Exhibit 4.1

EXECUTION VERSION

EGALET CORPORATION,

as Issuer,

the Guarantors party hereto as of the date hereof

and any Guarantor that becomes party hereto pursuant to Section 4.10 hereof

13% Senior Secured Notes due 2024

INDENTURE

Dated as of January 31, 2019

U.S. BANK NATIONAL ASSOCIATION,
as Trustee and as Collateral Agent

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N.A. means not applicable and expressly excluded from this Indenture.

* This Cross-Reference Table is not part of the Indenture.

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INDENTURE dated as of January 31, 2019 among Egalet Corporation, a Delaware corporation with an address at 600 Lee Road, Suite 100, Wayne, Pennsylvania 19087 (the “Issuer”), the Guarantors party hereto as of the date hereof, any other Guarantor that becomes party hereto pursuant to Section 4.10, and U.S. Bank National Association, as trustee (as more fully defined in Section 1.01, the “Trustee”) and as collateral agent (as more fully defined in Section 1.01, the “Collateral Agent”).

Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders of the Issuer’s 13% Senior Secured Notes due 2024 (as more fully defined in Section 1.01, the “Securities”).

ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01.            Definitions .

“ABL Collateral” means all or any of the following assets and properties owned as of the Issue Date, or at any time thereafter acquired, by the Issuer or any Restricted Subsidiary: (a) all Inventory; (b) all Accounts arising from the sale of Inventory or the provision of services; (c) to the extent evidencing, governing or securing the obligations of Account Debtors in respect of the items referred to in the preceding clauses (a) and (b), all (i) General Intangibles, (ii) Chattel Paper, (iii) Instruments, (iv) Documents, (v) Payment Intangibles (including tax refunds), other than any Payment Intangibles that represent tax refunds in respect of or otherwise relate to real property, Fixtures or Equipment (or any other Notes Collateral) and (vi) Supporting Obligations; (d) collection accounts and Deposit Accounts, including any Lockbox Account, and any cash or other assets in any such accounts constituting Proceeds of clause (a) or (b) (excluding identifiable cash proceeds in respect of Notes Collateral, including proceeds from the sale of the Securities or any cash, checks or other property held therein or credited thereto in respect of Notes Collateral); (e) all Indebtedness that arises from cash advances to enable the obligor or obligors thereon to acquire Inventory; (f) all books and records related to the foregoing; and (g) all Products and Proceeds of any and all of the foregoing in whatever form received, including proceeds of insurance policies related to Inventory or Accounts arising from the sale of Inventory of the Issuer or any Restricted Subsidiary or the provision of services by the Issuer or any Restricted Subsidiary and business interruption insurance; provided , however , that proceeds of ABL Collateral described in clause (c) above shall not constitute ABL Collateral unless such proceeds would otherwise constitute ABL Collateral in any of the foregoing clauses (a) through (f). All capitalized terms used in this definition and not defined elsewhere herein have the meanings assigned to them in the Uniform Commercial Code.

“ABL Intercreditor Agreement” means any intercreditor agreement, substantially in the form of Exhibit D attached hereto, among the holders of First Priority Lien Obligations or their Representative(s), the Trustee and/or the Collateral Agent, the Issuer and each Guarantor that may be party thereto from time to time, as it may be amended from time to time in accordance with this Indenture.

“Accredited Investors” means “accredited investors” as defined in Rule 501(a)(1), (a)(2), (a)(3) or (a)(7) of Regulation D under the Securities Act.

“Acquired Indebtedness” means, with respect to any specified Person:

(1)           Indebtedness of any other Person existing at the time such other Person is merged, consolidated or amalgamated with or into or became a Restricted Subsidiary of such specified Person; and

(2)           Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

“Additional Indebtedness Agent” means the Representative(s) of the holders of the Additional Indebtedness Obligations to the extent designated as such in a Customary Intercreditor Agreement.

“Additional Indebtedness Obligations” means all secured Indebtedness and other obligations incurred pursuant to Section 4.03(b)(xxvii).

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under common control with such specified Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.

“Applicable Percentage” means, with respect to any Payment Date, 15%.

“Applicable Premium” means, with respect to any Security (or portion thereof) to be redeemed on any redemption date, the greater of (x) 1.0% of the amount of principal of such Security to be redeemed and (y) the amount, if any, by which (a) the present value at such redemption date of (i) the redemption price of the amount of principal of such Security to be redeemed on January 31, 2020 (as stated in the table immediately following the second paragraph under Paragraph 5 of the form of Security set forth in Exhibit A hereto) plus (ii) all required interest payments due on the amount of principal of such Security to be redeemed through January 31, 2020 (excluding accrued but unpaid interest, if any, to the redemption date), computed using a discount rate equal to the Treasury Rate in respect of such redemption date plus 100 basis points, exceeds (b) the amount of principal of such Security to be redeemed.    The Trustee shall have no duty to calculate or verify the calculation of the Applicable Premium.

“ARYMO ER™” means the product referred to as ARYMO ER™ (whether marketed under such name or any other name).

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“ARYMO ER™ Product” means (a) ARYMO ER™ and (b) any and all product improvements, additional claims, line extensions, dosage changes and alternate delivery systems in respect thereof.

“Asset Sale” means:

(1)           the sale, conveyance, transfer or other disposition (whether in a single transaction or a series of related transactions) of property or assets (including by way of a Sale/Leaseback Transaction) of the Issuer or any Restricted Subsidiary of the Issuer (each referred to in this definition as a “disposition”); or

(2)           the issuance or sale of Equity Interests (other than directors’ qualifying shares and shares issued to foreign nationals or other third parties to the extent required by applicable law or any Preferred Stock or Disqualified Stock of a Restricted Subsidiary of the Issuer issued in compliance with Section 4.03 hereof) of any Restricted Subsidiary (other than to the Issuer or another Restricted Subsidiary of the Issuer) (whether in a single transaction or a series of related transactions),

in each case other than:

(a)           a disposition of (i) Cash Equivalents or Investment Grade Securities, (ii) obsolete, damaged or worn out assets, property or equipment in the ordinary course of business (including the abandonment or other disposition of Intellectual Property that is, in the reasonable judgment of the Issuer, no longer economically practicable or commercially reasonable to maintain or useful in any material respect, taken as a whole, in the conduct of the business of the Issuer and its Restricted Subsidiaries taken as a whole), (iii) Inventory (as defined in the Uniform Commercial Code) or goods (or other assets) held for sale in the ordinary course of business or (iv) equipment or other assets as part of a trade-in for replacement equipment;

(b)           the disposition of all or substantially all of the assets of the Issuer in a manner permitted pursuant to Section 5.01 or any disposition that constitutes a Change of Control;

(c)           any Restricted Payment or Permitted Investment that is permitted to be made, and is made, under Section 4.04;

(d)           any disposition of assets or issuance or sale of Equity Interests of the Issuer or any Restricted Subsidiary, which assets or Equity Interests so disposed or issued have an aggregate Fair Market Value (as determined in good faith by the Issuer) of less than $500,000;

(e)           any disposition of property or assets, or the issuance of securities, by a Restricted Subsidiary of the Issuer to the Issuer or by the Issuer or a Restricted Subsidiary of the Issuer to a Restricted Subsidiary of the Issuer (or to an entity that contemporaneously therewith becomes a Restricted Subsidiary);

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(f)           except in connection with an Intellectual Property Sale, any exchange of assets (including a combination of assets and Cash Equivalents) for assets related to a Similar Business of comparable or greater market value or usefulness to the business of the Issuer and its Restricted Subsidiaries as a whole, as determined in good faith by the Issuer, which in the event of an exchange of assets with a Fair Market Value in excess of (A) $500,000 shall be evidenced by an Officers’ Certificate and (B) $1,000,000 shall be set forth in a resolution approved by a majority of the Board of Directors of the Issuer, evidenced by an Officers’ Certificate certifying as to such approval;

(g)           foreclosure on assets of the Issuer or any of its Restricted Subsidiaries;

(h)           [reserved];

(i)           the lease, assignment or sublease of any real or personal property in the ordinary course of business;

(j)            (i)  any non-exclusive, incidental license, collaboration agreement, strategic alliance or similar arrangement providing for the licensing of Intellectual Property or the development or commercialization of Intellectual Property (other than Intellectual Property Licenses, Co-Promotion Arrangements and, for the avoidance of doubt, arrangements that are exclusive with respect to a geographic territory or indication) that, at the time such non-exclusive or incidental license, collaboration agreement, strategic alliance or similar arrangement is entered into, in the judgment of the Issuer, does not materially and adversely affect the business or condition (financial or otherwise) of the Issuer and any of its Restricted Subsidiaries, taken as a whole, and (ii) any Intellectual Property Licenses or Co-Promotion Arrangements, so long as any net cash proceeds from such Intellectual Property Licenses and Co-Promotion Arrangements are treated as Net Proceeds of an Asset Sale under Section 4.06;

(k)           a transfer of accounts receivable and related assets of the type specified in the definition of “Receivables Financing” (or a fractional undivided interest therein) to or by a Receivables Subsidiary in a Qualified Receivables Financing;

(l)            any surrender or waiver of contract rights or the settlement of, release of, recovery on or surrender of contract, tort or other claims of any kind;

(m)          in the ordinary course of business, any swap of assets, or lease, assignment or sublease of any real or personal property, in each case, other than Intellectual Property, in exchange for services (including in connection with any outsourcing arrangements) of comparable or greater value or usefulness to the business of the Issuer and its Restricted Subsidiaries taken as a whole, as determined in good faith by the Issuer;

(n)           any financing transaction with respect to property built or acquired by the Issuer or any of its Restricted Subsidiaries after the Issue Date, including any Sale/Leaseback Transaction or asset securitization, permitted by this Indenture, so long as any net cash proceeds from such financing, Sale/Leaseback Transaction or asset

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securitization (other than a financing, Sale/Leaseback Transaction or asset securitization entered into within 180 days of the acquisition of such property) are treated as Net Proceeds of an Asset Sale under Section 4.06;

(o)           the incurrence of Permitted Liens;

(p)           any disposition of Capital Stock of a Restricted Subsidiary pursuant to an agreement or other obligation with or to a Person (other than the Issuer or a Restricted Subsidiary of the Issuer) from whom such Restricted Subsidiary was acquired or from whom such Restricted Subsidiary acquired its business and assets (having been newly formed in connection with such acquisition), made as part of such acquisition and in each case comprising all or a portion of the consideration in respect of such sale or acquisition;

(q)           dispositions of receivables in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar proceedings and exclusive of factoring or similar arrangements;

(r)            voluntary terminations, transitions, sales or other dispositions of Hedging Obligations; and

(s)            the transfer, sale or other disposition resulting from any involuntary loss of title, involuntary loss or damage to or destruction of, or any condemnation or other taking of, any property or assets of the Issuer or any Restricted Subsidiary.

“Asset Purchase Agreement” means that certain Asset Purchase Agreement, dated as of October 30, 2018, among Iroko Pharmaceuticals, Inc., Egalet US Inc. and the Issuer.

“Associated Funds” means, with respect to any Person, any funds managed by such Person or under common management with such Person.

“Bank Indebtedness” means any and all amounts payable under or in respect of any Credit Agreement and the other Credit Agreement Documents as amended, restated, supplemented, waived, replaced, restructured, repaid, refunded, refinanced or otherwise modified from time to time (including after termination of such Credit Agreement), including principal, premium (if any), interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Issuer whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations, guarantees and all other amounts payable thereunder or in respect thereof.

“Bankruptcy Code” means the Bankruptcy Reform Act of 1978, as amended and codified in title 11 of the United States Code, 11 U.S.C. §§ 101-1532, as in effect on the date of the Plan of Reorganization but, with respect to amendments to the Bankruptcy Code subsequent to commencement of the Chapter 11 Cases, only to the extent that such amendments were made expressly applicable to bankruptcy cases which were filed as of the enactment of such amendments.

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“Bankruptcy Court” means the United States Bankruptcy Court for the District of Delaware or such other court as may have jurisdiction over the Chapter 11 Cases.

“Board of Directors” means, as to any Person, the board of directors, board of managers or similar governing body, as applicable, of such Person (or, if such Person is a partnership, the board of directors or other governing body of the general partner of such Person) or any duly authorized committee thereof. References in this Indenture to directors (on a Board of Directors) shall also be deemed to refer to managers (on a Board of Managers).

“Business Day” means a day other than a Saturday, Sunday or other day on which banking institutions are authorized or required by law to close in New York City or the city in which the Corporate Trust Office is located.

“Capital Stock” means:

(1)           in the case of a corporation, corporate stock or shares;

(2)           in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

(3)           in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited) and membership rights; and

(4)           any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person;

in each case to the extent treated as equity in accordance with GAAP.

“Capitalized Lease Obligation” means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP; provided that in no event shall an operating lease that is classified as such on the Issue Date be deemed to constitute a capital lease or a Capitalized Lease Obligation at any time after the Issue Date.

“Cash Contribution Amount” means the aggregate amount of cash contributions made to the capital of the Issuer used for purposes of calculating the amount of Indebtedness that may be Incurred as “Contribution Indebtedness” as described in the definition of “Contribution Indebtedness”; provided that such cash contributions shall cease to be treated as the Cash Contribution Amount to the extent the related Contribution Indebtedness has been reclassified in accordance with Section 4.03.

“Cash Equivalents” means:

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(1)           U.S. Dollars, Canadian dollars, pounds sterling, euros or the national currency of any member state in the European Union (including Danish kroner);

(2)           securities issued or directly and fully guaranteed or insured by the U.S. government or any country that is a member of the European Union or any agency or instrumentality thereof, in each case maturing not more than two years from the date of acquisition;

(3)           certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances, in each case with maturities not exceeding one year and overnight bank deposits, in each case with any commercial bank having capital and surplus in excess of $250,000,000 (or the U.S. dollar equivalent as of the date of determination) and whose long-term debt is rated “A” or the equivalent thereof by Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized rating agency);

(4)           repurchase obligations for underlying securities of the types described in clauses (2) and (3) above or (5) below entered into with any financial institution meeting the qualifications specified in clause (3) above;

(5)           commercial paper issued by a corporation (other than an Affiliate of the Issuer) rated at least “A-1” or the equivalent thereof by Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized rating agency), and in each case maturing within one year after the date of acquisition;

(6)           readily marketable direct obligations issued by any state of the United States of America or any political subdivision or taxing authority thereof rated at least “A-1” or the equivalent thereof by Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized rating agency), in each case with maturities not exceeding two years from the date of acquisition;

(7)           Indebtedness issued by Persons (other than an Affiliate of the Issuer) with a rating of “A” or higher from S&P or “A-2” or higher from Moody’s (or reasonably equivalent ratings of another internationally recognized rating agency), in each case with maturities not exceeding two years from the date of acquisition;

(8)           marketable short-term money market and similar securities rated at least “A-1” or the equivalent thereof by Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized rating agency) and in each case maturing within 12 months after the date of creation thereof; and

(9)           investment funds investing at least 95% of their assets in securities of the types described in clauses (1) through (8) above.

“Change of Control” means the occurrence of any of the following events:

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(i)            the sale, lease or transfer, in one or a series of related transactions, of all or substantially all the assets of the Issuer and its Subsidiaries, taken as a whole, to a Person other than any of the Issuer or its Restricted Subsidiaries;

(ii)           the Issuer becomes aware (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) of the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act or any successor provision), other than any of the Permitted Holders, in a single transaction or in a related series of transactions, by way of merger, consolidation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), of more than 50% of the total voting power of the issued and outstanding Voting Stock of the Issuer; or

(iii)          the adoption of a plan relating to the Issuer’s dissolution or liquidation in accordance with the Issuer’s organizational documents.

Notwithstanding the foregoing, the acquisition, directly or indirectly, of 100% of the total voting power of the issued and outstanding Voting Stock of the Issuer by any Person who, immediately after such acquisition, has no material assets other than the Capital Stock of the Issuer or its direct or indirect parent company will not, by itself, constitute a Change of Control.

“Chapter 11 Cases” means the joint chapter 11 case of the Issuer and its affiliated debtors, under Case No. 18-12439 (BLS) in the Bankruptcy Court.

“Co-Promotion Arrangement” means any agreement or arrangement related primarily to the marketing, promoting, distributing, detailing, or commercial selling of, or customer service with respect to, any product (including the Products).

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

“Collateral Agent” means U.S. Bank National Association, in its capacity as “Collateral Agent” under this Indenture and under the Security Documents and any successor thereto in such capacity.

“Collateral Agreement” means the Collateral Agreement dated as of the date hereof among the Issuer, the Guarantors party thereto, the Trustee and the Collateral Agent, as may be amended, extended, renewed, restated, supplemented, waived or otherwise modified from time to time.

“Confidentiality Agreement” means a confidentiality agreement substantially in the form attached to this Indenture as Exhibit G or other form reasonably acceptable to the Issuer.  For the avoidance of doubt, Section 4.1 of the Asset Purchase Agreement shall constitute

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a Confidentiality Agreement with respect to Iroko and its subsidiaries for purposes hereof and any agreement to be bound by the terms thereof shall constitute a Confidentiality Agreement with respect to any of Iroko’s Permitted Designees and its Permitted Transferees (each as defined in the Asset Purchase Agreement) for purposes hereof.

“Consolidated Interest Expense” means, with respect to any Person for any period, the sum, without duplication, of:

(1)           consolidated interest expense of such Person and its Restricted Subsidiaries for such period, to the extent such expense was deducted in computing Consolidated Net Income (including (i) amortization of original issue discount, (ii) the interest component of Capitalized Lease Obligations, (iii) net payments and receipts (if any) pursuant to interest rate Hedging Obligations, (iv) amortization of deferred financing fees, debt issuance costs, commissions, fees and expenses, (v) non-cash interest expense, (vi) all commissions, discounts and other fees and charges owed with respect to letters of credit or bankers acceptances, and (vii) any expensing of any bridge, commitment or other financing fees); plus

(2)           consolidated capitalized interest of such Person and its Restricted Subsidiaries for such period, whether paid or accrued; plus

(3)           commissions, discounts, yield and other fees and charges Incurred in connection with any Receivables Financing that are payable to Persons other than the Issuer and its Restricted Subsidiaries; minus

(4)           interest income for such period.

For purposes of this definition, interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by the Issuer to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP.

“Consolidated Leverage Ratio” means, with respect to any Person, at any date (the “Consolidated Leverage Calculation Date”), the ratio of (i) Indebtedness (other than Indebtedness of the kind described in clauses 1(c) and 1(e) of the definition of Indebtedness herein) of such Person and its Restricted Subsidiaries as of the Consolidated Leverage Calculation Date less the amount of Cash Equivalents in excess of any Restricted Cash that is stated on the balance sheet of such Person and its Restricted Subsidiaries and held by such Person and its Restricted Subsidiaries as of such Consolidated Leverage Calculation Date, not to exceed $25,000,000, to (ii) EBITDA of such Person for the most recent four full fiscal quarters period ending on the last day of the most recent fiscal quarter for which internal financial statements are available immediately preceding such Consolidated Leverage Calculation Date. In the event that the Issuer or any of its Restricted Subsidiaries Incurs, repays, repurchases or redeems any Indebtedness subsequent to the last day of such most recent four full fiscal quarter period but prior to the Consolidated Leverage Calculation Date, then the Consolidated Leverage Ratio shall be calculated giving pro forma effect to such Incurrence, repayment, repurchase or redemption of Indebtedness as if the same had occurred at the beginning of the applicable four-

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quarter period; provided that the Issuer may elect pursuant to an Officers’ Certificate delivered to the Trustee to treat all or any portion of the commitment under any agreement evidencing Indebtedness as being Incurred on the first day of the applicable four-quarter measurement period, in which case any subsequent Incurrence of Indebtedness under such commitment shall not be deemed, for purposes of this calculation, to be an Incurrence at such subsequent time; provided , further , that any Cash Equivalent proceeds received in connection with or as a result of such Incurrence or other transaction for which the Consolidated Leverage Ratio is being calculated shall not be subtracted from Indebtedness for purposes of calculating the Consolidated Leverage Ratio.

For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP), in each case, with respect to a business, a division or an operating unit of a business, as applicable, that the Issuer or any of its Restricted Subsidiaries has determined to make and/or made during the applicable four-quarter measurement period or subsequent to such measurement period and on or prior to or simultaneously with the Consolidated Leverage Calculation Date shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers, amalgamations, consolidations and discontinued operations (and the change of any associated Indebtedness and the change in EBITDA resulting therefrom) had occurred on the first day of the applicable four-quarter measurement period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into the Issuer or any Restricted Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, consolidation, amalgamation or discontinued operation, in each case, with respect to a business, a division or an operating unit of a business, as applicable, that would have required adjustment pursuant to this definition, then the Consolidated Leverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, merger, amalgamation, consolidation or discontinued operation had occurred on the first day of the applicable four-quarter measurement period.

For purposes of this definition, whenever pro forma effect is to be given to any event, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Issuer in accordance with Regulation S-X under the Securities Act. Any such pro forma calculation may include adjustments appropriate, in the reasonable good faith determination of the Issuer in accordance with Regulation S-X under the Securities Act, to reflect operating expense reductions, costs, savings and other operating improvements or synergies reasonably expected to result from the applicable event; provided , that any such expected operating expense reductions, costs, savings, operating improvements or synergies shall be approved by the audit committee of the Board of Directors of the Issuer if in excess of $5,000,000.

For purposes of this definition, any amount in a currency other than U.S. Dollars will be converted to U.S. Dollars based on the average exchange rate for such currency for the most recent four full fiscal quarter period immediately prior to the date of determination in a manner consistent with that used in calculating EBITDA for the applicable period.

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“Consolidated Liquidity” means, as of any date, the average, calculated as of the close of business on each of the 30 calendar days preceding (but including) such date, of the sum of (x) the aggregate amount of Cash Equivalents of the Issuer and its Restricted Subsidiaries which is free and clear of all Liens (other than Liens in favor of the Collateral Agent securing the Securities Obligations and Liens permitted by clauses (1), (2), (3), (6), (11), (12), (15), (24) and (37) of the definition of “Permitted Liens”) plus (y) any amount available to be borrowed, at such time, by the Issuer or its Restricted Subsidiaries under a revolving credit agreement (or similar facility) pursuant to the terms of such agreement, in each case, determined on a consolidated basis.

“Consolidated Net Income” means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis; provided , however , that:

(1)           any net after-tax extraordinary, non-recurring or unusual gains or losses (less all fees and expenses relating thereto) shall be excluded;

(2)           effects of purchase accounting adjustments (including the effects of such adjustments pushed down to such Person and such Subsidiaries) in amounts required or permitted by GAAP, resulting from the application of purchase accounting in relation to any consummated acquisition or the amortization or write-off of any amounts thereof, net of taxes, shall be excluded;

(3)           the Net Income for such period shall not include the cumulative effect of a change in accounting principles during such period;

(4)           any net after-tax income or loss from disposed, abandoned, transferred, closed or discontinued operations and any net after-tax gains or losses on disposal of disposed, abandoned, transferred, closed or discontinued operations shall be excluded;

(5)           any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to business dispositions or asset dispositions other than in the ordinary course of business (as determined in good faith by the Issuer) shall be excluded;

(6)           any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to the early extinguishment of indebtedness, and any unrealized gains and losses relating to Hedging Obligations or other derivative instruments shall be excluded;

(7)           the Net Income for such period of any Person that is not a Subsidiary of such Person or that is accounted for by the equity method of accounting, shall be included only to the extent of the amount of dividends or distributions or other payments paid in cash (or to the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period;

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(8)           solely for the purpose of determining the amount available for Restricted Payments under clause (1) of the definition of “Cumulative Credit”, the Net Income for such period of any Restricted Subsidiary (other than any Guarantor) shall be excluded to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary of its Net Income is not, at the date of determination with respect to such Restricted Payment, permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders or equityholders, unless such restrictions with respect to the payment of dividends or similar distributions have been legally waived; provided that the Consolidated Net Income of such Person shall be increased by the amount of dividends or other distributions or other payments actually paid in cash (or converted into cash) by any such Restricted Subsidiary to such Person, to the extent not already included therein;

(9)           any impairment charges or asset write-offs, in each case pursuant to GAAP, and the amortization of intangibles arising pursuant to GAAP shall be excluded;

(10)         any non-cash expense realized or resulting from stock option plans, employee benefit plans or post-employment benefit plans, or grants or sales of stock, stock appreciation or similar rights, stock options, restricted stock, preferred stock or other rights (including any of the foregoing related to terminated employees) shall be excluded;

(11)         any one-time non-cash compensation charges shall be excluded;

(12)         accruals and reserves that are established or adjusted within 12 months after the Issue Date and that are so required to be established or adjusted in accordance with GAAP or as a result of adoption or modification of accounting policies shall be excluded;

(13)         (a)(i) the non-cash portion of “straight-line” rent expense shall be excluded and (ii) the cash portion of “straight-line” rent expense that exceeds the amount expensed in respect of such rent expense shall be included and (b) non-cash gains, losses, income and expenses resulting from fair value accounting required by the applicable standard under GAAP and related interpretations shall be excluded;

(14)         any currency translation gains and losses related to currency remeasurements of Indebtedness, and any net loss or gain resulting from Hedging Obligations, shall be excluded;

(15)         solely for the purposes of calculating Restricted Payments, if positive, any permanent difference (but excluding, for the avoidance of doubt, any temporary difference the Issuer reasonably expects to be paid in cash in any future tax period) of the Consolidated Taxes of the Issuer calculated in accordance with GAAP and the actual Consolidated Taxes paid in cash by the Issuer during such period shall be excluded;

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(16)         any non-cash after-tax interest expense resulting from the application of Accounting Standards Codification Topic 470-20 “Debt — Debt with Conversion Options — Recognition” shall be excluded;

(17)         to the extent covered by insurance and actually reimbursed, or, so long as such Person has made a determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer and only to the extent that such amount is (a) not denied by the applicable carrier in writing and (b) in fact reimbursed within 365 days of the date of such evidence (with a deduction for any amount so added back to the extent not so reimbursed within 365 days), such loss or expense amounts as are so reimbursed, or reimbursable, by insurance providers in respect of liability or casualty events or business interruption shall be excluded;

(18)         to the extent covered by fees, costs, expenses and losses that are, or (without duplication) are required to be, covered by contractual indemnities, guaranty obligations, purchase price adjustments, insurance policies or other contractual reimbursement obligations of third parties, to the extent actually indemnified or reimbursed or with respect to which Issuer has determined that a reasonable basis exists for indemnification or reimbursement, but only to the extent that such amount is actually indemnified or reimbursed within 365 days of such determination (with a deduction in the applicable future period of any amount so added back to the extent not so indemnified or reimbursed within such 365 days) shall be excluded; and

(19)         any net after-tax gains, losses, charges or expenses arising from the implementation of “fresh start” accounting shall be excluded (it being understood that, for the avoidance of doubt, (i) the recognition of costs or expenses, amortization, depreciation or similar amounts from assets or liabilities adjusted in such “fresh start” accounting and (ii) any such non-cash charge to the extent it represents an accrual of or reserve for cash charges in any future period or amortization of a prepaid cash expense that was paid in a prior period not included in the calculation shall, in each case, not be excluded).

Notwithstanding the foregoing, for the purpose of Section 4.04 only, there shall be excluded from Consolidated Net Income any dividends, repayments of loans or advances or other transfers of assets from a Restricted Subsidiary of the Issuer to the extent such dividends, repayments or transfers increase the amount of Restricted Payments permitted under clauses (5) and (6) of the definition of “Cumulative Credit”.

Notwithstanding the foregoing, “Consolidated Net Income” shall exclude the effects of any issuance of any Permitted Cure Securities.

“Consolidated Non-cash Charges” means, with respect to any Person for any period, the aggregate depreciation, amortization and other non-cash expenses of such Person and its Restricted Subsidiaries reducing Consolidated Net Income of such Person for such period on a consolidated basis and otherwise determined in accordance with GAAP, but excluding any such

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charge that consists of or requires an accrual of, or cash reserve for, anticipated cash charges for any future period.

“Consolidated Taxes” means, with respect to any Person for any period, the provision for taxes of such Person and its Restricted Subsidiaries based on income, profits or capital, including state, franchise, property and similar taxes and foreign withholding taxes (including penalties and interest related to such taxes or arising from tax examinations).

“Contingent Obligations” means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including any obligation of such Person, whether or not contingent:

(1)           to purchase any such primary obligation or any property constituting direct or indirect security therefor;

(2)           to advance or supply funds:

(a)           for the purchase or payment of any such primary obligation; or

(b)           to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor; or

(3)           to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.

“Contribution Indebtedness” means Indebtedness of the Issuer or any Guarantor and Preferred Stock of any Guarantor in an aggregate principal amount not greater than the aggregate amount of cash contributions (other than Excluded Contributions) made to the capital of the Issuer after the Issue Date; provided that (1) such cash contributions have not been used to make a Restricted Payment or a Permitted Investment in any Person other than the Issuer or a Guarantor; and (2) such Contribution Indebtedness is Incurred within 180 days after the making of such cash contributions and is designated as Contribution Indebtedness .

“Controlled Foreign Corporation” means a corporation that is a “controlled foreign corporation” within the meaning of Section 957 of the Code.

“Corporate Trust Office” means the address of the Trustee specified in Section 12.01 or such other address as to which the Trustee may give notice to the Holders and the Issuer.

“Credit Agreement” means (i) if designated by the Issuer to be included in the definition of “Credit Agreement”, any revolving credit, line of credit or similar agreement, as amended, restated, supplemented, waived, replaced (whether or not upon termination, and whether with the original lenders or otherwise), restructured, repaid, refunded, refinanced or

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otherwise modified from time to time, including any agreement or instrument extending the maturity thereof, refinancing, replacing or otherwise restructuring all or any portion of the Indebtedness under such agreement or instrument or any successor or replacement agreement or agreements or instrument or instruments or increasing the amount loaned or issued thereunder or altering the maturity thereof and (ii) whether or not the agreements or instruments referred to in clause (i) remain outstanding, and if designated by the Issuer to be included in the definition of “Credit Agreement”, one or more (A) debt facilities or commercial paper facilities, providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to lenders or to special purpose entities formed to borrow from lenders against such receivables) or letters of credit, or (B) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers’ acceptances), in each case, with the same or different borrowers or issuers and, in each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to time.

“Credit Agreement Documents” means any Credit Agreement, any notes issued pursuant thereto and the guarantees thereof, and the collateral documents relating thereto, as amended, supplemented, restated, renewed, refunded, replaced, restructured, repaid, refinanced or otherwise modified from time to time.

“Cumulative Credit” means the sum of (without duplication):

(1)            50% of the Consolidated Net Income for the period (taken as one accounting period, the “Reference Period”) from April 1, 2019 to the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payments (or, in the case such Consolidated Net Income for such Reference Period is a deficit, minus 100% of such deficit); plus

(2)            100% of the aggregate net proceeds, including cash and the Fair Market Value (as determined in good faith by the Issuer) of property other than cash, received by the Issuer after the Issue Date from the issue, sale or exercise of Equity Interests of the Issuer (excluding Refunding Capital Stock, Designated Preferred Stock, Excluded Contributions, Disqualified Stock and the Cash Contribution Amount), including Equity Interests issued upon conversion of Indebtedness or Disqualified Stock or upon exercise of warrants or options (other than an issuance or sale to a Restricted Subsidiary of the Issuer); plus

(3)            100% of the aggregate amount of contributions to the capital of the Issuer received in cash and the Fair Market Value (as determined in good faith by the Issuer) of property other than cash after the Issue Date (other than Excluded Contributions, Refunding Capital Stock, Designated Preferred Stock, Disqualified Stock and the Cash Contribution Amount); plus

(4)            the principal amount of any Indebtedness, or the liquidation preference or maximum fixed repurchase price, as the case may be, of any Disqualified Stock of the Issuer or any Restricted Subsidiary thereof issued after the Issue Date (other

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than Indebtedness or Disqualified Stock issued to a Restricted Subsidiary) that has been converted into or exchanged for Equity Interests in the Issuer (other than Disqualified Stock) or any direct or indirect parent of the Issuer (provided in the case of any such parent, such Indebtedness or Disqualified Stock is retired or extinguished); plus

(5)            100% of the aggregate amount received by the Issuer or any Restricted Subsidiary in cash and the Fair Market Value (as determined in good faith by the Issuer) of property other than cash after the Issue Date received by the Issuer or any Restricted Subsidiary after the Issue Date from the sale or other disposition (other than to the Issuer or a Restricted Subsidiary of the Issuer) of Restricted Investments made by the Issuer and its Restricted Subsidiaries and from repurchases and redemptions of such Restricted Investments from the Issuer and its Restricted Subsidiaries by any Person (other than the Issuer or any of its Restricted Subsidiaries) and from repayments of loans or advances that constituted Restricted Investments (other than in each case to the extent that the Restricted Investment was made pursuant to clause (vii) or (x) of Section 4.04(b)).

Notwithstanding the foregoing, “Cumulative Credit” shall not include any proceeds of any Permitted Cure Securities.

“Customary Intercreditor Agreement” means in connection with the incurrence of Indebtedness pursuant to Section 4.03(b)(xxvii) that is to be secured by Liens on the Notes Collateral securing such Indebtedness that may rank senior, pari passu with or junior to the Liens on the Notes Collateral securing the Securities Obligations, an intercreditor agreement among the Trustee, the Collateral Agent and the holders of such Indebtedness or their Representative(s) in the form delivered by the Issuer to the Trustee and Collateral Agent providing that, inter alia, the Liens on the Notes Collateral in favor of the Collateral Agent shall be senior, pari passu with or junior to such Liens, as applicable, in favor of such holders or their Representative(s), provided that such intercreditor agreement shall contain customary terms consistent with then prevailing market terms as determined in good faith by the Issuer, as confirmed in an Officers’ Certificate to be delivered to the Trustee and Collateral Agent by the Issuer.

“Default” means any event that is, or after notice or passage of time or both would be, an Event of Default.

“Designated Non-cash Consideration” means the Fair Market Value (as determined in good faith by the Issuer) of non-cash consideration received by the Issuer or one of its Restricted Subsidiaries in connection with an Asset Sale that is so designated as Designated Non-cash Consideration, less the amount of Cash Equivalents received in connection with a subsequent sale of such Designated Non-cash Consideration.

“Designated Preferred Stock” means Preferred Stock of the Issuer or any direct or indirect parent of the Issuer, as applicable (other than Disqualified Stock), that is issued for cash (other than to the Issuer or any of its Subsidiaries or an employee stock ownership plan or trust established by the Issuer or any of its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to an Officers’ Certificate, on or promptly following the issuance date thereof.

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“Disqualified Stock” means, with respect to any Person, any Capital Stock of such Person that, by its terms (or by the terms of any security into which it is convertible or for which it is redeemable or exchangeable), or upon the happening of any event:

(1)           matures (other than an optional redemption by the Issuer thereof) or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (other than as a result of a change of control or asset sale; provided that the relevant asset sale or change of control provisions, taken as a whole, are no more favorable in any material respect to holders of such Capital Stock than the Asset Sale and Change of Control provisions applicable to the Securities and any purchase requirement triggered thereby may not become operative until compliance with the Asset Sale and Change of Control provisions applicable to the Securities (including the purchase of any Securities tendered pursuant thereto));

(2)           is convertible or exchangeable at the option of the holder thereof for Indebtedness or Disqualified Stock of such Person; or

(3)           is redeemable at the option of the holder thereof, in whole or in part (other than solely as a result of a change of control or asset sale),

in each case, prior to 91 days after the earlier of the then-applicable Stated Maturity of the Securities and the date the Securities are no longer outstanding; provided , however , that only the portion of Capital Stock that so matures or is mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock; provided , further , however , that if such Capital Stock is issued to any employee or to any plan for the benefit of employees of the Issuer or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Issuer in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s termination, death or disability; provided , further , that any class of Capital Stock of such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of Capital Stock that is not Disqualified Stock shall not be deemed to be Disqualified Stock.

“Domestic Subsidiary” means any Subsidiary of the Issuer incorporated or organized under the laws of the United States of America or any state or political subdivision of the United States of America.

“DTC” means The Depository Trust Company, its nominees and their respective successors.

“EBITDA” means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period plus, without duplication, to the extent the same was deducted (or otherwise not included) in calculating Consolidated Net Income:

(1)           Consolidated Taxes; plus

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(2)           Consolidated Interest Expense plus all cash dividend payments (excluding items eliminated in consolidation) on a series of Preferred Stock or Disqualified Stock of such Person and its Subsidiaries that are Restricted Subsidiaries; plus

(3)           Consolidated Non-cash Charges; plus

(4)           any expenses or charges related to any issuance of Equity Interests, Investment, acquisition, disposition, recapitalization or the incurrence or repayment of Indebtedness permitted to be incurred by this Indenture (including a refinancing thereof) (whether or not successful) or repaid on the Issue Date, including (i) such fees, expenses or charges related to the offering of the Securities and the Bank Indebtedness, (ii) any amendment or other modification of the Securities or other Indebtedness and (iii) commissions, discounts, yield and other fees and charges (including any interest expense) related to any Qualified Receivables Financing; plus

(5)           business optimization expenses and other restructuring charges, reserves or expenses (which, for the avoidance of doubt, shall include the costs related to severance or relocation, facility openings or closures, facility consolidations, retention, contract terminations, project start-up costs, acquisition integration costs and excess pension charges); plus

(6)           any costs or expenses incurred pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement, to the extent that such costs or expenses are funded with cash proceeds contributed to the capital of the Issuer or a Guarantor or net cash proceeds of an issuance of Equity Interests of the Issuer (other than Disqualified Stock) solely to the extent that such net cash proceeds are excluded from the calculation of the Cumulative Credit; plus

(7)           any expenses in connection with earn-out obligations of such Person and its Restricted Subsidiaries for such period; plus

(8)           expenses incurred and cash payments made in connection with the settlement of any litigation or claim involving the Issuer or its Restricted Subsidiaries; plus

(9)           Consolidated Net Income attributable to, or adding to the losses attributable to, the minority equity interests of third parties in any Restricted Subsidiary that is not a Wholly Owned Restricted Subsidiary of such Person, except to the extent of dividends declared or paid with respect to such period or any prior period on the shares of Capital Stock of such Restricted Subsidiary held by such third parties; plus

(10)         any ordinary course dividend, distribution or any other payment paid in cash and received from any Person in excess of amounts included in clause (7) of the definition of Consolidated Net Income;

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less, without duplication,

(11)         non-cash items increasing Consolidated Net Income for such period (excluding the recognition of deferred revenue or any items that represent the reversal of any accrual of, or cash reserve for, anticipated cash charges that reduced EBITDA in any prior period and any items for which cash was received in a prior period).

Notwithstanding the foregoing, without duplication, (i) any amounts arising from the implementation of “fresh start” accounting shall be excluded from the calculation of EBITDA (it being understood that, for the avoidance of doubt, (1) the recognition of costs or expenses, amortization, depreciation or similar amounts from assets or liabilities adjusted in such “fresh start” accounting and (2) any such non-cash charge to the extent it represents an accrual of or reserve for cash charges in any future period or amortization of a prepaid cash expense that was paid in a prior period not included in the calculation shall, in each case, shall not be excluded), (ii) any gains, losses, charges or expenses arising from the Emergence Transactions or the Chapter 11 Cases shall be excluded from the calculation of EBITDA and (iii) EBITDA shall exclude the effects of any issuance of any Permitted Cure Securities..

“Egalet-002” means the product candidate referred to on the Issue Date as Egalet-002 (whether marketed under such name or any other name).

“Egalet-002 Product” means (a) Egalet-002 and (b) any and all product improvements, additional claims, line extensions, dosage changes and alternate delivery systems in respect thereof.

“Egalet Limited” means Egalet Limited, a limited company organized under the laws of England and Wales.

“Emergence Transactions” means the consummation of the transactions contemplated by the Plan of Reorganization and emergence from Chapter 11 Cases on the Effective Date (as defined in the Plan of Reorganization) including, without limitation, the issuance of the Securities, the consummation of the transactions contemplated by the Asset Purchase Agreement and the payment of any fees and expenses related to any of the foregoing.

“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

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

“Excluded Assets” means (i) any license, contract, permit or agreement of the Issuer or any of the Guarantors, or the property or assets subject thereto, if and only for so long as and to the extent that the grant of a security interest therein under the Security Documents would result in a breach or default under, or abandonment, invalidation or unenforceability of, that license, contract, permit or agreement (except (x) to the extent the relevant term that would

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result in such breach, default, abandonment, invalidation or unenforceability is rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial Code (or equivalent statutes of any jurisdiction) or any other applicable law or (y) any such license, contract, permit or agreement between the Issuer and any Subsidiary of the Issuer or between Subsidiaries of the Issuer, or the property or assets subject thereto), (ii) any leasehold interest in real property (excluding fixtures), (iii) any asset or property to the extent that the grant of a security interest in such asset or property is prohibited by any applicable law or requires a consent not obtained of any Governmental Authority pursuant to applicable law (except to the extent the law prohibiting such grant or requiring such consent is rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial Code (or equivalent statutes of any jurisdiction) or any other applicable law), (iv) any assets or property as to which the Collateral Agent (at the direction of the Holders of a majority in principal amount of the Securities then outstanding) reasonably determines in good faith that the costs of obtaining such a security interest are excessive in relation to the value of the security to be afforded thereby, (v) [reserved], (vi) any Equity Interests in or of any Foreign Subsidiary (other than Egalet Limited and any Specified IP Subsidiary) or Domestic Subsidiary that owns (directly or indirectly through one or more disregarded entities) only the Equity Interests of one or more Controlled Foreign Corporations, other than 65% of the total outstanding voting Equity Interests and 100% of the non-voting Equity Interests of (x) any First Tier Controlled Foreign Corporation and (y) any Domestic Subsidiary that owns (directly or indirectly through one or more disregarded entities) only the Equity Interests of one or more Controlled Foreign Corporations to the extent and only for so long as the Issuer determines in good faith that permitting a pledge of 100% of such voting Equity Interests in the case of clause (x) above or clause (y) above would result in material adverse tax consequences for the Issuer or any of its Subsidiaries (including as a result of the operation of Section 956 of the Code or any similar law or regulation in any applicable jurisdiction) (it being understood that, in the case of clause (x) above or clause (y) above, if a percentage less than 100% but greater than 65% of such voting Equity Interests may be pledged without any such material adverse tax consequences, then such percentage shall be pledged), (vii) any Equity Interests of any Subsidiary (other than Egalet Limited and any Specified IP Subsidiary) owned by a First Tier Controlled Foreign Corporation or by a lower-tier Foreign Subsidiary to the extent and only for so long as the Issuer determines in good faith that permitting a pledge of 100% of such Equity Interests would result in material adverse tax consequences for the Issuer or any of its Subsidiaries (including as a result of the operation of Section 956 of the Code or any similar law or regulation in any applicable jurisdiction) (it being understood that, if a percentage less than 100% but greater than 0% of such Equity Interests may be pledged without any such material adverse tax consequences, then such percentage shall be pledged), (viii) any Equity Interests issued by any minority-owned Investment, so long as no other Person is granted a Lien in respect thereof which secured Indebtedness for borrowed money, (ix) any tax accounts, trust accounts, wage and benefit accounts, fiduciary accounts, zero balance accounts, payroll accounts, withholding tax accounts, pension and pension reserve accounts and employee benefit accounts to the extent funded or maintained in accordance with prudent business practice or as required by law, (x) the OXAYDO® Excluded Assets, (xi) any trademark or service mark applications filed in the United States Patent and Trademark Office on the basis of the intent of the Issuer or any Guarantor to use such trademark or service mark, unless and until evidence of use of such mark acceptable to the United States Patent and

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Trademark Office has been filed with the United States Patent and Trademark Office pursuant to Section 1(c) or Section 1(d) of the Lanham Act (15 U.S.C., et seq .), to the extent that granting a security interest in such application prior to such filing would adversely affect the validity or enforceability of such trademark application, (xii) any motor vehicle or other equipment that is subject to a certificate of title and (xiii) any fee owned real property with a fair market value less than $1,000,000 individually; provided , that if, following the Issue Date, the Issuer or any Guarantor, in the Issuer’s sole discretion, grants a security interest in any OXAYDO® Excluded Asset to any third-party financing source, such OXAYDO® Excluded Asset shall no longer be deemed an “Excluded Asset” and shall be deemed “After-Acquired Property,” in each case, subject to customary, agreed-upon intercreditor terms with such third-party financing source, such that the Lien on such OXAYDO® Excluded Asset securing the Securities and the Guarantees ranks equally with the Lien on such OXAYDO® Excluded Asset securing such third-party financing.

“Excluded Contributions” means the Cash Equivalents or other assets (valued at their Fair Market Value as determined in good faith by the Issuer) received by the Issuer after the Issue Date from:

(1)           contributions to its common equity capital; and

(2)           the sale (other than to a Subsidiary of the Issuer or to any Subsidiary management equity plan or stock option plan or any other management or employee benefit plan or agreement) of Capital Stock (other than Disqualified Stock and Designated Preferred Stock) of the Issuer,

in each case designated as Excluded Contributions on or after the date such capital contributions are made or the date such Capital Stock is sold, as the case may be.

“Fair Market Value” means, at the time of any given transaction, with respect to any asset or property, the price (after taking into account any liabilities related to such asset or property) that could be negotiated in an arm’s-length transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction.

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

“Federal Deposit Insurance Corporation” means the Federal Deposit Insurance Corporation or any successor thereto.

“Financial Officer” of any Person shall mean the Chief Financial Officer (and/or principal financial officer), Chief Accounting Officer (and/or principal accounting officer), Treasurer, Assistant Treasurer or Controller of such Person.

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“First Amortization Date” means, with respect to any security, the date specified in such security as the fixed date on which the first payment of principal of such security is due and payable.

“First Lien Agent” means the Representative(s) of the holders of the First Priority Lien Obligations to the extent designated as such in an ABL Intercreditor Agreement.

“First Priority Lien Obligations” means (i) all Secured Bank Indebtedness, (ii) all other Obligations (not constituting Indebtedness) of the Issuer and its Restricted Subsidiaries under the agreements governing Secured Bank Indebtedness and (iii) all other Obligations of the Issuer or any of its Restricted Subsidiaries in respect of Hedging Obligations or Obligations in respect of cash management services, in each case, owing to a Person that is a holder of Indebtedness described in clause (i) or Obligations described in clause (ii) or an Affiliate or Representative of such holder at the time of entry into such Hedging Obligations or Obligations in respect of cash management services, to the extent that, in the case of each of clause (i), (ii) or (iii), such Indebtedness or other Obligations are secured, in whole or in part, by the ABL Collateral; provided , that First Priority Lien Obligations may not, together with Receivables Financings and any outstanding Indebtedness incurred pursuant to Section 4.03(b)(xxvii), at any time exceed $20,000,000 in aggregate principal amount.

“First Tier Controlled Foreign Corporation” means any First Tier Foreign Subsidiary that is a Controlled Foreign Corporation.

“First Tier Foreign Subsidiary” means any Foreign Subsidiary the Equity Interests of which are owned directly by the Issuer or indirectly by the Issuer through one or more Domestic Subsidiaries or disregarded entities for U.S. federal income tax purposes.

“Foreign Subsidiary” means any Subsidiary of the Issuer that is not a Domestic Subsidiary.

“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, in each case, as in effect on the Issue Date, other than reports and financial information required to be delivered under Section 4.02, which shall be prepared in accordance with GAAP in effect on the date thereof.

“Governmental Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

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“guarantee” means a guarantee or other provision of credit support (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness or other obligations, including by providing security therefor or by becoming a co-obligor with respect thereto.  The term, “guarantee,” when used as a verb, shall mean to provide a guarantee.

“Guarantee” means any guarantee of the obligations of the Issuer under this Indenture and the Securities by any Person in accordance with the provisions of this Indenture.

“Guarantor” means any Restricted Subsidiary of the Issuer party to this Indenture on the Issue Date and any other Person that Incurs a Guarantee pursuant to Section 4.10; provided, however that, upon the release or discharge of such Person from its Guarantee in accordance with this Indenture, such Person ceases to be a Guarantor.

“Hedging Obligations” means, with respect to any Person, the obligations of such Person under:

(1)                                  currency exchange, interest rate or commodity swap agreements, currency exchange, interest rate or commodity cap agreements and currency exchange, interest rate or commodity collar agreements; and

(2)                                  other agreements or arrangements designed to protect such Person against fluctuations in currency exchange, interest rates or commodity prices or to otherwise manage interest rate risk or currency exchange risk.

“Holder” means the Person in whose name a Security is registered on the Registrar’s books.

“Incur” means issue, assume, guarantee, incur or otherwise become liable for; provided , however , that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Subsidiary (whether by merger, amalgamation, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Subsidiary; and “Incurrence” has a correlative meaning.

“Indebtedness” means, with respect to any Person:

(1)                                  the principal of any indebtedness of such Person, whether or not contingent, (a) in respect of borrowed money, (b) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers’ acceptances (or, without duplication, reimbursement agreements in respect thereof), (c) representing the deferred and unpaid purchase price of any property (except (i) any such balance that constitutes a trade payable or similar trade obligation Incurred in the ordinary course of business and (ii) any liabilities accrued in the ordinary course of business), which purchase price is due more than six months after the date of placing the property in service or taking delivery and title thereto, (d) in respect of Capitalized Lease Obligations, or (e) representing any

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Hedging Obligations, if and solely to the extent that any of the foregoing indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability on a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP;

(2)                                  to the extent not otherwise included under clause (1) above and without duplication, any guarantee of such Person to be liable for, or to pay, as obligor, guarantor or otherwise, on any such Indebtedness of another Person (other than by endorsement of negotiable instruments for collection in the ordinary course of business); and

(3)                                  to the extent not otherwise included under clause (1) above and without duplication, Indebtedness of another Person secured by a Lien on any asset owned by such Person (whether or not such Indebtedness is assumed by such Person); provided, however , that the amount of such Indebtedness will be the lesser of: (a) the Fair Market Value (as determined in good faith by the Issuer) of such asset at such date of determination; and (b) the amount of such Indebtedness of such other Person;

provided , however , that notwithstanding the foregoing, Indebtedness shall be deemed not to include: (1) Contingent Obligations incurred in the ordinary course of business and not in respect of borrowed money; (2) deferred or prepaid revenues; (3) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the respective seller; (4) any earn-out obligations, contingent consideration, purchase price adjustments, deferred purchase money amounts, milestone and/or bonus payments (whether performance or time-based), and royalty, licensing, revenue and/or profit sharing arrangements, in each case, characterized as such and arising expressly out of purchase and sale contracts, development arrangements or licensing arrangements; (5) deferred compensation; (6) accrued expenses; or (7) obligations in respect of Preferred Stock that is not Disqualified Stock.

Notwithstanding anything in this Indenture to the contrary, Indebtedness shall not include, and shall be calculated without giving effect to, the effects of Accounting Standards Codification section 815 and related interpretations to the extent such effects would otherwise increase or decrease the amount of Indebtedness deemed outstanding for purposes of this Indenture, (so that such outstanding amount differs from the principal amount of such Indebtedness payable at maturity) as a result of accounting for any embedded derivatives created by the terms of such Indebtedness; and any such amounts that would have constituted Indebtedness under this Indenture but for the application of this sentence shall not be deemed an Incurrence of Indebtedness under this Indenture.

“Indenture” means this Indenture as amended, restated or supplemented from time to time.

“Independent Financial Advisor” means an accounting, appraisal or investment banking firm or consultant, in each case of recognized standing in the United States that is, in the good faith determination of the Issuer, qualified to perform the task for which it has been engaged.

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“INDOCIN” means the product referred to as INDOCIN (whether marketed under such name or any other name).

“INDOCIN Product” means (a) INDOCIN and (b) any and all product improvements, additional claims, line extensions, dosage changes and alternate delivery systems in respect thereof.

“Intellectual Property” means, with respect to any Person, all intellectual property and proprietary rights in any jurisdiction throughout the world, and all corresponding rights, presently or hereafter existing, including: (a) all inventions (whether or not patentable or reduced to practice), all improvements thereto, and all patents, patent applications, industrial designs, industrial design applications, and patent disclosures, together with all reissues, continuations, continuations-in-part, revisions, divisionals, extensions, and reexaminations in connection therewith; (b) all trademarks, trademark applications, tradenames, servicemarks, servicemark applications, trade dress, logos and designs, business names, company names, Internet domain names, and all other indicia of origin, all applications, registrations, and renewals in connection therewith, and all goodwill associated with any of the foregoing; (c) all copyrights and other works of authorship, mask works, database rights and moral rights, and all applications, registrations, and renewals in connection therewith; (d) all trade secrets and proprietary know-how and confidential information (including technical data, customer and supplier lists, manufacturing processes, pricing and cost information, and business and marketing plans and proposals); (e) all software (including source code, executable code, data, databases, and related documentation); and (f) all rights of privacy and publicity, including rights to the use of names, likenesses, images, voices, signatures and biographical information of real persons.

“Intellectual Property Licenses” means the licensing, development or commercialization of all or any substantial portion of the Intellectual Property related to ARYMO ER™, Egalet-002, SPRIX® (ketorolac tromethamine) Nasal Spray or OXAYDO® for commercialization in the United States pursuant to any license, sub-license, collaboration agreement, strategic alliance or similar arrangement; provided , that Intellectual Property Licenses shall not include any Co-Promotion Arrangement or any license incidental to a Co-Promotion Arrangement.

“Intellectual Property Sale” means the sale, conveyance, transfer or other disposition (whether in a single transaction or a series of related transactions), other than, for the avoidance of doubt, pursuant to Intellectual Property Licenses or any Co-Promotion Arrangement, of all or any substantial portion of the Intellectual Property and other assets related to ARYMO ER™, Egalet-002, SPRIX® (ketorolac tromethamine) Nasal Spray or OXAYDO® for commercialization in the United States.

“Intercreditor Agreement” means (i) any ABL Intercreditor Agreement and (ii) any Customary Intercreditor Agreement.

“Interim Payments Note” means that certain unsecured promissory note in the aggregate principal amount of $4,500,000 issued on the Issue Date by the Issuer to Iroko Pharmaceuticals, LLC.

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“Investment Grade Securities” means:

(1)                                  securities issued or directly and fully guaranteed or insured by the U.S. government or any agency or instrumentality thereof (other than Cash Equivalents);

(2)                                  securities that have a rating equal to or higher than “Baa3” (or equivalent) by Moody’s or “BBB-” (or equivalent) by S&P, or an equivalent rating by any other Rating Agency, but excluding any debt securities or loans or advances between and among the Issuer and its Subsidiaries;

(3)                                  investments in any fund that invests exclusively in investments of the type described in clauses (1) and (2), which fund may also hold immaterial amounts of cash pending investment and/or distribution; and

(4)                                  corresponding instruments in countries other than the United States customarily utilized for high quality investments and in each case with maturities not exceeding two years from the date of acquisition.

“Investments” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital contributions (excluding accounts receivable, trade credit and advances to customers and commission, travel and similar advances to officers, employees and consultants made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet of the Issuer in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property. Except as otherwise provided in this Indenture, the outstanding amount of any Investment shall be deemed to be the initial cost of such Investment when made, purchased or acquired (without giving effect to any adjustments for subsequent increases or decreases in value), but giving effect to any repayments, interest, returns, profits, dividends, distributions, proceeds, fees, income and other amounts actually received by the Issuer or any Restricted Subsidiary of the Issuer in respect of such Investment and determined without regard to any write-downs or write-offs of any investments, loans or advances in connection therewith. For purposes of Section 4.04 (including Permitted Investments), “Investments” shall include the portion (proportionate to the Issuer’s equity interest in such Subsidiary) of the Fair Market Value (as determined in good faith by the Issuer) of the net assets of a Subsidiary of the Issuer at the time that such Subsidiary ceases to be a Subsidiary (to the extent the Issuer retains an Investment in such Person).

“Iroko” means Iroko Pharmaceuticals Inc.

“Iroko Director” means a director on the Board of Directors of the Issuer designated for nomination by any party to the Stockholder Agreement holding a majority of the outstanding Equity Consideration Shares (as defined in the Stockholder Agreement).

“IRS” means the U.S. Internal Revenue Service.

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“Issue Date” means January 31, 2019.

“Issuer” has the meaning set forth in the preamble hereof but, for the avoidance of doubt, shall not include any of its Subsidiaries.

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction); provided that in no event shall an operating lease be deemed to constitute a Lien.

“Lockbox Account” means any Deposit Account maintained at a depository institution whose customer deposits are insured by the Federal Deposit Insurance Corporation (to the extent required by law), into which account are paid solely the Proceeds of Inventory and Accounts that constitute ABL Collateral. All capitalized terms used in this definition and not defined elsewhere herein have the meanings assigned to them in the Uniform Commercial Code.

“Minimum Liquidity Amount” means, as of any date, an amount equal to the greater of (1) the quotient of (x) the outstanding principal amount of the Securities as of such date divided by (y) 9.5 and (2) $7,500,000.

“Moody’s” means Moody’s Investors Service, Inc. or any successor to the rating agency business thereof.

“Net Income” means, with respect to any Person, the net income (loss) of such Person and its Subsidiaries, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends.

“Net Proceeds” means the aggregate cash proceeds received by the Issuer or any of its Restricted Subsidiaries in respect of any Asset Sale (including any cash received in respect of or upon the sale or other disposition of any Designated Non-cash Consideration received in any Asset Sale and any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise, but only as and when received, but excluding the assumption by the acquiring Person of Indebtedness relating to the disposed assets or other consideration received in any other non-cash form), net of the direct costs relating to such Asset Sale and the sale or disposition of such Designated Non-cash Consideration (including legal, accounting and investment banking fees, and brokerage and sales commissions), and any relocation expenses Incurred as a result thereof, the Issuer’s good faith estimate of taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements to the extent related thereto), amounts required to be applied to the repayment of principal, premium (if any) and interest on Indebtedness required (other than pursuant to Section 4.06(b)(i)) to be paid as a result of such transaction, and any deduction of appropriate amounts to be provided by the Issuer as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and

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retained by the Issuer after such sale or other disposition thereof, including pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction, and any funded escrow established pursuant to the documents evidencing any such sale or disposition to secure any indemnification obligations or adjustments to the purchase price associated with any such sale or disposition ( provided , that to the extent that any amounts are released from such escrow to the Issuer or a Restricted Subsidiary, such amounts net of any related expenses shall constitute Net Proceeds) ; provided , that Net Proceeds shall not include (i) any amounts constituting Net Sales, (ii) the proceeds of any sale or other disposition of Intellectual Property to any Specified IP Subsidiary or (iii) the proceeds of any sale or other disposition of Excluded Assets (other than any OXAYDO® Excluded Assets).

“Net Sales” means, with respect to any Product, the gross amount invoiced for sales in the United States of such Product in arm’s length sales by the Issuer, any of its Affiliates or the Issuer’s licensees, sublicensees, assignees, transferees or other commercial partners or co-promoters (or any of their respective Affiliates) to independent, unrelated third parties, less the following deductions from such gross amounts that are actually incurred, allowed, accrued or specifically allocated: (i) credits, price adjustments or allowances for damaged products (to the extent not covered by insurance), defective goods, returns or rejections of such Product; (ii) normal and customary trade, cash and quantity discounts, allowances and credits (other than price discounts granted at the time of invoicing that have been already reflected in the gross amount invoiced); (iii) chargeback payments, rebates and similar allowances (or the equivalent thereof) granted to group purchasing organizations, managed health care organizations, distributors or wholesalers or to federal, state/provincial, local and other governments, including their agencies, or to trade customers (including, without limitation, pharmacy network fees incurred for selling outside of traditional wholesaler arrangements); (iv) any fees paid to any third party logistics providers, wholesalers and distributors (including, without limitation, title model fees incurred in connection with third party logistics provider purchases); (v) any freight, postage, shipping, insurance and other transportation charges incurred by the selling Person in connection with shipping such Product to third party logistics providers, wholesalers and distributors and to customers; (vi) adjustments for billing errors or recalls; (vii) sales, value-added (to the extent not refundable in accordance with applicable law), and excise taxes, tariffs and duties, and other taxes (including annual fees due under Section 9008 of the United States Patient Protection and Affordable Care Act of 2010 (Pub. L. No. 111-48), any fees or taxes imposed on the sale, manufacture or distribution of opioids and other comparable laws), levied on, absorbed, determined or imposed with respect to such sale (but not including taxes assessed against the income derived from such sale); (viii) amounts written off by reason of uncollectible debt, provided that if the debt is thereafter paid, the corresponding amount shall be added to the Net Sales of the period during which it is paid; (ix) with respect to Net Sales of the SPRIX® Product only, royalties payable by the Issuer or any of its Subsidiaries to independent, unrelated third parties in respect of the SPRIX® Product; (x) with respect to Net Sales of the OXAYDO® Product only, royalties payable by the Issuer or any of its Subsidiaries to independent, unrelated third parties in respect of the OXAYDO® Product; (xi) with respect to Net Sales of the INDOCIN Product only, royalties payable by the Issuer or any of its Subsidiaries to third parties in respect of the INDOCIN Product pursuant to obligations existing on the Issue Date; and (xii)

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with respect to Net Sales of the TIVORBEX Product, VIVLODEX Product and ZORVOLEX Product only, royalties payable by the Issuer or any of its Subsidiaries to third parties in respect of the TIVORBEX Product, VIVLODEX Product and ZORVOLEX Product pursuant to obligations existing on the Issue Date. Net Sales, as set forth in this definition, shall be calculated applying, in accordance with GAAP, the standard accounting practices the selling Person customarily applies to other branded products sold by it or its Affiliates under similar trade terms and conditions.  For the avoidance of doubt, Net Sales shall not include any amounts constituting Net Proceeds.

“Notes Collateral” means all property subject, or purported to be subject from time to time, to a Lien under any Security Documents. The Notes Collateral does not include the Excluded Assets. The Notes Collateral includes any license described in the last sentence of Section 4.14.

“Obligations” means any principal, interest, penalties, fees, indemnifications, reimbursements (including reimbursement obligations with respect to letters of credit and bankers’ acceptances), damages and other liabilities payable under the documentation governing any Indebtedness; provided , however , that Obligations with respect to the Securities shall not include fees, expenses or indemnifications in favor of the Trustee, the Collateral Agent or any other third party (other than any Holder).

“Officer” means the Chairman of the Board of Directors, the Chief Executive Officer (and/or principal executive officer), the Chief Financial Officer (and/or principal financial officer), the Chief Accounting Officer (and/or principal accounting officer), the President, any Executive Vice President, any Senior Vice President, any Vice President, the Controller, the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of the Issuer.

“Officers’ Certificate” means a certificate signed on behalf of the Issuer by two Officers of the Issuer, one of whom must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Issuer.

“Opinion of Counsel” means a written opinion from legal counsel who is reasonably acceptable to the Trustee and may be an employee of or counsel to the Issuer or the Trustee.

“OXAYDO®” means the product referred to as OXAYDO® (whether marketed under such name or any other name).

“OXAYDO® Excluded Assets” means the new drug applications, licensed intellectual property rights, other approvals and licenses and clinical and other data, in each case relating to the OXAYDO® Product.

“OXAYDO® Product” means (a) OXAYDO® and (b) any and all product improvements, additional claims, line extensions, dosage changes and alternate delivery systems in respect thereof.

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“Pari Passu Indebtedness” means:

(1)                                  with respect to the Issuer, the Securities and any Indebtedness that (i) ranks pari passu in right of payment to the Securities and (ii) is secured by Liens on the Notes Collateral that rank pari passu as to Lien priority with the Liens on the Notes Collateral securing the Securities; and

(2)                                  with respect to any Guarantor, its Guarantee and any Indebtedness that (i) ranks pari passu in right of payment with such Guarantor’s Guarantee and (ii) is secured by Liens on the Notes Collateral that rank pari passu as to Lien priority with the Liens on the Notes Collateral securing such Guarantor’s Guarantee.

“Permitted Cure Debt” means any Indebtedness (i) of (a) the Issuer that ranks subordinated in right of payment to the Securities or (b) any Guarantor that that ranks subordinated in right of payment to such Guarantor’s Guarantee, and, in each case reflects the payment subordination terms set forth in Exhibit E to this Indenture, (ii) that is unsecured and (iii) that has no scheduled cash interest or principal payments owing prior to the one year anniversary of the Stated Maturity of the Securities.

“Permitted Cure Securities” shall mean (i) any Equity Interests of the Issuer (other than Disqualified Stock) or (ii) any Permitted Cure Debt, in each case issued pursuant to the Cure Right.

“Permitted Holders” means, at any time, each of (i) Iroko Pharmaceuticals Inc., a business company incorporated in the British Virgin Islands (registered number 1732699), (ii) CR Group L.P. and its Affiliates and Associated Funds, including, without limitation, CRG Servicing LLC, CRG Partners III L.P., CRG Partners III — Parallel Fund “A” L.P., CRG Partners III (Cayman) L.P.,  CRG Partners III (Cayman) LEV AIV I L.P., CRG Partners III (Cayman) UNLEV AIV I, L.P. and CRG Partners III — Parallel Fund “B” (Cayman) L.P., (iii) CI Investments Inc. and its Affiliates and Associated Funds, (iv) Highbridge Capital Management, LLC, and its Affiliates and Associated Funds, (v) Honeywell Capital Management LLC, and its Affiliates and Associated Funds and (vi) any group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) the members of which include any of the Permitted Holders specified in clauses (i) through (v) above and that, directly or indirectly, hold or acquire beneficial ownership of the Voting Stock of the Issuer (a “Permitted Holder Group”), so long as (1) each member of the Permitted Holder Group has voting rights proportional to the percentage of ownership interests held or acquired by such member and (2) no Person or other “group” (other than Permitted Holders specified in clauses (i) through (v) above) beneficially owns more than 50% on a fully diluted basis of the Voting Stock held by the Permitted Holder Group. Any Person or group whose acquisition of beneficial ownership constitutes a Change of Control in respect of which a Change of Control Offer is made in accordance with the requirements of this Indenture will thereafter, together with its Affiliates and funds (or portions of funds) managed by any of the foregoing or under common management with any of the foregoing, constitute an additional Permitted Holder.

“Permitted Investments” means:

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(1)                                  any Investment in the Issuer or any Restricted Subsidiary; provided that any Notes Collateral may be transferred pursuant to this clause (1) only to a Restricted Subsidiary that is a Guarantor;

(2)                                  any Investment in Cash Equivalents or Investment Grade Securities;

(3)                                  any Investment by the Issuer or any Restricted Subsidiary of the Issuer in a Person if as a result of such Investment (a) such Person becomes a Restricted Subsidiary of the Issuer or (b) such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, the Issuer or a Restricted Subsidiary of the Issuer; provided that any Notes Collateral may be transferred pursuant to this clause (3) only to a Restricted Subsidiary that is a Guarantor;

(4)                                  any Investment in securities or other assets not constituting Cash Equivalents and received in connection with an Asset Sale made pursuant to the provisions of Section 4.06 or any other disposition of assets not constituting an Asset Sale;

(5)                                  any Investment existing on, or made pursuant to binding commitments existing on, the Issue Date or an Investment consisting of any extension, modification or renewal of any Investment existing on the Issue Date, if any; provided that the amount of any such Investment may be increased as required by the terms of such Investment as in existence on the Issue Date;

(6)                                  advances to employees not in excess of $500,000 outstanding at any one time in the aggregate;

(7)                                  any Investment acquired by the Issuer or any of its Restricted Subsidiaries (a) in exchange for any other Investment or accounts receivable held by the Issuer or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable, (b) as a result of a foreclosure by the Issuer or any of its Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default or (c) in settlement of or other resolution of claims or disputes, and, in each case, extensions, modifications and renewals thereof;

(8)                               Hedging Obligations permitted under Section 4.03(b)(x);

(9)                               any Investment by the Issuer or any of its Restricted Subsidiaries in a Similar Business having an aggregate Fair Market Value (as determined in good faith by the Issuer), taken together with all other Investments made pursuant to this clause (9) that are at that time outstanding, not to exceed $1,500,000 (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); provided, however , that if any Investment pursuant to this clause (9) is made in any Person that is not a Restricted Subsidiary of the Issuer at the

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date of the making of such Investment and such Person becomes a Restricted Subsidiary of the Issuer after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (9) for so long as such Person continues to be a Restricted Subsidiary;

(10)                           Investments by the Issuer or any of its Restricted Subsidiaries having an aggregate Fair Market Value, taken together with all other Investments made pursuant to this clause (10) that are at that time outstanding, not to exceed $1,500,000 (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); provided, however , that if any Investment pursuant to this clause (10) is made in any Person that is not a Restricted Subsidiary at the date of the making of such Investment and such Person becomes a Restricted Subsidiary after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (10) for so long as such Person continues to be a Restricted Subsidiary;

(11)                           loans and advances to officers, directors and employees for business-related travel expenses, moving expenses and other similar expenses, in each case Incurred in the ordinary course of business or consistent with past practice or to fund such person’s purchase of Equity Interests of the Issuer or any direct or indirect parent of the Issuer, not to exceed $500,000 at any one time outstanding pursuant to this clause (11);

(12)                           Investments the payment for which consists of Equity Interests of the Issuer (other than Disqualified Stock) or any direct or indirect parent of the Issuer, as applicable; provided, however , that such Equity Interests will not increase the amount available for Restricted Payments under clause (3) of the definition of “Cumulative Credit”;

(13)                           any transaction to the extent it constitutes an Investment that is permitted by and made in accordance with the provisions of Section 4.07(b) (except transactions described in clauses (ii), (iv), (v), (viii)(B), (x), (xiii), (xiv) and (xv) of such Section);

(14)                           Investments consisting of the licensing of Intellectual Property or collaboration agreements, strategic alliances, Co-Promotion Arrangements or similar arrangements in respect of Intellectual Property, in each case, for the development or commercialization of Intellectual Property that, at the time such license, collaboration agreement, strategic alliance, Co-Promotion Arrangement or similar arrangement is entered into, does not materially and adversely affect the Issuer’s business or condition (financial or otherwise) or the value of the Notes Collateral, taken as a whole;

(15)                           guarantees issued in accordance with Sections 4.03 and 4.10, including any guarantee or other obligation issued or incurred under any Credit Agreement in connection with any letter of credit issued for the account of the Issuer or any of its Subsidiaries (including with respect to the issuance of, or payments in respect of drawings under, such letters of credit);

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(16)                           Investments consisting of, or made in order or to finance, purchases and acquisitions of inventory, supplies, materials, services or equipment or purchases of contract rights or licenses or leases of Intellectual Property;

(17)                           any Investment in a Receivables Subsidiary or any Investment by a Receivables Subsidiary in any other Person in connection with a Qualified Receivables Financing, including Investments of funds held in accounts permitted or required by the arrangements governing such Qualified Receivables Financing or any related Indebtedness;

(18)                           Investments of a Restricted Subsidiary of the Issuer acquired after the Issue Date or of an entity merged into, amalgamated with, or consolidated with a Restricted Subsidiary of the Issuer in a transaction that is not prohibited by Section 5.01 after the Issue Date to the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger, amalgamation or consolidation;

(19)                           Investments in Restricted Subsidiaries who are not Guarantors not to exceed $2,500,000 at any one time outstanding pursuant to this clause (19);

(20)                           loans and advances relating to indemnification or reimbursement of any officers, directors or employees in respect of liabilities relating to their serving in such capacity;

(21)                           (i) lease, utility and other similar deposits, and (ii) prepaid expenses, negotiable instruments held for collection and lease, utility and workers’ compensation, performance and other similar deposits, in each case, in the ordinary course of business;

(22)                           any redemption or repurchase of the Securities permitted and made in accordance with the terms of this Indenture;

(23)                           Investments consisting of earnest money deposits required in connection with a purchase agreement, or letter of intent, or other acquisitions to the extent not otherwise prohibited by this Indenture;

(24)                           guarantees of the Issuer or any Restricted Subsidiary in connection with the provision of credit card payment processing services in the ordinary course of business; and

(25)                           Investments by the Issuer and its Restricted Subsidiaries consisting of deposits, prepayments and other credits to suppliers or landlords, and guaranties of business obligations owed to landlord, suppliers, customers, franchisees and licensees of the Issuer and its Subsidiaries.

In the event that any Investment (or any portion thereof) meets the criteria of more than one of the categories of Permitted Investments described in clauses (1) through

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(25) above, or is entitled to be Incurred or made pursuant to Section 4.04, the Issuer shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify, such Investment (or any portion thereof) in any manner that complies with such categories above or Section 4.04.  In addition, at the time of Incurrence or making of any Investment, the Issuer will be entitled to divide and classify such Investment in more than one of the categories of Permitted Investments described above or described in Section 4.04.

“Permitted Liens” means, with respect to any Person:

(1)                                  pledges or deposits by such Person under workmen’s compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits of cash or U.S. government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case Incurred in the ordinary course of business;

(2)                                  Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens, in each case for sums not overdue for more than 30 days or being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review;

(3)                                  Liens for taxes, assessments or other governmental charges not yet due or payable or subject to penalties for nonpayment or that are being contested in good faith by appropriate proceedings if adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;

(4)                                  Liens in favor of issuers of performance and surety bonds or bid bonds or with respect to other regulatory requirements or letters of credit issued pursuant to the request of and for the account of such Person in the ordinary course of its business (including any Liens securing Indebtedness permitted to be Incurred pursuant to Section 4.03(b)(v) and Section 4.03(b)(xi));

(5)                                  survey exceptions, encumbrances, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real properties or title defects or Liens incidental to the conduct of the business of such Person or to the ownership of its properties that were not Incurred in connection with Indebtedness and that do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;

(6)                                  (A) Liens on the ABL Collateral securing Indebtedness permitted to be Incurred pursuant to Section 4.03(b)(i) and First Priority Lien Obligations related thereto, which Liens shall be subject to the ABL Intercreditor Agreement, and (B) Liens securing

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Indebtedness permitted to be Incurred pursuant to Section 4.03(b)(iv) and Section 4.03(b)(xv) (provided that in the case of Section 4.03(b)(xv) such Lien applies solely to acquired property or assets of the acquired entity, as the case may be);

(7)                                  (A) Liens existing on the Issue Date, (B) Liens securing the Securities (in an aggregate principal amount not to exceed the amount set forth in Section 2.01(a)) or the Guarantees, including Liens arising under or relating to the Security Documents and (C) the Lien securing the Issuer’s and Guarantors’ payment obligations under Section 7.06;

(8)                                  Liens on assets, property or shares of stock of a Person at the time such Person becomes a Subsidiary; provided, however , that such Liens are not created or Incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary; provided, further, however , that such Liens may not extend to any other property owned by the Issuer or any Restricted Subsidiary of the Issuer;

(9)                                  Liens on assets or property at the time the Issuer or a Restricted Subsidiary of the Issuer acquired the assets or property, including any acquisition by means of a merger, amalgamation or consolidation with or into the Issuer or any Restricted Subsidiary of the Issuer; provided, however , that such Liens are not created or Incurred in connection with, or in contemplation of, such acquisition; provided, further, however , that the Liens may not extend to any other property owned by the Issuer or any Restricted Subsidiary of the Issuer;

(10)                           Liens securing Indebtedness or other obligations of a Restricted Subsidiary owing to the Issuer or a Guarantor permitted to be Incurred in accordance with Section 4.03;

(11)                           Liens securing Hedging Obligations not incurred in violation of this Indenture; provided that with respect to Hedging Obligations relating to Indebtedness, such Lien extends only to the property securing such Indebtedness;

(12)                           Liens on specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

(13)                           leases and subleases of real property that do not materially interfere with the ordinary conduct of the business of the Issuer or any of its Restricted Subsidiaries;

(14)                           Liens arising from Uniform Commercial Code financing statement filings regarding operating leases entered into by the Issuer and its Restricted Subsidiaries in the ordinary course of business;

(15)                           Liens in favor of the Issuer or any Guarantor;

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(16)                           Liens on accounts receivable of the type specified in the definition of “Receivables Financing” Incurred in connection with a Qualified Receivables Financing permitted under Section 4.03(b)(xvi);

(17)                           deposits made in the ordinary course of business to secure liability to insurance carriers;

(18)                           [reserved];

(19)                           (i) Intellectual Property Licenses, (ii) Co-Promotion Arrangements and (iii) any other license, collaboration agreement, strategic alliance or similar arrangement providing for the licensing of Intellectual Property or the development or commercialization of Intellectual Property that, in the case of any such agreement or arrangement entered into after the Issue Date, at the time of such grant, does not materially and adversely affect the Issuer’s business, condition (financial or otherwise) or the value of the Notes Collateral taken as a whole;

(20)                           Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancings, refundings, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness (“Refinancing Secured Indebtedness”) secured by any Lien referred to in the foregoing clauses (6)(B) (in the case of Liens to secure any Refinancing Secured Indebtedness under such clause (6)(B), such Liens shall be deemed to have also been incurred under such clause (6)(B), and not this clause (20), for purposes of determining amounts outstanding under such clause (6)(B)), (7), (8) and (9); provided, however , that (w) such new Lien shall be limited to all or part of the same property that secured (or, under the written arrangements under which the original Lien arose, could secure) the original Lien (plus improvements, accessions, proceeds or dividends or distributions in respect thereof), (x) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (6)(B), (7), (8) and (9) at the time the original Lien became a Permitted Lien under this Indenture, and (B) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement, (y) any refinancing, refunding, extension, renewal or replacement (or successive refinancings, refundings, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clause 7(B) shall, at the election of the Issuer, be secured by and entitled to the benefits of the Security Documents and rank pari passu with the Indebtedness that is refinanced, refunded, extended, renewed or replaced and (z) any Lien securing the Refinancing Indebtedness shall have a priority relative to the Liens securing the Securities and the Guarantees that is not greater than the relative priority of the Lien securing in the Indebtedness that is refinanced, refunded, extended, renewed or replaced;

(21)                           Liens on equipment of the Issuer or any Restricted Subsidiary granted in the ordinary course of business to the Issuer’s or such Restricted Subsidiary’s client at which such equipment is located;

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(22)                           judgment and attachment Liens not giving rise to an Event of Default and notices of lis pendens and associated rights related to litigation being contested in good faith by appropriate proceedings and for which adequate reserves have been made;

(23)                           Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the ordinary course of business;

(24)                           Liens incurred to secure cash management services or to implement cash pooling arrangements in the ordinary course of business that do not, individually or in the aggregate, materially impair the value of the Notes Collateral;

(25)                           any encumbrance or restriction (including put and call arrangements) with respect to Capital Stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement; provided, however , that this clause (25) shall not apply to any Liens securing Indebtedness;

(26)                           any amounts held by a trustee in the funds and accounts under an indenture securing any revenue bonds issued for the benefit of the Issuer or any Restricted Subsidiary;

(27)                           Liens arising by virtue of any statutory or common law provisions relating to banker’s Liens, rights of set-off or similar rights and remedies as to Deposit Accounts (as defined in the Uniform Commercial Code) or other funds maintained with a depository or financial institution;

(28)                           Liens that secure Indebtedness Incurred in the ordinary course of business not to exceed $1,500,000 at any one time outstanding;

(29)                           any interest of title of a lessor under any lease of real or personal property;

(30)                           Liens on the identifiable proceeds of any property or asset subject to a Lien otherwise constituting a Permitted Lien;

(31)                           Liens encumbering deposits made to secure obligations arising from statutory, regulatory, contractual, or warranty requirements of the Issuer or a Restricted Entity, including rights of offset and set off;

(32)                           Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

(33)                           Liens to secure a defeasance trust to the extent such defeasance is otherwise permitted pursuant to the terms of this Indenture;

(34)                           Liens to secure the financing of insurance premiums permitted to be Incurred pursuant to Section 4.03(b)(xx);

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(35)                           customary Liens granted in favor or a trustee (including the Trustee) to secure fees and other amounts owing to such trustee under an indenture or other agreement pursuant to which Indebtedness not prohibited by this Indenture is issued including this Indenture;

(36)                           Liens arising on any real property as a result of eminent domain, condemnation or similar proceedings against such property; and

(37)                           Liens on Notes Collateral of the Issuer or any Guarantor securing Indebtedness permitted to be Incurred pursuant to Section 4.03(b)(xxvii), which Liens may rank senior, pari passu or junior to Liens thereon securing the Securities Obligations, pursuant to a Customary Intercreditor Agreement).

For purposes of determining compliance with this definition, (a) Permitted Liens need not be incurred solely by reference to one category of Permitted Liens described above but are permitted to be incurred in part under any combination thereof and (b) in the event that a Lien (or any portion thereof) meets the criteria of one or more categories of Permitted Liens described above, the Issuer shall, in its sole discretion, classify (or later reclassify) such item of Permitted Liens (or any portion thereof) in any manner that complies with this definition and will only be required to include the amount and type of such item of Permitted Liens in one of the above clauses and such Lien will be treated as having been incurred pursuant to only one of such clauses .

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

“Plan of Reorganization” means the First Amended Joint Chapter 11 Plan of Reorganization of the Issuer and its affiliated debtors, dated December 3, 2018, as amended, for the resolution of outstanding claims and interests in the Chapter 11 Cases, as may be modified in accordance with the Bankruptcy Code, including all exhibits, supplements, appendices and schedules.

“Preferred Stock” means any Equity Interest with preferential right of payment of dividends or upon liquidation, dissolution or winding up.

“Product” means any of (i) the ARYMO ER™ Product, (ii) the Egalet-002 Product, (iii) the SPRIX® Product, (iv) the OXAYDO® Product, (v) the INDOCIN Product, (vi) the TIVORBEX Product, (vii) the VIVLODEX Product and (viii) the ZORVOLEX Product.

“Qualified Receivables Financing” means any Receivables Financing of a Receivables Subsidiary that meets the following conditions:

(1)                                  the Issuer shall have determined in good faith that such Qualified Receivables Financing (including financing terms, covenants, termination events and

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other provisions) is in the aggregate economically fair and reasonable to the Issuer and the Receivables Subsidiary;

(2)                                  all sales of accounts receivable and related assets to the Receivables Subsidiary are made at Fair Market Value (as determined in good faith by the Issuer); and

(3)                                  the financing terms, covenants, termination events and other provisions thereof shall be market terms (as determined in good faith by the Issuer) and may include Standard Securitization Undertakings.

The grant of a security interest in any accounts receivable of the Issuer or any of its Restricted Subsidiaries (other than a Receivables Subsidiary) to secure Bank Indebtedness, Indebtedness in respect of the Securities or any Refinancing Indebtedness with respect to the Securities shall not be deemed a Qualified Receivables Financing.

“Rating Agency” means (1) Moody’s, (2) S&P or (3) any “nationally recognized statistical rating organization” within the meaning of Section 3(a)(62) of the Exchange Act selected by the Issuer or any direct or indirect parent of the Issuer as a replacement agency for Moody’s or S&P, as the case may be.

“Receivables Fees” means distributions or payments made directly or by means of discounts with respect to any participation interests issued or sold in connection with, and all other fees paid to a Person that is not a Restricted Subsidiary in connection with, any Receivables Financing.

“Receivables Financing” means any transaction or series of transactions that may be entered into by the Issuer or any of its Subsidiaries pursuant to which the Issuer or any of its Subsidiaries may sell, convey or otherwise transfer to (a) a Receivables Subsidiary (in the case of a transfer by the Issuer or any of its Subsidiaries) and (b) any other Person (in the case of a transfer by a Receivables Subsidiary), or may grant a security interest in, any accounts receivable (whether now existing or arising in the future) of the Issuer or any of its Subsidiaries and any Hedging Obligations entered into by the Issuer or any such Subsidiary in connection with such accounts receivable.

“Receivables Repurchase Obligation” means any obligation of a seller of receivables in a Qualified Receivables Financing to repurchase receivables arising as a result of a breach of a representation, warranty or covenant or otherwise, including as a result of a receivable or portion thereof becoming subject to any asserted defense, dispute, offset or counterclaim of any kind as a result of any action taken by, any failure to take action by or any other event relating to the seller.

“Receivables Subsidiary” means a Restricted Subsidiary of the Issuer (or another Person formed for the purposes of engaging in Qualified Receivables Financing with the Issuer in which the Issuer or any Subsidiary of the Issuer makes an Investment and to which the Issuer or any Subsidiary of the Issuer transfers accounts receivable) that engages in no activities other than in connection with the financing of accounts receivable of the Issuer and its Subsidiaries, all

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proceeds thereof and all rights (contractual or other), collateral relating thereto, and any business or activities incidental or related to such business, and that is designated (as provided below) as a Receivables Subsidiary and:

(a)                                  no portion of the Indebtedness or any other obligations (contingent or otherwise) of which (i) is guaranteed by the Issuer or any other Subsidiary of the Issuer (except for a Subsidiary of such Receivables Subsidiary) (excluding guarantees of obligations (other than the principal of and interest on Indebtedness) pursuant to Standard Securitization Undertakings), (ii) is recourse to or obligates the Issuer or any other Subsidiary of the Issuer (except for a Subsidiary of such Receivables Subsidiary) in any way other than pursuant to Standard Securitization Undertakings, or (iii) subjects any property or asset of the Issuer or any other Subsidiary of the Issuer (except for a Subsidiary of such Receivables Subsidiary), directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings;

(b)                                  with which neither the Issuer nor any other Subsidiary of the Issuer (except for a Subsidiary of such Receivables Subsidiary) has any material contract, agreement, arrangement or understanding (other than as part of the Qualified Receivables Financing) other than on terms that the Issuer reasonably believes to be no less favorable to the Issuer or such Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of the Issuer; and