Document:

EX-10.1

 Exhibit 10.1 
  

 
  

INVESTMENT AGREEMENT 
 dated as of
May 1, 2017 
 by and among 

Roadrunner Transportation Systems, Inc., 

Elliott Associates, L.P. 
 and

 Brockdale Investments LP 
  

 
  

 Table of Contents 

 

							
	 	 	 	  	Page	 
	ARTICLE I	 
	
	PURCHASE; CLOSING	 
			
	 Section 1.1
	 	 Purchase
	  	 	1	 
	 Section 1.2
	 	 Closing
	  	 	2	 
	 Section 1.3
	 	 Closing Conditions
	  	 	2	 
	
	ARTICLE II	 
	
	REPRESENTATIONS AND WARRANTIES OF THE COMPANY	 
			
	 Section 2.1
	 	 Organization and Authority
	  	 	4	 
	 Section 2.2
	 	 Capitalization
	  	 	4	 
	 Section 2.3
	 	 Authorization
	  	 	6	 
	 Section 2.4
	 	 Sale and Status of Securities
	  	 	7	 
	 Section 2.5
	 	 SEC Documents; Financial Statements
	  	 	7	 
	 Section 2.6
	 	 Undisclosed Liabilities
	  	 	8	 
	 Section 2.7
	 	 Brokers and Finders
	  	 	8	 
	 Section 2.8
	 	 Litigation
	  	 	8	 
	 Section 2.9
	 	 Taxes
	  	 	9	 
	 Section 2.10
	 	 Permits and Licenses
	  	 	9	 
	 Section 2.11
	 	 Environmental Matters
	  	 	10	 
	 Section 2.12
	 	 Title
	  	 	10	 
	 Section 2.13
	 	 Intellectual Property
	  	 	10	 
	 Section 2.14
	 	 Employee Benefits/Labor
	  	 	10	 
	 Section 2.15
	 	 Intentionally Omitted
	  	 	12	 
	 Section 2.16
	 	 Registration Rights
	  	 	12	 
	 Section 2.17
	 	 Compliance with Laws
	  	 	12	 
	 Section 2.18
	 	 Absence of Changes
	  	 	12	 
	 Section 2.19
	 	 Anti-Corruption
	  	 	12	 
	 Section 2.20
	 	 Trade Controls
	  	 	13	 
	 Section 2.21
	 	 Listing and Maintenance Requirements
	  	 	13	 
	 Section 2.22
	 	 Material Contracts
	  	 	13	 
	 Section 2.23
	 	 Insurance
	  	 	14	 
	 Section 2.24
	 	 No Additional Representations
	  	 	14	 
	
	ARTICLE III	 
	
	REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS	 
			
	 Section 3.1
	 	 Organization and Authority
	  	 	15	 
	 Section 3.2
	 	 Authorization
	  	 	15	 
	 Section 3.3
	 	 Purchase for Investment
	  	 	16	 
	 Section 3.4
	 	 Financial Capability
	  	 	16	 
	 Section 3.5
	 	 Brokers and Finders
	  	 	16	 

  
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	ARTICLE IV	 
	
	COVENANTS	 
			
	 Section 4.1
	 	 Filings; Other Actions
	  	 	16	 
	 Section 4.2
	 	 Reasonable Best Efforts to Close
	  	 	17	 
	 Section 4.3
	 	 Confidentiality
	  	 	17	 
	 Section 4.4
	 	 State Securities Laws
	  	 	18	 
	 Section 4.5
	 	 Interim Operating Covenants
	  	 	18	 
	 Section 4.6
	 	 Non-Solicitation
	  	 	19	 
	 Section 4.7
	 	 Tax Matters
	  	 	20	 
	 Section 4.8
	 	 Use of Proceeds
	  	 	20	 
	 Section 4.9
	 	 New ABL Facility; Daily Payment
	  	 	20	 
	 Section 4.10
	 	 Board and Committee Appointments
	  	 	21	 
	
	ARTICLE V	 
	
	MISCELLANEOUS	 
			
	 Section 5.1
	 	 Survival
	  	 	21	 
	 Section 5.2
	 	 Expenses
	  	 	21	 
	 Section 5.3
	 	 Amendment; Waiver
	  	 	22	 
	 Section 5.4
	 	 Counterparts; Electronic Transmission
	  	 	22	 
	 Section 5.5
	 	 Governing Law
	  	 	22	 
	 Section 5.6
	 	 WAIVER OF JURY TRIAL
	  	 	22	 
	 Section 5.7
	 	 Notices
	  	 	22	 
	 Section 5.8
	 	 Entire Agreement
	  	 	23	 
	 Section 5.9
	 	 Assignment
	  	 	23	 
	 Section 5.10
	 	 Interpretation; Other Definitions
	  	 	24	 
	 Section 5.11
	 	 Captions
	  	 	32	 
	 Section 5.12
	 	 Severability
	  	 	32	 
	 Section 5.13
	 	 No Third Party Beneficiaries
	  	 	32	 
	 Section 5.14
	 	 Public Announcements
	  	 	32	 
	 Section 5.15
	 	 Specific Performance
	  	 	32	 
	 Section 5.16
	 	 Termination
	  	 	32	 
	 Section 5.17
	 	 Effects of Termination
	  	 	33	 
	 Section 5.18
	 	 Non-Recourse
	  	 	33	 
	 Section 5.19
	 	 Disclosure Letter
	  	 	34	 

  

	
	 Exhibit A: Form of Series B Certificate of Designations

	 Exhibit B: Form of Series C Certificate of Designations

	 Exhibit C: Form of Series D Certificate of Designations

	 Exhibit D: Form of Series E Certificate of Designations

	 Exhibit E: Form of Series F Certificate of Designations

	 Exhibit F: Form of Warrant Agreement

	 Exhibit G: Form of Stockholders’ Agreement

	 Exhibit H: Form of Registration Rights Agreement

	
	 Schedule A: Purchaser Allocations

  
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 INVESTMENT AGREEMENT, dated as of May 1, 2017 (this “Agreement”), by and
among Roadrunner Transportation Systems, Inc., a Delaware corporation (the “Company”), Elliott Associates, L.P., a Delaware limited partnership, and Brockdale Investments LP, a Delaware limited partnership (each a
“Purchaser,” and collectively, the “Purchasers”). 
 RECITALS: 

WHEREAS, on or prior to the date hereof, the Company has adopted and filed with the Secretary of State of the State of Delaware Certificates
of Designations, Preferences and Rights in respect of each of the Company’s Series B Cumulative Redeemable Preferred Stock, Series C Cumulative Redeemable Participating Preferred Stock, Series D Cumulative Redeemable
Participating Preferred Stock, Series E Cumulative Redeemable Preferred Stock and Series F Cumulative Redeemable Preferred Stock in the forms attached hereto as Exhibit A, Exhibit B,
Exhibit C, Exhibit D and Exhibit E, respectively (collectively, the “Certificate of Designations”), in order to create a series of preferred stock, par value $0.01 per
share, designated as Series B Cumulative Redeemable Preferred Stock (the “Series B Preferred Stock”), a series of preferred stock, par value $0.01 per share, designated as Series C Cumulative Redeemable
Participating Preferred Stock (the “Series C Preferred Stock”), a series of preferred stock, par value $0.01 per share, designated as Series D Cumulative Redeemable Participating Preferred Stock (the
“Series D Preferred Stock”), a series of preferred stock, par value $0.01 per share, designated as Series E Cumulative Redeemable Preferred Stock (the “Series E Preferred
Stock”) and a series of preferred stock, par value $0.01 per share, designated as Series F Cumulative Redeemable Preferred Stock (the “Series F Preferred Stock” and, together with the Series B
Preferred Stock, the Series C Preferred Stock, the Series D Preferred Stock and the Series E Preferred Stock, the “Preferred Stock”); 

WHEREAS, the Company proposes to issue and sell to the Purchasers (or to their assignees pursuant to Section 5.9),
in accordance with the percentages set forth on Schedule A, shares of Series B Preferred Stock, shares of Series C Preferred Stock, shares of Series D Preferred Stock, shares of Series E Preferred Stock
and shares of Series F Preferred Stock, subject to the terms and conditions set forth in this Agreement; 
 WHEREAS, in order to induce the
Purchasers to enter into this Agreement, the Company has agreed to issue to the Purchasers (or to their assignees pursuant to Section 5.9) in accordance with the percentages set forth on Schedule A
certain warrants (the “Warrants”) to purchase shares of common stock, par value $0.01 per share, of the Company (“Common Stock”) at the Closing pursuant to the Warrant Agreement in the form attached as Exhibit
F (the “Warrant Agreement”); and 
 WHEREAS, capitalized terms used in this Agreement have the meanings set forth in
Section 5.10. 
 NOW, THEREFORE, in consideration of the premises, and of the representations, warranties,
covenants and agreements set forth herein, the parties agree as follows: 
 ARTICLE I 

PURCHASE; CLOSING 

Section 1.1    Purchase. On the terms and subject to the conditions herein, on the Closing Date,
(i) the Company agrees to sell and issue to the Purchasers (or their assignees), and the Purchasers agree to purchase (or to cause their assignees to purchase) from the Company in accordance with the percentages set forth on
Schedule A, (v) 155,000 shares of Series B Preferred Stock (the “Series B Purchased Shares”) at a purchase price of $1,000.00 per share, (w) 55,000 shares of
Series C Preferred Stock (the “Series C  

 
Purchased Shares”) at a purchase price of $1,000.00 per share, (x) 100 shares of Series D Preferred Stock (the “Series D Purchased
Shares”) at a purchase price of $1.00 per share, (y) 90,000 shares of Series E Preferred Stock (the “Series E Purchased Shares”) at a purchase price of $1,000.00 per share, and
(z) 240,500 shares of Series F Preferred Stock (together with the Series B Purchased Shares, the Series C Purchased Shares, the Series D Purchased Shares and the Series E Purchased Shares, the “Purchased
Shares”) at a purchase price of $1,000.00 per share, in each case free and clear of any Liens (other than restrictions arising under the Certificate of Incorporation (as defined below), restrictions arising under applicable securities Laws
and restrictions set forth in the Stockholders’ Agreement) and (ii) the Company agrees to issue to the Purchasers (or their assignees) in accordance with the percentages set forth on Schedule A the number
of Warrants set forth in the Warrant Agreement, free and clear of any Liens (other than restrictions arising under applicable securities Laws and the Warrant Agreement). 

Section 1.2    Closing. 

(a)    Subject to the satisfaction or waiver of the conditions set forth in this Agreement, the closing of the purchase by
the Purchasers of the Purchased Shares and the issuance to the Purchasers of the Warrants pursuant to this Agreement (the “Closing”) shall take place remotely via the electronic exchange of documents and signatures at 12:01 a.m. New
York time on May 2, 2017, subject to the satisfaction or waiver of the conditions set forth in Section 1.3 (other than those conditions that by their nature are to be satisfied by actions taken at the Closing, but
subject to their satisfaction) or at such other date, time and place as the Company and the Purchasers agree (the “Closing Date”). 

(b)    Subject to the satisfaction or waiver at or prior to the Closing of the applicable conditions to the Closing in
Section 1.3, at the Closing: 
 (1)    the Company will deliver to each
Purchaser (i) certificates representing the Purchased Shares purchased by such Purchaser, (ii) the Warrant Certificates (as defined in the Warrant Agreement) representing the Warrants issued to such Purchaser,
(iii) each of the Stockholders’ Agreement, the Registration Rights Agreement, and the Warrant Agreement, executed by the Company and (iv) all other documents, instruments and writings required to be delivered by the
Company to such Purchaser pursuant to this Agreement; and 
 (2)    each Purchaser will deliver or cause
to be delivered (i) to one or more bank accounts designated by the Company in writing at least two (2) business days prior to the Closing Date, such Purchaser’s share of the Purchase Price (as determined in accordance with the
percentages set forth on Schedule A) by wire transfer of immediately available funds, (ii) each of the Stockholders’ Agreement, Registration Rights Agreement and Warrant Agreement, executed by such
Purchaser and (iii) all other documents, instruments and writings required to be delivered by such Purchaser to the Company pursuant to this Agreement. 

Section 1.3    Closing Conditions. 

(a)    The obligation of the Purchasers, on the one hand, and the Company, on the other hand, to effect the Closing is
subject to the satisfaction or waiver by the Purchasers and the Company at or prior to the Closing of the following condition: no temporary restraining order, preliminary or permanent injunction or other judgment or order issued by any Governmental
Entity, and no Law shall be in effect restraining, enjoining, making illegal or otherwise prohibiting the consummation of the transactions contemplated by this Agreement. 

(b)    The obligation of the Purchasers to effect the Closing is also subject to the satisfaction by the Company or waiver
by the Purchasers at or prior to the Closing of the following conditions: 

  
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 (1)    subject to the limitations set forth in
Section 5.2, substantially contemporaneous with the Closing, the Company shall have reimbursed the Purchasers for the costs, expenses and fees described in Section 5.2 to the extent incurred prior
to the Closing; 
 (2)    (i) the representations and warranties of the Company set forth in
Article II hereof (other than Sections 2.1, 2.2, 2.3(a), 2.4, 2.7 , 2.9(e) and 2.21) shall be true and correct (disregarding all qualifications or limitations as to
materiality or Company Material Adverse Effect) as of the date of this Agreement and as of the Closing Date as though made on and as of such date (except to the extent that any such representation or warranty speaks to an earlier date, in which case
such representation or warranty shall be true and correct as of such earlier date), except where the failure of such representations and warranties to be so true and correct would not, individually or in the aggregate, have a Company Material
Adverse Effect, and (ii) the representations and warranties of the Company set forth in Sections 2.1, 2.2, 2.3(a), 2.4, 2.7, 2.9(e) and 2.21 shall be true and correct in all but de
minimis respects as of the date of this Agreement and as of the Closing Date as though made on and as of such date (except to the extent that any such representation or warranty speaks to an earlier date, in which case such representation
or warranty shall be true and correct as of such earlier date); 
 (3)    the Company shall have
performed in all material respects all obligations required to be performed by it pursuant to this Agreement prior to the Closing; 

(4)    each Purchaser shall have received a certificate signed on behalf of the Company by a duly
authorized senior executive officer of the Company, certifying to the effect that the conditions set forth in Sections 1.3(b)(2) and (3) have been satisfied; 

(5)    the Purchasers shall have received a copy of a payoff letter or other evidence, reasonably
satisfactory to them, that upon payment of the amounts reflected therein, the amounts outstanding under the Existing Credit Facility shall have been repaid and all obligations thereunder satisfied and discharged; and 

(6)    HCI Equity Management, L.P. and its affiliates shall have agreed, in form and substance satisfactory
to the Purchasers, to terminate its advisory agreement with the Company and waive all unpaid fees thereunder. 

(c)    The obligation of the Company to effect the Closing is also subject to the satisfaction by the Purchasers or waiver
by the Company prior to the Closing of the following conditions: 
 (1)    the representations and
warranties of the Purchasers set forth in Article III hereof shall be true and correct as of the date of this Agreement and as of the Closing Date as though made on and as of such date (except to the extent that any such representation or
warranty speaks of an earlier date, in which case such representation or warranty shall be true and correct as of such date), except where the failure of such representations and warranties to be so true and correct would not, individually or in the
aggregate, reasonably be expected to prevent or materially delay the consummation of the transactions contemplated by this Agreement or the ability of the Purchasers to fully perform their covenants and obligations under this Agreement; 

(2)    the Purchasers shall have performed in all material respects all obligations required to be
performed by them pursuant to this Agreement prior to the Closing; and 

  
 3 

 (3)    the Company shall have received a certificate signed
on behalf of each Purchaser by a duly authorized officer of such Purchaser certifying to the effect that the conditions set forth in Section 1.3(c)(1) and (2) have been satisfied. 

ARTICLE II 
 REPRESENTATIONS
AND WARRANTIES OF THE COMPANY 
 Except as expressly disclosed in the SEC Documents publicly available before the date of this Agreement
(but excluding any disclosure set forth in any risk factor section, any disclosures in any section relating to forward-looking statements and any other disclosures included therein to the extent they are predictive or forward-looking in nature) or
as set forth in a correspondingly identified section of a letter provided to the Purchasers by the Company on the date hereof (such letter, collectively, the “Disclosure Letter”), the Company represents and warrants to each
Purchaser, as of the date hereof and as of the Closing Date (except to the extent made only as of a specified date, in which case as of such date), that: 

Section 2.1    Organization and Authority. 

(a)    The Company is a corporation duly organized and validly existing under the laws of the State of Delaware, has all
requisite corporate power and authority to own its properties and conduct its business as presently conducted, is duly qualified to do business and is in good standing in all jurisdictions where its ownership or leasing of property or the conduct of
its business requires it to be so qualified and where failure to be so qualified would, individually or in the aggregate, have a Company Material Adverse Effect. True and accurate copies of the certificate of incorporation of the Company (the
“Certificate of Incorporation”) and the bylaws of the Company (the “Bylaws”), each as in effect as of the date of this Agreement, have been made available to the Purchasers prior to the date hereof. 

(b)    Each Company Subsidiary is duly organized and validly existing under the laws of its jurisdiction of organization,
has all requisite corporate or other applicable entity power and authority to own its properties and conduct its business as presently conducted, is duly qualified to do business and is in good standing in all jurisdictions where its ownership or
leasing of property or the conduct of its business requires it to be so qualified and where failure to be so qualified would, individually or in the aggregate, have a Company Material Adverse Effect. As used herein, “Subsidiary”
means, with respect to any person, any corporation, partnership, joint venture, limited liability company, or other entity (i) of which such person or a subsidiary of such person is a general partner or (ii) of which a
majority of the voting securities or other voting interests, or a majority of the securities or other interests which have by their terms ordinary voting power to elect a majority of the board of directors or persons performing similar functions
with respect to such entity, is directly or indirectly owned by such person and/or one or more subsidiaries thereof; and “Company Subsidiary” means any Subsidiary of the Company. 

Section 2.2    Capitalization. 

(a)    The authorized capital stock of the Company consists of 105,000,000 shares of Common Stock and 15,005,000 shares of
preferred stock, par value $0.01 per share, 5,000 of which shares of preferred stock are designated as Series A Redeemable Preferred Stock, 155,000 of which shares of preferred stock are designated as Series B Preferred Stock, 55,000 of which shares
of preferred stock are designated as Series C Preferred Stock, 100 of which shares of preferred stock are designated as Series D Preferred Stock, 90,000 of which shares of preferred stock are designated as Series E Preferred Stock, and
240,500 of which shares of preferred stock are designated as Series F Preferred Stock. As of the close of business on April 28, 2017 (the “Capitalization Date”), there were 38,340,607 shares of Common Stock

  
 4 

 
issued and outstanding and no shares of preferred stock issued and outstanding. As of the close of business on the Capitalization Date, (i) 1,084,533 shares of Common Stock were reserved
for issuance upon the exercise of stock options outstanding on such date that were granted pursuant to the Company’s 2010 Incentive Compensation Plan (the “2010 Incentive Compensation Plan”), the Company’s Key Employee
Equity Plan and the Group Transportation Services Holdings, Inc. Key Employee Equity Plan (“Company Stock Options”), of which 905,668 were then unvested, (ii) 415,408 shares of Common Stock were reserved for issuance upon the
vesting of restricted stock units outstanding on such date that were granted pursuant to the 2010 Incentive Compensation Plan (“Company RSUs”), (iii) 71,829 shares of Common Stock were reserved for issuance pursuant to vested
Company RSUs, (iv) 361,152 shares of Common Stock were reserved for issuance upon the vesting of performance-based restricted stock units outstanding on such date that were granted pursuant to the 2010 Incentive Compensation Plan
(“Company PRSUs”) (at “target” levels of performance), (v) 1,749,898 shares of Common Stock were available for future awards under the 2010 Incentive Compensation Plan, (vi) 274,362 shares of Common
Stock were reserved for issuance upon the exercise of warrants outstanding on such date that were granted pursuant to the Securities Purchase Agreement, dated December 11, 2009, by and among Roadrunner Transportation Services, Inc., Roadrunner
Transportation Services Holdings, Inc., the “guarantors” named therein and the “purchasers” named therein (“Company Warrants”) and (vii) no shares of Common Stock were held by the Company in its
treasury. All of the issued and outstanding shares of Common Stock have been duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights. From the Capitalization Date through and as of the date of this
Agreement, no other shares of Common Stock or preferred stock have been issued other than shares of Common Stock issued in respect of the exercise of Company Stock Options or in respect of the vesting of Company RSUs or Company PRSUs in the ordinary
course of business. Section 2.2(a) of the Disclosure Letter sets forth as of the Capitalization Date a complete and correct list of all outstanding (w) Company Stock Options, (x) Company RSUs, (y) Company
PSRUs and (z) Company Warrants, the number of shares of Common Stock issuable thereunder or with respect thereto and the exercise price (if any), and the Company has granted no other such awards since the Capitalization Date. The Company
does not have outstanding shareholder purchase rights or a “poison pill” or any similar arrangement in effect. 

(b)    Section 2.2(b) of the Disclosure Letter sets forth the name and jurisdiction of organization of each Company
Subsidiary. All of the issued and outstanding shares of capital stock or other equity interests of each Company Subsidiary (x) have been duly authorized, are validly issued and are fully paid, nonassessable and free of preemptive rights
and (y) are owned by the owners thereof as set out in Section 2.2(b) of the Disclosure Letter free and clear of any Liens. No Company Subsidiary has or is bound by any outstanding subscriptions, options, warrants, calls,
commitments or agreements of any character calling for the purchase or issuance of any shares of capital stock, any other equity security or any Voting Debt (as defined below) of each such Company Subsidiary or any securities representing the right
to purchase or otherwise receive any shares of capital stock, any other equity security or Voting Debt of each such Company Subsidiary. 

(c)    No bonds, debentures, notes or other Indebtedness having the right to vote (or convertible into or exchangeable for
securities having the right to vote) on any matters on which the stockholders of the Company may vote (“Voting Debt”) are issued and outstanding. Except (i) pursuant to any cashless exercise provisions of any Company
Stock Options or Company Warrants or pursuant to the surrender of shares to the Company or the withholding of shares by the Company to cover tax withholding obligations under Company Stock Options, Company RSUs or Company PRSUs, and
(ii) as set forth in Section 2.2(a), the Company does not have and is not bound by any outstanding options, preemptive rights, rights of first offer, warrants, calls, commitments or other rights or agreements calling for the
purchase or issuance of, or securities or rights convertible into, or exchangeable for, any shares of Common Stock or any other equity securities of the Company or Voting Debt or any securities representing the right to

  
 5 

 
purchase or otherwise receive any shares of capital stock of the Company (including any rights plan or agreement). 

Section 2.3    Authorization. 

(a)    The Company has the corporate power and authority to enter into this Agreement and the other Transaction Documents
and to carry out its obligations hereunder and thereunder. The execution, delivery and performance of this Agreement and the other Transaction Documents by the Company and the consummation of the transactions contemplated hereby and thereby have
been duly authorized by the board of directors of the Company (the “Board of Directors”). This Agreement has been, and (as of the Closing) the other Transaction Documents will be, duly and validly executed and delivered by the
Company and, assuming due authorization, execution and delivery by the Purchasers, this Agreement is, and (as of the Closing) each of the other Transaction Documents will be, a valid and binding obligation of the Company enforceable against the
Company in accordance with its terms (except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’
rights or by general equity principles). No other corporate proceedings are necessary for the execution and delivery by the Company of this Agreement or the other Transaction Documents, and no other corporate proceedings (except to the extent set
forth in the other Transaction Documents) are necessary for the performance by the Company of its obligations hereunder or thereunder or the consummation by it of the transactions contemplated hereby or thereby. The total number of directors on the
Board of Directors is ten. 
 (b)    Neither the execution and delivery by the Company of this Agreement or the other
Transaction Documents, nor the consummation of the transactions contemplated hereby or thereby, nor compliance by the Company with any of the provisions hereof or thereof, will (i) violate, conflict with, or result in a breach of any
provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or
acceleration of, or result in the creation of any Lien upon any of the properties or assets of any Company Group Member under any of the terms, conditions or provisions of (x) the Certificate of Incorporation, the Certificate of
Designations, the Bylaws or the certificate of incorporation, charter, articles of association, bylaws or other governing instrument of any Company Subsidiary or (y) except as set forth on Section 2.3(b) of the Disclosure Letter,
any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which any Company Group Member is a party or by which it may be bound, or to which any Company Group Member or any of the properties
or assets of any Company Group Member may be subject, or (ii) violate any law, statute, ordinance, rule, regulation, permit, franchise or any judgment, ruling, order, writ, injunction or decree applicable to any Company Group Member or
any of its respective properties or assets, except in the case of clauses (i)(y) and (ii) for such violations, conflicts and breaches as would not, individually or in the aggregate, have a Company Material Adverse Effect. 

(c)    Other than the securities or blue sky laws of the various states and approval or expiration of applicable waiting
periods under the HSR Act and Other Competition Laws, no notice to, registration, declaration or filing with, exemption or review by, or authorization, order, consent or approval of any Governmental Entity, nor expiration or termination of any
statutory waiting period, is necessary for the consummation by the Company of the transactions contemplated by this Agreement or the other Transaction Documents except as would not, individually or in the aggregate, be materially adverse to the
Company Group, taken as a whole. 
 (d)    As of the Closing, the number of Warrant Shares shall represent 0.99% of the
outstanding shares of Common Stock. 

  
 6 

 Section 2.4    Sale and Status of Securities. 

(a)    Subject to the accuracy of the representations made by the Purchasers in Section 3.3, the
offer, sale and issuance of the Purchased Shares and the Warrants (i) has been and will be made in compliance with applicable exemptions from the registration and prospectus delivery requirements of the Securities Act and
(ii) will have been registered or qualified (or are exempt from registration and qualification) under the registration, permit or qualification requirements of all applicable material blue sky laws. 

(b)    The Purchased Shares to be issued pursuant to this Agreement, and the shares of Common Stock to be issued upon
exercise of the Warrants (the “Warrant Shares”), have been duly authorized by all necessary corporate action. When issued and sold against receipt of the consideration therefor as provided in this Agreement or the Warrant Agreement,
the Purchased Shares and the Warrant Shares will be validly issued, fully paid and nonassessable, will not be subject to preemptive rights of any other stockholder of the Company and will effectively vest in each Purchaser good title to the
Purchased Shares and the Warrant Shares, free and clear of all Liens (other than restrictions arising under the Certificate of Incorporation, restrictions arising under applicable securities Laws and restrictions set forth in the Stockholders’
Agreement). The respective rights, preferences, privileges and restrictions of the Common Stock, the Series B Preferred Stock, the Series C Preferred Stock, the Series D Preferred Stock, the Series E Preferred Stock and the
Series F Preferred Stock are as stated in the Certificate of Incorporation and the Certificate of Designations. 

Section 2.5    SEC Documents; Financial Statements. 

(a)    Except as set forth on Section 2.5 of the Disclosure Letter, the Company has filed all
required reports, proxy statements, forms, and other documents with the Securities and Exchange Commission (the “SEC”) since January 1, 2016 (collectively, the “SEC Documents”). Each of the SEC Documents, as of
its respective date, complied in all material respects with the requirements of the Securities Act and the Exchange Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder applicable to such SEC Documents and, except
as set forth on Section 2.5 of the Disclosure Letter, or to the extent that information contained in any SEC Document has been revised or superseded by a later filed SEC Document filed and publicly available prior to the
date of this Agreement, or except to the extent reflected in (i) the Company Financial Statements or (ii) the Company’s most recent drafts, dated April 10, 2017 and made available to the Purchasers on April 26,
2017, of (A) the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2015 and (B) the Company’s Annual Report on Form
10-K for the year ended December 31, 2016, none of the SEC Documents contained any untrue statement of a material fact or omitted 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. 

(b)    Except as set forth on Section 2.5 of the Disclosure Letter, the Company
(i) has implemented and maintains disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) that are reasonably designed to ensure that material information
relating to the Company Group is made known to the individuals responsible for the preparation of the Company’s filings with the SEC and (ii) has disclosed, based on its most recent evaluation prior to the date of this Agreement, to
the Company’s outside auditors and the Board of Director’s audit committee (A) any significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information and (B) any fraud,
whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting. 

  
 7 

 (c)    There is no transaction, arrangement or other relationship between the
Company and/or any of its Subsidiaries and an unconsolidated or other off-balance sheet entity that is required to be disclosed by the Company in its SEC Documents and is not so disclosed. 

(d)    The Company has delivered to the Purchasers a copy of the Company’s draft unaudited financial statements as of
and for the year ended December 31, 2016 (the “Draft Statements”). The Company subsequently delivered to the Purchasers a revised Consolidated Balance Sheet and a revised Consolidated Statement of Operations, which are included
in Section 2.5 of the Disclosure Letter (the “Updated Statements”). The Draft Statements, as revised by the Updated Statements (as so revised, the “Company Financial Statements”) present
fairly in all material respects the Company’s consolidated financial condition, results of operations and cash flows for the dates or periods indicated thereon; provided, however, that the Consolidated Statements of Stockholders’
Investment, the Consolidated Statements of Cash Flows, and the Notes to Consolidated Financial Statements included in the Draft Statements have not been revised to reflect the Updated Statements. The Company Financial Statements have been prepared
in accordance with U.S. generally accepted accounting principles (“GAAP”) applied in all material respects on a consistent basis throughout the periods indicated; provided, however, that the Consolidated Statements of
Stockholders’ Investment, the Consolidated Statements of Cash Flows, and the Notes to Consolidated Financial Statements included in the Draft Statements have not been revised to reflect the Updated Statements. 

(e)    Purchasers have received a true and correct copy of the cash flow report for the 11 week period ended
April 21, 2017, which has been prepared, consistent with past practice, based upon the books and records of the Company maintained in the ordinary course and used to prepare the financial statements of the Company. 

Section 2.6    Undisclosed Liabilities. Except as set forth on Section 2.6 of the
Disclosure Letter and except for (i) those liabilities that are reflected or reserved for in the Company Financial Statements, (ii) liabilities incurred since December 31, 2016 in the ordinary course of business
consistent with past practice (it being agreed that a violation of Law in any material respect or a material litigation or other adverse proceeding shall not be deemed ordinary course), (iii) liabilities incurred pursuant to the
transactions contemplated by this Agreement and the Transaction Documents and (iv) (x) liabilities that would be required to be included on a balance sheet prepared in accordance with GAAP that would not, individually or in the
aggregate, be materially adverse to the Company Group, taken as a whole, and (y) other liabilities that would not, individually or in the aggregate, have a Company Material Adverse Effect, the Company Group does not have any liabilities
or obligations of any nature whatsoever (whether accrued, absolute, contingent or otherwise). 

Section 2.7    Brokers and Finders. Except for Raymond James & Associates, Inc., the fees and
expenses of which are set forth on Section 2.7 of the Disclosure Letter and will be paid by the Company, no Company Group Member and none of their respective officers, directors, employees or agents has employed any broker
or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees, and no broker or finder has acted directly or indirectly for the Company in connection with this Agreement or the transactions
contemplated hereby. 
 Section 2.8    Litigation. Except as set forth on
Section 2.8 of the Disclosure Letter, there is no action, suit, proceeding or investigation pending or, to the Knowledge of the Company, threatened in writing (including “cease and desist” letters or invitations
to take patent license) against, nor any outstanding judgment, order, writ or decree against, any Company Group Member or any of its respective assets before or by any Governmental Entity which in the aggregate are, or if adversely determined, would
reasonably be expected to be, materially adverse to the Company Group, taken as a whole. Except as would not, individually or in the aggregate, be materially adverse to the Company Group, taken as a 

  
 8 

 
whole, no Company Group Member is in default with respect to any judgment, order or decree of any Governmental Entity. 

Section 2.9    Taxes. 

(a)    Except as would not, individually or in the aggregate, be materially adverse to the Company Group, taken as a whole:

 (1)    Each Company Group Member has duly and timely filed (taking into account applicable extensions)
all Tax Returns required to have been filed, such Tax Returns were accurate in all material respects, and all Taxes due and payable by the Company Group (whether or not shown on any Tax Return) have been timely paid, except for Taxes which are being
contested in good faith and by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP; 

(2)    All Taxes required to be withheld, collected or deposited by or with respect to each Company Group
Member have been timely withheld, collected or deposited as the case may be and, to the extent required, have been paid to the relevant taxing authority except with respect to matters for which adequate reserves have been established in accordance
with GAAP; and 
 (3)    There are no liens or encumbrances for Taxes upon the assets of any Company
Group Member except for statutory liens for current Taxes not yet due or liens for Taxes that are being contested in good faith and by appropriate proceedings and in respect of which adequate reserves have been established in accordance with GAAP.

 (b)    No unresolved material deficiencies for any Tax Returns referred to in
Section 2.9(a)(1) have been proposed or assessed against or with respect to any Company Group Member (and there is no outstanding audit, assessment, dispute or claim concerning any material Tax liability of any Company
Group Member pending or raised) in each case by any taxing authority in writing to any Company Group Member, except with respect to matters for which adequate reserves have been established in accordance with GAAP. 

(c)    No Company Group Member has engaged in, or has any material liability or material obligation with respect to, any
“listed transaction” within the meaning of Treasury Regulations Section 1.6011-4(c). 

(d)    The Company has not been a “distributing corporation” or a “controlled corporation” in any
distribution occurring during the last two (2) years intended to qualify under Section 355 of the Code. 

(e)    Each Company Group Member is not and does not expect to become a “passive foreign investment company”
within the meaning of Section 1297 of the Code. 
 Section 2.10    Permits and Licenses. The members of
the Company Group possess all certificates, authorizations, approvals, licenses and permits issued by each Governmental Entity necessary to conduct their respective businesses as presently conducted (the “Permits”), except where the
failure to possess any such Permits would not, individually or in the aggregate, be materially adverse to the Company Group, taken as a whole. All material Permits are valid and in full force and effect, and no Company Group Member is in default
under, or the subject of a proceeding for suspension, revocation or cancellation of, any of the Permits, except where the failure to possess any such Permits, individually or in the aggregate, would not reasonably be expected to be materially
adverse to the Company Group, taken as a whole. The completion of the transactions contemplated by this Agreement will not result in any 

  
 9 

 
material Permit ceasing to be valid and in full force and effect, nor shall it result in any material Permit becoming liable for revocation, termination or cancellation. 

Section 2.11    Environmental Matters. The Company Group is, and since December 31, 2014 has been, in
compliance with all applicable Environmental Laws, except where failure to be in such compliance would not, individually or in the aggregate, be materially adverse to the Company Group, taken as a whole. Since December 31, 2014, no Company
Group Member has received from any person any written notice alleging that such Company Group Member is not in compliance with, or has material liability under, any Environmental Law, including any investigative, corrective or remedial obligation,
other than any such violation or liability that has been fully and finally resolved and for which there are no additional obligations. There have been no Releases of or exposure to Hazardous Substances at any location that would reasonably be
expected to result in material liability to the Company Group, taken as a whole. 
 Section 2.12    Title.
Each Company Group Member (i) has good and marketable title to its property that is owned real property, (ii) has valid leases to its property that is leased real property and (iii) has good and valid title to or
a valid leaseholder interest in all of its other property, other than negligible assets not material to the operations of any Company Group Member, in each case, except as would not, individually or in the aggregate, have or reasonably be expected
to have a Company Material Adverse Effect. 
 Section 2.13    Intellectual Property. Except as would not,
individually or in the aggregate, be materially adverse to the Company Group, taken as a whole: 
 (a)    the Company
Group exclusively owns, free and clear of all Liens (other than licenses of Intellectual Property and any restriction or covenant associated with any license of Intellectual Property), (i) all Intellectual Property for which
registrations and applications have been filed in their names that are not expired or abandoned, which registrations are subsisting and unexpired, and valid and enforceable, and (ii) all of the other proprietary Intellectual Property
used in the conduct of the business of the Company Group that is not used pursuant to a license; 
 (b)    the Company
Group owns or has a valid right to use all Intellectual Property necessary and sufficient to conduct the business of the Company Group as presently conducted; 

(c)    the conduct of the business of the Company Group does not infringe, dilute, misappropriate or otherwise violate the
Intellectual Property of any third party, and, to the Knowledge of the Company, no person is infringing, diluting, misappropriating or otherwise violating any Intellectual Property owned by any Company Group Member; and 

(d)    neither the Company Group nor any third Person working on behalf of them, has had a breach of security or an
incident of unauthorized access, disclosure, use, corruption, destruction or loss of any data or non-public information that the Company Group (or a third Person on behalf of them) collects, stores, uses,
maintains or transmits. 
 Section 2.14    Employee Benefits/Labor. 

(a)    Except as would not, individually or in the aggregate, have a Company Material Adverse Effect, (i) each
Plan complies with, and has been operated and administered in compliance with, its terms and all applicable Laws (including ERISA and the Code and similar provisions of non-U.S. Law), (ii) the
Company Group has filed all reports, returns, notices, and other documentation required by applicable Law (including ERISA and the Code and similar provisions of non-U.S. Law) to be filed with any

  
 10 

 
Governmental Entity with respect to each Plan, (iii) with respect to any Plan, no actions, Liens, lawsuits, claims or complaints (other than routine claims for benefits, appeals of
such claims and domestic relations order proceedings) are pending or, to the Knowledge of the Company, threatened, and, to the Knowledge of the Company, no facts or circumstances exist that would reasonably be expected to give rise to any such
actions, Liens, lawsuits, claims or complaints, (iv) (x) none of the Plans are presently under audit or examination, nor is a potential audit or examination reasonably anticipated, by the Internal Revenue Service, the
Department of Labor or any other Governmental Entity and (y) no event has occurred with respect to a Plan which would reasonably be expected to result in a liability of any Company Group Member to any Governmental Entity, and
(v) all contributions and premiums required to have been paid by any Company Group Member to any Plan under the terms of any such plan or its related trust, insurance contract or other funding arrangement, or pursuant to any applicable
Law (including ERISA and the Code and similar provisions of non-U.S. Law) have been paid within the time prescribed by any such plan, agreement or applicable Law. 

(b)    No Plan is an unfunded pension plan or other unfunded retirement or termination plan, whether or not subject to
minimum funding standards under applicable Law. No Company Group Member maintains or contributes to, or has in the past sponsored, maintained or contributed to, any pension plan subject to Title IV of ERISA, including a Multiemployer Plan. Except as
would not, individually or in the aggregate, be materially adverse to the Company Group, taken as a whole, no Company Group Member has incurred any unsatisfied liability (including withdrawal liability) in respect of any Multiemployer Plan. Except
as would not, individually or in the aggregate, be materially adverse to the Company Group, taken as a whole, no liability under Title IV or Sections 302, 303 or 304 of ERISA or Sections 412, 430 or 431 of the Code or similar provisions of non-U.S. Law has been incurred by any Company Group Member, and no condition exists that would reasonably be expected to present a risk to any Company Group Member of incurring any such material liability, including
as a consequence of being considered a single employer with any other person under Section 414 of the Code or Title IV of ERISA or a similar provision of non-U.S. Law. 

(c)    Except as would not, individually or in the aggregate, be materially adverse to the Company Group, taken as a
whole, none of the execution of, or the completion of the transactions contemplated by, this Agreement, will result in (i) severance pay or an increase in severance pay upon termination after Closing to any current or former employee of
any Company Group Member, (ii) any payment or benefit becoming due, or increase in the amount of any payment or benefit due, to any current or former employee, director or, except for Raymond James & Associates, Inc.,
independent contractor of any Company Group Member, (iii) acceleration of the time of payment or vesting or result in funding of compensation or benefits to any current or former employee, director or independent contractor of any
Company Group Member, (iv) any new material obligation under any Plan, (v) any limitation or restriction on the right of any Company Group Member to merge, amend, or terminate any Plan, or (vi) any payments which
would not be deductible under Section 280G of the Code or subject to Tax under Section 4999 of the Code. No Plan provides for reimbursement or gross-up of any excise tax under Section 409A or
Section 4999 of the Code. 
 (d)    Except as would not, individually or in the aggregate, be materially adverse to
the Company Group, taken as a whole, no Company Group Member is a party to or is otherwise bound by any collective bargaining agreement or similar agreement, and there are no labor unions or other organizations or groups representing, purporting to
represent or attempting to represent any employees employed by the Company Group Member. Except as would not, individually or in the aggregate, have a Company Material Adverse Effect, (i) no labor strike, slowdown, work stoppage,
picketing, dispute, lockout, concerted refusal to work overtime or other labor controversy is in effect or, to the Knowledge of the Company, threatened in writing with respect to employees of any Company Group Member, and no Company Group Member has
experienced any such labor controversy within the past two (2) years, 

  
 11 

 
(ii) no action, complaint, charge, inquiry, proceeding or investigation by or on behalf of any current or former employee, labor organization (including any union or works council) or
other representative of the employees of any Company Group Member (including persons employed jointly by such entities with any other staffing or other similar entity) is pending or, to the Knowledge of the Company, threatened in writing and
(iii) the Company Group is in compliance with all applicable Laws, agreements, contracts, policies, plans and programs relating to employment, employment practices, compensation, benefits, profit sharing, wage and hours, terms and
conditions of employment and termination of employment, including workplace discrimination, harassment, workers’ compensation, classification of workers (including classification as exempt or non-exempt
or as employees or independent contractors), unlawful retaliation, the provision of meal and rest breaks, withholding of taxes, immigration, employee leave issues, plant closings and mass layoffs, occupational safety and health, fair labor
standards. 
 Section 2.15    Intentionally Omitted. 

Section 2.16    Registration Rights. Except as set forth on Section 2.16 of the
Disclosure Letter and except as provided in the Registration Rights Agreement, the Company has not granted or agreed to grant, and is not under any obligation to provide, any rights to register under the Securities Act any of its presently
outstanding securities or any of its securities that may be issued subsequently. 
 Section 2.17    Compliance
with Laws. Except as set forth on Section 2.17 of the Disclosure Letter and except as would not, individually or in the aggregate, be materially adverse to the Company Group, taken as a whole, no Company Group Member
is, or since December 31, 2014 has been, in violation of any applicable Law. No Company Group Member is being investigated with respect to any applicable Law, except for such of the foregoing as would not, individually or in the aggregate, be
materially adverse to the Company Group, taken as a whole. 
 Section 2.18    Absence of Changes. Since
January 1, 2017, there has not been any action or omission of any Company Group Member that, if such action or omission occurred between the date of this Agreement and the Closing Date, would violate Section 4.5(f) or Section
4.5(h) without the prior written consent of Purchasers. 
 Section 2.19    Anti-Corruption. 

(a)    Each Company Group Member and each of its respective officers, directors, employees, agents, distributors and other
Persons acting for or on behalf of any Company Group Member (collectively, the “Relevant Persons”) have not directly or indirectly violated or taken any act in furtherance of violating any provision of the U.S. Foreign Corrupt
Practices Act of 1977 (as amended), the U.K. Bribery Act 2010 or any other anti-corruption or anti-bribery Laws applicable to any Company Group Member except for such of the foregoing as would not, individually or in the aggregate, be materially
adverse to the Company Group, taken as a whole. 
 (b)    Except as would not, individually or in the aggregate, be
materially adverse to the Company Group, taken as a whole, the Relevant Persons have not directly or indirectly taken any act in furtherance of any payment, gift, bribe, rebate, loan, payoff, kickback or any other transfer of value, or offer,
promise or authorization thereof, to any Person, including any Government Official, for the purpose of: (i) improperly influencing or inducing such Person to do or omit to do any act or to make any decision in an official capacity or in
violation of a lawful duty; (ii) inducing such Person to influence improperly his or her or its employer, public or private, or any Governmental Entity, to affect an act or decision of such employer or Governmental Entity, including to
assist any Person in obtaining or retaining business; or (iii) securing any improper advantage. 

  
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 (c)    None of the officers, directors, employees or other Persons acting for
or on behalf of any Company Group Member is a Government Official or consultant to any Government Official, and there is no existing family relationship between any officer, director or, to the Knowledge of the Company, any employee or other Person
acting for or on behalf of any Company Group Member and any Government Official. 
 (d)    None of the executive
officers or directors of the Company nor any of the other Relevant Persons have, directly or indirectly: (i) circumvented the internal accounting controls of any Company Group Member; (ii) falsified any of the books, records
or accounts of any Company Group Member; or (iii) made false or misleading statements to, or attempted to coerce or fraudulently influence, an accountant in connection with any audit, review or examination of the financial statements of
any Company Group Member. 
 Section 2.20    Trade Controls. 

(a)    The Relevant Persons have not in the course of their actions for, or on behalf of, any Company Group Member engaged
directly or indirectly in transactions: (i) connected with any of North Korea, Crimea, Cuba, Iran, Syria, Myanmar or Sudan; or (ii) connected with any government, country or other entity or Person that is the target of U.S.
economic sanctions administered by the U.S. Treasury Department Office of Foreign Assets Control (“OFAC”) or by Her Majesty’s Treasury in the U.K., or the target of any applicable U.N., E.U. or other international sanctions
regime, including any transactions with specially designated nationals or blocked persons designated by OFAC or with persons on any U.N., E.U. or U.K. assets freeze list; or (iii) that is prohibited by any law administered by OFAC, or by
any other economic or trade sanctions law of the U.S. or any other jurisdiction. 
 (b)    None of the Company’s
executive officers or directors nor, to the Knowledge of the Company, any other Relevant Person is a person whose property or interests in property are blocked or frozen under the economic sanctions laws of the U.S., the E.U. or any other
jurisdiction; and no Relevant Person is designated as a denied person by the U.S. Commerce Department Bureau of Industry and Security or as a debarred party by the U.S. State Department’s Directorate of Defense Trade Control. 

Section 2.21    Listing and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b)
of the Exchange Act and the Company has taken no action designed to, or which to the Knowledge of the Company is reasonably likely to, have the effect of terminating the registration of the Common Stock under the Exchange Act nor has the Company
received since December 31, 2014 any written notification that the SEC intends to terminate such registration or from the NYSE that it intends to delist the Company. 

Section 2.22    Material Contracts. 

(a)    Except as would not, individually or in the aggregate, be materially adverse to the Company Group, taken as a whole,
each Material Contract is in full force and effect and constitutes a legal, valid and binding agreement of the Company or a Company Subsidiary (as applicable) enforceable against the Company or a Company Subsidiary (as applicable) and, to the
Knowledge of the Company, the other parties thereto in accordance with its terms except as such enforceability may be limited by bankruptcy, insolvency, moratorium and other requirement of applicable Law affecting creditor’s rights generally
and by general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity). 

(b)    Except as would not, individually or in the aggregate, be materially adverse to the Company Group, taken as a
whole, neither the Company nor any Company Subsidiary nor, to the 

  
 13 

 
Knowledge of the Company, any other party to any Material Contract is in breach or default under any such Material Contract, and no event has occurred that, with the giving of notice or the lapse
of time or both, would constitute a breach or default under any such Material Contract by the Company or any Company Subsidiary that would permit the other party to terminate such Material Contract. 

(c)    True and complete copies of each Material Contract relating to Indebtedness have been made available to the
Purchasers prior to the date hereof. Except as provided in the Existing Credit Agreement, no such Material Contract imposes any limitation on the payment of dividends at the Minimum Dividend Rate(s) (as defined in the applicable Certificate of
Designations) or, if applicable, Participating Dividends (as defined in the applicable Certificate of Designations) as contemplated to be paid under the terms of the applicable Certificate of Designations 

Section 2.23    Insurance. 

(a)    Except as would not, individually or in the aggregate, be materially adverse to the Company Group, taken as a whole,
(i) the third party insurance policies of the Company Group are in full force and effect in accordance with their terms and no Company Group Member is in default under the terms of any such policy and (ii) to the Knowledge of
the Company, as of the date hereof, there is no threatened termination of, or threatened premium increase with respect to, any of such policies. 

(b)    Except as would not, individually or in the aggregate, be materially adverse to the Company Group, taken as a
whole, (i) there is no claim pending under any of the Company Group’s insurance policies that has been denied, rejected, questioned or disputed by any insurer or as to which any insurer has made any reservation of rights or refused to
cover all or any portion of such claims and (ii) since December 31, 2014, all claims, actions, suits, proceedings, arbitrations, mediations or investigations, whether civil, criminal, administrative or investigative, covered by the Company
Group’s insurance policies have been properly reported to and accepted by the applicable insurer. 

Section 2.24    No Additional Representations. Except for the representations and warranties made by the
Company in this Article II, neither the Company nor any other person makes any express or implied representation or warranty with respect to any Company Group Member or their respective businesses, operations, assets, liabilities, employees,
employee benefit plans, conditions or prospects in connection with the transactions contemplated hereby, and the Company hereby disclaims any such other representations or warranties. In particular, without limiting the foregoing disclaimer, neither
the Company nor any other person makes or has made any representation or warranty to the Purchasers, or any of their Affiliates or representatives, with respect to (i) any financial projection, forecast, estimate, budget or prospect
information relating to any Company Group Member or its respective business, or (ii) except for the representations and warranties made by the Company in this Article II, any oral or written information presented to the Purchasers
or any of their Affiliates or representatives in the course of their due diligence investigation of the Company, the negotiation of this Agreement or in the course of the transactions contemplated hereby. Notwithstanding anything to the contrary
herein, nothing in this Agreement shall limit the right of each Purchaser and its Affiliates to rely on the representations, warranties, covenants and agreements expressly set forth in this Agreement or in any certificate delivered pursuant hereto,
nor will anything in this Agreement operate to limit any claim by such Purchaser or any of its Affiliates for fraud. 

  
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 ARTICLE III 

REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS 

Each Purchaser hereby represents and warrants to the Company, as of the date hereof and as of the Closing Date (except to the extent made only
as of a specified date, in which case as of such date), that: 
 Section 3.1    Organization and Authority.
Such Purchaser is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, is duly qualified to do business and is in good standing in all jurisdictions where its ownership or leasing of property
or the conduct of its business requires it to be so qualified and where failure to be so qualified would reasonably be expected to materially and adversely affect such Purchaser’s ability to perform its obligations under this Agreement or
consummate the transactions contemplated hereby on a timely basis, and such Purchaser has the power and authority and governmental authorizations to own its properties and assets and to carry on its business as it is now being conducted. 

Section 3.2    Authorization. 

(a)    Such Purchaser has the power and authority to enter into this Agreement and to carry out its obligations hereunder.
The execution, delivery and performance of this Agreement and the other Transaction Documents by such Purchaser and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all requisite action on the part of
such Purchaser, and no further approval or authorization by any of its stockholders, partners, members or other equity owners, as the case may be, is required. This Agreement has been, and (as of the Closing) the other Transaction Documents will be,
duly and validly executed and delivered by such Purchaser and, assuming due authorization, execution and delivery by the Company, this Agreement is, and (as of the Closing) each of the other Transaction Documents will be, a valid and binding
obligation of such Purchaser enforceable against such Purchaser in accordance with its terms (except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general
applicability relating to or affecting creditors’ rights or by general equity principles). 
 (b)    None of the
execution, delivery and performance by such Purchaser of this Agreement or the other Transaction Documents, the consummation of the transactions contemplated hereby or thereby, or compliance by such Purchaser with any of the provisions hereof or
thereof, will (i) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or
accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of any Lien upon any of the properties or assets of such Purchaser under any of the terms, conditions or provisions of
(x) its governing instruments, (y) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which such Purchaser is a party or by which it may be bound, or to which
such Purchaser or any of the properties or assets of such Purchaser may be subject or (z) any rule of the NYSE applicable to the Company, or (ii) subject to compliance with the statutes and regulations referred to in the next
paragraph, violate any law, statute, ordinance, rule or regulation, permit, concession, grant, franchise or any judgment, ruling, order, writ, injunction or decree applicable to such Purchaser or any of its respective properties or assets except in
the case of clauses (i)(y) and (ii) for such violations, conflicts and breaches as would not reasonably be expected to materially and adversely affect such Purchaser’s ability to perform its respective obligations under this Agreement or
consummate the transactions contemplated hereby on a timely basis. 

  
 15 

 (c)    Other than the securities or blue sky laws of the various states and
approval or expiration of applicable waiting periods under the HSR Act or Other Competition Laws, no notice to, registration, declaration or filing with, exemption or review by, or authorization, order, consent or approval of, any Governmental
Entity, nor expiration or termination of any statutory waiting period, is necessary for the consummation by such Purchaser of the transactions contemplated by this Agreement. 

Section 3.3    Purchase for Investment. Such Purchaser acknowledges that the offer and sale of the Purchased
Shares and the Warrants have not been registered under the Securities Act or under any state securities laws. Such Purchaser (i) acknowledges that it is acquiring the Purchased Shares and the Warrants pursuant to an exemption from
registration under the Securities Act solely for investment with no present intention to distribute any of the Purchased Shares or the Warrants to any person in violation of applicable securities laws, (ii) will not sell or otherwise
dispose of any of the Purchased Shares or the Warrants, except in compliance with the registration requirements or exemption provisions of the Securities Act and any other applicable securities laws, (iii) without limiting the
representations and warranties in Article II hereof has such knowledge and experience in financial and business matters and in investments of this type that it is capable of evaluating the merits and risks of its investment in the Purchased
Shares and the Warrants and of making an informed investment decision, (iv) is an “accredited investor” (as that term is defined by Rule 501 of the Securities Act), (v) is a “qualified institutional buyer”
(as that term is defined in Rule 144A of the Securities Act), and (vi) without limiting the representations and warranties in Article II hereof (A) has been furnished with or has had full access to all the information
that it considers necessary or appropriate to make an informed investment decision with respect to the Purchased Shares, (B) has had an opportunity to discuss with management of the Company the intended business and financial affairs of
the Company and to obtain information (to the extent the Company possessed such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to it or to which it had access and
(C) can bear the economic risk of (x) an investment in the Purchased Shares and the Warrants indefinitely and (y) a total loss in respect of such investment. 

Section 3.4    Financial Capability. Such Purchaser currently has capital commitments sufficient to, and at
the Closing will have available funds necessary to, consummate the Closing on the terms and conditions contemplated by this Agreement. Such Purchaser is not aware as of the date hereof of any reason why the funds sufficient to fulfill its
obligations under Article I will not be available on the Closing Date. 
 Section 3.5    Brokers and
Finders. Neither such Purchaser nor its Affiliates or any of their respective officers, directors, employees or agents has employed any broker or finder for which the Company will incur any liability for any financial advisory fees, brokerage
fees, commissions or finder’s fees, and no broker or finder has acted directly or indirectly for such Purchaser in connection with this Agreement or the transactions contemplated hereby. 

ARTICLE IV 
 COVENANTS 

Section 4.1    Filings; Other Actions. 

(a)    Promptly after the date hereof, each of the Purchasers, on the one hand, and the Company, on the other hand, will
cooperate and consult with the other and use reasonable best efforts to prepare and file all necessary documentation, to effect all necessary applications, notices, petitions, filings and other documents, and to obtain all necessary permits,
consents, orders, approvals and authorizations of, or any exemption by, all third parties and Governmental Entities, and the expiration or termination of 

  
 16 

 
any applicable waiting period, necessary or advisable to consummate the transactions contemplated by this Agreement, and to perform the covenants contemplated by this Agreement; provided
that all expenses associated with any of the foregoing shall be borne by the Company. Each party shall execute and deliver both before and after the Closing such further certificates, agreements and other documents and take such other actions as the
other parties may reasonably request to consummate or implement such transactions or to evidence such events or matters. In particular, the Purchaser and the Company shall use all reasonable best efforts to (i) as promptly as reasonably
practicable following the date hereof, submit the notifications under the HSR Act, with respect to the transactions contemplated hereby, including the issuance of the Purchased Shares and the Warrants to the Purchasers (including, for the avoidance
of doubt, the right to appoint Preferred Stock Directors (as defined in the Certificate of Designations) to the Board of Directors of the Company), and (ii) as promptly as reasonably practicable, make all filings under the applicable
Other Competition Laws, if any, required for the transactions contemplated hereby, including the issuance of the Purchased Shares and the Warrants to the Purchasers. The Purchasers and the Company will have the right to review in advance, and to the
extent practicable each will consult with the others, in each case subject to applicable laws relating to the exchange of information, all the information relating to such other party, and any of their respective Affiliates, which appears in any
filing made with, or written materials submitted to, any third party or any Governmental Entity in connection with the transactions contemplated by this Agreement. In exercising the foregoing right, each of the parties hereto agrees to act
reasonably and as promptly as reasonably practicable. Each party hereto agrees to keep the other party reasonably apprised of the status of matters referred to in this Section 4.1. Each Purchaser shall promptly furnish the
Company, and the Company shall promptly furnish each Purchaser, to the extent permitted by Law, with copies of written communications received by it or its Subsidiaries from any Governmental Entity in respect of the transactions contemplated by this
Agreement. Notwithstanding anything herein to the contrary, under no circumstances shall any Company Group Member or any Purchaser be required to (x) subject to Section 5.2, make any payment to any person to
secure such person’s consent, approval or authorization (excluding any applicable filing fees or other de minimis expenses that are required to be paid by the Company) or (y) proffer to, or agree to, license, dispose
of, sell or otherwise hold separate or restrict the operation of any of its assets, operations or other rights. 

(b)    Without limiting the generality of Section 4.1(a), the Company shall cause the Warrant Shares to be approved
for listing on the NYSE during the Pre-Closing Period, subject only to a notice of issuance. 

Section 4.2    Reasonable Best Efforts to Close. Promptly after the date hereof, the Company and the
Purchasers will use reasonable best efforts in good faith to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary under applicable laws so as to permit consummation of the transactions contemplated hereby as
promptly as practicable and otherwise to enable consummation of the transactions contemplated hereby and shall cooperate reasonably with the other party hereto to that end, including in relation to the satisfaction of the conditions to Closing set
forth in Sections 1.3(a), (b) and (c) and cooperating in seeking to obtain any consent required from Governmental Entities; provided that neither Purchaser shall be obligated to undertake any
monetary obligation or waive or modify any term of this Agreement in connection with the foregoing. 

Section 4.3    Confidentiality. Each party to this Agreement will hold, and will cause its respective
Affiliates and their respective directors, managers, officers, employees, agents, consultants and advisors to hold, in strict confidence, unless disclosure to a regulatory authority is necessary in connection with any necessary regulatory approval,
examination or inspection, or unless disclosure is required by judicial or administrative process or by other requirement of law or the applicable requirements of any regulatory agency or relevant stock exchange (in which case, other than in
connection with a disclosure in connection with a routine audit or examination by, or document request from, a regulatory or self-

  
 17 

 
regulatory authority, bank examiner or auditor, the party disclosing such information shall provide the other party with prior written notice of such permitted disclosure), all non-public records, books, contracts, instruments, computer data and other data and information (collectively, “Information”) concerning the other party hereto furnished to it by or on behalf of
such other party or its representatives pursuant to this Agreement (except to the extent that such information can be shown to have been (a) previously known by such party from other sources, provided that such source was not known by
such party to be bound by a contractual, legal or fiduciary obligation of confidentiality to the other party, (b) in the public domain through no violation of this Section 4.3 by such party or
(c) later lawfully acquired from other sources by the party to which it was furnished), and neither party hereto shall release or disclose such Information to any other person, except its auditors, attorneys, financial advisors,
financing sources and other consultants and advisors. Notwithstanding the foregoing, each Purchaser may disclose Information to the extent provided by the Stockholders’ Agreement. 

Section 4.4    State Securities Laws. During the Pre-Closing Period,
the Company shall use its reasonable best efforts to (a) obtain all necessary permits and qualifications, if any, or secure an exemption therefrom, required by any state securities laws prior to the offer and sale of the Purchased Shares
or the Warrants and (b) cause such authorization, approval, permit or qualification to be effective as of the Closing. 

Section 4.5    Interim Operating Covenants. Except as set forth on Section 4.5 of
the Disclosure Letter, during the Pre-Closing Period the Company shall, and shall cause each other Company Group Member to, operate its business in the ordinary course in substantially the same manner in which
it previously has been conducted and use its reasonable best efforts to preserve intact its business and assets and its relationships with customers, suppliers, employees and others having business dealings with it. Without limiting the generality
of the foregoing, without the prior written consent of the Purchasers (such consent not to be unreasonably withheld, conditioned or delayed) or as contemplated herein, and except as set forth on Section 4.5 of the
Disclosure Letter, the Company shall not, and shall cause each other Company Group Member not to: 
 (a)    declare, or
make payment in respect of, any dividend or other distribution upon any shares of capital stock of the Company (for the avoidance of doubt, the parties agree that this limitation does not apply to any other Company Group Member); 

(b)    redeem, repurchase or acquire any capital stock of any Company Group Member, other than repurchases of capital
stock from employees, officers or directors of any Company Group Member in the ordinary course of business pursuant to any of the Company Group’s agreements or plans in effect as of the date hereof; 

(c)    amend the Certificate of Incorporation, the Certificate of Designations or the Bylaws or take or authorize any
action to wind up its affairs or dissolve; 
 (d)    authorize, grant, issue or reclassify any capital stock, or
securities exercisable for, exchangeable for or convertible into capital stock (including options, warrants or rights) of the Company other than (i) the authorization and issuance of the Purchased Shares and (ii) issuances of
capital stock, or securities exercisable for, exchangeable for or convertible into shares or other capital stock, of the Company to employees, officers or directors of any Company Group Member in the ordinary course of business pursuant to any of
the Company Group’s agreements or plans in effect as of the date hereof; 
 (e)    incur any Indebtedness, other
than (i) Indebtedness existing on the date hereof, (ii) trade accounts payables incurred in the ordinary course of business consistent with past practice, or (iii) short-term working capital Indebtedness incurred
in the ordinary course of business consistent with past 

  
 18 

 
practice or to pay any transaction expenses, filing fees and other costs and expenses related to the transactions contemplated by this Agreement, the Existing Credit Facility and the New ABL
Facility; 
 (f)    settle or compromise any material action, suit, proceeding, investigation or other litigation; 

(g)    amend, modify or enter into any new agreement with Raymond James & Associates, Inc. in a manner that
materially increases the fees or commissions payable by the Company; 
 (h)    amend, modify or enter into any new
agreement with any Affiliate of the Company; 
 (i)    enter into, assume, amend, modify, waive any material right under
or terminate any Credit Document or any Contract that would be a Credit Document; or 
 (j)    agree or commit to do any
of the foregoing. 
 Section 4.6    Non-Solicitation. 

(a)    During the Pre-Closing Period, without the Purchasers’ prior written
consent, and except as set forth on Section 4.6 of the Disclosure Letter, none of the Company or any Company Subsidiary shall, directly or indirectly, take (and the Company shall not authorize or permit any directors,
officers, employees, accountants, consultants, legal counsel, advisors, agents or other representatives of the Company or any Company Subsidiary or, to the extent within the Company’s control, other Affiliates to take) any action to
(i) encourage (including by way of furnishing non-public information), solicit, initiate or facilitate any Acquisition Proposal, (ii) enter into any agreement with respect to any
Acquisition Proposal or enter into any agreement, arrangement or understanding requiring it to abandon, terminate or fail to consummate the issuance of the Purchased Shares and the Warrants or any other transaction contemplated by this Agreement or
the Transaction Documents or (iii) participate in any way in discussions or negotiations with, or furnish any information to, any person in connection with, or take any other action to facilitate any inquiries or the making of any
proposal that constitutes, or would reasonably be expected to lead to, any Acquisition Proposal. The Company shall use all reasonable best efforts to ensure that the directors, officers, employees, accountants, consultants, legal counsel, advisors,
agents and other representatives of the Company or any Company Subsidiary and, to the extent within the Company’s control, other Affiliates, do not take or do any of the actions referenced in the immediately foregoing sentence. Upon execution
of this Agreement, the Company shall cease immediately and cause to be terminated any and all existing discussions or negotiations with any parties conducted heretofore with respect to an Acquisition Proposal and promptly request that all
confidential information with respect thereto furnished on behalf of the Company be returned. 
 (b)    Until such time
as any of the Purchasers or any of their respective Affiliates has the right to designate an individual for election as a director of the Company pursuant to the Stockholders’ Agreement or Certificate of Designations, the Company shall, as
promptly as practicable (and in no event later than five (5) business days after receipt thereof), advise the Purchasers of any Acquisition Proposal, potential Acquisition Proposal, or any inquiry received by it relating to any potential
Acquisition Proposal and of the material terms of any proposal or inquiry, including, but not limited to, the identity of the person and its affiliates making the same, that it may receive in respect of any such Acquisition Proposal, potential
Acquisition Proposal, or inquiry, or of any information requested from it or of any negotiations or discussions being sought to be initiated with it, shall furnish to the Purchasers a copy of any such proposal or inquiry, if it is in writing, or a
reasonably accurate written summary of any such proposal or inquiry, if it is not in writing, and shall keep the Purchasers informed on a reasonably prompt basis with respect to any developments with respect to the foregoing. 

  
 19 

 Section 4.7    Tax Matters. 

(a)    The Company shall pay any and all documentary, stamp and similar issue or transfer tax due upon the issuance of the
Purchased Shares and the Warrants, and the Company will, at its own expense, file all necessary Tax returns and other documentation with respect to all such Taxes and fees and, if required by law, each Purchaser will, and will cause its Affiliates
to, join in the execution of any such Tax returns and other documentation. 
 (b)    Unless required as a result of a
change in law, (i) the Company shall not treat the Purchased Shares as giving rise to dividends for U.S. federal income tax purposes pursuant to Section 305 of the Code prior to the time that any such dividends are actually declared
by the Company, (ii) for so long as Brockdale Investments LP (as holder of a majority of the Preferred Stock) has the ability to appoint two or more people to the Board of Directors, the Company shall treat Brockdale Investments LP as
directly owning at least 10% of the voting stock of the Company for purposes of the tax treaty between the U.S. and Luxembourg (the “Treaty”), (iii) unless the Purchasers and their Affiliates, in the aggregate, own 50% or
more of the Company’s common stock (as measured by value), the Company shall treat amounts paid to each Purchaser in partial or complete redemption of each class of Preferred Stock as a payment in exchange for such Preferred Stock pursuant to
Section 302 of the Code and (iv) the Company shall not withhold or deduct any tax with respect to the daily payment described in Section 4.9(b). 

(c)    As and when reasonably requested by any Purchaser, the Company agrees to provide prompt assistance (including, if
applicable, by providing withholding certificates) in connection with determinations by such Purchaser of whether specified shares of Common Stock, shares of Preferred Stock or Warrants that such Purchaser holds or has held constitute a “United
States real property interest” under Section 897 of the Code. 
 (d)    At the time of any distribution with
respect to or redemption of Preferred Stock, if requested by a Purchaser the Company shall provide the Purchasers with a good faith estimate of the Company’s (i) accumulated earnings and profits for U.S. federal income tax purposes
for prior taxable years and (ii) expected earnings and profits for the taxable year in which such distribution or redemption occurs. The Company shall provide each Purchaser with the Company’s good faith estimated calculation of the
current and accumulated earnings and profits of the Company for U.S. federal income tax purposes with respect to each taxable year of the Company in which any such distribution or redemption occurs by February 28 of the immediately following
taxable year. 
 Section 4.8    Use of Proceeds. At the Closing, the Company shall use the proceeds of the
issuance of the Preferred Stock to repay the Existing Credit Facility and pay the fees and expenses incurred in connection with the transactions contemplated by this Agreement. 

Section 4.9    New ABL Facility; Daily Payment. 

(a)    Following the Closing, the Company shall use its reasonable best efforts to, within ninety (90) days following
the Closing Date, enter into the New ABL Facility Credit Agreement and the related Credit Documents. If the New ABL Facility is entered into, the Company shall use the proceeds of the New ABL Facility to redeem issued and outstanding shares Series F
Preferred Stock and, if applicable, Series E Preferred Stock, (in each case pursuant to the terms of the applicable Certificate of Designations) (the “Refinancing”, and the earlier of (x) the expiration of such
ninety (90) day period and (y) the date of the Refinancing, the “Refinancing Date”). For the avoidance of doubt, following the redemption of Series F Preferred Stock, and, if applicable, Series E Preferred
Stock in the Refinancing (and the payment of amounts referred to in clause (y) of the definition of New ABL Facility), the available borrowing under the New ABL Facility shall not exceed the amount in clause (z) of the definition of New
ABL Facility. 

  
 20 

 
Upon the Company’s reasonable request, the Purchasers shall cooperate in good faith with the Company’s efforts to negotiate and enter into such New ABL Facility Credit Agreement prior
to the Refinancing Date; provided, however, that neither Purchaser shall be obligated to undertake any monetary or other material obligation or waive or modify any term of this Agreement in connection with the foregoing. 

(b)    From the Closing Date until the Refinancing Date, the Company shall pay the Purchasers (or their designees), by
wire transfer of immediately available funds, a daily payment in an amount equal to $33,333.33 per calendar day during such period. Such daily payment shall accrue daily and be payable monthly in arrears, commencing on the first Business Day of the
first month following the Closing Date. 
 Section 4.10    Board and Committee Appointments. Promptly after
the Closing Date, the Board of Directors shall expand the size of the Board of Directors of the Company by two members, and shall leave the two newly created positions unfilled.    Following the date when all applicable waiting
periods (and any extension thereof) prescribed by the HSR Act have expired or been terminated, the Company, upon receipt of notice from the Preferred Holders (as defined in the Certificate of Designations), acting with the Preferred Requisite Vote
(as defined in the Certificate of Designations) shall within 10 business days convene a special meeting of the Board of Directors (or cause an action by written consent of the Board of Directors to be adopted) and (i) fill such two
vacancies with the individuals designated as the Preferred Stock Directors, with one individual appointed as a Class II director and the other individual appointed as a Class III director, as determined by the Preferred Holders (as defined
in the Certificate of Designations) and (ii) cause the Company to execute customary indemnification agreements with such two individuals, in form reasonably acceptable to the Preferred Holders (as defined in the Certificate of
Designations).    The Company shall not expand the size of the Board of Directors (except as contemplated by this Section 4.10) between the date of this Agreement and the 30th day following the expiration or termination of the waiting periods referred to in this Section 4.10. 

ARTICLE V 
 MISCELLANEOUS

 Section 5.1    Survival. The representations and warranties of the parties contained in this
Agreement shall survive for twelve (12) months following the Closing, except that (i) the representations and warranties of the Company contained in Sections 2.1(a), 2.2(b), 2.2(c), 2.3(a) and
Section 2.4 will survive until the expiration of the applicable statutes of limitation and (ii) the representations and warranties of the Company contained in Section 2.2(a) will survive indefinitely. The
covenants or other agreements of the parties that contemplate performance or fulfillment thereof prior to the Closing shall survive for six (6) months following the Closing. The covenants or other agreements of the parties that contemplate
performance or fulfillment thereof at or following the Closing shall survive the Closing until fully performed or fulfilled, unless and to the extent that non-compliance with such covenants or agreements is
waived in writing by the party entitled to such performance. 
 Section 5.2    Expenses. Except as set forth
in Section 4.7(a), each party will bear and pay all other costs and expenses incurred by it or on its behalf in connection with the transactions contemplated pursuant to this Agreement; provided, that the Company shall
(i) upon the Closing (or, to the extent any such costs and expenses are incurred after the Closing, promptly following notice from any Purchaser requesting reimbursement thereof) reimburse the Purchasers for their reasonable and
documented out-of-pocket costs and expenses incurred in connection with the evaluation (including due diligence), negotiation and consummation of this Agreement and the
other Transaction Documents and the transactions contemplated hereby and thereby, including fees and expenses of legal and accounting advisors in connection any of the foregoing; provided that the maximum amount of such costs and expenses reimbursed
at the Closing and thereafter shall not exceed $1,100,000 in the aggregate, (ii) bear 

  
 21 

 
the cost of all filing fees for any required filings under the HSR Act, Other Competition Laws and other applicable Laws in connection with the transactions contemplated by the Transaction
Documents and (iii) the fees and expenses in connection with any First Lien Notes or Secured Notes shall be subject to separate arrangements to be agreed as provided in the Stockholders’ Agreement. 

Section 5.3    Amendment; Waiver. No amendment or waiver of any provision of this Agreement will be effective
with respect to any party unless made in writing and signed by an officer or duly authorized representative of such party. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The conditions to each party’s obligation to consummate the Closing are for the sole benefit of
such party and may be waived by such party in whole or in part to the extent permitted by applicable law. No waiver of any party to this Agreement will be effective unless it is in a writing signed by a duly authorized officer of the waiving party
that makes express reference to the provision or provisions subject to such waiver. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law. 

Section 5.4    Counterparts; Electronic Transmission. For the convenience of the parties hereto, this
Agreement may be executed in any number of separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts will together constitute the same agreement. Executed signature pages to this Agreement may
be delivered by facsimile or other means of electronic transmission and such facsimiles or other means of electronic transmission will be deemed as sufficient as if actual signature pages had been delivered. 

Section 5.5    Governing Law. This Agreement will be governed by and construed in accordance with the laws of
the State of Delaware, without giving effect to principles or rules of conflict of laws to the extent such principles or rules would require or permit the application of Laws of another jurisdiction. The parties hereby irrevocably and
unconditionally consent to submit to the exclusive jurisdiction of the state and federal courts located in the Borough of Manhattan, State of New York for any actions, suits or proceedings arising out of or relating to this Agreement and the
transactions contemplated hereby. The parties hereby irrevocably and unconditionally consent to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such action, suit or proceeding and irrevocably waive, to the
fullest extent permitted by law, any objection that they may now or hereafter have to the laying of the venue of any such action, suit or proceeding in any such court or that any such action, suit or proceeding which is brought in any such court has
been brought in an inconvenient forum. Process in any such action, suit or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees
that service of process on such party as provided in Section 5.7 shall be deemed effective service of process on such party. 

Section 5.6    WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. 

Section 5.7    Notices. Any notice, request, instruction or other document to be given hereunder by any party
to the other will be in writing and will be deemed to have been duly given (a) on the date of delivery if delivered personally or by telecopy, facsimile or electronic mail, upon confirmation of receipt, (b) on the first (1st) business day following the date of dispatch if delivered by a recognized next-day courier service, or (c) on the third (3rd) business day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be

  
 22 

 
delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice. 

 

					
	(a)	  	If to any or all of the Purchasers:
		
		  	c/o Elliott Management Corporation
		  	40 West 57th Street
		  	New York, NY 10019
		  	Attn:	  	Elliot Greenberg
		  	Fax:	  	(212) 478-2371
		  	Email:	  	egreenberg@elliottmgmt.com
		
		  	with a copy to (which copy alone shall not constitute notice):
		
		  	Debevoise & Plimpton LLP
		  	919 Third Avenue
		  	New York, New York 10022
		  	Attn:	  	Kevin M. Schmidt
		  	Fax:	  	(212) 521-7178
		  	Email:	  	kmschmidt@debevoise.com
		
	(b)	  	If to the Company:
		
		  	Roadrunner Transportation Systems, Inc.
		  	4900 South Pennsylvania Ave.
		  	Cudahy, WI 53110
		  	Attn:	  	Curtis W. Stoelting
		  	Fax:	  	(630) 968-0509
		  	Email:	  	cstoelting@rrts.com
		
		  	with a copy to (which copy alone shall not constitute notice):
		
		  	Greenberg Traurig, LLP
		  	2375 E. Camelback Road
		  	Suite 700
		  	Phoenix, Arizona 85016
		  	Attn:	  	Bruce E. Macdonough
		  	Fax:	  	(602) 445-8618
		  	Email:	  	macdonoughb@gtlaw.com

 Section 5.8    Entire Agreement. This Agreement (including the Exhibits hereto
and the Disclosure Letter) constitutes the entire agreement, and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, among the parties, with respect to the subject matter hereof. 

Section 5.9    Assignment. Neither this Agreement, nor any of the rights, interests or obligations hereunder
shall be assigned by any of the parties hereto (whether by operation of Law or otherwise) without the prior written consent of the other party; provided that each Purchaser (or any Permitted Transferee) may assign its rights, interests and
obligations under this Agreement, in whole or in part, (i) if prior to the Closing, to one or more Permitted Transferees, (provided that no such assignment will relieve such Purchaser of its obligations hereunder prior to the Closing)
and, (ii) if following the 

  
 23 

 
Closing, to any transferee of shares of Preferred Stock, Warrants or Warrant Shares (subject to the Stockholders’ Agreement and the Warrant Agreement); provided, however, that
in the event of any such assignment, the assignee shall agree in writing to be bound by the provisions of this Agreement, including the rights, interests and obligations so assigned. 

Section 5.10    Interpretation; Other Definitions. Wherever required by the context of this Agreement, the
singular shall include the plural and vice versa, and the masculine gender shall include the feminine and neuter genders and vice versa and, unless specified otherwise, references to any agreement, document or instrument shall be deemed to refer to
such agreement, document or instrument as amended, supplemented or modified from time to time. All article, section, paragraph or clause references not attributed to a particular document shall be references to such parts of this Agreement, and all
exhibit, annex, letter and schedule references not attributed to a particular document shall be references to such exhibits, annexes, letters and schedules to this Agreement. In addition, the following terms are ascribed the following meanings: 

(1)    the term “business day” means any day that is not a Saturday, a Sunday and any other day on which
banks are required or authorized by law or other governmental action to be closed in New York City; 
 (2)    the terms
“herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision; 

(3)    the words “including,” “includes,” “included” and
“include” are deemed to be followed by the words “without limitation”; 
 (4)    the
word “or” is not exclusive; and 
 (5)    the term “person” has the meaning given to
it in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act. 

(6)    “2010 Incentive Compensation Plan” has the meaning set forth in Section 2.2(a). 

(7)    “Acquisition Proposal” means any proposal or offer from any person relating to any direct or
indirect (i) sale, lease or other disposition directly or indirectly by merger, consolidation, business combination, share exchange, joint venture or otherwise of assets of the Company or any Subsidiary representing 35% or more of the
consolidated assets of the Company Group (other than sales of inventory in the ordinary course of business and consistent with past practice); (ii) issuance, sale or other disposition, directly or indirectly (including by way of merger,
consolidation, business combination, share exchange, joint venture or any similar transaction), of securities (or options, rights or warrants to purchase, or securities convertible into or exchangeable for, such securities) representing 35% or more
of any class of equity securities of the Company; (iii) tender offer or exchange offer as defined pursuant to the Exchange Act that, if consummated, would result in any person beneficially owning 35% or more of any class or series (or
the voting power of any class or series) of equity securities of the Company or any other transaction in which any person shall acquire beneficial ownership or the right to acquire beneficial ownership, of 35% or more of any class or series (or the
voting power of any class or series) of equity securities; (iv) merger, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction involving any Company Group Member representing 35% or more of
the consolidated assets of the Company Group; or (v) combination of the foregoing (in each case, other than the arrangements contemplated by the Transaction Documents). 

  
 24 

 (8)    “Affiliate” means, with respect to any person, any
other person directly or indirectly controlling, controlled by or under common control with such person; provided, that (i) portfolio companies in which any person or any of its Affiliates has an investment shall not be deemed an
Affiliate of such person, (ii) no Company Group Member, and none of the Company’s other controlled Affiliates, will be deemed to be Affiliates of any Purchaser for purposes of this Agreement and (iii) each Company
Subsidiary shall be deemed an Affiliate of the Company and of each other Company Subsidiary. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and
“under common control with”), when used with respect to any person, means the possession, directly or indirectly, of the power to cause the direction of management or policies of such person, whether through the ownership of voting
securities, by contract or otherwise. 
 (9)    “Agreement” has the meaning set forth in the Preamble.

 (10)    “Board of Directors” has the meaning set forth in Section 2.3(a).

 (11)    “Bylaws” has the meaning set forth in Section 2.1(a). 

(12)    “Capitalization Date” has the meaning set forth in Section 2.2(a). 

(13)    “Capitalized Lease Obligations” means an obligation that is required to be classified as, and
expenses in respect of which are recognized as for, a capitalized lease for income statement reporting purposes in accordance with GAAP. 

(14)    “Certificate of Designations” has the meaning set forth in the Recitals. 

(15)    “Certificate of Incorporation” has the meaning set forth in Section 2.1(a). 

(16)    “Closing” has the meaning set forth in Section 1.2(a). 

(17)    “Closing Date” has the meaning set forth in Section 1.2(a). 

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

(19)    “Common Stock” has the meaning set forth in the Recitals. 

(20)    “Company” has the meaning set forth in the Preamble. 

(21)    “Company Financial Statements” has the meaning set forth in Section 2.5(d). 

(22)    “Company Group” means the Company and the Company Subsidiaries from time to time. 

(23)    “Company Group Member” means any corporation, partnership, joint venture, limited liability
company, unincorporated association, trust or other entity within the Company Group. 
 (24)    “Company
Material Adverse Effect” means, with respect to the Company, any Effect that is or is reasonably likely to be materially adverse to the business, assets, liabilities, results of operations or financial condition of the Company Group, taken
as a whole; provided, however, that in no event shall any of the following occurring after the date hereof, alone or in combination, be deemed to constitute, or be taken into account in determining whether a Company Material Adverse Effect
has occurred: (A) any decrease in the market price of the Company’s Common Stock on the NYSE, (B) any failure by the 

  
 25 

 
Company to meet any public revenue or earnings projections, (C) any Effect that results from changes affecting the industry in which the Company operates, or the United States economy
generally, or any Effect that results from changes affecting general worldwide economic or capital market conditions, (D) any Effect caused by the announcement or pendency of the transactions contemplated by this Agreement (or the
identity of the Purchasers or any of their Affiliates as the purchaser of the Purchased Shares pursuant to the transactions contemplated by this Agreement); (E) acts of war or terrorism or natural disasters, (F) the performance of
this Agreement and the transactions contemplated hereby, including compliance with the covenants set forth herein, or any actions or omissions of the Company taken or omitted at the written request of the Purchasers; (G) changes in GAAP
or other accounting standards (or any interpretation thereof) or (H) changes in any Laws or other binding directives issued by any Governmental Entity or interpretations or enforcement thereof; provided, however, that
(x) the exceptions in clause (A) and (B) shall not prevent or otherwise affect a determination that any Effect underlying such change or failure has resulted in, or contributed to, a Company Material Adverse Effect,
(y) with respect to clauses (C), (E), (G) and (H), such Effects, alone or in combination, may be deemed to constitute, or be taken into account in determining whether a Company Material Adverse Effect has
occurred to the extent such Effects disproportionately affect the Company Group, taken as a whole, relative to other companies operating in the same industry as the Company Group. 

(25)    “Company PRSUs” has the meaning set forth in Section 2.2(a). 

(26)    “Company RSUs” has the meaning set forth in Section 2.2(a). 

(27)    “Company Stock Options” has the meaning set forth in Section 2.2(a). 

(28)    “Company Subsidiary” has the meaning set forth in Section 2.1(b). 

(29)    “Company Warrants” has the meaning set forth in Section 2.2(a). 

(30)    “Contract” means any written or oral agreement, arrangement, commitment or other instrument or
obligation. 
 (31)    “Credit Agreement” means the Existing Credit Facility Credit Agreement or the
New ABL Facility Credit Agreement. 
 (32)    “Credit Documents” means, with respect to a Credit
Facility, the applicable Credit Agreement and all guarantees, security agreements, mortgages, deeds of trust, letters of credit, reimbursement agreements, waivers and amendments and all other Contracts and documents executed and delivered in
connection therewith. 
 (33)    “Credit Facility” means the Existing Credit Facility or the New ABL
Facility. 
 (34)    “Disclosure Letter” has the meaning set forth in
Article II. 
 (35)    “Draft Statements” has the meaning set forth in
Section 2.5(d). 
 (36)    “Effect” means any change, event, effect, state of facts, occurrence,
development or circumstance. 
 (37)    “Environmental Law” means any Laws regulating, relating to or
imposing standards of conduct concerning protection of natural resources, the environment or of human health and safety. 

  
 26 

 (38)    “ERISA” means the Employee Retirement Income
Security Act of 1974, as amended from time to time, and all rules, regulations, rulings and interpretations adopted by the Internal Revenue Service or the Department of Labor thereunder. 

(39)    “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder, as the same may be amended from time to time. 
 (40)    “Existing Credit
Facility” means the credit facility governed by the Existing Credit Facility Credit Agreement and the related Credit Documents. 

(41)    “Existing Credit Facility Credit Agreement” means Sixth Amended and Restated Credit Agreement,
dated as of September 24, 2015, among the Company, U.S. Bank National Association, as administrative agent, swing line lender and LC issuer, and the other parties thereto, as amended or modified by the Consent, Waiver and First Amendment to
Sixth Amended and Restated Credit Agreement, dated as of June 17, 2016, the Waiver, dated as of November 14, 2016, the Forbearance Agreement and Second Amendment to Sixth Amended and Restated Credit Agreement, dated as of February 27,
2017 and the Forbearance Agreement Extension and Third Amendment to Sixth Amended and Restated Credit Agreement, dated as of March 31, 2017. 

(42)    “First Lien Notes” has the meaning set forth in the Stockholders’ Agreement. 

(43)    ”Forbearance Agreement” means the Forbearance Agreement and Second Amendment to Sixth Amended and
Restated Credit Agreement, dated as of February 27, 2017, among the Company and the lenders party to the Existing Credit Facility, as amended by the Forbearance Agreement Extension and Third Amendment to Sixth Amended and Restated Credit
Agreement, dated as of March 31, 2017. 
 (44)    “GAAP” has the meaning set forth in Section
2.5(d). 
 (45)    “Government Official” means any (i) officer, employee or other
Person acting for or on behalf of any Governmental Entity or public international organization or (ii) holder of, or candidate for, public office, political party or official thereof or member of a royal family, or any other Person
acting for or on behalf of the foregoing. 
 (46)     “Governmental Entity” means any transnational,
multinational, domestic or foreign federal, state, provincial or local governmental, regulatory or administrative authority, instrumentality, department, court, arbitrator, agency, commission or official, including any political subdivision thereof,
any state-owned or state-controlled enterprise, or any non-governmental self-regulatory agency, commission or authority. 

(47)     “Hazardous Substances” means any gasoline or petroleum (including crude oil or any fraction
thereof) or petroleum products, polychlorinated biphenyls, urea-formaldehyde insulation, asbestos, pollutants, contaminants and any other substances that are regulated pursuant to, or could give rise to liability under, any Environmental Law. 

(48)    “HSR Act” means Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. 

(49)    “Indebtedness” means, with respect to any person, without duplication, (i) all
obligations of such person for borrowed money (including accrued and unpaid interest and the full redemption value of any premiums, costs or penalties associated with repaying such obligations), or with respect to deposits or advances of any kind,
(ii) all obligations of such person evidenced by bonds, debentures, notes or 

  
 27 

 
similar instruments, (iii) all obligations of such person upon which interest charges are customarily paid (other than trade payables incurred in the ordinary course of business
consistent with past practice), (iv) all obligations of such person under conditional sale or other title retention agreements relating to any property purchased by such person, (v) all obligations of such person incurred or
assumed as the deferred purchase price of property or services (excluding obligations of such person to creditors for raw materials, inventory, services and supplies incurred in the ordinary course of business consistent with past practice),
(vi) all Capitalized Lease Obligations, (vii) all obligations of others secured by a Lien on property or assets owned or acquired by such person, whether or not the obligations secured thereby have been assumed,
(viii) all obligations of such person under interest rate, currency or commodity derivatives or hedging transactions, (ix) all letters of credit or performance bonds issued for the account of such person (excluding
(A) letters of credit issued for the benefit of suppliers to support accounts payable to suppliers incurred in the ordinary course of business consistent with past practice, (B) standby letters of credit relating to
workers’ compensation insurance and (C) surety bonds and customs bonds) and (x) all guaranties and arrangements having the economic effect of a guaranty by such person of any Indebtedness of any other person. 

(50)    “Information” has the meaning set forth in Section 4.3. 

(51)    “Intellectual Property” means all worldwide intellectual and industrial property rights,
including (i) patents, utility models, and all renewals, re-examinations, re-issues, divisions, extensions, provisionals, continuations and continuations-in part thereof, (ii) trademarks, service marks, trade names, corporate names, trade dress, domain names, social media usernames and other source indicators (and all goodwill relating
thereto), (iii) copyrights and rights in copyrightable subject matter in published and unpublished works of authorship, (iv) rights in Software, (v) all registrations and applications to register or renew the
registrations of any of the foregoing, (vi) inventions, know-how, trade secrets, methods, processes, formulae, models, tools, technical or proprietary information, and technology, and
(vii) all other intellectual property rights. 
 (52)    “Knowledge of the Company” means
the knowledge, after reasonable inquiry, of the individuals set forth in Section 5.10(52) of the Disclosure Letter. 

(53)    “Law” or “Laws” mean any statute, law, ordinance, treaty, rule, code, regulation
or other binding directive issued, promulgated or enforced by any Governmental Entity. 

(54)    “Lien” means any mortgage, deed of trust, pledge, option, power of sale, retention of title,
right of pre-emption, right of first refusal, hypothecation, security interest, encumbrance, claim, lien or charge of any kind, or an agreement, arrangement or obligation to create any of the foregoing (other
than Permitted Liens). 
 (55)    “Material Contract” means any Contract (i) that has been
filed by the Company with the SEC that has not expired or been terminated prior to the date hereof, (ii) that relates to Indebtedness with an aggregate principal amount in excess of $10,000,000 or (iii) that is the
Forbearance Agreement or a side letter or agreement relating thereto. 
 (56)    “Multiemployer Plan”
means (x) a “multiemployer plan” as defined in Section 3(37) of ERISA that is maintained in the United States and (y) a non-U.S. defined-benefit pension plan for the
benefit of employees of multiple unrelated employers, in each case, to which any Company Group Member contributes or is or has been required to contribute. 

(57)    “New ABL Facility” means a customary asset based revolving credit facility (which may include a
term loan component) on terms and conditions reasonably acceptable to the Purchasers, it being 

  
 28 

 
understood that the following terms and conditions would be reasonably acceptable to the Purchasers (among other reasonably acceptable terms and conditions): (i) the amount of
revolving credit borrowings is subject to a borrowing base, (ii) the maximum amount borrowed or available to be borrowed under such credit facility (taking into account any customary borrowing base reserves and cash dominion, springing
financial covenant or other restrictive availability blocks included in such credit facility) at any time does not exceed an amount equal to the sum of (x) the amount required to consummate the Refinancing with respect to all issued and
outstanding shares of Series F Preferred Stock and, if elected by the Company, some or all issued and outstanding shares of Series E Preferred Stock (in each case in accordance with the applicable Certificate of Designations), plus
(y) the amount of all then unpaid transaction expenses, filing fees and other costs and expenses required to be paid by the Company in connection with the Transaction Documents, the Refinancing and the New ABL Facility, plus
(z) $40,000,000 (or such greater amount as may be approved by the Designating Majority (as such term is defined in the Stockholders’ Agreement)), (iii) the amount of funded loans thereunder is at least $175,000,000 (or such lesser
amount as may be approved by the Designating Majority) and the proceeds of such funded debt are used to consummate the Refinancing with respect to issued and outstanding shares of Series F Preferred Stock, (iv) the collateral securing
such facility is the same collateral that secures the Existing Credit Facility, (v) payments in respect of the Preferred Stock Minimum Dividend Rate(s) in accordance with the Certificate of Designations are permitted subject only to
satisfaction of reasonable and customary payment conditions, (vi) the redemption of the Preferred Stock at scheduled maturity thereof in accordance with the Certificate of Designations is permitted, (vii) redemption of the
Series E Preferred Stock in an amount equal to 80% of the net proceeds of the Permitted Divestiture (as defined in the Stockholders’ Agreement) is permitted and (viii) the terms are otherwise substantially the same as
applicable to the Existing Credit Facility or otherwise not materially adverse to the holders of shares of Preferred Stock. 

(58)    “New ABL Facility Credit Agreement” means a credit agreement governing the New ABL Facility. 

(59)    “Non-Recourse Party” has the meaning set forth in
Section 5.18. 
 (60)    “NYSE” means the New York Stock Exchange. 

(61)    “OFAC” has the meaning set forth in Section 2.20(a). 

(62)    “Other Competition Laws” means all non-U.S. Laws intended
to prohibit, restrict or regulate actions having an anti-competitive effect or purpose, including competition, restraint of trade, anti-monopolization, merger control or antitrust Laws. 

(63)    “Permits” has the meaning set forth in Section 2.10. 

(64)    “Permitted Lien” means: (i) liens for Taxes that are not yet due or payable or that
are being contested in good faith by appropriate proceedings and with respect to which reserves have been made on the financial statements to the extent required under GAAP; (ii) statutory liens of landlords and liens of carriers,
warehousemen, mechanics, material men, repairmen and other liens imposed by Law for amounts not yet due; (iii) liens incurred or deposits made to a Governmental Entity in the ordinary course of business or as required by applicable Laws
in connection with a governmental authorization, registration, filing, license, permit or approval; (iv) liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment
insurance or other types of social security; (v) defects of title, easements, rights of way, covenants, zoning, building and other similar restrictions, charges or encumbrances not materially interfering with the ordinary conduct of
business or 

  
 29 

 
(vi) liens incurred in the ordinary course of the business securing obligations or liabilities that are not individually or in the aggregate material to the relevant asset or
property, respectively. 
 (65)    “Permitted Transferee” means, with respect to any person,
(i) any Affiliate of such person, (ii) any successor entity of such person and (iii) with respect to any person that is an investment fund, vehicle or similar entity, any other investment fund, vehicle or similar
entity of which such person or an Affiliate, advisor or manager of such person serves as the general partner, manager or advisor; provided, however, that no portfolio company of any person shall be a Permitted Transferee. 

(66)    “Person” means an individual, a corporation, a general or limited partnership, a limited
liability company, an association, a trust, other legal entity or organization or Governmental Entity. 

(67)    “Plan” means any employee benefit plan (as defined in Section 3(3) of ERISA, whether or not
subject to ERISA) maintained for current or former employees of the Company, any Company Subsidiary or any other person with whom the Company is considered a single employer under Section 414 of the Code or Title IV of ERISA, to which any
Company Group Member is required to contribute, including any pension, profit-sharing, retirement, death, disability, supplemental retirement, welfare benefit, retiree health, and life insurance plan, agreement or arrangement, or any other
compensation plan, policy, program, agreement or arrangement, including any employment, change in control, bonus, equity or equity-based compensation, retention, severance, termination, deferred compensation or other similar agreement, arrangement,
plan, policy or program that any Company Group Member, maintains, sponsors, is a party to, or as to which any Company Group Member otherwise has or could have any material obligation or material liability, but excluding any Multiemployer Plans. 

(68)    “Pre-Closing Period” means the period commencing on the
date hereof and terminating on the earlier to occur of (i) the Closing and (ii) the termination of this Agreement in accordance with the provisions hereof. 

(69)    “Preferred Stock” has the meaning set forth in the Recitals. 

(70)    “Preferred Stock Directors” has the meaning set forth in the Certificate of Designations. 

(71)    “Purchase Price” means the aggregate purchase price payable by the Purchasers to the Company for
the issue of the Purchased Shares, which shall be $540,500,100.00. 
 (72)    “Purchased Shares” has
the meaning set forth in Section 1.1. 
 (73)     “Purchaser” or
“Purchasers” has the meaning set forth in the Preamble. 
 (74)    “Refinancing” has
the meaning set forth in Section 4.9(a). 
 (75)    “Refinancing Date” has the meaning set forth
in Section 4.9(a). 
 (76)    “Registration Rights Agreement” means that certain Registration
Rights Agreement, the form of which is set forth as Exhibit H. 

(77)    “Release” means disposing, discharging, injecting, spilling, leaking, pumping, pouring, leaching,
migration, emitting, escaping or emptying into or upon the indoor or outdoor environment. 
 (78)    “Relevant
Persons” has the meaning set forth in Section 2.19(a). 

  
 30 

 (79)    “SEC” has the meaning set forth in
Section 2.5(a). 
 (80)    “SEC Documents” has the meaning set forth in
Section 2.5(a). 
 (81)    “Secured Notes” has the meaning set forth in the
Stockholders’ Agreement. 
 (82)    “Securities Act” means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder, as the same may be amended from time to time. 

(83)    “Series B Preferred Stock” has the meaning set forth in the Recitals. 

(84)    “Series B Purchased Shares” has the meaning set forth in Section 1.1.

 (85)    “Series C Preferred Stock” has the meaning set forth in the Recitals. 

(86)    “Series C Purchased Shares” has the meaning set forth in Section 1.1.

 (87)    “Series D Preferred Stock” has the meaning set forth in the Recitals. 

(88)    “Series D Purchased Shares” has the meaning set forth in Section 1.1.

 (89)    “Series E Preferred Stock” has the meaning set forth in the Recitals. 

(90)    “Series E Purchased Shares” has the meaning set forth in Section 1.1.

 (91)    “Series F Preferred Stock” has the meaning set forth in the Recitals. 

(92)    “Software” means all computer software, whether in source code and object code formats, including
mobile applications, in any and all forms and media, and all related documentation. 

(93)    “Stockholders’ Agreement” means that certain Stockholders’ Agreement, the form of which
is set forth as Exhibit G. 
 (94)    “Subsidiary” has the meaning set forth
in Section 2.1(b). 
 (95)    “Tax Return” means any return, declaration,
report, statement or other document filed or required to be filed in respect of Taxes (including any attached schedules), including any information return, claim for refund, amended return and declaration of estimated Tax. 

(96)    “Taxes” means any U.S. federal, state, local, provincial or
non-U.S. taxes, charges, fees, levies or other assessments, including income, capital gains, alternative, minimum, accumulated earnings, personal holding company, franchise, capital stock, profits, windfall
profits, gross receipts, production, goods and services, sales, use, value added, transfer, registration, stamp, premium, excise, customs duties, severance, environmental (including taxes under section 59A of the Code), real property, personal
property, ad valorem, occupancy, license, occupation, employment, payroll, social security, disability, unemployment, workers’ compensation, withholding, estimated or other similar tax, duty, fee, assessment or other governmental charge or
deficiencies thereof (including all interest and penalties thereon, related liabilities and additions thereto). 

  
 31 

 (97)     “Transaction Documents” means this Agreement, the
Certificate of Designations, the Stockholders’ Agreement, the Registration Rights Agreement and the Warrant Agreement. 

(98)    “Treaty” has the meaning set forth in Section 4.7(b). 

(99)    “Updated Statements” has the meaning set forth in Section 2.5(d). 

(100)    “Voting Debt” has the meaning set forth in Section 2.2(c). 

(101)    “Warrant Agreement” has the meaning set forth in the Recitals. 

(102)    “Warrants” has the meaning set forth in the Recitals. 

Section 5.11    Captions. The article, section, paragraph and clause captions herein are for convenience of
reference only, do not constitute part of this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof. 

Section 5.12    Severability. If any provision of this Agreement or the application thereof to any person
(including the officers and directors of the parties hereto) or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to persons or
circumstances other than those as to which it has been held invalid or unenforceable, will remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination, the parties shall negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the
original intent of the parties. 
 Section 5.13    No Third Party Beneficiaries. Except as expressly
provided herein, nothing contained in this Agreement, expressed or implied, is intended to confer upon any person other than the parties hereto (and their permitted assigns), any benefit, right or remedies. 

Section 5.14    Public Announcements. Subject to each party’s disclosure obligations imposed by law or
regulation or the rules of any stock exchange, each of the parties hereto will cooperate with each other in the development and distribution of all news releases and other public information disclosures with respect to this Agreement and any of the
transactions contemplated by this Agreement, and neither the Company nor any Purchaser will make any such news release or public disclosure without first consulting with the other, and, in each case, also receiving the other’s consent (which
shall not be unreasonably withheld or delayed) and each party shall coordinate with the party whose consent is required with respect to any such news release or public disclosure. 

Section 5.15    Specific Performance. The parties agree that irreparable damage would occur in the event that
any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that, without the necessity of posting bond or other undertaking, the parties shall be entitled
to specific performance of the terms hereof, this being in addition to any other remedies to which they are entitled at law or equity, and in the event that any action or suit is brought in equity to enforce the provisions of this Agreement, and no
party will allege, and each party hereby waives, the defense or counterclaim that there is an adequate remedy at law. 

Section 5.16    Termination. This Agreement may only be terminated prior to the Closing: 

  
 32 

 (a)    by mutual written agreement of the Company and the Purchasers; 

(b)    by the Company or the Purchasers, upon written notice to the other party given at any time on or after May 5,
2017; provided, however, that the right to terminate this Agreement pursuant to this Section 5.16(b) shall not be available to any party whose material breach of any obligations under this Agreement shall have been the cause of,
or shall have resulted in, the failure of the Closing to occur on or prior to such date; 
 (c)    the Purchasers, upon
written notice to the Company, if the Forbearance Agreement ceases to be in effect (or superseded by a new forbearance agreement) for more than one (1) full Business Day for any reason; 

(d)    by notice given by the Company to the Purchasers, if there have been one or more inaccuracies in or breaches of one
or more representations, warranties, covenants or agreements made by any Purchaser in this Agreement such that the conditions in Section 1.3(c) would not be satisfied and which have not been cured by such Purchaser within thirty
(30) days after receipt by such Purchaser of written notice from the Company requesting such inaccuracies or breaches to be cured; or 

(e)    by notice given by the Purchasers to the Company, if there have been one or more inaccuracies in or breaches of one
or more representations, warranties, covenants or agreements made by the Company in this Agreement such that the conditions in Section 1.3(b) would not be satisfied and which have not been cured by the Company within thirty (30) days
after receipt by the Company of written notice from the Purchasers requesting such inaccuracies or breaches to be cured. 

Section 5.17    Effects of Termination. In the event of any termination of this Agreement in accordance with
Section 5.16, neither party (or any of its Affiliates) shall have any liability or obligation to the other (or any of its Affiliates) under or in respect of this Agreement, except to the extent of (A) any
liability arising from any intentional and material breach by such party under this Agreement arising prior to such termination or (B) any fraud of this Agreement. In the event of any such termination, this Agreement shall become void
and have no effect, and the transactions contemplated hereby shall be abandoned without further action by the parties hereto, in each case, except (x) as set forth in the preceding sentence and (y) that the provisions of
Section 4.3 (Confidentiality), Section 5.3 to Section 5.14 (Amendment, Waiver; Counterparts, Electronic Transmission; Governing Law; Waiver of Jury Trial;
Notices; Entire Agreement, Assignment; Interpretation; Other Definitions; Captions; Severability; No Third Party Beneficiaries; Public Announcements) and Section 5.18
(Non-Recourse) shall survive the termination of this Agreement. 

Section 5.18    Non-Recourse. This Agreement may only be enforced
against, and any claims or causes of action that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement, may only be made against the entities that are expressly identified as
parties hereto, including entities that become parties hereto after the date hereof, and no former, current or future equityholders, controlling persons, directors, officers, employees, agents or Affiliates of any party hereto or any former, current
or future equityholder, controlling person, director, officer, employee, general or limited partner, member, manager, advisor, agent or Affiliate of any of the foregoing (each, a “Non-Recourse
Party”) shall have any liability for any obligations or liabilities of the parties to this Agreement or for any claim (whether in tort, contract or otherwise) based on, in respect of, or by reason of, the transactions contemplated hereby or
in respect of any representations made or alleged to be made in connection herewith. Without limiting the rights of either party against the other party hereto, in no event shall either party or any of its Affiliates seek to enforce this Agreement
against, make any claims for breach of this Agreement against, or seek to recover monetary damages from, any Non-Recourse Party. 

  
 33 

 Section 5.19    Disclosure Letter. Any matter disclosed by
the Company in the Disclosure Letter pursuant to any Section of this Agreement shall be deemed to have been disclosed by the Company for purposes of each other Section of this Agreement to which such disclosure is readily apparent. 

[The remainder of this page was intentionally left blank.] 

  
 34 

 IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized
officers of the parties hereto as of the date first herein above written. 
  

			
	COMPANY
	
	ROADRUNNER TRANSPORTATION SYSTEMS, INC.
		
	By:	 	 /s/ Curtis W. Stoelting

		 	Name: Curtis W. Stoelting
		 	Title: Chief Executive Officer

  
 [Signature Page to
Investment Agreement] 

 
			
	PURCHASER
	
	ELLIOTT ASSOCIATES, L.P.
		
	By:	 	Elliott Capital Advisors, L.P., its General Partner
		
	By:	 	Braxton Associates, Inc., its General Partner
		
	By:	 	 /s/ Elliot Greenberg

		 	Name: Elliot Greenberg
		 	Title: Vice President

  
 [Signature Page to
Investment Agreement] 

 
			
	PURCHASER
	
	BROCKDALE INVESTMENTS LP
		
	By:	 	Middleton International Limited, its General Partner
		
	By:	 	 /s/ Elliot Greenberg

		 	Name: Elliot Greenberg
		 	Title: Vice President

  
 [Signature Page to
Investment Agreement] 

 Purchaser Allocations 

 

					
	 Purchaser
	  	Percentage	 
	 Elliott Associates, L.P.
	  	 	32	% 
	 Brockdale Investments LP
	  	 	68	%Exhibit

Exhibit 10.1

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THE REDACTED PORTIONS OF THIS EXHIBIT. THE REDACTIONS ARE INDICATED WITH “[**]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION.

CO-PROMOTION AGREEMENT 
This Co-Promotion Agreement (this “Agreement”) is entered into this 24th day of January, 2017 (the “Effective Date”), by and between Pacira Pharmaceuticals Inc., a Delaware corporation (“Pacira”), and DePuy Synthes Sales, Inc., a Massachusetts corporation (“DePuy Synthes”). Each of Pacira and DePuy Synthes is referred to herein, individually, as a “Party” and collectively, as the “Parties.”
BACKGROUND 
A.    Pacira owns, develops, markets and manufactures a bupivacaine liposome injectable suspension product, currently marketed as “EXPAREL” (the “Product”);
B.    DePuy Synthes develops, markets and manufactures, among other things, certain orthopaedic and spine products for operating room use; and
C.     Each of Pacira and DePuy Synthes wish to collaborate with the other on the terms and conditions set forth herein to optimize the sales of the Product in the Field (as hereinafter defined) in the Territory (as hereinafter defined).
AGREEMENT 
Now, therefore, in consideration of the foregoing and the mutual promises herein contained, Pacira and DePuy Synthes hereby agree as follows:
1.Definitions.
1.1    “10 mL Product” shall mean the Product to the extent distributed in 10 mL single use vials.
1.2    “20 mL Product” shall mean the Product to the extent distributed in 20 mL single use vials.
1.3    “Act” shall mean the United States Federal Food, Drug, and Cosmetic Act, as it may be amended from time to time.
1.4    “Affiliate” shall mean a corporation or business entity that, directly or indirectly, is controlled by, controls, or is under common control with any entity. For this purpose, control means the direct or indirect ownership of more than fifty percent (50%) of the voting or income interest in such corporation or business entity, or such other relationship as, in fact, constitutes actual control.
1.5    “Aggregate Incremental Sales” means the aggregate Incremental Sales of the 20 mL Product for the Year for which the Commission Payment is being calculated and all prior Years.
1.6    “Annual Sales Milestones” shall mean the minimum increase in Net Sales for each Year over Net Sales for the prior Year for 20 mL Product as established by the JSC in accordance with Section 3.2(ii) based upon the following factors: (i) account level forecasts; (ii) review of the Premier data set (market share); (iii) independent data collected by the DPS Commercial Personnel or the Pacira Sales Force, (iv) supply disruption or significant changes in the market or marketplace for the Product and (iv) any other information and sources agreed to by the JSC.

 
[**] - Indicates certain information has been redacted and filed separately with the U.S. Securities and Exchange Commission. Confidential treatment has been requested with respect to the redacted portions.    

 

1.7    “Baseline Sales” means Net Sales of the 10 mL Product or 20 mL Product, as the case may be, for the prior Year.  For the first Year that begins with the Effective Date, Baseline Sales shall be Net Sales of the 10 mL Product or 20 mL Product, as the case may be, beginning on the date that is one year prior to the Effective Date and ending on December 31, 2016.
1.8     “Commercially Reasonable Efforts” shall mean, with respect to a Party’s obligation to perform or achieve a specified obligation for the Product or generally under this Agreement, the efforts, expertise, degree of skill, and resources that are comparable in quality and scope to those efforts, expertise, degree of skill and resources that are generally used by such Party to perform or achieve a comparable obligation for a product controlled by such Party, which has the same regulatory requirements or status (for example, requires a prescription or is available over-the-counter), is at a comparable stage of development or product life as the Product, and that has similar market potential as the Product, taking into account relative safety and efficacy, product profile, the competitiveness of the marketplace, relevant regulatory circumstances, and other relevant factors, including technical, legal, scientific and/or medical factors, but, in any event, a Party’s effort shall be no less than the effort that a comparable company would expend with respect to a comparable product controlled by such company taking into consideration the factors outlined above.
1.9    “Current Good Manufacturing Practices” shall mean the current standards for manufacture, as set forth in the Act and applicable regulations, including without limitation 21 C.F.R. Parts 210 and 211, and guidelines promulgated thereunder or successors thereto, as shall be in effect from time to time during the Term.
1.10     “DePuy Synthes Trademarks” shall mean the trademark DePuy Synthes®, the DePuy Synthes corporate logo and any other related domain name, trademark or service mark (whether registered or unregistered) containing the words “DePuy Synthes.”
1.11     “DPS Commercial Personnel” shall mean the number of DePuy Synthes Sales Force and relevant commercial personnel (i.e., strategic customer group, regional marketing, and professional education).
1.12    “FDA” shall mean the United States Food and Drug Administration, or any successor agency in the Territory.
1.13    “Field” shall mean orthopaedic (including knee, hip, shoulder, sports and trauma) and spine markets for operating room use.
1.14    “GAAP” shall mean United States generally accepted accounting principles, as applied by Pacira in its audited financial statements, as may be amended from time to time.
1.15    “Governmental Authority” shall mean any local, state, national or other government or any entity, body, agency, department or authority of any government and including, but not limited to, law enforcement, prosecutorial and judicial bodies.
1.16    “Incremental Sales” means Net Sales of the 10 mL Product or 20 mL Product, as the case may be, for the applicable Year in excess of the Baseline Sales for such Product.
1.17    “NDA” shall mean the “new drug application” (as such term is used under the Act) with respect to the Product with new drug application number 022496 that was submitted by Pacira to the FDA on September 28, 2010 and approved by the FDA on October 28, 2011, and all subsequent submissions, supplements, and amendments thereto.
1.18    “Net Sales” shall mean the gross sales of the 10 mL Product or the 20 mL Product, as the case may be, in the Territory during the applicable period, less the following deductions, applied in a consistent manner and (as applicable) calculated in accordance with GAAP (consistently applied) and properly reported by Pacira to the U.S. Securities and Exchange Commission as net product sales (collectively, “Deductions”): (i) normal and customary trade, cash and quantity discounts, allowances, prompt payment discounts, wholesaler fees, credits or 

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retroactive price reductions, (ii) credits, price adjustments or allowances for damaged goods, returns, rebates or rejections of such Product, (iii) chargeback payments, credits and rebates (or equivalent thereof) granted on sales of such Product to group purchasing organizations, managed health care organizations, or federal, state, local or other governments, including their agencies, purchasers and/or reimbursers, or to trade customers, (iv) freight, shipping insurance and other packing and transportation charges to the extent included in gross sales, and (v) sales or sum taxes (including the amount of any duties or government charges imposed upon the sale of such Product), excise, gross receipts, or similar taxes which are added to the selling price or paid to a taxing authority by Pacira, excluding income taxes. All such amounts and calculations will be determined from books and records maintained by Pacira in accordance with GAAP.  Net Sales shall not include, and shall be deemed zero with respect to, the 10 mL Product or the 20 mL Product, as the case may be, distributed at no cost or charge in connection with (i) samples or other marketing programs approved by the JSC and (ii) clinical trials or research purposes.
1.19    “Non-Serious Adverse Event” shall mean any adverse drug experience associated with the use of the Product in humans, whether or not considered drug-related, which is not a Serious Adverse Event.
1.20    “Pacira Trademarks” shall mean the trademark Pacira®, the Pacira corporate logo and any other related domain name, trademark or service mark (whether registered or unregistered) containing the word “Pacira” or a close variant or derivative thereof.
1.21    “Product Promotional Materials” shall mean any artwork or samples of training, educational, sales and promotional materials relating to the Product in the Territory (including, without limitation, detailing aids, leave behind educational items, journal advertising, educational programs, formulary binders, appropriate reprints and reprint carriers, product monographs, patient support kits, convention exhibit materials, direct mail, training materials, and scripts for telemarketing and teleconferences).
1.22    “Product Technical Complaint” shall mean: (i) any complaint that questions the purity, identity, potency or quality of the Product, its packaging or labeling or the compliance of the Product with applicable laws, rules and regulations, including the Act and Current Good Manufacturing Practices; (ii) any complaint that concerns any incident that causes the Product or its labeling to be mistaken for, or applied to, another article; (iii) any bacteriological contamination or significant chemical, physical or other change or deterioration in the Product; (iv) any failure of the Product to meet the specifications therefor in the NDA; or (v) any complaint or evidence of tampering with the Product.
1.23    “Product Trademarks” mean the trademark EXPAREL® (U.S. registration no. 4074454) associated with the Product, and any other related trademark or service mark containing the word “Exparel” or a close variant or derivative thereof and any other trademark or service mark (whether registered or unregistered) used on or with the Product or in any Product-related sales and marketing materials (other than Pacira Trademarks or the DePuy Synthes Trademarks, as applicable) in the Territory during the Term. Product Trademarks shall also mean such other name or mark, other than Pacira Marks, as may be used by or under authority of Pacira for any product in the Exparel® line.
1.24    “Promote,” “Promotional” and “Promotion” mean those activities normally undertaken by a pharmaceutical company to encourage sales or appropriate use of the Product, including details, product sampling, detail aids, coupons, discount cards, journal advertising, direct mail programs, direct-to-consumer advertising, convention exhibits and other forms of marketing, advertising, public relations or promotion, to the extent set forth in an applicable Promotion Plan or otherwise approved by the JCC.  For clarity, “Promote,” “Promotional” and “Promotion” shall not include (i) discussing or responding to questions regarding the Product outside of the FDA-approved Product labels and inserts, (ii) independently maintaining a website, call center or medical information hotline for the Product, or (iii) taking Product orders or otherwise selling or offering the Product for sale.
1.25    “Promotion Plan” means an annual plan that sets forth: (a) the manner in which DePuy Synthes shall deploy its efforts to Promote the Product in the Field in the Territory, (b) Volume Forecasts, and (c) other matters relevant to Promotion of the Product.

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1.26    “Quarter” shall mean (i) for the first calendar quarter following the Effective Date, the period commencing on the Effective Date and ending on March 31, 2017 and (ii) each successive three month period ending on each of March 31, June 30, September 30 and December 31 of each Year.
1.27    “Risk Sharing” shall mean DePuy Synthes’ value-based customer offerings related to the Product.
1.28    “Roll Out Plan” shall mean a target account roll-out plan, including a timeline for training of the DPS Commercial Personnel, transition of sales relationships in the Field in the Territory from the Pacira Sales Force to the DPS Commercial Personnel and commencement of Promotion of the Product in the Field in the Territory by the DPS Commercial Personnel.
1.29    “Sales Force” shall mean the field-based sales representatives employed by or on behalf of Pacira or DePuy Synthes, as the case may be, for the Promotion of the Product in the Field in the Territory. DePuy Synthes’ Sales Force may include, without limitation, any sales representatives engaged through an arrangement with a contract sales organization or other distributor.
1.30    “Senior Officer(s)” shall mean the officers of each Party set forth on Exhibit B hereto (or such other executive or senior officer of the Party or an Affiliate designated in writing by the Chief Executive Officer of such Party to the other Party).
1.31    “Serious Adverse Event” shall have the meaning as set forth in 21 C.F.R. 314.80(a), namely, any adverse drug experience occurring at any dose that results in any of the following outcomes: death, a life-threatening adverse drug experience, inpatient hospitalization or prolongation of existing hospitalization, a persistent or significant disability/incapacity, or a congenital anomaly/birth defect. Important medical events that may not result in death, be life-threatening, or require hospitalization may be considered a Serious Adverse Event when, based upon appropriate medical judgment, they may jeopardize the patient or subject and may require medical or surgical intervention to prevent one of the outcomes listed in this definition.
1.32    “Target” means a healthcare professional with prescribing authority or a hospital pharmacist or material manager and related hospital personnel in the Field in the Territory to whom a member of the DPS Commercial Personnel Promotes the Product within applicable policy constraints and in compliance with applicable laws, rules and regulations.
1.33    “Territory” shall mean the United States of America and its territories and possessions.
1.34    “Trained DPS Commercial Personnel” shall mean the number of DPS Commercial Personnel that are qualified and are in good standing with the Pacira product training and compliance curriculum and such other training requirements.
1.35    “Year” means (i) for the first calendar year, the period commencing on the Effective Date and ending on December 31, 2017, (ii) for each successive period beginning on January 1 and ending twelve (12) consecutive calendar months later on December 31, and (iii) for the calendar year in which this Agreement is terminated, the period beginning on January 1 of such calendar year and ending on the effective date of the termination of this Agreement.
In addition, the following terms have the meanings set forth in the Sections set forth below:

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	Definition
	Location

	Accountant
	12.2

	Annual Training Goal
	4.6(iii)

	Base Commission
	5.1(i)

	CGL
	10.2

	CMS
	11.1(iii)

	Claim
	10.1(i)

	Committees
	3.1

	Compliance Policies
	4.9

	Confidential Information
	11.1(i)

	Confidentiality Agreement
	11.1(v)

	DePuy Synthes
	Preamble

	Discloser
	11.1(i)

	Dispute
	15.6

	Effective Date
	Preamble

	Enforcement Action
	9.3(ii)

	Files and Work Papers
	11.1(ii)

	Indemnified Persons
	10.1(i)

	JSC
	3.1

	JCC
	3.1

	Overpayment Amount
	5.3(ii)
	 

	Pacira
	Preamble

	Party/Parties
	Preamble

	Prior Agreements
	15.3

	Product
	Background

	Recipient
	11.1(i)

	Recipient’s Representatives
	11.1(ii)

	Commission Payment
	5.1

	Stark Law
	4.9

	Term
	13.1

	Training Certification
	4.6(iii)

	Training Records
	4.6(iii)

	Volume Forecast
	4.4

2.    Appointment.
2.1    Appointment. Pacira hereby appoints DePuy Synthes and DePuy Synthes hereby accepts such appointment, during the Term, on an exclusive basis to Promote the Product through the DPS Commercial Personnel in the Territory for its approved indications solely in the Field, subject to the terms and conditions of this Agreement, provided, however, that Pacira shall retain all rights and authority to also promote and market the Product in the Territory in the Field subject to the terms and conditions of this Agreement. In conducting its activities hereunder, DePuy Synthes will use Commercially Reasonable Efforts to Promote the Product in the Field in the Territory during the Term. The Parties shall cooperate, including taking such actions as are reasonably requested by the other Party, in performing their obligations hereunder. Except as set forth in this Agreement, such appointment shall be non-transferable and DePuy Synthes shall not grant any rights to, or permit or authorize, any person, other than 

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Affiliates of DePuy Synthes and their representatives, sales representatives engaged through an arrangement with a contract sales organization, and third-party distributors (provided that such representatives, sales representatives and third-party distributors are provided with training and education consistent with overall roles and responsibilities outlined in this Agreement), to Promote the Product in the Field in the Territory. Promotional activities shall at all times remain within the scope of the FDA-approved labeling and indications for the Product.
2.2    Retention of Rights. Pacira retains and shall retain all proprietary and property interests in the Product until the point of sale and DePuy Synthes shall have no responsibilities with respect to the Product except as otherwise expressly provided herein. DePuy Synthes shall not have nor represent that it has any control or proprietary interest or property interests in the Product, except for the rights and licenses granted hereunder. Except as expressly set forth herein, nothing contained herein shall be deemed to grant DePuy Synthes, by implication, a license or other right or interest in any patent, trademark or other similar property of Pacira or its Affiliates.
3.    Coordination of Activities.
3.1    Establishment of Committees Generally. Within thirty (30) days of the Effective Date, the Parties agree to establish, in each case for the purposes specified herein, (i) a Joint Steering Committee (the “JSC”) and (ii) a Joint Commercialization Committee (“JCC”, and together with the JSC, the “Committees”). The Parties acknowledge and agree that neither of the Committees has the power to amend, modify or waive any of the terms or conditions of this Agreement.
3.2    Joint Steering Committee.
(i)    Composition. The JSC shall be made up of an equal number of representatives from each Party. The JSC shall have four (4) members, two (2) of whom shall be appointed by Pacira, and two (2) of whom shall be appointed by DePuy Synthes and all of whom shall be qualified to appropriately represent such Party at the JSC level. Each Party may replace its representatives at any time, upon written notice to the other Party. Each Party shall have the right, upon written notice to the other Party, to have present at JSC meetings additional, non-voting participants, provided that such attendees shall be bound by obligations of confidentiality and non-use at least as restrictive as those set forth in this Agreement. Such additional participants shall not be deemed to be, and shall not have any of the rights or responsibilities of, members of the JSC.
(ii)    Role and Responsibilities. The JSC will be used as the forum to oversee and manage the relationship between the Parties and shall have the following responsibilities:
A.    providing oversight and guidance for the Promotion of the Product in the Field in the Territory;
B.    establishing the Annual Sales Milestones;
C.    establishing the Annual Training Goal with respect to the third Year and all subsequent Years;
D.    approving the DPS Commercial Personnel;
E.    overseeing the work of the JCC, and receiving and reviewing reports and other information submitted by the JCC;
F.    resolving all disputes referred to it by the Parties; and
G.    making such other decisions as may be delegated to the JSC pursuant to this Agreement or by written agreement of the Parties from time to time.

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Within fifteen (15) days of the end of each Quarter, DePuy Synthes shall advise the JSC in writing of the DPS Commercial Personnel and Trained DPS Commercial Personnel.  The JSC shall consider and, if in agreement, approve the DPS Commercial Personnel.
Notwithstanding the foregoing, (x) the JSC has no authority to make decisions with respect to matters that relate to the development of the Product or the authorization and/or continued authorization to Promote and market the Product in commercial quantities in the Territory without Pacira’s prior written consent, (y) the JSC has no authority to require a Party to engage in Promotion activities beyond those obligations set forth in Section 4, and (z) the JSC has no authority to amend or waive any term or condition of this Agreement.

(iii)    Meetings. The JSC shall meet face-to-face at mutually agreed upon times and locations at least quarterly during the first Year following the Effective Date, and at least semi-annually in subsequent Years (unless mutually agreed otherwise). Unless otherwise agreed, the location of such meetings will alternate between the Parties’ facilities, and the Party hosting a meeting shall be responsible for chairing the meeting and secretarial duties (i.e., scheduling the meeting, preparing and circulating an agenda and preparing and issuing minutes). The JSC shall also address issues as they arise in the interim via teleconference, videoconference or electronic mail.
(iv)    Decision-Making.
A.    Subject to this Section 3.3(iv), decisions of the JSC shall be made by mutual agreement between the representatives of Pacira and the representatives of DePuy Synthes, with each Party having one (1) vote. The Parties shall cause their respective representatives on the JSC to use their good faith efforts to resolve all matters appropriately presented to them in an expeditious manner.
B.    In the event that the JSC is unable to resolve a dispute or make a decision (including with respect to an Annual Sales Milestone) due to a lack of required unanimity within twenty (20) calendar days following consideration of the dispute or the decision by the JSC, then either Party may submit in writing the matter to the Senior Officers for a joint decision. The Senior Officers shall diligently and in good faith attempt to resolve the referred dispute or decision expeditiously and, in any event, within twenty (20) calendar days of receiving such written notification, or within such other time as mutually agreed upon in writing between such officers (and if the officers resolve the dispute, such resolution shall be deemed to be a decision of the JSC). In the event that the Senior Officers are unable to reach a resolution of the dispute within such time period, then such disputes shall be resolved pursuant to Section 15.6 below, provided, however, that in the event the Senior Officers are unable to agree on an Annual Sales Milestone or DPS Commercial Personnel within such time period, then such dispute shall not be resolved pursuant to Section 15.6 and instead the Senior Officer of Pacira, acting reasonably, shall make the final decision with respect to such Annual Sales Milestone or DPS Commercial Personnel, which decision shall be deemed to be a decision of the JSC. Notwithstanding the foregoing, in the event that DePuy Synthes disagrees in good faith with the Annual Sales Milestones determined by the Senior Officer of Pacira after following the dispute escalation provisions of this Section 3.2(iv)(B) and final determination by the Senior Officer of Pacira, DePuy Synthes may terminate this Agreement effective upon sixty (60) days prior written notice.
C.    For clarity, any dispute with respect to whether a Party has breached its obligations under this Agreement is not subject to the escalation procedures set forth in this Section 3.2, but either Party may refer such a dispute for resolution pursuant to Section 15.6.
3.3    Joint Commercialization Committee.
(i)    Composition. The JCC shall be made up of an equal number of representatives from each Party. The JCC shall have six (6) members, three (3) of whom shall be appointed by Pacira, and three (3) of whom shall be appointed by DePuy Synthes and all of whom shall be qualified to appropriately represent such Party at the JCC level. Each Party may replace its representatives at any time, upon written notice to the other Party. Each Party shall have the right, upon written notice to the other Party, to have present at JCC meetings additional, non-voting participants, provided that such attendees shall be bound by obligations of confidentiality and non-use at least as 

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restrictive as those set forth in this Agreement. Such additional participants shall not be deemed to be, and shall not have any of the rights or responsibilities of, members of the JCC.
(ii)    Role and Responsibilities. The JCC will be responsible for business planning and day-to-day operational management of the Promotion of the Product in the Field in the Territory and shall have the following responsibilities:
A.    review and approval of the Promotion Plan, including Volume Forecasts;
B.    strategic issues related to the Promotion of the Product in the Field in the Territory, including development of customer insights and orthopaedic pain protocols;
C.    review and approval of the Roll-Out Plan;
D.    the need for review and approval of any Product Promotional Materials by either Party pursuant to Section 4.5(iii);
E.    determine the medical education strategy for each Year.   Such strategy may include, but is not limited to, Smart Labs, WWCV & OR Visitations, National Courses, Anytime-Anywhere learning, and professional congresses and symposia in the Field in the Territory;
F.    updates regarding any product development, clinical, regulatory, manufacturing/supply and quality matters, including any applicable updates from DePuy Synthes to the Volume Forecasts; and
G.    any measures required to ensure the Promotion of the Product in the Field in the Territory under this Agreement complies with all applicable laws, restrictions and regulations.
As part of the annual review and approval of the Promotion Plan, DePuy Synthes shall present to the JCC its plan for Risk Sharing in the applicable Year.  If the JCC approves a plan for Risk Sharing, the Parties shall cooperate in good faith to amend this Agreement to address Risk Sharing.  Prior to any such amendment, DePuy Synthes shall not Promote the Product as part of Risk Sharing.

(iii)    Meetings. The JCC shall meet face-to-face or by video or teleconference at least quarterly (unless mutually agreed otherwise) at mutually agreed upon times and locations; provided that the JCC shall meet as and when necessary to review and approve, on a timely basis, all Promotion Plans and any amendments or updates thereto. Unless otherwise agreed, the location of such meetings will alternate between the Parties’ facilities, and the Party hosting a meeting (whether in-person or electronically) shall be responsible for chairing the meeting and secretarial duties (i.e., scheduling the meeting, preparing and circulating an agenda and preparing and issuing minutes). The JCC shall also address issues as they arise in the interim via teleconference, videoconference or electronic mail.
(iv)    Decision-Making. 
A.    Subject to this Section 3.3(iv), decisions of the JCC shall be made by mutual agreement between the representatives of Pacira, and the representatives of DePuy Synthes, with each Party having one (1) vote. The Parties shall cause their respective representatives on the JSC to use their good faith efforts to resolve all matters appropriately presented to them in an expeditious manner.
B.    In the event that the JCC is unable to resolve a dispute or make a decision due to a lack of required unanimity within twenty (20) calendar days following consideration of the dispute or the decision by the JCC, then either Party may submit the matter to the JSC for resolution.
3.4    Expenses. Each Party shall bear its own costs associated with its participation in the Committees, including but not limited to the costs of travel and expenses directly associated with participation in the Committees.

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4.    Product Promotion Matters.
4.1    Responsibilities. Each of the Parties shall have the obligations and responsibilities with respect to the promotion of the Product set forth in this Section 4 and on Exhibit A hereto, which is incorporated by reference herein. In the event of any conflict between the provisions of this Agreement and Exhibit A, this Agreement shall govern.
4.2    Costs. DePuy Synthes shall be responsible for all costs and expenses related to establishing, maintaining and training the DPS Commercial Personnel and conducting DePuy Synthes’ other activities under this Agreement, except as set forth in this Section 4. Pacira shall be responsible for all costs and expenses related to conducting Pacira’s activities under this Agreement.
4.3    Roll Out Plan. No later than forty-five (45) days after the Effective Date, appropriate representatives from each Party will jointly prepare the Roll Out Plan. The Parties shall provide the Roll Out Plan to the JCC for review, comment, and approval prior to DePuy Synthes initiating its Promotion activities hereunder.
4.4    Sales Process; Promotion Plan. DePuy Synthes shall be responsible for developing, managing and executing the sales process for the Product in the Field in the Territory, including selecting Targets, determining the manner in which the DPS Commercial Personnel will deploy its efforts to Promote the Product and contact Targets and other matters relevant to Promotion of the Product in the Field in the Territory. On or before October 1 of each Year beginning with October 1, 2017, DePuy Synthes shall submit to the JCC a Promotion Plan for the following Year, including a written forecast of the aggregate number of Products that are expected to be ordered for delivery by Pacira to hospitals and operating rooms during such Year in the Field in the Territory (a “Volume Forecast”). The JCC will review and approve the Promotion Plan within thirty (30) days of receipt thereof. If the JCC is unable to agree on the Promotion Plan for any Year, such dispute shall be resolved in accordance with Section 3.3(iv)(B). At each JCC meeting, DePuy Synthes will advise of any material update to the Volume Forecast.
4.5    Marketing; Product Promotional Materials.
(i)    DePuy Synthes shall be primarily responsible for leading and implementing the marketing strategy for the Product in the Field in the Territory to orthopaedic and spinal surgeons, with input and guidance from Pacira, and Pacira shall be primarily responsible for leading and implementing the marketing strategy for the Product outside of the Field, as further set forth on Exhibit A hereto.
(ii)    Promptly following the Effective Date, Pacira shall provide to DePuy Synthes in electronic format/operating system reasonably acceptable to DePuy Synthes any existing Product Promotional Materials.
(iii)    All Product Promotional Materials to be used by DePuy Synthes shall be reviewed and approved in writing by Pacira and DePuy Synthes prior to their use by DePuy Synthes. DePuy Synthes shall not be required to use any Product Promotional Materials that are not reviewed by and acceptable to DePuy Synthes, and DePuy Synthes shall only use the Product Promotional Materials in connection with the Product. If, after its review of any Product Promotional Materials (including any new materials introduced after the Effective Date), a Party believes that changes to any such Product Promotional Materials are required to meet applicable legal or regulatory requirements or applicable FDA requirements, such proposed changes shall be submitted to the JCC for review and approval. Pacira shall be responsible for ensuring that all Product Promotional Materials are at all times in full compliance with all applicable laws, rules and regulations. Approval by DePuy Synthes of any Product Promotional Materials shall not be deemed to constitute an acknowledgement, agreement or certification by DePuy Synthes that such Product Promotional Materials comply with any applicable laws, rules and regulations.
(iv)    Pacira shall provide to DePuy Synthes electronic copies of any Product Promotional Materials as reasonably requested by DePuy Synthes in a format/operating system reasonably acceptable to DePuy Synthes. DePuy Synthes may produce Product Promotional Materials based on such electronic copies at its own cost, which shall be subject to review and approval in writing as described in Section 4.5(iii) above. DePuy Synthes 

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shall be permitted to use in connection with the Promotion of the Product only (A) the Product Promotional Materials approved under Section 4.5(iii) above by each of DePuy Synthes and Pacira and (B) the FDA-approved Product labels and inserts. DePuy Synthes shall use such Product Promotional Materials only in the form so approved and consistent with the training provided pursuant to Section 4.6 and DePuy Synthes shall not change such Product Promotional Materials in any way following such approval and training, without the express written consent of Pacira. Pacira agrees that DePuy Synthes can utilize the vendor(s) used by Pacira to produce Product Promotional Materials at the rates charged by such vendors to Pacira for the production of Product Promotional Materials, subject to the agreement of such vendor(s) in each instance.  DePuy Synthes shall have the right, but not the obligation, to so utilize such vendors and shall have the right to negotiate rates that are lower than the rates charged to Pacira by any such vendors.
(v)    Pacira shall own all copyrights to all Product Promotional Materials (other than those items which are subject to third-party copyrights). Pacira shall, and does hereby, grant to DePuy Synthes a royalty-free, non-exclusive right and license to use, reproduce and distribute Product Promotional Materials solely in conjunction with the Promotion of the Product and the performance of DePuy Synthes’ obligations under this Agreement, which license shall not be sublicensable, assignable or transferable by DePuy Synthes, except in accordance with the terms of Section 15.1. DePuy Synthes shall not be permitted or licensed to make derivative works with respect to, or otherwise modify, any Product Promotional Materials without the prior written consent of Pacira.
4.6    Training and Education.
(i)    DPS Commercial Personnel. DePuy Synthes and Pacira shall consult and agree on the development and implementation of initial and refresher sales training for the DPS Commercial Personnel. DePuy Synthes shall provide training to each member of its Sales Force, at DePuy Synthes’ expense, prior to his or her commencement of Promotion of the Product hereunder to ensure that he or she is properly trained with respect to the matters described in this Section 4.6 and able to satisfy his or her Promotion and detailing responsibilities under this Agreement. Pacira shall have the right, but not the obligation, to participate in the sales training process, at Pacira’s expense as Pacira may reasonably deem necessary to comply with its code of conduct or any related policies or as required by applicable laws, rules and regulations or by a government entity or regulatory agency.
(ii)    Orthopaedic Health Care Professionals. In compliance with all applicable laws, rules and regulations, DePuy Synthes shall be responsible for developing and implementing a professional education strategy pursuant to which DePuy Synthes, through its Sales Force or otherwise, will provide training and education to orthopaedic health care professionals, direct operating room staff and key opinion leaders at the local, regional, and national level with respect to the Product and its appropriate use and infiltration techniques in the Field in the Territory. In furtherance of the foregoing, DePuy Synthes will incorporate training and education with respect to the Product into its existing professional education programs. The Parties will jointly develop and implement a training program to ensure training of surgical staff other than orthopaedic health care professionals and direct operating room staff, including post-anesthesia care unit and medical surgery staff.
(iii)    Training.  As of the end of each Year, the number of Trained DPS Commercial Personnel shall be with respect to the first Year, [**], with respect to the second Year, [**], and with respect to the third Year and all subsequent Years,  a number as determined by the JSC (the “Annual Training Goal”). Within fifteen (15) calendar days of the end of each Year, DePuy Synthes shall provide to Pacira a written certification including the Trained DPS Commercial Personnel as of the end of such Year (the “Training Certification”).  Within five (5) calendar days of receipt of the Training Certification, Pacira may provide DePuy Synthes with notice that it disagrees with the numbers in such certification, in which case DePuy Synthes shall provide Pacira its records with regard to Sales Force training for such Year (the “Training Records”) within five (5) calendar days and then Pacira shall have the right to examine such records for five (5) calendar days after receipt.  If (i) the Training Certification provides that the Annual Training Goal was not achieved or (ii) after review of the Training Records Pacira determines that the Annual Training Goal was not achieved, DePuy Synthes shall have until thirty (30) calendar days following the later of delivery of the Training Certification or the determination by Pacira to cure such non-compliance and provide to Pacira a certification, with appropriate support, that such deficiency has been cured.

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4.7    Future Development of the Product. Pacira shall have sole responsibility for any future development of the Product (including all studies and clinical trials related thereto, and related regulatory filings), including (i) responsibility for all decisions regarding, and submission of, regulatory submissions, or notices of any kind, and for interactions with Governmental Authorities, including interactions arising from DePuy Synthes’ Promotion of the Product, subject to meaningful consultation with, and opportunity for comment by, DePuy Synthes in circumstances where such submission, notice or interaction relates directly to DePuy Synthes’ Promotion of the Product; and (ii) responsibility for creation, subsequent modification, internal approval, and filing of all Product labeling, Product Promotional Material and medical/scientific material and content (including submission of Product Promotional Materials to the FDA’s Office of Prescription Drug Promotion).
4.8    Pricing; Reimbursement. Pacira shall be solely responsible for determining all Product pricing and positioning, including the timing of pricing changes, requests for reimbursement and the offering of any discounts (including cash discounts with wholesalers) or rebates. In addition, Pacira shall be solely responsible for developing and managing the formulary and pharmacy access strategy for the Product.
4.9    Compliance with Laws and Policies. Each of Pacira and DePuy Synthes agrees that it shall comply, and its Promotional activities with respect to the Product shall be conducted in accordance, with: (i) FDA and all other applicable regulatory approvals or requirements which are then in effect with respect to the Product and with the Code on Interactions with Healthcare Professionals promulgated by the Pharmaceutical Research and Manufacturers of America (PhRMA Code) and applicable American Medical Association (AMA) guidelines; (ii) all applicable laws, restrictions and regulations, including those of the FDA, the Department of Commerce, the Department of Health and Human Services and any other United States, state, local, or applicable agency or authority, including but not limited to FDA rules prohibiting the off-label promotion of approved drug products; the December 2011 FDA Guidance for Industry on “Responding to Unsolicited Requests for Off-Label Information About Prescription Drugs and Medical Devices”; the February 2014 FDA Guidance for Industry on “Distributing Scientific and Medical Publications on Unapproved New Uses – Recommended Practices”; U.S. state and federal false claims laws, the U.S. Limitation on Certain Physician Referrals (a.k.a. the Stark Law), U.S. federal anti-kickback law, and the U.S. Health Insurance Portability and Accountability Act, as well as their respective regulations and guidance documents; (iii) the FDA and healthcare compliance policies exchanged by both Parties (the “Compliance Policies”), as updated or amended from time to time and (iv) Exhibit D hereto. If any Party makes material changes to its Compliance Policies other than as required to comply with applicable laws, rules and regulations, it will give prior written notice of such changes to the other Party. If changes are made to the Compliance Policies to comply with applicable laws, rules and regulations, the Party making such change shall give notice of such change to the other Party as soon as reasonably practicable. Each of Pacira and DePuy Synthes shall limit its claims of efficacy and safety for the Product to those that are within the scope of approved Product Promotional Materials and FDA-approved prescribing information for the Product in the Territory, and shall not add, delete or modify claims of efficacy and safety in the marketing of the Product under this Agreement from those claims of efficacy and safety that are within the scope of the FDA-approved prescribing information and applicable laws, rules and regulations. Under no circumstance shall a Party incur expenses on behalf of the other Party that would be reportable for the other Party under the Physician Payments Sunshine Act (Section 6002 of the Affordable Care Act) of 2010 and its implementing regulations. Each Party agrees that any action taken or omitted to be taken by the other Party to the extent required by such Party’s Compliance Policies shall not constitute a breach of this Agreement by that Party.
4.10    Trademarks.
(i)    Pacira hereby grants to DePuy Synthes a non-exclusive, royalty-free license to use the Product Trademarks and Pacira Trademarks solely on and as the same appear on (A) the Product Promotional Materials approved under Section 4.5(iii) above by each of DePuy Synthes and Pacira and (B) the FDA-approved Product labels and inserts, solely to promote the Product pursuant to the terms of this Agreement in the Field in the Territory during the Term.  DePuy Synthes shall not use the Product Trademarks or Pacira Trademarks in connection with any product other than the Product as permitted above. All use of the Product Trademarks and Pacira Trademarks pursuant to this paragraph shall inure to the benefit of Pacira.  DePuy Synthes shall not use on or in connection with the Product or the Promotion thereof, any trademark, service mark, or domain name other than the 

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Product Trademarks and Pacira Trademarks as permitted above, without the prior written approval of Pacira in each instance.
(ii)    Each Party acknowledges the validity of DePuy Synthes’ right, title and interest in and to the DePuy Synthes Trademarks and the validity of Pacira’s right, title and interest in and to the Pacira Trademarks and the Product Trademarks. The Parties shall not have, assert or acquire any right, title or interest in or to any of DePuy Synthes Trademarks (in the case of Pacira), or the Pacira Trademarks or the Product Trademarks (in the case of DePuy Synthes) or the goodwill pertaining thereto, except as otherwise explicitly provided in Section 4.10(i) of this Agreement.
(i)    The Parties agree that, in the event a breach or threatened breach of this Section 4.10, the non-breaching Party, in addition to other rights and remedies existing in its favor, shall be entitled to specific performance and/or injunctive or other equitable relief from a court of competent jurisdiction in order to enforce, or prevent any violations of, the provisions hereof (without posting a bond or other security and at the expense of the breaching Party).
4.11    Notices. In addition to any other specific notice requirements set forth herein, Pacira shall provide DePuy Synthes with prompt written notice of any material developments or changes relating to the Product, which could reasonably be expected to have an effect on DePuy Synthes’ rights and obligations under this Agreement. Notwithstanding the generality of the foregoing, Pacira shall provide prompt written notice of any of the following matters:
(i)    any material manufacturing matters related to the Product (including potential shortages, quality matters, significant Product Technical Complaints, voluntary or mandatory withdrawals or recalls, etc.);
(ii)    any material change in new or existing litigation relating to the Product;
(iii)    any material communications with regulatory authorities relating to the Product; and
(iv)    to the best of Pacira’s knowledge, any changes to the availability of products in the same therapeutic class as the Product or any other generic product to the Product promoted or otherwise commercialized by a third party in the Territory.
5.    Compensation.
5.1    Compensation. For each applicable Year, Pacira shall pay DePuy Synthes an annual commission on Net Sales (the “Commission Payment”) as follows:
[**]
5.2    Changes in Dosage Practices. In the event that DePuy Synthes becomes aware of a material change in the infiltration procedures such that other dosage forms or formulations are being used in lieu of the 20 mL Product in the Field in the Territory, DePuy Synthes shall immediately inform Pacira of such change and provide supporting data. The Parties agree to negotiate in good faith appropriate changes to the Commission Payment to reflect the change in infiltration procedures based on the supporting data provided by DePuy Synthes.
5.3    Reports; Method of Payments.
(i)    Within forty (40) days after the end of each of the first three Quarters of each Year and sixty (60) days after the end of the applicable Year, Pacira shall provide a written report to DePuy Synthes, detailing: (A) the Net Sales of each of the 20 mL Product and 10 mL Product, including reasonably detailed descriptions of all itemized deductions from gross sales, for the applicable Year through the end of such Quarter; (B) the Incremental Sales of the 20 mL Product and 10 mL Product for the applicable Year through the end of such Quarter and Aggregate Incremental Sales of the 20 mL Product for the applicable Year through the end of such Quarter; (C) the 

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calculated amount of the Commission Payment due DePuy Synthes on account of such Net Sales and Incremental Sales; and (D) the basis for calculation of the Commission Payment due DePuy Synthes, including deductions of payments made with respect to earlier Quarters of the same Year pursuant to this Section 5.3(i) and any other applicable deductions/adjustments. During the final quarter of each Year, Pacira shall provide DePuy Synthes with a written estimate of full-Year 10mL Product and 20mL Product sales. With respect to Base Commission, Pacira shall pay the Base Commission to DePuy Synthes within sixty (60) days after the end of each of the first three Quarters of each Year and within seventy-five (75) days after the end of each Year.  With respect to the Commission Payment related to Incremental Sales, Pacira shall pay DePuy Synthes within sixty (60) day after the end of the second Quarter of each Year and within seventy-five (75) days after the end of each Year.  In the event that adjustment to the amount of the Commission Payment due DePuy Synthes for such Year results in a negative amount (the “Overpayment Amount”), such amount shall applied as a credit to Pacira against the next Commission Payment due and if, following termination or expiration of this Agreement any amount of such a credit remains unused, such unused amount shall be payable by DePuy Synthes to Pacira within seventy-five (75) days. In the event the due date is a Saturday, Sunday or a bank holiday, the due date will be the next business day.
(ii)    Pacira’s reports under Section 5.3(i) shall be transmitted to DePuy Synthes by email (to such email addresses as DePuy Synthes may from time to time designate in writing).
(iii)    Payment of the Commission Payment shall be made by wire transfer or ACH to an account designated by DePuy Synthes. All payments under this Agreement shall be made in U.S. Dollars.
5.4    Late Payments; Interest. Each Party shall have the right to charge interest on all overdue amounts under this Article 5 from the date due until paid at a rate equal to 1.5% per month, or, if less, the maximum rate permitted by applicable law.
5.5    Monthly Report.  In additional to Pacira’s reports under Section 5.3(i), Pacira shall provide to DePuy Synthes, within thirty (30) days following the end of each month a report providing the number of units of the Product sold in the preceding month.
6.    Regulatory Affairs.
6.1    Regulatory Affairs. Pacira shall have the sole right and responsibility, and shall bear all costs related thereto, to take such actions as may be necessary, in accordance with accepted business practices and legal requirements, to maintain the authorization and/or ability to market the Product in the Territory. If DePuy Synthes requests or requires any regulatory filing or other action under this Section 6.1 which Pacira determines is not commercially reasonable, the Parties shall negotiate in good faith a division of the costs of such filing or action between the Parties.
6.2    Communications with Regulatory Authorities. Pacira shall have the sole right and responsibility and shall bear all costs related to communications with any government agencies to satisfy their requirements regarding the authorization and/or continued authorization to market the Product in commercial quantities in the Territory. To the extent permitted by law, governmental order or regulation and not so prohibited by the governmental authority, DePuy Synthes shall notify Pacira within two (2) business days via facsimile or email of any inquiry or other communication that it receives from the FDA or any other governmental or regulatory authority concerning the Product. Pacira shall handle all communications with the FDA and other governmental and regulatory authorities concerning the Product, including but not limited to post-marketing reports of adverse drug experiences in compliance with 21 CFR §314.80, other post-marketing reports such as those described in 21 CFR §314.81, submission of advertising and promotional labeling to FDA’s Office of Prescription Drug Promotion (OPDP), and responding to any FDA inquiries concerning post-marketing reports and advertising or promotional materials, and shall provide copies of all such communication to DePuy Synthes within five (5) business days via facsimile or email. Notwithstanding the foregoing, DePuy Synthes shall be able to communicate with any such governmental agency regarding the Product to the extent that DePuy Synthes believes in good faith that such communication is necessary to comply with the terms of this Agreement or the requirements of any law, governmental order or regulation or at the request of such governmental agency, provided that DePuy Synthes shall 

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within two (2) business days disclose in writing to Pacira the nature of any such communication to the extent DePuy Synthes is not legally prohibited from making such a disclosure.
6.3    Notice of Adverse Events. Each Party shall promptly notify the other Party within the timelines described in the Parties’ safety data exchange agreement of any Product-related safety events, including without limitation Serious Adverse Events, Non-Serious Adverse Events, and governmental inquiries related to the safety of the Product. As between the Parties, Pacira shall have the sole responsibility for reporting and responding to such events to applicable governmental or regulatory authorities; provided that DePuy Synthes may take such actions (including issuing such reports) as it determines are required by applicable law, governmental order or regulation.  Each Party shall concurrently provide the other Party with a copy of all correspondence between such Party and any applicable governmental or regulatory authorities related to or arising from the Product or this Agreement.  Each Party shall provide the other Party with a copy of any proposed correspondence or action plan at least three (3) business days prior to submission of the correspondence or effecting of the action, and the other Party has the right to review and comment upon all such correspondences or actions before the Party providing such correspondence or plan may take the proposed action.  The Party providing such correspondence or plan shall consider the other Party’s comments in good faith and implement the other Party’s reasonably requested changes. However, nothing in this Section 6.3 shall be construed as requiring either Party to delay timely effecting of a required action.
6.4    Medical Inquiries. DePuy Synthes and its Sales Force shall direct all medical inquiries, including unsolicited requests for off-label information, to Pacira’s Medical Information Department or a designee. As between the Parties, any responses to such inquiries from patients, medical professionals, or other third parties shall be provided solely by Pacira.
6.5    Pharmacovigilance Responsibilities. The Parties shall enter into a mutually agreeable safety data exchange agreement no later than thirty (30) days following the Effective Date.
6.6    Product Technical Complaints and Recalls.
(i)    If DePuy Synthes becomes aware of any Product Technical Complaint, DePuy Synthes shall notify Pacira in writing of such Product Technical Complaint promptly but not later than within ten (10) business days to the extent DePuy Synthes is not legally prohibited from making such a notification.
(ii)    As between the Parties, Pacira shall have the sole authority and responsibility to respond to any governmental or regulatory authorities, including without limitation the FDA, in connection with Product Technical Complaints and medical complaints, and to make decisions regarding and handle all returns, recalls or market withdrawals of the Product subject to applicable law, at Pacira’s cost and expense (subject to the indemnification obligations of Section 10.1).
(iii)    Each Party shall promptly notify the other Party in writing via facsimile or email of any order, request or directive of a court or other governmental or regulatory authority to recall or withdraw the Product.
6.1    Manufacturer.  Pacira shall be considered the manufacturer of the Product and shall have the legal obligations thereas.
7.    Supply and Distribution.
7.1    Supply. In accordance with the provisions of this Agreement and all applicable legal requirements, except as set forth in Section 7.3, Pacira shall, at its cost and expense, perform or cause to be performed all Product manufacture, labeling, packaging, warehousing, distribution and return, order entry, payment processing, customer services and all other activities to supply and distribute the Product in the Territory. Pacira shall use commercially reasonable efforts to ensure that stock of the Product is available in its inventory to promptly fill orders in the Volume Forecast for the applicable Year throughout the Territory. Pacira shall use only FDA-registered manufacturing facilities and shall use Commercially Reasonable Efforts to have such FDA-registered manufacturing facilities available to it or its manufacturer that can produce an amount of the Product equal to the amount set forth 

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in the Volume Forecast for the applicable Year.  Pacira shall manufacture or cause to be manufactured the Product in accordance with all applicable laws, including without limitation the Act and all applicable rules and regulations thereunder, the NDA and Current Good Manufacturing Practices. In the event that the supply of the Product is disrupted, Pacira shall use Commercially Reasonable Efforts to ensure that a reasonable supply of the Product is available to DePuy Synthes pursuant to this Agreement. In the event that the disruption applies to the 20 mL Product, the JSC shall meet to discuss whether any changes should be made to the Annual Sales Milestones due to such disruption.
7.2    Distribution. Except as set forth in Section 7.3, Pacira will supply and distribute the Product to customers in accordance with the specifications and requirements set forth in the NDA approved by the FDA for sale of the Product in the Territory and all applicable laws, including without limitation the Act and all applicable rules and regulations thereunder, the NDA and Current Good Manufacturing Practices. Pacira will be responsible for supplying the Product in accordance with Pacira policies and procedures for purchase orders received by Pacira from customers for the Product, which supply of the Product shall meet all legal requirements as set forth above.
7.3    Orders Received by DePuy Synthes. The Parties recognize that DePuy Synthes may from time to time receive orders for the Product directly from third parties for delivery in the Territory. In such event, DePuy Synthes promptly shall advise such third party that DePuy Synthes is not authorized to accept orders for the Product and shall immediately and accurately forward such order to Pacira, or its designee, which order Pacira may accept or reject in its sole discretion. Pacira (whether directly or through a designee) shall be responsible for handling all returns of the Product with respect to the Territory. If any Product sold in the Territory is returned to DePuy Synthes, DePuy Synthes shall either instruct the returning Party to, or shall itself if providing such instructions in a timely manner is not feasible (e.g., if DePuy Synthes receives a return through the mail), return such Product with appropriate documentation directly to Pacira or its designee, as directed by Pacira, and in accordance with all applicable laws, but shall take no other actions with respect to such return without the prior written consent of Pacira. Except as set forth in Section 7.3, Pacira shall (whether directly or through a designee) have sole responsibility for shipping, distribution and warehousing, for the invoicing and billing of purchasers of the Product and for the collection of receivables resulting from the sales of the Product in the Field in the Territory.
8.    Representations and Warranties.
8.1    Representations and Warranties. Each Party hereby represents and warrants to the other Party as follows:
(i)    It is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. It has all requisite power and authority to carry on its business, to own and operate its properties and assets, to enter into this Agreement, to grant the rights and licenses granted under this Agreement and to perform its obligations under this Agreement. The execution, delivery and performance of this Agreement have been duly authorized by all applicable corporate action of such Party. Such Party has obtained all authorizations, consents and approvals, governmental or otherwise, necessary for the execution and delivery of this Agreement, and to otherwise perform such Party’s obligations under this Agreement.
(ii)    When executed and delivered by such Party, this Agreement will constitute the legal, valid and binding obligation of such Party, enforceable against it in accordance with its terms, except as may be limited by any applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws and equitable principles related to or affecting creditors' rights generally or the effect of general principles of equity.
(iii)    There is no pending or, to its knowledge, threatened litigation involving it which would have any material adverse effect on this Agreement or on its ability to perform its obligations hereunder.
(iv)    The execution, delivery, and performance of this Agreement by such Party will not in any material respect conflict with, breach, cause a default under, or result in the termination of any contract, employment relationship, agreement, or understanding, oral or written, with any third party, including without limitation any noncompetition covenant or agreement concerning exclusivity to which or by which it is bound.

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8.2    Additional Pacira Representations and Warranties. Pacira further hereby represents and warrants to DePuy Synthes that:
(i)    (a) the data regarding the efficacy and safety of the Product that is contained in the NDA and other regulatory filings submitted to the FDA in support of marketing approval of the Product is complete and accurate in all materials respects, does not contain any misstatement of a material fact related to safety or efficacy nor omit to state any material fact in Pacira’s possession related to safety or efficacy; (b) as of the Effective Date, Pacira has received no notice of a third-party claiming any ownership interest in the patent or trademark rights covering the Product; (c) Pacira has the exclusive right to Promote, market and sell the Product in the Territory and to perform its obligations under this Agreement; (d) as of the Effective Date, Pacira is unaware of any third-party infringement of the Product intellectual property (including patent and trademark rights) which would have a material adverse effect on the rights granted to DePuy Synthes hereunder; and (e) the Product’s label and labeling and all Product Promotional Materials, whether or not provided to DePuy Synthes shall comply with all applicable laws, rules and regulations; and
(ii)    neither Pacira nor any of Pacira’s employees or agents who will be performing services under this Agreement or otherwise with respect to the Product (i) is under investigation by the FDA for debarment action or is presently debarred under the Act or pursuant to the Generic Drug Enforcement Act of 1992 (21 U.S.C. 301 et seq.); (ii) is excluded from participation in any government-sponsored health care program in any jurisdiction, including under 42 U.S.C. Section 1320a-7 and implementing regulations; or (iii) has violated, been convicted of violating, or is subject to an ongoing proceeding for violating, any state or federal health care programs, any federal or state anti-kickback laws or regulations, or any laws or regulations that may render a person eligible for debarment by the FDA, except for the subpoena issued to Pacira and disclosed via press release on April 16, 2015. Pacira will notify DePuy Synthes in writing within five (5) business days upon any inquiry or the commencement of any of the foregoing proceedings concerning Pacira or any of its employees or agents.
8.3    Additional DePuy Synthes Representations and Warranties.  DePuy Synthes further hereby represents and warrants to Pacira that neither DePuy Synthes nor any of DePuy Synthes’ employees or agents who will be performing services under this Agreement or otherwise with respect to the Product (i) is under investigation by the FDA for debarment action or is presently debarred under the Act or pursuant to the Generic Drug Enforcement Act of 1992 (21 U.S.C. 301 et seq.); (ii) is excluded from participation in any government-sponsored health care program in any jurisdiction, including under 42 U.S.C. Section 1320a-7 and implementing regulations; or (iii) has violated, been convicted of violating, or is subject to an ongoing proceeding for violating, any state or federal health care programs, any federal or state anti-kickback laws or regulations, or any laws or regulations that may render a person eligible for debarment by the FDA. DePuy Synthes will notify Pacira in writing within five (5) business days upon any inquiry or the commencement of any of the foregoing proceedings concerning DePuy Synthes or any of its employees or agents.
8.4    Pacira Product Warranty. Pacira warrants to DePuy Synthes that at the time of delivery of all Product by or on behalf of Pacira to a third party, (i) such Product will be in conformity with the applicable specifications therefor and the NDA, (ii) such Product will have been manufactured in compliance with Current Good Manufacturing Practices and all other applicable legal requirements, (iii) such Product will have been manufactured in facilities that are in compliance with all applicable legal requirements at the time of such manufacture (including applicable inspection requirements of FDA and other governmental authorities), (iv) such Product will not be adulterated or misbranded under the Act, (v) such Product may be introduced into interstate commerce pursuant to the Act and (vi) the expiration date of such Product shall be no earlier than thirty (30) days after the date of delivery thereof.
9.    Intellectual Property Matters.
9.1    Intellectual Property Prosecution and Maintenance. Pacira shall, at its own expense, use Commercially Reasonable Efforts to prosecute and maintain all Pacira intellectual property in the Territory (including patents, the Product Trademarks and any copyrights associated with the Product Promotional Materials) related to the Product or its manufacture, use, offer for sale or sale. Pacira shall keep DePuy Synthes promptly 

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informed regarding the material developments in the ongoing prosecution and maintenance of Pacira patents to the extent they relate to the Product or its manufacture, use or sale in the Territory.
9.2    Ownership. Pacira shall own all intellectual property rights in and to the regulatory and clinical data or other inventions and improvements incorporated into the Product, in each case conceived or reduced to practice by either Party pursuant to this Agreement. The Parties shall jointly own all intellectual property rights with respect to commercial data related to the Product that are generated by DePuy Synthes. All other intellectual property rights with respect to commercial data related to the Product in the Field will be owned by Pacira.  Upon written request by the JSC, Pacira shall grant to DePuy Synthes a non-exclusive, royalty-free license to such commercial data.
9.3    Infringement.
(i)    If either Party learns of a claim or assertion that the manufacture, use or sale of the Product in the Territory infringes or otherwise violates the intellectual property rights of any third party or that any third party violates the intellectual property rights owned or Controlled by (i) Pacira in the Product or the Product Trademarks or Pacira Trademarks in the Territory or (ii) DePuy Synthes in the DePuy Synthes Trademarks, then the Party becoming so informed shall promptly, but in all events within ten (10) days thereof, notify the other Party of the claim or assertion. In the event Pacira receives a notice under Paragraph IV of the U.S. Federal Drug Price Competition and Patent Term Restoration Act of 1984, as amended, also known as the Hatch-Waxman Act, with respect to the Product, Pacira shall provide DePuy Synthes with written notice of such Paragraph IV notice within five (5) business days.
(i)    In the event of an Enforcement Action by DePuy Synthes with respect to any DePuy Synthes Trademark, at DePuy Synthes’ reasonable request, Pacira shall cooperate fully with DePuy Synthes with respect to any such Enforcement Action, and DePuy Synthes shall reimburse Pacira for its reasonable out-of-pocket expenses incurred in providing such cooperation. Any recovery achieved by DePuy Synthes with respect to such Enforcement Action shall be solely for the account of DePuy Synthes.
10.    Indemnification and Insurance.
10.1    Indemnification.
(i)    Each Party will defend, at its own expense, indemnify and hold harmless the other Party and its directors, officers, employees, agents and Affiliates (collectively, the “Indemnified Persons”) from and against any and all damages, liabilities, losses, costs, and expenses, including attorney’s fees, arising out of any third-party claim, suit or proceeding brought against the other Party (each, a “Claim” and collectively, “Claims”) to the extent such Claim arises out of or relates to (A) any breach or violation by the indemnifying Party of, or failure to perform by the indemnifying Party of, any representation, warranty, covenant, or other obligation in this Agreement or any other agreement between the Parties referenced herein, unless waived in writing by the indemnified Party; (B) the action or inaction of the indemnifying Party or its employees, distributors or subcontractors in performing its duties under this Agreement or any other agreement between the Parties referenced herein; (C) the fraud, negligence or willful misconduct of the indemnifying Party, or (D) failure of the indemnifying Party or its employees, distributors or subcontractors to comply with applicable law, provided, however, that the indemnified Party’s obligations pursuant to this Section 10.1 shall not apply (x) to the extent such claims or suits result from the fraud, negligence or willful misconduct of the indemnified Party or its employees, distributors or subcontractors, or (y) with respect to losses for which the indemnified Party has an obligation to indemnify the indemnifying Party or its Indemnified Persons pursuant to this Section 10.1.
(ii)    In addition, Pacira will defend, at its own expense, indemnify and hold harmless DePuy Synthes and its Indemnified Persons from and against any and all Claims to the extent such Claim arises out of or relates to: (A) any personal injury (including death) and/or property damage resulting from the handling, possession, sale or use of the Product;  (B) any other liability arising out of the manufacture, marketing, labeling, distribution, sale or use of the Product, including claims of infringement of third-party intellectual property rights, except (under 

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any of (A) and (B)) to the extent arising out of the breach, violation, failure, negligence or willful misconduct of DePuy Synthes or its employees, distributors or subcontractors; and (C) any Claims of third parties and any investigations, enforcement actions or other actions by, of or involving any Governmental Authority that involve or originate with the Product or any other products or other materials marketed or sold by Pacira.
(iii)    In addition, DePuy Synthes will defend, at its own expense, indemnify and hold harmless Pacira and its Indemnified Persons from and against any and all Claims to the extent such Claim arises out of or relates to: (A) any personal injury (including death) and/or property damage resulting from the handling, possession, sale or use of any products or other materials marketed or sold by DePuy Synthes other than the Product; and (B) any other liability arising out of the manufacture, marketing, labeling, distribution, sale or use of any products or other materials marketed or sold by DePuy Synthes other than the Product, including claims of infringement of third party intellectual property rights, except (under any of (A) and (B)) to the extent arising out of the breach, violation, failure, negligence or willful misconduct of Pacira or its employees, distributors or subcontractors; and (C) any Claims of third parties and any investigations, enforcement action or other actions by, of or involving any Governmental Authority that involve or originate with any products or other materials marketed or sold by DePuy Synthes other than the Product.
(iv)    Each Party agrees that it shall promptly notify the other in writing of any Claim and give the indemnifying Party full information and assistance in connection therewith. The indemnifying Party shall have the sole right to control the defense of any Claim or action and the sole right to settle or compromise any such Claim, except that the prior written consent of the other Party shall be required in connection with any settlement or compromise which could (A) place any obligation on or require any action of such other Party; (B) admit or imply any liability or wrongdoing of such other Party; or (C) adversely affect the goodwill or public image of such other Party. Notwithstanding the foregoing, the indemnified Party may participate therein through counsel of its choice, but the cost of such counsel shall be borne solely by the indemnified Party.
10.2    Insurance. Each Party shall maintain insurance against such risks and upon such terms (including coverages, deductible limits and self-insured retentions) as is customary for the activities to be conducted by such Party under this Agreement and is appropriate to cover its indemnification obligations hereunder. Notwithstanding the generality of the foregoing, each Party shall maintain during the Term commercial general liability (“CGL”) insurance in an amount of [**] per occurrence and claims made product liability insurance coverage in an amount of [**].  If claims made insurance is maintained, such insurance shall be maintained during the Term and for a period of not less than 5 years thereafter.  DePuy Synthes shall be named as an additional insured under Pacira’s CGL and product liability insurance policies.  Pacira shall be named as an additional insured under DePuy Synthes CGL and product liability insurance policies Upon written request by a Party, such other Party shall provide the requesting Party with a certificate of insurance as evidence of the requested coverage. Each Party shall give the other Party prompt notice of any cancellation or termination of such insurance.
11.    Confidentiality; Non-Solicitation; Publicity.
11.1    Confidentiality Obligation.
(i)    Each Party (for purposes of this Section 11.1, the “Recipient”) agrees that it shall hold in confidence and shall not use or disclose, for any purpose not directly related to and in support of performance of Recipient’s duties and obligations under this Agreement, any Confidential Information (as defined below) disclosed to the Recipient by the other Party (for purposes of this Section 11.1, the “Discloser”). For purposes of this Agreement, “Confidential Information” shall include (i) any information disclosed by the Discloser to the Recipient, either directly or indirectly, in writing, orally or by inspection of tangible objects, including, without limitation, concepts, data, design documents, products in development, development plans, drafts, drawings, engineering information, flow sheets, feasibility studies, software, hardware configuration information, know-how, ideas, inventions, methods, lab notes, processes, projections, records, reports, research, specifications, studies, technical information, test, sample or any other results, timelines, trade secrets, customer lists, account history information, business and operations strategies, sales and marketing strategies, financial information and commissions structure, or any other information which is designated as “confidential” or “proprietary” or by words of similar effect, either 

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in writing or orally, prior to, at or promptly after the time of disclosure or would reasonably be expected to be treated as confidential under the circumstances. During the term of this Agreement, and for a period of five (5) years thereafter, neither Party shall use or disclose to third parties any Confidential Information of the other Party. Notwithstanding the foregoing, the Recipient may disclose Confidential Information of the Discloser to the extent required by law or applicable stock exchange or requested by a governmental authority; provided, that the Recipient shall, to the extent not prohibited, (i) promptly notify the Discloser of such requirement or request, (ii) cooperate with the Discloser in seeking a protective order or similar relief to protect the confidentiality of the information to be disclosed and (iii) limit the disclosure to that which is required. Upon the Discloser’s request at any time, the Recipient shall return to the Discloser or destroy all material and documents containing or derived from Confidential Information of the Discloser. Confidential Information shall not include information that (i) was already known to the Recipient at the time of its receipt thereof or is independently developed by Recipient without use of any Confidential Information, (ii) is received from a third party who does not have any duty of confidentiality to the other Party hereunder with respect to such information, or (iii) is or becomes part of the public domain through no breach of this Agreement by the Recipient.
(ii)    The Parties further agree as follows:
A.    The Recipient shall be responsible to assure that all of its employees, directors, agents, representatives and contractors (collectively, the “Recipient’s Representatives”) are made aware of and comply fully with the confidentiality obligations imposed by this Section 11.1.
B.    Upon termination of the Agreement for any reason, each Party agrees to return to the other any property or documents that relate to the other Party’s business or that contain Confidential Information of the other Party. The Parties’ obligation of confidentiality shall survive termination of this Agreement however such termination arises.
C.    All paper or electronic records, files, documents, work papers and other information in any form, whether marked “confidential” or not (the “Files and Work Papers”), provided by the Discloser to the Recipient or generated pursuant to this Agreement shall remain the exclusive property of the Discloser.
(iii)    Each Party acknowledges that the Physician Payments Sunshine Act (Section 6002 of the Affordable Care Act) of 2010 and its implementing regulations require “applicable manufacturers” to annually report to the Centers for Medicare and Medicaid Services (“CMS”) certain information about payments and transfers of value provided directly or indirectly to U.S. physicians and teaching hospitals. As required by law, the Parties will report to CMS information about payments or transfers of value they provide to U.S. physicians and teaching hospitals. The Parties agree that such reported information will include the identity and business address of the recipient, the value and purpose of any payments or transfers of value that are made in connection with this Agreement, and any other information as may be required by law. DePuy Synthes may also report information about compensation, payments and transfers of value provided to U.S. physicians and teaching hospitals as necessary to meet any other legal requirements, and DePuy Synthes reserves the right to post on a website accessible to the public, information regarding such compensation made to U.S. physicians and teaching hospitals, whether or not required by law.
(iv)    The Parties agree that, in the event a breach or threatened breach of this Section 11.1, the non-breaching Party, in addition to other rights and remedies existing in its favor, shall be entitled to specific performance and/or injunctive or other equitable relief from a court of competent jurisdiction in order to enforce, or prevent any violations of, the provisions hereof (without posting a bond or other security and at the expense of the breaching Party, including reasonable attorneys’ fees and expenses).
(v)    Upon execution of this Agreement, the terms of this Section 11.1 shall supersede the Parties’ obligations under the Amended and Restated Mutual Confidentiality Agreement between the Pacira and DePuy Synthes Joint Reconstruction, a division of DePuy Orthopaedics, Inc., an Affiliate of DePuy Synthes, dated October 14, 2016 (the “Confidentiality Agreement”); provided, that any information relating to the Product or the 

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respective business operations of the Parties disclosed under the Confidentiality Agreement shall be deemed to have been disclosed under this Agreement.
11.2    Non-Solicitation. During the Term of this Agreement, neither Party shall, directly or indirectly, induce or attempt to induce any employee of the other Party to leave the employ of the other Party, or in any way interfere with the relationship between the other Party and any employee thereof without the express prior written consent of the other Party, other than by way of general solicitation not specifically targeted at any employee of the other Party. The Parties agree that, in the event a breach or threatened breach of this Section 11.2, the non-breaching Party, in addition to other rights and remedies existing in its favor, shall be entitled to specific performance and/or injunctive or other equitable relief from a court of competent jurisdiction in order to enforce, or prevent any violations of, the provisions hereof (without posting a bond or other security and at the expense of the breaching Party, including reasonable attorneys’ fees and expenses).
11.3    Publicity. Neither Party will originate any publicity, news release, public comment or other public announcement, written or oral, whether to the press, to stockholders, or otherwise, relating to this Agreement, without the consent of the other Party, except for such announcements which, in accordance with the advice of legal counsel to the Party making such announcement, are required by law, regulation, legal process or stock exchange rules or for such announcements that contain substantially the same disclosure as in prior permitted/approved public announcements or for discussions with investors regarding this Agreement that do not otherwise disclose information for which confidential treatment has been requested. Except as otherwise permitted pursuant to the immediately preceding sentence, any Party making any announcement which is required by law will, unless prohibited by law, give the other Party an opportunity to review the form and content of such announcement and comment before it is made. Either Party shall have the right to make such filings with governmental agencies, including without limitation the United States Securities and Exchange Commission, as to the contents and existence of this Agreement as it shall reasonably deem necessary or appropriate (provided that the Parties will reasonably cooperate with respect to obtaining confidential treatment of sensitive information, as appropriate). The Parties have agreed upon the form and content of a joint press release to be issued by the Parties promptly following the execution of this Agreement.
12.    Maintenance of Books and Records; Audits.
12.1    Maintenance of Books and Records. Each Party shall maintain complete and accurate books and records in sufficient detail, in accordance with GAAP and all applicable laws, rules, ordinances and regulations, to enable verification of the performance of such Party's obligations under this Agreement. Such records shall be maintained for a period of five (5) years after the end of the Term or longer if required by applicable law.
12.2    Payment Audits. DePuy Synthes shall have the right, upon thirty (30) days’ prior written notice, periodically but no more than once per Year, to review and examine or have an independent third party expert review and examine the appropriate books and records of Pacira related to, for a particular Year, the (i) invoiced sales of Product in the Territory, (ii) Deductions, (iii) calculation of Net Sales, (iv) calculation of Baseline Sales, and (v) calculation of the Commission Payments. The purpose of such examination shall be to confirm Pacira’s compliance with its obligations under Article 5 of this Agreement. Each such examination may only be conducted within twenty-four (24) months of the conclusion of the relevant Year. The right granted under this Section 12.2 may only be exercised during the normal business hours of Pacira. During the course of the examination, DePuy Synthes and its accountants shall use commercially reasonable efforts not disrupt or otherwise interfere with the business of Pacira. DePuy Synthes shall maintain the confidentiality of all documents and records reviewed, and any third party expert shall execute a confidentiality agreement satisfactory to Pacira prior to such examination. The costs and expenses of any such examination, including any independent third party expert, shall be the responsibility of DePuy Synthes, except that if any examination discloses that an amount due to DePuy Synthes or charged to DePuy Synthes was in error for the reviewed period by more than five percent (5%) in Pacira’s favor (after Pacira has had the opportunity to review and has not disputed the results of such examination), the portion of any such direct costs and expenses of any independent third party expert allocable to such examination shall be the responsibility of Pacira. DePuy Synthes shall share the results of any examination with Pacira promptly and each Party shall, within thirty (30) days of any adjustment in the other Party’s favor, pay the appropriate amount to such other Party. In the 

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event of a dispute over the results of any examination conducted pursuant to this Section 12.2, DePuy Synthes and Pacira shall work in good faith to resolve such dispute. Notwithstanding Section 15.6, if the Parties are unable to reach a mutually acceptable resolution of any such dispute within thirty (30) days, the dispute shall be submitted for arbitration to a certified public accounting firm selected by the Parties or to such other Person as the Parties shall mutually agree (the “Accountant”). The decision of the Accountant shall be final and the costs of such arbitration as well as the initial examination shall be borne between the Parties in such manner as the Accountant shall determine.
13.    Term and Termination.
13.1    Term. The “Term” of this Agreement shall commence on the Effective Date and shall continue, unless terminated sooner in accordance with the terms hereof, until December 31, 2021 (as the same may be extended or terminated as set forth in this Section 13). The Term may be renewed for additional twelve (12) month periods on mutual agreement of the Parties, following prior written notice from either Party of its desire to renew, given no less than six (6) months prior to the expiration of the then-current Term.
13.2    Termination by DePuy Synthes. DePuy Synthes shall have the right to terminate this Agreement:
(i)    at any time upon written notice to Pacira in the event of a Product recall that results in a material disruption of supply of the 20 mL Product for three (3) or more consecutive months;
(ii)    without cause, effective on six (6) months prior written notice, provided that DePuy Synthes may not provide notice of termination without cause under this Section 13.2(ii) before the three (3) year anniversary of the Effective Date;
(iii)    effective on sixty (60) days prior written notice if, following completion of the dispute escalation procedure in Section 3.2(iv)(B) through the final decision of Pacira’s Senior Officer, DePuy Synthes disagrees in good faith with Annual Sales Milestones determination; or
(iv)    immediately upon any prosecution of or enforcement action against or involving Pacira by any Governmental Authority related to the Product.  Pacira shall immediately notify DePuy Synthes of any such additional prosecution or enforcement action, and has previously disclosed the existence of the subpoena via press release dated April 16, 2015.
In the event DePuy Synthes terminates this Agreement pursuant to subsection (ii) above, the Commission Payment payable on Incremental Sales of 20 mL Product shall be reduced to [**] during the period beginning on the date DePuy Synthes provides notice of termination and ending on the effective date of termination of this Agreement.
13.3    Termination by Pacira. Pacira shall have the right to terminate this Agreement:
(i)    upon at least sixty (60) days’ prior written notice if at least [**] of the Annual Sales Milestone is not achieved with respect to the first Year or the second Year; provided that such termination notice is received by DePuy Synthes within sixty (60) days after the end of the applicable Year;
(ii)    upon at least sixty (60) days’ prior written notice if the Annual Training Goal is not achieved and not cured pursuant to Section 4.6(iii); provided that such termination notice is received by DePuy Synthes within ninety (90) days after the end of the applicable Year;
(iii)    without cause, effective on six (6) months prior written notice, provided that Pacira may not provide notice of termination without cause under this Section 13.3(iii) before the three (3) year anniversary of the Effective Date and provided, further, that in the event of termination pursuant to this Section 13.3(iii), Pacira shall pay to DePuy Synthes an amount equal to [**] of the Commission Payment with respect to the prior Year plus any earned but not yet paid Commission Payment for the current Year; or

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(iv)    immediately upon any prosecution of or enforcement action against or involving DePuy Synthes by any Governmental Authority related to the Product DePuy Synthes shall immediately notify Pacira of any such prosecution or enforcement action.
13.4    Mutual Termination Rights. Either Party may terminate this Agreement: (i) at any time, upon written notice to the other Party in the event of a material breach of this Agreement by such other Party where such breach is not cured within thirty (30) days following such other Party’s receipt of written notice of such breach; or (ii) at any time, in the event the other Party, its Affiliates, or any Person under its direction or control has been excluded from a federal or state health care program under Sections 1128 or 1156 of the Social Security Act, 42 U.S.C. §§ 1320a-7, 1320c-5 as may be amended or supplemented or has otherwise been excluded, suspended, or debarred by any Governmental Authority from any federal or state program, contracting with the federal government, or from working for any firm holding a pending or approved drug product application at FDA, in each case, to the extent such exclusion, suspension, or debarment is not remedied within thirty (30) days of receipt by the other Party of notice of such exclusion, suspension, or debarment (including, without limitation, through termination of the affected person).
13.5    Remedies. Except as indicated in Section 15.4, termination of this Agreement shall be without prejudice to (i) any remedies which any Party may then or thereafter have hereunder or at law; and (ii) a Party’s right to receive any payment accrued under this Agreement prior to the termination date but which became payable thereafter; and (iii) either Party’s right to obtain performance of any obligations provided for in this Agreement which survive termination by their terms or by a fair interpretation of this Agreement.
13.6    Post-Termination Obligations.
(i)    Expiration or termination of this Agreement shall not relieve either Party of any obligations accruing prior to such expiration or termination. The following provisions of this Agreement by their terms continue after the expiration or termination of this Agreement: Sections 6.2, 6.3, 6.6, 6.7, 8, 9, 10, 11, 12, 13, 14, and 15. In addition, any other provisions required to interpret and enforce the Parties’ rights and obligations under this Agreement shall also survive, but only to the extent required for the interpretation and performance of this Agreement. Upon the expiration or termination of this Agreement pursuant to this Section 13, each Party shall promptly transfer and return to the other Party or destroy all Confidential Information of the other Party (provided that each Party may keep one copy of such Confidential Information for archival purposes only).
(ii)    Upon the expiration or termination of this Agreement, DePuy Synthes shall immediately cease all Promotion of the Product in the Field in the Territory and deliver to Pacira all undistributed Product Promotional Materials. For clarity, upon the expiration or termination of this Agreement, the Committees shall immediately be disbanded and any and all grant of rights from Pacira to DePuy Synthes shall immediately cease.
14.    Notices. Unless otherwise provided herein, all notices, demands or other formal communications required or permitted under this Agreement shall be in writing and shall be deemed to have been properly given and to be effective on the date of delivery if delivered in person, on the date actually received or refused by addressee when deposited in the U.S. mail by certified or registered mail, or by Federal Express, return receipt requested, postage prepaid, addressed to the Parties at their respective addresses set forth below or to such other addresses as may later be designated in writing, or delivered via email to the email addresses provided by the Parties when received at the email server of the receiving Party.
If to DePuy Synthes, to: 

DEPUY SYNTHES SALES, INC. 
700 Orthopaedic Drive
Warsaw, IN 46582 
Attention: Vice President, Law______________________ 
Fax No: ________________________ 

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

Nutter, McClennen & Fish LLP
155 Seaport Boulevard
Boston, MA 02210
Attention: Paul R. Eklund
Fax No: (617) 310-9303

If to Pacira, to: 

PACIRA PHARMACEUTICALS INC.
5 Sylvan Way
Parsippany, NJ 07054
Attention: Anthony Molloy, VP, Legal and Compliance
Fax No: (973) 267-0060

15.    Miscellaneous.
15.1    Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their successors and assigns. This Agreement shall not be assignable by either Party without the written consent of the other Party; provided, however, that either Party may, without the prior written consent of the other Party, (i) assign any or all of its rights and obligations to any Affiliate of such Party or (ii) upon at least thirty (30) days prior written notice, assign any or all of its rights and obligations to any third party that acquires substantially all of the business or assets of the assigning Party, whether by merger, acquisition or otherwise. Notwithstanding the foregoing, in the event Pacira provides notice to DePuy Synthes that it intends to assign its rights and obligations to a third-party acquirer pursuant to clause (ii) of the immediately preceding sentence, and DePuy Synthes determines in its good faith judgment that such third-party acquirer is a competitor of DePuy Synthes or that being a party to this Agreement with such third-party acquirer would cause reputational harm to DePuy Synthes, it shall so notify Pacira within ten (10) days of receipt of the notice from Pacira hereunder and DePuy Synthes shall have the right to terminate this Agreement for cause effective immediately in the event Pacira assigns its rights or obligations to such third party. Any change in control of either Party resulting from a merger, consolidation, stock transfer or asset sale shall be deemed to be an assignment for purpose of this Agreement. Any purported transaction in violation of this Section 15.1 shall be null and void and of no force or effect.
15.2    Independent Contractors. Nothing herein contained shall be construed to constitute the Parties hereto as partners or as joint venturers, or either as agent for the other. No employee or representative of a Party shall have any authority to bind or obligate the other Party to this Agreement for any sum in any manner whatsoever, or to create or impose any contractual or other liability on the other Party without said Party’s authorized written approval. For all purposes, and notwithstanding any other provision of this Agreement to the contrary, DePuy Synthes’ legal relationship under this Agreement to Pacira shall be that of independent contractor.
15.3    Entire Agreement. This Agreement and all Exhibits or attachments hereto represents the entire understanding between the Parties and cancels and supersedes all prior agreements, contracts, amendments to same and/or any other understandings (collectively, “Prior Agreements”), whether written or oral, existing at any time between Pacira, on the one hand and DePuy Synthes on the other hand, except those provisions of such Prior Agreements which by their terms survive. This Agreement as well as all Exhibits and/or attachments shall be binding upon the Parties, their Affiliates, successors in interests and heirs, and may be modified only by a written agreement signed by an authorized officer of Pacira and of DePuy Synthes. The language of this Agreement shall for all purposes be construed as a whole, according to its fair meaning, not strictly for or against either Party, and without regard to the identity or status of any person who drafted all or part of it. Whenever the words “include” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.”
15.4    Limitation on Damages. Neither Pacira nor DePuy Synthes (which for the purposes of this Section 15.4 shall include their respective Affiliates, directors, officers, employees and agents) shall have any liability to the 

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other for any punitive damages, special, incidental, consequential or indirect damages, direct or indirect lost profits, lost revenues, or anticipated profits, relating to or arising from this Agreement, even if such damages may have been foreseeable. For the avoidance of doubt, nothing in this Section 15.4 shall be interpreted to limit the indemnification obligation of either Party in connection with the characterization of damages or losses claimed by a third party as being punitive, special, incidental, consequential or indirect or other like damages or losses.
15.5    Force Majeure. No Party shall be liable or responsible to the other Party, nor be deemed to have defaulted under or breached this Agreement, for any failure or delay in fulfilling or performing any term of this Agreement, when and to the extent such failure or delay is caused by or results from acts beyond the affected Party’s reasonable control, including, without limitation: (a) acts of God; (b) flood, fire, earthquake or explosion; (c) war, invasion, hostilities (whether war is declared or not), terrorist threats or acts, riot or other civil unrest; (d) law; (e) actions, embargoes or blockades in effect on or after the date of this Agreement; (f) action by any governmental authority; (g) national or regional emergency; (h) strikes, labor stoppages or slowdowns or other industrial disturbances; and (i) shortage of adequate power or transportation facilities.
15.6    Dispute Resolution. The Parties recognize that a dispute may arise relating to this Agreement (“Dispute”). Any Dispute, including Disputes that may involve the Affiliate of any Party, shall be resolved in accordance with Exhibit E to this Agreement. For the avoidance of doubt, disputes arising on issues within the jurisdiction of a Committee shall be resolved in accordance with the procedures set forth in Section 3.
15.7    Counterparts. This Agreement may be executed in counterparts, each of which is deemed an original, but all of which together are deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission is deemed to have the same legal effect as delivery of an original signed copy of this Agreement.
15.8    Governing Law. This Agreement and all exhibits or attachments hereto shall be governed by and interpreted in accordance with the internal laws of the State of New York regardless of the laws that might otherwise govern under applicable principles of conflict of law thereof.
15.9    Waiver of Jury Trial. Each Party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Agreement or the transactions contemplated hereby.
15.10    Waiver. Except to the extent that a Party may have otherwise agreed in writing, no waiver by such Party of any breach by any other Party of any of the other Party’s obligations, agreements or covenants hereunder shall be deemed to be a waiver by such first Party of any subsequent or other breach of the same or any other obligation, agreement or covenant; nor shall any forbearance by a Party to seek a remedy for any breach by the other be deemed a waiver by said Party of its rights or remedies with respect to such breach or of any subsequent or other breach of the same or any other obligation, agreement or covenant.
15.11    Headings. Headings as used in this Agreement are for convenience only and are not to be construed as having any substantive effect by way of limitation or otherwise. References to Sections herein are, unless otherwise indicated, references to the designated Sections of this Agreement, unless the content requires otherwise.
15.12    Severability. If one or more of the provisions of this Agreement shall, by any court or an arbitrator, be found to be void or unenforceable, the agreement as a whole shall not be affected thereby and shall remain in full force and effect, and the provisions in question shall be replaced by an interpretation in conformity with law which comes closer to effecting the Parties original intention.
[Signature Page Follows]

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed and delivered by their undersigned duly authorized representatives as of the Effective Date. 
    
PACIRA PHARMACEUTICALS INC. 

By: /s/ David Stack        
Name: David Stack        
Title: CEO and Chairman        
 
DEPUY SYNTHES SALES, INC. 

By: /s/ Jonathan B. Loane        
Name: Jonathan B. Loane            
Title: Treasurer            

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EXHIBIT A

DETAILED ROLES AND RESPONSIBILITIES

[**]
 

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EXHIBIT B
SENIOR OFFICERS
Pacira: Dave Stack, Chief Executive Officer, Chairman
DePuy Synthes: Max Reinhardt, Vice President, Marketing

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EXHIBIT C
INTENTIONALLY LEFT BLANK

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EXHIBIT D
COMPLIANCE WITH ANTI-CORRUPTION LAWS
Notwithstanding anything to the contrary in this Agreement, the Parties:

		
	(i)
	Shall not perform any actions that are prohibited by National, International and other anti-corruption laws, including without limitation the U.S. Foreign Corrupt Practices Act, (collectively “Anti-Corruption Laws”) that may be applicable to one or both Parties to this Agreement;

		
	(ii)
	Shall not, directly or indirectly, make any payment, or offer or transfer anything of value, or agree or promise to make any payment or offer or transfer anything of value, to a government official or government employee, to any political party or any candidate for political office or to any other third party related to the transaction with the purpose of influencing decisions related to this Agreement and/or its business in a manner that would violate Anti-Corruption Laws;

		
	(iii) 
	Shall not retain any government official or government employee in the performance of this Agreement unless it has been pre-approved in writing by the other Party. Furthermore, each Party shall notify the other writing in the event the notifying Party becomes aware that any person engaged in the performance of this Agreement becomes a government official or employee, a political party official or a candidate for political office. The requirements of this subsection shall not apply with respect to employees of an intermediary that is a government owned entity; and

		
	(iv)
	Agree that if a Party fails to comply with any of the provisions of this Exhibit D such failure shall be deemed to be a material breach of this Agreement and, upon any such failure, the non-breaching Party shall have the right to terminate this Agreement with immediate effect upon written notice to the other Party.

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EXHIBIT E
DISPUTE RESOLUTION
A.    Mediation.
		
	1.
	The Parties shall first attempt in good faith to resolve any Dispute by confidential mediation in accordance with the then current Mediation Procedure of the International Institute for Conflict Prevention and Resolution (“CPR Mediation Procedure”) (www.cpradr.org) before initiating arbitration. The CPR Mediation Procedure shall control, except where it conflicts with these provisions, in which case these provisions control. The mediator shall be chosen pursuant to CPR Mediation Procedure. The mediation shall be held in New York, New York.

		
	2.
	Either Party may initiate mediation by written notice to the other Party of the existence of a Dispute. The Parties agree to select a mediator within 20 days of the notice and the mediation will begin promptly after the selection. The mediation will continue until the mediator, or either Party, declares in writing, no sooner than after the conclusion of one full day of a substantive mediation conference attended on behalf of each Party by a senior business person with authority to resolve the Dispute, that the Dispute cannot be resolved by mediation. In no event, however, shall mediation continue more than 60 days from the initial notice by a Party to initiate meditation unless the Parties agree in writing to extend that period.

		
	3.
	Any period of limitations, whether contractual or established by law, that would otherwise expire between the initiation of mediation and its conclusion shall be extended until 20 days after the conclusion of the mediation.

B.    Arbitration.
		
	1.
	If the Parties fail to resolve the Dispute in mediation, and a Party desires to pursue resolution of the Dispute, the Dispute shall be submitted by either Party for resolution in arbitration pursuant to the then current CPR Non-Administered Arbitration Rules (“CPR Rules”) (www.cpradr.org), except where they conflict with these provisions, in which case these provisions control. The arbitration will be held in New York, New York. All aspects of the arbitration shall be treated as confidential.

		
	2.
	The arbitrators will be chosen from the CPR Panel of Distinguished Neutrals, unless a candidate not on such panel is approved by both Parties. Each arbitrator shall be a lawyer with at least 15 years’ experience with a law firm or corporate law department of over 25 lawyers or who was a judge of a court of general jurisdiction. To the extent that the Dispute requires special expertise, the Parties will so inform CPR prior to the beginning of the selection process.

		
	3.
	The arbitration tribunal shall consist of three arbitrators, of whom each Party shall designate one in accordance with the “screened” appointment procedure provided in CPR Rule 5.4.  The chair will be chosen in accordance with CPR Rule 6.4.

		
	4.
	If, however, the aggregate award sought by the Parties is less than $5 million and equitable relief is not sought, a single arbitrator shall be chosen in accordance with the CPR Rules.

		
	5.
	Candidates for the arbitrator position(s) may be interviewed by representatives of the Parties in advance of their selection, provided that all Parties are represented.

		
	6.
	The Parties agree to select the arbitrator(s) within 45 days of initiation of the arbitration.  The hearing will be concluded within nine (9) months after selection of the arbitrator(s) and the award will be rendered within 60 days of the conclusion of the hearing, or of any post-hearing briefing, which briefing will be completed by both sides within 45 days after the conclusion of the hearing. In the 

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event the Parties cannot agree upon a schedule, then the arbitrator(s) shall set the schedule following the time limits set forth above as closely as practical.
		
	7.
	The hearing will be concluded in ten hearing days or less. Multiple hearing days will be scheduled consecutively to the greatest extent possible. A transcript of the testimony adduced at the hearing shall be made and shall be made available to each Party.

		
	8.
	The arbitrator(s) shall be guided, but not bound, by the CPR Protocol on Disclosure of Documents and Presentation of Witnesses in Commercial Arbitration (www.cpradr.org) (“Protocol”). The Parties will attempt to agree on modes of document disclosure, electronic discovery, witness presentation, etc. within the parameters of the Protocol.  If the Parties cannot agree on discovery and presentation issues, the arbitrator(s) shall decide on presentation modes and provide for discovery within the Protocol, understanding that the Parties contemplate reasonable discovery.

		
	9.
	The arbitrator(s) shall decide the merits of any Dispute in accordance with the law governing this Agreement, without application of any principle of conflict of laws that would result in reference to a different law. The arbitrator(s) may not apply principles such as “amiable compositeur” or “natural justice and equity.”

		
	10.
	The arbitrator(s) are expressly empowered to decide dispositive motions in advance of any hearing and shall endeavor to decide such motions as would a United States District Court Judge sitting in the jurisdiction whose substantive law governs.

		
	11.
	The arbitrator(s) shall render a written opinion stating the reasons upon which the award is based. The Parties consent to the jurisdiction of the United States District Court for the district in which the arbitration is held for the enforcement of these provisions and the entry of judgment on any award rendered hereunder. Should such court for any reason lack jurisdiction, any court with jurisdiction may act in the same fashion.

		
	12.
	Each Party has the right to seek from the appropriate court provisional remedies such as attachment, preliminary injunction, replevin, etc. to avoid irreparable harm, maintain the status quo, or preserve the subject matter of the Dispute. Rule 14 of the CPR Rules does not apply to this Agreement.

31
     
[**] - Indicates certain information has been redacted and filed separately with the U.S. Securities and Exchange Commission. Confidential treatment has been requested with respect to the redacted portions.

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