which Shares shall be free and clear of any Liens; and

 

(b) a cross-receipt, executed by the Company and delivered to each Co-Investor certifying that it has received the Subscription Price from such Co-Investor as of the Investment Closing Date.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY; TRIBUTE; POZEN

 

3.1 Representations and Warranties of the Company.  In order to induce the Co-Investors to enter into this Agreement, the Company, Tribute and Pozen represent and warrant to each Co-Investor as follows:

 

(a) Corporate Existence; Authority.

 

(i) The Company is a private limited company duly incorporated and validly existing under the Laws of Ireland.  The Company has the corporate power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted.

 

(ii) The Company has the corporate power and authority to enter into, execute and deliver this Agreement, to perform its obligations under this Agreement, and to consummate the transactions contemplated hereby.  The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized and validly approved by the Board of the Company.  The Board of the Company has determined that this Agreement is advisable to and is in the best interests of the Company and its shareholders and no other corporate proceedings on the part of the Company are necessary to approve this Agreement and to consummate the transactions contemplated hereby.  This Agreement has been duly and validly executed and delivered by the Company and (assuming the due authorization, execution and delivery by each of the Co-Investors, Pozen and Tribute) constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws affecting creditors’ rights generally and to general principles of equity).

 

  

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(b) Valid Issuance.  The Shares to be issued pursuant to this Agreement will, when issued, allotted and delivered in accordance with the terms of this Agreement for the consideration expressed herein, be duly and validly issued and, at the Investment Closing, all such Shares will be fully paid and free of preemptive rights, with no personal liability attaching to the ownership thereof, and will be free and clear of all Liens.

 

(c) Conflicts; Consents and Approvals.  Neither the execution and delivery of this Agreement by the Company nor the consummation of the transactions contemplated by this Agreement will:

 

(i) conflict with, or result in a breach of, any provision of the Memorandum and Articles of Association of the Company;

 

(ii) violate, or conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with the giving of notice, the passage of time or otherwise, would constitute a default) under, or entitle any party (with the giving of notice, the passage of time or otherwise) to terminate, accelerate, adversely modify or call a default under, or result in the creation of any Liens upon any of the properties or assets of the Company or any of its Subsidiaries under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, contract, undertaking, agreement, lease or other instrument or obligation to which the Company or any of its Subsidiaries is a party;

 

(iii) violate any Laws applicable to the Company or any of its Subsidiaries or any of their respective properties or assets; or

 

(iv) require any action or consent or approval of, or review by, other than registrations or other actions required under federal and state securities Laws and the Canadian Securities Laws as are contemplated by this Agreement or any post-closing notice filings required under applicable United States federal or state securities laws.

 

(d) Private Placement.  Assuming that the representations of each Co-Investor set forth in Section 4.1(c) are true and correct, the initial allotment and issuance of the Shares in conformity with the terms of this Agreement are exempt from both (i) the registration requirements of Section 5 of the Securities Act and (ii) the prospectus requirements of the Canadian Securities Laws, and neither the Company nor any authorized agent acting on its behalf will take any action hereafter that would cause the loss of such exemptions.  Neither the Company nor, to the Company’s knowledge, any person acting on behalf of the Company has offered or sold any of the Shares by any form of “general solicitation” or “general advertising”, as such terms are used in Rule 502(c) of Regulation D under the Securities Act.

 

  

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(e) Registration Statement and Investor Registration Statement.  None of the information supplied or to be supplied by the Company for inclusion or incorporation by reference in the Registration Statement or the Investor Registration Statement to be filed with the Commission by the Company under the Securities Act at the time the Registration Statement or Investor Registration Statement becomes effective will contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading (it being understood that no representation or warranty is made by the Company with respect to statements made or incorporated by reference therein based on written information supplied by Purchaser expressly for inclusion or incorporation by reference in the Registration Statement or the Investors expressly for inclusion or incorporation by reference in the Investor Registration Statement). Each of the Registration Statement, except for such portions thereof that relate only to Purchaser and its Subsidiaries, and the Investor Registration Statement, except for such portions thereof that relate only to Investors, will comply as to form in all material respects with the provisions of the Securities Act.

 

(f) The Company has provided Purchaser with true, correct and complete copies of the Merger Agreement and any annexes, exhibits, schedules (including disclosure schedules) thereto.

 

3.2 Representations and Warranties of Pozen.  In order to induce the Co-Investors to enter into this Agreement, Pozen represents and warrants to each Co-Investor as follows:

 

(a) Corporate Existence; Authority.

 

(i) Pozen is a corporation validly existing and in good standing under the Laws of the jurisdiction of its organization.  Pozen has the corporate power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted.

 

(ii) Pozen has the corporate power and authority to enter into, execute and deliver this Agreement, to perform its obligations under this Agreement, and to consummate the transactions contemplated hereby.  The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized and validly approved by the Board of Pozen and no other corporate proceedings on the part of Pozen are necessary to approve this Agreement and to consummate the transactions contemplated hereby.  This Agreement has been duly and validly executed and delivered by Pozen and (assuming the due authorization, execution and delivery by each of the Co-Investors and Tribute) constitutes the valid and binding obligation of Pozen, enforceable against Pozen in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws affecting creditors’ rights generally and to general principles of equity).

 

  

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(b) Conflicts; Consents and Approvals.  Neither the execution and delivery of this Agreement by Pozen nor the consummation of the transactions contemplated by this Agreement will:

 

(i) conflict with, or result in a breach of, any provision of the Organizational Documents of Pozen;

 

(ii) violate, or conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with the giving of notice, the passage of time or otherwise, would constitute a default) under, or entitle any party (with the giving of notice, the passage of time or otherwise) to terminate, accelerate, adversely modify or call a default under, or result in the creation of any Liens upon any of the properties or assets of Pozen or any of its Subsidiaries under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, contract, undertaking, agreement, lease or other instrument or obligation to which Pozen or any of its Subsidiaries is a party;

 

(iii) violate any Laws applicable to Pozen or any of its Subsidiaries or any of their respective properties or assets; or

 

(iv) require any action or consent or approval of, or review by, or registration or filing by Pozen or any of its Affiliates with, any third party or any Governmental Authority, other than registrations or other actions required under federal and state securities Laws as are contemplated by this Agreement.

 

(c) SEC Filings.  Pozen has timely filed or received the appropriate extension of time within which to file with the Commission all forms, reports, schedules, statements and other documents required to be filed by it since January 1, 2014 under the Exchange Act or the Securities Act (such documents, as supplemented and amended since the time of filing, collectively, the “Pozen SEC Documents”).  The Pozen SEC Documents, including any financial statements or schedules included therein, at the time filed (and, in the case of registration statements and proxy statements, on the dates of effectiveness and the dates of mailing, respectively) (i) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading and (ii) complied in all material respects with the applicable requirements of the Exchange Act and the Securities Act, as the case may be.  The financial statements of Pozen included in the Pozen SEC Documents at the time filed complied as to form in all material respects with applicable accounting requirements and with the published rules and regulations of the Commission with respect thereto, were prepared in accordance with GAAP during the periods involved (except as may be indicated in the notes thereto, auditor’s report thereon or, in the case of unaudited statements, as permitted by Form 10-Q of the Commission), and fairly present in all material respects (subject in the case of unaudited statements to normal audit adjustments and subject to restatements filed with the Commission prior to the date of this Agreement) the consolidated financial position of Pozen and its consolidated Subsidiaries as at the dates thereof and the consolidated results of their operations and cash flows for the periods then ended.  No Subsidiary of Pozen is subject to the periodic reporting requirements of the Exchange Act other than as part of Pozen’s consolidated group or required to file any form, report or other document with the Commission, NASDAQ, any other stock exchange or comparable Governmental Authority.

 

  

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3.3 Representations and Warranties of Tribute.  In order to induce the Co-Investors to enter into this Agreement, Tribute represents and warrants to each Co-Investor as follows:

 

(a) Corporate Existence; Authority.

 

(i) Tribute is a corporation validly existing and in good standing under the Laws of the jurisdiction of its organization.  Tribute has the corporate power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted.

 

(ii) Tribute has the corporate power and authority to enter into, execute and deliver this Agreement, to perform its obligations under this Agreement, and to consummate the transactions contemplated hereby.  The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized and validly approved by the Board of Tribute and no other corporate proceedings on the part of Tribute are necessary to approve this Agreement and to consummate the transactions contemplated hereby.  This Agreement has been duly and validly executed and delivered by Tribute and (assuming the due authorization, execution and delivery by each of the Co-Investors and Pozen) constitutes the valid and binding obligation of Tribute, enforceable against Tribute in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws affecting creditors’ rights generally and to general principles of equity).

 

(b) Conflicts; Consents and Approvals.  Neither the execution and delivery of this Agreement by Tribute nor the consummation of the transactions contemplated by this Agreement will:

 

(i) conflict with, or result in a breach of, any provision of the Organizational Documents of Tribute;

 

(ii) violate, or conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with the giving of notice, the passage of time or otherwise, would constitute a default) under, or entitle any party (with the giving of notice, the passage of time or otherwise) to terminate, accelerate, adversely modify or call a default under, or result in the creation of any Liens upon any of the properties or assets of Tribute or any of its Subsidiaries under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, contract, undertaking, agreement, lease or other instrument or obligation to which Tribute or any of its Subsidiaries is a party;

 

(iii) violate any Laws applicable to Tribute or any of its Subsidiaries or any of their respective properties or assets; or

 

(iv) require any action or consent or approval of, or review by, or registration or filing by Tribute or any of its Affiliates with, any third party or any Governmental Authority, other than registrations or other actions required under federal and state securities Laws as are contemplated by this Agreement.

 

  

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(c) SEC Filings.  Tribute has timely filed or received the appropriate extension of time within which to file with the Commission all forms, reports, schedules, statements and other documents required to be filed by it since January 1, 2014 under the Exchange Act or the Securities Act (such documents, as supplemented and amended since the time of filing, collectively, the “Tribute SEC Documents”).  The Tribute SEC Documents, including any financial statements or schedules included therein, at the time filed (and, in the case of registration statements and proxy statements, on the dates of effectiveness and the dates of mailing, respectively) (i) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading and (ii) complied in all material respects with the applicable requirements of the Exchange Act and the Securities Act, as the case may be.  The financial statements of Tribute included in the Tribute SEC Documents at the time filed complied as to form in all material respects with applicable accounting requirements and with the published rules and regulations of the Commission with respect thereto, were prepared in accordance with GAAP during the periods involved (except as may be indicated in the notes thereto, auditor’s report thereon or, in the case of unaudited statements, as permitted by Form 10-Q of the Commission), and fairly present in all material respects (subject in the case of unaudited statements to normal audit adjustments and subject to restatements filed with the Commission prior to the date of this Agreement) the consolidated financial position of Tribute and its consolidated Subsidiaries as at the dates thereof and the consolidated results of their operations and cash flows for the periods then ended.  No Subsidiary of Tribute is subject to the periodic reporting requirements of the Exchange Act other than as part of Tribute’s consolidated group or required to file any form, report or other document with the Commission, NASDAQ, the TSX, any other stock exchange or comparable Governmental Authority.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES OF THE CO-INVESTORS

 

4.1 Representations and Warranties of the Co-Investors.  In order to induce the Company, Tribute and Pozen to enter into this Agreement, each Co-Investor severally for itself and not jointly with any one or more of the other Co-Investors represents and warrants to each of the Company, Tribute and Pozen as follows:

 

(a) Corporate Existence; Authority; No Violation.

 

(i) Co-Investor is a legal entity validly existing under the Laws of the jurisdiction of its organization.  Co-Investor has the corporate power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted.

 

(ii) Co-Investor has the corporate power and authority to enter into, execute and deliver this Agreement, to perform its obligations under this Agreement and to consummate the transactions contemplated hereby.  The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized and validly approved by all necessary corporate action on the part of Co-Investor.  No other corporate proceedings on the part of Co-Investor are necessary to approve this Agreement and to consummate the subscription for the Shares set forth opposite such Co-Investor’s name on Schedule I hereto.  This Agreement has been duly and validly executed and delivered by Co-Investor and (assuming the due authorization, execution and delivery by the Company, Tribute, Pozen and the other Co-Investors) constitutes the valid and binding obligation of Co-Investor, enforceable against Co-Investor in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws affecting creditors’ rights generally and to general principles of equity).

 

  

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(b) Conflicts; Consents and Approvals.  Neither the execution and delivery of this Agreement by Co-Investor nor the consummation of the subscription of the Shares set forth opposite such Co-Investor’s name on Schedule I hereto will:

 

(i) conflict with, or result in a breach of, any provision of the organizational documents of Co-Investor;

 

(ii) violate any Laws applicable to Co-Investor or any of its Subsidiaries or any of their respective properties or assets; or

 

(iii) require any action or consent or approval of, or review by, or registration or filing by Co-Investor or any of its Affiliates with, any third party or any Governmental Authority, other than registrations, beneficial ownership filings or other actions required under federal and state securities Laws as are contemplated by this Agreement.

 

(c) Certain Securities Law Matters.

 

(i) Co-Investor is acquiring its Shares as principal for its own account and, in the case of Purchaser, other than for the Distribution, not with a view to the distribution thereof within the meaning of the Securities Act and Canadian Securities Law.

 

(ii) Purchaser is resident in the Province of British Columbia.

 

(iii) Co-Investor understands that its Shares will not be transferable except (a) pursuant to an effective registration statement under the Securities Act or, in the case of Purchaser, a prospectus under the Canadian Securities Laws, (b) pursuant to an available exemption from, or in a transaction not subject to, the Securities Act as evidenced by receipt by the Company of a written opinion of counsel for Co-Investor reasonably satisfactory to the Company to the effect that the proposed transfer is exempt from the registration requirements of the Securities Act and relevant state securities laws, and, in the case of Purchaser, pursuant to an available exemption for prospectus requirements under Canadian Securities Laws, or (c) pursuant to Rule 144 under the Securities Act (“Rule 144”) and, in the case of Purchaser, after expiry of all “hold periods” in Canada.  Applicable U.S. and Canadian restrictive legends shall be placed on any certificate representing the Shares to be delivered to Co-Investor at the Investment Closing, substantially as follows:

 

  

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“NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933.  AS AMENDED (THE “SECURITIES ACT”), AND THE RULES AND REGULATIONS IN EFFECT THEREUNDER AND ALL APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS, (B) PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE SECURITIES ACT AS EVIDENCED BY THE CORPORATION BEING FURNISHED WITH AN OPINION OF COUNSEL FOR THE HOLDER, WHICH OPINION AND COUNSEL SHALL BE REASONABLY SATISFACTORY TO THE CORPORATION, TO THE EFFECT THAT SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION IS EXEMPT FROM THE REGISTRATION PROVISIONS OF THE SECURITIES ACT, OR (C) PURSUANT TO RULE 144 UNDER THE SECURITIES ACT.”

 

If at the time of the Investment Closing, the Company is a reporting issuer in any province or territory of Canada, then the Shares to be issued to the Purchaser will carry the following Canadian restrictive legend:

 

“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE __, 2015 [INSERT THE DATE THAT IS 4 MONTHS AND A DAY AFTER THE INVESTMENT CLOSING DATE].”

 

If at the time of the Investment Closing, the Company is not a reporting issuer in any province or territory of Canada, then the Shares to be issued to the Purchaser will carry the following Canadian restrictive legend:

 

“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE THE DATE THAT IS 4 MONTHS AND A DAY AFTER THE LATER OF (I) ___, 2015 [INSERT THE INVESTMENT CLOSING DATE], AND (II) THE DATE THE ISSUER BECAME A REPORTING ISSUER IN ANY PROVINCE OR TERRITORY OF CANADA.”

 

(a) Co-Investor Status.

 

(i) At the time Co-Investor was offered the Shares, it was, at the date hereof it is, either (a) “qualified institutional buyer”, as defined in Rule 144A under the Securities Act, or (b) an “accredited investor” as defined in Rule 501(a) of Regulation D.

 

(ii) Co-Investor is an “accredited investor” as defined in National Instrument 45-106 - Prospectus and Registration Exemptions promulgated under applicable Canadian Securities Laws.

 

  

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(b) Sufficiency of Funds.

 

(i) The Investor has sufficient cash on hand or other sources of immediately available funds to enable it to make payment of the Subscription Price and consummate the transactions contemplated by this Agreement.

 

(ii) The Purchaser has, and at all times during this Agreement (prior to and including the Investment Closing) shall have, sufficient cash on hand or other sources of immediately available funds to enable it to make payment of the Subscription Price and consummate the transactions contemplated by this Agreement.

 

(c) No Bad Actor.  No “bad actor” disqualifying event described in Rule 506(d)(1)(i)-(viii) of the Securities Act is applicable to the Co-Investor.

 

(d) No General Solicitation.  Neither the Co-Investor, nor any of its officers, directors, employees, agents, stockholders or partners has either directly or indirectly, including, through a broker or finder (a) engaged in any general solicitation, or (b) published any advertisement in connection with the offer, sale or contemplated distribution of the Shares.

 

(e) Exculpation Among Co-Investors.  Each Co-Investor represents that it has such knowledge in financial and business affairs as to be capable of evaluating the merits and risks of its investment in the Company pursuant to this Agreement and is able to bear the economic risk of loss of its investment in the Company pursuant to this Agreement.  Each Co-Investor acknowledges that it is not relying upon any Person, other than Tribute and Pozen and their officers and directors, in making its investment or decision to invest in the Company pursuant to this Agreement.  Each Co-Investor agrees that none of the Co-Investors or their respective controlling Persons, officers, directors, partners, agents, or employees shall be liable to any other Co-Investor for any action taken or omitted to be taken by any of them in connection with entering into, or complying with its respective obligations under, this Agreement, including without limitation purchasing the Shares.

 

ARTICLE V

 

COVENANTS AND AGREEMENTS

 

5.1 Furnishing Information.

 

(a) For purposes of furthering the transactions contemplated hereby, each of the Company, Tribute and Pozen shall promptly provide Purchaser with any report, schedule or other document filed or received by it pursuant to the requirements of the federal securities laws of the United States or the Canadian Securities Laws relating to the Shares covered by this Agreement (other than reports or documents that Tribute or Pozen, as applicable, is not permitted to disclose under applicable Law).  

 

(b) The parties hereto hereby agree that all information received by them or their respective officers, directors, employees or representatives in connection with this Agreement and the consummation of the transactions contemplated hereby shall be governed in accordance with the respective confidentiality agreement entered into by such receiving party and any of the other parties hereto (collectively, the “Confidentiality Agreements”), each of which shall continue in full force and effect in accordance with its terms.

 

  

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5.2 Filings; Commercially Reasonable Efforts; Notification.

 

(a) Upon the terms and subject to the conditions of this Agreement, each of the parties shall use its respective commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, as soon as practicable (and in any event prior to the End Date), the transactions contemplated by this Agreement, including (i) obtaining and maintaining all necessary actions or nonactions, waivers, consents, licenses, permits, authorizations, orders and approvals (collectively, “Consents”) from applicable Governmental Authorities and the making of all other necessary registrations and filings, (ii) obtaining all Consents from third parties that are reasonably necessary in connection with the transactions contemplated by this Agreement, and (iii) the execution and delivery of any additional instruments reasonably necessary to consummate any of the transactions contemplated by, and to fully carry out the purposes of, this Agreement.

 

(b) Each of the Company, Tribute and Pozen shall (i) use commercially reasonable efforts to make or cause to be made such filings with applicable Governmental Authorities as are required or, in Purchaser’s reasonable view, advisable in connection with the transactions contemplated by this Agreement as soon as reasonably practicable after the date of this Agreement and (ii) cooperate in good faith with the other party in obtaining any Consents from Governmental Authorities and in connection with resolving any investigation or other inquiry of any Governmental Authority with respect such filings.

 

(c) Each of the Company, Pozen and Tribute shall use commercially reasonable efforts to ensure that none of the information supplied or to be supplied by for inclusion or incorporation by reference in the Registration Statement or the Investor Registration Statement to be filed with the Commission by the Company under the Securities Act at the time the Registration Statement or Investor Registration Statement becomes effective will contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading (it being understood that no representation or warranty is made by the Company, Pozen, Tribute or the Co-Investors with respect to statements made or incorporated by reference therein based on written information supplied by the other parties hereto expressly for inclusion or incorporation by reference in the Registration Statement or the Investors expressly for inclusion or incorporation by reference in the Investor Registration Statement).

 

5.3 NASDAQ and TSX Listing.  The Company, Tribute and Pozen shall use commercially reasonable efforts to cause the Shares to be approved for listing on NASDAQ and conditionally approved for listing on the TSX prior to the Investment Closing, as mutually agreed by the parties, subject to official notice of issuance in respect of NASDAQ and subject to compliance with all of the customary requirements of the TSX, including receipt of all documentation required by the TSX.

 

  

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5.4 Further Assurances.  Subject to, and not in limitation of, Section 5.2, each of Tribute and Pozen shall use its respective commercially reasonable efforts to (i) take, or cause to be taken, all actions necessary or appropriate to consummate the transactions contemplated by this Agreement and (ii) cause the fulfillment at the earliest practicable date of all of the conditions to their respective obligations to consummate the transactions contemplated by this Agreement.

 

5.5 Advice of Changes.

 

(a) Tribute and/or Pozen, as applicable, shall promptly advise the Co-Investors of any fact, change, event or circumstance that has had a Material Adverse Effect on Tribute and/or Pozen which Tribute and/or Pozen believes would or would be reasonably likely to give rise to a failure of the condition precedent set forth in Section 6.1(d) hereof; provided that any failure to give notice in accordance with the foregoing shall not be deemed to constitute a violation of this Section 5.5 or the failure of the condition set forth in Section 6.1(d) hereof to be satisfied, or otherwise constitute a breach of this Agreement by Tribute and/or Pozen, in each case unless the underlying breach would independently result in a failure of the condition set forth in any of Section 6.1(d) hereof to be satisfied; provided further, that that the delivery of any notice pursuant to this Section 5.5 shall not limit or otherwise affect the remedies of the Co-Investors available hereunder and no information delivered pursuant to this Section 5.5 shall affect the representations or warranties of the parties hereunder.

 

(b) Tribute and/or Pozen shall promptly advise the Co-Investors of (i) any written notice or other written communication from any person alleging that the consent of such person is or may be required in connection with the transactions contemplated by this Agreement to the extent that either Tribute or Pozen believes there is a reasonable likelihood that the failure to obtain such consent would have a material impact on the timing of the consummation of the transactions contemplated by this Agreement or (ii) upon receiving any written communication from any Governmental Authority or third party whose consent or approval is required for the satisfaction of the condition to the Investment Closing set forth in Section 6.1(d) hereof that causes Tribute or Pozen to believe that there is a reasonable likelihood that any such consent or approval will not be obtained or that the receipt of any such consent or approval will be materially delayed.

 

(c) Tribute and/or Pozen, as applicable, shall promptly notify the Co-Investors of any notice, written threat, announcement or commencement of a material investigation by any Governmental Authority with respect to Tribute or any of its Subsidiaries or Pozen or any of its Subsidiaries.

 

(d) Each of Tribute and Pozen covenants and agrees to promptly provide Purchaser with notice and copies of any amendments to the Merger Agreement or any of the annexes, exhibits or schedules (including disclosure schedules) thereto within two (2) Business Days of any such amendment.  The provisions of this Section 5.5(d) shall not in any way affect each Co-Investor’s rights to insist upon the satisfaction of the condition to closing set forth in Section 6.1(c).

 

  

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5.6 Governance Matters.  The Company shall take all actions as may be necessary to elect, or cause to be elected, to the Board of the Company, effective with the Investment Closing and the consummation of the subscription of the Shares set forth opposite each Co-Investor’s name on Schedule I hereto, the individual designated by Purchaser, in writing, at least five (5) Business Days prior to the Investment Closing Date.

 

5.7 Re-registration as a Public Limited Company.  The Company shall, prior to the Investment Closing, re-register as a public limited company pursuant to Part 20 of the Irish Companies Act 2014.

 

5.8 Cooperation.

 

(a) The Company, Tribute and Pozen each acknowledge that Purchaser is a party to the Purchaser/Isotope Merger Agreement and, in connection therewith, will be filing with the Commission the Purchaser S-4 and will be furnishing the Isotope stockholders with copies of the prospectus / proxy statement contained therein.  The Company, Tribute and Pozen each hereby agrees to furnish such information as Purchaser may reasonably request for inclusion in the Purchaser S-4.  Each of the Company, Tribute and Pozen hereby agrees that such information pertaining to it provided for such inclusion will be true and accurate in all material respects and will not omit any material information.  Purchaser hereby agrees to provide the Company, Tribute and Pozen with copies of all proposed disclosure in the Purchaser S-4 relating to the Company, Tribute, Pozen, this Agreement and the transactions contemplated hereby, prior to its filing.  Purchaser further agrees to provide each of the Company, Tribute and Pozen with a reasonable opportunity (at least two (2) Business Days) to review and comment upon such proposed disclosure and Purchaser shall consider such comments in good faith and make any changes thereto reasonably requested by the Company, Tribute or Pozen.

 

(b) The Company, Tribute and Pozen each acknowledge and the Purchaser hereby agrees that the Purchaser shall not effect the Distribution until such time as the holders of Purchaser Common Shares vote at the Purchaser Meeting and the Registration Statement is on file with the SEC and declared effective and the Canadian Final Receipt has been issued.  In connection therewith, Purchaser will be filing the Purchaser Proxy Statement with the Commission and the Canadian Commissions (as defined in Annex B) and will be furnishing such document to the holders of the Purchaser Common Shares in connection with the votes to be taken at the Purchaser Meeting.  The Company, Tribute and Pozen each hereby agrees to furnish such information as Purchaser may reasonably request for inclusion in the Purchaser Proxy Statement.  Each of the Company, Tribute and Pozen hereby agrees that such information pertaining to it provided for such inclusion will be true and accurate in all material respects and will not omit any material information.  Purchaser hereby agrees to provide the Company, Tribute and Pozen with copies of all proposed disclosure in the Purchaser Proxy Statement relating to the Company, Tribute, Pozen, this Agreement and the transactions contemplated hereby, prior to its filing.  Purchaser further agrees to provide each of the Company, Tribute and Pozen with a reasonable opportunity (at least two (2) Business Days) to review and comment upon such proposed disclosure and Purchaser shall consider such comments in good faith and make any changes thereto reasonably requested by the Company, Tribute or Pozen.

 

  

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(c) The Company, Tribute and Pozen each hereby agrees and acknowledges that Purchaser may be required to file reports under the Exchange Act from and after the Closing of the transactions contemplated by this Agreement, which reports may require information (including financial information) concerning the Company, Tribute and Pozen.  Each of the Company, Tribute and Pozen hereby agrees to furnish such information as Purchaser may reasonably request for inclusion in such reports.  Each of the Company, Tribute and Pozen hereby agrees that such information pertaining to it provided for such inclusion will be true and accurate in all material respects and will not omit any material information.  Purchaser hereby agrees to provide the Company, Tribute and Pozen with copies of all proposed disclosure in the Purchaser Proxy Statement relating to the Company, Tribute, Pozen, this Agreement and the transactions contemplated hereby, prior to filing.  Purchaser further agrees to provide each of the Company, Tribute and Pozen with a reasonable opportunity (at least two (2) Business Days) to review and comment upon such proposed disclosure and Purchaser shall consider such comments in good faith and make any changes thereto reasonably requested by the Company, Tribute or Pozen.

 

5.9 Equal Treatment of Purchaser and the Investors.  No consideration shall be offered or paid to Purchaser or any Investor to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration is also offered to all of the parties hereto.  For clarification purposes, this provision constitutes a separate right granted to each of Purchaser and the Investors in their own respective right by Tribute and Pozen and negotiated separately by each of them in their own respective right, and is intended for Tribute and Pozen to treat Purchaser and the Investors as a class and shall not in any way be construed as such persons acting jointly or in concert or as a group with respect to the purchase, disposition or voting of Shares or otherwise.  Each Co-Investor represents that it does not have as of the date of this Agreement, and shall not have as of the Investment Closing, any verbal or written agreement, arrangement, commitment or understanding regarding voting rights attached to the Shares.

 

5.10 Investors’ Registration Rights.  The Investors shall have the registration rights set forth on Annex A hereto.  The Investor Registration Statement (as defined in such Annex A) shall be separate and distinct from the Registration Statement (as defined in Annex B) and shall be converted from Form S-1 to Form S-3 as soon as practicable following the time the applicable rules and regulations allow for such conversion.

 

5.11 Purchaser’s Registration Rights.  Purchaser shall have the registration rights set forth on Annex B hereto.  The Registration Statement shall be separate and distinct from the Investor Registration Statement.

 

ARTICLE VI

 

CONDITIONS TO INVESTMENT CLOSING

 

6.1 Mutual Conditions.  The respective obligations of each Co-Investor and the Company to consummate the subscription and issuance of the Shares shall be subject to the satisfaction on or prior to the Investment Closing Date of each of the following conditions (any or all of which may be waived by a party on behalf of itself in writing, in whole or in part, to the extent permitted by applicable Law):

 

  

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(a) no Law shall have been enacted or promulgated, and no action shall have been taken, by any Governmental Authority of competent jurisdiction that temporarily, preliminarily or permanently restrains, precludes, enjoins or otherwise prohibits the consummation of the transactions contemplated hereby or makes the transactions contemplated hereby illegal;

 

(b) No outstanding judgment, injunction, order or decree of a competent Governmental Authority shall have been entered and shall continue to be in effect, and no Law shall have been adopted or be effective, in each case that prohibits, enjoins or makes illegal the consummation of the transactions contemplated by this Agreement;

 

(c) No material amendment, modification or waiver of a material right under the Merger Agreement has occurred; and

 

(d) The conditions set forth in Article VIII of the Merger Agreement (the (“Merger Closing Conditions”) shall have been satisfied or waived, and the Closing shall occur concurrently with the Investment Closing.

 

6.2 Co-Investor’s Conditions.  The obligations of each Co-Investor to consummate the subscription of the Shares set forth opposite each Co-Investor’s name on Schedule I hereto shall be subject to the satisfaction on or prior to the Investment Closing Date of each of the following additional conditions (any or all of which may be waived by such Co-Investor on behalf of itself in writing, in whole or in part, to the extent permitted by applicable Law):

 

(a) The respective representations and warranties of the Company, Tribute and Pozen set forth in Sections 3.1, 3.2, and 3.3, respectively, qualified as to materiality shall be true and correct, and those not so qualified shall be true and correct in all material respects, in each case, as of the date of this Agreement and as of the Investment Closing as though made at and as of the Investment Closing, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties qualified as to materially shall be true and correct, and those not so qualified shall be true and correct in all material respects, on and as of such earlier date);

 

(b) each of the Company, Tribute and Pozen shall have performed and complied in all material respects with its respective obligations and agreements required in this Agreement to be performed or complied with by it on or prior to the Investment Closing Date;

 

(c) the Shares shall have been approved for listing on NASDAQ and the TSX, subject to official notice of issuances in respect of NASDAQ and subject to compliance with all of the customary requirements of the TSX, including receipt of all documentation required by the TSX;

 

(d) Tribute shall have delivered, or caused to be delivered, to such Co-Investor at the Investment Closing, Tribute’s closing deliverables described in Section 2.4;

 

(e) there shall not be pending any suit, action or proceeding by any Person seeking to restrain, preclude, enjoin or prohibit the transactions contemplated by this Agreement, which suit, action or proceeding is reasonably likely to have a material adverse effect on such Co-Investor;

 

  

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(f) Pozen shall have delivered, or caused to be delivered, to such Co-Investor at the Investment Closing, Pozen’s closing deliverables described in Section 2.5;

 

(g) the Company shall have delivered, or caused to be delivered, to such Co-Investor at the Investment Closing, the Company’s closing deliverables described in Section 2.7; and

 

(h) Purchaser, on the one hand, and the Company, Tribute and Pozen, on the other hand, shall not have terminated the Agreement pursuant to Section 7.1(a).

 

6.3 Company’s Conditions.  The obligation of the Company to consummate the allotment of the Shares to each Co-Investor shall be subject to the satisfaction on or prior to the Investment Closing Date of each of the following conditions with respect to such Co-Investor (any or all of which may be waived by the Company in writing, in whole or in part, to the extent permitted by applicable Law):

 

(a) the representations and warranties of such Co-Investor set forth in this Agreement qualified as to materially shall be true and correct, and those not so qualified shall be true and correct in all material respects, in each case, as of the date of this Agreement and as of the Investment Closing as though made at and as of the Investment Closing, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties qualified as to materially shall be true and correct, and those not so qualified shall be true and correct in all material respects, on and as of such earlier date);

 

(b) such Co-Investor shall have performed and complied in all material respects with all obligations and agreements required by this Agreement to be performed or complied with by such Co-Investor on or prior to the Investment Closing Date; and

 

(c) there shall not be pending any suit, action or proceeding by any Person seeking to restrain, preclude, enjoin or prohibit the transactions contemplated by this Agreement, which suit, action or proceeding is reasonably likely to have a material adverse effect on the Company; and

 

(d) such Co-Investor shall have delivered, or caused to be delivered, to the Company at the Investment Closing such Co-Investor’s closing deliverables described in Section 2.6.

 

ARTICLE VII

 

TERMINATION

 

7.1 Termination.  Notwithstanding anything in this Agreement to the contrary, this Agreement may be terminated and abandoned at any time prior to the Investment Closing with respect to the applicable parties as follows:

 

  

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(a) by mutual written consent of the Company, Tribute and Pozen, on the one hand, and one or more Co-Investors, on the other hand, which termination shall be effective as between or among the Company, Tribute and Pozen and such Co-Investor(s);

 

(b) by any of the Company, Tribute, Pozen, Purchaser or any of the Investors (but only with respect to such terminating Investor’s rights and obligations hereunder) if there shall be any Law that makes consummation of the transactions contemplated by this Agreement illegal or otherwise prohibited, or if any judgment, injunction, order or decree of a competent Governmental Authority enjoining the Company, Tribute, Pozen, Purchaser or such Investor from consummating the transactions contemplated by this Agreement shall have been entered and such judgment, injunction, order or decree shall have become final and nonappealable; provided that the party seeking to terminate this Agreement pursuant to this Section 7.1(b) shall have used its commercially reasonable efforts to render inapplicable such Law or regulation or remove such judgment, injunction, order or decree as required by Section 5.2;

 

(c) by any of the Company, Tribute, Pozen, Purchaser or any Investor (by only with respect to such terminating Investor’s rights and obligations hereunder) if the Investment Closing shall not have occurred on or prior to January 31, 2016 (the “End Date”); provided, however, that the right to terminate this Agreement under this Section 7.1(c) shall not be available to any party whose material breach of any covenant or obligation under this Agreement has been the cause of or resulted in the failure of the Investment Closing to occur on or before the End Date;

 

(d) by any of the Company, Tribute, Pozen, Purchaser or any of the Investors (but only with respect to such terminating Investor’s rights and obligations hereunder) if the Merger Agreement shall have been terminated;

 

(e) by Purchaser or any of the Investors (but only with respect to such terminating Investor’s rights and obligations hereunder) if there shall have been a breach by the Company, Tribute or Pozen of any of their respective representations, warranties, covenants or agreements contained in this Agreement, which breach would result in the failure of one or more of the conditions set forth in Sections 6.2(a) or 6.2(b) to be satisfied on or prior to the End Date, and such breach shall not be capable of being cured or shall not have been cured by the earlier of (i) the End Date and (ii) twenty (20) Business Days after detailed written notice thereof shall have been received by the party alleged to be in breach; or

 

(f) by the Company, Tribute or Pozen, with respect to any Co-Investor, if there shall have been a breach by such Co-Investor of any of its representations, warranties, covenants or agreements contained in this Agreement, which breach would result in the failure of one or more of the conditions set forth in Sections 6.3(a) or 6.3(b) to be satisfied on or prior to the End Date, and such breach shall not be capable of being cured or shall not have been cured by the earlier of (i) the End Date and (ii) twenty (20) Business Days after detailed written notice thereof shall have been received by the party alleged to be in breach.

 

7.2 Procedure Upon Termination.  In the event of termination and abandonment by the Company, Tribute, Pozen, Purchaser or any Investor pursuant to Section 7.1, written notice thereof specifying the provision of this Agreement pursuant to which such termination is effected, shall forthwith be given to the other parties hereto, and, solely with respect to a termination by Tribute or Pozen or all of the Co-Investors, this Agreement shall terminate, and the subscription for the Shares hereunder shall be abandoned.  For the avoidance of doubt, a termination by any Co-Investor shall only terminate the rights and obligations of such Co-Investor hereunder and shall not affect the rights and obligations of the other parties hereto.  The parties acknowledge that the failure by any one Co-Investor to consummate the subscription of the Shares set forth opposite such Co-Investor’s name on Schedule I hereto shall not affect or modify the obligations of the Company or the other Co-Investors to consummate the transactions contemplated hereby.

 

  

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7.3 Effects of Termination.  In the event of any termination of this Agreement as provided in Section 7.1 by the Company, Tribute or Pozen, or all of the Co-Investors, this Agreement, except for the provisions of Section 5.1(b), this Section 7.3 and ARTICLE VIII, shall terminate and become void and have no effect, without any liability on the part of any party or its directors, officers or stockholders with respect thereto.  Notwithstanding the foregoing, nothing in this Section 7.3 shall relieve any party to this Agreement of liability for fraud or any material breach of any covenant or agreement set forth in this Agreement.  No termination of this Agreement shall affect the obligations of the parties contained in any of the Confidentiality Agreements, all of which obligations shall survive termination of this Agreement in accordance with its terms.

 

ARTICLE VIII

 

MISCELLANEOUS

 

8.1 Survival.  Notwithstanding any investigation made by any party to this Agreement, all covenants, agreements, representations and warranties made by the Company, Tribute, Pozen or the Co-Investors herein shall survive the execution of this Agreement, the delivery to the Co-Investors of the Shares and the payment therefor.

 

8.2 Expenses.  Except as otherwise provided in this Agreement, whether or not the transactions contemplated by this Agreement are consummated, all costs and expenses incurred in connection with the negotiation and execution of this Agreement and the transactions contemplated hereby shall be paid by the party incurring or required to incur such expenses, including the Registration Expenses, Investor Registration Expenses and the Canadian Prospectus Expenses (which shall be from the account of the Company).

 

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

 

  

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

 

8.5 Jurisdiction; Specific Enforcement.  Each of the parties hereto irrevocably agrees that any legal action or proceeding with respect to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder brought by the other party hereto or its successors or assigns, shall be brought and determined exclusively in the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware (or, if the Delaware Court of Chancery declines to accept jurisdiction over a particular matter, any state or federal court within the State of Delaware).  Each of the parties hereto hereby irrevocably submits with regard to any such action or proceeding for itself and in respect of its property, generally and unconditionally, to the personal jurisdiction of the aforesaid courts and agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than the aforesaid courts.  Each of the parties hereto hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement, (a) any claim that it is not personally subject to the jurisdiction of the above named courts, (b) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) to the fullest extent permitted by applicable Law, any claim that (i) the suit, action or proceeding in such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.  To the fullest extent permitted by applicable Law, each of the parties hereto hereby consents to the service of process in accordance with Section 8.7; provided, however, that nothing herein shall affect the right of any party to serve legal process in any other manner permitted by Law.

 

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

 

8.7 Notices.  All notices and other communications hereunder shall be in writing and shall be deemed given (a) upon personal delivery to the party to be notified; (b) when received when sent by email or facsimile by the party to be notified, provided, however, that notice given by email or facsimile shall not be effective unless either (i) a duplicate copy of such email or fax notice is promptly given by one of the other methods described in this Section 8.7 or (ii) the receiving party delivers a written confirmation of receipt for such notice either by email or fax or any other method described in this Section 8.7; or (c) when delivered by a courier (with confirmation of delivery); in each case to the party to be notified at the following address:

 

  

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If to Purchaser, to:

 

QLT Inc.

887 Great Northern Way, Suite 250

Vancouver, BC V5T 4T5

Canada

Facsimile: (604) 707-7001

Attention: Geoffrey Cox, Interim Chief Executive Officer

Dori Assaly, Vice President, Legal Affairs

Email: gfcox@qltinc.com

dassaly@qltinc.com

 

with copies to:

 

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, New York 10153

Facsimile: (212) 310-8007

Attention: Raymond O. Gietz

Email: raymond.gietz@weil.com

 

If to the Company, to:

 

Aguono Limited

c/o POZEN Inc.

1414 Raleigh Road, Suite 400

Chapel Hill, North Carolina 27517

Facsimile: (919) 490-5552

Attention: Adrian Adams, Chief Executive Officer

Email: aadams@pozen.com

 

with copies to:

 

DLA Piper LLP (US)

51 John F. Kennedy Parkway, Suite 120

Short Hills, New Jersey 07078-2704

Facsimile: (973) 520-2573

Attention: Andrew Gilbert, Esq.

Email: andrew.gilbert@dlapiper.com

 

If to Pozen, to:

 

POZEN Inc.

1414 Raleigh Road, Suite 400

Chapel Hill, North Carolina 27517

Facsimile: (919) 490-5552

Attention: Adrian Adams, Chief Executive Officer

Email: aadams@pozen.com

 

  

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with copies to:

DLA Piper LLP (US)

51 John F. Kennedy Parkway, Suite 120

Short Hills, New Jersey 07078-2704

Facsimile: (973) 520-2573

Attention: Andrew Gilbert, Esq.

Email: andrew.gilbert@dlapiper.com

If to Tribute, to:

Tribute Pharmaceuticals Canada Inc.

151 Steeles Avenue East

Milton, Ontario, Canada  L9T 1Y1

Facsimile: (519) 434-4382

Attention: Robert Harris, President and Chief Executive Officer

E-mail: rob.harris@tributepharma.com

with copies to:

Fogler, Rubinoff LLP

77 King Street West, Suite 3000

Toronto, Ontario  M5K 1G8

Facsimile: +1-416-941-8852

Attention: Eric R. Roblin

E-mail: eroblin@foglers.com

 

If to an Investor, at its address set forth under its name on Schedule I hereto,

 

or to such other address as any party shall specify by written notice so given, and such notice shall be deemed to have been delivered as of the date so telecommunicated or personally delivered.  Any party to this Agreement may notify any other party of any changes to the address or any of the other details specified in this Section 8.7; provided, however, that such notification shall only be effective on the date specified in such notice or five (5) Business Days after the notice is given, whichever is later.  Rejection or other refusal to accept or the inability to deliver because of changed address of which no notice was given shall be deemed to be receipt of the notice as of the date of such rejection, refusal or inability to deliver.

 

8.8 Assignment; Binding Effect.  Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned or delegated by any of the parties hereto without the prior written consent of the other parties; provided, however, that (i) any Co-Investor may assign any of its rights hereunder to any of its Affiliates without the prior written consent of the Company, Tribute or Pozen, but no such assignment shall relieve such Co-Investor of any of its obligations hereunder, (ii) at any time prior to the filing of the Investor Registration Statement or the Registration Statement, as applicable, any Co-Investor may reallocate, in whole or in part, the number of Shares allocated to such Co-Investor hereunder and assign its rights and obligations hereunder with respect to such reallocated Shares, to any other Co-Investor (and Schedule I will be updated accordingly), and (iii) Purchaser may assign any of its rights hereunder in connection with a merger or amalgamation of Purchaser, or the sale of all or substantially all of the assets of Purchaser and its Subsidiaries.  Subject to the first sentence of this Section 8.8, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns.  Any purported assignment not permitted under this Section 8.8 shall be null and void.  In addition, if Purchaser were to sell in a private transaction any of its Shares to (i) another Co-Investor or (ii) one or more persons identified on Schedule II hereto, then such purchaser shall have the rights set forth in Annex A hereto with respect to such purchased Shares.

 

  

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

 

8.10 Independent Legal and Investment Advice.  Each party acknowledges that Weil, Gotshal & Manges LLP, McCullough O’Connor Irwin LLP and Greenhill & Co., LLC are advisors to the Purchaser and not any other party to this Agreement.  In addition, each party to this Agreement acknowledges having had the opportunity to obtain independent legal advice and independent investment advice in connection with the execution of this Agreement and the transactions contemplated hereby, prior to the execution of this Agreement, and further, each party to this Agreement represents to the other parties that it has either sought independent legal advice and independent investment advice or has waived its right to seek such advice.

 

8.11 Entire Agreement.  This Agreement together with the annexes, schedules and exhibits hereto and each of the Confidentiality Agreements constitute the entire agreement, and supersede all other prior agreements and understandings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof and thereof, and this Agreement is not intended to grant standing to any person other than the parties hereto.

 

8.12 Amendments; Waivers.  At any time prior to the Effective Time, any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by the Company, Tribute, Pozen, Purchaser and each of the Investors; provided, however, that any amendment or waiver of any of the provisions of Annex A shall require only the signature of the Company and the affected Investor, and any amendment or waiver of Annex B shall only require the signature of the Company and Purchaser.  Notwithstanding the foregoing, no failure or delay by any party hereto in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise of any other right hereunder.

 

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

 

8.14 No Third-Party Beneficiaries.  Each of the Co-Investors, Pozen, Tribute and the Company agrees that (a) their respective representations, warranties, covenants and agreements set forth herein are solely for the benefit of the other party hereto, in accordance with and subject to the terms of this Agreement, and (b) this Agreement is not intended to, and does not, confer upon any person other than the parties hereto any rights or remedies hereunder, including the right to rely upon the representations and warranties set forth herein, with the exception of the rights and remedies of the Indemnified Parties pursuant to Annex B.

 

  

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8.15 Obligations of the Co-Investors and the Company.  The obligations of the Co-Investors are several and not joint and the breach by any Co-Investor of its obligations hereunder shall not result in any liability being incurred by any one or more of the other Co-Investors as a result of such breach.  Each of the Company, Tribute and Pozen acknowledges and agrees that should one or more Co-Investors not be ready, willing and able to subscribe for its respective Shares hereunder, any of the other Co-Investors may subscribe for such Shares in lieu of the non-performing Co-Investor.

 

 

** REMAINDER OF PAGE INTENTIONALLY LEFT BLANK**

 

 

 

  

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

 

 

TRIBUTE PHARMACEUTICALS CANADA INC.

 

By:       /s/ Scott Langille                                                                    

Name: Scott Langille

Title: Chief Financial Officer

 

 

POZEN INC.

 

 

By:       /s/ Adrian Adams                                                                    

Name: Adrian Adams

Title: Chief Executive Officer

 

 

AGUONO LIMITED

 

 

By:       /s/ William L. Hodges                                                                    

Name: William L. Hodges

Title: Director

 

  

  

  

 

QLT INC.

 

 

By:       /s/ Geoffrey Cox                                                                    

Name:  Geoffrey Cox

Title:    Interim Chief Executive Officer

 

  

  

  

 

DEERFIELD PRIVATE DESIGN FUND III, L.P.

By:  Deerfield Mgmt III, L.P., General Partner

By:  J.E. Flynn Capital III, LLC, General Partner

By:       /s/ David J. Clark                                                                    

Name: David J. Clark

Title:   Authorized Signatory

 

DEERFIELD INTERNATIONAL MASTER FUND, L.P.

 

By:  Deerfield Mgmt, L.P., General Partner

By:  J.E. Flynn Capital, LLC, General Partner

 

By:       /s/ David J. Clark                                                                    

Name: David J. Clark

Title:   Authorized Signatory

 

 

DEERFIELD PARTNERS, L.P.

 

 

By:  Deerfield Mgmt, L.P., General Partner

By:  J.E. Flynn Capital, LLC, General Partner

 

By:       /s/ David J. Clark                                                                    

Name: David J. Clark

Title:   Authorized Signatory

 

 

  

  

  

 

ECOR1 CAPITAL FUND, L.P.

 

 

By:  EcoR1 Capital, LLC

 

 

By:       /s/ Oleg Nodelman                                                                    

Name: Oleg Nodelman

Title:   Managing Director

 

 

ECOR1 CAPITAL FUND QUALIFIED, L.P.

 

 

By:  EcoR1 Capital, LLC

 

 

By:       /s/ Oleg Nodelman                                                                    

Name: Oleg Nodelman

Title:   Managing Director

 

  

  

  

 

BROADFIN HEALTHCARE MASTER FUND, LTD

 

 

By:       /s/ Jason Abrams                                                                    

Name:  Jason Abrams

Title:    Authorized Signatory

 

  

  

  

 

JW PARTNERS, LP

 

 

By:  JW GP, LLC, its General Partner

 

 

By:       /s/ Jason Wild                                                                    

Name: Jason Wild

Title:   Authorized Signatory

 

 

JW OPPORTUNITIES FUND, LLC

 

 

By:  JW GP, LLC, its Manager

 

 

By:       /s/ Jason Wild                                                                    

Name: Jason Wild

Title:   Authorized Signatory

 

  

  

  

 

SCHEDULE I

 

SCHEDULE OF CO-INVESTORS

 

	
Co-Investor - Name and Address

	
Shares

	
Subscription Price

	
QLT Inc.

250 – 887 Great Northern Way

Vancouver, B.C., Canada

Attn: Geoffrey Cox

Fax: (604) 707-7001

Email: gfcox@qltinc.com

	
6,250,000

	
$45,000,000

	
Deerfield Private Design Fund III, L.P.

Deerfield International Master Fund, L.P.

Deerfield Partners, L.P.

780 Third Avenue, 37th Floor

New York , New York  100017

Attn: David J. Clark

Fax: (212) 599-3075

Email: dclark@deerfield.com

	
1,736,111

972,222

763,889

 

	
$12,500,000

$7,000,000

$5,500,000

	
Broadfin Healthcare Master Fund, LTD

300 Park Avenue, 25th Floor,

New York, NY 10005

Attn: Jason Abrams

Fax: (212) 808-2464

Email: Jason@broadfincapital.com

	
208,333

	
$1,500,000

	
JW Partners, LP

JW Opportunities Fund, LLC

515 Madison Ave, 14B

New York, NY 10022

Attn: Jason Wild

Fax: (212) 207-4674

Email: jwild@jwfunds.com

	
108,333

30,556

	
$780,000

$220,000

	
EcoR1 Capital Fund Qualified, L.P.

EcoR1 Capital Fund, L.P.

409 Illinois Street

San Francisco, CA 94158

Attn: Oleg Nodelman

Fax: (415) 952-9412

Email: oleg@ecor1cap.com

	
232,639

114,583

	
$1,675,000

$825,000

	
Total:

	
10,416,667

	
$75,000,000

 

  

  

  

 

SCHEDULE II

 

SCHEDULE OF POTENTIAL PURCHASER TRANSFEREES

	
1.  

	
NONE.

 

  

  

  

 

ANNEX A

 

INVESTORS’ REGISTRATION RIGHTS

 

1.1 Certain Definitions.

 

	
(a)  

	
“Investor Prospectus” shall mean the prospectus (including any preliminary, final or summary prospectus) included in the Investor Registration Statement, all amendments and supplements to such prospectus and all other material incorporated by reference in such prospectus.

 

	
(b)  

	
“Investor Registration Expenses” shall mean any and all expenses incurred by the Company and its Subsidiaries in effecting the Investor Registration pursuant to this Agreement, including, all (a) Investor Registration and filing fees, and all other fees and expenses payable in connection with the listing of securities on any securities exchange or automated interdealer quotation system, (b) fees and expenses of compliance with any securities or “blue sky” Laws (including reasonable fees and disbursements of counsel in connection with “blue sky” qualifications of the Investor Shares), (c) expenses in connection with the preparation, printing, mailing and delivery of the Investor Registration Statement, Investor Prospectus and other documents in connection therewith and any amendments or supplements thereto, (d) printing expenses, (e) internal expenses of the Company (including, all salaries and expenses of its officers and employees performing legal or accounting duties), (f) fees and disbursements of counsel for the Company and fees and expenses for independent certified public accountants retained by the Company and (g) fees and expenses of any special experts retained by the Company in connection with such Investor Registration.  Investor Registration Expenses shall not include, and the Company shall not have any obligation to pay, any out-of-pocket expenses of any Investor, including the attorneys’ fees of any such Investor.

 

	
(c)  

	
“Investor Registration” shall mean the registration effected by preparing and filing (a) the Investor Registration Statement in compliance with the Securities Act (and any post-effective amendments filed or required to be filed) and the declaration or ordering of effectiveness of such Investor Registration Statement, or (b) an Investor Prospectus and/or Investor Prospectus supplement in respect of the effective Investor Registration Statement.

 

	
(d)  

	
The terms “register,” “registered” and “registration” shall refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act and applicable rules and regulations thereunder, and the declaration or ordering of the effectiveness of such registration statement.

 

	
(e)  

	
“Registrable Securities” shall mean:  (i) the Investor Shares and any shares of ordinary shares of the Company issued or issuable to each Investor (A) upon any distribution with respect to, any exchange for or any replacement of such Investor Shares, or (B) upon any conversion, exercise or exchange of any securities issued in connection with any such distribution, exchange or replacement; (ii) securities issued or issuable upon any stock split, stock dividend, recapitalization or similar event with respect to the foregoing; and (iii) any other security issued as a dividend or other distribution with respect to, in exchange for or in replacement of the securities referred to in the preceding clauses, except that any such Investor Shares or other securities shall cease to be Registrable Securities when (A) they have been sold to the public or (B) they may be sold by such Investor without restriction pursuant to Rule 144.

 

  

A-1

  

 

	
(f)  

	
“Selling Expenses” shall mean all selling commissions and transfer taxes applicable to the sale, transfer, issuance or allotment of Registrable Securities and all fees and disbursements of counsel for Investors.

 

1.2 Registration Requirements.  The Company shall use its commercially reasonable efforts to effect the registration of the resale of the Registrable Securities (including, without limitation, the execution of an undertaking to file post-effective amendments, appropriate qualification under applicable blue sky or other state securities laws and appropriate compliance with applicable regulations issued under the Securities Act) as would permit or facilitate the resale of all the Registrable Securities in the manner (including manner of sale) and in all states reasonably requested by the Investors, provided that in no event shall the Company be required to register the resale of the Investor Shares in an underwritten offering.  Such commercially reasonable efforts by the Company shall include, without limitation, the following:

 

	
(a)  

	
The Company shall use commercially reasonable efforts to, as expeditiously as possible:

 

	
(i)  

	
prepare and promptly following the filing of Registration Statement on Form S-4 by the Company (in no event later than August 7, 2015), file a registration statement with the Commission pursuant to Rule 415 under the Securities Act covering resales by the Investors as selling stockholders (not underwriters) of the Investor Shares (the “Investor Registration Statement”).  The Company shall use its commercially reasonable efforts to cause such Investor Registration Statement and other filings to be declared effective as soon as possible following its filing.

 

	
(ii)  

	
respond to all Commission comments, inquiries and requests, and shall request acceleration of effectiveness of the Investor Registration Statement at the earliest possible date.  The Company shall provide the Investors reasonable opportunity to review the portions of any such Investor Registration Statement or amendment or supplement thereto containing disclosure regarding the Investors prior to filing.

 

	
(iii)  

	
prepare and file with the Commission such amendments and supplements to such Investor Registration Statement and the Investor Prospectus used in connection with such Investor Registration Statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Investor Registration Statement and notify the Investors of the filing and effectiveness of such Investor Registration Statement and any amendments or supplements.

 

	
(iv)  

	
furnish or otherwise make available to each Investor copies of a current prospectus included in the Investor Registration Statement conforming with the requirements of the Securities Act, copies of the Investor Registration Statement, any amendment or supplement thereto and any documents incorporated by reference therein and such other documents as such Investor may reasonably require in order to facilitate the disposition of Registrable Securities owned by such Investor.

 

  

A-2

  

 

	
(v)  

	
register and qualify the securities covered by the Investor Registration Statement under the securities or “blue sky” laws of all domestic jurisdictions, to the extent required; provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions.

 

	
(vi)  

	
notify each Co- Investor of the happening of any event (but not the substance or details of any such events) as a result of which the Investor Prospectus (including any supplements thereto or thereof) included in such Investor Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and use its commercially reasonable efforts to promptly update and/or correct such prospectus.

 

	
(vii)  

	
notify each Investor of the issuance by the Commission or any state securities commission or agency of any stop order suspending the effectiveness of the Investor Registration Statement or the threat or initiation of any proceedings for that purpose.  The Company shall use its commercially reasonable efforts to prevent the issuance of any stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible time.

 

	
(viii)  

	
if required by the NASDAQ or the principal securities exchange and/or market on which the Company ordinary shares is then listed, qualify the Registrable Securities covered by such Investor Registration Statement for listing on the NASDAQ or the principal securities exchange and/or market on which the Company ordinary shares are then listed, including the preparation and filing of any required filings with such principal market or exchange.

 

	
(b)  

	
The Company may suspend the use of any Investor Prospectus used in connection with the Investor Registration Statement only in the event, and for such period of time as, (i) such a suspension is required by the rules and regulations of the Commission or any self-regulatory organization, or (ii) it is determined in good faith by the Board of the Company that because of valid business reasons (not including the avoidance of the Company’s obligations hereunder), it is in the best interests of the Company to suspend such use, and prior to suspending such use in accordance with this clause (b) the Company provides the Investors with written notice of such suspension, which notice need not specify the nature of the event giving rise to such suspension.  The Company will use commercially reasonable efforts to cause such suspension to terminate at the earliest possible date.  Notwithstanding the foregoing, the use of any Investor Prospectus may be suspended by reason of clause (ii) of this subsection (b) for a period of time not to exceed (A) sixty consecutive days for any one such suspension or (B) an aggregate of ninety days during the Investor Registration Period.

 

  

A-3

  

 

	
(c)  

	
The Company shall prepare and file with the Commission such amendments (including post-effective amendments) and supplements to the Investor Registration Statement and the Investor Prospectus used in connection with the Investor Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated under the Securities Act, as may be necessary to keep the Investor Registration Statement effective at all times during the Investor Registration Period (as defined below), and, during such period, comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities of the Company covered by the Investor Registration Statement.  In the case of amendments and supplements to the Investor Registration Statement which are required to be filed pursuant to this Agreement (including pursuant to this Section 1.2(c)) by reason of the Company filing a report on Form 10-K, Form 10-Q or Form 8-K or any analogous report under the Exchange Act, the Company shall have incorporated such report by reference into the Investor Registration Statement, if applicable, or shall file such amendments or supplements with the Commission on the same day on which the Exchange Act report is filed which created the requirement for the Company to amend or supplement the Investor Registration Statement.

 

	
(d)  

	
Each Investor agrees by its acquisition of the Registrable Securities that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Sections 1.2(a)(vi) or 1.2(a)(vii), and upon notice of any suspension under Section 1.2(b), such Investor will forthwith discontinue disposition of such Registrable Securities under the Investor Registration Statement until such Investor’s receipt of the copies of the supplemented prospectus and/or amendment to the Investor Registration Statement contemplated by this Section 1.2, or until it is advised in writing by the Company that the use of the applicable prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such prospectus or the Investor Registration Statement.  The Company may provide appropriate stop orders to enforce the provisions of this paragraph.

 

	
(e)  

	
If requested by an Investor, the Company shall (i) as soon as practicable incorporate in a prospectus supplement or post-effective amendment such information as an Investor reasonably requests to be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being offered or sold, the Subscription Price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering, (ii) as soon as practicable make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment, and (iii) as soon as practicable, supplement or make amendments to the Investor Registration Statement if reasonably requested by an Investor holding any Registrable Securities.

 

  

A-4

  

 

1.3 Expenses of Investor Registration.  All Investor Registration Expenses in connection with any registration, qualification or compliance with registration pursuant to this Agreement shall be borne by the Company, and all Selling Expenses of an Investor shall be borne by such Investor.

 

1.4 Investor Registration Period.  In the case of the Investor Registration, the Company shall keep such registration effective from the date on which the Investor Registration Statement initially became effective until the earlier of: (i) the date on which all the Investors have completed the sales or distribution described in the Investor Registration Statement relating to the Registrable Securities registered for resale thereunder; (ii) until such Registrable Securities may be sold by the Investors without restriction pursuant to Rule 144 (or any successor thereto); or (iii) one year from the effective date of the Investor Registration Statement (the “Investor Registration Period”).  Thereafter, the Company shall be entitled to withdraw such Investor Registration Statement and the Investors shall have no further right to offer or sell any of the Registrable Securities registered for resale thereon pursuant to the Investor Registration Statement (or any prospectus relating thereto).

 

1.5 Indemnification.

 

	
(a)  

	
Indemnification by the Company.  The Company agrees to indemnify and hold harmless, to the fullest extent permitted by Law, (i) each Investor and its officers, directors, stockholders, employees, advisors, agents and Affiliates, (ii) each Investor’s Affiliates’ officers, directors, stockholders, employees, advisors, agents, and (iii) each Person who controls (within the meaning of the Securities Act, the Exchange Act) such Persons, against any and all claims, losses, damages, penalties, judgments, suits, costs, liabilities and expenses (or actions in respect thereof) (collectively, the “Losses”) arising out of or based on (A) any untrue statement (or alleged untrue statement) of a material fact contained in the Investor Registration Statement (including any Investor Prospectus) or any other document incorporated by reference therein, (B) any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not false or misleading (in the case of any Investor Prospectus, in light of the circumstances under which they were made), or (C) any violation by the Company of the Securities Act, the Exchange Act, the Canadian Securities Laws or any state securities or “blue sky” Laws applicable to the Company, and will reimburse each of the Persons listed above, for any reasonable and documented out-of-pocket legal and any other expenses reasonably incurred in connection with investigating and defending any such Losses; provided, that the Company will not be liable in any such case to the extent that any such Losses arise out of or are based on any untrue statement or omission based upon written information furnished to the Company by such Person and stated to be specifically for use in such Investor Registration Statement or Investor Prospectus.

 

	
(b)  

	
Indemnification by Investors.  Each Investor agrees to indemnify and hold harmless, to the fullest extent permitted by Law, (i) the Company and its officers, directors, stockholders, employees, advisors, agents and Affiliates, (ii) each of the Company’s Affiliates’ officers, directors, stockholders, employees, advisors, agents, and (iii) each Person who controls the Company (within the meaning of the Securities Act, the Exchange Act or the Canadian Securities Laws), against any and all Losses arising out of or based on (A) any untrue statement (or alleged untrue statement) of a material fact made by such Investor contained in the Investor Registration Statement (including any Investor Prospectus) or any other document incorporated by reference therein or (B) any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements by such Investor therein not false or misleading (in the case of any Investor Prospectus, in light of the circumstances under which they were made), and will reimburse the Persons listed above for any reasonable and documented legal or any other expenses reasonably incurred in connection with investigating or defending any such Losses, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in reliance upon and in conformity with written information furnished to the Company by such Investor and stated to be specifically for use in such Investor Registration Statement or Investor Prospectus, provided, however, that the obligations of each Investor hereunder shall be limited to such Investor’s respective Subscription Price.

 

  

A-5

  

 

	
(c)  

	
Conduct of the Indemnification Proceedings.  Each Person entitled to indemnification under this Section 1.5 (the “Indemnified Party”) shall give notice to the Person required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom; provided, that counsel for the Indemnifying Party, who shall conduct the defense of such claim or any litigation resulting therefrom, shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld) and the Indemnified Party may participate in such defense at such Indemnified Party’s expense (unless the Indemnified Party shall have reasonably concluded that there may be a conflict of interest between the Indemnifying Party and the Indemnified Party in such action, in which case the fees and expenses of counsel shall be at the expense of the Indemnifying Party); and provided, further, that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 1.5 unless the Indemnifying Party is actually and materially prejudiced thereby.  It is understood and agreed that the Indemnifying Party shall not, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate legal counsel for all Indemnified Parties; provided, however, that where the failure to be provided separate legal counsel would be reasonably likely to result in a conflict of interest on the part of such legal counsel for all Indemnified Party, separate counsel shall be appointed for the Indemnified Parties to the extent needed to alleviate such potential conflict of interest.  No Indemnifying Party, in the defense of any such claim or litigation shall, except with the prior written consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect of such claim or litigation.  Each Indemnified Party shall furnish such information regarding itself or the claim in question as an Indemnified Party may reasonably request in writing and as shall be reasonably required in connection with the defense of such claim and litigation resulting therefrom.

 

  

A-6

  

 

	
(d)  

	
Contribution.  If the indemnification provided for in this Section 1.5 is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any Losses, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party, on the one hand, and the Indemnified Party, on the other, in connection with the statements or omissions (or alleged statements or omissions) which resulted in such Losses, as well as any other relevant equitable considerations.  The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by reference to, among other things, whether the untrue (or alleged untrue) statement of a material fact or the omission (or alleged omission) to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified Party and such parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; provided, however, that the obligations of each Investor shall be limited to an amount equal to the such Investor’s respective Subscription Price; and provided, further, that no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) or gross negligence shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation or gross negligence.

 

	
(e)  

	
Exclusivity.  Subject to the limitations on each Investor’s liability set forth in Section 1.5(b) and Section 1.5(d), the remedies provided for in this Section 1.5 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any Indemnified Party at Law or equity.  The remedies shall remain in full force and effect regardless of any investigation made by or on behalf of an Investor or any Indemnified Party and survive the transfer of the Investor Shares by an Investor.

 

1.6 Survival.  The indemnity and contribution agreements contained in Section 1.5 shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Indemnified Party or by or on behalf of the Company, and (iii) the consummation of the sale or successive resales of the Registrable Securities.

 

1.7 Information by Investors.  Each Investor shall promptly furnish to the Company such information regarding such Investor and the distribution and/or sale proposed by such Investor as the Company may from time to time reasonably request in writing in connection with any Investor Registration, qualification or compliance referred to in this Agreement, and the Company may exclude from such Investor Registration the Registrable Securities of any Investor who unreasonably fails to furnish such information within a reasonable time after receiving such request.  The intended method or methods of disposition and/or sale of such securities as so provided by such purchaser shall be included without alteration in the Investor Registration Statement covering the Registrable Securities and shall not be changed without written consent of such Investor.  Each Investor agrees that, other than ordinary course brokerage arrangements, in the event it enters into any arrangement with a broker dealer for the sale of any Registrable Securities through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, such Investor shall promptly deliver to the Company in writing all applicable information required in order for the Company to be able to timely file a supplement to the Investor Prospectus pursuant to Rule 424(b), or take any other action, under the Securities Act, to the extent that such supplement or other action is legally required.  Such information shall include a description of (i) the name of such Investor and of the participating broker dealer(s), (ii) the number of Registrable Securities involved, (iii) the price at which such Registrable Securities were or are to be sold, and (iv) the commissions paid or to be paid or discounts or concessions allowed or to be allowed to such broker dealer(s), where applicable

 

  

A-7

  

 

ANNEX B

 

PURCHASER’S REGISTRATION RIGHTS

 

1.1. Certain Definitions.

 

	
(a)  

	
“Canadian Commissions” means the securities commissions or similar regulatory authorities in the Canadian Qualifying Provinces.

 

	
(b)  

	
“Canadian Final Prospectus” means the final prospectus of the Company and any amendments thereto, in respect of the qualification for distribution of the Purchaser Shares from the Purchaser to the holders of the Purchaser Common Shares.

 

	
(c)  

	
“Canadian Final Receipt” means a receipt for the Canadian Final Prospectus issued in accordance with the Canadian Passport System.

 

	
(d)  

	
“Canadian Passport System” means the system and procedures for the filing of prospectuses and related materials in one or more Canadian jurisdictions pursuant to applicable Canadian Securities Laws.

 

	
(e)  

	
“Canadian Preliminary Prospectus” means the preliminary prospectus of the Company and any amendments thereto, in respect of the qualification for distribution of the Purchaser Shares from the Purchaser to the holders of the Purchaser Common Shares.

 

	
(f)  

	
“Canadian Preliminary Receipt” means a receipt for the Canadian Preliminary Prospectus issued in accordance with the Canadian Passport System.

 

	
(g)  

	
“Canadian Prospectus” means, collectively, the Canadian Preliminary Prospectus and the Canadian Final Prospectus.

 

	
(h)  

	
“Canadian Prospectus Expenses” means any and all expenses incurred by the Company and its Subsidiaries in qualification of the Purchaser Shares for distribution from the Purchaser to the holders of the Purchaser Common Shares, including all (a) costs and expenses of or incidental to the preparation, filing, reproduction (including the commercial copies thereof) and printing of the Canadian Preliminary Prospectus, the Canadian Final Prospectus and any other documents in connection therewith and any amendments or supplements thereto, (b) fees and expenses of compliance with applicable Canadian Securities Laws, (c) expenses in connection with the preparation, printing, mailing and delivery of the Registration Statement, Canadian Prospectus and other documents in connection therewith and any amendments or supplements thereto, (d) internal expenses of the Company (including, all salaries and expenses of its officers and employees performing legal or accounting duties), (f) fees and disbursements of counsel for the Company and fees and expenses for independent certified public accountants retained by the Company and (g) fees and expenses of any special experts retained by the Company in connection with any of the above.  Canadian Prospectus Expenses shall not include, and the Company shall not have any obligation to pay, any out-of-pocket expenses of Purchaser.

 

  

B-1

  

 

	
(i)  

	
“Canadian Qualifying Provinces” means each of the provinces and/or territories in Canada in which a holder of Purchaser Common Shares is resident.

 

	
(j)  

	
“Prospectus” means the prospectus (including any preliminary, final or summary prospectus) included in the Registration Statement, all amendments and supplements to such prospectus and all other material incorporated by reference in such prospectus.

 

	
(k)  

	
“Registration” means the registration effected by preparing and filing (a) the Registration Statement in compliance with the Securities Act (and any post-effective amendments filed or required to be filed) and the declaration or ordering of effectiveness of such Registration Statement, or (b) a Prospectus and/or Prospectus supplement in respect of the effective Registration Statement.

 

	
(l)  

	
“Registration Expenses” means any and all expenses incurred by the Company and its Subsidiaries in effecting the Registration pursuant to this Agreement, including, all (a) Registration and filing fees, and all other fees and expenses payable in connection with the listing of securities on any securities exchange or automated interdealer quotation system, (b) fees and expenses of compliance with any securities or “blue sky” Laws (including reasonable fees and disbursements of counsel in connection with “blue sky” qualifications of the Purchaser Shares), (c) expenses in connection with the preparation, printing, mailing and delivery of the Registration Statement, Prospectus and other documents in connection therewith and any amendments or supplements thereto, (d) printing expenses, (e) internal expenses of the Company (including, all salaries and expenses of its officers and employees performing legal or accounting duties), (f) fees and disbursements of counsel for the Company and fees and expenses for independent certified public accountants retained by the Company and (g) fees and expenses of any special experts retained by the Company in connection with such Registration.  Registration Expenses shall not include, and the Company shall not have any obligation to pay, any out-of-pocket expenses of Purchaser or any transfer taxes (x) applicable to the sale, transfer, issuance or allotment of the Purchaser Shares; or (y) arising in connection with the Distribution, both of which shall be borne by Purchaser.

 

	
(m)  

	
“Registration Statement” means the registration statement of the Company that covers the Distribution of the Purchaser Shares to the holders of the Purchaser Common Shares pursuant to the provisions of this Agreement filed with, or to be filed with, the Commission under the rules and regulations promulgated under the Securities Act, including the related Prospectus, amendments and supplements to such registration statement, including pre- and post-effective amendments, and all exhibits, financial information and all other material incorporated by reference in such registration statement.

 

1.2. Registration Requirements.

 

  

B-2

  

 

	
(a)  

	
As promptly as practicable following the filing of a Registration Statement on Form S-4 by the Company, the Company shall (i) prepare and cause to be filed with the Commission (no later than August 7, 2015) the Registration Statement on an eligible form and the Company shall use its commercially reasonable efforts to have the Registration Statement declared effective under the Securities Act as promptly as practicable after such filing, and (ii) prepare and caused to be filed with the Canadian Commissions on or prior to August 7, 2015 the Canadian Preliminary Prospectus, and as soon as possible thereafter prepare and caused to be filed with the Canadian Commissions the Canadian Final Prospectus for the purposes of qualifying the Purchaser Shares for distribution from the Purchaser to the holders of the Purchaser Common Shares pursuant to the Canadian Securities Laws.  The Company shall use its commercially reasonable efforts to keep the Registration Statement and the Canadian Final Prospectus current and effective until the time the Distribution is completed.  In addition, until the completion of the Distribution, the Company shall take all reasonably necessary steps and proceedings as may be required from time to time under the Canadian Securities Laws to qualify the Purchaser Shares for distribution to the holders of the Purchaser Common Shares in each Canadian Qualifying Province, or in the event that the Purchaser Shares have for any reason ceased to so qualify, to again qualify the Purchaser Shares for distribution.  Each of Purchaser and Pozen shall furnish the Company all information concerning such person and its Affiliates, and provide such other assistance, as may be reasonably requested in connection with the preparation and filing of the Registration Statement and the Canadian Prospectus.  Each of the Registration Statement and the Canadian Prospectus shall include all information reasonably requested by the Purchaser to be included therein.  The Company shall promptly notify the other upon the receipt of any comments from the Commission or the Canadian Commissions or any request from the Commission or the Canadian Commissions for amendments or supplements to the Registration Statement or the Canadian Prospectus, and shall provide Purchaser with copies of all correspondence between it and its representatives, on one hand, and the Commission or the Canadian Commissions, on the other hand.  The Company shall use its commercially reasonable efforts to respond as promptly as practicable to any comments from the Commission or the Canadian Commissions with respect to the Registration Statement or the Canadian Prospectus, as the case may be.  Notwithstanding the foregoing, prior to filing (i) the Registration Statement (or any amendment or supplement thereto) or responding to any comments of the Commission with respect thereto, or (ii) Canadian Prospectus (or any amendment or supplement thereto) or responding to any comments of the Canadian Commissions with respect thereto, the Company shall provide Purchaser an opportunity to review and comment on such document or response (including the proposed final version of such document or response).  The Company shall advise Purchaser, promptly after receipt of notice thereof, of the time of effectiveness of the Registration Statement, the issuance of any stop order relating thereto, and the Company shall use its commercially reasonable efforts to have any such stop order or suspension lifted, reversed or otherwise terminated.  In addition, the Company shall advise the Purchaser, promptly after receipt thereof, of the receipt of the Canadian Preliminary Receipt and the Canadian Final Receipt.  The Company shall also take any other action (other than qualifying to do business in any jurisdiction in which it is not now so qualified) required to be taken under the Securities Act, the Exchange Act, the Canadian Securities Laws, any applicable foreign or state securities or “Blue Sky” laws and the rules and regulations thereunder in connection with the transactions associated with this Agreement.

 

  

B-3

  

 

	
(b)  

	
If, prior to the completion of the Distribution, any event occurs with respect to the Company or Pozen or any of their respective Subsidiaries, or any change occurs with respect to other information supplied by the Company or Pozen for inclusion in the Registration Statement, the Canadian Preliminary Prospectus or the Canadian Final Prospectus, which is required to be described in an amendment of, or a supplement to, the Registration Statement, the Canadian Preliminary Prospectus or the Canadian Final Prospectus, the Company shall promptly notify Purchaser of such event or Pozen shall promptly notify the Company and Purchaser of such event, as applicable, and the Company shall use commercially reasonable efforts to promptly file with (i) the Commission any necessary amendment or supplement to the Registration Statement, and (ii) with the Canadian Commissions any necessary amendment or supplement to the Canadian Preliminary Prospectus or the Canadian Final Prospectus, as the case may be, and, as required by Law and the Canadian Securities Laws, disseminate the information contained in such amendment or supplement.  Nothing in this Section 1.2(b) shall limit the obligations of any party under Section 1.2(a).

 

	
(c)  

	
If prior to the completion of the Distribution, any event occurs with respect to Purchaser or any of its Subsidiaries, or any change occurs with respect to other information supplied by Purchaser for inclusion in the Registration Statement, the Canadian Preliminary Prospectus or the Canadian Final Prospectus, which is required to be described in an amendment of, or a supplement to, the Registration Statement, the Canadian Preliminary Prospectus or the Canadian Final Prospectus,  Purchaser shall promptly notify the Company of such event, and the Company shall use commercially reasonable efforts to promptly file with the (i) Commission any necessary amendment or supplement to the Registration Statement, and (ii) with the Canadian Commissions any necessary amendment or supplement to the Canadian Preliminary Prospectus or the Canadian Final Prospectus, as the case may be and, as required by Law and the Canadian Securities Laws, disseminate the information contained in such amendment or supplement.  Nothing in this Section 1.2(c) shall limit the obligations of any party under Section 1.2(a).

 

	
(d)  

	
The Company shall deliver to Purchaser, without charge, as many copies of the Prospectus and the Canadian Prospectus, and any amendment or supplement thereto, as Purchaser may reasonably request in the context of the Distribution (it being understood that the Company consents to the use of the Prospectus and the Canadian Prospectus and any amendment or supplement thereto in connection with the Distribution) and such other documents as Purchaser may reasonably request in order to facilitate the Distribution.

 

	
(e)  

	
The Company shall reasonably cooperate with Purchaser to facilitate the timely preparation and delivery of certificates, with requisite CUSIP numbers, representing the Purchaser Shares to be distributed to the holders of the Purchaser Common Shares pursuant to the Distribution and not bearing any restrictive legends.

 

	
(f)  

	
The Company will use its commercially reasonable efforts to procure the cooperation of the Company’s transfer agent in settling the distribution of the Purchaser Shares to the holders of the Purchaser Common Shares pursuant to the Distribution, including with respect to the transfer of physical security instruments into book-entry form in accordance with any procedures reasonably requested by Purchaser.

 

  

B-4

  

 

1.3. Indemnification.

 

	
(a)  

	
Indemnification by the Company.  The Company agrees to indemnify and hold harmless, to the fullest extent permitted by Law, (i) Purchaser and its officers, directors, stockholders, employees, advisors, agents and Affiliates, (ii) each of Purchaser’s Affiliates’ officers, directors, stockholders, employees, advisors, agents, and (iii) each Person who controls (with the meaning of the Securities Act, the Exchange Act or the Canadian Securities Laws) such Persons, against any and all claims, losses, damages, penalties, judgments, suits, costs, liabilities and expenses (or actions in respect thereof) (collectively, the “Losses”) arising out of or based on (A) any untrue statement (or alleged untrue statement) of a material fact contained in the Registration Statement (including any Prospectus) or the Canadian Prospectus or any other document incorporated by reference therein, (B) any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not false or misleading (in the case of any Prospectus and the Canadian Prospectus, in light of the circumstances under which they were made), or (C) any violation by the Company of the Securities Act, the Exchange Act, the Canadian Securities Laws or any state securities or “blue sky”' Laws applicable to the Company, and will reimburse each of the Persons listed above, for any reasonable and documented out-of-pocket legal and any other expenses reasonably incurred in connection with investigating and defending any such Losses; provided, that the Company will not be liable in any such case to the extent that any such Losses arise out of or are based on any untrue statement or omission based upon written information furnished to the Company by Purchaser and stated to be specifically for use in such Registration Statement, Prospectus or the Canadian Prospectus.

 

	
(b)  

	
Indemnification by Purchaser.  Purchaser agrees to indemnify and hold harmless, to the fullest extent permitted by Law, (i) the Company and its officers, directors, stockholders, employees, advisors, agents and Affiliates, (ii) each of the Company’s Affiliates’ officers, directors, stockholders, employees, advisors, agents, and (iii) each Person who controls the Company (within the meaning of the Securities Act, the Exchange Act or the Canadian Securities Laws), against any and all Losses arising out of or based on (A) any untrue statement (or alleged untrue statement) of a material fact made by Purchaser contained in any Registration Statement (including any Prospectus), the Canadian Prospectus or any other document incorporated by reference therein or (B) any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements by Purchaser therein not false or misleading (in the case of any Prospectus and the Canadian Prospectus, in light of the circumstances under which they were made), and will reimburse the Persons listed above for any reasonable and documented legal or any other expenses reasonably incurred in connection with investigating or defending any such Losses, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in reliance upon and in conformity with written information furnished to the Company by Purchaser and stated to be specifically for use in such Registration Statement, Prospectus or the Canadian Prospectus, provided, however, that the obligations of Purchaser hereunder shall be limited to the Subscription Price.

 

  

B-5

  

 

	
(c)  

	
Conduct of the Indemnification Proceedings.  Each Person entitled to indemnification under this Section 1.3 (the “Indemnified Party”) shall give notice to the Person required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom; provided, that counsel for the Indemnifying Party, who shall conduct the defense of such claim or any litigation resulting therefrom, shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld) and the Indemnified Party may participate in such defense at such Indemnified Party’s expense (unless the Indemnified Party shall have reasonably concluded that there may be a conflict of interest between the Indemnifying Party and the Indemnified Party in such action, in which case the fees and expenses of counsel shall be at the expense of the Indemnifying Party); and provided, further, that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 1.3 unless the Indemnifying Party is actually and materially prejudiced thereby.  It is understood and agreed that the Indemnifying Party shall not, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate legal counsel for all Indemnified Parties; provided, however, that where the failure to be provided separate legal counsel would be reasonably likely to result in a conflict of interest on the part of such legal counsel for all Indemnified Party, separate counsel shall be appointed for the Indemnified Parties to the extent needed to alleviate such potential conflict of interest.  No Indemnifying Party, in the defense of any such claim or litigation shall, except with the prior written consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect of such claim or litigation.  Each Indemnified Party shall furnish such information regarding itself or the claim in question as an Indemnified Party may reasonably request in writing and as shall be reasonably required in connection with the defense of such claim and litigation resulting therefrom.

 

	
(d)  

	
Contribution.  If the indemnification provided for in this Section 1.3 is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any Losses, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party, on the one hand, and the Indemnified Party, on the other, in connection with the statements or omissions (or alleged statements or omissions) which resulted in such Losses, as well as any other relevant equitable considerations.  The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by reference to, among other things, whether the untrue (or alleged untrue) statement of a material fact or the omission (or alleged omission) to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified Party and such parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; provided, however, that the obligations of Purchaser shall be limited to an amount equal to the Subscription Price; and provided, further, that no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) or gross negligence shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation or gross negligence.

 

  

B-6

  

 

	
(e)  

	
Exclusivity.  Subject to the limitations on Purchaser’s liability set forth in Section 1.3(b) and Section 1.3(d), the remedies provided for in this Section 1.3 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any Indemnified Party at Law or equity.  The remedies shall remain in full force and effect regardless of any investigation made by or on behalf of Purchaser or any Indemnified Party and survive the transfer of the Shares by Purchaser.

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