Document:

Exhibit 10.01

Exhibit 10.01

PATENT PURCHASE AGREEMENT

This PATENT PURCHASE AGREEMENT (“Agreement”) is entered into by and between ENDO
PHARMACEUTICALS INC., a Delaware corporation, with an office at 100 Endo Boulevard, Chadds Ford, PA
19317 (“Purchaser”), and LECTEC CORPORATION, a Minnesota corporation, with an office at 1407 S.
Kings Highway, Texarkana, TX 75501 (“Seller”).

RECITAL

Seller wishes to sell the Patent Assets to Purchaser, and Purchaser wishes to purchase the
Patent Assets from Seller, pursuant to the terms and conditions of this Agreement.

AGREEMENT

Purchaser and Seller (each being a “Party” and together the “Parties”) hereby agree as
follows:

	1.	 	Definitions

	1.1	 	“Assignment Agreements” means any agreements assigning ownership of any part, portion, or all
of the Patents from the inventors and/or prior owners to Seller, which agreements are listed
on Schedule 1.1 hereto.

	1.2	 	“Confidential Information” means the contents, nature, terms, conditions form, existence, and
parties to: (a) any licenses and agreements, relating to the Patent Assets (including,
without limitation, any licenses granted to the Patent Assets prior to the Effective Date of
this Agreement); and (b) any invention disclosures, unpublished patent applications, inventor
notebooks, and similar materials, to the extent they have not been made publicly available.

	1.3	 	“Current License Agreements” means any license, settlement or other agreements that the
Patent Assets are subject to or that otherwise relates to the Patent Assets as of the
Effective Date, and which are listed on Schedule 1.3 hereto.

	1.4	 	“Effective Date” means the date on which this Agreement is last executed by the Parties.

	1.5	 	“Excluded Liabilities” has the meaning set forth in Section 3.2.

	1.6	 	“List of Prosecution Counsel” means the list to be supplied by Seller pursuant to Section 5.1
that sets forth the names and addresses of each and every law firm that was or currently is
involved in the prosecution of any of the Patents.

 

 

 

	1.7	 	“Patent Assets” means, collectively, all of the following:

	 	(a)	 	all of the patents and patent applications listed on Exhibit A hereto;

	 	(b)	 	all continuation, continuations-in-part and divisionals of such patents and
patent applications, and any United States patents resulting from any reissue or
reexamination of such patents and patent applications;

	 	(c)	 	all United States and foreign patents and patent applications claiming common
priority to any of the patents or patent applications set forth in clauses (a) and (b)
above (whether claiming priority from such patents and patent applications or forming
the basis of priority for such patents and patent applications);

	 	(d)	 	any foreign counterparts to any of the patents and patent applications set
forth in clauses (a), (b) and (c) above (all of the foregoing included in clauses (a),
(b), (c) and (d), the “Patents”);

	 	(e)	 	all past, present and future claims, causes of actions and other rights against
third parties relating to infringement of any of the Patents, including without
limitation, all rights to pursue damages, injunctive relief, and other remedies for
past, current, and future infringement of the Patents; and

	 	(f)	 	all rights of Seller to license and collect royalties with respect to all of
the Patents.

The Patent Assets include prosecution history files and inventor assignments for the
Patents.

	1.8	 	“Patent Assignment” means the Assignment of Patent Rights attached hereto as Exhibit
B.

	1.9	 	“Person” means any natural person, corporation, partnership, joint venture, limited liability
company, or other legal entity recognized in any jurisdiction in the world.

	1.10	 	“Purchase Price” has the meaning set forth in Section 2.1.

	1.11	 	“Purchaser Indemnitees” has the meaning set forth in Section 4.1.

	1.12	 	“Settlement Agreement” means the Settlement and License Agreement, dated November 11, 2009,
between Seller and Purchaser.

	1.13	 	Additional definitions appear in various Sections below.

	2.	 	Payment

	2.1	 	In consideration of the sale, assignment, transfer and conveyance to Purchaser of the Patent
Assets by Seller, Purchaser shall, within five (5) days of the Effective Date, pay to Seller
the amount of two million U.S. dollars ($2,000,000 USD) (the “Purchase Price”). Such payment
will be made by wire transfer to the following account:

WELLS FARGO BANK, N.A., MINNEAPOLIS, MN 55479

WIRE TRANSFER ROUTING #121000248 ACCOUNT #6355061600

SWIFT CODE (INTERNATIONAL WIRES) — WFBIUS6S

ROUTING NUMBER (ACH TRANSACTIONS) — 091000019

 

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	3.	 	Transfer of Patents

	3.1	 	Assignment of Patent Assets. Upon the Effective Date, Seller hereby irrevocably
sells, assigns, transfers, and conveys to Purchaser, and Purchaser hereby accepts, all of
Seller’s right, title, and interest worldwide in and to the Patent Assets, including without
limitation, all rights of Seller under the Assignment Agreements. For avoidance of doubt,
without limiting Sections 3.2 and 3.5 below, Purchaser is not assuming any of the rights and
obligations of Seller under the Current License Agreements. For clarification, upon the sale,
assignment, transfer and conveyance by Seller under this Section 3.1, pursuant to Section 3.2
and notwithstanding Exhibit B, Seller continues to hold rights sufficient, but not greater
than necessary, to enable Seller to maintain its obligations with respect to the Maintained
Licenses (as defined below). Concurrently with the execution of this Agreement, Seller shall
deliver to Purchaser a fully executed Patent Assignment, which Seller acknowledges Purchaser
shall file with the U.S. Patent and Trademark Office and other patent offices in foreign
countries if desired by Purchaser. For purposes of this Agreement, “Maintained Licenses”
means those licenses granted from Seller to the third party licensees specified in
Schedule 3.2 (the “Third Party Licensees”) limited to the scope and limitations
(including territory, rights granted and excluded, field of use and duration) expressly
granted in the specified provisions of the Current License Agreements listed in Schedule
3.2 and in force immediately prior to the Effective Date, in each case limited to the
extent that Seller had the authority to and did grant such licenses.

	3.2	 	Third Party License Rights Maintained. Effective upon the sale, assignment, transfer
and conveyance by Seller of the Patent Assets under this Section 3.2, subject to Sections 3.4
and 3.5 below, Purchaser hereby irrevocably grants to Seller, and Seller hereby accepts, a
license under the Patent Assets (the “Grantback License”), which rights will automatically and
immediately as of the Effective Date (without the need for any action by any other party) be
sublicensed to the Third Party Licensees pursuant to the terms of the Maintained Licenses.
The rights granted to Seller under the Grantback License are of a limited scope that is
sufficient, but not greater than necessary, to enable Seller to maintain its licensing
obligations under the Maintained Licenses. The Grantback License is non-terminable except to
the extent specified in Section 3.4 below. For the avoidance of doubt, the rights granted to
the Third Party Licensees under the Maintained Licenses, include but are not limited to the
right of Novartis (but no other licensee) to grant sublicenses. For the avoidance of doubt,
without limiting the rights of Seller to grant sublicenses to the Third Party Licenses as set
forth above, no rights are granted to Seller under the Grantback License to, and Seller shall
not, itself make, use or sell any products or services under the Patent Assets, enforce or
seek to enforce any rights in the Patent Assets (except as set forth in Section 3.5 below),
collect royalties (except as set forth in Section 3.5 below) or grant any other licenses to
any third party thereunder.

 

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	3.3	 	Liabilities. Purchaser shall not assume, or in any way be liable or responsible for,
and Seller shall retain, any debts, contracts, agreements, commitments, obligations or
liabilities of any type or nature, known or unknown, contingent or otherwise
(“Liabilities”) that have arisen or accrued at any time prior to the Effective Date with
regard to the Patent Assets, including without limitation the Current License Agreements
(the “Excluded Liabilities”). Purchaser shall be solely responsible for all Liabilities
that arise or accrue at any time after the Effective Date with regard to the Patent Assets,
except for the Excluded Liabilities and breach of this Agreement by Seller.

	3.4	 	Reversion Upon License Termination. To the extent a license grant under the Patent
Assets as stated in any of the Current License Agreements expires or is terminated, all such
expired or terminated rights under the Patent Assets hereby automatically are transferred to
Purchaser without the need for any other action by any party. Seller shall advise Purchaser
promptly in writing of any termination of any license grant under the Patent Assets stated in
the Current License Agreements.

	3.5	 	Enforcement Actions Under Novartis License. For the avoidance of doubt,
notwithstanding anything to the contrary herein, subject to only those rights expressly
granted to Novartis Consumer Health, Inc. (“Novartis”) under Sections 6.4 and 6.6 of the
Supply and License Agreement of January 1, 2004 between Seller and Novartis (the “Supply and
License Agreement”), Purchaser retains all rights to enforce the Patents, and Seller shall
have no such rights (except to the extent that such rights are sublicensed by Seller to
Novartis, consistent with Section 3.2 hereof, solely for Novartis’ exclusive field of use as
expressly set forth in the Supply and License Agreement). Without limiting the foregoing,
Purchaser agrees to cooperate with Seller and Novartis to the extent reasonably necessary for
Novartis to enjoy the rights and benefits expressly granted to it under the Supply and License
Agreement with respect to the maintenance and enforcement of the Patents, including without
limitation asserting claims against an infringer and/or appearing at Seller’s request in any
enforcement action required under the express terms of the Supply and License Agreement.
Notwithstanding anything to the contrary herein (including in Exhibit B hereto), Seller shall
be entitled to collect and retain royalties from Novartis in respect of the license granted to
Novartis under the Supply and License Agreement of January 1, 2004. In the event that,
pursuant to the terms of Section 6.4 of the Supply and License Agreement, Novartis has the
right to, and does, require Seller to commence a legal action against any third party
infringer of the Patent Assets and to assume the costs of such action, then Seller shall
reimburse Purchaser for such costs and expenses actually incurred by Purchaser in its
cooperation, provided that such reimbursement amount shall not exceed the total of such
royalties collected by Seller from Novartis since the Effective Date of this Purchase
Agreement.

	3.6	 	Payment of Fees. If, and to the extent, required under the Supply and License
Agreement, Purchaser shall timely pay any maintenance fees and annuities that become due after
the Effective Date on any Patents which, at the time such maintenance fees and annuities are
due, are licensed to Novartis in the Supply and License Agreement, and Purchaser shall
otherwise use its commercially reasonable efforts to assist Seller in preventing abandonment
of such Patents. If Purchaser elects not to maintain any of such Patents, it shall promptly
notify Seller of that election. Upon such election, Seller shall have the right, but not the
obligation, to pay any such maintenance fees and annuities.

 

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	3.7	 	Execution of Consent Agreements. Purchaser agrees to execute acknowledgements in the
form set forth in Exhibit C. Purchaser shall deliver such executed acknowledgements to Seller
simultaneously with its execution of this Agreement and acknowledges that Seller cannot sign
this Agreement until such acknowledgements are delivered.

	4.	 	Indemnification

	4.1	 	Seller’s Duty to Indemnify. Seller shall indemnify, defend and hold harmless
Purchaser and its officers, directors, employees, and agents (the “Purchaser Indemnitees”),
from and against all claims, liabilities, damages, losses, costs and expenses (including
reasonable attorneys’ fees and expenses) arising out of third party claims relating to (a)
Seller’s breach of this Agreement (including without limitation any breach of the
representation and warranties set forth in Section 6 hereof) and (b) the Excluded Liabilities,
provided that Seller is notified in writing promptly after any Purchaser Indemnitee receives
notice of such a claim (provided, further, that any delay in giving such notice shall not
affect Seller’s obligations hereunder unless Seller has been materially prejudiced by such
delay).

	5.	 	Additional Obligations of Seller

	5.1	 	Further Cooperation. At the reasonable request and expense of Purchaser, Seller
shall:

	 	(a)	 	execute and deliver any instruments, and do and perform any other acts and
things, as may be reasonably necessary for effecting completely the consummation of the
transactions contemplated hereby including, without limitation, (i) Purchaser’s defense
and enforcement of the Patents and (ii) the execution, acknowledgment, perfection, and
recordation of any papers;

	 	(b)	 	use commercially reasonable best efforts to obtain the same from the respective
inventors, as reasonably necessary for fully perfecting and conveying unto Purchaser
the benefit of the transactions contemplated hereby (including Purchaser’s defense and
enforcement of the Patents);

	 	(c)	 	in furtherance of this Section 5.1, Seller hereby agrees, if necessary under
the applicable law to be legally joined as a party in any suit, action or proceeding
that is contemplated by this Section 5.1, and Purchaser shall reimburse Seller for
Seller’s reasonable costs and expenses incurred in connection therewith; and

	 	(d)	 	promptly deliver to Purchaser and/or shall cause its counsel to deliver to
Purchaser a copy of all prosecution history files, including without limitation all
correspondence with patent offices, relating to the Patents, and all memoranda,
opinions, analyses and other documentation relating to the preparation, filing,
prosecution and maintenance of the Patents, and authorize its patent counsel to
cooperate with Purchaser with respect to the Patents.

 

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	5.2	 	Payment of Fees. Seller shall pay any maintenance fees, annuities, and the like that
become due on the Patents prior to the Effective Date, and shall otherwise use its
commercially reasonable efforts to assist Purchaser in preventing abandonment of the
Patents. As between Purchaser and Seller, Seller, and Seller only, is solely responsible
for any payments or other compensation, required by law or otherwise, which may become
payable to the inventor(s) of the Patents as a result of consummation of the transaction
contemplated by this Agreement or otherwise.

	6.	 	Representations and Warranties

Seller represents, warrants and covenants, as of the Effective Date and subject to any
disclosures in Schedule 6.4, that:

	6.1	 	Authority. Seller has the full right and authority to enter into this Agreement,
including the Patent Assignment, and to carry out its obligations hereunder, and covenants
that Seller will not enter into any agreements that would interfere with these obligations,
and Seller has made no assignments or agreements that could prevent, delay, or interfere with
the sale of the Patent Assets to Purchaser.

	6.2	 	Title and Contest. Except as provided in the Current License Agreements, (a) Seller
is the sole and exclusive legal and beneficial owner of all rights, title, and interest
worldwide in and to the Patent Assets, and Seller has received no written notice or claim
challenging Seller’s complete and exclusive ownership of any of the Patent Assets or
suggesting that any Person has any claim of legal or beneficial ownership with respect
thereto; (b) Seller has the exclusive, unrestricted right to sue for past, present, and future
infringement of the Patents; (c) the Patent Assets are free and clear of any and all liens,
mortgages, security interests, or other encumbrances or imperfections of title, and
restrictions on transfer; and (d) there are no actions, suits, investigations, claims, or
proceedings pending, in progress, or threatened, relating in any way to the Patent Assets.

	6.3	 	No Existing Agreements or Licenses. Except for the Current License Agreements,
Seller has not licensed, granted any options with respect to, or otherwise encumbered
(including by granting any covenant not to sue or security interest) or placed limitations on
any Patent Asset, and there are no existing contracts, agreements, licenses, leases, options,
commitments or rights with, to, or in any person to acquire any of the Patent Assets or any
interest therein or to grant any right or license therein or thereunder.

	6.4	 	Restrictions on Rights. Except as set forth in Schedules 1.3 and 6.4, Seller is not
subject to any covenant not to sue or similar restrictions on its enforcement or enjoyment of
the Patents as a result of any action taken or not taken by Seller or any prior owner of any
of the Patents or any part thereof.

	6.5	 	Conduct. In connection with the prosecution of any Patent, Seller and its
representatives (and any prior owner of any of the Patents), have not engaged in any conduct,
or omitted to perform any necessary act, the result of which would invalidate any of the
Patents, including, without limitation, failing to disclose material prior art.

	6.6	 	Enforcement. Except for the matters with regard to which the Current License
Agreements were entered into and as set forth in Schedule 6.4, Seller: (a) has not put a
third party on notice of actual or potential infringement of any of the Patents; (b) has not
considered enforcement action(s) with respect to any of the Patents; and (c) has no
knowledge that any third party is actually infringing any of the Patents.

 

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	6.7	 	Patent Office Proceedings. With the exception of the reexaminations set forth in
Exhibit A, none of the Patents have been or are currently involved in any reexamination,
reissue, interference proceeding, or similar proceeding, and Seller has no knowledge that such
proceedings are pending or threatened.

	6.8	 	Fees. All maintenance fees and annuities due on or before the Effective Date on the
Patents have been timely paid.

	6.9	 	Consents. Seller has obtained all third party consents, approvals, and/or other
authorizations required to sell and assign to Purchaser the Patent Assets.

	6.10	 	Validity and Enforceability. (a) None of the Patents has ever been found invalid,
unenforceable, or misused for any reason in any administrative, arbitration, judicial, or
other similar proceeding; (b) except as provided in the Current License Agreements, no third
party has any joint ownership interest in any of the Patents; and (c) all of the Assignment
Agreements have been duly recorded in the appropriate jurisdictions. To the knowledge of
Seller, the Patents are valid and enforceable without any qualification, limitation or
restriction on their use, and Seller is unaware of any evidence that reasonably could be
expected to cause the Patents to be found unenforceable or invalid which have not been
disclosed to Purchaser. For the purpose of this Section 6.10, the “knowledge of Seller” means
the knowledge of Greg Freitag, CEO of Seller, or William Johnson, Controller of Seller.

	6.11	 	Schedules are Complete. Seller represents and warrants to Purchaser that each of the
following is accurate and complete in all material respects: Schedules 1.1 (Assignment
Agreements), 1.3 (Current License Agreements), 1.6 (List of Prosecution Counsel) and 6.4
(Disclosures).

	6.12	 	EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 6, THE PATENT ASSETS ARE SOLD “AS IS,” AND ANY
AND ALL WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, ARE HEREBY EXPRESSLY DISCLAIMED,
INCLUDING WARRANTIES RELATED TO MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, VALIDITY,
SCOPE, NON-INFRINGEMENT OR NON-MISAPPROPRIATION OF ANY INTELLECTUAL PROPERTY RIGHT.

	7.	 	Amendment of Settlement Agreement

	7.1	 	Amendment. Seller and Purchaser hereby amend the Settlement Agreement by deleting
Sections 3.1 and 4.1(a) from the Settlement Agreement in their entirety. Seller and Purchaser
agree that this Section 7.1 constitutes an amendment of the Settlement Agreement in accordance
with Section 8.3 of the Settlement Agreement. Except as expressly amended in this Section
7.1, all terms set forth in the Settlement Agreement shall continue in full force and effect.

 

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	8.	 	Miscellaneous

	8.1	 	Purchaser’s Limitation of Liability. EXCEPT FOR FRAUD, PURCHASER’S AGGREGATE
LIABILITY ARISING OUT OF ANY AND ALL KINDS OF LEGAL CLAIMS (WHETHER IN CONTRACT, TORT OR
OTHERWISE) RELATING IN ANY WAY TO THIS AGREEMENT SHALL BE THE PAYMENT OF FUNDS AS REQUIRED
PURSUANT TO SECTION 2.1.

	8.2	 	Seller’s Limitation of Liability. EXCEPT FOR FRAUD AND EXCEPT FOR SELLER’S
INDEMNIFICATION OBLIGATIONS UNDER SECTION 4.1, AND EXCEPT FOR COMPENSATION, REQUIRED BY LAW OR
OTHERWISE, WHICH MAY BECOME PAYABLE TO THE INVENTOR(S) OF THE PATENTS, SELLER’S AGGREGATE
LIABILITY ARISING OUT OF ANY AND ALL KINDS OF LEGAL CLAIMS (WHETHER IN CONTRACT, TORT OR
OTHERWISE) RELATING IN ANY WAY TO THIS AGREEMENT SHALL NOT EXCEED THE CONSIDERATION RECEIVED
PURSUANT TO SECTION 2.1.

	8.3	 	Limitation of Damages. EXCEPT FOR FRAUD AND EXCEPT FOR SELLER’S INDEMNIFICATION
OBLIGATIONS UNDER SECTION 4.1, AND EXCEPT FOR COMPENSATION, REQUIRED BY LAW OR OTHERWISE,
WHICH MAY BECOME PAYABLE TO THE INVENTOR(S) OF THE PATENTS, IN NO EVENT SHALL EITHER PARTY OR
ANY OTHER PERSON HAVE ANY LIABILITY FOR SPECIAL, EXEMPLARY, INCIDENTAL, MULTIPLE, INDIRECT OR
CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, LOST PROFITS OR REVENUES, LOSS OF USE OR
CLAIMS OF THIRD PARTIES), ARISING OUT OF OR IN ANY MANNER IN CONNECTION WITH THIS AGREEMENT,
THE PERFORMANCE OR BREACH HEREOF, THE SUBJECT MATTER HEREOF OR THE PARTIES’ OR ANY OTHER
PERSON’S OR ENTITY’S USE OF, OR INABILITY TO USE, THE PATENTS, REGARDLESS OF THE FORM OF
ACTION (INCLUDING, WITHOUT LIMITATION, NEGLIGENCE OR STRICT LIABILITY), WHETHER OR NOT THE
OTHER PARTY HAS BEEN ADVISED OF, OR OTHERWISE MIGHT HAVE ANTICIPATED THE POSSIBILITY OF, SUCH
DAMAGES.

	8.4	 	Essential Element. SECTIONS 8.1 THROUGH 8.3 ALLOCATE THE RISKS BETWEEN THE PARTIES,
ARE REFLECTED IN THE ECONOMIC TERMS OF THIS AGREEMENT, ARE AN ESSENTIAL ELEMENT OF THE BARGAIN
BETWEEN THE PARTIES AND WILL BE EFFECTIVE NOTWITHSTANDING THE FAILURE OF PURPOSE OF ANY
ESSENTIAL AND/OR OTHER REMEDY HEREIN.

	8.5	 	Compliance with Laws. Notwithstanding anything contained in this Agreement to the
contrary, the obligations of the Parties shall be subject to all laws, present and future, of
any government having jurisdiction over the Parties and this transaction, and to orders,
regulations, directions, or requests of any such government, including, without limitation,
any applicable export controls provisions.

 

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	8.6	 	Confidentiality of Terms. The Parties shall keep confidential and will not now or
hereafter divulge any Confidential Information to any third party, except as necessary to
consummate this Agreement, or:

	 	(a)	 	with the prior written consent of the other Party; or

	 	(b)	 	in confidence to legal and financial advisors in their capacity of advising a
Party; or

	 	(c)	 	as may be required by law or legal process (e.g., litigation or securities
laws), (i) so long as the disclosing Party uses reasonable efforts to provide that such
disclosure of Confidential Information is restricted at least in the same manner, and
to the same degree, as is the disclosure of confidential information of other parties
involved, and (ii) provided that:

	 	(A)	 	the disclosing Party provides the other Party with at least ten
(10) days prior written notice of such disclosure requirement, if reasonably
possible, and assists the other Party in its efforts to maintain the
confidentiality of such Confidential Information; and

	 	(B)	 	the disclosing Party first uses all legitimate and legal means
available to minimize the disclosure of Confidential Information to third
parties, including without limitation, seeking a protective order whenever
appropriate or available.

Neither Party will be liable for the disclosure of any Confidential Information that is
rightfully in the public domain, other than by a breach of this Agreement by the disclosing
Party or its employees or former employees.

Subject to the foregoing exceptions for disclosure of Confidential Information: (a) Seller
will not divulge any information that may be used or construed to undermine the validity of
any of the Patents. Notwithstanding the foregoing provisions of this Section 7.6, nothing
in this Agreement restricts or limits Purchaser’s ability to disclose and provide any
evidence that it is the owner of all right, title, and interest in the Patents and the fact
that Purchaser acquired the Patents from Seller. Nothing in this confidentiality provision
limits the applicability of any confidentiality obligations imposed under any other
agreement in effect between the Parties to this Agreement, each of which remains in full
force and effect.

	8.7	 	Governing Law. The validity and interpretation of this Agreement and the legal
relations of the Parties will be governed exclusively by the internal laws, and not the law of
conflicts, of the Commonwealth of Pennsylvania. The Parties agree to the non-exclusive
jurisdiction of any state or federal court located in the Commonwealth of Pennsylvania with
respect to any action or dispute arising under or relating to this Agreement, and waives
personal service of any and all process upon it, and consents that all services of process be
made by registered mail, directed to it at its address as set forth in Section 7.9, and
service so made shall be deemed to be completed when received. The Parties waive any objection
based on forum non-conveniens and waive any objection to venue of any
action instituted hereunder. Nothing in this Section 7.7 shall affect the right of any
Party to serve legal process in any other manner permitted by law.

 

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	8.8	 	Entire Agreement and Miscellaneous Terms. The terms and conditions of this
Agreement, including, without limitation, its exhibits and schedules, constitutes the entire
agreement between the Parties with respect to the subject matter hereof, and, except where
explicitly stated otherwise, merges and supersedes all prior and contemporaneous agreements,
understandings, negotiations and discussions. Neither of the Parties shall be bound by any
conditions, definitions, warranties, understandings, or representations with respect to the
subject matter of this Agreement other than as expressly provided herein. The waiver by a
Party of a breach of any provision set forth herein or of any right contained herein will not
operate as or be construed as a continuing waiver or a wavier of any subsequent breach or
right granted herein The section headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
No oral explanation or oral information by either Party hereto shall alter the meaning or
interpretation of this Agreement. No purported amendments or modifications to this Agreement
shall be effective unless in a writing signed by an authorized representative of each Party.
These terms and conditions will prevail notwithstanding any different, conflicting, or
additional terms and conditions which may appear on any purchase order, acknowledgment, or
other writing not expressly incorporated into this Agreement. This Agreement may be executed
in two (2) or more counterparts, all of which, taken together, shall be regarded as one and
the same instrument.

	8.9	 	Notices. All notices and other communications required or permitted to be given
hereunder must be in writing, make reference to this Agreement, and be delivered by hand,
facsimile or dispatched by prepaid air courier or by registered or certified mail, postage
prepaid, addressed as follows:

	 	 	 
	If to Seller	 	If to Purchaser
	LecTec Corporation

	 	Endo Pharmaceuticals, Inc.
	Attention: Gregory Freitag

	 	Attention: Guy Donatiello
	1407 S. Kings Highway

	 	100 Endo Boulevard
	Texarkana, TX 75501

	 	Chadds Ford, PA 19317
	Fax: 763-559-7593

	 	Fax: 484-840-4269

Such notices will be deemed served when received by addressee or, if delivery is not
accomplished by reason of some fault of the addressee, when tendered for delivery. Either
Party may give written notice of a change of address and, after notice of the change has
been received, any notice or request must thereafter be given to that Party at that changed
address.

	8.10	 	Relationship of Parties. The Parties hereto are independent contractors. Neither
Party has any express or implied right or authority to assume or create any obligations on
behalf of the other or to bind the other to any contract, agreement or undertaking with any
third party. Nothing in this Agreement shall be construed to create a partnership, joint
venture, employment, or agency relationship between Seller and Purchaser.

 

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	8.11	 	Severability. The terms and conditions stated herein are declared to be severable.
If any paragraph, provision, or clause in this Agreement is found or held to be invalid or
unenforceable in any jurisdiction in which this Agreement is being performed, the remainder of
this Agreement will remain valid and enforceable and the Parties shall use good faith to
negotiate a substitute, valid and enforceable provision which most nearly effects the Parties’
intent in entering into this Agreement.

	8.12	 	Waiver. Failure by either Party to enforce any term of this Agreement shall not be
deemed a waiver of future enforcement of that or any other term in this Agreement or of any
other agreement that may be in place between the Parties.

	8.13	 	Assignment. The terms and conditions of this Agreement shall inure to the benefit of
Purchaser, its successors, assigns and other legal representatives, and are binding upon
Seller, its successor, assigns, and other legal representatives, provided that Seller may not
delegate any duties under this Agreement. Purchaser may assign or transfer its rights under
this Agreement to any third party without the consent of Seller. Seller may not assign or
transfer its rights under this Agreement to any third party without the written consent of
Purchaser, except with respect to a merger of Seller with a third party or the sale of
substantially all of Seller’s assets to a third party. Any assignment or transfer of Seller’s
rights under this Agreement in contravention of this Section 7.13 shall be null and void.

[Remainder of Page Left Intentionally Blank; Signature Page to Follow on Next Page]

 

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IN WITNESS WHEREOF, the Parties have caused this Patent Purchase Agreement to be duly executed
on the dates below written.

	 	 	 	 	 	 	 	 	 	 	 
	LecTec Corporation

A Minnesota corporation (“Seller”)	 	 	 	Endo Pharmaceuticals Inc.

A Delaware corporation (“Purchaser”)	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Gregory G. Freitag
 

	 	 	 	By:
	 	/s/ David P. Holveck
 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Gregory G. Freitag	 	 	 	David P. Holveck	 	 
	 	 	 	 	 	 	 
	Printed Name	 	 	 	Printed Name	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Chief Executive Officer	 	 	 	President and Chief Executive Officer	 	 
	 	 	 	 	 	 	 
	Title	 	 	 	Title	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	May 9, 2011	 	 	 	May 6, 2011	 	 
	 	 	 	 	 	 	 
	Date	 	 	 	Date	 	 

 

 

 

LIST OF EXHIBITS AND SCHEDULES

	 	 	 
	Exhibit A

	 	Purchased Patents and Patent Applications
	 
	 	 
	Exhibit B

	 	Assignment of Patent Rights
	 
	 	 
	Exhibit C

	 	Acknowledgements
	 
	 	 
	Schedule 1.1

	 	Assignment Agreements
	 
	 	 
	Schedule 1.3

	 	Current License Agreements
	 
	 	 
	Schedule 1.6

	 	List of Prosecution Counsel
	 
	 	 
	Schedule 3.2

	 	Maintained Licenses
	 
	 	 
	Schedule 6.4

	 	Disclosures

 

 

 

Exhibit A

Purchased Patents and Patent Applications

US Patent No. 5,536,263

US Patent No. 5,741,510

US Patent No. 6,096,333

US Patent No. 6,096,334

US Patent No. 6,361,790

Reexamination Certificate corresponding to Reexamination Request No. 90/005,877 issued on April 4,
2007 for US Patent No. 5,536,263

Reexamination Certificate corresponding to Reexamination Request No. 90/005,878 issued on April 30,
2002 for US Patent No. 5,741,510

Austria: AT 269744

Australia: AU 676623

Canada: CA 2133598

Germany: DE 69433859

European Patent Office: EP 0674913

Spain: ES 2224102

Finland: FI 950465

Japan: JP 7265353

Norway: NO 951217

 

A-1

 

Exhibit B

Assignment of Patent Rights

Whereas, LecTec Corporation, a Minnesota corporation, with an office at 1407 S. Kings Highway,
Texarkana, TX (hereinafter “COMPANY”) is the sole and exclusive owner of certain United States
and/or foreign patents and/or patent applications listed in Exhibit A annexed hereto (collectively
referred to as the “Patents”); and

Whereas Endo Pharmaceuticals, a Delaware corporation, with an office at Endo Boulevard, Chadds
Ford, PA 19137 (hereinafter “ENDO”) is desirous of acquiring the right, title and interest in, to
and under the said Patents (and all foreign counterparts and related foreign patents).

Now, Therefore,

For good and valuable consideration, the receipt of which is hereby acknowledged, COMPANY does
hereby sell, assign, transfer and set over to ENDO the Patents aforesaid, including (i) all of the
patents and patent applications listed on Schedule 1 hereto, (ii) all continuation,
continuations-in-part and divisionals of such patents and patent applications, and any United
States patents resulting from any reissue or reexamination of such patents and patent applications,
(iii) all United States and foreign patents and patent applications claiming common priority to any
of the patents or patent applications set forth in clauses (i) and (ii) above (whether claiming
priority from such patents and patent applications or forming the basis of priority for such
patents and patent applications), (iv) any foreign counterparts to any of the patents and patent
applications set forth in clauses (i), (ii) and (iii) above, (iv) all past, present and future
claims, causes of actions and other rights against third parties relating to infringement of any of
the foregoing patents and patent applications, and (v) all rights of COMPANY to license and collect
royalties with respect to any of the foregoing patents and patent applications.

And, COMPANY, hereby authorizes and requests the Commissioner of the United States Patents and
Trademark Office to issue any and all Letters Patents of the United States on said inventions to
ENDO as assignee of the entire interest, and hereby covenants that COMPANY has full right to convey
the entire interest herein assigned, and that, except as otherwise provided between the Parties,
COMPANY has not executed, and will not execute, any agreements in conflict therewith.

 

B-1

 

In Witness Whereof, COMPANY, by its duly authorized representative, has executed this
Assignment of Patent Rights.

	 	 	 	 	 	 	 
	DATE:                     , 2011

	 	By:	 	 	 	 
	 

	 	 	 	 

Printed/Typed Name
	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Signature	 	 

 

B-2

 

Schedule 1

Schedule to Assignment of Patent Rights

US Patent No. 5,536,263

US Patent No. 5,741,510

US Patent No. 6,096,333

US Patent No. 6,096,334

US Patent No. 6,361,790

Reexamination Certificate corresponding to Reexamination Request No. 90/005,877 issued on April 4,
2007 for US Patent No. 5,536,263

Reexamination Certificate corresponding to Reexamination Request No. 90/005,878 issued on April 30,
2002 for US Patent No. 5,741,510

Austria: AT 269744

Australia: AU 676623

Canada: CA 2133598

Germany: DE 69433859

European Patent Office: EP 0674913

Spain: ES 2224102

Finland: FI 950465

Japan: JP 7265353

Norway: NO 951217

 

B-3

 

EXHIBIT C

ACKNOWLEDGEMENTS

[ENDO LETTERHEAD]

May 6, 2011

Chattem, Inc.

1715 W. 38th Street

Chattanooga, Tennessee 37409

	 	 	 	 	 
	 

	 	Re:
	 	Confidential Settlement Agreement and Mutual Release between Chattem,
Inc. and LecTec Corporation effective as of March 23, 2011

To Whom It May Concern:

I write on behalf of Endo Pharmaceuticals (“Endo”) with reference to the Patent Purchase Agreement
dated May 6, 2011 between Endo and LecTec Corporation (“LecTec”) and Endo’s purchase pursuant to
that agreement of certain patents and patent applications owned by LecTec (the “Purchased LecTec
Patents”). By this letter, Endo confirms its agreement that, with respect to the Purchased LecTec
Patents, Endo will be bound by the “Covenant Not to Sue” and “License Grant” as expressly set forth
in Sections 4 and 5, respectfully, of the Confidential Settlement Agreement and Mutual Release
between LecTec and Chattem, Inc. (“Chattem”) effective as of March 23, 2011, in each case solely to
the extent of the rights relating to the Purchased LecTec Patents that LecTec had the authority to
and did grant to Chattem under those provisions.

	 	 	 
	 

	 	Sincerely,

 

C-1

 

[ENDO LETTERHEAD]

May 6, 2011

Johnson and Johnson Consumer Companies, Inc.

199 Grandview Road

Skillman, New Jersey 08558

	 	 	 	 	 
	 

	 	Re:
	 	Confidential Settlement Agreement and Mutual Release between Johnson and
Johnson and Johnson Consumer Companies, Inc. and LecTec Corporation effective as
of December 18, 2009

To Whom It May Concern:

I write on behalf of Endo Pharmaceuticals (“Endo”) with reference to the Patent Purchase Agreement
dated May 6, 2011 between Endo and LecTec Corporation (“LecTec”) and Endo’s purchase pursuant to
that agreement of certain patents and patent applications owned by LecTec (the “Purchased LecTec
Patents”). By this letter, Endo confirms its agreement that, with respect to the Purchased LecTec
Patents, Endo will be bound by the “License Grant” as expressly set forth in Section 4 of the
Confidential Settlement Agreement and Mutual Release between LecTec and Johnson and Johnson
Consumer Companies, Inc. (“JJCC”) effective as of December 18, 2009, solely to the extent of the
rights relating to the Purchased LecTec Patents that LecTec had the authority to and did grant to
JJCC under those provisions.

	 	 	 
	 

	 	Sincerely,

 

C-2

 

[ENDO LETTERHEAD]

May 6, 2011

The Mentholatum Company

707 Sterling Drive

Orchard Park, New York 14127

	 	 	 	 	 
	 

	 	Re:
	 	Settlement Agreement and Mutual Release between The Mentholatum Company
and LecTec Corporation effective as of May 29, 2009

To Whom It May Concern:

I write on behalf of Endo Pharmaceuticals (“Endo”) with reference to the Patent Purchase Agreement
dated May 6, 2011 between Endo and LecTec Corporation (“LecTec”) and Endo’s purchase pursuant to
that agreement of certain patents and patent applications owned by LecTec (the “Purchased LecTec
Patents”). By this letter, Endo confirms its agreement that, with respect to the Purchased LecTec
Patents, Endo will be bound by the “Covenant Not to Sue” as expressly set forth in Section 4 of the
Settlement Agreement and Mutual Release between LecTec and The Mentholatum Company (“Mentholatum”)
effective as of May 29, 2009, solely to the extent of the rights relating to the Purchased LecTec
Patents that LecTec had the authority to and did grant to Mentholatum under those provisions.

	 	 	 
	 

	 	Sincerely,

 

C-3

 

[ENDO LETTERHEAD]

May 6, 2011

Prince of Peace Enterprises, Inc.

3536 Arden Road

Hayward, California 94545

	 	 	 	 	 
	 

	 	Re:
	 	Settlement Agreement and Mutual Release among LecTec Corporation, Prince of
Peace Enterprises, Inc., Haw Par Corporation Limited, Haw Par Healthcare Ltd.

To Whom It May Concern:

I write on behalf of Endo Pharmaceuticals (“Endo”) with reference to the Patent Purchase Agreement
dated May 6, 2011 between Endo and LecTec Corporation (“LecTec”) and Endo’s purchase pursuant to
that agreement of certain patents and patent applications owned by LecTec (the “Purchased LecTec
Patents”). By this letter, Endo confirms its agreement that, with respect to the Purchased LecTec
Patents, Endo will be bound by the “License Grant” as expressly set forth in Section 4 of the
Settlement Agreement and Mutual Release among LecTec, Prince of Peace Enterprises, Inc., Haw Par
Corporation Limited and Haw Par Healthcare Ltd. (collectively, the “Released Parties”), effective
as of April 25, 2011, solely to the extent of the rights relating to the Purchased LecTec Patents
that LecTec had the authority to and did grant to the Released Parties under those provisions.

	 	 	 
	 

	 	Sincerely,

 

C-4

 

[ENDO LETTERHEAD]

May 6, 2011

Haw Par Corporation Limited

Haw Par Healthcare Ltd.

401 Commonwealth Drive

No. 03-03 Haw Par. Technocentre, Singapore

	 	 	 	 	 
	 

	 	Re:
	 	Settlement Agreement and Mutual Release among LecTec Corporation, Prince of
Peace Enterprises, Inc., Haw Par Corporation Limited, Haw Par Healthcare
Ltd.

To Whom It May Concern:

I write on behalf of Endo Pharmaceuticals (“Endo”) with reference to the Patent Purchase Agreement
dated May 6, 2011 between Endo and LecTec Corporation (“LecTec”) and Endo’s purchase pursuant to
that agreement of certain patents and patent applications owned by LecTec (the “Purchased LecTec
Patents”). By this letter, Endo confirms its agreement that, with respect to the Purchased LecTec
Patents, Endo will be bound by the “License Grant” as expressly set forth in Section 4 of the
Settlement Agreement and Mutual Release among LecTec, Prince of Peace Enterprises, Inc., Haw Par
Corporation Limited and Haw Par Healthcare Ltd. (collectively, the “Released Parties”), effective
as of April 25, 2011, solely to the extent of the rights relating to the Purchased LecTec Patents
that LecTec had the authority to and did grant to the Released Parties under those provisions.

	 	 	 
	 

	 	Sincerely,

 

C-5

 

[ENDO LETTERHEAD]

May 6, 2011

Novartis Consumer Health, Inc.

200 Kimball Drive

Parsippany, NJ 07054-0622

	 	 	 	 	 
	 

	 	Re:
	 	Supply and License Agreement between Novartis Consumer Health, Inc. and LecTec
Corporation dated January 1, 2004

To Whom It My Concern:

In connection with its purchase of the Purchased LecTec Patents (defined below), Endo
Pharmaceuticals (“Endo”) hereby acknowledges and agrees that pursuant to the Patent Purchase
Agreement by which it is purchasing the Purchased LecTec Patents, Endo grants to LecTec Corporation
(“LecTec”) a license under the Purchased LecTec Patents of a scope and duration sufficient for
LecTec to continue to grant to Novartis Consumer Health, Inc. (“Novartis”) the license granted
pursuant to Section 6.2.3 of the Supply And License Agreement between Novartis and LecTec dated
January 1, 2004 (“Supply And License Agreement”). Endo acknowledges that Novartis has exercised
its option pursuant to Section 1.2 of the Supply and License Agreement to include adult cough/cold
category under the License granted to Novartis under Section 6.2.3 of the Supply and License
Agreement. In addition to granting such license to LecTec, Endo also has agreed in the Patent
Purchase Agreement to provide reasonable cooperation to LecTec to enable compliance with Novartis’
rights with respect to the maintenance and enforcement of the Purchased LecTec Patents as expressly
set forth in the Supply And License Agreement. For the avoidance of doubt, LecTec is retaining the
Supply and License Agreement, and other than the agreements of Endo acknowledged above, Endo is not
taking an assignment of the Supply and License Agreement or assuming any obligations of LecTec
under that agreement.

For purposes of this Acknowledgement, the “Purchased LecTec Patents” mean: (a) U.S. Patent No.
5,536,263; U.S. Patent No. 5,741,510; U.S. Patent No. 6,096,333; U.S. Patent No. 6,096,334; and
U.S. Patent No. 6,361,790; (b) all continuation, continuations-in-part and divisionals of such
patents and patent applications, and any United States patents resulting from any reissue or
reexamination of such patents and patent applications; (c) all United States and foreign patents
and patent applications claiming common priority to any of the patents or patent applications set
forth in clauses (a) and (b) above (whether claiming priority from such patents and patent
applications or forming the basis of priority for such patents and patent applications); and (d)
any foreign counterparts to any of the patents and patent applications set forth in clauses (a),
(b) and (c) above.

Endo agrees that LecTec may provide a copy of this Acknowledgement to Novartis.

ACKNOWLEDGED
AND AGREED

ENDO PHARMACEUTICALS

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	Name:
	 	 	 	 
	 

	 	 

	 	 
	Title:
	 	 	 	 
	 

	 	 

	 	 
	Date:
	 	 	 	 
	 

	 	 

	 	 

 

C-6

 

SCHEDULE 1.1

Assignment Agreements

	1.	 	Assignment from David Rolf and Elisabeth K. Sjoblom Urmann executed on March 30, 1994.

	2.	 	Assignment from David Rolf and Elisabeth K. Sjoblom Urmann, executed on March 21, 1996
and March 26, 1996, respectively.

 

S-1.1

 

SCHEDULE 1.3

Current License Agreements

	1.	 	Novartis Consumer Health, Inc. Supply and License Agreement dated January 1, 2004
	 
	2.	 	Mentholatum Company Settlement Agreement dated May 29, 2009
	 
	3.	 	Endo Settlement and License Agreement dated November 11, 2009
	 
	4.	 	Johnson & Johnson Settlement Agreement dated December 18, 2009
	 
	5.	 	Chattem, Inc. Settlement Agreement dated March 23, 2011
	 
	6.	 	Prince of Peace Enterprises, Inc. Settlement Agreement dated April 25, 2011
	 
	7.	 	Hisamitsu and Seller Letter of Understanding dated August 20, 2010.

 

S-1.3

 

SCHEDULE 1.6

List of Prosecution Counsel

	1.	 	Rader, Fishman & Grauer PLLC

39533 Woodward Ave.,

Suite 140

Bloomfield Hills, Michigan 48304
	 
	2.	 	Schwegman, Lundberg & Woessner, P.A.

1600 TCF Tower

121 South Eighth Street

Minneapolis, MN 55402-2815

 

S-1.6

 

SCHEDULE 3.2

Maintained Licenses

	1.	 	The license granted under Section 6.2.3 (as extended under Section 1.2) of the Novartis
Consumer Health, Inc. Supply and License Agreement dated January 1, 2004

	2.	 	The license granted under Sections 4.1, 4.1(a) and 4.3 (to the extent that Section 4.3
relates to the license granted in Section 4.1) of the Johnson & Johnson Settlement Agreement
dated December 18, 2009

	3.	 	The license granted under Section 5 of the Chattem, Inc. Settlement Agreement dated March 23,
2011

	4.	 	The license granted under Sections 4.1, 4.1(a) and 4.3 (to the extent that Section 4.3
relates to the license granted in Section 4.1) of the Prince of Peace Enterprises, Inc.
Settlement Agreement dated April 25, 2011

 

S-3.2

 

SCHEDULE 6.4

Disclosures

	1.	 	Hisamitsu Letter to Seller dated August 20, 2010.

	2.	 	Hisamitsu and Seller Letter of Understanding dated August 20, 2010.

 

S-6.4exv10w1

Exhibit 10.1

Lavonia
D. Johnson

Assistant Vice President

Commercial Banking

April 30, 2011

(“Effective Date”)

Sterling Chemicals, Inc.

333 Clay Street, Suite 3600

Houston, Texas 77002-4109

	 	 	 

	RE:

	 	$5,000,000.00 Revolving Line of Credit for letters of credit from JPMORGAN CHASE BANK, N.A.
(“Chase”) to Sterling Chemicals, Inc.
(“Borrower ”)

Gentlemen:

Chase is pleased to advise approval of a revolving line of credit in the amount of $5,000,000.00
(“Line of Credit”) for issuance of commercial and standby letters of credit, subject to the
terms and conditions stated herein (as the same may be amended, renewed, extended, supplemented or
restated from time to time, this “Agreement”). This agreement continues, amends and
restates the letter agreement dated January 31, 2010 (including any prior amendments and
restatements, the “Prior Agreement ”).

NOW THEREFORE, in consideration of the above stated premises, Borrower and Chase agree as follows:

TERMS AND CONDITIONS

SECTION 1 — THE DISCRETIONARY LINE OF CREDIT

Section 1.1
Line of Credit for Letters of Credit (“Line of Credit”): Prior
to April 30, 2012 (“Termination Date ”), Chase will issue letters of credit (“LCs”)
for the account of Borrower and in favor of such person or persons as may be designated by
Borrower, in each case subject to the Continuing Agreement for Standby Letters of Credit between
Borrower and Chase executed in connection herewith (as the same may be amended, supplemented,
restated and otherwise rearranged, “LC Agreement ”) on Chase’s then standard form of
application thereunder for the type of LC requested (each an “Application ”). Each LC shall
be in form and in favor of beneficiaries acceptable to Chase in Chase’s sole discretion, and shall
have an expiration date of no later than April 30, 2015, unless Chase agrees otherwise in its sole
discretion. “LC Obligations” shall mean the face amount of all LCs issued and outstanding
plus any unreimbursed drawings under the LCs plus any other amounts owing to Chase under or in
respect of any LC or Application. The maximum outstanding amount of LC Obligations shall not exceed
$5,000,000.00 (“Maximum Amount”) at any time.

Section 1.2
Terms and Fees: Unless quoted otherwise by Chase at the time of
application for any LC, Borrower shall pay an annual fee of one percent per annum of face
amount, plus an issuance fee of $500.00, for each standby and commercial LC.

Section 1.3
Collateral; Loan Documents: The Line of Credit and all obligations in
respect of issuance of LCs (including without limitation all ”Obligations” as defined in
the LC Agreement) shall be secured, in addition to any security provided for in the LC Agreement,
by a cash collateral deposit with Chase of not less than $5,000,000.00 provided for in the
Assignment of Deposit Account (as the same may be amended, supplemented, restated and otherwise
rearranged, “Assignment”) dated January 31, 2010, executed and delivered b y Borrower in
favor of Chase in connection with the Prior Agreement. The Assignment, LC Agreement, Applications,
LCs, this Agreement and each other written document, instrument, agreement related to the Line of
Credit (together with any and all renewals, extensions, modifications, supplements, amendments and
replacements thereof) that may be required to be executed and delivered on behalf of Borrower to
Chase shall hereinafter be called the “Loan Documents.” Chase shall be entitled to require
each of the Loan Documents be executed in form and substance acceptable to Chase (“Proper
Form ”) in accordance with Chase’s regular practices.

Section 1.4 Existing LCs. All letters of credit issued by Chase currently
outstanding for the account of Borrower, together with all letters of credit issued by
Chase for the account of Borrower at any time this Agreement is in force, shall be LCs subject to
this Agreement unless the parties agree otherwise in writing. The parties acknowledge that in
connection with the execution and delivery of this agreement, certain LCs issued for the account of
Borrower under a syndicated credit facility will be replaced with LCs issued under the Line of
Credit and subject to the terms and limitations of this Agreement.

SECTION 2 — CONDITIONS PRECEDENT

Section 2.1 Conditions Precedent: Prior to issuance of additional LCs for under the
Line of Credit, Borrower shall have executed and/or delivered, in Proper Form, the
following documents: (i) each of the Loan Documents other than the Applications; (ii) for each LC,
an Application, presented in advance of the proposed issuance date in accordance with Chase’s usual
practices; and (iii) any other document, instrument, certificate or instrument that Chase may
reasonably require to consider the request including but not limited to organizational and
authority documents of Borrower.

SECTION 3 — REPRESENTATION AND WARRANTIES

To induce Chase to enter into this Agreement and to issue LCs, Borrower represents and warrants
that on the date hereof, on the date of each Application for and issuance of any LC, and at all
times during the term of this Agreement:

JPMorgan Chase Bank, N.A. • P.O. Box 2558, Houston, Texas 77252-2558

Member FDIC • Equal Housing Lender

 

 

	 	 	 	 	 

	Letter Agreement

	 	Sterling Chemicals, Inc.
	 	April 30, 2011

Section 3.1 Organization, Due Execution, and Enforceability: Borrower is and
shall remain duly organized, validly existing and in good standing under the laws of the
state of Delaware and other states that it is necessary and/or desirous to do so, has the authority
to do its business in the state of Texas, and the execution of the Loan Documents by Borrower has
been duly authorized and does not contravene the articles of incorporation or by-laws of Borrower,
and will not result in the breach of, or constitute a default under any agreement, judgment, order
or decree binding upon Borrower, and the Loan Documents executed by Borrower are legally binding
obligations of Borrower, enforceable in accordance with their respective terms, except as may be
limited by bankruptcy, insolvency and other similar laws;

Section 3.2 Accurate Information: The information in the financial statements
and other information provided, or to be provided to Chase by Borrower, are true, correct
and accurate as of the date provided and shall be true and correct on the date that any LC is
requested to be issued;

Section 3.3 No Defaults: No Event of Default (as defined hereinafter) or
default exists under this Agreement or under any of the other Loan Documents and no default
exists under any other agreement material to the financial condition of Borrower or is continuing;

Section 3.4 No Litigation, etc.: Borrower is not subject to any agreement,
contract, order, judgment, or litigation which could materially and adversely affect its
respective financial condition, business affairs or operations;

Section 3.5 Payment of Taxes: Borrower has paid all its taxes due and owing
including without limitation employment taxes, except for those for which extensions have
been obtained and those being contested in good faith and for which adequate reserves have been
established;

Section 3.6 Compliance, Governmental Requirements, Permits and Contracts: Borrower is not subject to any governmental order, any contract or administrative or
judicial order or judgment that could materially and adversely affect its financial condition,
business affairs or operations of its business. Borrower has no material contingent liability with
respect to compliance with laws, rules and regulations applicable to Borrower; and

Section 3.7 Regulation U: None of the proceeds of any credit provided for herein
shall be used for the purpose of purchasing or carrying directly or indirectly, any margin
stock or for any other purpose which would make any credit provided by Chase to Borrower hereunder
a purpose credit within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System.

SECTION 4 — COVENANTS

Borrower covenants and agrees that so long as any LC is outstanding or any amounts are owing
under the other Loan Documents Borrower shall:

Section 4.1 Financial Information Statements: (a) Within 120 days after
Borrower’s fiscal year end, Borrower shall provide to Chase Borrower’s financial statements
prepared in accordance with GAAP and audited with an unqualified opinion by an accounting firm of
national standing. (b) Within 45 days after each fiscal quarter end, Borrower shall provide to
Chase Borrower’s financial statements prepared in accordance with GAAP. Borrower shall also provide
such other financial and business information concerning Borrower as Chase shall request from time
to time.

Section 4.2 Representation and Warranties: Borrower shall ensure that each of the
representations and warranties of Borrower contained herein shall be true and correct when
given and when deemed given hereunder and notify Chase immediately should any representation or
warranty become untrue or misleading;

Section 4.4 Notification of Corporate and Other Changes: Borrower shall
notify Chase in writing at least 30 days prior to any date that Borrower changes its name
or the location of its principal place of business or the location of its books and records, and
give Chase prompt notice if Borrower becomes a party to any merger or consolidation, or if there is
a change or modification to its business or legal structure; and

Section 4.5 Compliance: Borrower shall at all times comply with applicable
laws, rules, regulations, ordinances and Executive Orders.

SECTION 5 — EVENTS OF DEFAULT AND REMEDIES

Section 5.1 Defaults and Remedies. If any of Event of Default shall occur, then Chase may
do any or all of the following: (1) declare the LC Obligations to be, and thereupon the
balance thereof shall forthwith become, immediately due and payable, together with all accrued and
unpaid interest thereon and all fees and all other obligations and indebtedness of Borrower under
the Loan Documents, without notice of acceleration or of intention to accelerate, presentment and
demand or protest, all of which are hereby expressly waived; (2) without notice to Borrower,
terminate the Line of Credit and refuse to issue LCs; (3) set off, in any order, against the
indebtedness of Borrower under the Loan Documents, against the Account covered by the Assignment;
and (4) exercise any and all other rights pursuant to the Loan Documents, at law, in equity or
otherwise. “Event of Default “ shall mean the occurrence of any of (a) any “Even t of
Default” as defined in the LC Agreement, (b) any event described in section 6 (c) of the LC
Agreement, (c) any representation or warranty made in connection with any Loan Document having been
incorrect, false or misleading; and (d) Borrower having concealed, removed, or permitted to be
concealed or removed, any part of its property, with intent to hinder, delay or defraud its
creditors or any of them, or made or suffered a transfer of any of its property which may be
fraudulent under any bankruptcy, fraudulent conveyance or similar law; or shall have made any
transfer of its property to or for the benefit of a creditor at a time when other creditors
similarly situated have not been paid.

SECTION 6 — MISCELLANEOUS

Section 6.1 Amendments and Waivers: No failure to exercise and no delay on the part
of either party in exercising any power or right in connection herewith or under any of the
Loan Documents shall operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any other power or right.
No course of dealing between Borrower and Chase shall operate as a waiver of any provision of this
Agreement or any other Loan Document nor any consent to any departure therefrom shall in any event
be effective unless the same shall be in writing and signed by the person against whom enforcement
thereof is to be sought, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given.

Page 2 of 3 Pages

 

	 	 	 	 	 

	Letter Agreement

	 	Sterling Chemicals, Inc.
	 	April 30, 2011

Section 6.2 Expenses: Any provision to the contrary notwithstanding, and
whether or not the transactions contemplated by this Agreement shall be consummated,
Borrower agrees to pay on demand all out-of-pocket expenses (including, without limitation, the
fees and expenses of counsel for Chase) in connection with the negotiation, preparation, execution,
filing, recording, modification, supplementing and waiver of the Loan Documents and the making,
servicing and collection of any of the indebtedness evidenced by the Loan Documents. The
obligations of Borrower under this and the following section shall survive the termination of this
Agreement.

Section 6.3 Usury: Borrower and Chase intend to conform strictly to applicable
usury laws. Therefore, the total amount of interest (as defined under applicable law)
contracted for, charged or collected under this Agreement or any other Loan Document will never
exceed the Highest Lawful Rate. If Chase contracts for, charges or receives any excess interest, it
will be deemed a mistake. Chase will automatically reform the Loan Document or charge to conform to
applicable law, and if excess interest has been received, Chase will either refund the excess to
Borrower or credit the excess on any unpaid principal amount of the relevant Loan Document. All
amounts constituting interest will be spread throughout the full term of the relevant Loan Document
in determining whether interest exceeds lawful amounts. “Highest Lawful Rate” means the
maximum nonusurious rate of interest from time to time permitted by applicable law.

Section 6.4 Survival: All representations, warranties, covenants and agreements
made by or on behalf of Borrower in connection with the Loan Documents shall survive the
execution and delivery of the Loan Documents; shall not be affected by any investigation made by
Chase, and shall bind Borrower and successors, trustees, receivers and assigns of Borrower and
inure to the benefit of the successors and assigns of Chase; provided that the undertaking
of Chase hereunder to issue LCs upon the application of Borrower shall not inure to the benefit of
any successor or assign of Borrower. Except as otherwise provided herein, the term of this
Agreement shall be until the later of final expiry of all LCs and the full and final payment of all
amounts due under the Loan Documents.

Section 6.5 Documentary Matters: This Agreement may be executed in several
identical counterparts, and by the parties hereto on separate counterparts, and each
counterpart, when so executed and delivered, shall constitute an original instrument, and all such
separate counterparts shall constitute but one and the same instrument. The headings and captions
appearing in the Loan Documents have been included solely for convenience and shall not be
considered in construing the Loan Documents. The Loan Documents embody the entire agreement between
Borrower and Chase and supersede all prior proposals, agreements and understandings. If any
provision of any Loan Document shall be invalid, illegal or unenforceable in any respect under any
applicable law, the validity, legality and enforceability of the remaining provisions shall not be
affected or impaired thereby.

Section 6.6 Governing Law: THIS AGREEMENT SHALL BE CONSTRUED AND GOVERNED IN ACCORDANCE
WITH THE
LAWS OF THE STATE OF NEW YORK AND AS APPLICABLE THE LAWS OF THE UNITED STATES OF AMERICA.

JURY WAIVER. BORROWER AND THE BANK HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY
WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED ON CONTRACT,
TORT, OR OTHERWISE) BETWEEN BORROWER AND THE BANK ARISING OUT OF OR IN ANY WAY RELATED TO THIS
AGREEMENT. THIS PROVISION IS A MATERIAL INDUCEMENT TO THE BANK TO PROVIDE THE FINANCING DESCRIBED
HEREIN.

Section 6.7 WAIVER OF SPECIAL DAMAGES. EACH PARTY WAIVES, TO THE MAXIMUM EXTENT NOT
PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER FROM THE OTHER PARTY IN ANY
LEGAL ACTION OR PROCEEDING ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES.

IN WITNESS WHEREOF, the duly authorized officers of the undersigned have entered into and executed
and delivered this Agreement effective as of the first date above written.

	 	 	 	 	 
	 	Sincerely yours,

JPMORGAN CHASE BANK, N.A.

 	 
	 	By:  	/s/
L. JOHNSON	 
	 	 	Name:  	Lavonia
D. Johnson 	 
	 	 	Title:  	Assistant
Vice President 	 
	 
	 	Accepted and agreed:

STERLING CHEMICALS, INC.

 	 
	 	By:  	/s/ JOHN V. GENOVA 	 
	 	 	Name:  	John V. Genova 	 
	 	 	Title:  	President, Chief Executive Officer and Director 	 
	 

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