Egalet Corp (Form: 10-Q, Received: 05/17/2019 12:30:38)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2019

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-36295

Egalet Corporation

(Exact Name of Registrant as Specified in Its Charter)


Delaware (State or Other Jurisdiction of Incorporation or Organization)		46-3575334 (I.R.S. Employer Identification No.)

600 Lee Road Suite 100 Wayne, PA (Address of Principal Executive Offices)		19087 (Zip Code)

Registrant’s telephone number, including area code: (610) 833-4200

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

Large accelerated filer ☐		Accelerated filer ☐

Non-accelerated filer ☐		Smaller reporting company ☒

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act

of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐ No ☒

Securities registered pursuant to Section 12(b) of the Act:


Title of each class:	Trading Symbol	Name of each exchange on which registered:
Par value $0.001	ZCOR	OTCQX

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date.

Common Stock, $0.001 par value Shares outstanding as of May 15, 2019: 9,360,968

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		Page

	PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets as of March 31, 2019 (Successor) (unaudited) and December 31, 2018 (Predecessor)	1
	Consolidated Statements of Operations  unaudited  for the Period February 1, 2019 through March 31, 2019 (Successor), the Period January 1, 2019 through January 31, 2019 (Predecessor) and the three months ended March 31, 2018 (Predecessor)	2
	Consolidated Statements of Comprehensive Loss  unaudited  for the Period February 1, 2019 through March 31, 2019 (Successor), the Period January 1, 2019 through January 31, 2019 (Predecessor) and the three months ended March 31, 2018 (Predecessor)	3
		4
	Consolidated Statements of Cash Flows  unaudited  for the Period February 1, 2019 through March 31, 2019 (Successor), the Period January 1, 2019 to January 31, 2019 (Predecessor) and the three months ended March 31, 2018 (Predecessor)	5
	Notes to Unaudited Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	37
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	45
Item 4.	Controls and Procedures	45
	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	46
Item 1A.	Risk Factors	46
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	46
Item 3	Defaults Upon Senior Securities	46
Item 4.	Mine Safety Disclosures	46
Item 5.	Other Information	46
Item 6.	Exhibits	47

SIGNATURES		53

Unless otherwise indicated or the context otherwise requires, references to the “Company”, “we”, “us” and “our” refer to Egalet Corporation and its subsidiaries. The Egalet logo is our trademark and Egalet is our registered trademark. All other trade names, trademarks and service marks appearing in this Quarterly Report on Form 10-Q are the property of their respective owners. We have assumed that the reader understands that all such terms are source-indicating. Accordingly, such terms, when first mentioned in this Quarterly Report on Form 10-Q, appear with the trade name, trademark or service mark notice and then throughout the remainder of this Quarterly Report on Form 10-Q without the trade name, trademark or service mark notices for convenience only and should not be construed as being used in a descriptive or generic sense. Unless otherwise indicated, all statistical information provided about our business in this report is as of March 31, 2019.

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PART I

ITEM 1. FINANCIAL STATEMENTS

Egalet Corporation and Subsidiaries

Consolidated Balance Sheet s

(in thousands, except share and per share data)


	Successor		Predecessor
	March 31, 2019		December 31, 2018
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	10,387	$	35,323
Marketable securities, available for sale		—		4,988
Accounts receivable, net		39,944		8,006
Inventory		23,276		2,639
Prepaid expenses and other current assets		3,258		2,715
Other receivables		—		846
Total current assets		76,865		54,517
Intangible assets, net		120,974		4,281
Restricted cash		400		400
Property and equipment, net		3,941		1,059
Right of use asset, net		1,745		—
Goodwill		58,747		—
Deposits and other assets		2,151		1,676
Total assets	$	264,823	$	61,933
Liabilities and stockholders’ equity (deficit)
Current liabilities:
Accounts payable	$	11,569	$	8,561
Accrued expenses		58,925		24,584
Debt - current, net		2,635		—
Acquisition-related contingent consideration		1,200		—
Other current liabilities		1,043		—
Total current liabilities		75,372		33,145
Debt - non-current portion, net		92,957		—
Acquisition-related contingent consideration		13,800		—
Deferred income tax liability		24		24
Credit agreement		5,000		—
Other liabilities		1,165		536
Total liabilities not subject to compromise		188,318		33,705

Liabilities subject to compromise		—		139,588

Commitments and contingencies (Note 17)
Stockholders’ deficit:
Predecessor common stock--$0.001 par value; 275,000,000 shares authorized; 56,547,101 shares issued and outstanding at December 31, 2018		—		55
Successor common stock--$0.001 par value; 100,000,000 shares authorized; 9,360,968 shares issued and outstanding at March 31, 2019		9		—
Additional paid-in capital		86,988		276,569
Accumulated other comprehensive (loss) income		(9)		869
Accumulated deficit		(10,483)		(388,853)
Total stockholders' equity (deficit)		76,505		(111,360)
Total liabilities and stockholders’ equity (deficit)	$	264,823	$	61,933

See accompanying notes to unaudited consolidated financial statements.

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Egalet Corporation and Subsidiaries

Consolidated Statements of Operations (Unaudited)

(in thousands, except share and per share data)



	Successor		Predecessor
	Period from		Period from
	February 1, 2019		January 1, 2019		Three months
	through		through		ended
	March 31, 2019		January 31, 2019		March 31, 2018
Revenue
Net product sales	$	15,810	$	1,775	$	6,261
Total revenue		15,810		1,775		6,261

Costs and Expenses
Cost of sales (excluding amortization of product rights)		12,461		554		2,216
Amortization of product rights		2,332		171		537
General and administrative		3,365		5,413		7,073
Sales and marketing		5,131		2,773		9,055
Research and development		5		186		1,303
Restructuring and other charges		—		799		—
Change in fair value of contingent consideration payable		200		—		—
Total costs and expenses		23,494		9,896		20,184
Loss from operations		(7,684)		(8,121)		(13,923)

Other (income) expense:
Change in fair value of warrant and derivative liability		—		—		(5,125)
Interest expense, net		2,193		(52)		3,556
Other (gain) loss		—		(140)		—
Total other expense (income)		2,193		(192)		(1,569)
Reorganization items		606		(115,169)		—
(Loss) income after reorganization charges and before provision (benefit) for income taxes		(10,483)		107,240		(12,354)
Provision (benefit) for income taxes		—		—		—
Net (loss) income	$	(10,483)	$	107,240	$	(12,354)
Per share information:
Net (loss) income per share of common stock, basic and diluted	$	(0.73)	$	1.90	$	(0.26)
Weighted-average shares outstanding, basic and diluted		14,333,332		56,547,101		47,303,659

See accompanying notes to unaudited consolidated financial statements.

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Egalet Corporation and Subsidiaries

Consolidated Statements of Comprehensive Los s (Unaudited)

(in thousands)



	Successor		Predecessor
	Period from		Period from
	February 1, 2019		January 1, 2019		Three months
	through		through		ended
	March 31, 2019		January 31, 2019		March 31, 2018
Net (loss) income	$	(10,483)	$	107,240	$	(12,354)
Other comprehensive (loss) income:
Unrealized loss on available for sale securities		(1)		—		(30)
Foreign currency translation adjustments		(8)		—		124
Comprehensive (loss) income	$	(10,492)	$	107,240	$	(12,260)

See accompanying notes to unaudited consolidated financial statements.

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Egalet Corporation and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity (Deficit) (unaudited)

(in thousands, except per share data)



	Common stock

								Accumulated
		$0.001		Additional				Other
	Number of	Par		Paid-in		Accumulated		Comprehensive
	Shares	Value		Capital		Deficit		Income		Total

Balance, December 31, 2017	45,939,663	$	46	$	254,871	$	(295,300)	$	1,008	$	(39,375)
Cumulative adjustment - ASU 2014-09	—		—				1,901		—		1,901
Restricted shares of common stock issued	—		—		—		—		—		—
Deferred tax liability	—		—		(920)						(920)
Issuance of common stock, net of costs	5,941,538		6		4,151		—		—		4,157
Exchange of convertible debt and issuance of warrants	1,000,000		1		12,497						12,498
Stock-based compensation expense	—		—		952		—		—		952
Unrealized loss on available for sale securities	—		—		—		—		(30)		(30)
Foreign currency translation adjustment	—		—		—		—		124		124
Net loss	—		—		—		(12,355)		—		(12,355)
Balance,March 31, 2018	52,881,201	$	53	$	271,551	$	(305,754)	$	1,102	$	(33,048)


Balance, December 31, 2018 (Predecessor)	56,547,101	$	55	$	276,569	$	(388,853)	$	869	$	(111,360)
Stock-based compensation expense	—		—		4,125		—		—		4,125
Net income	—		—		—		107,240		—		107,240
Cancellation of Predecessor common stock and stock-based compensation	(56,547,101)		(55)		(280,694)		—		—		(280,749)
Elimination of Predecessor accumulated deficit and accumulated other comprehensive income	—		—		—		281,613		(869)		280,744
Common stock issued for settlement of predecessor debt	4,774,093		5		31,000		—		—		31,005
Common stock issued for asset purchase	4,586,875		4		29,784		—		—		29,788
Warrants issued for settlement of predecessor debt	—		—		14,303		—		—		14,303
Warrants issued for asset purchase	—		—		11,841		—		—		11,841
Balance as of January 31, 2019 (Predecessor)	9,360,968	$	9	$	86,928	$	—	$	—	$	86,937


Balance as of February 1, 2019 (Successor)	9,360,968		9		86,928		—		—		86,937
Stock-based compensation expense	—		—		60		—		—		60
Unrealized loss on available for sale securities	—		—		—		—		(1)		(1)
Foreign currency translation adjustment	—		—		—		—		(8)		(8)
Net loss	—		—		—		(10,483)		—		(10,483)
Balance as of March 31, 2019 (Successor)	9,360,968	$	9	$	86,988	$	(10,483)	$	(9)	$	76,505

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Egalet Corporation and Subsidiaries

Consolidated Statements of Cash Flow s (Unaudited)

(in thousands)


	Successor		Predecessor
	Period from		Period from
	February 1, 2019		January 1, 2019		Three months
	through		through		ended
	March 31, 2019		January 31, 2019		March 31, 2018
Operating activities:
Net (loss) income	$	(10,483)	$	107,240	$	(12,354)
Adjustment to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization		2,470		204		1,210
Non-cash reorganization items		—		(121,144)		—
Change in fair value of warrant and derivative liability		—		—		(5,125)
Stock-based compensation expense		60		4,125		952
Non-cash interest and amortization of debt discount		954		(9)		496
Accretion of discount on marketable securities		(3)		(5)		(97)
Change in fair value of contingent consideration		200		—		—
Changes in assets and liabilities:
Accounts receivable		(35,802)		3,865		(11,234)
Inventory		10,562		340		955
Prepaid expenses		686		219		439
Right of Use Assets		109		—		—
Other receivables		131		711		2
Deposits and other assets		(476)		1		164
Accounts payable		3,231		103		(19)
Accrued expenses		12,142		5,172		3,995
Other current liabilities		13		—		—
Other liabilities		(194)		—		(44)
Net cash (used in) provided by operating activities		(16,400)		822		(20,660)
Investing activities:
Payments for purchase of property and equipment		(6)		—		(3)
Purchases of investments		—		—		(4,265)
Sales of investments		2,497		—		—
Maturity of investments		2,500		—		23,500
Net cash provided by (used in) investing activities		4,991		—		19,232
Financing activities:
Net proceeds from issuance of common stock		—		—		4,157
Payments on borrowings		—		(19,104)		—
Proceeds from credit agreement		4,775		—		—
Royalty payments in connection with the 13% Notes		—		—		(201)
Net cash provided by (used in) financing activities		4,775		(19,104)		3,956
Effect of foreign currency translation on cash and cash equivalents		(26)		6		61
Net (decrease) increase in cash, cash equivalents and restricted cash		(6,660)		(18,276)		2,589
Cash, cash equivalents and restricted cash at beginning of period		17,447		35,723		31,490
Cash, cash equivalents and restricted cash at end of period	$	10,787	$	17,447	$	34,079

Supplemental disclosures of cash flow information:
Cash interest payments	$	—	$	—	$	5,878
Non-cash financing activities:
Reclassification to additional paid-in capital of derivative liability	$	—	$	—	$	12,497

See accompanying notes to unaudited consolidated financial statements.

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Egalet Corporation and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

1. Organization and Description of the Business

Interim Financial Statements

The consolidated financial statements of Egalet Corporation and its subsidiaries (“Egalet” or the “Company”) as of March 31, 2019 (Successor) and for the periods from February 1, 2019 through March 31, 2019 (Successor), January 1, 2019 through January 31, 2019 (Predecessor) and the three months ended March 31, 2018 (Predecessor) are unaudited and reflect all adjustments (consisting only of normal recurring adjustments), which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim periods. The Company’s Consolidated Balance Sheet as of December 31, 2018 (Predecessor) has been derived from the audited financial statements as of that date contained in our Annual Report on Form 10-K for the year ended December 31, 2018 (the “2018 Annual Report on Form 10-K”). The Company’s consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto, together with management’s discussion and analysis of financial condition and results of operations, contained in the Company’s 2018 Annual Report on Form 10-K, though, as described below, such prior financial statements will not be comparable to the interim financial statements due to the adoption of fresh start accounting on January 31, 2019. For additional information, see Note 3- Fresh Start Accounting. The Company’s Consolidated Statements of Operations for the period from February 1, 2019 through March 31, 2019 (Successor) are not necessarily indicative of future financial results.

Emergence from Voluntary Reorganization Under Chapter 11 Proceedings

Chapter 11 Cases

On October 30, 2018, the Company entered into a definitive asset purchase agreement (The “Purchase Agreement”) to acquire the SOLUMATRIX® products and INDOCIN® products and one development product from Iroko Pharmaceuticals, Inc. and its subsidiaries (collectively, “Iroko”). To facilitate the transactions contemplated by the Purchase Agreement (the “Iroko Products Acquisition”) and to reorganize its financial structure, the Company and its wholly-owned subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) and a related Joint Plan of Reorganization ( “the Plan”) on October 30, 2018. The Iroko Products Acquisition was consummated, and the Plan became effective, on January 31, 2019.

The Company requested that the Chapter 11 cases (the “Chapter 11 Cases”) be jointly administered for procedural purposes only under the caption “In re Egalet Corporation, et al., Case No. 18-12439”. Upon filing, the Company continued to operate its business as a “debtor-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The Company continued ordinary course operations substantially uninterrupted during the Chapter 11 Cases and sought approval from the Bankruptcy Court for relief under certain “first day” motions authorizing the Company to continue to conduct its business in the ordinary course. On January 14, 2019, the Bankruptcy Court entered the Confirmation Order confirming the Plan under Chapter 11 of the Bankruptcy Code. On January 31, 2019 (the “Effective Date”), and substantially concurrent with the consummation of the acquisition of the Iroko products named below (the “Iroko Products Acquisition”), the Plan became effective.

Organization and Business Overview

The Company is a commercial-stage life sciences company focused on developing and marketing important treatments for patients and healthcare providers. Egalet currently has a portfolio of innovative treatments for different types of pain and inflammation. The Company has seven commercially available products: SPRIX ® (ketorolac tromethamine) Nasal Spray, ZORVOLEX ® (diclofenac), VIVLODEX ® (meloxicam), TIVORBEX ® (indomethacin), INDOCIN ® (indomethacin) suppositories, INDOCIN® oral suspension and OXAYDO ® (oxycodone HCI, USP) tablets for oral use only —CII. To augment its current product portfolio, the Company is seeking to acquire additional product

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candidates or approved products to develop and/or market. The Company plans to grow its business through its commercial revenue and potential business development opportunities.

Liquidity and Substantial Doubt in Going Concern

Substantial Doubt Regarding Going Concern

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred recurring operating losses since inception. As of March 31, 2019, the Company had an accumulated deficit of $10.5 million and working capital of $1.5 million. Even though the Company emerged from bankruptcy, it continues to have significant indebtedness and its ability to continue as a going concern is contingent upon the successful integration of the Iroko Products Acquisition, increasing its revenue, managing its expenses and complying with the terms of its new debt agreements. Refer to Note 9—Debt for additional details of debt agreements.

These factors, in combination with others described above, resulted in the conclusion that there is substantial doubt about the ability of the Company to continue as a going concern for the one-year period after the date that these financial statements are issued. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern .

2. Summary of Significant Accounting Policies and Basis of Accounting

Basis of Accounting

The unaudited consolidated financial statements are prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Certain information and footnotes normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q. The Company’s consolidation policy requires the consolidation of entities where a controlling financial interest is held. All intercompany balances and transactions have been eliminated in consolidation.

Upon emergence from bankruptcy, the Company adopted fresh start accounting in accordance with the provisions of Financial Accounting Standards Board (‘FASB”) Accounting Standards Codification (“ASC”) 852, Reorganizations , which resulted in the Company becoming a new entity for financial reporting purposes on February 1, 2019. As a result of the adoption of fresh start accounting, the Company’s unaudited consolidated financial statements subsequent to January 31, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019, any other interim periods or any future year or period . See Note 3 – Fresh Start Accounting for further details on the impact of fresh start accounting on the Company’s unaudited consolidated financial statements. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2018 filed on March 29, 2019 with the SEC.

References to "Successor" or "Successor Company" relate to the financial position and results of operations of the reorganized Company subsequent to January 31, 2019. References to "Predecessor" or "Predecessor Company" relate to the financial position and results of operations of the Company prior to, and including, January 31, 2019.

The Company’s significant accounting policies are described in Note 2 of the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K. Since the date of those financial statements, new accounting policies are noted below.

Goodwill

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at the reporting unit level at least annually or when a triggering event occurs that could indicate a potential impairment by assessing qualitative factors or performing a quantitative analysis in determining whether it is more likely than not that the fair value of net assets are below their carrying amounts. A reporting unit is the same as, or one level below, an operating segment. Our operations are currently comprised of a single, entity wide reporting unit.

The Company determined that no events have occurred or circumstances changed during the period from February 1, 2019 through March 31, 2019 (Successor) and the period from January 1, 2019 through January 31, 2019 (Predecessor) that would more likely than not reduce the fair value of any of the Company’s reporting units below their respective carrying amounts. However, if conditions deteriorate or there is a change in the business, it may be necessary to record impairment charges in the future.

Acquisition-related contingent consideration

Pursuant to the Iroko Products Acquisition, the Company has obligations relating to contingent payment consideration for future royalty obligations to Iroko based upon annual INDOCIN product net sales over $20.0 million . The Company recorded the acquisition-date fair value of these contingent liabilities, based on the likelihood of contingent earn-out payments. The earn-out payments are subsequently remeasured to fair value each reporting date. The fair value of the acquisition-related contingent consideration is remeasured each reporting period, with changes in fair value recorded in the Company’s Consolidated Statements of Operations. The royalty term commenced on the Effective Date and ends on the tenth anniversary of the Effective Date, January 31, 2029.

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02 Leases (ASC 842). In July 2018, the FASB issued ASU No. 2018-10, "Codification Improvements to Topic 842, Leases" (ASU 2018-10), which provides narrow amendments to clarify how to apply certain aspects of the new lease standard, and ASU No. 2018-11, "Leases (Topic 842)-Targeted Improvements" (ASU 2018-11), which addressed implementation issues related to the new lease standard. These and certain other lease-related ASUs have generally been codified in ASC 842. ASC 842 supersedes the lease accounting requirements in Accounting Standards Codification Topic 840, Leases (ASC 840). ASC 842 establishes a right-of-use model that requires a lessee to record a right-of-use ("ROU") asset and a lease liability on the balance sheet for all leases. Under ASC 842, leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The standard also requires disclosures to help investors and other financial statement users better understand the amount, timing and uncertainty of cash flows arising from leases.

The Company adopted ASC 842 using the modified retrospective transition approach as of the effective date, which allows the Company to not adjust the comparative periods presented. The Company has elected to adopt the package of transition practical expedients and, therefore, has not reassessed whether existing or expired contracts contain a lease, the lease classification for existing or expired leases or the accounting for initial direct costs that were previously capitalized. The Company did not elect the practical expedient to use hindsight for leases existing at the adoption date. Further, the Company does not expect the amendments in ASU 2018-01: Land Easement Practical Expedient to have an effect on its financial position because it did not enter into land easement arrangements. The Company has elected, as an accounting policy, to not recognize ROU assets and lease liabilities for all short-term leases that have a lease term of 12 months or less.

Upon adoption, the Predecessor Company recorded a lease liability of $2.5 million with a corresponding ROU asset of $1.9 million for its operating leases. The adoption of ASC 842 did not have a material impact on the Company’s Consolidated Statements of Operations or Consolidated Statements of Cash Flows.

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3. Fresh Start Accounting

Upon emergence from bankruptcy, the Company adopted fresh start accounting as (i) the reorganization value of the assets of the Successor Company immediately before the date of confirmation of the Plan was less than the total of all post-petition liabilities and allowed claims and (ii) the holders of the Predecessor Company’s voting shares immediately before confirmation of the Plan received less than 50 percent of the voting shares of the emerging entity.

GAAP requires the adoption of fresh start accounting on the later of (i) the Plan confirmation date, or (ii) when all material conditions precedent to the Plan’s becoming effective are resolved, which occurred on January 31, 2019. Accordingly, the Company selected January 31, 2019 as the fresh start reporting date. Upon the application of fresh start accounting, the Company allocated the reorganization value to its individual assets based on their estimated fair values. Reorganization value represents the fair value of the Successor Company’s assets before considering liabilities. The excess reorganization value over the fair value of identified tangible and intangible assets is reported as goodwill.

The Bankruptcy Court confirmed the Plan based upon an estimated enterprise value of the Company between $162 million and $200 million, which was estimated using various valuation methods, including (i) comparable public company analysis, a method to estimate the value of a company relative to other publicly traded companies with similar operation and financial characteristics; (ii) discounted cash flow analysis, a calculation of the present value of the future cash flows to be generated by the asset or business based on its projection, and (iii) precedent transaction analysis, a method to estimate the value of a company by examining comparable public merger and acquisition transactions. Based upon a reevaluation of relevant factors used in determining the range of enterprise value and updated expected cash flow projections, the Company concluded the enterprise value, or fair value, was $196.6 million.

The basis of the discounted cash flow analysis used in developing the enterprise value was based on Company prepared projections that included a variety of estimates and assumptions. While the Company considers such estimates and assumptions reasonable, they are inherently subject to significant business, economic and competitive uncertainties, many of which are beyond the Company’s control and, therefore, may not be realized. Changes in these estimates and assumptions may have had a significant effect on the determination of the Company’s enterprise value. The assumptions used in the calculations for the discounted cash flow analysis, which had the most significant effect on our estimated enterprise value, included the following: forecasted revenue, costs and free cash flows through 2023, discount rate of 15.1 %. A terminal value of $217.3 million was established, which was determined using a perpetual long-term growth rate of 3%.

The four-column consolidated statement of financial position as of January 31, 2019, included herein, applies effects of the Plan and fresh start accounting to the carrying values and classifications of assets or liabilities. Upon adoption of fresh start accounting, the recorded amounts of assets and liabilities were adjusted to reflect their estimated fair values. Accordingly, the reported historical financial statements of the Predecessor Company prior to the adoption of fresh start accounting for periods ended on or prior to January 31, 2019 are not comparable to those of the Successor Company.

In applying fresh start accounting, the Company followed these principles:

The reorganization value, which represents the concluded enterprise value plus excess cash and cash equivalents and non-interesting bearing liabilities of the entity, was allocated to the entity’s reporting units in conformity with ASC 805, Business Combinations . The reorganization value exceeded the sum of the fair value assigned to assets and liabilities. This excess was recorded as Successor Company goodwill as of January 31, 2019.

Each asset and liability existing as of the fresh start accounting date, other than deferred taxes, has been stated at the fair value, and determined at appropriate risk adjusted interest rates.

Deferred taxes were reported in conformity with applicable income tax accounting standards, principally ASC 740, Income Taxes .

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The following four-column consolidated statement of financial position table identifies the adjustments recorded to the Predecessor Company’s January 31, 2019 Consolidated Balance Sheets as a result of implementing the Plan and applying fresh start accounting:



			Plan Effects			Fresh Start
(in thousands)	Predecessor		Adjustments			Adjustments			Successor
Assets
Current assets
Cash and cash equivalents	$	36,785	$	(19,738)	(a)	$	—		$	17,047
Marketable securities, available for sale		4,994		—			—			4,994
Accounts receivable		4,141		—			—			4,141
Inventory		2,299		28,364	(b)		3,175	(h)		33,838
Prepaid expenses and other current assets		2,497		1,446	(b)		—			3,943
Other receivables		133		—			—			133
Total current assets		50,849		10,072			3,175			64,096
Intangible assets, net		4,109		90,106	(b)		29,091	(i)		123,306
Restricted cash		400		—			—			400
Property and equipment, net		1,027		3,047	(b)		—			4,074
Right of use asset, net		1,854		—			—			1,854
Goodwill		—		—			58,747	(j)		58,747
Deposits and other assets		1,676		—			—			1,676
Total assets	$	59,915	$	103,225		$	91,013		$	254,153
Liabilities and stockholders’ (deficit) equity
Current liabilities:
Accounts payable		9,839		(1,500)	(a)		—			8,339
Accrued expenses		26,617		20,183	(c)		—			46,800
Deferred revenue		52		—			(52)	(k)		—
Debt - current		—		1,492	(d)		—			1,492
Acquisition-related contingent consideration		—		1,200	(d)		—			1,200
Other current liabilities		1,030		—			—			1,030
Total current liabilities		37,538		21,375			(52)			58,861
Debt - non-current portion, net		—		93,371	(d)		—			93,371
Acquisition-related contingent consideration		—		13,600	(d)		—			13,600
Deferred income tax liabilities		24		—			—			24
Other liabilities		1,463		—			(103)	(k)		1,360
Total liabilities not subject to compromise		39,025		128,346			(155)			167,216

Liabilities subject to compromise		138,884		(138,884)	(e)		—			—

Stockholders’ (deficit) equity:
Common stock		55		(46)	(f)		—			9
Additional paid in capital		276,880		(189,952)	(f)		—			86,928
Other comprehensive income (loss)		866		—			(866)	(l)		—
Accumulated deficit		(395,795)		303,761	(g)		92,034	(l)		—
Total stockholders’ (deficit) equity		(117,994)		113,763			91,168			86,937
Total liabilities and shareholders’ (deficit) equity	$	59,915	$	103,225		$	91,013		$	254,153

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Effects of Plan Adjustments

Reflects cash distribution of $18.2 million and reimbursement to Iroko for transaction expenses incurred on the acquisition of $1.5 million.

Reflects preliminary purchase accounting for Iroko Products Acquisition. Assets acquired and liabilities assumed are recorded at fair value on the acquisition date.



Iroko Purchase Price Allocation	(in thousands)
Iroko Note	$	45,000
Iroko Equity Value in Reorganization		41,630
Fair Value of Contingent Consideration		14,800
Iroko Promissory Note		4,500
Total Iroko Purchase Price	$	105,930

Identifiable Assets / (Liabilities)
Inventory	$	28,364
Prepaid expenses		1,446
Fixed Assets		3,047
Intangible — Indocin		90,106
Product Liability		(17,033)
Total Iroko Purchase Price	$	105,930
Goodwill attributable to Iroko acquisition	$	—

Adjustments to accrued expense reflect i) $2.15 million success fees to be paid after the Effective Date upon the completion of the Iroko Products Acquisition and Chapter 11 proceedings, ii) $1.0 million transaction fees to be paid after the Effective Date for expenses Iroko incurred in connection with the acquisition, and iii) $17.03 million product related liabilities such as rebate, coupon payment, etc. assumed from Iroko.

Reflects obligations entered into upon emergence to finance transactions effectuated by the Plan: i) $90.3 million in 13% Notes, net of discount for interest-free period, and a royalty rights agreement giving the right to receive payment equal to 1.5% of net sales on all reorganized entity products, ii) $4.5 million pursuant to the Interim Promissory Note, and iii) $14.8 million in contingent consideration. Specifically, the contingent consideration represents the fair value of future royalty payments due to Iroko in the event Indocin net sales exceed $20.0 million in any fiscal year between the Effective Date and January 31, 2029 (“Indocin Royalty”). The current portion of the 13% Notes, Interim Promissory Note, and Indocin Royalty is $1.1 million, $0.4 million, and $1.2 million, respectively.

The adjustment to liabilities subject to compromise relates to the extinguishment of the former 13% Notes and associated royalty rights, the 5.50% and 6.50% Notes, and rejected contracts. The former 13% Notes were settled with $50.0 million in aggregate principal amount of the 13% Notes newly issued common stock of the Successor Company representing approximately 19.38% of the common stock then outstanding, and $20.0 million in cash equal to the sum of adequate protection payments of $1.8 million and cash distribution of $18.2 million. The 5.50% and 6.50% Notes were settled with newly issued common stock of the Successor Company representing approximately 31.62% of the common stock then outstanding. Contracts rejected in the Chapter 11 cases did not receive any consideration.

Pursuant to the Plan, the Company’s predecessor common stock was cancelled, and new common stock and warrants were issued. The adjustment eliminated the Predecessor Company’s common stock, additional paid-in capital and recorded the Successor Company’s new $0.001 par value common stock, warrants and additional paid-in capital. The Company issued 9,360,968 shares of new common stock and additional paid-in capital of $60.8 million and $26.1 million of warrants. The warrants were valued using the Black Scholes model. Significant assumptions used in determining the fair value of such warrants at issuance include an assumed share price volatility of 60%, a risk-free rate of return of 2.43% with a 5 year term, and marketability discount between 7% and 20% for the lock-up periods.

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This adjustment reflects the net effect of the transaction related to the consummation of the Plan on Predecessor’s accumulated deficit. The table below provides a summary of the adjustments:


Liabilities subject to compromise	(in thousands)
13% Senior Secured Debt	$	85,438
5.50% Convertible Notes		24,650
6.50% Convertible Notes		23,888
Accrued interest		2,464
Accrued royalty rights ("Existing Senior Secured Royalty Rights")		2,119
Accrued expenses		325
Liabilities subject to compromise	$	138,884

Consideration given pursuant to the Plan:
Issuance of warrants	$	(14,303)
Issuance of new common stock		(31,004)
Issuance of new Senior Secured Notes		(45,363)
Cash payment		(18,238)
Total consideration given pursuant to the Plan	$	(108,908)

Gain on extinguishment of prepetition liabilities		29,976

Other adjustments to accumulated deficit:
Success fees		(2,150)
Reimbursement to Iroko of acquisition expense		(1,000)
Cancellation of Predecessor stock-based compensation expense		(3,814)
Tax related expenses on gain on extinguishment of prepetition liabilities		—
Total other adjustments		(6,964)

Extinguishment of Predecessor Common Stock and Additional-paid-in-capital		280,749
Total adjustments to accumulated deficit:	$	303,761

Fresh Start Adjustments

A $3.2 million adjustment was recorded to adjust the Company’s legacy inventory, excluding inventory assumed from Iroko, to fair value. The Company obtained an independent third-party valuation specialist’s assistance in the determination of the fair values of inventory. The inventory valuation included an analysis of net realizable value of the work in progress inventory and finished goods. Finished goods are valued using the comparative sales method as a function of the estimated selling price less the sum of any cost to complete, costs of disposal, holding costs, and a reasonable profit allowance. Carrying value of raw materials and packaging is assumed to represent a reasonable proxy for fair value.

Reflects fresh start adjustments recorded to adjust intangible assets related to the Company’s legacy products, SPRIX and OXAYDO, to fair value. The Company obtained independent-third party valuation specialist’s assistance in determination of the fair values of intangibles. SPRIX and OXAYDO intellectual property values are valued using the multi period excess earnings method under the income approach. The multi-period excess earnings method measures economic benefit indirectly by calculating the income attributable to an asset after appropriate returns are paid to complementary assets used in conjunction with the subject asset to produce contributory asset charges. Key components of the excess earnings methods include revenue, adjusted operating margin, charges for use of other assets, and discount rate.

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Adjustment to record the reorganization value of assets in excess of amounts allocated to identifiable tangible and intangible assets, also referred to as Successor Company goodwill. Estimated business enterprise value is developed for the combined company upon emergence from bankruptcy and therefore allocated to both identified tangible and intangible assets from the Predecessor Company and assumed from acquisition of Iroko.


	(in thousands)
Estimated business enterprise value	$	196,600
Add: Fair value of liabilities excluded from enterprise value		57,552
Less: Fair value of tangible assets		(72,099)
Less: Fair value of identified intangible assets		(123,306)
Reorganization value of assets in excess of amounts allocated to identified tangible and intangible assets (Successor company goodwill)	$	58,747

Total Successor Goodwill	$	58,747

Adjustments to eliminate deferred revenue and related product advance.

The Predecessor Company’s accumulated deficit and accumulated other comprehensive income was eliminated in conjunction with the adoption of fresh start accounting pursuant to ASC 852, Reorganization . The Predecessor Company recognized a $91.2 million gain related to the fresh start accounting adjustments related for revaluation of assets and liabilities as follows:


	(in thousands)
Establish Successor goodwill attributable to emergence from Chapter 11	$	58,747
Intangible fair value adjustments		29,091
Inventory fair value adjustments		3,175
Deferred revenue and product advance adjustments		155
Gain on fresh start adjustment for revaluation of assets and liabilities		91,168

Eliminate Predecessor Company Other comprehensive income		866
Total adjustment to stockholders' deficit	$	92,034

4. Revenue From Contracts with Customers

Revenue Recognition

Under ASC 606, revenue is recognized when, or as, performance obligations under the terms of a contract are satisfied, which occurs when control of the promised products or services is transferred to customers. To recognize revenue pursuant to the provisions of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect substantially all the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses whether the goods or services promised within each contract are distinct to determine those that are performance obligations.

Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or services to a customer (“transaction price”). The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. To the extent that the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price to which the Company expects to be entitled after giving effect to returns, rebates, sales allowances and other variable elements with contracts between the Company and its customers. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a

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significant future reversal of cumulative revenue under the contract will not occur. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance under the contract and all information (historical, current and forecasted) that is reasonably available. Sales taxes and other taxes collected on behalf of third parties are excluded from revenue.

When determining the transaction price of a contract, an adjustment is made if payment from a customer occurs either significantly before or significantly after performance, resulting in a significant financing component. Applying the significant financing practical expedient, the Company does not assess whether a significant financing component exists if the period between when the Company performs its obligations under the contract and when the customer pays is one year or less. None of the Company’s contracts contained a significant financing component during the period ended March 31, 2019.

The Company’s existing contracts with customers contain only a single performance obligation and, as such, the entire transaction price is allocated to the single performance obligation. Should future contracts contain multiple performance obligations, those would require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines standalone selling prices based on observable prices or a cost-plus margin approach when one is not available.

The Company’s performance obligations are to provide pharmaceutical products to several wholesalers or a single specialty pharmaceutical distributor. All of the Company's performance obligations, and associated revenue, are generally transferred to customers at a point in time. Revenue is recognized at the time the related performance obligation is satisfied by transferring control of a promised good to a customer, which is typically upon delivery. Payments for invoices are generally due within 30 to 65 days of invoice date.

Disaggregation of Revenue

The following table summarizes revenue by revenue source for the Successor period February 1, 2019 through March 31, 2019 and the Predecessor periods January 1, 2019 through January 31, 2019 and the three months ended March 31, 2018:


	Successor		Predecessor
	Period from		Period from
	February 1, 2019		January 1, 2019		Three months
	through		through		ended
(in thousands)	March 31, 2019		January 31, 2019		March 31, 2018
Product lines
SPRIX Nasal Spray	$	3,830	$	1,354	$	4,814
OXAYDO		673		421		1,260
INDOCIN products		7,499		—		—
SOLUMATRIX products		3,808		—		—
ARYMO ER		—		—		187
Total	$	15,810	$	1,775	$	6,261

Reserves for Variable Consideration

Revenues from product sales are recorded at the transaction price, which includes estimates of variable consideration for which reserves are established and which result from returns, rebates and sales allowances that are offered within or impacted by contracts between the Company and its customers. Where appropriate, these estimates take into consideration a range of possible outcomes which are probability-weighted for relevant factors such as the Company’s historical experience, current contractual requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. Overall, these reserves reflect the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of the contract as of the date of determination. The amount of variable consideration which is included in the transaction price may be constrained, and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from the Company’s estimates. If actual results in the future vary from the Company’s estimates, the Company adjusts these estimates, which would affect net product revenue and earnings in the period such variances become known.

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Product Returns

Consistent with industry practice, the Company generally offers customers a limited right of return for its products. The Company estimates the amount of its product sales that may be returned by its customers and records this estimate as a reduction of revenue in the period the related product revenue is recognized. The Company estimates product return liabilities using the expected value method based on its historical sales information and other factors that it believes could significantly impact its expected returns, including product discontinuations, product recalls and expirations, of which it becomes aware. These factors include its estimate of actual and historical return rates for non-conforming product and open return requests.

Specialty Pharmacy Fees

The Company pays certain specialty pharmaceutical distributor fees based on a contractually determined rate. The Company records the fees on shipment to the distributor and recognizes the fees as a reduction of revenue in the same period the related revenue is recognized.

Wholesaler Fees

The Company pays certain pharmaceutical wholesalers fees based on a contractually determined rate. The Company accrues the fees on shipment to the respective wholesalers and recognizes the fees as a reduction of revenue in the same period the related revenue is recognized.

Prompt Pay Discount

The Company offers cash discounts to its customers, generally 2% of the sales price, as an incentive for prompt payment. The Company estimates cash discounts using the mostly likely amount method by reducing accounts receivable by the prompt pay discount amount. The discount is recognized as a reduction of revenue in the same period as the related revenue.

Patient Discount Programs

The Company offers co-pay discount programs to patients for each of its products, in which patients receive a co-pay discount on their prescriptions. For discount amounts that are not immediately available, the Company estimates the total amount that will be redeemed using the expected value method based on the quantity of product shipped. The Company recognizes the discount as a reduction of revenue in the same period as the related revenue.

Commercial and Government Rebates

The Company contracts with various commercial and government payor organizations, primarily private insurance companies and pharmacy benefit managers, for the payment of rebates with respect to utilization of its products. The Company estimates these rebates using the expected value method and records such estimates in the same period the related revenue is recognized, resulting in a reduction of net product sales and the establishment of an accrued expense.

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The following table summarizes activity in each of the net product sales allowance and reserve categories for the Successor period February 1, 2019 through March 31, 2019 and the Predecessor periods January 1, 2019 through January 31, 2019 and the three months ended March 31, 2018:


	Successor
(in thousands)	Fees and distribution costs		Co-pay assistance		Rebates		Returns		Total
Balances at January 31, 2019	$	2,680	$	19,330	$	3,423	$	7,964	$	33,397
Allowances for current period sales		11,161		29,602		3,900		1,262		45,925
Credits or payments made for prior period sales		—		(935)		(692)		(76)		(1,703)
Credits or payments made for current period sales		(921)		(23,474)		(1,016)		—		(25,411)
Balances at March 31, 2019	$	12,920	$	24,523	$	5,615	$	9,150	$	52,208

Total gross product sales									$	61,735

Total provision for product sales allowances and accruals as a percentage of total gross sales										74%



	Predecessor
(in thousands)	Fees and distribution costs		Co-pay assistance		Rebates		Returns		Total
Balances at December 31, 2018	$	462	$	13,326	$	2,664	$	2,020	$	18,472
Allowances for current period sales		568		6,593		595		28		7,784
Assumed liabilities Iroko Acquisition		2,076		5,791		723		5,944		14,534
Credits or payments made for prior period sales		(361)		(6,380)		(559)		(28)		(7,328)
Credits or payments made for current period sales		(65)		—		—		—		(65)
Balances at January 31, 2019	$	2,680	$	19,330	$	3,423	$	7,964	$	33,397

Total gross product sales									$	9,559

Total provision for product sales allowances and accruals as a percentage of total gross sales										81%

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	Predecessor
(in thousands)	Fees and distribution costs		Co-pay assistance		Rebates		Returns		Total
Balances at December 31, 2017	$	595	$	3,644	$	579	$	—	$	4,818
Adjustment for ASU 2014-09		—		4,221		656		—		4,877
Allowances for current period sales		2,067		19,541		2,058		277		23,943
Adjustment related to prior period sales		—		—		180		—		180
Credits or payments made for prior period sales		(541)		(6,755)		(797)		—		(8,093)
Credits or payments made for current period sales		(1,333)		(7,979)		(133)		(115)		(9,560)
Balances at March 31, 2018	$	788	$	12,672	$	2,543	$	162	$	16,165

Total gross product sales									$	30,384

Total provision for product sales allowances and accruals as a percentage of total gross sales										79%

Transaction Price Allocated to Future Performance Obligations

ASC 606 requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of March 31, 2019. The guidance provides certain practical expedients that limit this requirement including performance obligations that are part of a contract that has an original expected duration of one year or less. All of the Company’s contracts are eligible for the practical expedient provided by ASC 606, therefore the Company elected not to disclose any remaining performance obligations.

Contract Balances from Contracts with Customers

When the Company receives consideration from a customer, or such consideration is unconditionally due from a customer prior to the transfer of goods or services to the customer under the terms of a contract, the Company records a contract liability. Contract liabilities are recognized as revenue after control of the products is transferred to the customer and all revenue recognition criteria have been met. The Company classifies contract liabilities as deferred revenue. The Company had no deferred revenue as of March 31, 2019 or December 31, 2018.

Contract assets primarily relate to rights to consideration for goods or services transferred to the customer when the right is conditional on something other than the passage of time. Contract assets are transferred to accounts receivable when the rights become unconditional. The Company had no contract assets as of March 31, 2019 or December 31, 2018.

Costs to Obtain and Fulfill a Contract

The Company accounts for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the associated products. When shipping and handling costs are incurred after a customer obtains control of the products, the Company has elected to account for these as costs to fulfill the promise and not as a separate performance obligation. Shipping and handling costs associated with the distribution of finished products to customers are expensed as incurred and are recorded in costs of goods sold in the accompanying consolidated statements of operations. The Company expenses incremental costs of obtaining a contract with a customer (for example, commissions) when incurred as the period of benefit is less than one year.

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5. Investments

Marketable Securities

The Company owned no marketable securities as of March 31, 2019.

Marketable securities consisted of the following as of December 31, 2018:


(in thousands)	Cost Basis		Unrealized Gains		Unrealized Losses		Fair Value
Corporate notes and bonds	$	4,990	$	—	$	(2)	$	4,988
Total	$	4,990	$	—	$	(2)	$	4,988

6. Inventory

Inventory is stated at fair value as of March 31, 2019. Inventory as of December 31, 2018 is stated at the lower of cost or market using actual cost net of reserve for excess and obsolete inventory. The following represents the components of inventory at March 31, 2019 and December 31, 2018:


	Successor		Predecessor
	March 31,		December 31,
(in thousands)	2019		2018
Raw materials	$	2,677	$	1,374
Work in process		843		665
Finished goods		19,756		600
Total	$	23,276	$	2,639

As a result of the Iroko Products Acquisition as of January 31, 2019, the SOLUMATRIX products and the INDOCIN products inventory was acquired and added at its fair value of $28.4 million, with $27.1 million of finished goods inventory and $1.3 million of raw materials inventory.

As a result of fresh start accounting, the Company’s SPRIX Nasal Spray and OXAYDO inventory was adjusted to its fair value as of January 31, 2019. The fair value adjustment totaled $3.2 million, with $2.2 million related to work in process inventory and $1.0 million related to finished goods inventory.

7. Intangible Assets and Goodwill

The following represents the balance of the intangible assets of the Successor Company at March 31, 2019:


	Gross				Net		Remaining Useful
	Intangible		Accumulated		Intangible		Life
(in thousands)	Assets		Amortization		Assets		(in years)
OXAYDO product rights	$	1,300	$	(72)	$	1,228	2.84
SPRIX Nasal Spray product rights		31,900		(591)		31,309	8.84
INDOCIN product rights		90,106		(1,669)		88,437	8.84
Goodwill		58,747		—		58,747	N/A
Total	$	182,053	$	(2,332)	$	179,721

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The following represents the balance of the intangible assets of the Predecessor Company at December 31, 2018


	Gross				Net		Remaining Useful
	Intangible		Accumulated		Intangible		Life
(in thousands)	Assets		Amortization		Assets		(in years)
OXAYDO product rights	$	7,623	$	(4,330)	$	3,293	3.00
SPRIX Nasal Spray product rights		4,831		(3,843)		988	1.00
Total	$	12,454	$	(8,173)	$	4,281

As a result of fresh start accounting, the OXAYDO and SPRIX Nasal Spray product rights and their remaining useful lives were revalued. The value of the OXAYDO product rights were reduced to $1.3 million and the remaining useful life decreased to 3 years as of January 31, 2019. The SPRIX Nasal Spray product rights were increased to $31.9 million and the remaining useful life increased to 9 years as of January 31, 2019.

As a result of the Iroko Products Acquisition, the Company acquired the product rights to the INDOCIN products. The fair value of the INDOCIN product rights was determined to be $90.1 million and the remaining useful life to be 9 years as of January 31, 2019.

On January 31, 2019, the Company recognized $58.7 million of goodwill as a result of fresh start accounting adjustments. See Note 3—Fresh Start Accounting for additional details.

8. Accrued Expenses

Accrued expenses were as follows:



	Successor		Predecessor
(in thousands)	March 31,		December 31,
	2019		2018
Sales allowances	$	47,683	$	17,174
Professional services		4,490		1,847
Payroll and related		1,684		3,567
Interest		1,036		—
Royalties		601		1,049
Sales and marketing		683		81
Restructuring		621		—
Manufacturing services		14		34
Other		2,113		832
	$	58,925	$	24,584

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9. Debt

Successor Company Debt

The following table summarizes the Successor Company’s debt as of March 31, 2019:


	March 31, 2019
(in thousands)
Series A-1 Notes	$	50,000
Series A-2 Notes		45,000
Royalty rights obligation		5,778
Credit agreement		5,000
Interim promissory note		4,500
		110,278
Unamortized debt discounts		(9,433)
Unamortized deferred financing fees		(253)
Carrying value		100,592
Less: current portion of long-term debt		(2,635)
Net, long-term debt	$	97,957

13% Senior Secured Notes Indenture Due 2024

On the Effective Date, the Company issued $95.0 million aggregate principal amount of its 13% senior secured notes (the “13% Notes”) and entered into an indenture (the “Indenture”) governing the 13% Notes with the guarantors party thereto (the “Guarantors”) and U.S. Bank National Association, a national banking association, as trustee (the “Trustee”) and collateral agent (the “Collateral Agent”). The 13% Notes were issued in two series: (x) $50.0 million of “Series A-1 Notes”, issued pursuant to the Plan to former holders of First Lien Secured Notes Claims (the “former 13% Notes”) and which will be subject to an interest holiday from the Effective Date through November 1, 2019 and (y) $45.0 million of “Series A-2 Notes,” issued to Iroko and certain of its affiliates and which are subject to the rights of set-off and recoupment and related provisions set forth in the Purchase Agreement. On the Effective Date, the Company recorded a discount associated with interest holiday on the Series A-1 Notes of $4.6 million. The obligations of the Company under the Indenture and the 13% Notes are unconditionally guaranteed on a secured basis by the Guarantors.

Interest on the 13% Notes accrues at a rate of 13% per annum and is payable semi-annually in arrears on May 1 and November 1 of each year (each, a “Payment Date”) commencing on May 1, 2019 (subject to the interest holiday referred to above with respect to the Series A-1 Notes). On each Payment Date, the Company will also pay an installment of principal on the 13% Notes in an amount equal to 15% of the aggregate net sales of OXAYDO (oxycodone HCI, USP) tablets for oral use only —CII, SPRIX (ketorolac tromethamine) Nasal Spray, ARYMO ER, Egalet-002, the SOLUMATRIX® products and the INDOCIN products for the two consecutive fiscal quarter period most recently ended, less the amount of interest paid on the 13% Notes on such Payment Date.

The 13% Notes are senior secured obligations of the Company and will be equal in right of payment to all existing and future pari passu indebtedness of the Company, will be senior in right of payment to all existing and future subordinated indebtedness of the Company, will have the benefit of a security interest in the 13% Notes collateral and will be junior in lien priority in respect of any collateral that secures any first priority lien obligations incurred from time to time in accordance with the Indenture. The stated maturity date of the 13% Notes is January 31, 2024. Upon the occurrence of a Change of Control, subject to certain conditions, or certain Asset Sales events (each, as defined in the Indenture), holders of the 13% Notes may require the Company to repurchase for cash all or part of their 13% Notes at a repurchase price equal to 101% of the principal amount of the 13% Notes to be repurchased, plus accrued and unpaid interest to the date of repurchase.

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The Company may redeem the 13% Notes at its option, in whole or in part from time to time, prior to January 31, 2020, at a redemption price equal to 100% of the principal amount of the 13% Notes being redeemed, plus accrued and unpaid interest, if any, through the redemption date, plus a make-whole premium computed using a discount rate equal to the treasury rate in respect of such redemption date plus 1%. The Company may redeem the 13% Notes at its option, in whole or in part from time to time, on or after January 31, 2020, at a redemption price equal to: (i) from and including January 31, 2020 to and including January 30, 2021, 103% of the principal amount of the 13% Notes to be redeemed and (ii) from and including January 31, 2021 and thereafter, 100% of the principal amount of the 13% Notes to be redeemed, in each case, plus accrued and unpaid interest to the redemption date. In addition, prior to January 31, 2020, the Company may redeem, at its option, up to 35% of the aggregate principal amount of the 13% Notes with the proceeds of one or more public or private equity offerings at a redemption price equal to 113.50% of the aggregate principal amount of the 13% Notes to be redeemed, plus accrued and unpaid interest to the date of redemption in accordance with the Indenture; provided that at least 65% of the aggregate principal amount of 13% Notes issued under the Indenture remains outstanding immediately after each such redemption and provided further that each such redemption occurs within 90 days of the date of closing of each such equity offering. No sinking fund is provided for the 13% Notes, which means that the Company is not required to periodically redeem or retire the 13% Notes.

Pursuant to the Indenture, the Company and its restricted subsidiaries must also comply with certain affirmative covenants, such as furnishing financial statements to the holders of the 13% Notes, and negative covenants, including limitations on the following: the incurrence of debt; the issuance of preferred and/or disqualified stock; the payment of dividends, the repurchase of shares and under certain conditions making certain other restricted payments; the prepayment, redemption or repurchase of subordinated debt; the merger, amalgamation or consolidation involving the Company; engaging in certain transactions with affiliates; and the making of investments other than those permitted by the Indenture. In addition, commencing December 31, 2019, the Company must maintain a minimum level of consolidated liquidity, based on unrestricted cash on hand and availability under any revolving credit facility, equal to the greater of (1) the quotient of the outstanding principal amount of the Notes divided by 9.5 and (2) $7.5 million.

The Indenture governing the 13% Notes contains customary events of default with respect to the 13% Notes (including the Company’s failure to make any payment of principal or interest on the 13% Notes when due and payable or the Company’s failure to comply with the minimum consolidated liquidity covenant described above), and upon certain events of default occurring and continuing, the Trustee by notice to the Company, or the holders of at least 25% in principal amount of the outstanding 13% Notes by notice to the Company and the Trustee, may (subject to the provisions of the Indenture) declare 100% of the principal of and accrued and unpaid interest, if any, on all the 13% Notes to be due and payable. Upon such a declaration of acceleration, such principal and accrued and unpaid interest, if any, as well as the then-applicable optional redemption premium under the Indenture, will be due and payable immediately. In the case of certain events of bankruptcy, insolvency or reorganization involving the Company or a Restricted Subsidiary (as defined in the Indenture), the Notes will automatically become due and payable. With respect to any event of default due to the Company’s non-compliance with the minimum liquidity covenant, the Company may, within ten business days, cure such default through the issuance of equity securities, subordinated debt securities or certain other capital contributions.

Preemptive Rights Agreements

On the Effective Date, the Company entered into preemptive rights agreements (the “Preemptive Rights Agreements”) with certain of the holders of the former 13% Notes. The Preemptive Rights Agreements provide for customary preemptive rights in favor of the parties thereto with respect to certain future issuances of debt or equity securities by the Company, subject to certain exceptions, for so long as such party continues to hold at least 2.5% of the outstanding shares of the Company’s common stock.

Collateral Agreement

On the Effective Date and in connection with its entry into the Indenture, the Company entered into a collateral agreement, dated as of the Effective Date, with the Collateral Agent and the subsidiary parties from time to time party thereto (the “Collateral Agreement”). Pursuant to the terms of the Collateral Agreement, the Notes and the related guarantees are secured by a first priority lien on substantially all of the Company’s and the Guarantors’ assets, in each

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case, subject to certain prior liens and other exclusions, and a pledge of 65% of the voting equity interests and 100% of the non-voting equity interests of the Company’s foreign subsidiaries (other than Egalet Limited and any Specified IP Subsidiary (as defined in the Indenture), of which 100% of the voting equity interests have been pledged) to the extent and only for so long as the Company determines in good faith that permitting a pledge of 100% of such voting Equity Interests would result in material adverse tax consequences for the Company or any of its subsidiaries, it being understood that, 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.

Royalty Rights Obligation

In connection with 13% Notes, the Company entered into royalty rights agreements (the “Royalty Rights”) with each of the holders of the 13% Notes pursuant to which the Company will pay the holders of the 13% Notes aggregate 1.5% royalty on Net Sales (as defined in the Indenture) from the Effective Date through December 31, 2022.

The Royalty Rights were determined to be a freestanding element with respect to the 13% Notes and the Company is accounting for the Royalty Rights obligation relating to future royalties as a debt instrument. The Company has Royalty Rights obligations of $5.5 million as of March 31, 2019, which are classified as current and non-current debt in the Company’s Consolidated Balance Sheets.

The accounting for the 13% Notes requires the Company to make certain estimates and assumptions about the future net sales. The estimates of the magnitude and timing of net sales are subject to significant variability due to the extended time period associated with the financing transaction, and are thus subject to significant uncertainty. Therefore, these estimates and assumptions are likely to change, which may result in future adjustments to the portion of the debt that is classified as a current liability, the amortization of debt issuance costs and discount as well as the accretion of the interest expense. Any such adjustments could be material. On the Effective Date, the fair value of the Royalty Rights obligation associated with net product sales was estimated to be approximately $5.7 million using a probability-weighted present value analysis. On the Effective Date, the Royalty Rights obligation was recorded with an offsetting discount recognized on the 13% Notes.

Credit Agreement

On March 20, 2019, (the “Closing Date”), the Company entered into a credit agreement (the “Credit Agreement”) with Cantor Fitzgerald Securities as administrative agent and collateral agent (in such capacities, the “Agent”) and certain funds managed by Highbridge Capital Management, LLC, as lenders (collectively, the “Lenders”), which Credit Agreement consists of a $20.0 million revolving line of credit. The Company drew $5.0 million on the Closing Date and must maintain at least 25% of the commitment amount outstanding at all times. The Company will use the proceeds of the loans under the Credit Agreement for working capital purposes and to pay costs and expenses incurred by the Credit Agreement and related transactions. This arrangement will be recognized as a related party transaction as the Lenders are holders of a portion of the Company’s 13% Notes that were issued on January 31, 2019.

Advances under the Credit Agreement bear interest at the Company’s option at either the LIBOR Rate (as defined in the Credit Agreement) plus 5.00% or the Base Rate (as defined in the Credit Agreement) plus 4.00%. The Credit Agreement matures on March 20, 2022.

The obligations of the Company under the Credit Agreement are unconditionally guaranteed on a senior secured basis by the Company’s wholly-owned subsidiaries, Egalet US Inc. and Egalet Ltd. (collectively, the “Guarantors”). As security for the Company’s obligations under the Credit Agreement, the Company and the Guarantors have granted to the Agent, for the benefit of the Lenders and other secured parties, a first priority lien on substantially all of their tangible and intangible personal property (other than certain specified excluded assets), including proceeds and accounts related to this property and the capital stock of the Guarantors, pursuant to the terms of that certain Collateral Agreement, dated as of the Closing Date (the “Collateral Agreement”), among the Company and the Guarantors in favor of the Agent for the benefit of the Lenders and other secured parties. The Credit Agreement will (i) be equal in right of payment to all existing and future pari passu indebtedness of the Company, (ii) be senior in right of payment to the obligations of the Company pursuant to that certain Indenture, dated as of January 31, 2019 (the “Indenture”), among the

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Company, the Guarantors and U.S. Bank National Association, as trustee and collateral agent, and (iii) be senior in right of payment to all existing and future subordinated indebtedness of the Company.

The Company may terminate the commitments under the Credit Agreement at its option, in whole or in part from time to time, subject to a termination fee equal to (x) 1.0% from the Closing Date through March 20, 2020 and (y) 0.50% from March 20, 2020 through March 20, 2021.

Pursuant to the Credit Agreement, the Company and its subsidiaries must also comply with certain customary affirmative covenants, such as furnishing financial statements to the Lenders, and negative covenants, including limitations on the following: incurring debt; issuing preferred and/or disqualified stock; paying dividends, repurchasing shares and, under certain conditions, making certain other restricted payments; prepaying, redeeming or purchasing subordinated debt; conducting a merger or consolidation involving the Company; engaging in certain transactions with affiliates; disposing of assets under certain circumstances; and making certain investments, in each case, other than those permitted by the Credit Agreement. In addition, commencing with the fiscal quarter ending on December 31, 2019, the Company must maintain a minimum level of consolidated liquidity, based on unrestricted cash on hand and availability under any revolving credit facility, equal to the greater of (1) the quotient of the outstanding principal amount of the senior secured notes issued pursuant to the Indenture divided by 9.5 and (2) $7,500,000.

The Credit Agreement contains customary events of default (including the Company’s failure to make any payment of principal or interest when due and payable, the failure to comply with the minimum consolidated liquidity covenant or other covenants described above, or upon a Change of Control (as defined in the Credit Agreement)), and, upon such events of default occurring and continuing, the Lenders may accelerate the loans. In the event of certain events of bankruptcy, insolvency or reorganization involving the Company or its subsidiaries, the obligations under the Credit Agreement will automatically become due and payable. With respect to any event of default due to the Company’s non-compliance with the minimum liquidity covenant (described above), the Company may, within ten business days, cure such default through the issuance of equity securities, subordinated debt securities or certain other capital contributions.

On the Closing Date and in connection with its entry into of the Credit Agreement, the Company and the Guarantors entered into the Collateral Agreement, which granted a first priority lien on substantially all of the Company’s and the Guarantors’ assets, in each case subject to certain existing liens and other exclusions.

Interim Promissory Note

On the Effective Date, pursuant to the Purchase Agreement, the Company issued a $4.5 million promissory note to an affiliate of Iroko in respect of certain inventory purchases by Iroko as a part of the Iroko Products Acquisition (the “Interim Promissory Note”). The Interim Promissory Note bears interest at a rate of 8% per annum (payable by way of increasing the principal amount of the Interim Promissory Note on each interest payment date) and matures on July 31, 2020.

At March 31, 2019, unamortized discounts and deferred financing fees on debt consist of the following:


			Deferred
(in thousands)	Discounts		Financing Fees
Series A-1 Notes, interest holiday	$	4,008	$	—
13% Notes, Royalty Rights Obligation		5,227		—
Credit agreement		198		253
	$	9,433	$	253

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The following table sets forth the Company’s estimated future principal payments as of March 31, 2019, and excludes payments to be made under the Royalty Rights Obligation, which are included in the carrying value of the Company’s current and non-current debt on the Company’s Consolidated Balance Sheet at March 31, 2019:


(in thousands)
Remainder of 2019	$	217
2020		6,672
2021		4,632
2022		12,050
2023		9,897
2024		71,092

Predecessor Company Debt

Former 13% Senior Secured Notes

In August 2016 and January 2017, the Company issued a total of $80.0 million aggregate principal amount of the 13% Notes (the “former 13% Notes”). The former 13% Notes were sold only to qualified institutional buyers within the meaning of Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”).

The former 13% Notes were senior secured obligations of the Company and equal in right of payment to all existing and future pari passu indebtedness of the Company (including the 5.50% Notes), were senior in right of payment to all existing and future subordinated indebtedness of the Company, had the benefit of a security interest in the Notes collateral and are junior in lien priority in respect of any collateral that secures any first priority lien obligations incurred, which includes intellectual property, from time to time in accordance with the indenture governing the former 13% Notes.

On the Effective Date, in addition to the cash settlement of $20.0 million, the outstanding 13% Notes were converted into the number of shares of common stock of the Company (or Warrants) representing, in the aggregate, 19.4% of the shares outstanding as of the Effective Date and the issuance of the Series A-1 Notes of $50.0 million. As of December 31, 2018, a total of $80.0 million in principal amount of the former 13% Notes remained outstanding. Refer to Note 3 – Fresh Start Accounting for further details.

Former 5.50% Convertible Senior Notes

In April and May 2015, the Company issued through a private placement $61.0 million in aggregate principal amount of the 5.50% Convertible Senior Notes (the “5.50% Notes”).

The 5.50% Notes were general, unsecured and unsubordinated obligations of the Company and ranked senior in right of payment to all of the Company’s indebtedness that was expressly subordinated in right of payment to the 5.50% Notes. The 5.50% Notes were effectively subordinated to any secured indebtedness of the Company to the extent of the value of the assets securing such indebtedness.

On the Effective Date, the outstanding 5.50% Notes were cancelled and the 5.50% noteholders received shares of common stock of the Successor Company (or warrants) representing, in the aggregate, 16.1 % of the shares of common stock outstanding as of the Effective Date. As of March 31, 2019, the 5.50% Notes were no longer outstanding. As of December 31, 2018, a total of $24.7 million in principal amount of the 5.50% Notes remained outstanding. Refer to Note 3 – Fresh Start Accounting for further details.

Former 6.50% Convertible Notes

In December 2017, the Company entered into exchange agreements (the “Exchange Agreements”) with certain holders (the “Holders”) of the Company’s 5.50% Notes pursuant to which the Holders agreed to exchange, in the aggregate, approximately $36.4 million of outstanding principal amount of the 5.50% Notes for, in the aggregate, (i)

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approximately $23.9 million of 6.50% Convertible Senior Notes due 2024 (the “6.50% Notes”) issued by the Company, (ii) a warrant exercisable for 3,500,000 shares of the Company’s common stock at an exercise price of $0.01 per share and (iii) payments, in cash, of all accrued but unpaid interest as of the closing on the 5.50% Notes exchanged in the transaction (the “Exchange”). At the closing of the Exchange, 2,500,000 warrants were exercised. The remaining 1,000,000 warrants were exercised in January 2018.

On the Effective Date, the outstanding 6.50% Notes were cancelled and the 6.50% noteholders received shares of common stock of the Successor Company (or warrants) representing, in the aggregate, 15.5% of the shares of common stock outstanding as of the Effective Date. As of March 31, 2019, the 6.50% Notes were no longer outstanding. As of December 31, 2018, a total of $23.9 million in principal amount of the 6.50% Notes remained outstanding. Refer to Note 3 – Fresh Start Accounting for further details.

10. Leases

The Company leases office space, vehicles and office equipment under operating lease arrangements. The leases have initial lease terms ranging from one to five years. Certain of the Company’s leases contain renewal options to extend the lease, which if the Company determined it is reasonably certain to exercise, that renewal option would be included in the total lease term.

The Company accounts for its leases in accordance with ASC 842. The Company determines if an arrangement is a lease at contract inception. A lease exists when a contract conveys to the Company the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. The definition of a lease embodies two conditions: (1) there is an identified asset in the contract that is land or a depreciable asset (i.e., property, plant, and equipment), and (2) the Company has the right to control the use of the identified asset and to obtain substantially all of the economic benefits from using the underlying asset.

Right-of-use assets represent the Company’s right to control the use of an explicitly or implicitly identified fixed asset for a period of time and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating leases where the Company is the lessee are included in ROU assets, Other current liabilities and Other long-term liabilities on the Company’s consolidated balance sheets. The lease liabilities are measured at the present value of the unpaid lease payments at the lease commencement date. Key estimates and judgments include how the Company determined the incremental borrowing rate (“IBR”) it uses to present value the unpaid lease payments, the lease term and lease payments.

ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its IBR. The Company’s leases do not provide an implicit rate, therefore, management uses its IBR based on the information available at commencement date in determining the present value of lease payments.

The lease term for all of the Company’s leases includes the noncancelable period of the lease. Lease payments included in the measurement of the lease asset or liabilities comprised of fixed payments. The ROU asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date less any lease incentives received. For operating leases, the ROU asset is subsequently measured throughout the lease term at the carrying amount of the lease liability, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company recognizes lease expense associated with its short-term leases as an expense on a straight-line basis over the lease term. Variable lease payments are presented in the Company’s consolidated statements of operations in the same line item as expense arising from fixed lease payments for operating leases.

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The components of lease expense were as follows:


	Successor		Predecessor
	Period from		Period from
	February 1, 2019		January 1, 2019		Three months
	through		through		ended
(in thousands)	March 31, 2019		January 31, 2019		March 31, 2018

Operating lease expense:
Fixed lease cost	$	139	$	69	$	—
Variable lease cost		—		—		—
Short-term lease cost		—		—		—
Total operating lease expense	$	139	$	69	$	—

Supplemental balance sheet information related to leases was as follows:


		Successor
(in thousands)	Location in Balance Sheet	As of March 31, 2019
Operating leases
Operating lease ROU asset	ROU asset - operating lease	$	1,745

Current operating lease liabilities	Other current liabilities		1,043
Non-current operating lease liabilities	Other liabilities		1,165
Total operating lease liability		$	2,208

Supplement lease term and discount rate information related to leases was as follows:


	Successor
	As of March 31, 2019
Weighted-average remaining lease terms

Weighted-average remaining lease term		2.54	years

Weighted-average discount rate		8.0%

Supplemental cash flow information related to leases was as follows:


	Successor		Predecessor
	Period from		Period from
	February 1, 2019		January 1, 2019		Three months
	through		through		ended
(in thousands)	March 31, 2019		January 31, 2019		March 31, 2018

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	211	$	—	$	—

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	—	$	2,478	$	—

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Future minimum lease payments under noncancelable leases as of March 31, 2019 were as follows:


(in thousands)
2019 (excludes the three months ended March 31, 2019)	$	953
2020		809
2021		555
2022		93
2023		—
Thereafter		—
Total lease payments		2,410
Less: Imputed interest		(202)
Total minimum lease payments	$	2,208

11. Stockholders’ Equity

Successor

Preferred Stock

The Successor Company’s certificate of incorporation authorizes it to issue up to 5,000,000 shares of preferred stock with a par values of $0.001 per share. As of March 31, 2019, there were no preferred shares outstanding.

Common Stock

The Successor Company’s certificate of incorporation authorizes it to issue up to 100,000,000 shares of common stock with a par value of $0.001 per share. As of March 31, 2019, there were 9,360,968 shares issued and outstanding. Outstanding shares were issued to holders of Predecessor first lien obligations and convertible notes claims of 4,774,093 shares and Iroko and its affiliates of 4,586,875 shares.

Amended and Restated Charter and Bylaws

On February 1, 2019, in accordance with the Plan, the Company’s Fourth Amended and Restated Certificate of Incorporation (as amended and restated, the “A&R Charter”) was filed with the Secretary of State of the State of Delaware, at which time the A&R Charter became effective. Among other things, the A&R Charter decreases the

number of shares of authorized common stock of the Company from 275,000,000 to 100,000,000 and decreases the maximum number of directors that may serve on the Board to seven.

On the Effective Date, pursuant to the Plan, the Company’s Second Amended and Restated Bylaws (the “A&R Bylaws”) became effective. Among other things, the A&R Bylaws provide for special director nomination procedures, related party transaction approval procedures and independence requirements with respect to certain directors appointed by the Supporting Noteholders pursuant to the Plan (or such directors successors), in each case, for a two-year period following the Effective Date.

Stockholders’ Agreement

On the Effective Date, the Company entered into a stockholders’ agreement (the “Stockholders’ Agreement”) with Iroko and certain of its affiliates. Pursuant to the Stockholders’ Agreement, Iroko and the other stockholder parties have agreed to a customary lock-up with respect to their shares of common stock for a period of 90 days following the Effective Date and a customary standstill provision for a period of 24 months following the Effective Date, in each case, subject to certain exceptions. In addition, pursuant to the Stockholders’ Agreement, the stockholder parties are entitled to designate two nominees to the Company’s board of directors for so long as such entities hold 25% of the equity consideration received on the Effective Date. The Stockholders’ Agreement also provides for customary preemptive rights in favor of the stockholder parties with respect to future issuance of equity securities by the Company, subject to certain exceptions.

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Warrant Agreements

On the Effective Date, the Company entered into warrant agreements (the “Warrant Agreements”) with Iroko, certain of Iroko’s affiliates and certain other parties entitled to receive shares of the Company’s common stock as consideration pursuant to the Purchase Agreement or in satisfaction of certain claims pursuant to the Plan. Pursuant to the Warrant Agreements, the Company issued warrants to purchase up to an aggregate of 4,972,365 shares of the Company’s common stock. The warrants are exercisable at any time at an exercise price of $0.001 per share, subject to certain ownership limitations including, with respect to Iroko and its affiliates, that no such exercise may increase the aggregate ownership of such parties above 49% of the number of shares of its common stock then outstanding for a period of 18 months. All of the Company’s outstanding warrants have similar terms whereas under no circumstance may the warrants be net-cash settled. As such, all warrants are equity-classified.

Predecessor

In connection with the Company’s Plan of Reorganization and emergence from bankruptcy, all equity interests in the Predecessor Company were cancelled, including common stock and equity-based awards.

Registration Rights Agreement

On the Effective Date, the Company entered into a registration rights agreement (the “Registration Rights Agreement”) with Iroko pursuant to which the Company agreed to file with the SEC, upon Iroko’s request at any time following the date which is 180 days following the date on which any equity securities of the Company are accepted for listing on any national securities exchange, a registration statement on Form S-1 or Form S-3, and thereafter to use its commercially reasonable efforts to cause to be declared effective as promptly as practicable, one or more registration statements for the offer and resale of the Company’s common stock held by Iroko and certain of its affiliates. The Registration Rights Agreement contains other customary terms and conditions, including, without limitation, provisions with respect to blackout periods, underwrite cutbacks, reimbursement of expenses and indemnification.

12. Fair Value Measurements

The Company measures certain assets and liabilities at fair value in accordance with ASC 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability (the exit price) in an orderly transaction between market participants at the measurement date. The guidance in ASC 820 outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. In determining fair value, the Company maximizes the use of quoted prices and observable inputs. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources. The fair value hierarchy is broken down into three levels based on the source of inputs as follows:

Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2—Valuations based on observable inputs and quoted prices in active markets for similar assets and liabilities.

Level 3—Valuations based on inputs that are unobservable and models that are significant to the overall fair value m easurement.

Cash equivalents - Cash equivalents primarily consisted of money market funds with overnight liquidity and no stated maturities. The Company classified cash equivalents as Level 1, due to their short-term maturity, and measured the fair value based on quoted prices in active markets for identical assets.

Acquisition-related contingent consideration - As of March 31, 2019, the Company had obligations to make contingent payment consideration for future royalties to Iroko based upon annual INDOCIN product net sales over $20.0 million . Pursuant to the Iroko Products Acquisition, the Company recorded the acquisition-date fair value of these contingent

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liabilities, based on the likelihood of contingent earn-out payments. The earn-out payments are subsequently remeasured to fair value each reporting date. The Company classified the acquisition-related contingent consideration liabilities to be settled in cash as Level 3, due to the lack of relevant observable inputs and market activity. Changes in assumptions described above could have an impact on the payout of contingent consideration.

The following fair value hierarchy table presents information about each major category of the Company’s financial assets and liabilities measured at fair value on a recurring basis :


(in thousands)	Fair Value Measurements as of March 31, 2019
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents (money market funds)	$	76	$	—	$	—	$	76
Total assets	$	76	$	—	$	—	$	76

Liabilities
Acquisition-related contingent consideration	$	—	$	—	$	15,000	$	15,000
Total liabilities	$	—	$	—	$	15,000	$	15,000


(in thousands)	Fair Value Measurements as of December 31, 2018
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents (money market funds)	$	22,996	$	—	$	—	$	22,996
Marketable securities, available-for-sale		—		4,988		—		4,988
Total assets	$	22,996	$	4,988	$	—	$	27,984

13. Net (Loss) Income Per Common Share

On the Effective Date the Predecessor Company's equity was cancelled and new equity was issued. Additionally, the Predecessor Company's 5.50% and 6.50% Convertible Notes were cancelled. See Note 11 – Stockholders' Equity and Note 16 – Reorganization Items for further details.

Basic net loss per common share excludes dilution for potential common stock issuances and is computed by dividing net loss by the weighted-average number of shares of common stock outstanding for the period. 4,972,364 shares of common stock issuable upon the exercise of warrants “penny warrants” are included in the number of outstanding shares used for the computation of basic and diluted loss per share.

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The following table sets forth the computation of basic and diluted weighted average shares outstanding and net income (loss) per share for the periods indicated:


	Successor		Predecessor		Predecessor
	Period from		Period from
	February 1, 2019		January 1, 2019		Three Months
	through		through		Ended
(in thousands, except share and per share data)	March 31, 2019		January 31, 2019		March 31, 2018

Basic and diluted net income (loss) per common share calculation:
Net (loss) income per share of common stock—basic and diluted	$	(10,483)	$	107,240	$	(12,354)
Weighted average common stock outstanding		14,333,332		56,547,101		47,303,659
Net (loss) income per share of common stock—basic and diluted	$	(0.73)	$	1.90	$	(0.26)

14. Stock-Based Compensation

Successor

2019 Stock-Based Incentive Compensation Plan

In March 2019, the Company adopted its 2019 Stock-Based Incentive Compensation Plan (the “2019 Stock Plan”) for the benefit of employees, non-employee directors and consultants of the Company and its subsidiaries and affiliates. The 2019 Stock Plan is designed to attract and retain valued employees, consultants and non-employee directors by offering them a greater stake in the Company’s success and a closer identity with it, and to encourage ownership of the Company’s stock by such persons. Under the 2019 Stock Plan, 2,150,000 shares of the Company’s common stock are reserved for issuance, including 1,433,333 shares reserved for grants to executives and 716,667 shares reserved for persons other than executives, subject to equitable adjustment based on the effect of certain corporate transactions. The Stock Plan will be administered by the Compensation Committee of the Board (the “Compensation Committee”). In the discretion of the committee, the right of a 2019 Stock Plan participant to exercise or receive a grant or settlement of any award, and the timing thereof, may be subject to performance goals as may be specified by the committee. Awards granted to executives that are forfeited or otherwise terminate will once again be available for issuance to executives under the 2019 Stock Plan. Similarly, awards granted to persons other than executives that are forfeited or otherwise terminate will once again be available for issuance to persons who are not executives under the Stock Plan. Any award granted under the 2019 Stock Plan, including a common stock award, will be subject to mandatory repayment by the participant to the Company pursuant to the terms of any “clawback” or recoupment policy that is directly applicable to the 2019 Stock Plan and set forth in an award agreement or as required by applicable law.

For restricted stock awards and restricted stock units that vest subject to the satisfaction of service requirements, stock-based compensation expense is measured based on the fair value of the award on the date of grant and is recognized as expense on a straight-line basis over the requisite service period. All of the restricted stock awards and restricted stock units reflected above vest based on performance conditions or over time as stipulated in the individual award agreements. In the event of a change in control, the unvested awards will be accelerated and fully vested immediately prior to the change in control.

On March 26, 2019, the Compensation Committee of the Company granted 511,000 time-based RSUs and 509,000 performance-based RSUs to certain executive officers of the Company. 367,000 of the time-based RSUs vest ratably over three years. 144,000 of the time-based RSUs vest 100% on the first anniversary of the date of grant. 367,000 of the performance-based RSUs are eligible to vest as follows: a maximum of 50% are eligible to vest on each of March 1, 2020 and March 1, 2021 (provided that at least 75% of the Company’s 2019 Corporate Goals are attained — ratably, between 75% and 100% attainment). 142,000 of the performance-based RSUs are scheduled to vest as follows: a

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maximum of 100% are eligible to vest on March 1, 2020 (provided that at least 75% of the Company’s 2019 Corporate Goals are attained - ratably, between 75% and 100% attainment).

The Company used the Black-Scholes model to estimate the compensation cost for the March 2019 Grant. The Company recognized stock-based compensation expense of $60,000 in the Successor period February 1, 2019 through March 31, 2019.

As of March 31, 2019, there was $6.1 million of total unrecognized stock-based compensation expense, related to restricted stock units under the 2019 Plan.

Time-Based Restricted Stock Unit Award Agreement

Time-based restricted stock units granted under the 2019 Stock Plan will be awarded pursuant to a time-based restricted stock unit agreement with the Company. On March 26, 2019, the Compensation Committee approved a form of time-based Restricted Stock Unit Award Agreement (the “Time RSU Agreement”). The Time RSU Agreement provides for grants of restricted stock units (“RSUs”), with two potential vesting schedules: (i) 1/3 of the RSUs vesting on each of the first three anniversaries of the date of grant; and (ii) 100% of the RSUs vesting on the first anniversary of the date of grant, in each case subject to the participant’s continued employment with the Company through each such anniversary date. In the event of a change of control (as defined in the 2019 Stock Plan) prior to a termination of the participant’s service, any remaining unvested time-based RSUs will vest and be settled immediately prior to the change of control. Participants holding time-based RSUs will be entitled to receive the benefit of any dividends paid on shares in the form of additional RSUs, the number of which will be determined by a formula set forth in the Time RSU Agreement.

Performance-Based Restricted Stock Unit Award Agreement

Performance-based RSUs granted under the 2019 Stock Plan will be awarded pursuant to a performance-based restricted stock unit agreement with the Company. On March 26, 2019, the Compensation Committee approved a form of performance-based Restricted Stock Unit Award Agreement (the “Performance RSU Agreement”). The Performance RSU Agreement provides for grants of RSUs, which only vest if the Company achieves at least 75% of its 2019 Corporate Goals, as set by the Board in March 2019, with the exact number of performance-based RSUs vesting pro-rated based on the level of achievement between 75% and 100%. 2019 Corporate Goals include financial performance, business development goals and other corporate metrics. Assuming those parameters are satisfied, the performance-based RSUs have two potential issuance schedules: (i) one with 50% of the performance-based RSUs eligible for issuance on each of March 1, 2020 and March 1, 2021 and (ii) one with 100% of the performance-based RSUs eligible for issuance on March 1, 2020, in each case subject to the participant’s continued employment with the Company through each such anniversary date. In the event of a change of control (as defined in the 2019 Stock Plan) prior to a termination of the participant’s service, any remaining unvested performance-based RSUs will vest and be settled immediately prior to the change of control. Participants holding performance-based RSUs will be entitled to receive the benefit of any dividends paid on shares in the form of additional restricted stock units, the number of which will be determined by a formula set forth in the Performance RSU Agreement.

Shares Available for Future Grant Under Equity Compensation Plans

As of March 31, 2019, the Company has reserved the following shares to be granted under its 2019 Stock Plan:


Shares initially reserved under the 2019 Plan		2,150,000
Time-based restricted stock units granted under the 2019 Plan		(511,000)
Performance-based restricted stock units granted under the 2019 Plan		(509,000)
Remaining shares available for future grant		1,130,000

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Predecessor

The Predecessor Company’s common stock was cancelled and new common stock was issued on the Effective Date. Accordingly, the Predecessor Company’s then existing stock-based compensation awards were also cancelled, which resulted in the recognition of any previously unamortized expense on the date of cancellation. Stock-based compensation for the Successor and Predecessor periods are not comparable.

The Predecessor Company had granted stock-based awards that were cancelled upon emergence from bankruptcy. In conjunction with the cancellation, the Predecessor Company accelerated the unrecognized stock-based compensation expense and recorded $4.1 million of compensation expense in the period from January 1, 2019 to January 31, 2019.

15. Restructuring and Other Charges

The following table presents a summary of the Company’s restructuring and other charges for the Successor period February 1, 2019 through March 31, 2019 and the Predecessor periods January 1, 2019 through January 31, 2019 and the three months ended March 31, 2018:


	Successor		Predecessor
	Period from		Period from
	February 1, 2019		January 1, 2019		Three months
	through		through		ended
(in thousands)	March 31, 2019		January 31, 2019		March 31, 2018

Severance	$	—	$	776	$	—
Professional fees		—		23		—
Total restructuring and other costs	$	—	$	799	$	—

Restructuring and other charges for the Predecessor period January 1, 2019 through January 31, 2019 primarily reflect severance costs related to the closure of the Denmark facility.

16. Reorganization items

The Company incurred reorganization items of $606,000 subsequent to the bankruptcy filing in the Successor period February 1, 2019 through March 31, 2019 and a gain of $115.2 million in the Predecessor period January 1, 2019 through January 31, 2019 related to its Chapter 11 filing. See Note 3—Fresh Start Accounting for further details.


	Successor		Predecessor
	Period from		Period from
	February 1, 2019		January 1, 2019		Three months
	through		through		ended
(in thousands)	March 31, 2019		January 31, 2019		March 31, 2018

Professional fees	$	—	$	2,612	$	—
Iroko acquisition related fees		—		2,138		—
Legal fees		—		713		—
Other reorganization expenses		—		473		—
Bankruptcy fees		606		42		—
Gain on extinguishment of debt		—		(29,976)		—
Revaluation of assets and liabilities		—		(91,171)		—
Total reorganization items	$	606	$	(115,169)	$	—

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17. Commitments and Contingencies

Legal Proceedings

On January 27, 2017 and February 10, 2017, respectively, two putative securities class actions were filed in the U.S. District Court for the Eastern District of Pennsylvania that named as defendants Egalet Corporation and current officer Robert S. Radie and former officers Stanley J. Musial and Jeffrey M. Dayno (the “Officer Defendants” and together with Egalet Corporation, the “Defendants”). These two complaints, captioned Mineff v. Egalet Corp. et al., No. 2:17-cv-00390-MMB and Klein v. Egalet Corp. et al., No. 2:17-cv-00617-MMB, assert securities fraud claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) on behalf of putative classes of persons who purchased or otherwise acquired Egalet Corporation securities between December 15, 2015 and January 9, 2017 and seek damages, interest, attorneys’ fees and other expenses. On May 1, 2017, the Court entered an order consolidating the two cases (the “Securities Class Action Litigation”) before it, appointing the Egalet Investor Group (consisting of Joseph Spizzirri, Abdul Rahiman and Kyle Kobold) as lead plaintiff and approving their selection of lead and liaison counsel. On July 3, 2017, the plaintiffs filed their consolidated amended complaint, which named the same Defendants and also asserted claims for purported violations of Sections 10(b) and 20(a) of the Exchange Act. Plaintiffs brought their claims individually and on behalf of a putative class of all persons who purchased or otherwise acquired shares of Egalet between November 4, 2015 and January 9, 2017 inclusive. The consolidated amended complaint based its claims on allegedly false and/or misleading statements and/or failures to disclose information about the likelihood that ARYMO ER would be approved for intranasal abuse-deterrent labeling. The Defendants moved to dismiss the consolidated amended complaint on September 1, 2017 (the “Motion to Dismiss”), the plaintiffs filed their opposition on October 31, 2017, and the Defendants filed their reply on December 8, 2017. The Court heard oral arguments on the Motion to Dismiss on February 20, 2018 and entered an order pursuant to which the plaintiffs filed a motion for leave to file a second amended complaint on March 6, 2018. The Defendants responded on March 20, 2018 and the plaintiffs filed their reply on March 27, 2018. The Court heard oral arguments on the plaintiffs’ motion for leave to file a second amended complaint on July 12, 2018. On August 2, 2018, the Court granted the Defendants’ Motion to Dismiss and dismissed the Securities Class Action Litigation with prejudice. On August 31, 2018, plaintiffs filed their notice of appeal with the United States Court of Appeal for the Third Circuit. On November 7, 2018, the Defendants filed a notice of suggestion of bankruptcy and unopposed motion to stay the appeal as to the Officer Defendants (the appeal was automatically stayed as to the Company upon the Chapter 11 filing). On February 6, 2019, the Officer Defendants filed a Notice of Lifting of Automatic Stay of Proceedings and Discharge of Subordinated Claims, as plaintiffs’ claim against us was extinguished as part of the bankruptcy, which restarted the appellate process. On April 22, 2019, plaintiffs filed their brief with the United States Court of Appeals for the Third Circuit. The Company disputes the allegations in the lawsuit and intend to defend these actions vigorously. The Company cannot determine the likelihood of, nor can it reasonably estimate the range of, any potential loss, if any, from these lawsuits.

On May 1, 2019, the Company was served in a lawsuit entitled International Brotherhood of Electrical Workers Local 728 Family Healthcare Plan v. Allergan, PLC, et al., which was filed in the Philadelphia County Court of Common Pleas on March 29, 2019 in which the Company was named as a defendant. In the lawsuit, plaintiff alleges that the Company, along with numerous other named defendants, manufactured, promoted, sold and distributed branded and generic opioid pharmaceutical products in the Commonwealth of Pennsylvania, State of Florida and the City of Philadelphia. Plaintiffs assert that the defendants’ conduct has exacted a financial burden on the plaintiff which has unnecessarily spent considerably more on costs directly attributable to opioid use and over-use in the Commonwealth of Pennsylvania and City of Philadelphia. The Company disputes the allegations made in this lawsuit and intends to defend these actions vigorously. The Company cannot determine the likelihood of, nor can it reasonably estimate the range of, any potential loss, if any, from this lawsuit.

In January 2017, Lupin Pharmaceuticals, Inc. and Lupin Limited (together “Lupin”) notified iCeutica Pty Ltd. and Iroko Pharmaceuticals, LLC that Lupin had submitted an Abbreviated New Drug Application (“ANDA”) to United States Food and Drug Administration (“FDA”) requesting permission to manufacture and market a generic version of VIVLODEX® (meloxicam). In the notice, Lupin alleges that U.S. Patent No. 9,526,734 covering meloxicam is invalid as obvious and that Lupin’s generic product will not infringe any claim of the patent. On February 10, 2017, Plaintiffs iCeutica Pty Ltd. and Iroko Pharmaceuticals, LLC filed a complaint in the District Court for the District of Maryland alleging infringement of U.S. Patent No. 9,526,734 by Lupin under 35 U.S.C. sections 271(e)(2) and 271(a)-(b). On

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June 5, 2017, Lupin sent a second notice alleging that U.S. Patent No. 9,649,318 was invalid and not infringed. Plaintiffs filed an amended complaint alleging infringement of U.S. Patent Nos. 9,526,734 and 9,649,318 by the Lupin defendants under 35 U.S.C. sections 271(e)(2) and 271(a)-(b) on July 7, 2017. On February 1, 2018, the district court granted Lupin’s motion for summary judgment on non-infringement and dismissed Plaintiffs’ amended complaint. Plaintiffs filed a timely notice of appeal to the United States Court of Appeals for the Federal Circuit and filed their opening brief on July 13, 2018. Lupin filed its answering brief on October 22, 2018 and Plaintiffs filed their reply brief on January 4, 2019. With the Company’s acquisition of certain assets of Iroko and the assignment of Iroko’s exclusive license to U.S. Patent Nos. 9,526,734; 9,526,734; and 9,649,318 to the Company, Egalet has been substituted for Iroko as a Plaintiff in this matter. The Company cannot determine the likelihood of, nor can it reasonably estimate the range of, any potential loss, if any, from this lawsuit.

In March 2018, Novitium Pharma LLC (“Novitium”) notified iCeutica Pty Ltd. and Iroko Pharmaceuticals, LLC that Novitium had submitted an ANDA to FDA requesting permission to manufacture and market a generic version of VIVLODEX® (meloxicam). In the notice, Novitium alleges that its generic product will not infringe any claim of U.S. Patent Nos. 9,526,734; 9,526,734; and 9,649,318. On April 20, 2018, Plaintiffs iCeutica Pty Ltd and Iroko Pharmaceuticals, LLC filed a complaint in the District Court for the District of Delaware alleging infringement of United States Patent Nos. 9,526,734, 9,649,318, and 9,808,468 by Novitium under 35 U.S.C. sections 271(e)(2) and 271(a)-(c). With the Company’s acquisition of certain assets of Iroko and the assignment of Iroko’s exclusive license to U.S. Patent Nos. 9,526,734; 9,526,734; and 9,649,318 to the Company, Egalet has been substituted for Iroko as a Plaintiff in this matter. The Company cannot determine the likelihood of, nor can it reasonably estimate the range of, any potential loss, if any, from this lawsuit.

On October 30, 2018, the Company filed the Bankruptcy Petitions in the U. S. Bankruptcy Court for the District of Delaware. The Company requested that the Chapter 11 cases (the “Chapter 11 Cases”) be jointly administered for procedural purposes only under the caption In re Egalet Corporation, et al., Case No. 18-12439. Upon filing, the Company intended to operate its business as a “debtor-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The Company continued ordinary course operations substantially uninterrupted during the Chapter 11 Cases and sought approval from the Bankruptcy Court for relief under certain “first day” motions authorizing the Debtors to continue to conduct its business in the ordinary course. On January 14, 2019, the Court entered the Confirmation Order confirming the Plan under Chapter 11 of the Bankruptcy Code. On the Effective Date, and substantially concurrent with the consummation of the Iroko Products Acquisition, the Plan became effective. On March 26, 2019, the Bankruptcy Court issued a final decree closing the Chapter 11 Cases.

18. Acquisitions and License and Collaboration Agreements

Purchase Agreement with Iroko

On October 30, 2018, the Company entered into the Purchase Agreement with Iroko pursuant to which, upon the terms and subject to the conditions set forth therein, the Company acquired certain assets and rights of Iroko, referred to in the Purchase Agreement as the “Transferred Assets,” and assumed certain liabilities of Iroko, referred to in the Purchase Agreement as the “Assumed Liabilities,” including assets related to Iroko’s marketed products, the SOLUMATRIX products under the iCeutica License Agreement and the INDOCIN products. The Iroko Products Acquisition was completed on January 31, 2019.

iCeutica License Agreement

Pursuant to the Purchase Agreement, on the Effective Date, the Company assumed the rights and obligations of Iroko and its subsidiaries pursuant to the Amended and Restated Nano-Reformulated Compound License Agreement, dated October 30, 2018 (the “iCeutica License”), with iCeutica Inc. and iCeutica Pty Ltd. (collectively, “iCeutica”) to license certain technology, intellectual property and expertise related to iCeutica’s SOLUMATRIX ® technology, meloxicam and certain other rights of iCeutica.

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Pursuant to the iCeutica License, iCeutica granted to the Company (as the assignee of Iroko) a sole and exclusive, world-wide right and license under certain iCeutica intellectual property to make, use, sell, offer and import certain products made from the compounds indomethacin, diclofenac, naproxen and meloxicam. In consideration of the grant of the iCeutica License, the Company is obligated to pay to iCeutica a mid-single digit royalty on all Net Sales of any licensed products, including pro rata portions of any combination products that include a licensed product.

The iCeutica License will terminate on a country-by-country basis until the expiration of the last-to-expire of any patent rights in such country, and otherwise twenty years after the date of the first commercial introduction of a licensed product in such country. Either party may terminate the license in its entirety if the other party materially breaches the License Agreement, subject to applicable cure periods. The iCeutica License also contains customary provisions for an agreement of this type related to intellectual property matters, confidentiality, representations and warranties and indemnification.

Iroko Royalty Arrangement

Pursuant to the Purchase Agreement, on the Effective Date, the Company is also obligated to pay to Iroko a 5% royalty payment on Net Sales of TIVORBEX, ZORVOLEX and the development product acquired on a quarterly basis.

Collaboration and License Agreement with Acura

In January 2015, the Company entered into the OXAYDO License Agreement with Acura to commercialize OXAYDO tablets containing Acura’s Aversion Technology. OXAYDO (formerly known as Oxecta®) is currently approved by the FDA for marketing in the United States. in 5 mg and 7.5 mg strengths, but was not actively marketed at the time of the OXAYDO License Agreement. Under the terms of the OXAYDO License Agreement, Acura transferred the approved New Drug Application (“NDA”) for OXAYDO to the Company and the Company was granted an exclusive license under Acura’s intellectual property rights for development and commercialization of OXAYDO worldwide in all strengths.

Under the OXAYDO License Agreement, Acura will be entitled to a one-time $12.5 million milestone payment when OXAYDO net sales reach a level of $150.0 million in a calendar year.

In addition, Acura receives from the Company, a tiered royalty percentage based on sales thresholds. Based on the Company’s current level of net sales, the royalty percentage payable to Acura is in the mid-single digits; however, the percentage may increase in future years in the event the Company achieves the higher sales thresholds set forth in the License Agreement. In addition, in any calendar year in which net sales exceed a specified threshold, Acura is entitled receive a double-digit royalty on all OXAYDO net sales in that year. The Company’s royalty payment obligations commenced on the first commercial sale of OXAYDO and expire, on a country-by-country basis, upon the expiration of the last to expire valid patent claim covering OXAYDO in such country (or if there are no patent claims in such country, then upon the expiration of the last valid claim in the U.S.). Royalties will be reduced upon the entry of generic equivalents, as well for payments required to be made by the Company to acquire intellectual property rights to commercialize OXAYDO, with an aggregate minimum floor. The term of the Acura license agreement expires, in its entirety, upon the final expiration of any such patent claim in any country. OXAYDO is currently sold in the United States and is covered by six U.S. patents that expire between 2023 and 2025. Patents covering OXAYDO in foreign jurisdictions expire in 2024. Either the Company or Acura may terminate the license agreement for certain customary reasons, including cause, insolvency or patent challenge. The Company may terminate the license agreement upon 90 days prior written notice.

Purchase Agreement with Luitpold

In January 2015, the Company entered into and consummated the transactions contemplated by the SPRIX Purchase Agreement with Luitpold (the “SPRIX Purchase Agreement”), pursuant to which, the Company acquired certain assets and liabilities associated with SPRIX Nasal Spray, the Company was assigned an exclusive license with Recordati Ireland Ltd. (“Recordati”) for intranasal formulations of ketorolac tromethamine (the “Licensed Product”), the

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active ingredient in SPRIX Nasal Spray. The Company is required to pay a fixed, single-digit royalty to Recordati on net sales of the Licensed Product. The exclusive term of the license agreement expires, on a country-by-country basis, on the later of the final expiration of any patent right in such country that contains a valid claim covering the Licensed Product, or ten years from the date of the first commercial sale of the Licensed Product in such country, and thereafter the Company will retain a non-exclusive, perpetual license in such country. In addition, during the exclusivity period with respect to the United States, Canada and Latin America, the royalty payable to Recordati is decreased if no patent containing a valid claim is in force in the country at the time of sale. SPRIX Nasal Spray is currently sold in the United States and the patent expired in December 2018 and the first commercial sale of SPRIX Nasal Spray in the United States occurred in May 2011.

19. Income Taxes

The Company had a deferred tax liability of $24,000 as of March 31, 2019 and March 31, 2018, respectively . The Company maintains a full valuation allowance against all net deferred tax assets for federal and foreign purposes except for the net deferred tax liability as management has determined that it is not more likely than not that the Company will realize these future tax benefits.

Tax Cuts and Jobs Act (the "Tax Act"), enacted on December 22, 2017, became effective January 1, 2018. The Tax Act had significant changes to U.S. tax law, including the lowering of U.S. corporate income tax rates, implementing a territorial tax system, imposing a one-time transition tax on deemed repatriated earnings of foreign subsidiaries and modified the taxation of other income and expense items. Due to the valuation allowance on the Company’s deferred tax assets, these provisions do not have any material impact on the Company.

The Tax Act contains additional international provisions which may impact the Company prospectively, including the tax on Global Intangible Low-Taxed Income. The Company does not believe the impact will be material given the historical losses in its international subsidiary and projected future losses.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and result of operations should be read in conjunction with our 2018 Annual Report on Form 10-K filed with the SEC.

Forward Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. In some cases, you can identify forward-looking statements by the words “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “project,” “potential,” “continue,” “seek to” and “ongoing,” or the negative of these terms, or other comparable terminology intended to identify statements about the future. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Form 10-Q, we caution you that these statements are based on a combination of facts and factors currently known by us and our expectations of the future, about which we cannot be certain, including, but not limited to, risks related to: anticipated benefits of the Iroko acquisition and the impact of the Iroko acquisition on our earnings, capital structure, strategic plan and results of operations; our ability to continue as a going concern; the impact of our bankruptcy on our business going forward, including with regard to relationships with vendors and customers, employee attrition, and the costs and expenses resulting from our bankruptcy; the trading price of our common stock and the liquidity of the trading market with respect thereto; our ability to satisfy Nasdaq initial listing requirements; our ability to recruit or retain key scientific or management personnel or to retain our executive officers; our ability to obtain and maintain regulatory approval of our products and the labeling claims that we believe are necessary or desirable for successful commercialization of our products; the impact of strengthening any of the labels for our products; our ability to maintain the intellectual property position of our products; our ability to operate our business without infringing the intellectual property rights of others; our ability to identify and reliance upon qualified third parties to manufacture our products; our ability to execute on our sales and marketing strategy, including developing relationships with customers, physicians, payors and other constituencies; our ability to commercialize our products, and to do so successfully; the rate and degree of receptivity in the marketplace and among physicians to our products; the costs of commercialization activities, including marketing, sales and distribution; the size and growth potential of the markets for our products, and our ability to service those markets; our ability to obtain reimbursement and third-party payor contracts for our products; the impact of commercial access wins on patient access to our products; the entry of any generic products for SPRIX Nasal Spray or our other products; any delay in or inability to reformulate SPRIX Nasal Spray; our ability to find and hire qualified sales professionals; the success of products that compete with our products that are or become available; the regulatory environment and recently enacted and future legislation and regulations regarding the healthcare system, including relating to social concerns about limiting the use of opioids; the outcome of any litigation in which we are or may be involved; our ability to integrate and grow any businesses or products that it may acquire; and general market conditions.

You should refer to the “Risk Factors” section of our most recent Annual Report on Form 10-K (which are incorporated herein by reference) and our other filings with the SEC for a discussion of additional important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these risks and uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements included herein or that may be made elsewhere from time to time by, or on behalf of, us. Furthermore, such forward-looking statements speak only as of the date of this report. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Our Current Business

We are a commercial-stage life sciences company focused on developing and marketing treatments for patients and healthcare providers. Egalet currently has a portfolio of innovative treatments for different types of pain and inflammation. We have seven commercially available products: SPRIX ® (ketorolac tromethamine) Nasal Spray,

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ZORVOLEX ® (diclofenac), VIVLODEX ® (meloxicam), TIVORBEX ® (indomethacin), INDOCIN ® (indomethacin) suppositories, INDOCIN ® oral suspension and OXAYDO ® (oxycodone HCI, USP) tablets for oral use only —CII. To augment our current product portfolio, we are seeking to acquire additional product candidates or approved products.

Since we acquired and licensed SPRIX Nasal Spray and OXAYDO, respectively, we have built a fully scaled commercial organization focused on educating providers taking care of individuals with pain and inflammation. As the market demonstrated a greater appetite for non-narcotics, we increased our focus on the promotion of our NSAID SPRIX Nasal Spray. We acquired the Iroko products not only because they are NSAIDs, but because they can be promoted with our existing salesforce with little additional expense. Prior to our acquisition of the five Iroko products, we had over 80 territories focused on similar targets. We added additional geographies where the Iroko products had been previously marketed. With our dedicated employee sales force, we can cover 99 percent of existing SPRIX targets and 98 percent of existing ZORVOLEX targets. Our 87 sales representatives promote our products to approximately 8,000 healthcare providers in the United States. We believe that our focused targeting, sales force execution, proper brand positioning, message delivery and education, as well as our focus on ensuring proper product access to patients who require our therapies, will help us achieve our promotional goals. As part of our commercial strategy, we are working to enhance patient access to our products where possible through minimizing co-pays, increasing availability of our products in pharmacies and, in some cases, providing more access to product samples. We believe we can significantly increase our potential annual revenue for approximately the same operating expense.

While our current focus is on our commercial products, we are seeking to acquire product candidates or approved products that we can develop and/or market. We plan to grow our business through our commercial revenue and potential business development opportunities.

Critical Accounting Policies and Significant Judgments and Estimates

We believe there have been no significant changes in our critical accounting policies and significant judgments and estimates as discussed in our audited consolidated financial statements and the notes thereto for the year ended December 31, 2018 filed on March 29, 2019, other than as noted below.

Goodwill

Goodwill is calculated as the excess of the reorganization equity value over the fair value of tangible and identifiable intangible assets pursuant to ASC 852 Reorganizations . Goodwill is not amortized but is tested for impairment at the reporting unit level at least annually or when a triggering event occurs that could indicate a potential impairment by assessing qualitative factors or performing a quantitative analysis in determining whether it is more likely than not that the fair value of net assets are below their carrying amounts. A reporting unit is the same as, or one level below, an operating segment. Our operations are currently comprised of a single, entity wide reporting unit.

We determined that no events have occurred or circumstances changed during the period from February 1, 2019 through March 31, 2019 (Successor) and the period from January 1, 2019 through January 31, 2019 (Predecessor) that would more likely than not reduce the fair value of any of our reporting units below their respective carrying amounts. However, if conditions deteriorate or there is a change in the business, it may be necessary to record impairment charges in the future.

Acquisition-related contingent consideration

Pursuant to the Iroko Products Acquisition, we have obligations relating to contingent payment consideration for future royalty obligations to Iroko based upon annual INDOCIN product net sales over $20.0 million . We recorded the acquisition-date fair value of these contingent liabilities, based on the likelihood of contingent earn-out payments. The earn-out payments are subsequently remeasured to fair value each reporting date. The fair value of the acquisition-related contingent consideration is remeasured each reporting period, with changes in fair value recorded in our Consolidated Statements of Operations. The royalty term commenced on the Effective Date and ends on the tenth anniversary of the Effective Date, January 31, 2029.

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Results of Operations

Comparison of the period from February 1, 2019 through March 31, 2019 and the period from January 1, 2019 through January 31, 2019 to the three months ended March 31, 2018


	Successor		Predecessor		Predecessor
	Period from		Period from
	February 1, 2019		January 1, 2019		Three Months
	through		through		Ended
(in thousands)	March 31, 2019		January 31, 2019		March 31, 2018		Change
Revenue
Net product sales	$	15,810	$	1,775	$	6,261	$	11,324
Total revenue		15,810		1,775		6,261		11,324

Costs and Expenses
Cost of sales (excluding amortization of product rights)		12,461		554		2,216		10,799
Amortization of product rights		2,332		171		537		1,966
General and administrative		3,365		5,413		7,073		1,705
Sales and marketing		5,131		2,773		9,055		(1,151)
Research and development		5		186		1,303		(1,112)
Restructuring & other charges		—		799		—		799
Change in fair value of contingent consideration payable		200		—		—		200
Total costs and expenses		23,494		9,896		20,184		13,206
Loss from operations		(7,684)		(8,121)		(13,923)		(1,882)

Other (income) expense:
Change in fair value of warrant and derivative liability		—		—		(5,125)		5,125
Interest expense, net		2,193		(52)		3,556		(1,415)
Other gain		—		(140)		—		(140)
Loss (gain) on foreign currency exchange		—		—		—		—
Total other (income) expense		2,193		(192)		(1,569)		3,570
Reorganization items		606		(115,169)		—		(114,563)
Loss after reorganization charges and before provision (benefit) for income taxes		(10,483)		107,240		(12,354)		109,111
Provision (benefit) for income taxes		—		—		—		—
Net loss	$	(10,483)	$	107,240	$	(12,354)	$	109,111

Net product sales

Net product sales increased by $11.3 million for the three months ended March 31, 2019 compared to the three months ended March 31, 2018. Net product sales for the three months ended March 31, 2019 consisted of $5.2 million for SPRIX Nasal Spray, $1.1 million for OXAYDO, $3.8 million for the SOLUMATRIX products and $7.5 million for INDOCIN products. Net product sales for the three months ended March 31, 2018 consisted of $4.8 million for SPRIX Nasal Spray, $1.3 million for OXAYDO and $187,000 for ARYMO ER.

Cost of sales (excluding amortization of product rights)

Cost of sales (excluding amortization of product rights) increased by $10.8 million for the three months ended March 31, 2019 compared to the three months ended March 31, 2018.

Cost of sales for SPRIX Nasal Spray and OXAYDO reflect the average cost of inventory shipped to wholesalers and specialty pharmaceutical companies from January 1, 2019 to January 31, 2019. Cost of sales for SPRIX

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Nasal Spray, OXAYDO, SOLUMATRIX products and INDOCIN products reflects the fair value of finished goods inventory for the period from February 1, 2019 to March 31, 2019.

Cost of sales for SPRIX Nasal Spray, OXAYDO and ARYMO ER for the three months ended March 31, 2018 reflects the average cost of inventory shipped to wholesalers and specialty pharmaceutical companies during the period. There was a charge related to the minimum manufacturing requirements for ARYMO ER of $634,000 in the three months ended March 31, 2018

Amortization of product rights

Amortization of product rights increased by $2.0 million for the three months ended March 31, 2019 compared to the three months ended March 31, 2018. Amortization of product rights relates to the INDOCIN, OXAYDO and SPRIX Nasal Spray intangible assets. The increase was due to the acquisition on January 31, 2019 of the INDOCIN product rights that were valued at $90.1 million and the increase in the value of the SPRIX Nasal Spray intangible assets to $31.9 million, offset in part by a decrease in the value of OXAYDO, as a result of a Fresh Start Accounting adjustment.

General and administrative expenses

General and administrative expenses increased by $1.7 million for the three months ended March 31, 2019 compared to the three months ended March 31, 2018. The increase was due to an increase in stock-based compensation expense of $2.7 million, an increase in regulatory fees related to the acquisition of the SOLUMATRIX and INDOCIN products of $373,000. We recognized $3.5 million of unamortized stock-based compensation on January 31, 2019 as a result of the reorganization. These expenses were offset by a decrease in ARYMO ER and OXAYDO post-marketing study fees of $687,000, a decrease in salary expense of $503,000 due to reduced headcount and a decrease in other administrative expenses of $120,000.

Sales and marketing expenses

Sales and marketing expenses decreased by $1.2 million for the three months ended March 31, 2019 compared to the three months ended March 31, 2018. The decrease was primarily due to an $817,000 decrease in marketing expenses as a result of the discontinuation of promotion of ARYMO ER in September 2018 and a $293,000 decrease in other sales and marketing expenses.

Research and development expenses

Research and development expenses decreased by $1.1 million for the three months ended March 31, 2019 compared to the three months ended March 31, 2018. This decrease was driven by a discontinuation of operating expenses that did not directly support the growth of our commercial business.

Restructuring and other charges

Restructuring and other charges of $799,000 for the three months ended March 31, 2019 reflect costs related to our reduction in force in our Denmark facility in January 2019. There were no restructuring charges in the three month period ended March 31, 2018.

Change in fair value of acquisition-related contingent consideration

Acquisition-related contingent consideration, which consists of our future royalty obligations to Iroko based upon annual INDOCIN product net sales over $20.0 million, was recorded on the acquisition date, January 31, 2019, at the estimated fair value of the obligation, in accordance with the acquisition method of accounting. The fair value of the acquisition-related contingent consideration is remeasured quarterly. The change in fair value of the acquisition-related contingent consideration for the period from February 1, 2019 through March 31, 2019 was $200,000. The change in fair

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value of the contingent consideration for the period from February 1, 2019 through March 31, 2019 was due primarily to the passage of time as there were no other significant changes in the key assumptions during the periods.

Change in fair value of warrant and derivative liability

The interest make-whole provisions of the 6.50% Notes, as well as the warrant liability associated with the warrants issued in our July 2017 equity offering are subject to re-measurement at each balance sheet date. Refer to Note 12 – Fair Value Measurements for further details. We recognize any change in fair value in our consolidated statements of operations and comprehensive loss as a change in fair value of the derivative liabilities. During the three months ended March 31, 2018, we recognized a change in the fair value of our derivative liabilities of $5.1 million. The 6.50% Notes were cancelled as a part of the reorganization.

Interest expense

The decrease of $1.4 million was driven primarily by the cancellation of the 5.50% Convertible Notes and 6.50% Convertible Notes as a result of our Chapter 11 filing.

The interest expense of $2.1 million for the three months ended March 31, 2019 includes non-cash interest and amortization of debt discount totaling $1.2 million. The interest expense of $3.6 million for the three months ended March 31, 2018 includes non-cash interest of and amortization of debt discount totaling $449,000.

Reorganization items

Reorganization items of $114.6 million for the three months ended March 31, 2019 consisted of a gain on the revaluation of assets and liabilities of $91.2 million, a gain on extinguishment of debt of $30.0 million and fees of $6.6 million related to the bankruptcy and Iroko Acquisition.

Provision (benefit) for income taxes

We had no provision nor benefit for income taxes for the three months ended March 31, 2019 or March 31, 2018 since we have been in a full valuation allowance for federal and state purposes.

Liquidity and Capital Resources

Since our inception, we have incurred net losses and generally negative cash flows from our operations. We incurred net loss of $10.5 million, net income of $107.2 million and net loss of $12.4 million for the period February 1, 2019 through March 31, 2019, the period January 1, 2019 through January 31, 2019 and the three months ended March 31, 2018 , respectively. Our operating activities used $16.4 million of cash during the period from February 1, 2019 through March 31, 2019 , provided $822,000 of cash for the period from January 1, 2019 through January 31, 2019 and used $20.7 million of cash in the three months ended March 31, 2018 . At March 31, 2019, we had an accumulated deficit of $10.5 million, a working capital of $1.5 million and cash, restricted cash, cash equivalents and marketable securities totaling $10.8 million.

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Cash Flows

The following table summarizes our cash flows for the period from February 1, 2019 through March 31, 2019, the period from January 1, 2019 through January 31, 2019 and the three months ended March 31, 2018:


(in thousands)	Successor		Predecessor
	Period from		Period from
	February 1, 2019		January 1, 2019		Three months
	through		through		ended
	March 31, 2019		January 31, 2019		March 31, 2018
Net cash provided by (used in):
Operating activities	$	(16,400)	$	822	$	(20,660)
Investing activities		4,991		—		19,232
Financing activities		4,775		(19,104)		3,956
Effect of foreign currency translation on cash		(26)		6		61
Net (decrease) increase in cash and restricted cash	$	(6,660)	$	(18,276)	$	2,589

Cash Flows from Operating Activities

Net cash used in operating activities for the period from February 1, 2019 through March 31, 2019 was $16.4 million and consisted primarily of a net loss of $10.5 million. The net loss was partially offset by $2.5 million in depreciation and amortization expense. Net cash outflows from changes in operating assets and liabilities of $9.6 million consisted of an increase in accounts receivable of $35.8 million, offset by decrease in inventory of $10.6 million and a decrease in accrued expenses of $12.1 million.

Net cash provided by operating activities for the period from January 1, 2019 through January 31, 2019 was $822,000 and consisted primarily of net income of $107.2 million. In addition to net income, there were reorganization items of $121.1 million. Net cash inflows from changes in operating assets and liabilities of $10.4 million primarily consisted of a decrease in accounts receivable of $3.9 million, a decrease in other receivables of $711,000 and a decrease in accrued expenses of $5.2 million.

Net cash used in operating activities for the three months ended March 31, 2018 was $20.7 million and included a net loss of $12.4 million. Net non-cash adjustments to reconcile net loss to net cash used in operations were $2.5 million, and included $5.1 million in change in fair value of our derivative liability, partially offset by depreciation and amortization expense of $1.2 million, stock-based compensation expense of $952,000 and non-cash interest and amortization of debt discount of $496,000. Net cash outflows from changes in operating assets and liabilities of $5.8 million consisted of an increase in accounts receivable of $11.2 million and a decrease in accrued expenses of $4.0 million.

Cash Flows from Investing Activities

Net cash provided by investing activities for the period from February 1, 2019 through March 31, 2019 was $5.0 million and consisted of cash inflows of $2.5 million and $2.5 million for the maturity and sale of investments, respectively.

Net cash provided by investing activities for the three months ended March 31, 2018 was $19.2 million and consisted primarily of the maturity of investments for $23.5 million, offset by cash outflows of $4.3 million for the purchase of investments.

Cash Flows from Financing Activities

Net cash provided by financing activities was $4.8 million for the period from February 1, 2019 through March 31, 2019 and consisted of net proceeds from the Highbridge Credit Agreement.

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Net cash used in financing activities was $19.1 million for the period from January 1, 2019 through January 31, 2019 and consisted of repayments to former 13% Noteholders.

Net cash provided by financing activities was $4.0 million for the three months ended March 31, 2018 and consisted of $4.2 million in net proceeds from the issuance of common stock under our at-the-market offering and employee stock purchase plan.

Operating and Capital Expenditure Requirements

We have not achieved profitability since our inception and we expect to continue to incur net losses for the foreseeable future. Our primary uses of capital are, and we expect will continue to be, compensation and related expenses, sales and marketing expenses, commercial infrastructure, legal and other regulatory expense, business development opportunities and general overhead costs, including interest and principal repayments on indebtedness.

To date, we have been unable to achieve profitability, and with just our existing products and product candidates, we believe we are unlikely to achieve profitability in the future.

Until such time if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity or debt financings and collaboration arrangements. In order to meet these additional cash requirements, we may seek to sell additional equity or convertible debt securities that may result in dilution to our holders of our Successor Egalet common stock. The indenture governing the 13% Senior Secured Notes contains covenants that, among other things, restrict our ability to issue additional indebtedness. Although our ability to issue additional indebtedness is significantly limited by such covenants, if we raise additional funds through the issuance of convertible debt securities, these securities could have rights senior to those of our Successor Egalet common stock and could contain covenants that restrict our operations. We may also seek to raise additional financing through the issuance of debt which, if available and permitted pursuant to the documents governing the 13% Senior Secured Notes and any other indebtedness we may incur in the future, may involve agreements that include restrictive covenants limiting our ability to take important actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through collaboration arrangements in the future, we may have to relinquish valuable rights to our technologies, future revenue streams or product candidates or grant licenses on terms that may not be favorable to us. There can be no assurance that we will be able to obtain additional equity or debt financing on terms acceptable to us, if at all. If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our research and development programs or any future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. In addition, certain agreements we entered into in connection with the consummation of the Iroko Products Acquisition and the Chapter 11 Cases further restrict and limit our ability to raise additional capital, including agreements with respect to pre-emptive rights. Accordingly, our ability to raise additional capital is restricted by these agreements as well.

Going Concern

As of March 31, 2019, we had cash, cash equivalents and restricted cash of $10.8 million. Even though we have emerged from bankruptcy and have funds available under the Credit Agreement with Highbridge, we continue to have significant indebtedness and our ability to continue as a going concern is contingent upon the successful integration of the Iroko Products Acquisition, increasing our revenue, managing our expenses and complying with the terms of our new debt agreements. We cannot be certain that these initiatives will be successful.

Our current debt arrangements with holders of the Series A-1 and Series A-2 Notes as well as the Credit Agreement with Highbridge involve agreements that include minimum liquidity requirements and covenants limiting or restricting our ability to take specific actions. If we raise additional funds through collaborations, strategic alliances or licensing arrangements with pharmaceutical partners, we may have to relinquish valuable rights to our technologies, future revenue streams or product candidates, or grant licenses on terms that may not be favorable to us.

The unaudited financial statements as of March 31, 2019 have been prepared under the assumption that we will continue as a going concern for the next 12 months. Our ability to continue as a going concern is dependent upon our

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uncertain ability to successfully integrate the Iroko Products into our business, increasing our revenue, managing our expenses and complying with the terms of our new debt agreements. These unaudited financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Contractual Obligations and Purchase Commitments


(in thousands)	Payments Due By Period
			Less than						More than
	Total		1 year		1 to 3 years		3 to 5 years		5 years
Operating lease obligations (1)	$	1,593	$	540	$	1,053	$	—	$	—
13% Series A-1 Notes (2)		75,625		2,853		16,266		56,506		—
13% Series A-2 Notes (3)		71,540		6,045		14,639		50,856		—
Promissory Note (4)		5,019		1,125		3,894		—		—
Credit agreement (5)		6,524		514		6,010		—		—
Supply Agreement - ACP Nimble Buyer (6)		12,960		6,480		6,480		—		—
Supply Agreement - Catalent (7)		1,000		500		500		—		—
Total	$	174,261	$	18,057	$	48,842	$	107,362	$	—

(1)

Operating lease obligations reflect our obligation to make payments in connection with the leases for our office space and office equipment. The office lease expires on February 28, 2022 and the office equipment leases expire in December 2019.

(2)

On January 31, 2019, we issued $50.0 million aggregate principal amount of our 13% senior secured notes, designated as Series A-1 Notes, to former holders of First Lien Secured Notes Claims. The Series A-1 Notes are subject to an interest holiday from January 31, 2019 through November 1, 2019. Interest on the Series A-1 notes accrues at a rate of 13% per annum, and is payable semi-annually in arrears on May 1 and November of each year, commencing on May 1, 2019, subject to the interest holiday referred to above. The stated maturity date of the Series A-1 Notes is January 31, 2024.

(3)

On January 31, 2019, we issued $45.0 million aggregate principal amount of our 13% senior secured notes, designated as Series A-2 Notes, to Iroko and certain of its affiliates. Interest on the Series A-2 notes accrues at a rate of 13% per annum, and is payable semi-annually in arrears on May 1 and November of each year, commencing on May 1, 2019. The stated maturity date of the Series A-1 Notes is January 31, 2024.

(4)

On January 31, 2019, pursuant to the Iroko Products Purchase Agreement, we issued a $4.5 million promissory note to an affiliate of Iroko in respect of certain inventory purchases by Iroko as a result of the Iroko Products Acquisition (the “Interim Promissory Note”). The Interim Promissory Note bears interest at a rate of 8% per annum (payable by way of increasing the principal amount of the Interim Promissory Note on each interest payment date), is subordinate to the Notes, and matures on July 31, 2020.

(5)

On March 20, 2019, (the “Closing Date”), we entered into a credit agreement (the “Credit Agreement”) with Cantor Fitzgerald Securities as administrative agent and collateral agent certain funds managed by Highbridge Capital Management, LLC, as lenders, which Credit Agreement consists of a $20.0 million revolving line of credit. We drew $5.0 million on the Closing Date and must maintain at least 25% of the commitment amount outstanding at all times. Advances under the Credit Agreement bear interest at the Company’s option at either the LIBOR Rate (as defined in the Credit Agreement) plus 5.00% or the Base Rate (as defined in the Credit Agreement) plus 4.00%. The Credit Agreement matures on March 20, 2022.

(6)

On January 31, 2019, as part of Asset Purchase Agreement to acquire products from Iroko, we assumed a Collaborative License, Exclusive Manufacture and Global Supply Agreement with ACP Nimble Buyer, Inc. (formerly G&W Laboratories, Inc.) (the “Supply Agreement”) for the manufacture

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and supply of INDOCIN Suppositories to Egalet for commercial distribution in the United States. We are obligated to purchase all of our requirements for INDOCIN Suppositories from ACP Nimble Buyer, Inc., and are required to meet minimum purchase requirements for the calendar years 2019 and 2020. The term of the Supply Agreement extends through July 31, 2023, and there are no minimum requirements in any of the other subsequent years.

(7)

On January 31, 2019, as part of our Iroko Products Purchase Agreement, we assumed a Commercial Supply Agreement (“CSA”) with Catalent Pharma Solutions (“Catalent”) for the manufacture of certain SoluMatrix products. Based on the CSA, we are obligated to purchase certain minimum amounts of manufacturing and product maintenance services on an annual basis for the term of the contract (“Minimum Requirement”) through September 2021.

Off-Balance Sheet Arrangements

We did not have, during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under SEC rules.

JOBS Act

As an “emerging growth company” under the JOBS Act of 2012, we can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We are electing not to delay our adoption of such new or revised accounting standards. As a result of this election, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We have limited exposure to market risk related to changes in interest rates. As of March 31, 2019, we had cash and cash equivalents and restricted cash of $10.8 million. As of December 31, 2018, we had cash and cash equivalents, restricted cash and marketable securities of $40.7 million, consisting of money market funds, certificates of deposit, commercial paper, U.S. government agency securities and corporate debt securities.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer (“PEO”)/principal financial officer (“PFO”), has evaluated the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, our management, including our PEO/PFO, concluded that as of March 31, 2019 our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our PEO/PFO, as appropriate to allow timely decisions regarding required disclosure.

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Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the period from February 1, 2019 through March 31, 2019 and the period from January 1, 2019 through January 31, 2019, which were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II

ITEM 1. LEGAL PROCEEDING S

Refer to Note 17 - Commitments and Contingencies—Legal Proceedings in the notes to the unaudited consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, which is incorporated into this item by reference.

ITEM 1A. RISK FACTORS

We are subject to various risks and uncertainties that could have a material impact on our business, financial condition, results of operations and cash flows. The discussion of these risk factors is included in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2018. There were no changes in our Risk Factors for the period from February 1, 2019 through March 31, 2019 and the period from January 1, 2019 through January 31, 2019.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On January 31, 2019 (the “Effective Date”), we completed the Iroko Acquisition and consummated the transactions contemplated by the Plan. All of our then-outstanding equity interests were cancelled pursuant to the Plan. On the Effective Date, we issued (i) an aggregate of 4,774,093 shares of Common Stock to the former holders of First Lien Secured Notes Claims and Convertible Notes Claims (as defined in the Plan) and (ii) Warrants issuable for an aggregate of 2,535,905 shares of common stock to certain holders of First Lien Secured Notes Claims and Convertible Notes Claims. Based on the confirmation order and the Plan, the issuance of such shares of common stock and the warrants (including shares of common stock issuable upon the exercise thereof) were exempt from registration requirements of the Securities Act, in reliance on Section 1145 of the Bankruptcy Code. Also on the Effective Date, we issued an aggregate of 4,586,875 shares of common stock and a warrant to purchase 2,436,459 shares of common stock to Iroko and certain of its affiliates pursuant to the purchase agreement for the Iroko Acquisition. The issuance of the common stock and warrant (including shares of common stock issuable upon the exercise thereof) pursuant to the purchase agreement was exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) thereof and Regulation D promulgated thereunder.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

The following is a list of exhibits filed as part of this Quarterly Report on Form 10-Q. Where so indicated by footnote, exhibits that were previously filed are incorporated by reference. For exhibits incorporated by reference, the location of the exhibit in the previous filing is indicated.


Exhibit Number		Description

2.1		Debtors’ First Amended Joint Plan of Reorganization, filed with the Court on January 10, 2018 (incorporated by reference to Exhibit 99.1 to Egalet Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 16, 2019).

2.2		Order Confirming Debtors’ First Amended Joint Plan of Reorganization, dated January 14, 2018 (incorporated by reference to Exhibit 99.2 to Egalet Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 16, 2019).

3.1		Fourth Amended and Restated Certificate of Incorporation of Egalet Corporation, as amended (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed February 1, 2019).

3.2		Second Amended and Restated Bylaws of Egalet Corporation (incorporated by reference to Exhibit 3.2 to Egalet Corporation’s current report on Form 8‑K filed with the Securities and Exchange Commission on February 1, 2019).

4.1		Form of Certificate of Common Stock (incorporated by reference to Exhibit 4.1 to the Registrant’s Annual Report on Form 10-K filed with the Commission on March 29, 2019).

4.2		Indenture, dated as of January 31, 2019, among Egalet Corporation, the Guarantors from time to time party thereto and U.S. Bank National Association, as trustee and collateral agent (incorporated by reference to Exhibit 4.1 to the Registrant’s current report on Form 8-K filed with the Commission on February 1, 2019).

4.3		Form of Iroko Warrant Agreement (incorporated by reference to Exhibit 4.3 to the Registrant’s current report on Form 8-K filed with the Commission on February 1, 2019).

4.4		Form of Non-Iroko Warrant Agreement (incorporated by reference to Exhibit 4.4 to the Registrant’s current report on Form 8-K filed with the Commission on February 1, 2019).

4.5		Promissory Note, dated as of January 31, 2019, by and between Egalet Corporation and Iroko Pharmaceuticals Inc. (incorporated by reference to Exhibit 4.2 to Egalet Corporation’s current report on Form 8‑K filed with the Securities and Exchange Commission on February 1, 2019).

10.1		Form of Royalty Rights Agreement (incorporated by reference to Exhibit 10.1 to Egalet Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 1, 2019).

10.2		Collateral Agreement, dated as of January 31, 2019, among the Company, the Subsidiary Parties from time to time party thereto and U.S. Bank National Association as trustee and collateral agent (incorporated by reference to Exhibit 10.2 to Egalet Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 1, 2019).

10.3		Credit Agreement, dated as of March 20, 2019, among the Company, Cantor Fitzgerald Securities, as administrative agent and collateral agent, and the lenders party thereto (incorporated by reference to Exhibit 10.1 to Egalet Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 20, 2019).

10.4		Collateral Agreement, dated as of March 20, 2019, among the Company, the subsidiaries of the Company party thereto as Guarantors, and Cantor Fitzgerald Securities, as collateral agent (incorporated by reference to Exhibit 10.2 to Egalet Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 20, 2019).

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10.5		Stockholders’ Agreement, dated as of January 31, 2019, among the Company and the stockholder(s) of the Company from time to time party thereto (incorporated by reference to Exhibit 10.3 to Egalet Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 1, 2019).

10.6		Form of Preemptive Rights Agreement (incorporated by reference to Exhibit 10.4 to Egalet Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 1, 2019).

10.7		Form of Lock-Up Agreement (incorporated by reference to Exhibit 10.6 to Egalet Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 1, 2019).

10.8		Registration Rights Agreement, dated as of January 31, 2019, by and between the Company and Iroko Pharmaceuticals Inc. (incorporated by reference to Exhibit 10.7 to Egalet Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 1, 2019).

10.9		Amended and Restated Nano-Reformulated Compound License Agreement dated October 30, 2018 among iCeutica Inc., Iroko Pharmaceuticals, LLC and Iroko Properties Inc. (the Company succeeded the Iroko parties as a party to this agreement). (filed herewith)*

10.10		Collaborative License, Exclusive Manufacture and Global Supply Agreement between G&W Laboratories, Inc. and Iroko Pharmaceuticals, LLC, as amended by Amendment 1 and Amendment 2 thereto (the Company succeeded Iroko as a party to this agreement). (filed herewith)*

10.11		Master Services Agreement made as of August 28, 2013 between Patheon Pharmaceuticals Inc. and Iroko Pharmaceuticals, LLC, as amended by an amendment thereto (the Company succeeded Iroko as a party to this agreement). (filed herewith)*

10.12		Commercial Supply Agreement, effective October 1, 2018, between Iroko Pharmaceuticals, LLC and Catalent CTS, LLC (the Company succeeded Iroko as a party to this agreement). (filed herewith)*

10.13		Transition Services Agreement, dated as of January 31, 2019, by and between the Company and Iroko Pharmaceuticals Inc. (incorporated by reference to Exhibit 10.5 to Egalet Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 1, 2019).

10.14		Form of Employment Agreement Amendment (incorporated by reference to Exhibit 10.8 to Egalet Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 1, 2019).+

10.15		Egalet Corporation Form of Time-Based Restricted Stock Unit Agreement (incorporated by reference to Exhibit 4.10 to the Registrant’s Registration Statement on Form S-8 filed with the Commission on March 29, 2019).+

10.16		Egalet Corporation Form of Performance Restricted Stock Unit Agreement (incorporated by reference to Exhibit 4.11 to the Registrant’s Registration Statement on Form S-8 filed with the Commission on March 29, 2019).+

10.17		Amended and Restated Egalet Corporation 2019 Stock-Based Incentive Compensation Plan, as amended (incorporated by reference to Exhibit 10.1 to the Registrant’s Registration Statement on Form S-8 filed with the Commission on March 29, 2019).+

10.18		Egalet Corporation Form of Non-Qualified Stock Option Agreement (filed herewith).+

31.1		Certification of the Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934 (filed herewith).

32.1		Certification of the Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

101.INS		XBRL Instance Document (filed herewith).

101.SCH		XBRL Taxonomy Extension Schema Document (filed herewith).

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith).

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101.DEF		XBRL Taxonomy Extension Definition Linkbase Document (filed herewith).

101.LAB		XBRL Taxonomy Extension Label Linkbase Document (filed herewith).

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith).

		*Portions of this exhibit have been omitted pursuant to a request for confidential treatment.
		+Indicates management contract or compensatory plan.

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EXHIBIT INDEX


Exhibit Number		Description

2.1		Debtors’ First Amended Joint Plan of Reorganization, filed with the Court on January 10, 2018 (incorporated by reference to Exhibit 99.1 to Egalet Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 16, 2019).

2.2		Order Confirming Debtors’ First Amended Joint Plan of Reorganization, dated January 14, 2018 (incorporated by reference to Exhibit 99.2 to Egalet Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 16, 2019).

3.1		Fourth Amended and Restated Certificate of Incorporation of Egalet Corporation, as amended (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed February 1, 2019).

3.2		Second Amended and Restated Bylaws of Egalet Corporation (incorporated by reference to Exhibit 3.2 to Egalet Corporation’s current report on Form 8‑K filed with the Securities and Exchange Commission on February 1, 2019).

4.1		Form of Certificate of Common Stock (incorporated by reference to Exhibit 4.1 to the Registrant’s Annual Report on Form 10-K filed with the Commission on March 29, 2019).

4.2		Indenture, dated as of January 31, 2019, among Egalet Corporation, the Guarantors from time to time party thereto and U.S. Bank National Association, as trustee and collateral agent (incorporated by reference to Exhibit 4.1 to the Registrant’s current report on Form 8-K filed with the Commission on February 1, 2019).

4.3		Form of Iroko Warrant Agreement (incorporated by reference to Exhibit 4.3 to the Registrant’s current report on Form 8-K filed with the Commission on February 1, 2019).

4.4		Form of Non-Iroko Warrant Agreement (incorporated by reference to Exhibit 4.4 to the Registrant’s current report on Form 8-K filed with the Commission on February 1, 2019).

4.5		Promissory Note, dated as of January 31, 2019, by and between Egalet Corporation and Iroko Pharmaceuticals Inc. (incorporated by reference to Exhibit 4.2 to Egalet Corporation’s current report on Form 8 ‑ K filed with the Securities and Exchange Commission on February 1, 2019).

10.1		Form of Royalty Rights Agreement (incorporated by reference to Exhibit 10.1 to Egalet Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 1, 2019).

10.2		Collateral Agreement, dated as of January 31, 2019, among the Company, the Subsidiary Parties from time to time party thereto and U.S. Bank National Association as trustee and collateral agent (incorporated by reference to Exhibit 10.2 to Egalet Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 1, 2019).

10.3		Credit Agreement, dated as of March 20, 2019, among the Company, Cantor Fitzgerald Securities, as administrative agent and collateral agent, and the lenders party thereto (incorporated by reference to Exhibit 10.1 to Egalet Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 20, 2019).

10.4		Collateral Agreement, dated as of March 20, 2019, among the Company, the subsidiaries of the Company party thereto as Guarantors, and Cantor Fitzgerald Securities, as collateral agent (incorporated by reference to Exhibit 10.2 to Egalet Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 20, 2019).

10.5		Stockholders’ Agreement, dated as of January 31, 2019, among the Company and the stockholder(s) of the Company from time to time party thereto (incorporated by reference to Exhibit 10.3 to Egalet Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 1, 2019).

10.6		Form of Preemptive Rights Agreement (incorporated by reference to Exhibit 10.4 to Egalet Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 1, 2019).

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10.7		Form of Lock-Up Agreement (incorporated by reference to Exhibit 10.6 to Egalet Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 1, 2019).

10.8		Registration Rights Agreement, dated as of January 31, 2019, by and between the Company and Iroko Pharmaceuticals Inc. (incorporated by reference to Exhibit 10.7 to Egalet Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 1, 2019).

10.9		Amended and Restated Nano-Reformulated Compound License Agreement dated October 30, 2018 among iCeutica Inc., Iroko Pharmaceuticals, LLC and Iroko Properties Inc. (the Company succeeded the Iroko parties as a party to this agreement). (filed herewith)*

10.10		Collaborative License, Exclusive Manufacture and Global Supply Agreement between G&W Laboratories, Inc. and Iroko Pharmaceuticals, LLC, as amended by Amendment 1 and Amendment 2 thereto (the Company succeeded Iroko as a party to this agreement). (filed herewith)*

10.11		Master Services Agreement made as of August 28, 2013 between Patheon Pharmaceuticals Inc. and Iroko Pharmaceuticals, LLC, as amended by an amendment thereto (the Company succeeded Iroko as a party to this agreement). (filed herewith)*

10.12		Commercial Supply Agreement, effective October 1, 2018, between Iroko Pharmaceuticals, LLC and Catalent CTS, LLC (the Company succeeded Iroko as a party to this agreement). (filed herewith)*

10.13		Transition Services Agreement, dated as of January 31, 2019, by and between the Company and Iroko Pharmaceuticals Inc. (incorporated by reference to Exhibit 10.5 to Egalet Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 1, 2019).

10.14		Form of Employment Agreement Amendment (incorporated by reference to Exhibit 10.8 to Egalet Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 1, 2019).+

10.15		Egalet Corporation Form of Time-Based Restricted Stock Unit Agreement (incorporated by reference to Exhibit 4.10 to the Registrant’s Registration Statement on Form S-8 filed with the Commission on March 29, 2019).+

10.16		Egalet Corporation Form of Performance Restricted Stock Unit Agreement (incorporated by reference to Exhibit 4.11 to the Registrant’s Registration Statement on Form S-8 filed with the Commission on March 29, 2019).+

10.17		Amended and Restated Egalet Corporation 2019 Stock-Based Incentive Compensation Plan, as amended (incorporated by reference to Exhibit 10.1 to the Registrant’s Registration Statement on Form S-8 filed with the Commission on March 29, 2019).+

10.18		Egalet Corporation Form of Non-Qualified Stock Option Agreement (filed herewith).+

31.1		Certification of the Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934 (filed herewith).

32.1		Certification of the Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

101.INS		XBRL Instance Document (filed herewith).

101.SCH		XBRL Taxonomy Extension Schema Document (filed herewith).

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith).

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document (filed herewith).

101.LAB		XBRL Taxonomy Extension Label Linkbase Document (filed herewith).

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith).

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*Portions of this exhibit have been omitted pursuant to a request for confidential treatment.

+Indicates management contract or compensatory plan.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Date: May 17, 2019

	EGALET CORPORATION

	By:	/s/ Robert S. Radie
		Robert S. Radie
		President and Chief Executive Officer

Exhibit 10.10

COLLABORATIVE LICENSE, EXCLUSIVE MANUFACTURE AND

GLOBALSUPPLYAGREEMENT

between

G&W LABORATORIES, INC.

("MANUFACTURER")

and

IROKO PHARMACEUTICALS , LLC.

("BUYER")

Dated as of August 1, 2008

**** Information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.

SCHEDULE OF EXHIBITS

Exhibit A Products

Exhibit B Pricing Schedule

Exhibit C Specifications

Exhibit D Production Batch Sizes

Exhibit E Insurance

Exhibit F Quality Agreement

COLLABORATIVE LICENSE, EXCLUSIVE MANUFACTURE AND GLOBAL

SUPPLY AGREEMENT

This COLLABORATIVE LICENSE, EXCLUSIVE MANUFACTURE AND GLOBAL SUPPLY AGREEMENT ( Agreement "), dated August 1, 2008 (the " Signature Date ") and deemed effective as of November 1, 2008 (the " Launch Date"), is by and between:

lroko Pharmaceuticals, LLC ("Buyer"), a limited liability company duly organized and registered under the laws of the State of Delaware, and

G&W Laboratories, Inc. (" Manufacturer "), a corporation duly organized and incorporated under the laws of the State of New Jersey.

WITNESSETH:

WHEREAS, Manufacturer owns or controls a certain approved drug marketing application and know-how related to lndomethacin Suppositories, 50mg ("Product"), and has authority and the intent to grant certain rights and licenses to Buyer;

WHEREAS, the Product (as detailed in Exhibit A) is officially designated by the Food and Drug Administration (" FDA ") as the reference listed drug ("RLD") in the Approved Drug Products with Therapeutic Equivalence Evaluations ("Orange Book") published by the FDA;

WHEREAS, Manufacturer is manufacturing, promoting and distributing the Product in the United States and its territories ("Domestic Market");

WHEREAS, Buyer owns or controls certain trademarks, approved drug marketing applications and know-how related to lndocin® suppositories, and has authority and the intent to grant certain rights and licenses thereunder to Manufacturer;

WHEREAS, the parties desire to grant and receive exclusive licenses to market the Product bearing Buyer's trademark lndocin® (in the immediate container consisting of foil packaging identifying Manufacturer) in the Domestic Market;

WHEREAS, Buyer desires to have Manufacturer manufacture and supply Product exclusively to Buyer for the Domestic Market beginning on the Launch Date;

WHEREAS, Manufacturer desires to be appointed as an exclusive manufacturer and supplier to manufacture, supply and distribute the Product for the Domestic Market, and (Buyer agrees to appoint the Manufacturer, all on the terms and conditions contained in this Agreement; and

WHEREAS, the parties are willing to carry out the foregoing pursuant to the terms and conditions set forth in this Agreement;

NOW, THEREFORE, in consideration of these premises, which are hereby incorporated into and made a part of the covenants, agreements and stipulations hereinafter set forth, the parties hereto agree as follows:

Section 1. Definitions .

Section 1 . 1 . Definitions . The following terms (except as otherwise expressly provided) for all purposes of this Agreement shall have the following respective meanings:

" Action or Proceeding " shall mean any action, claim, suit, proceeding, arbitration or Governmental or Regulatory Authority action, notification , investigation or audit.

" Active Ingredient " shall mean the active chemical substance contained in the Product or the lndocin Formulation .

" Affiliate " shall mean any Person that directly or indirectly through one or more intermediaries is controlled by the Person specified . For purposes of this definition, control of a Person means the power, direct or indirect, to direct or cause the direction of the management and policies of such Person, whether by contract or otherwise .

" Agreement Quarters " shall mean for the Term, each of the three-month periods ending March 31, June 30, September 30 and December 31.

" ANDA " shall mean the Abbreviated New Drug Application for the Product owned and filed by Manufacturer and approved by the FDA, including any supplements thereto.

" Buyer's Distribution Center " shall mean ICS - AmerisourceBergen Specialty Group, 345 International Boulevard, Suite 100, Brooks, Kentucky 40109 , Attention: Director of Operations.

" cGMP " shall mean the current good manufacturing practices as required by the regulations of the FDA.

" DMF " shall mean drug master file with the FDA.

" Environmental Laws " shall mean all applicable laws, directives, rules, ordinances, codes , guidelines, regulations, governmental, administrative or judicial orders or decrees or other legal requirements of any kind, including common Jaw, whether currently in existence or hereafter promulgated, enacted , adopted or amended, relating to safety, preservation or protection of human health and the environment.

'' Environmental Losses " shall mean any and all fines, penalties, costs, liabilities, damages , losses or expenses (including, without limitation , sampling, monitoring or remediation costs, reasonable legal, consultants ' or engineering fees and disbursements, costs of defense and interest expenses) incurred by Buyer or an Affiliate of Buyer or for wh i ch Buyer or an Affiliate of Buyer is liable or obligated pursuant to any Environmental Law relating to, arising from, or in any way connected with the manufacture of the Product or its transportation or storage at any time prior to shipment to Buyer .

" Facility " shall mean the Manufacturer's facility located at 111 Coolidge Street, South Plainfield, NJ 07080 and, subject to Buyer's prior written approval , such other facilities used by the Manufacturer in the Manufacture of Product hereunder .

" FDA " shall mean the United States Food and Drug Administration and any successor thereto .

" Forecasts " shall have the meaning set forth in Section 4.3(a) hereof.

" Foreign Market " shall mean the market outside of the Domesti c Market.

" Governmental or Regulatory Authority " shall mean any court , tribunal, arbitrator, agency, commission, official or other instrumentality of a country or territory in the Territory or any other relevant country , territory, state , province , county , city or other political subdivision thereof.

' ' lndocin® Formulation " shall mean the 50mg and 100mg lndocin® suppositories distributed by Buyer or its designee in the Foreign Market.

" Laws " shall mean any law , statute, rule, regulation , guideline (including cGMPs), ordinance or other pronouncements of any Governmental or Regulatory Authority having the effect of law in the Territory .

" Losses " shall mean any and all damages , fines, fees, settlements, payments, obligations, penalties, deficiencies, losses , costs and expenses (including, without limitation, Environmental Losses, interest, court costs, reasonable fees of attorneys , accountants and other experts and other reasonable expenses of litigation or other proceedings or of any claim, default or assessment).

" Manufacture " shall mean all the activities relating to production of the Product, from purchasing Raw Materials to packaging and shipping Products including , but not limited to, purchasing Raw Materials, production , quality control and assurance, filling, labeling, packaging and finishing, release, holding and storage, and the tests and analyses conducted in connection therewith.

" Manufacturer Error " shall mean the failure to perform , the negligent performance or willful misconduct in the performance by the Manufacturer its Affiliates or their respective officers, agents or employees of any obligation imposed upon or assigned to Manufacturer under this Agreement which in any case has a material adverse effect on the Product sold by Buyer .

" Person " shall mean any person, corporat i on , partnership or other entity .

" Purchase Order " shall have the meaning set forth in Section 4.3(b) hereof.

" Purchase Price " shall mean the price to be charged by the Manufacturer for Product manufactured and supplied hereunder , as set forth on Exhibit B attached hereto and incorporated herein by reference .

" Product(s) " shall mean Manufacturer ' s lndomethacin Suppositories 50 mg , which are ready for safe to customers in finished , final packaged form bearing labels selected by Buyer , with a minimum of two years of shelf life at the time of Manufacturing .

" Raw Materials ” shall mean the Active Ingredient , all other raw materials, intermediate products and packaging materials required to Manufacture the Product, all of which shall be approved by FDA.

" Regulatory Approvals " shall mean the approvals obtained through meeting the requirements of the Federal Food , Drug and Cosmetic Act , as amended, and its attendant regulations in addition to any approvals , licenses , registrations or authorizations of any federal, state, local, or foreign regulatory agency, department , bureau or other government entity , necessary for the manufacture, sale , offer for sale , storage, export , or import of Product in the Domestic Market or the Foreign Market.

" Specifications " shall mean the specificat i ons and Manufacturing procedures set forth in the ANDA for the Product and , to the extent permitted under the ANDA, in Exhibit C hereto (as may be amended by Buyer from time to time) and otherwise required by Buyer for t he Manufacture and supply of the Products, including without limitation all formulae , know-how , Manufacturing processes, Raw Materials requirements, in-process and finished Product specifications , analytica l methods and standards of quality control and quality assurance .

" Term " and " Initial Term " shall have the meanings set forth in Section 11 . 1 hereof.

" Territory '' shall mean the Domestic Market.

Section 2. Licenses.

Section 2 . 1. During the Term of this Agreement and subject to the provisions hereof, Manufacturer grants and Buyer receives a revocable, non - transferable(other than as detailed in this Agreement), royalty - free license to exclusively market the Product in the Territory . No conveyance of ownership is granted to Buyer herein and all right, title and interest in and to the Product and any other proprietary rights contained therein are retained solely by Manufacturer.

Section 2.2. During the Term of this Agreement and subject to the provisions hereof , Buyer grants and Manufacturer receives a revocable, non-transferable, non exclusive, royalty-free license to use the lndocin® trademark (the ' 'Trademarks ") solely in connection with performance of Manufactur e r’s obligations hereunder . No conveyance of ownership is granted to the Manufacturer herein and all right , title and interest in and to the Trademark and any other proprietary rights conta i ned therein are retained solely by Buyer.

(a) All rights not expressly granted herein to the Trademarks are reserved by Buyer and Manufacturer acknowledges that nothing in this Agreement shall give it any right , t i tle or interest in the Trademarks other than the license granted herein . In using the Trademarks, Manufacturer shall use the necessary trademark designat i ons and shall use the Trademarks in compliance with Buyer written guidelines relating to branding, key messages and style as communicated from time to time to Manufacturer.

(b) Manufacturer hereby acknowledges that Buyer i s the sole a nd rightful owner of the Trademarks and all goodwill attached to the Trademarks and that Buyer and its successors and assigns shall retain full right to the Trademarks, all registrations granted with respect to the Trademarks, and all the goodwill associated therewith , subject only to the authorization of Manufacturer by Buyer to use the Trademarks as permitted by this Agreement. The use of the Trademarks by Manufacturer pursuant to this Agreement shall inu r e to the benefit of and be on behalf of Buye r. Manufacturer agrees that during the continuance and after termination of this Agreement , noth i ng in this Agreement shall give Manufacturer any right, title or interest in the Trademarks or any confusingly similar variation thereof, and Manufacturer will not claim any rights , title or interest in or to the Trademarks other than the rights to use the Trademarks in accordance with this Agreement. Manufacturer will not dispute or otherwise challenge or assist others to dispute or otherwise challenge the ownersh i p and title of Buyer to the Trademarks or the validity of the Trademarks . Manufacturer agrees , at the request of Buyer, to execute any and all papers, documents, or other filings, or take other actions necessary to preserve and extend the trademark and service mark rights relating to the Trademarks, and any documents required by any Governmental Authority to show the relationship between Buyer and Manufacturer .

Sect i on 2 . 3 . Option for Manufacture and Supply for the Foreign Market.

Subject to Buyer's existing supply obligations, Manufacturer obtaining all required licenses, permits and Regulatory Approvals and the successful technology transfer of the lndocin® Formulation, Manufacturer and Buyer shall enter into good faith negotiations for Manufacture to exclusively Manufacture and supply to Buyer (and/or its Affiliates), and for Buyer to exclusively purchase from Manufacturer, the lndocin® Formulation pursuant to Buyer's forecasts for the Foreign Market.

Section 3 . Regulatory.

Section 3.1 Manufacturer will be responsible for obtaining and maintaining, at its sole cost and expense, all Regulatory Approvals and any amendments or supplements as required in order for Buyer to sell or distribute Product in the Domestic Market.

Section 3.2 Buyer will be responsible for obtaining and maintaining, at its sole cost and expense , all Regulatory Approvals and any amendments or supplements as requi r ed in order for Buyer to sell or distribute the lndocin® Formulation in the Foreign Market. Furthermore, if the parties enter into an exclusive Manufacturing and supply arrangement for the Foreign Market, Buyer will be responsible for obtaining and maintaining, at its sole cost and expense, all Regulatory Approvals and any amendments or supplements as required for Manufacturer to implement a technology transfer of the lndocin® Formulation to Manufacturer's facility to supply lndocin® to Buyer for sales in the Foreign Market.

Section 4. Purchase and Supply of Product .

Section 4.1. Agreement to Supply . Manufacturer shall Manufacture and supply to Buyer (and/or its Affiliates), and Buyer shall purchase exclusively from Manufacturer and market in the Domestic Market , Product for marketing under ANDAs held by Manufacturer as indicated on Exhibit A hereto.

Section 4.2 . Use of Facility and Equipment; Notice . All Manufacturing activities with respect to the Product to be manufactured hereunder by the Manufacturer shall be carried out by the Manufacturer at the Facility and utilizing equipment in the manner set forth in the Specifications , except to the extent that the Manufacturer receives Buyer's advance written permission to alter the location or specified usage of the equipment that may be required under the Specifications .

Section 4.3. Forecasts; Orders; Annual Purchase Requirements.

(a) As soon as practicable after the execution of this Agreement, and upon the 1st day of each Agreement Quarter thereafter during the Term , Buyer shall provide the Manufacturer with a rolling four (4) quarter forecast for its purchases of the Product (the " Forecast"). Such Forecasts shall represent Buyer's best estimate at the time of its Product requirements from the Manufacturer for such twelve (12) month period ;

provided , however, that, except as set forth in Section 12 . 1 hereto, the Forecasts (i) are for the convenience of the Manufacturer only, (ii) shall not constitute firm purchase or shipping orders and (iii) shall not be binding upon, or create any obligation or liability with respect to Buyer .

(b) During the Term of this Agreement, not less than sixty (60) days prior to the first day of each Agreement Quarter , Buyer will provide the Manufacturer with a firm purchase order setting forth the quantities ordered for each month of that next Agreement Quarter , the delivery dates for such quantities and the locations to which such quantities shall be delivered (" Purchase Order "). The Manufacturer will use commercially reasonable efforts to supply Product in a Purchase Order that exceed the Forecast, but shall not be obligated to do so.

(c) During the Term of this Agreement, Buyer shall purchase and Manufacturer shall supply the following mandatory minimum annual quantities for the Domestic Market:

[****]

In addition, Buyer shall purchase and Manufacturer shall supply the following minimum annual quantities of samples :

[****]

Sect i on 4.4. Shipping Instructions/Risk of Loss . The Manufacturer shall ship Product ordered by Buyer pursuant to Section 4 . 3(b) hereof F . O.B. Buyer ' s Distribution Center. Title to and risk of loss of all Product shipped hereunder shall pass to Buyer upon Manufacturer's delivery to Buyer's Distribution Center, regardless of any provision for payment of freight or insurance of shipping documents .

Section 4.5. Standard Forms . In ordering and delivering the Product pursuant hereto, Buyer and Manufacturer may employ their standard forms, but nothing in those forms shall be construed to modify, amend or supplement the terms of this Agreement and, in the case of any conflict herewith, the terms of this Agreement shall control.

Section 4.6. Quantitative Defects . Buyer shall inform Manufacturer of any claim relating to quantitative defects or missing quantities in shipments of the Product within thirty (30) days following actual receipt of such shipments by Buyer . The Manufacturer

shall , at its own expense, provide Buyer with any defective or missing quantities of such Product promptly after receipt of notice from Buyer.

Section 4.7 Product Labels, Printed Packaging Materials and Inserts. At least eight (8) weeks prior to the Launch Date, Buyer shall provide Manufacturer with all artwork, copy or other material developed or produced by Buyer for Product labels, printed packaging materials and Product inserts . Said labels shall , to conform to regulatory requirements of Manufacturer's ANDA, include a disclosure that the Product has been manufactured by Manufacturer with such prominence and at such location as is reasonably acceptable to Buyer . The Manufacturer will not make any change to the artwork, copy or other materials submitted by Buyer without the prior written approval of Buyer.

Section 4.8. Inventory . The Manufacturer will keep adequate inventories of Raw Materials on hand or with suppliers to meet Buyer's requirements, (and Buyer will absorb the cost of such stock in the event that Manufacturer is unable to use such stock with the Buyer); provided, however. that the Manufacturer shall not maintain any Raw Materials inventory in excess of those quantities needed to meet the requirements of the next two (2) Agreement Quarters of the Forecast in effect at the time such materials were ordered, unless (i) minimum or economic order requirements of any vendor supplying such materials exceed such quantities or (ii) the lead time restrictions of any vendor supplying materials requires quantities in excess of such quantities.

Section 5. Purchase Price; Payments .

Section 5.1 . Purchase Price . The Purchase Price of the Product to be paid by Buyer hereunder and the terms of any adjustments thereto are set forth in Exhibit B hereto . The Purchase Price of the Product includes all costs associated with the Manufacturing of the Product , including all packaging, packaging/patient inserts, and shipping and delivery costs to Buyer or its designee for the Domestic Market.

Section 5.2 . Invoices for Manufactured Products . The Manufacturer shall submit invoices to Buyer for all shipments of Product Manufactured hereunder in the manner that Buyer shall from time to time direct. All invoices hereunder shall be payable by Buyer net thirty (30) days of the date such invoice is issued by Manufacturer and shall be dated no earlier than the date of the applicable bill of lading. The currency of invoice and payment shall be in United States dollars.

Section 5.3. Taxes . The payments hereunder do not include use, consumption, sales or excise taxes of any taxing authority. The amount of any applicable taxes, if any, will be added to the Purchase Price of the Product in effect at the time of shipment thereof and shall be reflected and detailed in the invoices submitted to Buyer by the Manufacturer .

Section 6. Quality Control and Assurance .

Section 6 . 1 . Specifications; Modifications .

(a) The Manufacturer shall Manufacture and supply the Product to Buyer in accordance with the Specifications and all applicable Laws . Any changes to the Specifications, including but not limited to changes to the Manufacturing process and/or analytical methods, must be approved by Buyer in writing prior to implementation. In addition, Manufacturer shall only use: (i) active pharmaceutical ingredient that has an approved DMF with the FDA ; and (ii) raw materials approved by the FDA, and shall not change suppliers of materials without the prior written consent of the Buyer , which shall not be unreasonably withheld.

(b) Buyer will inform Manufacturer in writing of any modifications to the Specifications it requires . The Manufacturer will inform Buyer of the amount of the additional costs (including capital expenditures) the Manufacturer would incur due to the modifications, if any, and if Buyer elects to adopt the modification, (i) Buyer will reimburse the Manufacturer for such required capital expenditures, (ii) the Purchase Price will be increased by the amount of such other additional costs, and (iii) Exhibit C hereto will be revised accordingly. The Manufacturer will provide Buyer a written explanation of such capital expenditures and additional costs . Notwithstanding the foregoing, if the proposed modification is required as a result of Manufacturer Error, the Manufacturer shall bear any resulting increase in the cost of Manufacturing the Product and any required capital expenditures therefor. Furthermore, if the parties agree that Manufacturer is technically unable to comply with a proposed modification or if Buyer is unwilling to pay Manufacturer's costs, Buyer shall have the option to withdraw the proposed modification . In the event that any modification results in a cost savings to Manufacturer, the Purchase Price will be revised by an amount equal to the reduction of Manufacturer's cost of production of the Product that will result from implementation of such modification . ln no event will Manufacturer be required to make (or not to make) a modification that it reasonably deems prohibited (or required) by applicable regulations or regulatory authorities.

Section 6.2 Quality Provisions . The Manufacturer and Buyer agree that the quality assurance provisions set forth in the Quality Agreement appended hereto as Exhibit F hereto shall be incorporated herein and form part of this Agreement.

Section 6 . 3. Storage Requirements . The Manufacturer shall store all Raw Materials, in-process and finished Product under such conditions that the quality of such materials and the Product Manufactured therefrom are not affected . Storage and handling of the foregoing shall be in accordance with the provisions of all applicable Laws, the Specifications and the instructions of the manufacturer of such Raw Materials. Raw Materials utilized by Manufacturer in connection with the Manufacture of the Products shall be used by Manufacturer on a first in, first out basis; provided, however, that Raw Materials shall not be used by Manufacturer beyond the shelf life

required under applicable Laws, Specifications or designated or approved by Buyer from time to time for such Raw Materials.

Section 6.4 . Maintenance of Facility and Equipment. The Manufacturer shall maintain all Equipment utilized in the Manufacture and supply of Product hereunder in good operating condition and shall maintain the Facility and such Equipment i n accordance with the requirements of all applicable Laws (including, without limitation , cGMP requirements) and all requirements set forth in the Specifications.

Section 6.5 . Quality Tests and Checks : The Manufacturer, at its sole cost and expense , shall perform all stability, validation, Raw Material and in-process and finished product tests or checks required by Buyer, the Specifications and applicable Laws in order to assure the conformity of the Raw Materials and the Product to the Specifications and the quality of the Products manufactured and supplied hereund e r. The Manufacturer shall supply to Buyer a certificate of analysis with respect to each batch of Product supplied hereunder in the form and at the time required by the Quality Agreement.

Section 6.6 . Non-conforming Materials and Product.

(a) The Manufacturer shall not use any Raw Materials that are not FDA- approved and do not comply with the Specifications, the United States Pharmacopeia, National Formulary (USP/NF), and applicable Laws .

(b) No Product shall be released for shipment by Manufacturer unless such Product complies with the Specifications and all applicable Laws . The Manufacturer shall advise Buyer of such noncompliance and of the testing or inspection results of such batch or batches of Product as provided in the Quality Agreement. Product that does not comply may be released only with the prior written approval of Buyer .

Section 6.7 . Rejection of Product; Dispute Resolution .

(a) Within forty-five (45) days following receipt by Buyer of any given shipment of Products hereunder, Buyer shall have the right to give Manufacturer notice of rejection of any part of such shipment of Product that fails to meet Specifications or applicable law; provided, however, that there shall be no time restrictions applicable to Buyer's provision of notice of rejection of any shipments of Product where there are latent defects in the shipped Product or i n the event that Manufacturer has breached any of its representations, warranties or obligations hereunder .

(b) Within thirty (30) days following receipt by Manufacturer of Buyer's notice of rejection, the parties shall consult with each other in order to examine the basis of the rejection. lf Manufacturer concurs with the Buyer ' s rejection, the parties shall proceed under Section 6.7(c) . If after good faith attempt the parties fail to agree on the matter within thirty (30) days following receipt by Manufacturer of Buyer ' s notice of rejection, an

independent, reputable analytical laboratory designated by Buyer and reasonably acceptable to Manufacturer shall perform an assessment, which findings shall be conclusive. The cost of the assessment shall be borne by (i) the Buyer if the findings indicate the Product met Specifications, or (ii) the Manufacturer if the findings indicate the Product failed to meet Specifications.

(c) Buyer shall return any shipments of Products (or portions thereof) rejected pursuant to subsection (a) of this Section 6.7 to Manufacturer at the Manufacturer's expense, and at Buyer's option (i) such Products shall be replaced by Manufacturer as quickly as possible at Manufacturer's sole expense and the payment in respect of such quantities postponed until such replacement quantities are received and accepted by Buyer or (ii) Manufacturer shall refund any amounts paid in respect of such quantities to Buyer.

Section 6.8 . Responsibility for Rejected Products and Materials . Products rejected pursuant to Section 6 . 6 or 6 . 7 hereof shall be properly tagged and isolated and shall not be released without the prior written approval of Buyer. Buyer shall not be required to pay for any Product that is non-complying or rejected . All Products rejected pursuant to Section 6.7 shall be removed (if applicable) and disposed of by Manufacturer, at the Manufacturer's expense, in a manner consistent with applicable Laws.

Section 6.9 . Maintenance and Retention of Records and/or Samples. The Manufacturer shall maintain detailed records with respect to Raw Material usage and finished Product production as set forth in the Quality Assurance Agreement.

Section 6 . 10. Regulatory Contacts . The Buyer shall notify Manufacturer immediately, and in no event later than three (3) days, after it receives any materially adverse contact or communication from any Governmental or Regulatory Authority that relates to the Product. The Buyer shall provide Manufacturer with copies of all communications received from or sent to any Governmental or Regulatory Authority with respect to any Product immediately, and in no event later than three (3) days, after receipt or sending of the communication, as the case may be. The Buyer shall consult with Manufacturer regarding the response to any inquiry or observation from a Governmental or Regulatory Authority relating to a Product. The Manufacturer shall comply with all reasonable requests and comments by Buyer with respect to all contacts and communications with a Governmental or Regulatory Authority.

Section 6.11. Customer Complaints; Recalls.

(a) Except as otherwise set forth in Section 8 hereto, Buyer shall make all decisions with respect to any complaint, Adverse Drug Experience Report or Serious Adverse Drug Experience Report (each as defined in the Quality Agreement), or any recall, market withdrawals or any other corrective action related to the Product. The Manufacturer shall provide commercially reasonable assistance to Buyer in

investigating complaints regarding any Product supplied by Manufacturer hereunder, including without limitation testing of the Product in accordance with Manufacturer's specifications . The Manufacturer shall notify Buyer in accordance with the terms of the Quality Agreement of any complaints received by Manufacturer concerning the Product.

(b) Upon the receipt by either party of any direction to withdraw or recall any Product from the market from any Governmental or Regulatory Authority having jurisdiction, the receiving party shall notify the other party in accordance with the terms of Section 7.10 hereof . lf any such withdrawal or recall results from Manufacturer Error, the parties agree that the Manufacturer shall reimburse Buyer for (i) the costs incurred by Buyer to effect the withdrawal or recall, such as Buyer ' s labor and expenses, and the fees of a third party, if any, performing reasonable and necessary recall services on Buyer's behalf, and (ii) any Purchase Price and other amounts paid to the Manufacturer by Buyer in respect of such recalled or withdrawn Products. Nothing herein shall require Manufacturer to indemnify or reimburse Buyer for any costs, charges , penalties , or other damages claimed by or paid to Buyer's customers relating solely and directly to such recalled or withdrawn Product ("Customer Claims "), and the parties expressly intend and agree that such Customer Claims shall be borne by Buyer . This Section 6.11(b) in no way impacts or affects the Manufacturer's liability, if any, with respect to product liability or any other claims not solely and directly resulting from the withdrawal or recall of Products .

Section 6 . 12 . Inspections and Audits by Buyer . Representatives of Buyer shall have access to any Facility for the purpose of (i) conducting inspections of such Facility and Manufacturer's maintenance and usage of the Equipment utilized in the Manufacture of Product, (ii) performing quality control audits or (iii) witnessing the Manufacturing or transportation of the Product or the materials related to or used in the Manufacture of Product. Buyer shall have access to the results of any tests performed by Manufacturer or at the Manufacturer's direction relating to Product or the processes or materials used in the Manufacturing of the Product. Such inspections do not relieve the Manufacturer of any of its obligations under this Agreement or create new obligations on the part of Buyer. Such visits by Buyer's representatives shall be conducted during normal business hours upon reasonable notice.

Section 6 . 13. Environmental; Health and Safety Matters . The Manufacturer shall Manufacture and supply Product hereunder in compliance with all Environmental Laws and shall be solely responsible for all Environmental Losses relating thereto.

Section 7. Representations and Warranties and Covenants.

Section 7.1 . Representations, Warranties and Covenants . The Manufacturer hereby represents, warrants and covenants to Buyer that

(a) As of the date hereof the Manufacturer , the Facility and all equipment utilized in the Manufacture and supply of Product hereunder is, and during the Term o f this Agreement shall be, in full compliance with all applicable Laws .

(b) As of the date hereof the Manufacturer holds, and shall continue during the Tern, of this Agreement to hold, all licenses, permits and similar authorizations of Governmental and Regulatory Authorities (including the ANDA for all Product so indicated on Exhibit A ) necessary or required for the Manufacturer to conduct its operations and business in the manner currently conducted and as otherwise contemplated herein .

(i) shall conform, with and shall be Manufactured and supplied in conformity with the Specifications, the Quality Agreement and all applicable Laws; and

(ii) shall not contain any material that would cause the Product to be adulterated within the meaning of Section 501 or misbranded within the meaning of Section 502 of the Food , Drug and Cosmetic Act, as amended , or which material has not been used, handled or stored in accordance with the Specifications, any other agreed upon quality assurance requirements of Buyer and or the supplier of such material, and all applicable Laws.

(d) The Manufacturer and its employees, affiliates and agents have never been (i) debarred, or {ii) convicted of a crime for which a person can be debarred, under Section 306(a) or 306(b) of the Generic Drug Enforcement Act of 1992 ("Section 306(a) or (b) ") . The Manufacturer agrees that it will promptly notify Buyer in the event of any such debarment, conviction, or indictment, in which event, Buyer will be entitled to terminate this Agreement immediately if the same affects the Manufacturer's performance under this Agreement or Buyer's ability to market or sell the Product.

(e) The Manufacturer has sufficient annual Manufacturing capacity to meet the Forecasts .

(f) The Manufacturer has served notice terminating all contractual commitments to supply the Product to any other purchaser as of the Launch Date, and any and all such contractual commitments now existing have been terminated by said notice as of the Launch Date and will be of no further force and effect.

Section 7 . 2. Authority . Each of Buyer and Manufacturer is a limited liability company or corporation duly registered or incorporated, validly existing and in good standing under the laws of the jurisdiction of its formation or incorporation and has all requ i site entity or corporate power to execute and deliver this Agreement and to perform

its obligations hereunder . The execution and delivery by each of Buyer and Manufacturer of this Agreement and its performance of its obligations hereunder have been duly and validly authorized. Th i s Agreement constitutes a legal, valid and binding obligation of each of Buyer and Manufacturer, enforceable in accordance with its terms subject to applicable bankruptcy, insolvency , r eorganization , and other laws of general application limiting the enforcement of creditor ' s r i ghts .

Section 7 . 3 Disclaimer . EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT , INCLUDING WITHOUT LIMITATION SECTION 8 HERETO, THE MANUFACTURER AND BUYER MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING ANY EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE . IN NO EVENT WILL E ITHER PARTY BE LIABLE FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL , OR INCIDENTAL DAM AGES , HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, ARISING IN ANY WAY OUT OF THIS AGREEMENT. THIS LIMITATION OF LIABILITY WILL APPLY EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, AND NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY PROVIDED HEREIN .

Section 8 . Indemnification.

Section 8.1 . Manufacturer's Indemnification of Buyer . The Manufacturer shall indemnify and hold Buyer, its Affiliates and their respective officers , di r ectors , employees and agents harmless from and against any and all losses suffered, incurred or susta i ned by any of them or to which any of them becomes subject at any t i me, to the extent arising out of or resulting from (i) any breach of its representations , warranties or obligations under this Agreement, or nonfulfillment of or failure to perform any covenant or agreement made by the Manufacturer in this Agreement ; (ii ) a n y actual or alleged i njury to Person or property or death occurring to any Manufacturer employees, subcontractors , agents or any individuals on the Manufacturer ' s premises; (iii) the possession , use or consumption by any person of any Product supplied by the Manufacturer under this Agreement in the event that such Product (a) fails to meet Specifications or (b) was Manufactured according to Specifications which were not current in meeting FDA requirements at the time of Manufacture , unless such Losses in (a) or (b) above are solely and directly a result of the Buye r 's negligence or malfeasance; or (iv) any other negligent act or omission on the part of the Manufacturer, i ts Affiliates or their respective emp l oyees or agents .

Section 8 . 2. Buyer's Indemnification of Manufacturer . Buyer shall indemnify and hold the Manufacturer, its Affiliates and the i r respective officers , directors , employees and agents harmless from and against any and all Losses suffered, incurred or sustained by any of them or to which any of them becomes subje c t at any time , (i) to the extent arising out of or resulting from any breach of its representations, warranties or obligations under this Agreement, or nonfulfillment of or failure to perform any covenant

or agreement made by Buyer in this Agreement ; or (ii) to the extent resulting from the adulteration or contamination of Product while in the care and custody of Buyer.

Section 8 . 3 . Assertion of Claim . In the event that any claim is asserted against any party hereto, or any party hereto is made a party defendant in any Act i on or Proceeding, and such claim, Action or Proceeding involves a matter which is subject to a claim for indemnification under this Section 6 , then such party (an " Indemnified Party") shall promptly give written notice to the other party or parties (the " Indemnifying Party") of such claim , Action or Proceeding, and such Indemnifying Party shall have the right to join in the defense of said claim, Action or Proceeding, at such Ind emnifying Party's own cost and expense, and if the Indemnifying Party agrees in writ i ng to be bound by and to promptly pay the full amount of any final judgment from which no further appeal may be taken and if the Indemnified Party is reasonably assured of the Indemnifying Party's ability to satisfy such agreement, then at the option of the Indemnifying Party, such Indemnifying Party may take over the defense of such claim, Action or Proceeding, except that, in such case, the Indemnified Party shall have the right to approve any attorney or counsel selected by the Indemnifying Party (which approva l shall not be unreasonably delayed or withheld) and to join in the defense of said claim, Action or Proceeding at its own cost and expense. In no event shall the Manufacturer or the Buyer institute , settle or otherwise resolve any claim or potential claim, Action or Proceeding relating to the Products or any trademarks, patents or other intellect ual property of or licensed to Buyer without the prior written consent of the other party.

Section 8.4. Joint Defense . Notwithstanding anything in this Agreement to the contrary, in the event that a claim arises regarding any Product that on i ts face triggers neither of the indemnity obligations set forth in Sections 8 . 1 or 8.2 above , the parties shall share joint responsibility for all Losses arising therefrom.

Section 9. Insurance.

Section 9.1. Coverage . Each of Buyer and Manufac t urer shall , as of the date hereof, obtain and keep in force throughout the Term of this Agreement and for a period of three (3) years from the effective date of expiration or termination of this Agreement, policies of insurance from carriers having an A. M . Best rating of A- or better providing coverage as specified in Exhibit E attached hereto and incorporated herein by reference.

Section 10. Confidential Information.

Section 10 . 1 . Confidential Information . All confident i al and/or proprietary information of a party disclosed to the other party , in clud i ng, but not limited to, information relating to the business affairs or finances of such party and the terms of this Agreement (the " Confidential Information " ) shall be held in confidence and not disclosed by the other party to any third party or used outs i de the scope of this Agreement, except that such party may disclose such informatio n to its Affiliates or

employees having a need to know such information, all of whom are under a similar obligation of secrecy, solely in furtherance of the purposes of this Agreement. The aforesaid obligation of confidentiality assumed by the parties hereunder shall not apply to any confidential information which (i) at the time of disclosure is in the public domain or which thereafter becomes part of the public domain by publication or otherwise through no act or default of the receiving party; (ii) the receiving party can conclusively establish was in its possession prior to the time of the disclosure of it by the disclosing party and was not acquired directly or indirectly from the disclosing party or any of its employees or agents; (iii) is independently made available as a matter of right to the receiving party by a third party who has not breached directly or indirectly a contractual relationship with the disclosing party; or (iv) which the receiving party is required to disclose by Law. Upon expiration or termination of this Agreement, each party shall return to the other party all Information received from the other party; provided, however, that each party shall be entitled to retain one copy of all Information .

Section 11. Term, Termination .

Section 11 . 1 . Initial Term; Term . Unless terminated in accordance with the provisions of this Agreement, the initial term (the " Initial Term ") of this Agreement shall commence as of the Signature Date and shall continue until December 31, 2013. Following the Initial Term, this Agreement shall automatically renew for consecutive one year periods unless and until either party hereto submits to the other party hereto written notice of its intention not to renew at least six (6) months prior to the end of the Initial Term or any renewal term, as the case may be. The Initial Term and all renewals thereof collectively shall be considered the "Term" of this Agreement.

Section 11.2. Termination . This Agreement may be terminated, without recourse to any court:

(a) by either party upon notice to the other party, with immediate effect, in the event of an assignment by the other party for the benefit of creditors; the admitted insolvency of the other party; the institution of voluntary or involuntary proceedings by or against the other party in bankruptcy, insolvency, moratorium or for a receivership, or for a winding-up or for the dissolution or reorganization of the other party; or the taking of any action by the other party under an act for relief from creditors; to the extent permitted by applicable Law; or

(b) by either party upon sixty (60) days ' written notice to the other party in the event of a failure of such other party to perform or observe a material obligation imposed by this Agreement (other than a failure which would permit termination under subclause (c) of this Section 11.2) , unless such failure is cured or the parties have reached agreement on a plan to achieve a cure of such failure prior to the end of such sixty (60) day period; or

(c) by Buyer upon written notice to the Manufacturer, with immediate effect, if in Buyer's reasonable opinion an inspection pursuant to this Agreement reveals that any Facility does not comply with cGMP or other requirements of applicable Law to such an extent that in Buyer's reasonable opinion the Manufacturer cannot perform its obligations under this Agreement; or

(d) pursuant to Section 7.1(d) or 12 . 1 of this Agreement; or

(e) by mutual agreement of the parties .

Section 11.3 . Effect of Termination . Termination of this Agreement shall not affect any obligation to pay money, indemnify, reimburse or maintain confidentiality that either party hereto may have incurred during the Term hereof .

Section 11.4. Return of Materials. etc .

(a) Upon the effective date of expiration or termination of this Agreement for any reason whatsoever, Confidential Information of either party delivered to Buyer and Manufacturer pursuant to this Agreement shall promptly be collected and returned in whatever form it may exist. In addition, the Manufacturer shall promptly collect and return to Buyer all artwork , copy or other material developed or provided by Buyer for Product labels, printed packaging materials or Product inserts .

(b) Upon the effective date of expiration or termination of this Agreement for any reason whatsoever, the Manufacturer shall also deliver to Buyer all Products manufactured hereunder and shall invoice Buyer for such Products in accordance with the terms of Section 5 . 2 . Upon the termination of this Agreement, the Buyer shall be responsible for the costs of any Raw Materials purchased in accordance with this Agreement and for any above-mentioned removal and transportation costs , unless Manufacturer may salvage such Raw Materials . Subsequent to the expiration or termination of this Agreement, the parties shall continue to be responsible for rejected Products, in accordance with the terms of S ection 6 . 8 .

Section 11.5 . Maintenance of Records . Upon the effective date of expiration or termination of this Agreement, all quality control and assurance records will be maintained by the Manufacturer for a minimum of three (3) years following production , or such other reasonable time period specified by Buyer in writing.

Section 12. Force Majeure .

Section 12.1. Force Majeure . The occurrence of an event which materially interferes with the ability of a party to perform its obligations or duties hereunder which is not within the reasonable control of the party affected, not due to malfeasance, and

which could not with the exercise of due diligence have been avoided ("Force Majeure "), including, but not limited to, fire, accident , labor difficulty, strike, riot, civil commotion, act of God, delay or errors by shipping companies or change in Law shall not excuse such party from the performance of its obligations or duties under this Agreement , but shall merely suspend such performance during the continuation of Force Majeure. The party prevented from performing its obligations or duties because of Force Majeure shall promptly notify the other party hereto (the " Other Partv ") of the occurrence and particulars of such Force Majeure and shall provide the Other Party, from time to time, with its best estimate of the duration of such Force Majeure and with notice of the termination thereof. The party so affected shall use its best efforts to avoid or remove such causes of nonperformance . Upon termination of Force Majeure, the performance of any suspended obligation or duty shall promptly recommence . Neither party shall be liable to the other party for any direct, indirect, consequential, incidental, special, punitive or exemplary damages arising out of or relating to the suspension or termination of any of its obligations or duties under this Agreement by reason of the occurrence of Force Majeure. In the event that Force Majeure has occurred and is continuing for a period of at least six (6) months, the Other Party shall have the right to terminate this Agreement upon thirty (30) days' notice.

Section 13. Miscell a neous.

Section 13.1. Relationship of the Parties . The parties shall be deemed independent contractors with respect to the terms and provisions of this Agreement and shall not in any respect act as an agent or employee of the other party. All persons employed by the Manufacturer in connection with the Manufacture and supply of the Products to Buyer shall be employees, agents or contractors of the Manufacturer. Under no circumstances shall employees or agents of one party be deemed to be employees or agents of the other party.

Section 13.2. Assignment . This Agreement shall be assignable or transferable by either party hereto only with the consent in writing of the other party , which consent shall not be unreasonably withheld; provided, however , that Buyer shall be entitled to assign its rights and obligations hereunder without such consent: (i) to an Affiliate, or (ii) in connection with the sale , license, merger or consolidation of all or substantially all of its business or similar transaction.

Section 13.3. Notice . Unless otherwise set forth herein, all notices, requests and other communications hereunder must be in writing and will be deemed to have been duly given only if delivered personally (including by overnight courier) or by facsimile transmission (receipt confirmed by telephone) to the party at the following address or facsimile numbers set forth:

If to Buyer:

lroko Pharmaceuticals, LLC

Navy Yard Corporate Center

One Crescent Drive, Suite 400

Philadelphia , PA 19112

Attention: Chief Executive Officer & President

Facsimile No: 267/546-3004

with a copy to:

lroko Pharmaceuticals, LLC

Navy Yard Corporate Center

One Crescent Drive, Suite 400

Philadelphia, PA 19112

Attention : General Counsel

Facsimile No : 267/546-3004

If to the Manufacturer:

G & W Laboratories, Inc.

111 Coolidge Street

South Plainfield, NJ 07080

Attention: President

Facsimile No : 908-753-1587

With a copy to:

G & W Laboratories, Inc.

111 Coolidge Street

South Plainfield, NJ 07080

Attention: Vice President. Administration & General Counsel

Facsimile No : 908-753-1587

The above addresses for receipt of notice may be changed by either party by notice, given as provided herein.

Section 13.4. Entire Agreement . This Agreement , including the Specifications and all Exhibits attached hereto and made a part hereof, and the Confidentiality/Non Disclosure Agreement currently in effect between the parties, contain the entire understanding of the parties, superseding in all respects any and all prior oral or written agreements or understandings pertaining to the subject matter hereof. This Agreement may be amended or modified only by written agreement executed by the parties hereto.

Section 13.5. Survival . The provisions of Sections 6.7(b), 6.8, 6.9, 6 . 1O. 6.11. 6 . 13, 7, 8, 9, 10, 11.4 and 11.5 shall survive the termination or expiration of this Agreement.

Section 13.6. Waiver . Any term or condition of this Agreement may be waived at any time by the party that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in a written instrument duly executed by or on behalf of the party or parties waiving such term or condition . No waiver by any party of any term or condition of this Agreement, in any one or more instances, shall be deemed to be or construed as a waiver of the same or any other term or condition of this Agreement on any future occasion. All remedies, either under this Agreement or by Law or otherwise afforded , will be cumulative and not alternative.

Section 13 . 7 . Headings . Headings in this Agreement are included for ease of reference only and have no legal effect.

Section 13 . 8 . Counterparts . This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

Section 13 . 9. Governing Law . This Agreement, and all matters arising directly or indirectly herefrom, including tort claims, shall be governed by and construed in accordance with the laws of the State of New Jersey without giving effect to the conflict of laws principles thereof.

End of Agreement . Signature Page Follows.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and to be effective as of the date first above written.

	IROKO PHARMACEUTICALS, LLC

	By:	/s/ JOHN VAVRICKA
	Name:	John Vavricka
	Title:	Chief Executive Officer & President

	G&W LABORATORIES, INC.

	By:	/s/ RONALD GREENBLATT
	Name:	Ronald Greenblatt
	Title:	President

EXHIBIT A

PRODUCT

Name of Product	Dosage	Packaging Size	ANDA Owner

lndomethacin Suppositories	50 mg rectal suppositories	30 suppositories per unit carton	Manufacturer

lndomethacin	50 mg rectal	2 suppositories	Manufacturer
Suppositories	suppositories	per unit sample
		carton

EXHIBIT B

Pricing Schedule

[****]

EXHIBIT C

SPECIFICATIONS

EXHIBIT D

PRODUCTION BATCH SIZES


Product	Dosage	Theoretical
		Batch Size

lndomethacin Suppositories	50 mg	[****]

EXHIBIT E

INSURANCE

[****]

EXHIBIT F

QUALITY AGREEMENT

[****]

AMENDMENT 1

Collaborative License, Exclusive Manufacture and Global Supply Agreement

This AMENDMENT 1 ("Amendment l"), is effective as of December 27, 2017 ("Amendment 1 Effective Date"), and amends the Collaborative License, Exclusive Manufacture and Global Supply Agreement, dated August 1, 2008 (the" Agreement") by and between lroko Pharmaceuticals, LLC (“Iroko” ) and G&W Laboratories , Inc. ("G&W"). Iroko and G&W are each a " Partv " and together constitute the "P a rties' ' under the Agreement.

WHEREAS, pursuant to the Agreement, among other things, G&W agreed to manufacture and supply Iroko with the Products for a specified period of time as G&W' s exclusive distributor for such Products: and

WHEREAS, the Parties desire to amend the Agreement on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the various promises and undertakings set forth herein. the Parties agree as follows:

1. Capitalized terms not otherwise defined herein shall have the meaning set forth in the Agreement.

2. The Initial Term shall be extended to December 31, 2020.

3. The definition of "Product(s)" shall mean Manufacturer' s Indomethacin Suppositories 50 mg, with a minimum of two years of shelf life at the time of Manufacturing.

For purposes of Section 4.1, Product shall mean any Indomethacin Suppositories 50 mg, with a minimum of two years of shelf life at the time of manufacturing.

4. The Price for each Product shall [****] effective for all Products ordered pursuant to Purchased Orders placed on or after the Amendment 1 Effective Date. which orders shall be consistent with Iroko's existing forecast and past practice. The Parties shall enter into good faith negotiations to amend the Agreement and the Quality Assurance Agreement (the “ Amended Agreements '') to provide for, among other things, profit sharing, pricing protections (such as a PPI and raw material adjustments), minimum annual commitments, and such other revisions and modifications as the parties may mutually agree (including, without limitation, appropriate updates to the Quality Assurance Agreement and any quality-related sections of the Agreement). In the event the Parties. after good faith negotiations, are unable to finalize and sign the Amended Agreements on or prior to March 31. 2018, [****].

5. Section 132 of the Agreement is amended and restated in its entirety as follows:

''Section 132. Assignment . This Agreement shall be assignable or transferable bv either party hereto only with the consent in writing of the other party, which consent shall not be unreasonably withheld; provided, however, that either party shall be entitled to assign its rights and obligations hereunder without such consent: (i) to an Affiliate, or (ii) in connection with the sale, license, merger or consolidation of all or substantially all of its business or similar transaction relating to such Products."

6. This Amendment 1 is effective as of the Amendment 1 Effective Date. Except as expressly provided in this Amendment 1, all of the terms and provisions of the Agreement are and will remain in full force and effect, and are hereby ratified and confirmed by the Parties. On and after the Amendment 1 Effective Date, each reference in the Agreement to "this Agreement," "the Agreement," "hereunder," "hereof," "herein" or words of like import, and each reference to the Agreement in any other agreements, documents or instruments executed and delivered pursuant to, or in connection with, the Agreement, will mean and be a reference to the Agreement, as amended by this Amendment 1.

7. This Amendment 1 shall be governed by and construed under the laws of New Jersey, excluding its conflicts of law principles.

8. This Amendment 1 may be executed in one or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same instrument. Any photocopy, facsimile or electronic reproduction of this Amendment 1 shall constitute an original.

IN WITNESS WHEREOF, the Parties have caused this Amendment 1 to be executed by their respective duly authorized officers and effective as of the Amendment 1 Effective Date, each copy of which shall for all purposes be deemed to be an original.


IROKO PHARMACEUTICALS, LLC		G&W LABORATORIES, INC.

By:	/s/ TODD SMITH	By:	/s/ JAMES H. COY
Name:	Todd Smith	Name:	James H. Coy
Title:	CEO	Title:	VP, Alliance Management

AMENDMENT 2

Collaborative License, Exclusive Manufacture and Global Supply Agreement

This AMENDMENT 2 (" Amendment 2 "), is effective as of July 10, 2018 (" Amendment 2 Effective Date "), and amends the Collaborative License, Exclusive Manufacture and Global Supply Agreement, dated August 1, 2008, as amended (the " Agreement ") by and between Iroko Pharmaceuticals, LLC (" Iroko ") and G&W Laboratories, Inc. (" G&W "). Iroko and G&W are each a " Patty " and together constitute the " Parties " under the Agreement.

WHEREAS, the Parties amended the Agreement effective December 27, 2017; and

WHEREAS, the Patties desire to further amend the Agreement on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the various promises and undertakings set forth herein, the Parties agree as follows:

1. Capitalized terms not otherwise defined herein shall have the meaning set forth in the Agreement.

2. The Initial Term shall be extended to July 31, 2023.

3. Section 2.1 of the Agreement is amended and restated in its entirety as follows:

"Section 2.1. During the Term of this Agreement and subject to the provisions hereof, Manufacturer grants and Buyer receives an irrevocable, non-transferable (other than as detailed in this Agreement), royalty-free license to exclusively market the Product in the Territory. No conveyance of ownership is granted to Buyer herein and all right, title and interest in and to the Product and any other proprietary rights contained therein are retained solely by Manufacturer."

4. The Price for each Product [****], effective for all Products ordered pursuant to Purchased Orders placed on or after the Amendment 2 Effective Date, which orders shall be consistent with Iroko's existing forecast and past practice. The Parties shall enter into good faith negotiations to amend the Agreement and the Quality Assurance Agreement (the "Amended Agreements ") to provide for, among other things, profit sharing, pricing protections (such as a PPI and raw material adjustments), minimum annual commitments, and such other revisions and modifications as the parties may mutually agree (including, without

limitation, appropriate updates to the Quality Assurance Agreement and any quality-related sections of the Agreement).

5. Section 4.3(b) of the Agreement is amended to add the following at the end of such section:

"Buyer and Manufacturer will continue to work in good faith to ensure that all Purchase Orders (i) are in full batch quantities [****] other than the one Purchase Order for the remainder of 2018, as described below, (ii) [****], and (iii) otherwise ensure for efficient manufacturing by Manufacturer."

6. Section 4.3 (d) of the Agreement will be added as follows:

" Section 4.3(d) . Provided that no generic products of the Products are available for sale in the Territory, Buyer shall purchase and Manufacturer shall supply the following [****], notwithstanding any quantities of Product delivered prior to the Amendment 2 Effective Date. In the event Buyer does not place Purchase Orders to purchase such quantities for delivery during the applicable calendar year, then Buyer shall pay Manufacturer, not later than sixty (60) days following the end of the applicable calendar year, an amount equal to the Price per unit in effect as of the last day of such calendar year multiplied by (i) the applicable annual minimum order quantity minus (ii) the number of units of Products actually ordered for delivery during the applicable calendar year

[****]

7. This Amendment 2 is effective as of the Amendment 2 Effective Date. Except as expressly provided in this Amendment 2, all of the terms and provisions of the Agreement are and will remain in full force and effect, and are hereby ratified and confirmed by the Parties. On and after the Amendment 2 Effective Date, each reference in the Agreement to "this Agreement," "the Agreement," "hereunder," "hereof," "herein" or words of like import, and each reference to the Agreement in any other agreements, documents or instruments executed and delivered pursuant to, or in connection with, the Agreement, will mean and be a reference to the Agreement, as amended by this Amendment 2.

8. This Amendment 2 shall be governed by and construed under the laws of New Jersey, excluding its conflicts of law principles.

9. This Amendment 2 may be executed in one or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same instrument. Any photocopy, facsimile or electronic reproduction of this Amendment 2 shall constitute an original.

IN WITNESS WHEREOF, the Parties have caused this Amendment 2 to be executed by their respective duly authorized officers and effective as of the Amendment 2 Effective Date, each copy of which shall for all purposes be deemed to be an original.


IROKO PHARMACEUTICALS, LLC		G&W LABORATORIES, INC.

By:	/s/ TODD SMITH	By:	/s/ JAMES H. COY
Name:	Todd N. Smith	Name:	James H. Coy
Title:	CEO	Title:	VP, Alliance Management

Exhibit 10.11

Manufacturing Services Agreement

May 29, 2009

[****] Information has been excluded from the exhibit because it is both (i) not material and (ii) would be

competitively harmful if publicly disclosed.

Table of Contents


ARTICLE 1		1

INTERPRETATION		1

1.1	DEFINITIONS	1
1.2	CURRENCY	5
1.3	SECTIONS AND HEADINGS	5
1.4	SINGULAR TERMS	5
1.5	SCHEDULES	5

ARTICLE 2		6

PATHEON'S MANUFACTURING SERVICES		6

2.1	MANUFACTURING SERVICES	6

ARTICLE 3		7

CLIENTS OBLIGATIONS		7

3.1	PAYMENT	7
3.2	ACTIVE MATERIALS	7

ARTICLE 4		8

CONVERSION FEES AND COMPONENT COSTS		8

4.1	FIRST YEAR PRICING	8
4.2	PRICE ADJUSTMENTS - SUBSEQUENT YEARS' PRICING	8
4.3	PRICE ADJUSTMENTS - CURRENT YEAR PRICING	9
4.4	ADJUSTMENTS DUE TO TECHNICAL CHANGES	9

ARTICLE 5		10

ORDERS, SHIPMENT, INVOICING, PAYMENT		10

5.1	ORDERS AND FORECASTS	10
5.2	RELIANCE BY PATHEON	10
5.3	MINIMUM ORDERS	11
5.4	SHJPMENTS	11
5.5	INVOICES AND PAYMENTS	11

ARTICLE 6		12

PRODUCT CLAIMS AND RECALLS		12

6.1	PRODUCT CLAIMS	12
6.2	PRODUCT RECALLS AND RETURNS	12
6.3	PATHEON'S RESPONSIBILITYFOR DEFECTIVE AND RECALLED PRODUCTS	13
6.4	DISPOSITION OF DEFECTIVE OR RECALLED PRODUCTS	14
6.5	HEALTHCARE PROVIDER OR PATIENT QUESTIONS AND COMPLAINTS	14

6.6	SOLE REMEDY	14

ARTICLE 7		14

COOPERATION		14

7.1	QUARTERLY REVIEW	14
7.2	GOVERNMENTAL AGENCIES	14
7.3	RECORDS AND ACCOUNTING BY PATHEON	15
7.4	INSPECTION	15
7.5	ACCESS	15
7.6	NOTIFICATION OF REGULATORY INSPECTIONS	15
7.7	REPORTS	15
7.8	FDA FILINGS	15

ARTICLE 8		16

TERM AND TERMINATION		16

8.1	INITIAL TERM	16
8.2	TERMINATION	17
8.3	PRODUCT DISCONTINUATION	17
8.4	OBLIGATIONS ON TERMINATION	17

ARTICLE 9		18

REPRESENTATIONS, WARRANTIES AND COVENANTS		18

9.1	AUTHORITY	18
9.2	CLIENT WARRANTIES	18
9.3	PATHEON WARRANTIES	19
9.4	DEBARRED PERSONS	20
9.5	PERMITS	20
9.6	No WARRANTY	20

ARTICLE 10		20

REMEDIES AND INDEMNITIES		20

10.1	CONSEQUENTIAL DAMAGES	20
10.2	LIMITATION OF LIABILITY	20
10.3	PATHEON	21
10.4	CLIENT	21
10.5	REASONABLE ALLOCATION OF RISK	21

ARTICLE 11		21

CONFIDENTIALITY		21

11.1	CONFIDENTIALITY	21

ARTICLE 12		22

DISPUTE RESOLUTION		22

12.1	COMMERCIAL DISPUTES	22
12.2	TECHNICAL DISPUTE RESOLUTION	22

ARTICLE 13		22

MISCELLANEOUS		22

13.1	INVENTIONS	22
13.2	INTELLECTUAL PROPERTY	23
13.3	INSURANCE	23
13.4	INDEPENDENT CONTRACTORS	23
13.5	No WAIVER	23
13.6	ASSIGNMENT	24
13.7	FORCE MAJEURE	24
13.8	NOTICES	24
13.9	SEVERABILITY	25
13.10	ENTIRE AGREEMENT	25
13.11	OTHER TERMS	26
13.12	No THIRD-PARTY BENEFIT OR RIGHT	26
13.13	EXECUTION IN COUNTERPARTS	26
13.14	USE OF CLIENT NAME	26
13.15	GOVERNING LAW	26

iii

MANUFACTURING SERVICES AGREEMENT

THIS MANUFACTURING SERVICES AGREEMENT (the "Agreement'') is made as of May 29, 2009 (the "Effective Date")


BETWEEN:

	PATHEON INC.,

	a corporation existing under the laws of Canada

	("Patheon"),

	-and-

	IROKO PHARMACEUTICALS, LLC,

	a limited liability company existing under the laws of Delaware

	("Client")

THIS AGREEMENT WITNESSES THAT in consideration of the rights conferred and the obligations assumed herein, and for other good and valuable consideration (the receipt and sufficiency of which are acknowledged by each party), and intending to be legally bound the parties agree as follows:

ARTICLE 1

INTERPRETATION

1. 1 Definitions .

The following terms will, unless the context otherwise requires, have the respective meanings set out below and grammatical variations of these terms will have corresponding meanings:

" Active Materials ”, “Active Pharmaceutical Ingredients ” or “API" means the materials listed on Schedule D;

“Affiliate" means;

(a) a business entity which owns, directly or indirectly, a controlling interest in a party to this Agreement, by stock ownership or otherwise; or

(b) a business entity which ls controlled by a p arty to this Agreement, either directly or indirectly, by stock ownership or otherwise; or

(c) a business entity, the controlling interest of which is directly or indirectly common to the majority ownership of a party to this Agreement;

For this definition, “control" means the ownership of shares carrying at least a majority of the votes for the election of the directors of a corporation.

"Annual Report" means the annual report to the FDA prepared by Client regarding the Product as described In Title 21 of the United States Code of Federal Regulations, Section 314.81(b)(2);

" Annual Product Review Report" means the annual product review report prepared by Patheon as described in Title 21 of the United States Code of Federal Regulations, Section 211.180(e);

“ Annual Volume " means the minimum volume of Product to be manufactured in any Year of this Agreement as set forth in Schedule B ;

"Applicable Laws" means the jurisdiction where the Manufacturing Site is located (Canada) as well as the United States of America.

“ Authority " means any governmental or regulatory authority, department, body or agency or any court, tribunal, bureau, commission or other similar body, whether federal, state, provincial, county or municipal;

"Batch" means one formulation of [****] prepared according to the manufacturing instructions and one set of bottles filled from that formulation into approximately 1,000 bottles;

"Bill Back Items " means the reasonable expenses for all third-party supplier fees for the purchase of columns, standards, tooling, PAPR or PPE suits (where applicable), RFID tags and supporting equipment, and other project specific items necessary for Patheon to perform the Manufacturing Services, and which are not Included as Components;

" Business Day" means a day other than a Saturday, Sunday or a day that is a statutory holiday in the Province of Ontario, Canada. A list of Canadian holidays is attached hereto as Schedule I;

“ cGMPs ” means current good manufacturing practices as described in:

(a) Division 2 of Part C of the Food and Drug Regulations (Canada);

(b) Parts 210 and 211 of Title 21 of the United States' Code of Federal Regulations;

together with the latest Health Canada, FDA guidance documents pertaining to manufacturing and quality control practice, au as updated, amended and revised from time to time;

“ Client Intellectual Property" means Intellectual Property generated or derived by Client before entering into this Agreement, or by Patheon while performing any Manufacturing Services or otherwise generated or derived by Patheon In its business which Intellectual Property is specific to, or dependent upon, Client's Active Material or Product;

"Components” means, collectively, all Active Materials, packaging components, raw materials, and ingredients (including labels, product inserts and other labelling for the Products), required to manufacture the Products In accordance with the Specifications;

"Confidentiality Agreement" means the agreement about the non-disclosure of confidential information between Patheon and Client dated December 9, 2008;

" Deficiency Notice ” has the meaning specified in Section 6.1(a);

" Equipment ” will have the meaning ascribed to it in the Capital Eq uipment Agreement related to this MSA and attached hereto as Schedule H;

“FDA” means the United States Food and Drug Administration;

"Firm Orders" has the meaning specified in Section 5.1(c);

"First Firm Order" has the meaning specified in Section 5.1(b);

"Forecast” has the meaning specified in Section 5.1 (a);

"Health Canada" means the section of the Canadian Government known as Health Canada and includes, among other departments, the Therapeutic Products Directorate and the Health Products and Food Branch Inspectorate:

“ Initial Set Exchange Rate " means one Canadian dollar equals 0.82216 United States Dollars as of the Effective Date of the Agreement being the initial exchange rate to convert one unit of Patheon facility local currency to one unit of the billing currency, calculated as the average interbank exchange rate for conversion of one unit of Patheon facility local currency to one unit of the billing currency during the 90 day period immediately preceding the Effective Date as published by OANDA.com "The Currency Site” under the heading " FxHistory: historical currency exchange rates" at www.OANDA.com/convert/fxhistory;

" Intellectual Property” includes, without limitation, rights in patents, patent applications, formulae, trade marks, trade-mark applications, trade-names, inventions, copyrights, industrial designs, trade secrets, and know how;

“ Invention ” means information about any Innovation, improvement, development, discovery, computer program, device, trade secret, method, know-how, process, technique or the like, whether or not written or otherwise fixed in any form or medium, regardless of the media on which it is contained and whether or not patentable or copyrightable;

“inventory” means all inventories of Components and work-in-process produced or held by Patheon for the manufacture of the Product;

"Laws" means all laws, statutes, ordinances, regulations, rules, by-laws, judgments, decrees or orders of any Authority;

" Manufacturing Services " means the manufacturing, quality control, quality assurance, stability testing, packaging, and related services, set forth in this Agreement, required to manufacture Product from Active Materials and Components;

"Manufacturing Site" means the facility owned and operated by Patheon that is located at 111 Consumers Drive, Whitby, ON L1N 525;

“Materials" means all Components, Bill Back Items, and other materials used to manufacture the Product;

"Minimum Run Quantity” means the minimum number of batches of a Product to be produced during the same cycle of manufacturing as set forth in Schedule B;

"Patheon Intellectual Property” means Intellectual Property generated or derived by Patheon before performing any Manufacturing Services, Intellectual Property developed by Patheon while performing the Manufacturing Services, or otherwise generated or derived by Patheon in its business which Intellectual Property is not specific to, or dependent upon, Client's Active Material or Product including, without limitation, Inventions and Intellectual Property which may apply to manufacturing processes or the formulation or development of drug products, drug product dosage forms or drug delivery systems unrelated to the specific requirements of the Product(s);

“Price" means the price measured in US Dollars to be charged by Patheon for performing the Manufacturing Services, and includes the cost of Components, certain cost items as set forth in Schedule B , and annual stability testing costs as set forth In Schedule C ;

“ Product " means the product listed on Schedule A;

“ Quality Agreement" means the agreement between the parties setting out the quality assurance standards for the Manufacturing Services to be performed by Patheon for Client;

"Regulatory Authority" means the FDA, Health Canada and any other foreign regulatory agencies competent to grant manufacturing, marketing and packaging approvals for pharmaceutical products including the Products In the Territory;

"Reset Date” means, with reference to any particular Year, the date on which Patheon Is to provide Client with updated pricing for the Product for the next Year; which date may be not less than one month prior to the beginning of that Year;

"RFID” means Radio Frequency Identification Devices which (at present or in the future) may be affixed to Products or Materials to assist in inventory control, tracking, and identification;

"Set Exchange Rate" means the exchange rate to convert one unit of Patheon facility local currency to one unit of the billing currency for each Year, calculated as the average interbank exchange rate for conversion of one unit of Patheon facility local currency to one unit of the billing currency during the three month period immediately preceding the Reset Date by one month as published by OANDA.com "The Currency Site under the heading "FxHistory: historical currency exchange rates" at www.OANDA.com/convert/fxhistory ;

"Specifications" means the file, for each Product, which is given by Client to Patheon in accordance with the procedures listed in Schedule A and which contains documents relating to each Product, Including, without limitation:

(a) specifications for Active Materials and Components;

(b) manufacturing specifications, directions, and processes ;

(d) all environmental, health and safety Information for the Product including material safety data sheets; and

(e) the finished Product specifications, packaging specifications and Product shipping requirements;

all as updated, amended and revised from time to time by Client In accordance with the terms of this Agreement;

" Technical Dispute" has the meaning specified in Section 12.2;

"Territory" means in the geographic area of the United States of A merica;

" Third Party Rights ” means the Intellectual Property of any third party;

"Year" means in the first year of this Agreement the period from the Effective Date up to and including December 31 of the im mediately following calendar year. Thereafter, Year means a calendar year.

1. 2 Currency .

Unless otherwise indicated, all monetary amounts are expressed In this Agreement in the lawful currency of the United States of America.

1. 3 Sections and Headings.

The division of this Agreement into Articles, Sections, Subsections, and Schedules and the insertion of headings are for convenience of reference only and will not affect the interpretation of this Agreement. Unless otherwise indicated, any reference in this Agreement to a Section or Schedule refers to the specified Section or Schedule to this Agreement. In this Agreement, the terms "this Agreement", “ hereof, "herein", “hereunder'' and similar expressions refer to this Agreement and not to any particular part, Section or Schedule of this Agreement.

1. 4 Singular Terms.

Except as otherwise expressly stated or unless the context otherwise requires, all references to the singular will include the plural and vice versa.

1. 5 Schedules .

The following Schedules are attached to, incorporated in, and form part of this Agreement:

Schedule A	Product List and Specifications
Schedule B	Minimum Run Quantity, Annual Volume, and Price
Schedule C	Annual Stability Testing & Technical Transfer Work
Schedule D	Active Materials
Schedule E	Technical Dispute Resolution
Schedule F	(Form of) Shipping Logistics Protocol
Schedule G	Example of Price Adjustment due to Currency Fluctuation
Schedule H	Capital Equipment Agreement
Schedule I	Canadian Holidays

ARTICLE 2

PATHEON'S MANUFACTURING SERVICES

2. 1 Manufacturing Services.

Client hereby appoints Patheon, and Patheon hereby accepts the appointment by Client, to perform the Manufacturing Services for the Territory for the Prices set forth ln Schedules B and C . Schedule B sets forth a 11st of cost items that are included in the Price for Products; all cost items that are not included in this list are excluded from the Price and are subject to additional fees to be paid by the Client. Patheon may change the Manufacturing Site for the Products only with the prior written consent of Client. this consent not to be unreasonably withheld. If Client has not directed Manufacturing Services to commence within 12 months of the date of execution of this Agreement. Patheon may amend the fees set out in Schedules B and C . Patheon will be the sole manufacturer of Products offered for sale by Client in the Territory. In performing the Manufacturing Services, Patheon and Client agree that:

(a) Conversjon of Active Materials and Components . Patheon will convert Active Materials and Components into Products.

(b) Quality Control and Quality Assurance. Patheon will perform the quality control and quality assurance testing specified in the Quality Agreement. Batch review and release to Client will be the responsibility of Patheon's quality assurance group. Patheon will perform its batch review and release responsibilities in accordance with Patheon's standard operating procedures. Each time Patheon ships Products to Client, it will give Client a certificate of analysis and certificate of compliance including a statement that the Batch has been manufactured and tested in accordance with Specifications and cGMPs. Client will have sole responsibility for the release of Products to the market. The form and style of Batch documents, including, but not limited to, Batch production records, lot packaging records, equipment set up control, operating parameters, and data printouts, raw material data, and laboratory notebooks are the exclusive property of Patheon. Specific Product related information contained in those Batch documents is Client property.

(c) Components. Patheon will purchase and test all Components at Patheon's expense and as required by the Specifications.

(d) Stability Testing. Patheon will conduct stability testing on the Products in accordance with the protocols set out In the Specifications for the fees and during the time periods set out in Schedule C . Patheon will not make any changes to these testing protocols without prior written approval from Client. If a confirmed stability test failure occurs, Patheon will notify Client within one Business Day, after which Patheon and Client will jointly determine the proceedings and methods to be undertaken to investigate the cause of the failure, including which party will bear the cost of the investigation. Patheon will not be liable for these costs unless It has failed to perform the Manufacturing Services in accordance with the Specifications, cGMPs, and Applicable Laws. Patheon will give Client all stability test data and results at Client's request.

(e) Packaging . Patheon will package the Products as set out in the specifications. Client will be responsible for the cost of artwork development. Patheon will determine and Imprint the batch numbers and expiration dates for each Product shipped. The Batch numbers and expiration dates will be affixed on the Products and on the shipping carton of each Product as outlined in the Specifications and as required by cGMPs. Client may, in its sole discretion, make changes to labels, product inserts, and other packaging for the Products. Those changes will be submitted by Client to all applicable governmental agencies and other third parties responsible for the approval of the Products. Client will be responsible for the cost of labelling

obsolescence when changes occur, as contemplated ln Section 4.4. Patheon's name will not appear on the label or anywhere else on the Products unless: (i) required by any Laws; or (ii) Patheon consents in writing to the use of its name.

(f) Active Materials and Client Supplied Components Importing . The parties agree that Patheon shall purchase sufficient amounts of Active Materials from Client. Client shall ensure that the Active Material is available for purchase and delivered to Patheon at least [****] before the scheduled production date. If the Active Materials are not received [****] before the scheduled production date, Patheon may delay the shipment of Product by the same number of days as the delay in receipt of the Active Materials. But ff Patheon is unable to manufacture Product to meet this new shipment date due to prior third party production commitments, Patheon may delay the shipment until a later date as agreed to by the parties. All shipments of Active Material from Client will be accompanied by certificate(s) of analysis from the Active Material manufacturer, confirming the identity and purity of the Active Materials and its compliance with the Active Material specifications.

(g) Bill Back Items . Bill Back Items will be charged to Client at Patheon's cost plus a [****] handling fee. Unless Identified to and accepted by Client, all other expenses, including services related to the Manufacturing Services, shall be billed to Client at Patheon's cost without any markup.

(h) Validation Activities . Patheon may assist in the development and approval of the validation protocols for analytical methods and manufacturing procedures (including packaging procedures) for the Products. The fees associated with Patheon's assistance in providing validation development assistance are set out in Schedule C .

( i) Product Rejection for Finished Product Specification Fajlure . Internal process specifications will be defined and mutually agreed upon. If Patheon manufactures Product in accordance with the agreed upon process specifications and a batch or portion of batch of Product does not meet a Finished Product Specification, Client will pay Patheon the applicable fee per unit for the nonconforming Product.

(G) Technical Transfer Activities . Patheon will conduct technical transfer activities on the Product in accordance with the specifications and fees set out in Schedule C .

ARTICLE 3

CLIENT'S OBLIGATIONS

3. 1 Payment .

In consideration for Patheon performing the Manufacturing Services , Client will pay Patheon the Prices specified in Schedules B and C . These Prices may be subject to adjustment under other parts of this Agreement. Client will also pay Patheon for any Bill Back Items.

3. 2 Active Materials.

Client will deliver the Active Materials to Patheon (in accordance with Section 2.1(f)) sufficient for Patheon to manufacture the desired quantities of Product on the requested delivery date. All materials purchased will be shipped prepaid. The parties agree that title to the Active Materials will transfer to Patheon upon Patheon's purchase of the Active Materials from Client. Any Active Materials received by Patheon will be used by Patheon solely to perform the Manufacturing Services.

ARTICLE 4

CONVERSION FEES AND COMPONENT COSTS

4. 1 First Year Pricing

The tiered Price and annual stability Price for the Products for the first Year are listed in Schedules B and C and are subject to the adjustments set forth in Sections 4.2 and 4.3.

4. 2 Price Adjustments - Subsequent Years' Pricing.

After the first Year of the Agreement, Patheon may adjust the Price effective January 1sL of each Year as follows:

(a) Manufacturing Costs. Patheon may adjust the Price for inflation, based upon the preliminary number for any change in the Producer Price Index pcu325412325412 for Pharmaceutical Preparation Manufacturing (“PPl”) published by the United States Department of Labor, Bureau of Labor Statistics in August of the preceding Year compared to the final number for the same month of the Year prior to that, unless the parties otherwise agree in writing. On or about November 1st of each Year, Patheon will give Client a statement setting forth the calculation for the inflation adjustment to be applied in calculating the Price for the next Year.

(b) Component Costs. If Patheon incurs an increase or decrease in Component costs during the Year, it may adjust the Price for the next Year to pass through the change in the Component costs. On or about November 1st of each Year, Patheon will give Client information about the change in Component costs which will be applied to the calculation of the Price for the next Year to reasonably demonstrate that the Price adjustment is justified. But Patheon will not be required to give information to Client that Is subject to obligations of confidentiality between Patheon and its suppliers.

(c) Pricing Basis. Client acknowledges that the Price in any Year is quoted based upon the Minimum Run Quantity and the price tiers specified in Schedule B . The Price is subject to change if the specified Minimum Run Quantity changes or If the minimum Annual Volume in the lowest tier is not ordered in a Year. For greater certainty, If Patheon and Client agree that the Minimum Run Quantity will be reduced or the minimum Annual Volume in the lowest tier will not be ordered in a Year whether as a result of a decrease in estimated annual volume or otherwise and, as a result of the reduction, Patheon demonstrates to Client that its costs to perform the Manufacturing Services and to acquire the Materials for the Product will increase on a per unit basis (including the amount of the increase), then Patheon may increase the Price by an amount sufficient to absorb the documented increased costs. On or about November 1 of each Year, Patheon will give Client a statement setting forth the information to be applied in calculating those cost increases for the next Year. But Patheon will not be required to give information to Client that is subject to obligations of confidentiality between Patheon and its suppliers.

(d) Adjustments Due to Currency Fluctuations. Patheon will adjust the Price for all Product that Is manufactured outside the United States or Puerto Rico to reflect currency fluctuations. The adjustment will be calculated after all other annual Price adjustments under this Section 4.2 have been made. The adjustment will proportionately reflect the increase or decrease, If any, in the Set Exchange Rate compared to the Set Exchange Rate established for the prior Year or the Initial Set Exchange Rate, as the case may be. An example of the calculation of the price adjustment Is set forth in Schedule G .

For all Price adjustments under this Section 4.2, Patheon will deliver to Client on or about November 1st of each Year a revised Schedule B to be effective for the next Year.

4. 3 Price Adjustments - Current Year Pricing.

During any Year of this Agreement, the Prices will be adjusted as follows:

Extraordinary Changes jn Component Costs. If, at any time, market conditions result in Patheon's cost of Components being materially different than normal forecasted changes, then Patheon or Client will be entitled to an adjustment to the Price for any affected Product to compensate It for the change in Component costs. Changes materially greater than normal forecasted increases will have occurred if: (i) the cost of a Component changes by [****] of the cost for that Component upon which the most recent fee quote was based; or (II) the aggregate cost for all Components required to manufacture a Product changes by [****] of the total Component costs for the Product upon which the most recent fee quote was based. If Component costs have been previously adjusted to reflect an increase in the cost of one or more Components, the adjustments set out in (I) and (ii) above will operate based on the last cost adjustment for the Components.

For a Price adjustment under this Section 4.3, Patheon will deliver to Client a revised Schedule B and budgetary pricing information, adjusted Component costs or other documents reasonably sufficient to demonstrate that a Price adjustment is justified. Patheon will have no obligation to deliver any supporting documents that are subject to obligations of confidentiality between Patheon and its suppliers. The revised Price will be effective for any Product delivered on or after the first day of the month following Client's receipt of the revised Schedule B.

4. 4 Adjustments Due to Technical Changes.

Amendments to the Specifications or the Quality Agreement requested by Client will only be implemented following a technical and cost review by Patheon and are subject to Client and Patheon reaching agreement on Price changes required because of the amendment. Amendments to the Specifications, the Quality Agreement or the Manufacturing Site requested by Patheon will only be implemented following the written approval of Client, the approval not to be unreasonably withheld. If Client accepts a proposed Price change, the proposed change in the Specifications will be implemented, and the Price change will become effective, only for those orders of Products that are manufactured under the revised Specifications. In addition, Client agrees to purchase, at Patheon's cost (including all costs incurred by Patheon for the purchase and handling of the Inventory), all Inventory used under the “old" Specifications and purchased or maintained by Patheon in order to fill Firm Orders or under Section 5.2, if the Inventory can no longer be used under the revised Specifications. Open purchase orders for Components no longer required under any revised Specifications that were placed by Patheon with suppliers in order to fill Firm Orders or under Section 5.2 will be cancelled where possible, and If the orders may not be cancelled without penalty, will be assigned to and satisfied by Client.

ARTICLE 5

ORDERS, SHIPMENT, INVOICING, PAYMENT

5. 1 Orders and Forecasts .

(a) Rolling 18 Month Forecast. When this Agreement is executed, Client will give Patheon a non-binding 1B month Forecast of the volume of Product that Client expects to order in the first 18 months of commercial manufacture of the Product (the "Forecast”). This Forecast will then be updated by Client on or before the 101h day of each month on a rolling forward basis. Client will update the Forecast forthwith if it determines that the volumes estimated in the most recent Forecast have changed by more than 20%. The most recent 1B month Forecast will prevail. Patheon acknowledges and agrees that it will make every effort to ensure that it has adequate capacity to fulfill Client's requirements under the Forecast.

(b) Firm Orders for Initial Manufacturing Month . At least three months before the start of commercial manufacture of the Product, Client will update the rolling forecast for the first three months of manufacture of the Product (the "Initial Manufacturing Period”). The first month of this updated forecast ("Initial Manufacturing Month") will constitute a final written order in the form of a purchase order or otherwise ("First Firm Order") by Client to purchase and, when accepted by Patheon, for Patheon to manufacture the quantity of the Product. [****].

(c) Firm Orders Thereafter. After the Initial Manufacturing Month, on a rolling basis during the term of this Agreement, and on or before the 10th day of each month, Client will issue an updated 1B month forecast and the first three months of that updated forecast will constitute a firm written order in the form of a purchase order or otherwise ("Firm Order") by Client to purchase and, when accepted by Patheon, for Patheon to manufacture and deliver the agreed quantity of the Products on a date not less than three months from the first day of the month Immediately following the date that the Firm Order is submitted. Finn Orders submitted to Patheon will specify Client's Manufacturing Services purchase order number, quantities by Product type, monthly delivery schedule, and any other elements necessary to ensure the timely manufacture and shipment of the Products. The quantities of Products ordered in those written orders will be firm and binding on Client and may not be reduced by Client.

(d) Three Year Forecast. On or before the 10th day of June of each Year, Client will give Patheon a written non-binding three year forecast, broken down by quarters for the second and third years of the forecast, of the volume of each Product Client then anticipates will be required to be manufactured and delivered to Client during the three year period.

5. 2 Reliance by Patheon .

(a) Client understands and acknowledges that Patheon will rely on the Firm Orders and rolling forecasts submitted under Sections 5.1(a), (b), and (c) in ordering the Components required to meet the Firm Orders. In addition, Client understands that to ensure an orderly supply of the Components, Patheon may want to purchase the Components in sufficient volumes to meet the production requirements for Products during part or all of the forecasted periods referred to in Section 5.1(a) or to meet the production requirements of any longer period agreed to by Patheon and Client. Accordingly, Client authorizes Patheon to purchase Components to satisfy the Manufacturing Services requirements for Products for the first six months contemplated in the most recent forecast given by Client under Section 5.1(a). Patheon may make other purchases of Components to meet Manufacturing Services requirements for longer periods If agreed to in writing by the parties. The Client will give Patheon written authorization to order Components for any launch quantities of Product requested by Client which will be considered a Finn Order when accepted by Patheon. If Components ordered by Patheon under Firm Orders or this Section 5.2 are not included in finished Products manufactured for Client within six (6) months after the forecasted month for which the purchases have been made (or for a longer period as the parties may agree) or if the Components have expired during the period, then Client will pay to Patheon its costs therefor (including all costs incurred by Patheon for the purchase and handling of the Components). But if these Components are used in Products subsequently manufactured for Client or in third party products manufactured by Patheon, Client will receive credit for any costs of those Components previously paid to Patheon by Client.

(b) If Client fails to take possession or arrange for the destruction of Components within 12 months of purchase or, in the case of finished Product, within three months of manufacture, Client will pay Patheon [****], per month thereafter for storing the Components or finished Product. Storage fees for Components or Product which contain controlled substances or require refrigeration will be charged at [****]. Storage fees are subject to a one pallet minimum charge per month. Patheon may ship finished Product held by It longer than 3 months to the Client at Client's expense on 14 days written notice to the Client.

5. 3 Minimum Orders .

Client may only order Manufacturing Services for Batches of Products in multiples of the Minimum Run Quantities as set out in Schedule B .

5. 4 Shipments .

Shipments of Products will be made DOU (INCOTERMS 2000) lroko Pharmaceuticals, LLC. Location shall be designated on the Purchase Order. Title shall remain with Patheon until the Product reaches the destination point identified by Client, however, risk of loss or damage to Product will only remain with Patheon until Patheon loads the Product onto the carrier's vehicle for shipment at the shipping point at which time risk of loss or damage will transfer to Client. Patheon will, in accordance with Client's instructions and as agent for Client (i) arrange for shipping to be paid by Client and (II) at Client's risk and expense, obtain any export license or other official authorization necessary to export the Product. Client will arrange for insurance and will select the freight carrier used by Patheon to ship Product and may monitor Patheon's shipping and freight practices as they pertain to this agreement. Product will be transported in accordance with the Specifications.

5. 5 Invoices and Payments

Invoices will be sent by fax or email to the fax number or email address given by Client to Patheon in writing from time to time. Invoices will be sent when the Product Is shipped by Patheon to the Client. Patheon will also submit to Client, with each shipment of Products, a duplicate copy of the Invoice covering the shipment. Patheon will also give Client an invoice covering any Inventory or Components which are to be purchased by Client under Section 5.2 of this Agreement. Each invoice will, to the extent applicable, identify Client's Manufacturing Services purchase order number, Product numbers, names and quantities, unit price, freight charges, and the total amount to be paid by Client. Client will pay all invoices [****]. [****].

ARTICLE 6

PRODUCT CLAIMS AND RECALLS

6.1 Product Claims .

(a) Product Claims . Client has the right to reject any portion of any shipment of Products that deviates from the Specifications, cGMPs, or Applicable Laws without invalidating any remainder of the shipment. Client will inspect the Products manufactured by Patheon upon receipt and will give Patheon written notice (a “Deficiency Notice”) of all claims for Products that deviate from the Specifications, cGMPs, or Applicable Laws within 30 days after Client's receipt thereof (or, in the case of any defects not reasonably susceptible to discovery upon receipt of the Product, within 30 days after discovery by Client, but not after the expiration date of the Product). Should Client fail to give Patheon the Deficiency Notice within the applicable 30 day period, then the delivery will be deemed to have been accepted by Client on the 30" day after delivery or discovery, as applicable. Except as set out in Section 6.3, Patheon will have no liability for any deviations for which it has not received notice within the applicable 30 day period.

(b) Determination of Deficiency . Upon receipt of a Deficiency Notice, Patheon will have ten days to advise Client by notice in writing that it disagrees with the contents of the Deficiency Notice. If Client and Patheon fall to agree within ten days after Patheon's notice to Client as to whether any Products Identified in the Deficiency Notice deviate from the Specifications, cGMPs, or Applicable Laws, then the parties will mutually select an independent laboratory to evaluate If the Products deviate from the Specifications, cGMPs, or Applicable Laws. This evaluation will be binding on the parties. If the evaluation certifies that any Products deviate from the Specifications, cGMPs, or Applicable Laws, Client may reject those Products in the manner contemplated in this Section 6.1 and Patheon will be responsible for the cost of the evaluation. If the evaluation does not so certify for any of the Products, then Client will be deemed to have accepted delivery of the Products on the 40th day after delivery (or, in the case of any defects not reasonably susceptible to discovery upon receipt of the Product, on the 40th day after discovery thereof by Client, but not after the expiration date of the Product) and Client will be responsible for the cost of the evaluation.

6. 2 Product Recalls and Returns .

(a) Records and Notice . Patheon and Client will each maintain records necessary to permit a Recall of any Products delivered to Client or customers of Client. Each party will promptly notify the other by telephone (to be confirmed in writing) of any information which might affect the marketability, safety or effectiveness of the Products or which might result in the Recall or seizure of the Products. Upon receiving this notice or upon this discovery, each party will stop making any further shipments of any Products in its possession or control until a decision has been made whether a Recall or some other corrective action is necessary. The decision to initiate a Recall or to take some other corrective action, if any, will be made and implemented by Client. "Recall" will mean any action (I) by Client to recover title to or possession of quantities of the Products sold or shipped to third parties (including, without limitation, the voluntary withdrawal of Products from the market); or (ii) by any regulatory authorities to detain or destroy any of the Products. Recall will also

include any action by either Party to refrain from selling or shipping quantities of the Products to third parties which would have been subject to a Recall if sold or shipped.

(b) Recalls . If (I) any governmental or regulatory authority Issues a directive, order or, following the issuance of a safety warning or alert about a Product, a written request that any Product be Recalled, (ii) a court of competent jurisdiction orders a Recall, or (Ill) Client determines that any Product should be Recalled or that a "Dear Doctor" letter Is required relating the restrictions on the use of any Product, Patheon will co-operate as reasonably required by Client, having regard to all applicable laws and regulations.

(c) Product Returns . Client will have the responsibility for handling customer returns of the Products. Patheon will give Client any assistance that Client may reasonably require to handle th e returns.

6.3 Patheon's Responsibility for Defective and Recalled Products .

(a) Defective Product . If Client rejects Products under Section 6.1 and the deviation is determined to have arisen from Patheon's failure to provide the Manufacturing Services in accordance with the Specifications, cGMPs, and Applicable Laws, Patheon will credit Client's account for Patheon's invoice price for the defective Products. If Client previously paid for the defective Products, Patheon will promptly, at Client's election, either: (i) refund the invoice price for the defective Products; (ii) offset the amount paid against other amounts due to Patheon hereunder; or (Iii) replace the Products with conforming Products without Client being liable for payment therefore under Section 3.1. contingent upon Patheon being able to obtain from Client of all Active Materials required for the manufacture of the replacement Products.

(b) Recalled Product . If a Recall or return results from, or arises out of, a failure by Patheon to perform the Manufacturing Services in accordance with the Specifications, cGMPs, and Applicable Laws, Patheon will be responsible for the documented out-of-pocket expenses of the Recall or return and will use its commercially reasonable efforts to replace the Recalled or returned Products with new Products, contingent upon Patheon being able to obtain from Client of all Active Materials required for the manufacture of the replacement Products. If Patheon is unable to replace the Recalled or returned Products (except where this inability results from a failure to receive the required Active Materials), then Client may request Patheon to reimburse Client for the price that Client paid to Patheon for Manufacturing Services for the affected Products. In all other circumstances, Recalls, returns, or other corrective actions will be made at Client’s cost and expense.

(c) Except as set forth in Sections 6.3(a) and (b) above, Patheon will not be able to Client nor have any responsibility to Client for any deficiencies in, or other liabilities associated with, any Product manufactured by it, (collectively, "Product Claims"). For greater certainty, Patheon will have no obligation for any Product Claims to the extent the Product Claim (i) is caused by deficiencies in the Specifications, the safety, efficacy, or marketability of the Products or any distribution thereof, (ii) results from a defect in a Component that is not reasonably discoverable by Patheon using the test methods set forth in the Specifications, (ill) results from a defect in the Components supplied by Client that Is not reasonably discoverable by Patheon using the test methods set forth in the Specifications, (Iv) is caused by actions of third parties occurring after the Product is shipped by Patheon under Section 5.4, (v) is due to packaging design or labelling defects or omissions for which Patheon has no responsibility, (vi) is due to any unascertainable reason despite Patheon having performed the Manufacturing Services in accordance with the Specifications, cGMP's, and Applicable Laws, or (vii) Is due to any other breach by Client of Its obligations under this Agreement.

6. 4 Disposition of Defective or Recalled Products .

Client will not dispose of any damaged, defective, returned, or Recalled Products for which it intends to assert a claim against Patheon without Patheon's prior written authorization to do so. Alternatively, Patheon may instruct Client to return the Products to Patheon as Patheon's own expense. Patheon will bear the cost of disposition for any damaged, defective, returned or Recalled Products for which it bears responsibility under Section 6.3. In all other circumstances, Client will bear the cost of disposition, including all applicable fees for Manufacturing Services, for any damaged, defective, returned, or Recalled Products.

6. 5 Healthcare Provider or Patient Questions and Complaints .

Client will have the sole responsibility for responding to questions and complaints from its customers. Questions or complaints received by Patheon from Client's customers, healthcare providers or patients will be promptly referred to Client. Patheon will co-operate as reasonably required to allow Client to determine the cause of and resolve any questions and complaints. This assistance will include follow-up investigations, including testing. In addition, Patheon will give Client all mutually agreed upon information that will enable Client to respond property to questions or complaints about the Products as set forth in the Quality Agreement. Unless It Is determined that the cause of the complaint resulted from a failure by Patheon to perform the Manufacturing Services in accordance with the Specifications, cGMPs, and Applicable Laws, all costs incurred under this Section 6.5 will be borne by Client.

6. 6 Sole Remedy .

Except for the indemnity set forth in Section 10.3 and subject to the limitations set forth in Sections 10.1 and 10.2, the remedies described in this Article 6 will be Client's sole remedy for any failure by Patheon to provide the Manufacturing Services in accordance with the Specifications, cGMPs, and Applicable Laws.

ARTICLE 7

CO-OPERATION

7. 1 Quarterly Review .

Each party will forthwith upon execution of this Agreement appoint one of its employees to be a relationship manager responsible for liaison between the parties. The relationship managers will meet not less than quarterly to review the current status of the business relationship and manage any Issues that have arisen.

7. 2 Governmental Agencies .

Subject to Section 7.8, each party may communicate with any governmental agency, including but not limited to governmental agencies responsible for granting regulatory approval for the Products, regarding the Products if, in the opinion of that party's counsel, the communication is necessary to comply with the terms of this Agreement or the requirements of any law, governmental order or regulation. Unless, in the reasonable opinion of its counsel, there Is a legal prohibition against doing so, a party will permit the other party to accompany and take part in any communications with the agency, and to receive copies of all communications from the agency.

7. 3 Records and Accounting by Patheon .

Patheon will keep records of the manufacture, testing, and shipping of the Products, and retain samples of the Products as are necessary to comply with manufacturing regulatory requirements applicable to Patheon, as well as to assist with resolving Product complaints and other similar investigations. Copies of the records and samples will be retained for a period of one year following the date of Product expiry, or longer if required by raw, at which time Client will be contacted concerning the delivery and destruction of the documents and/or samples of Products. Client is responsible for retaining samples of the Products necessary to comply with the legal/regulatory requirements applicable to Client.

7. 4 Inspection .

Client may inspect Patheon reports and records relating to this Agreement during normal business hours and with not less than five days advance notice, but a Patheon representative must be present during the inspection.

7. 5 Access .

Once the products listed in Schedule A of the MSA are approved, Patheon will give Client reasonable access at mutually agreeable times to the areas of the Manufacturing Site in which the Products are manufactured, stored , handled, or shipped to permit Client to verify that the Manufacturing Services are being performed in accordance with the Specifications, cGMPs, and Applicable Laws. But, with the exception of “for-cause” audits, Client will be limited each Year to one cGMP-type audit, lasting no more than two days, and involving no more than two auditors. [****]

7.6 Notification of Regulatory Inspections .

Patheon will notify Client’s Head of Quality within one Business Day of any inspections by any governmental agency specifically involving the Products. Patheon will also notify Client's Head of Quality of receipt of any form 483's or warning letters or any other significant regulatory action which Patheon's quality assurance group determines could impact the regulatory status of the Products.

7. 7 Reports .

Patheon will supply on an annual basis all Product data in its control, including release test results, complaint test results, and all investigations (in manufacturing, testing, and storage), that Client reasonably requires in order to complete any filing under any applicable regulatory regime, including any Annual Report that Client Is required to file with the FDA. At the Client's request, Patheon will provide a copy of the Annual Product Review Report to the Client at no additional cost. Any additional report requested by Client beyond the scope of cGMPs and customary FDA requirements will be subject to an additional fee to be agreed upon between Patheon and the Client.

7. 8 FDA Filings .

(a) Regulatory Authority . Client will have the sole responsibility for filing all documents with all Regulatory Authorities and taking any other actions that may be required for the receipt and/or maintenance of Regulatory Authority approval for the commercial manufacture of the Products. Patheon will assist Client, to the extent consistent with Patheon’s obligations under this Agreement, to obtain Regulatory Authority approval for the commercial manufacture of an Products as quickly as reasonably possible.

(b) Verification of Data . At least 14 days prior to filing any documents with any Regulatory Authority, unless otherwise agreed to by Patheon and Client, that incorporate data generated by Patheon, Client will give Patheon a copy of the documents incorporating this data to give Patheon the opportunity to verify the accuracy and regulatory validity of those documents as they relate to Patheon generated data. Client and Patheon agree that for the initial CBE-30 filing expedited preparation and review are

required and as such every effort will be made by both parties to carry out those activities within a mutually acceptable compressed timeline.

(c) Verification of CMC . At least 14 days prior to filing with any Regulatory Authority, unless otherwise agreed to by Patheon and Client, any documentation which is or is equivalent to the FDA's Chemistry and Manufacturing Controls ("CMC”) related to any Marketing Authorization, such as a New Drug Application or Abbreviated New Drug Application, Client will give Patheon a copy of the CMC as well as all supporting documents which have been relied upon to prepare the CMC. This disclosure will permit Patheon to verify that the CMC accurately describes the work that Patheon has performed and the manufacturing processes that Patheon will perform under this Agreement. Client will give Patheon copies of all FDA filings at the time of submission which contain CMC information regarding the Product. Client and Patheon agree that for the initial CBE-30 filing, expedited preparation and review are required and as such, every effort will be made by both parties to carry out those activities within a mutually acceptable compressed timelin e.

(d) Deficiencies . If, in Patheon's sole discretion, acting reasonably, Patheon determines that any of the information given by Client under clauses (b) and (c) above is inaccurate or deficient in any manner whatsoever (the “Deficiencies”), Patheon will notify Client in writing of the Deficiencies. The parties will work together to have the Deficiencies resolved prior to any pre-approval inspection.

(e) Client Responsibility . For clarity, the parties agree that in reviewing the documents referred to in clause (b} above, Patheon's role will be limited to verifying the accuracy of the description of the work undertaken or to be undertaken by Patheon. Subject to the foregoing, Patheon will not assume any responsibility for the accuracy of any application for receipt of an approval by a Regulatory Authority. The Client is solely responsibility for the preparation and filing of the application for approval by the Regulatory Authorities and any relevant costs will be borne by the Client.

(f) inspection by Regulatory Authorities . If Client does not give Patheon the documents requested under clause (b) above within the time specified and if Patheon reasonably believes that Patheon’s standing with a Regulatory Authority may be Jeopardized, Patheon may, in its sole discretion, delay or postpone any inspection by the Regulatory Authority until Patheon has reviewed the requested documents and is satisfied with their contents.

ARTICLE 8

TERM AND TERMINATION

8.1 Initial Term .

This Agreement will become effective as of the Effective Date and will continue until December 31, 2012 (the “Initial Term"), unless terminated earlier by one of the parties in accordance herewith. This Agreement will automatically continue after the Initial Term for successive terms of two years each unless either party gives at least 12 months written notice to the other party of its intention to terminate this Agreement.

8. 2 Termination

(a) Either party at Its sole option may terminate this Agreement upon written notice where the other party has failed to remedy a material breach of any of Its representations, warranties, or other obligations under this Agreement within 60 days following receipt of a written notice (the " Remediation Period”) of the breach that expressly states that it is a notice under this Section B.2(a) (a “Breach Notice"). The aggrieved party's right to terminate this Agreement under this Section 8.2(a) may only be exercised for a period of 60 days following the expiry of the Remediation Period (where the breach has not been remedied) and if the termination right Is not exercised during this period then the aggrieved party will be deemed to have waived the breach of the representation, warranty, or obligation described in the Breach Notice.

(b) Either party at its sole option may immediately terminate this Agreement upon written notice, but without prior advance notice, to the other party if: (i) the other party ls declared insolvent or bankrupt by a court of competent Jurisdiction; (ii) a voluntary petition of bankruptcy Is filed in any court of competent jurisdiction by the other party; or (iii) this Agreement is assigned by the other party for the benefit of creditors.

(c) Client may terminate this Agreement as to any Product upon 30 days' prior written notice if any Authority takes any action, or raises any objection, that prevents Client from importing, exporting, purchasing, or selling the Product. But if this occurs, Client will still fulfill all of Its obligations under Section 8.4 below and under any Capital Equipment Agreement regarding this Product.

(d) Either party may terminate this Agreement upon six months' prior written notice if the other party assigns under Section 13.6 any of its rights under this Agreement to an assignee that, in the opinion of the non-assigning party acting reasonably, Is: (i) not a credit worthy substitute for the assigning party; or (ii) a competitor of the non-assigning party; or (iii) an entity with whom non-assigning party has had prior unsatisfactory business relations.

(e) Client may terminate this Agreement without cause at any time after twelve months from the Effective Date of this Agreement, upon twelve months' prior written notice to Patheon. Notwithstanding the termination provisions above, Client agrees that if Patheon receives notice of termination by Client pursuant to section 8.2(e) above prior to December 31, 2012 (other than in connection with the expiration of the Initial Term and non-renewal of this Agreement), then the rebate outlined in Schedule C, Part 9, shall not be applicable. In the event the rebate in Schedule C has already been paid out by Patheon if termination pursuant to 8.2(e) occurs, Client agrees that this rebate will be refunded to Patheon within thirty (30) days of the notice of termination.

8. 3 Product Discontinuation .

Client will give at least six months' advance notice if it intends to no longer order Manufacturing Services for a Product due to this Product’s discontinuance in the market.

8.4 Obligations on Termination .

If this Agreement is completed, expires, or is terminated in whole or in part other than breach by Patheon of the warranty provided in Section 9.3(a), then:

(a) Client will take delivery of and pay for all undelivered Products that are manufactured and/or packaged under a Firm Order, at the price in effect at the time the Firm Order was placed;

(b) Client will purchase, at Patheon's cost (including all costs incurred by Patheon for the purchase and handling of the inventory), the inventory applicable to the Products which was purchased, produced or maintained by Patheon in contemplation of filling Firm Orders or in accordance with Section 5.2 prior to notice of termination being given;

(c) Client will satisfy the purchase price payable under Patheon's orders with suppliers of Components, if the orders were made by Patheon in reliance on Firm Orders or in accordance with Section 5.2;

(d) Client acknowledges that no competitor of Patheon will be pennltted access to the Manufacturing Site.

(e) Client will make commercially reasonable efforts, at Its own expense, to remove from Patheon site(s), within 30 Business Days, all of Client's Components, inventory and Materials (whether current or obsolete), supplies, undelivered Product, chattels, equipment or other moveable property owned by Client, related to the Agreement and located at a Patheon site or that is otherwise under Patheon's care and control (“Client Property'"). If Client fails to remove the Client Property within five Business Days following the completion, termination, or expiration of the Agreement Client will pay Patheon $100.00 per pallet, per month, one pallet minimum ($200 per pallet, per month, one pallet minimum, for any of the Client Property that contains controlled substances or requires refrigeration} thereafter for storing the Client Property and will assume any third party storage charges invoiced to Patheon regarding the Client Property. Patheon will invoice Client for the storage charges as set forth in Section 5.5 of this Agreement.

(f) Any termination or expiration of this Agreement will not affect any outstanding obligations or payments due hereunder prior to the termination or expiration, nor will it prejudice any other remedies that the parties may have under this Agreement [or any related Capital Equipment Agreement). For greater certainty, termination of this Agreement for any reason will not affect the obligations and responsibilities of the parties under Articles 10 and 11 and Sections 5.4, 5.5, 8.4, 13.1, 13.2, 13.3, and 13.15, all of which survive any termination.

ARTICLE 9

REPRESENTATIONS, WARRANTIES AND COVENANTS

9. 1 Authority .

Each party covenants, represents, and warrants that it has the full right and authority to enter into this Agreement and that it is not aware of any impediment that would inhibit its ability to perform its obligations hereunder.

9. 2 Client Warranties .

Client covenants , represents; and warrants that:

(a) Non-Infringement .

(i) the Specifications for each of the Products are its or its Affiliate's property and that Client may lawfully disclose the Specifications to Patheon;

(ii) any Client Intellectual Property, used by Patheon in performing the Manufacturing Services according to the Specifications (A) is Client's or its Afflllate's unencumbered property, (B) may be lawfully used as directed by Client, and (C) does not infringe and will not infringe any Third Party Rights;

(iii) the performance of the Manufacturing Services by Patheon for any Product under this Agreement or the use or other disposition of any Product by Patheon as may be required to perform its obligations under this Agreement does not and will not infringe any Third Party Rights;

(iv) to the best of Its knowledge, there are no actions or other legal proceedings concerning the infringement of Third Party Rights related to any of the Specifications, or the sale, use or other disposition of any Product made in accordance with the Specifications.

(b) Quality and Compliance .

(i) the Specifications for all Products conform to all applicable cGMPs and Applicable Laws;

(ii) the Products, if labelled and manufactured in accordance with the Specifications and in compliance with applicable cGMPs and Applicable Laws (i) may be lawfully sold and distributed in every jurisdiction in which Client markets the Products. (ii) will be fit for the purpose intended, and (iii) will be safe for human consumption;

(iii) on the date of shipment, the API will have been manufactured in accordance with cGMP and will conform to the specifications for the API that Client has given to Patheon and that the API will be adequately contained, packaged, and labelled and will conform to the affirmations of fact on the container, as certified by the API manufacturer.

9. 3 Patheon Warranties .

Patheon covenants, represents, and warrants that:

(a) it will perform the Manufacturing Services in accordance with the Specifications, cGMPs, the Quality Agreement and Applicable Laws;

(b) any Patheon Intellectual Property used by Patheon to perform the Manufacturing Services (i) is Patheon's or its Affiliates’ unencumbered property,(ii) may be lawfully used by Patheon, and (iii) does not infringe and will not infringe any Third Party Rights;

(c) Patheon is a corporation duly incorporated, validly existing and ln good standing under the laws of the jurisdiction of its incorporation and has all requisite corporate power to execute and deliver this Agreement and to perform its obligations hereunder. The execution and delivery by Patheon of this Agreement and its performance of Its obligations hereunder have been duly and validly authorized. This Agreement constitutes a legal, valid and binding obligation on Patheon, enforceable in accordance with Its terms, subject to applicable bankruptcy, insolvency, reorganization, and other laws of general application limiting the enforcement of creditor's rights.

(d) As of the Effective Date hereof, Patheon holds, and shall continue during the term to hold, all licenses and permits necessary for Patheon to perform the Manufacturing Services as contemplated herein.

(e) As of the Effective Date hereof and during the term of this Agreement the Manufacturing Services, Manufacturing Site, Materials and all equipment utilized, in performing its obligations under this Agreement shall be In full compliance and In accordance with Specifications, cGMP and all Applicable Laws in which it is contemplated to be performed and/or provided .

(f) Patheon is not aware of any safety, efficacy, or regulatory Issues relating to its manufacturing processes other than the information that has previously been made available to the Client, that would preclude Patheon from manufacturing the Product in compliance with Applicable Laws.

9. 4 Debarred Persons .

Patheon covenants that it will not in the performance of its obligations under this Agreement use the services of any person debarred or suspended under 21 U.S.C. §335(a) or (b). Patheon represents that it does not currently have, and covenants that It will not hire, as an officer or an employee any person who has been convicted of a felony under the laws of the United States for conduct relating to the regulation of any drug product under the Federal Food, Drug, and Cosmetic Act (United States).

9. 5 Permits .

Client will be solely responsible for obtaining or maintaining, on a timely basis, any permits or other regulatory approvals for the Products or the Specifications, including, without limitation, all marketing and post-marketing approvals.

Patheon will maintain at all relevant times all governmental permits, licenses, approval, and authorities required to enable it to lawfully and properly perform the Manufacturing Services.

9. 6 No Warranty .

NEITHER PARTY MAKES ANY WARRANTY OF ANY KIND, EITHER EXPRESSED OR IMPLIED, BY FACT OR LAW, OTHER THAN THOSE EXPRESSLY SET FORTH IN THIS AGREEMENT. PATHEON MAKES NO WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE OR WARRANTY OF MERCHANTABILITY FOR THE PRODUCTS.

ARTICLE 10

REMEDIES AND INDEMNITIES

10. 1 Consequential Damages .

Under no circumstances whatsoever will either party be liable to the other in contract, tort, negligence, breach of statutory duty, or otherwise for (i) any ( direct or indirect) loss of profits, of production, of anticipated savings, of business, or goodwill or (ii) for any other liability, damage, costs, or expense of any kind incurred by the other party of an indirect or consequential nature, regardless of any notice of the possibility of these damages.

10. 2 Limitation of Liability .

Maximum Liability . Excluding the indemnity provided by Client in Section 10.4 dealing with any claim of infringement or partial infringement of a Third Party's Rights, each Party's maximum liability to the other under this Agreement for any reason whatsoever, including any liability arising under Article 6 or 10.3 or (other than infringement of a Third Party's Rights) hereof or resulting from any and all breaches of its representations, warranties, or any other obligations under this Agreement [****] .

10. 3 Patheon .

Patheon agrees to defend, indemnify, and hold Client, its officers, employees, and agents harmless against any and all losses, damages, costs, claims, demands, judgments and liability to, from and in favor of third parties (other than Affiliates) resulting from, or relating to any claim of personal injury or property damage to the extent that the injury or damage is the result of Patheon’s breach of this Agreement or a failure by Patheon to perform the Manufacturing Services in accordance with the Specifications, cGMPs, and Applicable Laws except to the extent that the losses, damages, costs, claims, demands, judgments, and liability are due to the negligence or wrongful act(s) of Client. its officers, employees, agents, or Affiliates.

If a claim occurs, Client will: (a) promptly notify Patheon of the claim; (b) use commercially reasonable efforts to mitigate the effects of the claim; (c) reasonably cooperate with Patheon in the defense of the claim; and (d) permit Patheon to control the defense and settlement of the claim, all at Patheon's cost and expense.

10. 4 Client

Client agrees to defend, indemnify, and hold Patheon, its officers, employees, and agents harmless against any and all losses, damages, costs, claims, demands, judgments and liability to, from and in favor of third parties (other than Affiliates) resulting from, or relating to any claim of infringement or alleged infringement of any Third Party Rights ln the Products, or any portion thereof, or any claim of personal injury or property damage to the extent that the injury or damage is the result of a breach of this Agreement by Client, including, without limitation, any representation or warranty contained herein, except to the extent that the losses, damages, costs, claims, demands, judgments, and liability are due to the negligence or wrongful act(s) of Patheon, Its officers, employees, or agents.

If a claim occurs, Patheon will: (a) promptly notify Client of the claim; (b) use commercially reasonable efforts to mitigate the effects of the claim: (c) reasonably cooperate with Client in the defense of the claim; and (d) permit Client to control the defense and settlement of the claim, all at Client's cost and expense.

10. 5 Reasonable Allocation of Risk .

This Agreement (including, without limitation, this Article 10) is reasonable and creates a reasonable allocation of risk for the relative profits the parties each expect to derive from the Products. Patheon assumes only a limited degree of risk arising from the manufacture, distribution, and use of the Products because Client has developed and holds the marketing approval for the Products, Client requires Patheon to manufacture and label the Products strictly in accordance with the Specifications, and Client, not Patheon, is best positioned to inform and advise potential users about the circumstances and manner of use of the Products.

ARTICLE 11

CONFIDENTIALITY

11. 1 Confidentiality .

The Confidentiality Agreement will apply to all confidential information disclosed by the parties under this Agreement If the Confidentially Agreement expires or Is terminated prior to the expiration or termination of this Agreement, the terms of the Confidentially Agreement will continue to govern the parties' obligations of confidentiality for any confidential or proprietary information disclosed by the parties

hereunder, for the term of this Agreement, as though the Confidentiality Agreement remained in full force and effect.

ARTICLE 12

DISPUTE RESOLUTION

12. 1 Commercia l Disputes .

If any dispute arises out of this Agreement (other than a dispute under Section 6.1(b) or a Technical Dispute, as defined herein), the parties will first try to resolve it amicably. In that regard, any party may send a notice of dispute to the other, and each party will appoint, within ten Business Days from receipt of the notice of dispute, a single representative having full power and authority to solve the dispute. The representatives will meet as necessary in order to resolve the dispute. If the representatives fail to resolve the matter within one month, from their appointment, or If a party falls to appoint a representative within the ten Business Day period set forth above, the dispute will immediately be referred to the Chief Executive Officer (or another officer as he/she may designate) of each party who will meet and discuss as necessary to try to resolve the dispute amicably. Should the parties fall to reach a resolution under this Section 12.1, the dispute will be referred to a court of competent jurisdiction in accordance with Section 13.15.

12. 2 Technical Dispute Resolution .

If a dispute arises (other than disputes under Sections 6.1(b) or 12.1) between the parties that is exclusively related to technical aspects of the manufacturing, packaging, labelling, quality control testing, handling, storage, or other activities under this Agreement (a Technical Dispute"), the parties will make all reasonable efforts to resolve the dispute by amicable negotiations. In that regard, senior representatives of each party will, as soon as practicable, and in any event no later than ten Business Days after a written request from either party to the other, meet in good faith to resolve any Technical Dispute. If, despite this meeting, the parties are unable to resolve a Technical Dispute within a reasonable time, and in any event within 30 Business Days of the written request, the Technical Dispute will, at the request of either party, be referred for determination to an expert in accordance with Schedule E . If the parties cannot agree that a dispute is a Technical Dispute, Section 12.1 will prevail. For greater certainty, the parties agree that the release of the Products for sale or distribution under the applicable marketing approval for the Products will not by Itself indicate compliance by Patheon with Its obligations for the Manufacturing Services and further that nothing in this Agreement (including Schedule E ) will remove or limit the authority of the relevant qualified person {as specified by the Quality Agreement) to determine whether the Products are to be released for sale or distribution.

ARTICLE 13

MISCELLANEOUS

13. 1 Inventions .

(a) For the term of this Agreement, Client hereby grants to Patheon a non-exclusive, paid-up, royalty-free, non-transferable license of Client's Intellectual Property which Patheon must use exclusively for the purpose of performing the Manufacturing Services.

(b) All Intellectual Property generated or derived by Patheon while performing the Manufacturing Services, to the extent it is specific to the development, manufacture, use, and sale of Client's Product that is the subject of the Manufacturing Services, will be the exclusive property of Client.

(c) All Patheon Intellectual Property will be the exclusive property of Patheon. Patheon hereby grants to Client a perpetual, irrevocable, non-exclusive, paid up, royalty-free, transferable license to use the Patheon Intellectual Property used by Patheon to perform the Manufacturing Services to enable Client to manufacture the Product(s).

(d) Each party will be solely responsible for the costs of filing, prosecution, and maintenance of patents and patent applications on its own Inventions.

(e) Either party will give the other party written notice, as promptly as practicable, of all Inventions which can reasonably be deemed to constitute Improvements or other modifications of the Products or processes or technology owned or otherwise controlled by the party.

13. 2 Intellectual Property .

Subject to Section 13.1, au Client Intellectual Property will be owned by Client and all Patheon Intellectual Property will be owned by Patheon. Neither party has, nor will it acquire, any interest in any of the other party's Intellectual Property unless otherwise expressly agreed to in writing. Neither party will use any Intellectual Property of the other party, except as specifically authorized by the other party or as required for the performance of Its obligations under this Agreement.

13. 3 Insurance .

Each party will maintain commercial general liability Insurance, including blanket contractual liability Insurance covering the obligations of that party under this Agreement through the term of this Agreement and for a period of three years thereafter. [****] If requested each party will give the other a certificate of Insurance evidencing the above and showing the name of the issuing company, the policy number, the effective date, the expiration date, and the limits of Lability. The insurance certificate will further provide for a minimum of 30 days' written notice to the Insured of a cancellation of, or material change in, the insurance. If a party Is unable to maintain the insurance policies required under this Agreement through no fault of its own, then the party will forthwith notify the other party in writing and the parties will in good faith negotiate appropriate amendments to the insurance provision of this Agreement in order to provide adequate assurances.

13.4 Independent Contractors .

The parties are independent contractors and this Agreement will not be construed to create between Patheon and Client any other relationship such as, by way of example only, that of employer employee, principal agent, joint-venturer, co-partners, or any similar relationship, the existence of which is expressly denied by the parties.

13. 5 No Waiver .

Either party's failure to require the other party to comply with any provision of this Agreement will not be deemed a waiver of the provision or any other provision of this Agreement, with the exception of Sections 6.1 and 8.2.

13. 6 Assignment .

Patheon may not assign this Agreement or any of Its rights or obligations hereunder without the written consent of Client, this consent not to be unreasonably withheld ; provided, however, that Patheon may arrange for subcontractors to perform specific testing services arising under this Agreement without the prior consent of Client.

Subject to Section 8.2(d), Client may assign this Agreement or any of its rights or obligations hereunder without approval from Patheon. But Client will give Patheon prior written notice of any assignment and any assignee will covenant in writing with Patheon to be bound by the terms of this Agreement. Any partial assignment will be subject to Patheon's cost review of the assigned Products and Patheon may terminate this Agreement or any assigned part thereof, on 12 months' prior written notice to Client and the assignee if good faith discussions do not lead to agreement on amended Manufacturing Service fees within a reasonable time.

Despite the foregoing provisions of this Section 13.6, either party may, upon notice to the other party assign this Agreement to any of Its Affiliates or to a successor to or purchaser of all or substantially all of its business, but the assignee must execute an agreement with the non-assigning party whereby it agrees to be bound hereunder.

13.7 Force Majeure .

Neither party will be liable for the failure to perform its obligations under this Agreement If the failure Is caused by an event beyond that party's reasonable control, including, but not limited to, strikes or other labor disturbances, lockouts, riots, quarantines, communicable disease outbreaks, wars, acts of terrorism, fires, floods, storms, interruption of or delay in transportation, defective equipment, lack of or inability to obtain fuel, power or components, or compliance with any order or regulation of any government entity acting within color of right (a Force Majeure Event) . A party claiming a right to excused performance under this Section 13.7 will Immediately notify the other party in writing of the extent of its inability to perform, which notice will specify the event beyond its reasonable control that prevents the performance. Neither party will be entitled to rely on a Force Majeure Event to relieve it from an obligation to pay money (including any interest for delayed payment} which would otherwise be due and payable under this Agreement.

13. 8 Notices .

Any notice, approval, instruction or other written communication required or permitted hereunder will be sufficient if made or given to the other party by personal delivery, by telecopy, facsimile communication, or confirmed receipt electronic mail or by sending the same by first class mall, postage prepaid to the respective addresses, telecopy or facsimile numbers or electronic mall addresses set forth below:

If to Client:

[****]

If to Patheon:

[****]

or to any other addresses, telecopy or facsimile numbers or electronic mail addresses given to the other party in accordance with the terms of this Section 13.8. Notices or written communications made or given by personal delivery, telecopy, facsimile, or electronic mail will be deemed to have been sufficiently made or given when sent (receipt acknowledged), or if mailed, five days after being deposited in the United States or Canada mail, postage prepaid or upon receipt, whichever Is sooner.

Invoices should be sent to Client at this address:

[****]

13. 9 Severability .

If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid, Illegal, or unenforceable in any respect, that determination will not Impair or affect the validity, legality, or enforceability of the remaining provisions hereof, because each provision Is separate, severable, and distinct.

13. 10 Entire Agreement .

This Agreement, together with the Quality Agreement and the Confidentiality Agreement, constitutes the full, complete, final and integrated agreement between the parties relating to the subject matter hereof and supersedes all previous written or oral negotiations, commitments, agreements, transactions, or understandings concerning the subject matter hereof. Any modification, amendment, or supplement to this Agreement must be in writing and signed by authorized representatives of both parties. in case of conflict, the prevailing order of documents will be this Agreement, the Quality Agreement, and the Confidentiality Agreement.

13. 11 Other Terms .

No terms, provisions or conditions of any purchase order or other business form or written authorization used by Client or Patheon will have any effect on the rights, duties, or obligations of the parties under or otherwise modify this Agreement, regardless of any failure of Client or Patheon to object to the terms, provisions. or conditions unless the document specifically refers to this Agreement and Is s1gr1ed by both parties.

13. 12 No Third Party Benefit or Right .

For greater certainty, nothing in this Agreement will confer or be construed as conferring on any third-party benefit or the right to enforce any express or implied term of this Agreement

13. 13 Execution in Counterparts .

This Agreement may be executed in two or more counterparts, by original or facsimile signature, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

13. 14 Use of Client Name .

Patheon will not make any use of Client's name, trademarks or logo or any variations thereof, alone or with any other word or words, without the prior written consent of Client, which consent will not be unreasonably withheld. Client agrees however, that Patheon may include Client's name and logo in customer lists or related marketing and promotional material for the purpose of Identifying users of Patheon's Manufacturing Services.

13. 15 Governing Law .

This Agreement will be construed and enforced in accordance with the laws of the State of Delaware subject to the exclusive jurisdiction of the courts thereof. The UN Convention on Contracts for the international Sale of Goods will not apply to this Agreemen t.

IN W ITNESS WHEREOF, the duly authorized representatives of the parties have executed this Agreement as of the date first written abov : e.


	PATHEON INC.
	By:


	IROKO PHARMACEUTICALS, LLC
	By:

SCHEDULE A

PRODUCT LIST AND SPECIFICATIONS

Product List

lndocin (indomethacin) - 237 ml Oral Suspension 25 mg per 5 ml, NDC 42211-101-11, Amber Glass Bottle in a Carton

Specifications

Prior to the start of commercial manufacturing of Product under this Agreement, Client will give Patheon the originally executed copies of the FDA approved Specifications. If the Specifications received are subsequently amended, then Client will give Patheon the revised and originally executed copies of the revised Specifications. Upon acceptance of the revised Specifications (which acceptance shall not be unreasonable withheld), Patheon will give Client a signed and dated receipt indicating Patheon's acceptance of the revised Specifications.

SCHEDULE B

MINIMUM RUN QUANTITY, ANNUAL VOLUME, AND PRICE

Pricing

Patheon is providing full service pricing for lndocin® Oral Suspension, per 237 ml (label claim) amber glass bottle in a carton, encompassing the following activities;

 Supply of all raw materials and packaging components, including the API, indomethacin

 Manufacturing and packaging of the suspension

 All QC testing requirements for raw materials, packaging components and finished product

Pricing for the Product Is provided in 3 tiers {see chart below) such that the price for manufacturing decreases as volume demanded increases. In the event that volumes in a single year do not reach 20,000 cartons, Patheon reserves the right to adjust and provide new reasonable, pricing to Client.

All pricing includes cost of all raw materials and packaging components, including the API, indomethacin, to be furnished by Client. An API cost of [****] per Kg Is assumed in this proposal.

Indocin® (indomethacin) - 237 mL Oral Suspension 25 mg per 5 ml, NOC 42211-101-11, Amber Glass Bottle in a Carton

[****]

Pricing Example

In the event that Patheon manufactures [****].

Manufacturing Assumptions

1. The manufacturing process at Patheon will follow the process information provided by Client and Patheon's best estimates.

2. The API, indomethacin, has been evaluated by Patheon as a Toxicity Category 2 compound and can be handled safely using existing equipment and facility at the Manufacturing Site.

3. Patheon will order excipients from vendors provided and/or approved by Client.

4. Manufacturing involves multiple mixing stages ln tanks and vessels, and suspension will be re circulated in the final mixing tank through a homogenizing mill. Patheon will maintain the existing manufacturing process and batch size as part of the CBE-30 fifing strategy.

5. Manufacturing equipment will be provided by lroko al no cost to Patheon.

6. The existing batch size will be maintained at [****] .

7. [****] processing campaigns are proposed in the Pricing Table.

8. Patheon assumes the current cleaning procedure is adequate and full cleaning occurs after each campaign.

9. A manufacturing yield of [****] is assumed, as per agreement with lroko.

Packaging Assumptions

1. The packaging equipment train will consist of the following equipment: [****]

2. The target fill and packaging configuration are as follows: [****]

3. [****]

4. [****]

5. [****]

Testing Assumptions

1. Testing for raw materials, packaging components and finished product are based on the specifications supplied by Client and Patheon's best estimates. Testing Is based on standard USP/NF.

2. Testing labor may be subject to change after the final agreement on testing specifications and requirements.

Schedule C

Fees and Technical Overview

Annual Stability Testing/Technical Transfer Work

Patheon and Client will agree in writing on any stability testing to be performed by Patheon on the Products. This agreement will specify the commercial and Product stability protocols applicable to the stability testing and the fees payable by Client for this testing.

[****][7 pages redacted].

SCHEDULE D

ACTIVE MATERIALS


Active Materials	Supplier
indomethacin	lroko Pharmaceuticals, LLC

SCHEDULE E

TECHNICAL DISPUTE RESOLUTION

Technical Disputes which cannot be resolved by negotiation as provided in Section 12.2 will be resolved in the following manner:

1. Appointment of Expert . Within ten Business Days after a party requests under Section 12.2 that an expert be appointed to resolve a Technical Dispute, the parties will jointly appoint a mutually acceptable expert with experience and expertise in the subject matter of the dispute. If the parties are unable to so agree within the ten Business Day period, or in the event of disclosure of a conflict by an expert under Paragraph 2 hereof which results in the parties not confirming the appointment of the expert, then an expert (willing to act in that capacity hereunder) will be appointed by an experienced arbitrator on the roster of ADR Chambers who will be a retired Judge of the Ontario Superior Court of Justice or on the roster of the American Arbitration Association.

2. Conflicts of Interest . Any person appointed as an expert will be entitled to act and continue to act as an expert even If at the time of his appointment or at any time before he gives his determination, he has or may have some interest or duty which conflicts or may conflict with his appointment If before accepting the appointment (or as soon as practicable after he becomes aware of the conflict or potential conflict) he fully discloses the interest or duty and the parties will, after the disclosure, have confirmed his

appointment.

3. Not Arbitrator . No expert will be deemed to be an arbitrator and the provisions of the Arbitration Act (Ontario) or of any other applicable statute (foreign or domestic) and the law relating to arbitration will not apply to the expert or the expert's determination or the procedure by which the expert reaches his determination under this Schedule E .

4. Procedure . Where an expert is appointed:

Timing . The expert will be so appointed on condition that (i) he promptly fixes a reasonable time and place for receiving representations, submissions or information from the parties and that he issues the authorizations to the parties and any relevant third party for the proper conduct of his determination and any hearing and (ii) he renders his decision (with full reasons) within 15 Business Days (or another other date as the parties and the expert may agree) after receipt of all information requested by him under Paragraph 4(b) hereof.

Disclosure of Evidence . The parties undertake one to the other to give to any expert all the evidence and information within their respective possession or control as the expert may reasonably consider necessary for determining the matter before him which they will disclose promptly and in any event within five Business Days of a written request from the relevant expert to do so.

Advisors . Each party may appoint any counsel, consultants and advisors as it feels appropriate to assist the expert in his determination and so as to present their respective cases so that at all times the parties will co-operate and seek to narrow and limit the Issues to be determined.

Appointment of New Expert . If within the time specified in Paragraph 4(a) above the expert will not have rendered a decision in accordance with his appointment, a new expert may (at the request of either party) be appointed and the appointment of the existing expert will thereupon cease for the purposes of determining the matter at issue between the parties save this if the existing expert renders his decision

with full reasons prior to the appointment of the new expert, then this decision will have effect and the proposed appointment of the new expert will be withdrawn.

Final and Binding . The determination of the expert will, except for fraud or manifest error, be final and binding upon the parties.

Costs . Each party will bear its own costs for any matter referred to an expert hereunder and, Jn the absence of express provision in the Agreement to the contrary, the costs and expenses of the expert will be shared equally by the parties.

For greater certainty, the release of the Products for sale or distribution under the applicable marketing approval for the Products will not by Itself indicate compliance by Patheon with Its obligations for the Manufacturing Services and further that nothing in this Agreement (including this Schedule E ) will remove or limit the authority of the relevant qualified person (as specified by the Quality Agreement) to determine whether the Products are to be released for sale or distribution.

SCHEDULE F

[FORM OF] SHIPPING LOGISTICS PROTOCOL

Shipping will be carried out under the following terms and conditions:

Shipping terms will be DOU (INCOTERMS 2000), lroko Pharmaceuticals, LLC. Location shall be designated on the Purchase Order.

Exports of Products from Canada to the United States

1. Shipping terms will be DDU (INCOTERMS 2000), lroko Pharmaceuticals, LLC. Location should be designated on the Purchase Order.

2. Client, as the importer of record into the United States. will advise Patheon prior to export of the Products from Canada of Client's designated customs broker and freight forwarder to enable Patheon to complete all applicable shipping documentation.

3. Client will be responsible for all shipping costs and shall assume all risk of loss and damage at the point that the Product is loaded onto the carrier for shipping.

[****][2 pages redacted]

SCHEDULE G

EXAMPLE OF PRICE ADJUSTMENT DUE TO CURRENCY FLUCTUATION

Section 4.2(d)

[****]

SCHEDULE H

CAPITAL EXPENDITURE AND EQUIPMENT AGREEMENT

THIS CAPITAL EXPENDITURE AND EQUIPMENT AGREEMENT (the "Agreement”) made as of the 29th day of May 2009 (the "Effective Date") between:

IROKO PHARMACEUTICALS, LLC,

a limited liability corporation existing under the laws of the State of Delaware, (hereinafter referred to as "lroko"),

OF THE FIRST PART,

-and-

PATHEON INC.,

a corporation existing under the laws of Canada, (hereinafter referred to as "Patheon"),

OF THE SECOND PART.

WHE REAS lroko and Patheon have entered into a Manufacturing Services Agreement (the "MSA") dated May 29, 2009, whereby Patheon agrees to provide Manufacturing Services with respect to lroko's products (the "Services");

AND WHEREAS in order for Patheon to perform the Services, certain capital expenditures will be necessary in respect of capital equipment required to be acquired and installed at Patheon's facility located at 111 Consumers Drive, Whitby, Ontario (the "Facility"} and certain modifications will be required to be made to the Facility;

AND WHEREAS the purpose of this Agreement is to set out the parties' agreement with respect to such capita[ expenditures.

NOW, THEREFORE, In consideration of the rights conferred and the obligations assumed herein, and Intending to be legally bound, the parties hereby agree as follows:

1. Definitions

"Affiliate" shall mean any person, joint venture, partnership, corporation, trust, unincorporated organization or other entity which, directly or indirectly, controls, is controlled by, or Is under common control with another party.

"Transferred Equipment means the Items listed on S chedule A .

2. Equipment

(a) lroko shall, at Its expense, arrange to deliver the Transferred Equipment to the Facility including, without limitation, all costs and expenses associated with transportation, insurance and customs clearance (if applicable).

(b) In consideration of the mutual covenants contained in this Agreement, lroko herebytransfers and conveys all of its title and interest in and to the Transferred Equipment to Patheon in the United States, prior to transfer to the Whitby, Ontario site.

(i) the Transferred Equipment is free and clear of all encumbrances;

(ii) prior to the transfer and conveyance of the Transferred Equipment to Patheon, lroko was the sole legal and beneficial owner of the Transferred Equipment and such sale, transfer and conveyance does not contravene any agreement to which lroko is a party;

(iii) the delivery to and Installation at the Facility of the Transferred Equipment does not contravene any agreement to which lroko is a party;

(iv) upon the delivery of the Transferred Equipment at the Facility, the Transferred Equipment shall be deemed to be in good working order; and

(v) there are no pending or outstanding claims or liabilities, Including, without limitation, safety-related claims in respect of the Transferred Equipment.

(d) If it is determined by Patheon in its reasonable discretion and confined by lroko that, upon delivery of the Transferred Equipment, the Transferred Equipment Is not in good working order or has been damaged during transit, lroko agrees that It shall be responsible for any reasonable costs incurred by Patheon to repair the Transferred Equipment or bring the Transferred Equipment up to the standard of good working order.

(e) lroko shall be responsible for all reasonable, actual direct costs and expenses associated with Installing, and performing the installation qualification/operational qualification and the process qualification of the Transferred Equipment at the Facility. lroko shall also be responsible for all reasonable costs and expenses associated with performing the process qualification of the Transferred Equipment at the Facility.

3. Use of the Transferred Equipment

Patheon may use the Transferred Equipment for the manufacture of products for third parties but only upon terms and payments of fees to be negotiated by the parties on a case by case basis and provided that such use does not interfere with the services provided to lroko.

4. Reimbursement for the Transferred Equipment

[****]

5. Risk of Loss of Equipment

Risk of loss to the Transferred Equipment shall transfer to Patheon upon delivery to Patheon at the Facility. Patheon shall use commercially reasonable efforts to preserve, protect and maintain the Transferred Equipment in good working order. Patheon shall be responsible for the routine maintenance of the Transferred Equipment at its sole cost and expense. In the event there is any damage, destruction or loss to the Transferred Equipment after delivery thereof to the Facility or should any major repairs or replacements subsequently be required for the Transferred Equipment. Patheon shall, at its sole cost and expense, promptly repair, replace and restore the condition thereof to the condition of such equipment before such event or to such better condition as may be required by applicable law or in the ordinary course of business.

6. Effect of Termination of MSA

Upon the expiration or termination of the MSA by lroko, other than a breach by Patheon of Its obligations herein and In the MSA, then the repayments contemplated in Section 3 shall cease as of the termination date by lroko and Patheon shall have no further obligations In respect thereof; provided, however, that (1) in the event lroko or Its Affiliates enter into an agreement with Patheon prior to or within twelve (12) months of the termination date of the MSA for Patheon's manufacture and supply of a new product that uses the Transferred Equipment or (II) In the event Patheon enters into an agreement with a third party prior to or within twelve (12) months of the termination date of the MSA to the termination date of the MSA to manufacture a product that utilizes the Transferred Equipment and/or the lroko Capital Improvements, Patheon shall continue to be obligated to make repayments for any remaining amount due to lroko for the Transferred Equipment under Section 3 on terms to be agreed upon by Patheon and lroko based on the portion of Ancillary Equipment and/or lroko Capital Improvements used for such new or third party product. Title to the Transferred Equipment shall revert back to lroko in the event of failure by Patheon to meet the required payment terms.

7. General

(a) AU monetary amounts are expressed in the lawful currency of the United States of America.

(b) This Agreement shall be construed and enforced in accordance with the laws of the laws of the State of Delaware (without regard to principles of conflicts of law).

(c) This Agreement and the MSA contain the entire understanding of the parties with respect to the subject matter herein and supersedes all previous agreements (oral and written), negotiations and discussions.

(d) The parties may modify or amend the provisions hereof only by an instrument in writing duly executed by both of the parties.

(e) Neither party may assign or otherwise transfer Its rights or obligations hereunder without the prior written consent of the other party, not to be unreasonably withheld except to Affiliates or in connection with the transfer or sale of all or substantially all of the transferor's business.

(f) This Agreement may be signed by facsimile or in two counterparts, each of which when executed and delivered or transmitted, shall be considered an original and both of which together shall constitute one and the same Instrument.

IN WITNESS WHEREOF the duly authorized representatives of the parties have executed this Agreement.


IROKO PHARMACEUTICALS, LLC			PATHEON INC.


Per:			Per:


Name:			Name:

Title:			Title:



Date:			Date:

Schedule I

lroko Transferred Equipment

[****]

SCHEDULE J

SCHEDULE OF CANADIAN STATUTORY HOLIDAYS


New Year's Day	Thursday, January 1

Family D ay	Monday, February 16

Good Friday	Friday, April 10

Victoria D ay	Monday, May 16

Canada Day	Wednesday, July 1

Civic Holiday	Monday, August 3

Labour Day	Monday, September 7

Thanksgiving Day	Monday, October 12

Christmas Eve	Thursday, December 24 (half day)

Christmas Day	Friday, December 25

Boxing Day	Monday, December 28
Float #1	Tuesday, December 29

Float#2	Wednesday, December 30

Float#3	Thursday, December31

New Years Day	Friday, January 1

AMENDMENT NO. 3 TO MANUFACTURING SERVICES AGREEMENT

THIS AMENDMENT (the "Amendment") to the Manufacturing Services Agreement is entered into as of June 2, 2011 by and among Patheon Inc., a Canadian corporation ("Patheon"), having its principal office at 2100 Syntex Court, Mississauga, Ontario, Canada, L5N 7K9, and lroko Pharmaceuticals LLC ("lroko"), having a principal office at One Crescent Drive, Suite 400, Philadelphia, PA 19112, USA.

WHEREAS Patheon and lroko entered into a Manufacturing Services Agreement dated May 29, 2009 and amended as of June 29, 2010 and August 5, 2010 (the "Agreement"); and

WHEREAS the parties hereto wish to further amend the Agreement in order to provide for the qualification of a new source of lndomethacin USP from [****];

NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree that the Agreement is amended as follows:

1. A new Schedule C-3 is added to the Agreement as attached hereto.

Except as set forth herein, all other terms and conditions of the Agreement shall remain in full force and effect for the term thereof. In the event of any conflict between this Amendment and the Agreement, the terms of this Amendment shall control. Upon execution, the Agreement and this Amendment shall be deemed to constitute the entire Agreement.

IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by duly authorized representatives on the dates set forth below.


PATHEON INC	IROKO PHARMACEUTICALS, LLC

SCHEDULE C-3

QUALIFICATION OF NEW [****] INDOMETHACIN API SOURCE

Project

This change of scope describes development activities to be performed for lroko Pharmaceuticals, LLC ("Client") by Patheon Inc. ("Patheon") under the terms and conditions of Technology Transfer Agreement IRO-FW01-0900-0109-R2 by and between Patheon and the Client which is hereby revised to include this change of scope in its entirety.

Due to the fact that there is only a limited remaining supply of indomethacin USP (the active pharmaceutical ingredient in lndocin Oral Suspension), from the current supplier (Merck), lroko has sourced a replacement. The existing supplies of Merck API expire in Nov 2012. lroko has selected material manufactured by [****] as a suitable replacement.

Patheon will purchase sufficient quantities of 3 distinct batches of [****] API for use in (1) the qualification of all methods necessary to test and release the API and (2) to manufacture 3 batches of lndocin Oral Suspension (qualification batches) for a stability study. The data generated from the stability study will be used in support of the FDA filing for this new API source. An API cost [****] per kg is assumed in this proposal.

Current commercial manufacturing and packaging processes are assumed however the revised unit pricing (see tables below) will apply due to the increased API cost (as compared to current assumed Merck API costs). Unit pricing includes manufacturing, packaging and release testing. There will be an up-charge for validation testing (above and beyond routine commercial release testing) during the manufacturing of these qualification batches.

lndocin® 237 ml Oral Suspension 25 mg/5 ml - Amber Glass Bottle in a Carton


Volume	Tier 1	Tier2	Tier3
[****]	[****]	[****]	[****]
[****]	[****]	[****]	[****]
[****]	[****]	[****]	[****]
[****]	[****]	[****]	[****]
[****]	[****]	[****]	[****]
[****]	[****]	[****]	[****]
[****]	[****]	[****]	[****]

lndocin® 50 ml Oral Suspension 25 mg/5 ml - Amber Glass Bottle in a Carton


Volume	Tier 1
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]

Pricing

[****]

1. [***]

2. [****]

3. [****]

4. Stability- Va li dation Batches

[****]

1. Standard Assumptions

1. [****]

2. [****]

3. [****]

4. [****]

5. [****]

Exhibit 10.12

COMMERCIAL SUPPLY AGREEMENT

This Commercial Supply Agreement ("Agreement") is entered into with effect as of 01 October 2018 (the “ Effective Date ”), by and between Iroko Pharmaceuticals, LLC a Delaware limited liability company, with a place of business at One Kew Place, 150 Rouse Boulevard, Philadelphia, Pennsylvania 19112 USA ("Iroko"), and Catalent CTS, LLC with a place of business at 10245 Hickman Mills Drive, Kansas City, Missouri 64137 USA ("Catalent").

RECITALS

A. Iroko is a company that develops, markets and sells pharmaceutical products;

B. Catalent is a leading provider of advanced technologies, and development, manufacturing and packaging services for pharmaceutical, biotechnology and consumer healthcare companies;

C. Iroko desires to have Catalent provide the services set forth in this Agreement (as defined below) in connection with Iroko’s Product (as defined below), and Catalent desires to provide such services, all pursuant to the terms and conditions in this Agreement.

THEREFORE, in consideration of the foregoing, and the mutual covenants, terms and conditions set forth in this Agreement, the parties agree as follows:

ARTICLE 1 DEFINITIONS

The following terms have the following meanings in this Agreement:

1.1 "Acknowledgement" has the meaning set forth in Section 4.3.

1.2 "Affiliate(s)" means, with respect to Iroko or any third party, any corporation, firm, partnership or other entity that controls, is controlled by or is under common control with such entity; and with respect to Catalent, Catalent Pharma Solutions, Inc. and any corporation, firm, partnership or other entity controlled by it. For the purposes of this definition, "control" means the ownership of at least fifty (50%) of the voting share capital of an entity or any other comparable equity or ownership interest.

1.3 "Agreement" has the meaning set forth in the introductory paragraph, and includes all its Attachments and other appendices (all of which are incorporated herein by reference) and any amendments to any of the foregoing made as provided herein or therein.

1.4 "Amended and Restated Agreement" means the Amended and Restated Commercial Supply Agreement entered into by the parties pursuant to the Settlement Agreement between the parties dated as of December 23, 2015, with an effective date of May 25, 2016.

1.5 "Authority" means any governmental or regulatory authority, department, body or agency

[****] Information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed

or any court, bureau, commission or other similar body, whether federal, state, provincial, county or municipal.

1.6 "API" means the compounds as further described in the Specifications provided to Catalent by Iroko or its designee, along with a certificate of analysis, as provided in this Agreement. Iroko may require Catalent to test and release the API, for which Iroko shall pay Catalent in accordance with the fee schedule in Attachment C hereof.

1.7 "Applicable Laws" means, with respect to Catalent, the Laws of the jurisdiction where the Facility is located and, to the extent applicable to the Processing of the Product by Catalent under this Agreement, the Laws of the countries in which the Product Processed by Catalent are distributed, marketed and sold by Iroko or its designees or licensee; provided, that (A) Catalent shall not be required to comply with any Law of a country which conflicts with Catalent's obligations under U.S. Laws including without limitation those imposed by the United States Office of Foreign Asset Control, and (B) Catalent shall not be required to breach any of its existing obligations to other customers in order to ensure compliance with a Law of a country outside of the United States. [****] With respect to Iroko, Applicable Laws means the Laws of each country in which API or Product is produced, marketed, distributed, used or sold as applicable to the obligations of Iroko under this Agreement. Applicable Laws includes without limitation:

A. All applicable federal, state and local laws and regulations of the United States;

B. The United States Federal Food, Drug and Cosmetic Act;

C. All applicable regulations and codes of the [****] or any successor agency or similar or equivalent regulations and codes of the [****] or any successor agency;

D. cGMP or Good Laboratory Practices ("GLPs") applicable to Processing the Product promulgated by the Regulatory Authorities, as amended from time to time, in the U.S. and [****]; provided, that cGMP shall not constitute Applicable Laws except to the extent expressly stated in this Agreement; and

E. [****].

1.8 "Batch" means a defined quantity of Product that has been or is being Processed in accordance with the Specifications and packaged into bulk containers.

1.9 "Batch Records" means the written record of the materials and processing steps to manufacture the Product.

1.10 "Batch Yield" means the yield quantity of Manufactured Product.

1.11 "Catalent" has the meaning set forth in the introductory paragraph, or any successor or permitted assign. Catalent shall have the right to cause any of its Affiliates to perform any of its obligations hereunder, and Iroko shall accept such performance as if it were performance by Catalent. Any Catalent Affiliate which performs any of Catalent's obligations under this Agreement agrees to be bound by the terms of this Agreement as if it were a party thereto.

1.12 "Catalent Defective Processing" has the meaning set forth in Section 5.2(A).

[****] Information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed

1.13 "Catalent Equipment" means the equipment purchased and owned by Catalent and used in the Processing of Product as set forth in Attachment A , as may be amended from time to time during the Term.

1.14 "Catalent Indemnitees" has the meaning set forth in Section 13.2.

1.15 "cGMP" means current Good Manufacturing Practices promulgated by the Regulatory Authorities in the jurisdictions included in Applicable Laws (as applicable to Iroko and Catalent respectively). In the United States, this includes 21 C.F.R. Parts 210 and 211, as amended; and in the European Union, this includes 2003/94/EEC Directive (as supplemented by Volume 4 of EudraLex published by the European Commission), as amended, if and as implemented in the relevant constituent country.

1.16 "Confidential Information" has the meaning set forth in Section 10.2 .

1.17 "Contract Year" means each consecutive 12-month period beginning on the Effective Date and each anniversary thereof or the date of Transfer, as applicable.

1.18 "Date of Manufacturing" or "DOM" means the good faith estimate by Catalent of the first date of manufacture of DOM as provided in the batch record . The DOM shall not be binding and is subject to cancel or delay as determined by Catalent.

1.19 "Defective Product" has the meaning set forth in Section 5 .2(A).

1.20 "Effective Date" means October 1, 2018.

1.21 "Equipment" includes the Catalent Equipment and Iroko Equipment as those terms are defined herein in Attachment A and referenced in Article 18 of this Agreement.

1.22 "Exception Notice" has the meaning set forth in Section 5.2(A).

1.23 "Facility" means Catalent's facility located in [****] or such other facility as agreed by the parties.

1.24 "Facility Modifications" has the meaning set forth in Section 1.6.

1.25 "Firm Commitment" has the meaning set forth in Section 4.2.

1.26 [****]

1.27 "lroko" has the meaning set forth in the introductory paragraph, or any successor or permitted assign.

1.28 "lroko Equipment" means the specialized equipment purchased and owned by Iroko used in the Processing of Product set forth in Attachment A as may be amended from time to time to include any additional equipment supplied by lroko at Iroko's cost and expense.

[****] Information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed

1.29 [****]

1.30 "lroko lndemnitees" has the meaning set forth in Section 13.1.

1.31 "lroko-supplied Materials" means any materials to be supplied by or on behalf of Iroko to Catalent for Processing, as provided in Attachment D, including API and reference standards.

1.32 "lroko Proprietary Process" means the milling process, including cleaning and preparation using Iroko Equipment to produce an attrited blend of API and excipients.

1.33 "Laws" means all laws, statutes, ordinances, regulations, rules, by-laws, judgments, decrees or orders of any Authority.

1.34 "Losses" has the meaning set forth in Section 13.l.

1.35 "Minimum Requirement" means the minimum requirement set forth in Section 4.9.

1.36 "Process" or "Processing" or "Processed" as the context requires, means the milling, compounding, filling, pressing, tableting, encapsulating, producing and bulk packaging (but not secondary or retail packaging) of Iroko-supplied Materials and Raw Materials into Product by Catalent using the Iroko Proprietary Process, in accordance with the Specifications and under the terms of this Agreement.

1.37 "Processing Date" means the day on which the first step of physical Processing is scheduled to occur, as identified in an Acknowledgement or as otherwise communicated to Iroko.

1.38 "Product" means each pharmaceutical product containing the API, as agreed by the parties in writing and as more fully described in the Specifications. For the purposes of clarity, all references to the [****] shall have the same meaning as the term [****] used in this Agreement. For the avoidance of doubt, Product refers to [****] . Additional Product may be added to this Agreement by mutual written agreement of the Parties.

1.39 "Product Maintenance Services" has the meaning set forth in Section 2.3.

1.40 "Purchase Order" has the meaning set forth in Section 4.3(A).

1.41 "Quality Agreement" has the meaning set forth in Section 9.6.

1.42 "Raw Materials" means all raw materials, supplies, components, capsules and packaging necessary to manufacture and ship Product in accordance with the Specifications supplied by Catalent, as provided in Attachment D , but excluding Iroko-supplied Materials.

1.43 "Recall" has the meaning set forth in Section 9.5 .

1.44 "Regulatory Approval" means any approvals, permits, product and/or establishment licenses, registrations or authorizations, including approvals pursuant to U.S. Investigational New Drug applications, New Drug Applications, Supplemental New Drug Application, and Abbreviated New Drug

[****] Information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed

Applications (or equivalent non-U.S. filings, such as European marketing authorization applications), as applicable, of any Regulatory Authorities that are necessary or advisable in connection with the development, manufacture, testing, use, storage, exportation, importation, transport, promotion, marketing, distribution or sale of API or Product in the Territory.

1.45 "Regulatory Authority" means the international, federal, state or local governmental or regulatory bodies, agencies, departments, bureaus, courts or other entities in the Territory that are responsible for (A) the regulation (including pricing) of any aspect of pharmaceutical or medicinal products intended for human use or (B) health, safety or environmental matters generally. In the United States, this includes the United States Food and Drug Administration; and in the European Union, this includes the European Medicines Agency or any successor agency.

1.46 "Representatives" of an entity means such entity's duly-authorized officers, directors, employees, agents, accountants, attorneys or other professional advisors.

1.47 "Review Period" has the meaning set forth in Section 5.2.

1.48 "Rolling Forecast" has the meaning set forth in Section 4.2.

1.49 "Specifications" means the procedures, requirements, standards, quality control testing and other data for the Product, API and the scope of services (as applicable) as set forth in Attachment D , as modified from time to time in accordance with Article 8.

1.50 "Term" has the meaning set forth in Section 16.1.

1.51 "Territory" means [****], except shall not include countries that are targeted by the comprehensive sanctions, restrictions or embargoes administered by the United Nations, European Union, United Kingdom or the United States, Catalent shall not be obliged to Process Products for sale in any of such countries if it is prevented from doing so, or would be required to obtain or apply for special permission to do so, due to any restriction (such as an embargo) imposed on it by any governmental authority, including those imposed by the U.S. Department of the Treasury’s Office of Foreign Assets Control.

1.52 "Theoretical Batch Yield" means the estimated yield amount of Product that will be Manufactured.

1.53 "Unit" means each unit of Product as defined in Attachment C.

1.54 "Unit Pricing" has the meaning set forth in Section 7.l(C).

1.55 "Validation Services" has the meaning set forth in Section 2.1.

1.56 "Vendor" has the meaning set forth in Section 3.2(B).

[****] Information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed

ARTICLE2

VALIDATION, PROCESSING & RELATED SERVICES

2.1 Validation Services . Catalent shall perform the Product qualification, validation and stability services described in Attachment B (the "Validation Services").

2.2 Supply and Purchase of Product . Catalent shall Process Product in accordance with the Specifications, Applicable Laws and the terms and conditions of this Agreement.

2.3 Product Maintenance Services . Iroko will receive the following product maintenance services (the "Product Maintenance Services" ): [****]; [****], if applicable; [****]; [****]; [****]; [****]; [****], as applicable. For avoidance of doubt, the following services and items are not included in Product Maintenance Services: [****] as applicable.

2.4 Other Related Services . Catalent shall provide such Product-related services, other than Validation Services, Processing or Product Maintenance Services, as agreed to in writing by the parties from time to time. Such writing shall include the scope and fees for any such services and be appended to this Agreement in a Statement of Work ("SOW"). The terms and conditions of this Agreement shall govern and apply to such SOW. In the event of a conflict between this Agreement and an SOW, this Agreement shall govern except to the extent the provisions of the SOW expressly provide otherwise.

ARTICLE 3

MATERIALS

3.1 Iroko -supplied Materials .

A. Iroko shall supply to Catalent for Processing, at Iroko's cost, all Iroko-supplied Materials from Iroko qualified and audited suppliers, in quantities sufficient to meet Iroko's requirements for Product. Iroko shall deliver such items and associated certificates of analysis [****] no later than [****]; provided, that where Catalent is to provide microtesting services on any such item, Iroko must deliver the item no later than [****]. Iroko shall be responsible [****] for securing any necessary DEA, export or import, or similar clearances or permits required in respect of such supply. Catalent shall use such items solely for Processing. Prior to delivery of any such items, Iroko shall provide to Catalent a copy of all associated material safety data sheets, safe handling instructions and health and environmental information, and shall promptly provide any updates thereto; and shall provide information relating to the qualification and a summary of audit of suppliers as reasonably requested by Catalent.

B. Following receipt of Iroko-supplied Materials Catalent shall inspect such items to verify their identity. Unless otherwise expressly agreed by the parties in writing, Catalent shall have no obligation to test such items to confirm that they meet the associated specifications or certificate of analysis or otherwise. In the event that Catalent detects a nonconformity with Specifications, Catalent shall give Iroko prompt notice of such nonconformity. Catalent shall not be liable for any defects in Iroko-supplied Materials, or in Product as a result of defective Irokosupplied Materials, including any delay in Processing as a result of such defective Iroko-supplied Materials. Catalent shall follow Iroko's reasonable written instructions in respect of return or disposal of defective Iroko-supplied Materials, [****].

[****] Information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed

C. Iroko shall retain title to Iroko-supplied Materials at all times and shall bear the risk of loss of any such Iroko-supplied Materials. [****] Iroko shall obtain and maintain insurance for such items while at the Facility and in transit to and from any Facility in accordance with Article 15.

3.2 Raw Materials .

A. Catalent shall be responsible for procuring, inspecting and releasing adequate Raw Materials as necessary to meet the Firm Commitment unless otherwise agreed to by the parties in writing. Catalent shall not be liable for any delay in delivery of Product if Catalent placed orders for such Raw Materials promptly following receipt of Iroko's Firm Commitment. In the event that any Raw Material becomes subject to purchase lead time beyond the Firm Commitment time frame, the parties will negotiate in good faith an appropriate amendment to this Agreement, including Section 4.2.

B. In certain instances, Iroko may require a specific supplier, manufacturer or vendor ("Vendor") to be used for Raw Material. In such an event, (i) such Vendor will be identified in the Specifications and (ii) the Raw Materials from such Vendor shall be deemed Iroko-supplied Materials for purposes of this Agreement. [****] Iroko will be responsible for [****].

C. In the event of (i) a Specification change for any reason, (ii) obsolescence of any Raw Material or (iii) termination or expiration of this Agreement, Iroko shall bear the cost of [****], so long as [****].

ARTICLE 4

PURCHASE ORDERS & FORECASTS

4.1 INTENTIONALLY LEFT BLANK

4.2 Forecast . On or before [****], Iroko shall furnish to Catalent a written [****] rolling forecast of the quantities of Product that Iroko intends to order from Catalent during such period ( "Rolling Forecast" ). The first [****] of such Rolling Forecast shall constitute a binding order for the quantities of Product specified therein ("Firm Commitment") and the following [****] of the Rolling Forecast shall be non-binding, good faith estimates.

4.3 Purchase Orders .

A. From time to time as provided in this Section 4.3(A), Iroko shall submit to Catalent a binding, non-cancelable purchase order for Product specifying only the number of Batches and Units to be Processed, the requested delivery date for each Batch and reference to this Agreement and its Effective Date ("Purchase Order"). Purchase Orders shall not include unit pricing. Concurrently with the submission of each Rolling Forecast, Iroko shall submit a Purchase Order for the Firm Commitment. For clarity, Purchase Orders with the requested delivery date in the Purchase Order prior to the Effective Date of this Agreement shall be governed by the Amended and Restated Agreement.

B. Promptly following receipt of a Purchase Order, Catalent shall issue a written

[****] Information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed

acknowledgement ("Acknowledgement") that it accepts or rejects such Purchase Order. Each acceptance Acknowledgement shall either confirm the delivery date set forth in the Purchase Order or set forth a reasonable alternative delivery date. Catalent may accept, reject or modify any Purchase Order in excess of the Firm Commitment, or otherwise not given in accordance with this Agreement.

4.4 In the event of a conflict between the terms of any Purchase Order or Acknowledgement and this Agreement, the terms of this Agreement shall control.

4.5 Catalent's Cancellation of Purchase Orders . Notwithstanding Section 4.3 and 4.6 to the contrary, Catalent reserves the right to cancel all, or any part of, a Purchase Order upon written notice to Iroko, and Catalent shall have no further obligations or liability with respect to such Purchase Order if Iroko refuses or fails to timely supply conforming Iroko-supplied Materials in accordance with Section 3.1. Any such cancellation of Purchase Orders by Catalent shall not constitute a breach of this Agreement by Catalent, provided such cancellation of the Purchase Order or any part thereof by Catalent is only due to Iroko's refusal or failure to timely supply conforming Iroko-supplied Materials in accordance with Section 3.1.

4.6 Iroko's Modification or Cancellation of Purchase Orders .

A. In the event that Iroko fails to place Purchase Orders sufficient to satisfy the Firm Commitment, Iroko shall pay to Catalent [****].

B. Neither changes to nor postponement of any Batch of Product (provided such changes or postponement are not caused by Catalent's negligence or breach of this Agreement), will reduce or in any way affect Iroko's Firm Commitment obligations set forth in Section 4.2.

C. Iroko may modify the delivery date or quantity of Product in a Purchase Order only by submitting a written change order to Catalent at least [****] in advance of the earliest Processing Date covered by such change order. Such change order shall be effective and binding against Catalent only upon the written approval of Catalent, and, notwithstanding any such written approval, Iroko shall remain responsible for the Firm Commitment.

4.7 Unplanned Delay or Elimination of Processing. Catalent shall use commercially reasonable efforts to meet the Purchase Orders, subject to the terms and conditions of this Agreement. Catalent shall provide Iroko with as much advance notice as practicable if Catalent determines that any Processing will be delayed for any reason.

4.8 Observation of Processing . In addition to Iroko's audit right pursuant to Section 9.5, Catalent and Iroko may also agree in writing from time to time to have another Iroko representative observe Processing for a maximum of [****] days per Contract Year at reasonable times during regular business hours excluding Iroko maintenance and repair activities. Such Iroko representatives shall abide by all Catalent safety rules, quality policies and procedures and other applicable employee policies and procedures, and Iroko shall be responsible for such compliance. Iroko shall indemnify and hold harmless Catalent for any action, omission or other activity of its representatives while on Catalent's premises. Iroko's representatives may be required to sign Catalent's standard visitor confidentiality agreement prior to being allowed access to the Facility.

[****] Information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed

4.9 Minimum Requirement. [****]

ARTICLE 5

TESTING; SAMPLES; RELEASE

5.1 Batch Record s and Data; Release . Unless otherwise agreed to by the parties during their ordinary course of dealings, after Catalent completes Processing of a Batch, Catalent shall provide Iroko with copies of Batch records prepared in accordance with the Specifications; provided, that if testing reveals an out-of-Specification result, Catalent shall provide such Batch records promptly following resolution of the out-of Specification result and provide Iroko with notification of any anticipated delay in delivery. After Catalent completes Processing of a Batch, Catalent shall also provide Iroko or its designee with a certificate of analysis for such Batch and a "Certificate of Manufacture," which indicates that the material was manufactured under cGMP conditions. Issuance of a certificate of analysis constitutes release of the Batch by Catalent to Iroko. Iroko shall be responsible for final commercial release of Product at its cost to the market.

5.2 Testing ; Rej e ction; D efec tiv e Product.

A. Following Catalent QA release of a Batch, Iroko or Iroko's designee may test samples of such Batch to confirm that the Specifications have been met. Unless within [****] ("Review Period"), Iroko or its designee notifies Catalent in writing (an "Exception Notice") that such Batch does not meet the warranty set forth in Section 12.1 at the time of tender of delivery ("Defective Product"), and provides a sample of the alleged Defective Product, the Batch shall be deemed accepted by Iroko and Iroko shall have no right to reject such Batch. Upon timely receipt of an Exception Notice from Iroko, Catalent shall conduct an appropriate investigation to determine whether or not it agrees with Iroko that Product is Defective Product and to determine the cause of any nonconformity. If Catalent agrees that Product is Defective Product and determines that the cause of nonconformity is attributable solely to Catalent's negligence , willful misconduct or breach of this Agreement, including without limitation non-compliance with cGMP ("Catalent Defective Processing"), then Section 5.4 shall apply. For avoidance of doubt, where Catalent cannot determine or assign the cause of nonconformity or Iroko disagrees with Catalent's conclusions, Section 5.3 shall apply; and where the cause of nonconformity still cannot be determined or assigned after resort to Section 5.3, it shall be deemed not Catalent Defective Processing. Iroko shall be responsible to pay for the Batch or Batches if Product is not Defective Product or there is no Catalent Defective Processing after resort to Section 5.3 (should resort to Section 5.3 be necessary) . Notwithstanding the preceding provisions of this Section 5.2 A, the Review Period for the process validation Batches and Batches manufactured in preparation for launch of the Product shall be [****].

B. In the event a Batch is not released by Catalent QA as set forth above because it does not meet Specifications, it shall be considered Defective Product. Catalent shall conduct an appropriate investigation in accordance with site Standard Operating Procedures and the timelines set forth therein to determine the cause of the nonconformity. If Catalent determines that the cause of nonconformity is attributable solely to Catalent's negligence, willful misconduct or breach of this Agreement then it shall

[****] Information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed

be deemed Catalent Defective Processing and Section 5.4 shall apply. For avoidance of doubt, where Catalent cannot determine or assign the cause of nonconformity, Section 5.3 shall apply unless the parties otherwise agree in writing. Where the cause of nonconformity still cannot be determined or assigned after resort to Section 5.3, it shall be deemed not Catalent Defective Processing and Iroko shall be responsible to pay for the Batch or Batches at issue.

C. Notwithstanding anything to the contrary in Section 5.2 A and B above, the parties acknowledge and agree, provided Iroko agrees in writing or it is determined by an independent third-party laboratory in accordance with Section 5.3 below, that Catalent Processed the Batch in accordance with the master batch record, Specifications, and cGMP, it shall be deemed not Catalent Defective Processing and Iroko shall be responsible to pay for the Batch. For the avoidance of doubt, any nonconformity caused by the Iroko Equipment or Iroko's Process shall not be deemed Catalent Defective Processing unless the nonconformity was caused solely by Catalent's gross negligence or willful misconduct in the use of the Iroko Equipment.

5.3 Discrepant Results . If the parties disagree as to whether Product is Defective Product and/or whether the cause of the nonconformity is Catalent Defective Processing, and this is not resolved within [****] days of the Exception Notice date, the parties shall cause a mutually acceptable independent third-party laboratory to review records, test data and to perform comparative tests and/or analyses on samples of the alleged Defective Product and its components, including Iroko-supplied Materials. The independent party's results as to whether or not Product is Defective Product and the cause of any nonconformity shall be final and binding. Unless otherwise agreed to by the parties in writing, the costs associated with such testing and review shall be borne by [****].

5.4 Catalent Defective Processing . Catalent shall, at its option, either (A) [****] or (B) [****]. THE OBLIGATION OF CATALENT TO [****], (SUBJECT, FOR THE AVOIDANCE OF DOUBT, TO ARTICLE 14), SHALL BE IROKO'S SOLE AND EXCLUSIVE REMEDY UNDER THIS AGREEMENT FOR DEFECTIVE PRODUCT AND IS IN LIEU OF ANY OTHER WARRANTY, EXPRESS OR IMPLIED.

5.5 Supply of Material for Defective Product . In the event Catalent reprocesses Defective Product pursuant to Section 5.4, Iroko shall supply Catalent with sufficient quantities of Iroko supplied Materials in order for Catalent to complete such reprocessing. [****]

ARTICLE 6

DELIVERY

6.1 Delivery . Catalent shall deliver Product [****] promptly following Catalent's release of Product. Catalent shall segregate and store all Product until tender of delivery. Title to Product shall transfer to Iroko upon Catalent's tender of delivery. If Catalent provides storage services, title to such items shall pass to Iroko upon transfer to storage. Iroko shall qualify at least one (1) carrier to ship Product and then designate the priority of such qualified carriers to Catalent. In the event Catalent arranges shipping or performs similar loading and/or logistics services for Iroko at Iroko’s request, such services are performed by Catalent as a convenience to Iroko only and do not alter the terms and limitations set forth in this Section 6.1. Catalent shall not be responsible for Product in transit, including any cost of insurance or

[****] Information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed

transport fee for Product, or any risk associated with transit or customs delays, storage and handling.

6.2 Storage Fees . If Iroko fails to take delivery of any Product on any scheduled delivery date, Catalent shall store such Product [****] for [****] following release of the Batch [****]. Thereafter Iroko shall be invoiced [****] following such scheduled delivery for [****].

6.3 Bill and Hold . From time to time, at the Iroko’s request, the agreed delivery date of the Purchase Order may be extended under a bill and hold arrangement as more fully set forth below. For each such Batch of stored Product, Iroko agrees that: (A) Iroko has made a fixed commitment to purchase the Product, (B) risk of loss for such Product passes to Iroko upon placement into storage, (C) such Product shall be on a bill and hold basis for legitimate business purposes, (D) the Iroko shall identify a fixed delivery date for the Product and (E) Iroko agrees to be invoiced and to pay such invoice in accordance with the Payment terms set forth in this Agreement. Upon making a request for a bill and hold arrangement, Iroko shall provide Catalent with a letter confirming items (A) through (E) of this Section for each Batch of stored Product.

ARTICLE 7

PAYMENTS

7.1 Fees . In consideration for Catalent performing services hereunder:

A. Iroko shall pay to Catalent the fees for Validation Services set forth on Attachment B . Catalent shall submit an invoice to Iroko for such fees upon the completion of the relevant phase of the Validation Services.

B. Iroko shall pay to Catalent the fees for annual stability and API testing services set forth on Attachment C . Catalent shall submit an invoice to Iroko for such fees upon the completion of the relevant service.

C. Catalent will invoice Iroko for [****] (“Upfront Invoice”); and [****] (“Delivery Invoice”) of the Product at the then effective Unit Price as of the delivery date and in accordance with Attachment C (together with any subsequent updates to pricing, " Unit Pricing ") [****]. The following examples provide specific clarity:

Examples:

The following examples are provided only for the purpose of illustrating the method for calculating the Unit Price for hypothetical Product delivery. The examples do not reflect actual information or circumstances.

[****]

D. Catalent shall deliver Product in the event the corresponding Upfront Invoice has been paid

[****] Information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed

in full without any reserve.

E. Iroko shall pay Catalent the annual fees for Product Maintenance Services set forth on Attachment C . Catalent shall submit an invoice to Iroko for such fees on the anniversary of the Product approvals of each calendar year during the Term.

F. Other Fees. Iroko shall pay Catalent for all other fees and expenses of Catalent owing in accordance with the terms of this Agreement, including pursuant to Sections 2.3, 2.4, 4.2, 6.2 and 16.3. Catalent shall submit an invoice to Iroko for such fees as and when appropriate.

7.2 Pricing Increase or Decrease . The Pricing as shown on Attachment C and the Minimum Requirement in Section 4.9, may be adjusted [****] of this Agreement upon [****]. The Unit Pricing adjustments specified herein shall be equal to [****]. In addition, price increases for Raw Materials (including those Raw Materials referenced in Section 3.2(B)), labor, and utilities shall be passed through to Iroko at the time of such price increase through an adjustment to the Unit Pricing.

7.3 Payment Terms . Payment of all Catalent invoices are due within [****] following the date of invoice. Iroko shall make payment in U.S. Dollars and otherwise as directed in the applicable invoice. Any applicable wire transfer fees must be included in the payment issued to Catalent.

7.4 Non-Payment of Invoices . Notwithstanding any other provision of this Agreement , if at any time any payment is not received by Catalent by its due date, then Catalent may, in addition to any other remedies available at equity or in law, (A) charge interest on the outstanding sum from the due date (both before and after any judgment) at [****] per month until paid in full (or, if less, the maximum amount permitted by Applicable Law); (B) suspend any further performance hereunder until such invoice is paid in full; (C) require payment in advance before performing any further Services or making an further shipment of Product; and/or (D) and/or terminate this Agreement in accordance with Section 16.2 and without releasing Iroko from its obligations under this Agreement .

7.5 Taxes . All taxes, duties and other amounts assessed (excluding tax based on net income and franchise taxes) on Iroko-supplied Materials, services or Product prior to or upon provision or sale to Catalent or Iroko, as the case may be, are the responsibility of [****], and [****] shall reimburse [****] for all such taxes, duties or other expenses paid by Catalent or such sums will [****], where applicable. If any deduction or withholding in respect of tax or otherwise is required by law to be made from any of the sums payable hereunder, Iroko shall be obliged to pay to Catalent [****].

7.6 Iroko and Third-Party Expenses . [****], Iroko shall be responsible for [****] of its own and all Iroko-sponsored/retained third-party expenses associated with the development, Regulatory Approvals and commercialization of Product, including regulatory filings and post-approval marketing studies . For the avoidance of doubt, Iroko shall be responsible for expenses relating to third party vendors retained by Catalent on Iroko's behalf provided that Iroko agreed in writing to the engagement and/or retention of such vendor.

7.7 Development Batches. Each Batch produced under this Agreement, [****], will be considered to be a "development batch" unless and until Processing has been validated. [****] Catalent and Iroko shall

[****] Information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed

cooperate in good faith to resolve any problems causing the out-of-Specification Batch.

ARTICLE 8

CHANGES TO SPECIFICATIONS

All Specifications and any changes thereto agreed to by the parties from time to time shall be in writing, dated and signed by the parties. Impact to the Specifications from any Process change shall be agreed in writing by the parties, dated and signed by an authorized signatory for each of the parties. No change in the Specifications or the Process shall be implemented by Catalent, whether requested by Iroko or requested or required by any Regulatory Authority, until the parties have agreed in writing to such change, the implementation date of such change [****]. Catalent shall respond promptly to any request made by Iroko for a change in the Specifications or the Process, and both parties shall use commercially reasonable, good faith efforts to agree to the terms of such change in a timely manner. As soon as possible after a request is made for any change in Specifications or the Process, Catalent shall notify Iroko of the costs associated with such change and shall provide such supporting documentation as Iroko may reasonably require. [****] If there is a conflict between the terms of this Agreement and the terms of the Specifications, this Agreement shall control. Catalent reserves the right to postpone effecting changes to the Specifications or the Process until such time as the parties agree to and execute the required written amendment.

ARTICLE 9

RECORDS; REGULATORY MATTERS

9.1 Recordkeeping . Catalent shall maintain materially complete and accurate Batch, laboratory data, reports and other technical records relating to Processing in accordance with Catalent standard operating procedures. Such information shall be maintained for a period of at least [****] from the relevant finished Product expiration date or longer if required under Applicable Laws or the Quality Agreement.

9.2 Regulatory Compliance. Catalent shall obtain and maintain all approvals, permits and licenses with respect to the Facility required by any Regulatory Authority in the jurisdiction where Catalent Processes Product. Iroko shall obtain and maintain all other Regulatory Approvals related to the Product, including those necessary for Catalent to commence Processing, but excluding Regulatory Approvals for the Facility in the jurisdiction where Catalent Processes the Product, which shall be sole responsibility of Catalent [****]. Iroko shall not identify Catalent in any ANDA/NDA application or other such initial regulatory filing or submission without Catalent’s prior written consent. Such consent shall not be unreasonably withheld and shall be memorialized in a writing signed by authorized Representatives of both Parties. Upon written request, Iroko shall provide Catalent with a copy of any Regulatory Approvals required to distribute, market and sell Product in the Territory. If Iroko is unable to provide such information, Catalent shall have no obligation to deliver Product to Iroko, notwithstanding anything to the contrary in this Agreement. During the Term, Catalent will assist Iroko with all regulatory matters relating to Processing, [****], excluding Regulatory Approvals for the Facility in the jurisdiction where Catalent Processes the Product, which shall be sole responsibility of Catalent [****]. The parties intend and commit to cooperate to allow each party to satisfy its obligations under Applicable Laws relating to Processing under this Agreement.

9.3 Governmental Inspections and Requests . Catalent shall promptly advise Iroko if an authorized

[****] Information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed

agent of any Regulatory Authority notifies Catalent that it intends to or does visit the Facility for the purpose of reviewing any activities associated with the Processing. Upon request, Catalent shall provide Iroko with a copy of any report issued by such Regulatory Authority received by Catalent following such visit, redacted as appropriate to protect any confidential information of Catalent and Catalent's other customers. Iroko acknowledges that it may not direct the manner in which Catalent fulfills its obligations to permit inspection by and to communicate with Regulatory Authorities. [****]

9.4 lroko Facility Audits . During the Term, Iroko's Representatives shall be granted access upon at least [****] business days' prior notice, at reasonable times during regular business hours, to (A) the portion of the Facility where Catalent performs Processing, (B) relevant personnel involved in Processing and (C) Processing records described in Section 9.2, in each case solely for the purpose of verifying that Catalent is Processing in accordance with cGMP, the Specifications and the Product master Batch records. Iroko may not conduct an audit under this Section more than [****] per Product during any [****] period; provided, that additional inspections may be conducted by Iroko or its Representatives without prior notice to Catalent in the event there is a material quality or compliance issue concerning Product or its Processing. Iroko's Quality Assurance Manager will arrange Iroko audits with Catalent Quality Management. Audits shall be designed to minimize disruption of operations at the Facility. Iroko's Representatives shall be required to sign Catalent's standard visitor confidentiality agreement prior to being allowed access to the Facility. Such Representatives shall comply with the Facility's rules and regulations. Iroko shall indemnify and hold harmless Catalent for any action or activity of such Representatives while on Catalent's premises.

9.5 Recall . If a Regulatory Authority orders or requires the recall of any Product supplied hereunder or if either Catalent or Iroko believes a recall, field alert, Product withdrawal or field correction ("Recall") may be necessary with respect to any Product supplied under this Agreement, the party receiving the notice from the Regulatory Authority or that holds such belief shall promptly notify the other party in writing. With respect to any Recall, Catalent shall provide all necessary co-operation and assistance to Iroko. Iroko shall provide Catalent with an advance copy of any proposed submission to a Regulatory Authority in respect of any Recall, and shall consider in good faith any comments from Catalent, provided, Catalent provides its comments to Iroko within [****] of Catalent's receipt of the advance copy of such proposed submission to a Regulatory Authority. The cost of any Recall shall be borne by [****], and [****] shall reimburse [****] for expenses incurred in connection with any Recall, in each case unless such Recall is caused solely by [****], then such cost shall be borne by [****]. For purposes hereof, such cost shall be limited to [****] .

9.6 Quality Agreement . Within [****] after the Effective Date, and in any event prior to the first commercial manufacture of Product hereunder, the parties shall negotiate in good faith and enter into a quality agreement on Catalent's standard template (the "Quality Agreement" ). The Quality Agreement shall in no way determine liability or financial responsibility of the parties for the responsibilities set forth therein. In the event of a conflict between any of the provisions of this Agreement and the Quality Agreement with respect to quality-related activities, including compliance with cGMP, the provisions of the Quality Agreement shall govern. In the event of a conflict between any of the provisions of this Agreement and the Quality Agreement with respect to any commercial matters, including allocation of risk, liability and financial responsibility, the provisions

[****] Information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed

of this Agreement shall govern.

9.7 Regulatory Authority Fees . Iroko shall reimburse Catalent for [****] . Without limiting the foregoing, Iroko shall reimburse Catalent for [****] .

ARTICLE 10

CONFIDENTIALITY

10.1 The receiving party shall keep confidential and not disclose to any third party or use for its own benefit, except as expressly permitted herein, or for the benefit of any third party any Confidential Information disclosed by the disclosing party to it, or any Confidential Information to which the receiving party has access or an opportunity to gain knowledge. Receiving party agrees to secure and protect the Confidential Information of the disclosing party in the same manner as it would secure and protect its own Confidential Information and agrees to take appropriate action by instruction or agreement with is agents who are permitted access to the Confidential Information to satisfy its obligations hereunder. Receiving party shall cooperate with and assist the disclosing party in identifying and preventing any unauthorized use, copying or disclosure of the Confidential Information.

10.2 For purposes of this Agreement, "Confidential Information" means all information relating to the disclosing party including without limitation and whether oral or written, information relating to the disclosing party and its business (and its assets, operations and finances), prospective business opportunities, all technical and non-technical information, batch records, manufacturing and analytical reports, regulatory documents, patent, copyright, trade secret, trademark and other proprietary information, techniques, sketches, inventions, innovations, samples, business plans, designs, routines, programs, manuals, ideas, graphics, art, concepts, business methods, drawings, models, know-how, processes, apparatus, Equipment, algorithms, software programs, software source documents, source code, object code and formulae related to the current, future and proposed products and services of the disclosing party. "Confidential Information" also includes, without limitation and whether oral or written, [****] (as such term is defined in the [****])

10.3 Notwithstanding the foregoing paragraph, "Confidential Information" shall not include any information or materials that: (a) are or become known to the general public through no act or omission of receiving party or any other person with an obligation of confidentiality to the disclosing party; (b) receiving party can establish was in its lawful possession prior to its receipt thereof from the disclosing party (c) receiving party can establish by contemporaneous written records was independently developed by receiving party without breach of this Agreement; or (d) are required to be disclosed pursuant to applicable law (provided, however, that where possible to do so, prior to any disclosure of Confidential Information as required by applicable law, receiving party shall advise the disclosing party of such required disclosure promptly upon learning thereof and shall cooperate with the disclosing party in order to afford it a reasonable opportunity to contest or limit such disclosure).

10.4 The confidentiality provisions of Section 9 of the [****] remain in full force and effect. In the event of any inconsistency between the provisions of this Section 10 and Section 9 of the [****] , the provisions of Section 9 of the [****] shall prevail.

[****] Information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed

ARTICLE 11

INTELLECTUAL PROPERTY

11.1 [****] . [****] rights in inventions and discoveries made by Catalent in relation to [****] (as such term is defined in the [****] ) shall be governed by the [****] . Catalent shall give [****] and the Iroko written notice, as promptly as practicable, of all such [****] inventions and discoveries. Iroko's rights in [****] shall be governed by [****] .

11.2 Ownership . Subject to Section 11.1 above, a ll "Iroko Intellectual Property" (as defined in 11.4 below) will be owned by the Iroko and Catalent has not, nor will it acquire, any interest in any of the Iroko intellectual property. Catalent shall not use any Iroko Intellectual Property except as specifically authorized in writing by Iroko respectively or as required for the performance of its obligations under this Agreement.

11.3 Iroko Inventions . Means, without limitation, any and all data, information, works of authorship, discoveries, improvements, inventions, designs, graphics, content, ideas, processes, techniques, know-how and data, whether or not patentable, which are [****].

11.4 Catalent Property . Iroko acknowledges that Catalent possesses certain inventions, processes, know-how, trade secrets, and other intellectual property, including [****] (collectively, all "Catalent Property"). Notwithstanding anything contained herein to the contrary, any Catalent Property or improvements thereto which are improved, modified, developed or otherwise used by Catalent under or during the term of this Agreement and which does not rely on Iroko Intellectual Property shall be the sole and exclusive property of Catalent. Catalent hereby grants to the Iroko, a royalty-free, worldwide license to Catalent Property or improvements hereto with respect to the performance of the Processing.

11.5 Iroko Intellectual Property . Means intellectual property rights of the lroko including, but not limited to rights in patents, patent applications, trademarks, trade-mark applications, trade names, copyrights, industrial designs, know-how, [****].

11.6 [****]

ARTICLE 12

REPRESENTATIONS AND WARRANTIES

12.1 Catalent . Catalent represents, warrants and undertakes to Iroko that:

A. At the time of delivery by Catalent as provided in Section 6.1, Product shall have been Processed in accordance with Applicable Laws (including cGMP) and in conformance with the Specifications and shall not be adulterated, misbranded or mislabeled within the meaning of Applicable Laws; [****];

B. As of the Effective Date and throughout the Term, Catalent holds and shall continue to hold, all licenses and permits of Regulatory Authorities necessary for Catalent to perform the Processing in the jurisdiction where Catalent manufactures or packages the Product as contemplated in this Agreement;

[****] Information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed

C. Any Catalent property or Catalent Equipment which Catalent may use to perform the services and/or Process the Product (i) is Catalent ' s or its Affiliate ' s unencumbered property, (ii) may be lawfully used by Catalent, and (iii) does not infringe and will not infringe any third party rights;

D. Catalent's Facility, the Facility personnel, the Catalent Equipment and other generally available equipment located at the Facility provide sufficient capacity and resources to undertake the Processing of the Products and if applicable utilizing the Iroko Proprietary Process in accordance with the terms and conditions of this Agreement. Catalent makes no representation or warranty with respect to the lroko Equipment or the Iroko Proprietary Process or the capacity thereof; and

E. No transaction or dealing under this Agreement shall be conducted with or for an individual or entity that is designated as the target of any sanction, restriction or embargo administered by the United Nations, European Union, United Kingdom, or United States.

12.2 Iroko . Iroko represents, warrants and undertakes to Catalent that:

A. All Iroko-supplied Materials shall have been produced in accordance with Applicable Laws (including cGMP), shall comply with all applicable specifications, including the Specifications, shall not be adulterated, misbranded or mislabeled within the meaning of Applicable Laws, and shall have been provided in accordance with the terms and conditions of this Agreement and with all relevant safety materials and data, [****].

B. The content of all artwork provided to Catalent shall comply with all Applicable Laws;

C. All Product delivered to Iroko by Catalent shall be held, used and disposed of by or on behalf of the Iroko in accordance with all applicable laws, and Iroko will otherwise comply with all laws, rules, regulations and guidelines applicable to Iroko ' s performance under this Agreement;

D. Iroko will not release any Batch of Product if the required certificates of analysis indicate that Product does not comply with the Specifications or if Iroko does not hold all necessary Regulatory Approvals to market and sell the Product and Iroko will use all reasonable efforts to ensure that the Product is safe and effective;

E. Iroko has all necessary authority to use and to permit Catalent to use pursuant to this Agreement all intellectual property related to Product or Iroko-supplied Materials (including artwork), and the Processing of the foregoing, including any copyrights, trademarks, trade secrets, patents, inventions and developments; there are no patents owned by others related to the Iroko Intellectual Property utilized with the Product that would be infringed or misused by Iroko's performance of the Agreement; and, to its knowledge, no trade secrets or other proprietary rights of others related to the Iroko Intellectual Property utilized with the Product that would be infringed or misused by Iroko's performance of this Agreement;

F. The services to be performed by Catalent in accordance with the terms of this Agreement

[****] Information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed

will not violate or infringe upon any trademark, trade name, copyright, patent, trade secret, or other intellectual property or other right held by any person or entity;

G. Iroko has all necessary licenses, permits and registrations to transport Iroko- supplied Materials to the Facility; and

H. The Process and the Iroko Equipment are capable of producing Product in conformance with the Specifications and Applicable Laws (including cGMP) when operated and/or conducted in accordance with the applicable batch records and cGMP.

I. No transaction or dealing under this Agreement shall be conducted with or for an individual or entity that is designated as the target of any sanction, restriction or embargo administered by the United Nations, European Union, United Kingdom, or United States.

12.3 Limitations . THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS AGREEMENT ARE THE SOLE AND EXCLUSIVE REPRESENTATIONS AND WARRANTIES MADE BY EACH PARTY TO THE OTHER PARTY, AND NEITHER PARTY MAKES ANY OTHER REPRESENTATIONS, WARRANTIES OR GUARANTEES OF ANY KIND WHATSOEVER, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, NON-INFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE .

ARTICLE 13

INDEMNIFICATION

13.1 Indemni fi ca ti on by C atal e nt . Catalent shall indemnify and hold harmless Iroko, its Affiliates, and their respective directors, officers and employees (" lroko Indemnitees ") from and against any and all suits, claims, losses, demands, liabilities, damages, costs and expenses (including reasonable attorneys' fees and reasonable investigative costs) in connection with any suit, demand or action by any third party ("Losses") arising out of or resulting from (A) any breach of its representations, warranties or obligations set forth in this Agreement or (B) any negligence or willful misconduct by Catalent ; in each case except to the extent that any of the foregoing arises out of or results from any Iroko Indemnitee's negligence, willful misconduct or breach of this Agreement.

13.2 Indemnification by Iroko . Iroko shall indemnify and hold harmless Catalent, its Affiliates, and their respective directors, officers and employees ("Catalent Indemnitees") from and against any and all Losses arising out of or resulting from (A) any breach of its representations, warranties or obligations set forth in this Agreement, (B) [****], (C) Iroko's (including any Iroko representative at the Facility pursuant to Section 4.7) exercise of control over the Processing, to the extent that Iroko's instructions or directions violate laws, (D) the conduct of any clinical trials utilizing Product or API, (E) any actual or alleged infringement or violation of any third party patent, trade secret, copyright, trademark or other proprietary rights by intellectual property or other information provided by Iroko, including Iroko-supplied Materials, or (F) any negligence or willful misconduct by Iroko; in each case except to the extent that any of the foregoing arises out of or results from any Catalent lndemnitee's negligence, willful misconduct or breach of this Agreement.

13.3 Indemnification Procedures . All indemnification obligations in this Agreement are conditioned

[****] Information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed

upon the indemnified party (A) promptly notifying the indemnifying party of any claim or liability of which the indemnified party becomes aware (including a copy of any related complaint, summons, notice or other instrument); provided, that failure to provide such notice within a reasonable period of time shall not relieve the indemnifying party of any of its obligations hereunder except to the extent the indemnifying party is prejudiced by such failure, (B) allowing the indemnifying party, if the indemnifying party so requests, to conduct and control the defense of any such claim or liability and any related settlement negotiations (at the indemnifying party's expense), (C) cooperating with the indemnifying party in the defense of any such claim or liability and any related settlement negotiations (at the indemnifying party's expense) and (D) not compromising or settling any claim or liability without prior written consent of the indemnifying party.

ARTICLE 14

LIMITATIONS OF LIABILITY

14.1 CATALENT'S LIABILITY UNDER THIS AGREEMENT FOR ANY AND ALL CLAIMS FOR LOST, DAMAGED OR DESTROYED IROKO-SUPPLIED MATERIALS, WHETHER OR NOT SUCH IROKO-SUPPLIED MATERIALS ARE INCORPORATED INTO PRODUCT SHALL NOT EXCEED [****].

14.2 NOTWITHSTANDING THE ABOVE, CATALENT'S TOTAL LIABILITY UNDER THIS AGREEMENT [****] FOR LOST, DAMAGED OR DESTROYED IROKO-SUPPLIED MATERIALS, WHETHER OR NOT INCORPORATED INTO PRODUCT SHALL IN NO EVENT EXCEED [****].

14.3 [****], CATALENT'S TOTAL LIABILITY UNDER THIS AGREEMENT IS LIMITED TO [****].

14.4 NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES OR LOSS OF REVENUES, PROFITS OR DATA ARISING OUT OF PERFORMANCE UNDER THIS AGREEMENT, WHETHER IN CONTRACT OR IN TORT, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

ARTICLE 15

INSURANCE

Each party shall, at its own cost and expense, obtain and maintain in full force and effect during the Term the following: (A) Commercial General Liability Insurance with a per-occurrence limit of not less than [****]; (B) Products and Completed Operations Liability Insurance with a per-occurrence limit of not less than [****]; (C) Workers' Compensation Insurance with statutory limits and Employers Liability Insurance with limits of not less than [****]. Iroko shall, at its own cost and expense, obtain and maintain All Risk Property Insurance, including transit coverage, in an amount equal to the full replacement value of its property while in, or in transit to, a Catalent facility as required under this Agreement. Each party may self-insure all or any portion of the required insurance as long as, together with its Affiliates, its US GAAP net worth is greater than [****] or its annual EBITDA (earnings before interest, taxes, depreciation and amortization) is greater than [****]. Each required insurance policy, other than self-insurance, shall be obtained from an insurance carrier with an AM. Best rating of at least A- VIL If any of the required

[****] Information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed

policies of insurance are written on a claims made basis, such policies shall be maintained throughout the Term and for a period of at least [****] thereafter. Each party shall obtain a waiver of subrogation clause from its property insurance carriers in favor of the other party. Each party shall be named as an additional insured within the other party's products liability insurance policies; provided, that such additional insured status will apply solely to the extent of the insured party's indemnity obligations under this Agreement. Such waivers of subrogation and additional insured status obligations will operate the same whether insurance is carried through third parties or self-insured. Upon the other party's written request from time to time, each party shall promptly furnish to the other party a certificate of insurance or other evidence of the required insurance.

ARTICLE 16

TERM AND TERMINATION

16.1 Term. This Agreement shall commence on the Effective Date and shall continue until the end of the third Contract Year (which, for the avoidance of doubt, is September 30, 2021), unless earlier terminated in accordance with Section 16.2 (as may be extended in accordance with this Section, (the "Term" ). The Term shall automatically be extended for successive two (2) year periods unless and until terminated by either party on written notice to the other pursuant to Section 16.2 below. In the event Iroko divests, sells, assigns, licenses or transfers (“Transfer”) the partial or entire right, title and interest to any Product to any third party, then this Agreement shall be partially assigned to the third party for each Product Transfer and the Term of the partially assigned Agreement shall be extended for three years and the Minimum Requirement under the partially assigned Agreement as provided in Section 4.9 shall be applicable as provided in Attachment E For clarity, such Transfer does not terminate this Agreement.

16.2 Termination . This Agreement may be terminated immediately without further action:

A. by either party if the other party files a petition in bankruptcy, or enters into an agreement with its creditors, or applies for or consents to the appointment of a receiver, administrative receiver, trustee or administrator, or makes an assignment for the benefit of creditors, or suffers or permits the entry of any order adjudicating it to be bankrupt or insolvent and such order is not discharged within [****], or takes any equivalent or similar action in consequence of debt in any jurisdiction;

B. by either party if the other party materially breaches any of the provisions of this Agreement and such breach is not cured within [****] after the giving of written notice requiring the breach to be remedied; provided, that in the case of a failure of Iroko to make payments in accordance with the terms of this Agreement, Catalent may terminate this Agreement if such payment breach is not cured within ten (10) days of receipt of notice of nonpayment from Catalent; or

C. by either party without cause upon [****] prior written notice to the other; provided that neither party may deliver such notice prior to October 1, 2020.

16.3 Effect of Termination . Expiration or termination of this Agreement shall be without prejudice

[****] Information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed

to any rights or obligations that accrued to the benefit of either party prior to such expiration or termination. In the event of a termination of this Agreement:

A. Catalent shall promptly return to Iroko, at Iroko's expense and direction, any remaining inventory of Product or Iroko-supplied Materials; provided, that all outstanding invoices have been paid in full;

B. Iroko shall pay Catalent all invoiced amounts outstanding hereunder, plus, upon receipt of invoice therefor, for any (i) [****], (ii) [****], and (iii) in the event that this Agreement is terminated for any reason other than by Iroko pursuant to Section 16.2(A) or (B), or by Catalent pursuant to Section 16.2(C), [****];

C. in the event that this Agreement is terminated for any reason other than by Iroko pursuant to Section 16.2(A) or (B), or by Catalent pursuant to Section 16.2(C), Iroko shall pay Catalent for [****]; and s ubject to those obligations which survive termination of this Agreement as set forth in Section 16.4, upon Iroko's fulfillment of its obligations under Sections 16.3 A, B and C, all other obligations of Iroko under this Agreement shall be immediately terminated; and

D. Iroko shall remove the Iroko Equipment, [****] .

16.4 Survival . The rights and obligations of the parties shall continue under Articles 11 (Intellectual Property), 13 (Indemnification), 14 (Limitations of Liability), 17 (Notice), 19 (Miscellaneous); under Articles 10 (Confidentiality and Non-Use) and 15 (Insurance), in each case to the extent expressly stated therein; and under Sections 7.4 (Payment Terms), 7.6 (Taxes), 7.7 (Iroko and Third Party Expenses), 9.2 (Recordkeeping), 9.6 (Recall), 12.3 (Limitations on Warranties), 16.3 (Effect of Termination) and 16.4 (Survival), in each case in accordance with their respective terms if applicable, notwithstanding expiration or termination of this Agreement.

ARTICLE 17

NOTICE

All notices and other communications hereunder shall be in writing and shall be deemed given: (A) when delivered personally or by hand; (B) when delivered by e-mail (receipt verified); (C) when delivered by facsimile transmission (receipt verified); (C) when received or refused, if sent by registered or certified mail (return receipt requested), postage prepaid; or (D) when delivered, if sent by express courier service; in each case to the parties at the following addresses (or at such other address for a party as shall be specified by like notice; provided, that notices of a change of address shall be effective only upon receipt thereof):

To Iroko:		Iroko Pharmaceuticals, LLC
		Navy Yard Corporate Center
		One Kew Place, 150 Rouse Boulevard
		Philadelphia, PA 19112
		Attn: General Counsel Facsimile: 267/546-3004
		Email: legal_iroko@iroko.com

[****] Information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed

To Catalent:		Catalent CTS, LLC
		10245 Hickman Mills Drive
		Kansas City, MO 64137
		Attn: General Manager
		FAX: 816-767-7312

With copy to:		Catalent Pharma Solutions, LLC
		14 Schoolhouse Road
		Somerset, NJ 08873
		Attn: General Counsel
		Email: GenCouns@Catalent.com

ARTICLE 18

EQUIPMENT & BREAKAGE COSTS

Iroko shall be responsible for [****] unless Catalent is [****] . For the avoidance of doubt, Catalent shall not be responsible for [****] unless Catalent [****] .

ARTICLE 19

MISCELLANEOUS

19.1 Entire Agreement; Amendments . This Agreement, together with the Quality Agreement and the [****] , constitute the entire understanding between the parties, and supersedes any contract or understandings (oral or written) of the parties, with respect to the subject matter hereof. For the avoidance of doubt, this Agreement does not supersede any existing generally applicable confidentiality agreement between the parties as it relates to time periods prior to the date hereof or to business dealings not covered by this Agreement. No term of this Agreement may be amended except upon written agreement of both parties, unless otherwise expressly provided in this Agreement.

19.2 Captions; Certain Conventions . The captions in this Agreement are for convenience only and are not to be interpreted or construed as a substantive part of this Agreement. Unless otherwise expressly provided herein or the context of this Agreement otherwise requires, (A) words of any gender include each other gender, (B) words such as "herein", "hereof', and "hereunder" refer to this Agreement as a whole and not merely to the particular provision in which such words appear, (C) words using the singular shall include the plural, and vice versa, (D) the words "include(s)" and "including" shall be deemed to be followed by the phrase "but not limited to", "without limitation" or words of similar import, (E) the word "or" shall be deemed to include the word "and" (e.g., "and/or") and (F) references to "Article," "Section," "subsection," "clause" or other subdivision, or to an Attachment or other appendix, without reference to a document are to the specified provision or Attachment of this Agreement. This Agreement shall be construed as if it were drafted jointly by the parties.

19.3 Further Assurances . The parties agree to execute, acknowledge and deliver such further instruments and to take all such other incidental acts as may be reasonably necessary or appropriate to carry out the purpose and intent of this Agreement.

[****] Information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed

19.4 No Waiver . Failure by either party to insist upon strict compliance with any term of this Agreement in any one or more instances will not be deemed to be a waiver of its rights to insist upon such strict compliance with respect to any subsequent failure.

19.5 Severability . If any term of this Agreement is declared invalid or unenforceable by a court or other body of competent jurisdiction, the remaining terms of this Agreement will continue in full force and effect.

19.6 Independent Contractors . The relationship of the parties is that of independent contractors, and neither party will incur any debts or make any commitments for the other party except to the extent expressly provided in this Agreement. Nothing in this Agreement is intended to create or will be construed as creating between the parties the relationship of joint ventures, co-partners, employer/employee or principal and agent. Neither party shall have any responsibility for the hiring, termination or compensation of the other party's employees or contractors or for any employee benefits of any such employee or contractor.

19.7 Successors and Assigns . This Agreement will be binding upon and inure to the benefit of the parties, their successors and permitted assigns. Neither party may assign this Agreement, in whole or in part, without the prior written consent of the other party, except that either party may, without the other party's consent (but subject to prior written notice), assign this Agreement in its entirety to an Affiliate or to a successor to substantially all of the business or assets of the assigning party or the assigning party's business unit responsible for performance under this Agreement (“Assignment”) and subject to Section 4.9.

19.8 No Third-Party Beneficiaries . This Agreement shall not confer any rights or remedies upon any person or entity other than the parties named herein and their respective successors and permitted assigns.

19.9 Governing Law . This Agreement shall be governed by and construed under the laws of the Commonwealth of Pennsylvania excluding its conflicts of law provisions. The United Nations Convention on Contracts for the International Sale of Goods shall not apply to this Agreement.

19.10 Alternative Dispute Resolution. Except with regards to disputes regarding nonconforming or Defective Product under Article 5 of this Agreement, any dispute that arises between the parties in connection with this Agreement shall first be presented to the senior executives of the parties for consideration and resolution. If such executives cannot reach a resolution of the dispute within [****], then such dispute shall be finally resolved by binding alternative dispute resolution in the state courts of New York, New York, in the English language, in accordance with the then existing commercial arbitration rules of The CPR Institute for Conflict and Dispute Resolution, 30 East 33 rd Street, 6th Floor, New York, NY 10016.

19.11 Prevailing Party . In any dispute resolution proceeding between the parties in connection with this Agreement, the prevailing party will be entitled to recover its reasonable attorney's fees and costs in such proceeding from the other party .

[****] Information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed

19.12 Publicity . Neither party will make any press release or other public disclosure regarding this Agreement or the transactions contemplated hereby without the other party's express prior written consent, except as required under Applicable Laws, by any governmental agency or by the rules of any stock exchange on which the securities of the disclosing party are listed, in which case the party required to make the press release or public disclosure shall use commercially reasonable efforts to obtain the approval of the other party as to the form, nature and extent of the press release or public disclosure prior to issuing the press release or making the public disclosure, such approval not to be unreasonably withheld.

19.13 Right to Dispose and Settle. If Catalent requests in writing from Iroko direction with respect to disposal of any inventories of Product, Iroko-supplied Materials, equipment, samples or other items belonging to Iroko and is unable to obtain a response from Iroko within a reasonable time period after making reasonable efforts to do so, Catalent shall be entitled in its sole discretion to (A) dispose of all such items and (B) set-off any and all amounts due to Catalent or any of its Affiliates from Iroko against any credits Iroko may hold with Catalent or any of its Affiliates.

19.14 Force Majeure . Except as to payments required under this Agreement, neither party shall be liable in damages for, nor shall this Agreement be terminable or cancelable by reason of, any delay or default in such party's performance hereunder if such default or delay is caused by events beyond such party's reasonable control, including acts of God, law or regulation or other action or failure to act of any government or agency thereof, war or insurrection, civil commotion, destruction of production facilities or materials by earthquake, fire, flood or weather, labor disturbances, epidemic or failure of suppliers, vendors, public utilities or common carriers; provided, that the party seeking relief under this Section shall immediately notify the other party of such cause(s) beyond such party's reasonable control. The party that may invoke this Section shall use commercially reasonable efforts to reinstate its ongoing obligations to the other party as soon as practicable. If the cause(s) shall continue unabated for [****], then both parties shall meet to discuss and negotiate in good faith what modifications to this Agreement should result from such cause(s).

19.15 Counterparts . This Agreement may be executed in one or more counterparts , each of which will be deemed an original but all of which together will constitute one and the same instrument. Any photocopy, facsimile or electronic reproduction of the executed Agreement shall constitute an original.

IN WITNESS WHEREOF , the parties have caused their respective duly authorized representatives to execute this Agreement effective as of the Effective Date.


Catalent CTS, LLC			Iroko Pharmaceutical s, LLC

By:			By:

Name:			Name:

Title:			Title:

[****] Information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed

ATTACHMENT A

Iroko Equipment Description	Quantity
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]

Catalent Equipment Description	Quantity
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]
[****]	[****]

[****] Information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed

ATTACHMENT B

VALIDATION SERVICES

Should the parties agree to additional validation services to be governed by this Agreement, such services shall be set forth on a SOW and attached hereto.

[****] Information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed

ATTACHMENT C

Unit Pricing and Additional Fees

[****][2 pages redacted]

[****] Information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed

ATTACHMENT D

SPECIFICATIONS

I. Client-Supplied Materials (and associated specifications)

II. Raw Materials (and associated specifications)

III. Product Specifications (including Batch size)

(to be agreed upon by both parties and maintained by Quality organization )

[****] Information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed

ATTACHMENT E

Partial Assignment Agreement

This Partial Assignment Agreement (the "Partial Assignment ") is made and entered into this ___day of _____________, 20__ (the " Assignment Effective Date "), amongst Iroko Pharmaceuticals, LLC a Delaware limited liability company, with a place of business at One Kew Place, 150 Rouse Boulevard, Philadelphia, Pennsylvania 19112 (“Iroko”), Catalent CTS, LLC, with a place of business at 10245 Hickman Mills Drive, Kansas City, Missouri 64137 ("Catalent"), and _____________, with a place of business at ____________________________ ("Third Party "). Iroko, Catalent, and Third Party may hereinafter be referred to individually as a "Party," or collectively as the "Parties."

WHEREAS, Iroko and Catalent have entered into the Commercial Supply Agreement dated the 1st day of October, 2018, ("Catalent Agreement ") pertaining to the supply of certain products to Iroko;

WHEREAS, Iroko and Third Party have entered into a _________________ Agreement, dated as of __________________, 20__ (the "Transfer Agreement "), whereby Iroko has sold to the Third-Party rights to ______________________ (“Product”);

WHEREAS, Iroko desires to assign to the Third Party, certain supply rights and obligations under the Catalent Agreement solely as necessary to allow the Catalent to supply the Third Party with Product;

WHEREAS, Catalent wishes to consent to this partial assignment and to release Iroko from any obligations with respect to the rights assigned to, and obligations assumed by, the Third Party hereunder; and

WHEREAS, the Parties wish that all other terms and conditions of the Catalent Agreement shall remain unchanged and shall be retained in full force and effect unless specifically agreed otherwise herein.

NOW, therefore, in consideration of the promises and the mutual covenants contained herein, and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto agree as follows:

1. DEFINITIONS. Capitalized terms used herein and not otherwise defined shall have the meanings given them in the Catalent Agreement.

(a) As used herein, the term " Product " shall mean _____________________.

2. CONDITIONAL EFFECTIVENESS OF PARTIAL ASSIGNMENT. The effectiveness of this Partial Assignment shall be conditioned on the Third Party and Iroko fully executing the transfer ______________________.

3. PARTIAL ASSIGNMENT OF SUPPLY RIGHTS AND OBLIGATIONS.

(a) This Partial Assignment is being executed by the Parties for the purpose of Iroko assigning to the Third Party certain rights and obligations under the ________________ for the supply and payment of Product, as such rights and obligations is a mirror to the existing Catalent Agreement. Any provisions of the Catalent Agreement which are assigned to the Third Party by Iroko shall continue to apply to Iroko to define its rights and obligations for other products not subject to this Partial Agreement.

[****] Information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed

(b) Iroko assigns, transfers, conveys and delivers to the Third Party that portion of Iroko’s rights and obligations to the Catalent Agreement (the “Assigned Catalent Supply Terms"), so that a mirror agreement is entered into between the Third Party and Catalent under which the Third Party and Catalent will perform the obligations contained in the Assigned Catalent Supply Terms and be entitled to the rights contained in such Assigned Third-Party Supply Rights (the "Assigned Supply Agreement ").

(c) Catalent hereby consents to the assignment by Iroko to the Third Party of the Assigned Catalent Supply Terms. Catalent will, with effect from the Effective Date, observe and perform in favor of the Third Party all liabilities and obligations set out in the Assigned Supply Agreement to the same extent as if the Third Party had been an original party to the Catalent Agreement in relation to the Assigned Catalent Supply Terms, as of the Effective Date.

4. CONSENT AND PARTIAL ASSIGNMENT. Catalent hereby consents to the foregoing Partial Assignment and releases Iroko from any obligations under the Catalent Agreement in respect of the Product for the Assigned Third-Party Supply Terms as from the Effective Date, however, Iroko shall be responsible for all obligations, liability, indemnification, costs and expenses relating to the Product before the Assigned Third-Party Supply Terms Effective Date.

5. EFFECT ON CATALENT AGREEMENT. The Catalent Agreement shall remain in full force and effect between Iroko and Catalent, and nothing in this Partial Assignment is intended to impair or alter any other rights, obligations, or remedies of Iroko and/or Catalent, respectively, under the Catalent Agreement.

IN WITNESS WHEREOF, the parties hereto have duly executed this Partial Assignment as of the Effective Date.

AGREED AND ACCEPTED:


Iroko

By:
Name:
Title:


Third Party

By:
Name:
Title:


Catalent Pharma Solutions, LLC (Catalent)

By:
Name:
Title:

[****] Information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed

Exhibit 10.18

EGALET CORPORATION

Option Agreement

This Option Agreement (this " Agreement ") is made and entered into as of __________, 20__ (the “ Grant Date ”) by and between Egalet Corporation, a Delaware corporation (the " Company "), and ________________ (the " Participant ").

1. Grant of Option .

1.1 Grant; Type of Option . The Company hereby grants to the Participant an option (the " Option ") to purchase the total number of shares of Common Stock of the Company set forth in the Notice of Grant attached hereto as Exhibit A , at the Exercise Price set forth therein. The Option is being granted pursuant to the terms of the Company's Amended and Restated 2019 Stock-Based Incentive Compensation Plan, as amended and/or restated from time to time (the " Plan ").

1.2 Consideration; Subject to Plan . The grant of the Option is made in consideration of the services to be rendered by the Participant to the Company and is subject to the terms and conditions of the Plan. Capitalized terms used but not defined herein will have the meaning ascribed to them in the Plan.

2. Exercise Period; Vesting .

2.1 Vesting Schedule . The Option will become vested and exercisable in accordance with the vesting schedule set forth in the attached Notice of Grant.

2.2 Expiration . The Option will expire on the Expiration Date set forth in the attached Notice of Grant, or earlier as provided in this Agreement or the Plan.

3. Termination of Service .

3.1 Termination for Reasons other than Cause . If the Participant's employment or other service relationship with the Company and the Company Affiliates is terminated for any reason other than Cause (regardless of whether such termination is initiated by the Company, any Company Affiliate or the Participant), the Participant or, if applicable, the Participant’s legal guardian, executor, administrator, heir or legatee, may exercise the vested portion of the Option, but only within such period of time ending on the earlier of: (a) the date three months following the termination of the Participant's employment or other service relationship or (b) the Expiration Date. Any portion of the Option that is unvested as of the date of the Participant’s termination of employment or other service with the Company and the Company Affiliates shall be immediately forfeited upon such termination with no compensation or other payment due to the Participant or any other Person.

3.2 Termination for Cause . If the Participant's employment or other service relationship is terminated for Cause, the Option (whether vested or unvested) shall immediately be cancelled for no compensation and cease to be exercisable.

3.3 Definition of Cause : For purposes of this Agreement, (i) if the Participant is party to an effective employment, severance or similar agreement with the Company or any Company Affiliate at the time of the Participant’s termination that contains a definition of Cause, then “Cause” shall have the meaning set forth therein and (ii) if clause (i) does not apply, then “Cause” means (a) the Participant’s indictment for, conviction of, or the entering of a guilty plea or plea of no contest (or its equivalent under any applicable legal system) by Participant with respect to, a felony, the equivalent thereof, or any other crime involving moral turpitude; (b) the Participant’s commission of fraud, embezzlement or theft against the Company or any Company Affiliate, or the Participant’s commission of sexual harassment against any Person; (c) the Participant’s material breach of the terms of this Agreement; (d) the Participant’s willful misconduct in the performance of the Participant’s duties, or the willful and material violation by the Participant of any material written Company or Company Affiliate policy or code of conduct applicable to and previously provided or made available to the Participant in writing; (e) the Participant’s material breach of any confidentiality, non-disparagement, non-competition, non-solicitation or other restrictive covenant in any written agreement between the Participant and the Company or any Company Affiliate; (f) the Participant’s refusal or failure to follow the lawful instructions of the Board or the Participant’s supervisor that are consistent with the Participant’s position; (g) the Participant’s material breach of any fiduciary duty owed under applicable law, statute or regulation to the Company or any Company Affiliate; or (h) the Participant’s engagement in any intentional activity that injures or would reasonably be expected to injure (monetarily or otherwise), in any material respect, the reputation, the business or a material business relationship of the Company or any Company Affiliate. Notwithstanding the foregoing, Cause shall not exist until and unless (i) the Participant has been provided with written notice from the Board (excluding, if applicable, the Participant) finding that the Participant has engaged in the conduct described in any of clauses (a) through (h) of this Section 3.3 and expressing its intention to terminate the Participant’s employment for Cause and (ii) with respect to clauses (c), (e), (f) or (g) of this Section 3.3, the Participant fails to cure such breach, refusal or failure (if such breach, refusal or failure is capable of cure) within ten (10) business days after Participant’s receipt of such written notice.

4. Manner of Exercise .

4.1 Election to Exercise . To exercise the Option, the Participant (or in the case of exercise after the Participant's death or incapacity, the Participant's executor, administrator, heir or legatee, as the case may be) must deliver to the Company a notice of intent to exercise in the manner designated by the Committee. If someone other than the Participant exercises the Option, then such Person must submit documentation

reasonably acceptable to the Company verifying that such Person has the legal right to exercise the Option.

4.2 Payment of Exercise Price . The entire Exercise Price of the Option shall be payable within three days of the date of exercise (i) in cash or (ii) with the consent of the Committee in its sole discretion, by (a) authorizing the Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to the Participant as a result of the exercise of the Option (valued at Fair Market Value on the date of exercise), (b) tendering proceeds received from a broker-dealer whom the Participant has authorized to sell all or a portion of the Common Stock covered by the Option or (c) delivering to the Company previously owned and unencumbered shares of Common Stock valued at Fair Market Value on the date of exercise.

4.3 Withholding . If the Company, in its discretion, determines that it is obligated to withhold any tax in connection with the exercise of the Option, the Participant must make arrangements satisfactory to the Company to pay or provide for any applicable federal, state, local and other withholding obligations of the Company or any Company Affiliate. The Participant may satisfy any tax withholding obligation relating to the exercise of the Option by (i) tendering a cash payment or (ii) with the consent of the Committee in its sole discretion, by (a) authorizing the Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to the Participant as a result of the exercise of the Option (valued at Fair Market Value on the date of exercise), (b) tendering proceeds received from a broker-dealer whom the Participant has authorized to sell all or a portion of the Common Stock covered by the Option or (c) delivering to the Company previously owned and unencumbered shares of Common Stock valued at Fair Market Value on the date of exercise. Notwithstanding the foregoing, Participants who are subject to the reporting requirements of Section 16 of the 1934 Act may elect to pay all or a portion of any withholding or other taxes due in connection with the exercise of the Option by directing the Company to withhold shares of Common Stock that would otherwise be received in connection with such exercise (valued at Fair Market Value on the date of exercise). The Company and the Company Affiliates have the right to withhold from any compensation paid to the Participant.

4.4 Issuance of Shares . Provided that the exercise notice and payment are in form and substance satisfactory to the Company, the Company shall issue the shares of Common Stock registered in the name of the Participant, the Participant's authorized assignee, or the Participant's legal representative, which shall be evidenced by stock certificates representing the shares with the appropriate legends affixed thereto, appropriate entry on the books of the Company or of a duly authorized transfer agent, or other appropriate means as determined by the Company.

5. No Right to Continued Service; No Rights as Stockholder . Neither the Plan nor this Agreement shall confer upon the Participant any right to be retained in any position with the Company or any Company Affiliate as an Employee or other service provider.

Further, nothing in the Plan or this Agreement shall be construed to limit the discretion of the Company or any Company Affiliate to terminate the Participant's employment or other service relationship at any time for any reason, with or without notice. The Participant shall not have any rights as a stockholder with respect to any shares of Common Stock subject to the Option unless and until certificates representing the shares have been issued by the Company to the holder of such shares, or the shares have otherwise been recorded on the books of the Company or of a duly authorized transfer agent as owned by such holder.

6. Transferability . Except with the prior written consent of the Committee in its sole discretion, the Option is not transferable by the Participant other than to a designated beneficiary upon the Participant's death or by will or the laws of descent and distribution, and is exercisable during the Participant's lifetime only by him or her (or his or her legal guardian in the event of the Participant’s incapacity). No assignment or transfer of the Option, or the rights represented thereby, whether voluntary or involuntary, by operation of law or otherwise (except to a designated beneficiary, upon death, by will or the laws of descent or distribution or with the Committee’s prior written consent) will vest in the assignee or transferee any interest or right herein whatsoever, but immediately upon such assignment or transfer the Option will terminate and become of no further effect.

7. Change in Control . Unless otherwise determined by the Committee in accordance with Section 4.3 of the Plan, a Change in Control shall have no effect on the Option.

8. Adjustments . The exercise price of the Option and the number and kind of securities subject to the Option may be adjusted in any manner as contemplated by Section 12 of the Plan.

9. Tax Liability and Withholding . Notwithstanding any action the Company takes with respect to any or all income tax, social insurance, payroll tax, or other tax-related withholding (" Tax-Related Items "), the ultimate liability for all Tax-Related Items is and remains the Participant's responsibility and the Company (a) makes no representation or undertakings regarding the treatment of any Tax-Related Items in connection with the grant, vesting, or exercise of the Option or the subsequent sale of any shares acquired on exercise; and (b) does not commit to structure the Option to reduce or eliminate the Participant's liability for Tax-Related Items.

10. Compliance with Law . The exercise of the Option and the issuance and transfer of shares of Common Stock shall be subject to compliance by the Company and the Participant with all applicable requirements of federal, state and all other securities laws and with all applicable requirements of any stock exchange on which the Company's shares of Common Stock may be listed. No shares of Common Stock shall be issued pursuant to this Option unless and until any then applicable requirements of state, federal and all other laws and regulatory agencies have been fully complied with to the satisfaction of the Company and its counsel. The Participant understands that the

Company is under no obligation to register the shares with the Securities and Exchange Commission, any other securities commission or any stock exchange to effect such compliance.

11. Notices . Any notice required to be delivered to the Company under this Agreement shall be in writing and addressed to the Chief Financial Officer of the Company at the Company's principal corporate offices. Any notice required to be delivered to the Participant under this Agreement shall be in writing and addressed to the Participant at the Participant's address as shown in the records of the Company. Either party may designate another address in writing (or by such other method approved by the Company) from time to time.

12. Governing Law . This Agreement will be construed and interpreted in accordance with the laws of the State of Delaware without regard to conflict of law principles.

13. Interpretation . Any dispute regarding the interpretation of this Agreement shall be submitted by the Participant or the Company to the Committee for review. The resolution of such dispute by the Committee shall be final and binding on the Participant and the Company.

14. Options Subject to Plan . This Agreement is subject to the Plan. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.

15. Successors and Assigns . The Company may assign any of its rights and obligations under this Agreement. This Agreement will be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement will be binding upon the Participant and the Participant's beneficiaries, executors, administrators and the Person(s) to whom this Agreement may be transferred by will, the laws of descent or distribution or otherwise.

16. Severability . The invalidity or unenforceability of any provision of the Plan or this Agreement shall not affect the validity or enforceability of any other provision of the Plan or this Agreement, and each provision of the Plan and this Agreement shall be severable and enforceable to the extent permitted by law.

17. Discretionary Nature of Plan . The Plan is discretionary and may be amended, cancelled or terminated by the Company at any time, in its discretion, as provided in the Plan. The grant of the Option in this Agreement does not create any contractual right or other right to receive any Options or other Awards in the future. Future Awards, if any, will be at the sole discretion of the Company. Any amendment, modification, or termination of the Plan shall not constitute a change or impairment of the terms and

conditions of the Participant's employment or other service relationship with the Company.

18. Amendment . The Committee has the right to amend, alter, suspend, discontinue or cancel the Option, prospectively or retroactively; provided, that , no such action shall adversely affect the Participant's material rights under this Agreement without the Participant's prior written consent.

19. Recoupment . The shares acquired upon exercise of the Option and any compensation paid with respect thereto shall be subject to mandatory repayment by the Participant to the Company pursuant to the terms of any Company “clawback” or recoupment policy directly applicable to the Plan and in effect on the date hereof or required by law to be applicable to the Participant.

20. No Impact on Other Benefits . The value of the Participant's Option is not part of his or her normal or expected compensation for purposes of calculating any severance, retirement, welfare, insurance or similar employee benefit, if applicable.

21. Counterparts . This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. Counterpart signature pages to this Agreement transmitted by facsimile transmission, by electronic mail in portable document format (.pdf), or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing an original signature.

22. Acceptance . The Participant hereby acknowledges receipt of a copy of the Plan and this Agreement. The Participant has read and understands the terms and provisions of the Plan and this Agreement, and accepts the Option subject to all of the terms and conditions of the Plan and this Agreement. The Participant acknowledges that there may be adverse tax consequences upon exercise of the Option or disposition of the underlying shares and that the Participant should consult a tax advisor prior to such exercise or disposition.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

	EGALET CORPORATION

	By:
	Name:
	Title:

	PARTICIPANT


	Name:

Exhibit A

Notice of Grant

This Notice of Grant sets forth the specific terms that apply to the Option granted to the Participant identified below under the Option Agreement (the “ Agreement ”), made and entered into as of __________ 20__, between Egalet Corporation, a Delaware corporation (the “ Company ”), and the Participant. Capitalized terms that are used but not defined herein shall have the meanings given to such terms in the Agreement.

Participant Name:	[__________]

Type of Option:
	Non-Qualified Stock Option

Shares Subject to Option:	[__________]

Grant Date:	[__________]

Exercise Price per Share:	$[__________]

Expiration Date:	[___________]

Vesting Schedule:

FOR EMPLOYEES:

Time-Based Awards

[Subject to the Participant’s continuing employment with the Company or one of the Company Affiliates on the applicable vesting date, the Option will become vested and exercisable with respect to 1/3 of the shares set forth above on the first anniversary of the Grant Date and for 1/36 of the shares set forth above each month thereafter until the Option is 100% vested. The unvested portion of the Option will be cancelled for no compensation or other payment upon the Participant's termination of employment or other service with the Company and the Company Affiliates for any reason (regardless of whether such termination was initiated by the Participant, by the Company or by any Company Affiliate).]

Exhibit 10.9

AMENDED AND RESTATED NANO-REFORMULATED COMPOUND LICENSE AGREEMENT

This Amended and Restated Nano-Reformulated Compound License Agreement (this “ Agreement ”), dated October 30, 2018 (the “ Agreement Date ”), is made by and among iCeutica Inc., a Delaware corporation (“ iCeutica Inc. ”), its wholly-owned subsidiary iCeutica Pty Ltd., an Australian corporation (together, “ iCeutica ”), Iroko Pharmaceuticals, LLC, a Delaware limited liability company (“ Iroko LLC ”) and Iroko Properties Inc., a British Virgin Islands company (“ Properties BVI ” and together with Iroko LLC, “ Iroko ”). iCeutica and Iroko are individually referred to herein as a “ Party ” and collectively referred to herein as the “ Parties .”

WHEREAS, iCeutica has proprietary technology, intellectual property and expertise in the nano-reformulation of pharmaceutical compounds. Iroko is a marketer of novel reformulated and repositioned pharmaceutical products. No assignment of the iCeutica IP or iCeutica Technology is contemplated by this Agreement.

WHEREAS, the Parties are party to that certain the Amended and Restated Nano-Reformulated Compound License and Option License Agreement, dated as of December 28, 2012 and amended on November 21, 2013 (the “ NSAID License Agreement ”), pursuant to which iCeutica granted certain rights to Iroko in relation to nonsteroidal anti-inflammatory drugs;

WHEREAS, the Parties are party to that certain Nano-Reformulated Compound License Agreement, dated December 28, 2012 and amended on November 21, 2013 (the “ Meloxicam License Agreement ”), pursuant to which iCeutica granted certain rights in meloxicam to Iroko; and

WHEREAS, the Parties are party to certain Trademark License Agreements, dated November 27, 2012 and October 18, 2013 (the “ Trademark Agreements ”), pursuant to which iCeutica granted certain trademark rights to Iroko.

The Parties now desire to enter into this Agreement to narrow the scope of rights granted and to consolidate the grant of rights into one document.

Therefore, in consideration of the promises set forth in this Agreement, the Parties agree as follows:

1. Definitions.

1.1 “ Affiliate ” means an entity that is controlled by Iroko Pharmaceuticals, Inc., a company incorporated under the laws of the State of the British Virgin Islands or iCeutica Inc., as applicable. For this purpose, “control’’ means (i) the power to direct or cause the direction of the management and affairs of the entity, whether by direct or indirect ownership of voting stock, positions on the board of directors, contract, or otherwise; or (ii) ownership of more than fifty percent (50%) of the equity or other ownership interest of the entity.

1.2 “ API ” means active pharmaceutical ingredient, i.e. the pharmacoactive ingredient in a pharmaceutical product either in a salt-free or salt form, as appropriate for the pharmacoactive ingredient.

1.3 “ Combination Product ” means a commercial product with two (2) or more therapeutically active ingredients, one of which is a Licensed Product and the other(s) of which are not Licensed Products.

1.4 “ Commercial Ready Grant IP ” means Patent Rights or Confidential Information developed as part of Australian Commercial Ready Grant Number COM03690.

[****] Information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.

1.5 “ Confidential Information ” means all business, financial and technical information, data, documents and other materials, whether in electronic or physical form or orally disclosed, provided by one Party (“ Discloser ”) to the other (“ Receiver ”), but excluding any information that Receiver can demonstrate:

(a) was public knowledge at the time of disclosure to Receiver;

(b) became public knowledge without fault by Receiver;

(d) was disclosed to Receiver from a source not known to Receiver to be under a duty of confidentiality to Discloser.

1.6 “ Dollars ” or “ $ ” means U.S. dollars.

1.7 “ FDA ” means the United States Food and Drug Administration.

1.8 “ Force Majeure ” means an act, event or condition beyond the reasonable control of a Party.

1.9 “ iCeutica IP ” means Patent Rights, the Marks and iCeutica Technology.

1.10 “ iCeutica Technology ” means technology owned or controlled by iCeutica and licensable to third parties relating to (i) methods and apparatus for producing APIs [****] and (ii) pharmacoactive compositions of matter [****].

1.11 “ Indocin® ” means the nonsteroidal anti-inflammatory indomethacin sold under the brand name Indocin®.

1.12 “ Intellectual Property ” or “ IP ” means patents, patent applications and confidential information.

1.13 “ Invention ” means any invention or discovery conceived, whether or not reduced to practice, as those terms are defined under the patent laws of the United States.

1.14 “ Licensed Products ” means the Selected Compounds, an aspect of the manufacture, use, offering for sale, sale or importation of which is covered by a pending or issued claim of Patent Rights, and as to any issued claim, the claim has not been held invalid or unenforceable by a court or administrative agency in an unappealed or unappealable decision, disclaimed or admitted to be invalid.

1.15 “ Marks ” means the trademark SOLUMATRIX for pharmaceutical, medicinal and veterinary preparations, including but not limited to U.S. trademark registration no. 4250536 for SOLUMATRIX, and the trademark FINE PARTICLE TECHNOLOGY for pharmaceutical, medicinal and veterinary preparations, including but not limited to U.S. trademark registration no. 4718272 for FINE PARTICLE TECHNOLOGY;

1.16 ‘‘ Net Sales ” means revenues of Iroko and Iroko Affiliates from the sale or other disposition of (i) Licensed Products or (ii) subject to paragraph 5.2, Combination Products, as the case may be, to a non-Affiliate less:

(a) payments made or credits allowed for promotional purposes;

(b) customary allowances, rebates and trade, quantity, cash discounts, including discounts, rebates or other payments required under Medicaid, Medicare or other governmental medical assistance programs, to the extent allowed and taken;

(d) to the extent separately stated on invoices, taxes and other governmental charges levied on the production, sale, transportation, delivery, or use of a product sold by Iroko containing a Licensed Compound, paid by or on behalf of Iroko or an Affiliate.

1.17 “ Party ” or “ Parties ” means iCeutica Inc., iCeutica and/or Iroko, as applicable.

1.18 “ Patent Rights ” means: (i) the provisional and utility patent applications listed on Exhibit A , which will be updated periodically upon request by Iroko, to add all additional patents and patent applications included in this definition; (ii) provisional and utility patent applications relating to iCeutica Technology and owned or licensable by iCeutica on or within twenty (20) years after the Effective Date; (iii) any patents or patent applications relating to the Licensed Products; and (iv) reissues, reexaminations, renewals, extensions, divisions, continuations, continuations-in-part and foreign counterparts of and patents which issue on any of the foregoing.

1.19 “ Selected Compounds ” means: (i) indomethacin, diclofenac, naproxen and meloxicam; and (ii) homologs, analogs and first order derivatives of, composition of matter modifications of or improvements to (i).

1.20 “ Sublicense ” means any sublicense or other agreement of Iroko with a non-Affiliate permitting the commercial exploitation of any (i) iCeutica IP or (ii) applicable Third Party IP which is licensed to Iroko and sublicensed by Iroko for the manufacture, use or sale of Licensed Products.

1.21 “ Sublicense Revenues ” means minimum royalties and all other royalty revenues of Iroko from Sublicenses.

1.22 “ Third Party IP ” means IP related to [****] by a third party during the term of this Agreement and licensable by iCeutica, and including improvements thereof made by iCeutica. There may be multiple Third Party IP opportunities and each shall be treated separately. The SoluMatrix TM technology is not Third Party IP.

1.23 “ Third Party Payments ” means royalties and other sums payable to a third party with respect to a Licensed Product for the use of the applicable Third Party IP.

1.24 “ Sublicense Net Sales ” means revenues of a Sublicensee from the sale or other disposition of (i) Licensed Products or (ii) subject to paragraph 5.2, Combination Products, as the case may be, to an unaffiliated entity, less:

(a) payments made or credits allowed for promotional purposes;

(b) customary allowances, rebates and trade, quantity, or cash discounts, including discounts, rebates or other payments required under Medicaid, Medicare or other governmental medical assistance programs, to the extent allowed and taken;

(d) to the extent separately stated on invoices, taxes and other governmental charges levied on the production, sale, transportation, delivery, or use of Licensed Products, paid by or on behalf of a Sublicensee.

2. Effectiveness of this Agreement; Conditions to Closing; Termination.

2.1 As of the Agreement Date, only Sections 1, 2, 15 and 16 are effective.

2.2 The remainder of this Agreement shall become effective when the following conditions are satisfied or waived in writing by iCeutica in its sole discretion:

(a) The closing under the Asset Purchase Agreement, dated as of October 30, 2018, by and among Iroko Pharmaceuticals Inc., a business company incorporated in the British Virgin Islands (registered number 1732699) and Egalet US Inc., a Delaware corporation and Egalet Corporation, a Delaware corporation, as the same may hereafter be amended or modified, (the “ APA ”) shall have occurred;

(b) iCeutica Inc. shall have received the Lender Payment and the Participation Interest under the Purchase And Participation Agreement, dated as of October 30, 2018, by and among CRG Partners III L.P., CRG Partners III – Parallel Fund “A” 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., the Administrative Agent (as defined below) and iCeutica Inc.; and

(c) If, at the time of the closing of this Agreement, Iroko is a debtor in any case pending under the United States Bankruptcy Code, this Agreement shall have been assumed by Iroko pursuant to 11 U.S.C. 365(a).

2.3 If the entirety of this Agreement has not become effective on or prior to March 31, 2019, then this Agreement shall automatically terminate.

3. License Grant.

3.1 Grant to Iroko. iCeutica grants to Iroko a sole and exclusive (even as to iCeutica and iCeutica Inc.), world-wide, royalty-bearing right and license under the iCeutica IP to make, have made, use, sell, offer to sell and import Licensed Products. Further, iCeutica grants to Iroko a non-exclusive, worldwide license to use the Marks for the Licensed Products and in related promotional materials and literature. iCeutica retains all other rights to the iCeutica IP and has no obligations thereto to Iroko except as set forth in this Agreement.

3.2 Grant to Third Party IP . Effective upon written request by Iroko, iCeutica grants to Iroko an exclusive (if possible; otherwise, non-exclusive), world-wide, royalty-bearing right and license under the applicable Third Party IP to develop, make, have made, use, sell, offer to sell and import Licensed Products only.

3.3 Sublicenses. Iroko may grant Sublicenses, consistent with the applicable terms and conditions of this Agreement. Each Sublicense shall incorporate the substance of paragraphs 4.1(a), 6, 7.1, 10, 11 and 12, mutatis mutandis.

3.4 No Assignment of Commercial Ready Grant IP . For the avoidance of doubt, the Parties acknowledge that nothing in this Agreement constitutes an assignment of the Commercial Ready Grant IP.

4. Cooperation and Sublicensing Activity.

4.1 Diligence .

(a) Iroko will use commercially reasonable diligence to commercialize, market and sell Licensed Products, itself and/or through Affiliates or Sublicensees, subject to Force Majeure. Within thirty (30) days after the end of each calendar year, Iroko will provide iCeutica with a detailed written commercialization plan for each Licensed Product. If Iroko does not exercise commercially reasonable diligence as to any of the Licensed Products, Iroko and iCeutica will, if requested by iCeutica, negotiate reasonable terms (considering Iroko’s investment in the compound following the grant of the license to that Licensed Product by iCeutica, and the Licensed Product’s stage of development), to return all rights to that Licensed Product to iCeutica.

4.2 Cooperation .

(a) iCeutica will make available to Iroko from time-to-time or as requested, all information and materials in its possession, including Confidential Information (but excluding confidential information of third persons that iCeutica is not permitted to disclose), that is necessary or desirable to enable Iroko to test and commercially sell Licensed Products.

(b) Each Party shall designate a coordinator through whom all communications and cooperation for the purposes of this Agreement shall be channeled.

(c) iCeutica will notify Iroko from time-to-time in a timely manner of any applicable Third Party IP, related test results and associated Third Party Payments, which Iroko may elect to use, but is not obligated to use. If Iroko elects to use Third Party IP, iCeutica and Iroko will negotiate with each other in good faith the share of Third Party Payments (such as up front, milestone and minimum payments, but any royalties based on units sold or revenues of Iroko or its Sublicensees will be paid in full by Iroko or its Sublicensees) for which Iroko will be responsible and all other terms of an agreement allowing Iroko to use the Third Party IP, to the extent permitted by agreement governing the rights of iCeutica to the Third Party IP.

5. Payments.

5.1 Royalties. In consideration of the license grants of paragraphs 3.1 and 3.3, Iroko shall pay to iCeutica Inc. a royalty equal to [****].

5.2 Combination Products. Net Sales for each Combination Product shall be determined as follows:

(a) If all active ingredients have separate, established market prices, Net Sales of the Combination Product shall be multiplied by a fraction, the numerator of which is the established market price for the Licensed Product(s) in the Combination Product and the denominator of which is the sum of the established market prices for the Licensed Product(s) and the other active ingredients; or

(b) When market prices for the other active ingredients are not established, Net Sales of the Combination Product shall be multiplied by a fraction, the numerator of which is the established market price for the Licensed Product alone and the denominator of which is the established market price for the Combination Product.

5.3 Royalty Stacking. If Iroko, its Affiliates or Sublicensees enter licenses or sublicenses for one or more technologies from third parties or from iCeutica in order to develop and market Licensed Products, the royalty payments due to iCeutica under paragraph 5.1 shall be reduced by [****]; provided that in no event shall the royalty payments due to iCeutica be [****] otherwise due under paragraph 5.1. The foregoing calculations and deductions shall be made on a Licensed Product-by-Licensed Product basis.

5.4 Sublicense Revenues and Sublicensee Net Sales. As to each payment received from a Sublicensee, Iroko shall pay iCeutica Inc. the lesser of [****].

5.5 Payment of Third Party Payments. Iroko shall pay iCeutica Inc. or iCeutica, as directed for any applicable Third Party Payments on a Dollar-for-Dollar basis, taking into account any withholding, Goods and Services Tax or other taxes payable by iCeutica on such Third Party Payments, such that iCeutica shall not be out-of-pocket after the remittance to the applicable licensor.

5.6 Payment Terms.

(a) [****].

(b) Amounts due under paragraphs 5.1, 5.2, 5.3, 5.4 and 5.5 are payable quarterly, within sixty (60) days after each calendar quarter.

(c) All payments shall be transmitted to iCeutica Inc. or iCeutica, as appropriate, by wire transfer of immediately available funds to a bank account or accounts specified in writing by iCeutica.

(d) If any amount due to iCeutica Inc. or iCeutica is collected in a currency other than Dollars, the amount shall be converted into Dollars at the applicable exchange rate published in The Wall Street Journal, Eastern edition, on the last business day of the calendar quarter in which the collection was made .

5.7 Tax Withholding. If Iroko is required by the laws of any country to withhold any tax with respect to any payment to iCeutica Inc. or iCeutica, as appropriate, the tax will be deducted and paid to the taxing authority. Iroko will notify and promptly furnish iCeutica Inc. or iCeutica, as appropriate, with original receipts of any tax certificate or other available documentation evidencing the tax withheld. Iroko will use commercially reasonable efforts to minimize any withholding.

6. Reports and Records.

6.1 Royalty Reports. Each royalty payment under paragraphs 5.1, 5.2, 5.3, 5.4 and 5.5 shall be accompanied by a detailed royalty report, specifying the computation of royalties payable and certified to be correct by the Chief Financial Officer of Iroko.

6.2 Books and Records. Iroko shall keep accurate books of account adequate to show amounts payable under this Agreement and the performance of the Iroko’s other obligations hereunder for three (3) years after each applicable year.

6.3 Sublicenses. Iroko shall provide iCeutica Inc. with a copy of each Sublicense promptly after its execution. The Sublicense shall be deemed Confidential Information.

6.4 Audit Request. Iroko shall permit an independent, certified public accountant appointed and paid by iCeutica Inc. and reasonably acceptable to Iroko to examine and make copies of applicable records and other documents of Iroko and its Sublicensees no more often than once per calendar year during regular business hours and upon two (2) weeks’ notice for the purpose of verifying amounts and reports due from, and obligations to be performed by, each of them. The results of each examination shall be made available to iCeutica Inc. and Iroko, and shall be considered Confidential Information. Should the audit discover an underpayment equal to the greater of five percent (5%) or Twenty Five Thousand Dollars ($25,000), Iroko shall pay the cost of the audit.

6.5 Late Charge . All overdue payments will be paid promptly with a late charge of two percent (2%) per annum above the prime rate of J.P. Morgan Chase Manhattan Bank, N.A., as reported in The Wall Street Journal, Eastern edition, on the last business day of the calendar quarter in which each payment was to be made. Interest shall be calculated from the last day on which the payment was payable. Any portion of such payments that are being contested in good faith shall not be considered overdue.

7. Intellectual Property Maintenance.

7.1 Prosecution and Maintenance of Patent Rights. iCeutica shall file, prosecute and maintain the Patent Rights and pay all fees and expenses therefor. Iroko will reimburse iCeutica for the reasonable costs of preparing, prosecuting and maintaining Selected Compound-specific patent applications and patents in countries other than the United States. If iCeutica intends to abandon any U.S. patent application or patent of Patent Rights in a manner which will result in a forfeiture of rights, it shall notify Iroko and, if requested by Iroko and for so long as Iroko pays one-half (½) of the applicable fees and expenses, iCeutica will continue to prosecute and maintain the applicable Patent Rights.

7.2 No Inventions. The Parties acknowledge that no Inventions are expected to arise in connection with this Agreement.

7.3 Maintenance and Standards for use of the Marks. iCeutica shall file, prosecute and maintain the Marks and pay all fees and expenses therefor. iCeutica shall undertake best efforts to maintain all trademark registrations for the Marks provided the Marks are still in use. Iroko will comply with all quality control standards supplied by iCeutica. Upon request by iCeutica, Iroko will provide iCeutica with samples of any goods or materials bearing the Marks. Iroko shall make reasonable use of the ® symbol in connection with the Marks. Iroko acknowledges that use of the Marks by Iroko shall inure solely to the benefit of iCeutica.

7.4 Publications . Iroko will provide iCeutica with a copy of each publication relating to iCeutica Technology at least forty five (45) days before the publication date, to provide an opportunity for iCeutica to file patent applications before the publication date. Iroko will also delete from the proposed publications any Confidential Information, as reasonably requested by iCeutica.

7.5 Data, Reports and SOPs etc . Iroko will provide iCeutica upon request with a copy of any data, report, standard operating procedure, validation procedure, IND submission, animal or clinical trial report or other information (“ Information ”) relating to any Selected Compounds or Indocin which is developed utilizing the iCeutica Technology. iCeutica shall be entitled to use such Information and shall have a license to such Information for its own regulatory, marketing or other related purposes.

8. Infringement.

8.1 Notices. Each Party shall inform the other promptly of any third party infringement of the Marks, Patent Rights or Third Party IP or misappropriation of Confidential Information of which it has knowledge.

8.2 Enforcement. If and to the extent that any iCeutica IP is infringed or misappropriated by any third party products which compete with any Licensed Products:

(a) iCeutica shall have the right, but not the obligation, at iCeutica’s expense, to bring suit for infringement or misappropriation, as applicable, of the iCeutica IP and may join Iroko as a co-plaintiff, subject to reimbursement of reasonable fees and expenses for counsel; and

(b) Iroko shall have the right (but not the obligation), exercised within sixty (60) days after notice prior to filing of the complaint, to share equally with iCeutica the legal fees and expenses of the suit; or

(c) If iCeutica does not initiate a suit for infringement or misappropriation of iCeutica IP, as applicable, within four (4) months after notice from Iroko (the notice shall include detailed claim charts or evidence of misappropriation and competitive information demonstrating a substantial adverse competitive impact of the infringement or misappropriation on sales of Licensed Products) Iroko shall have the right to initiate the suit at Iroko’s expense, and may join iCeutica as a co-plaintiff.

(d) For the avoidance of doubt, Iroko is in control of the following ongoing litigations and is solely responsible for all legal fees and expenses associated therewith:

(i) iCeutica Pty Ltd. et al v. Lupin Limited et al, No. 1:17-cv-00394-MJG (D. Md. 2017), appeal docketed, No. 18-1658 (Fed. Cir. Mar. 9, 2018).

(ii) iCeutica Pty Ltd. et al v. Novitium Pharma LLC, No. 1:18-cv-00599-CFC (D. Del. 2018).

8.3 Declaratory Judgment Suits. If a declaratory judgment suit is brought against Iroko, alleging invalidity, unenforceability, or non-infringement of any patents of the iCeutica IP, Iroko shall provide prompt

notice thereof to iCeutica; and iCeutica, shall have the right, but not the obligation, within thirty (30) days after notice, to assume the defense of the suit at iCeutica’s expense.

8.4 Recoveries. Any amounts received as awards or in license or settlement agreements entered into pursuant to any claim or suit under paragraph 8.2 and allocable to Licensed Products shall be distributed as follows:

(a) First, to reimburse the Parties, pro rata, for their out-of-pocket legal fees and expenses incurred in connection with the claim or suit; and

(b) The balance shall be paid:

(i) Fifty-fifty (50-50) if the Parties shared equally the costs of the suit; and otherwise

(ii) Ninety percent (90%) to the Party paying for the suit and ten percent (10%) to the other.

Payments shall be made within thirty (30) days after funds are received and shall be accompanied by a report detailing the computation of the payments.

9. iCeutica Representations and Warranties; Changed Circumstances.

9.1 iCeutica and iCeutica Inc. each represents and warrants to Iroko as of the Agreement Date that:

(a) Right and Power . It has the right and power to enter into and perform this Agreement in accordance with its terms, and is not now and will not become party to an agreement in derogation of iCeutica’s obligations to Iroko in this Agreement.

(b) Ownership. iCeutica owns all right, title and interest in and to the iCeutica IP, free and clear of liens, security interests, charges and other encumbrances. No Patent Right has been abandoned.

(c) No Conflicting License. iCeutica has not granted any license or covenant not to sue that conflicts with the rights granted under this Agreement.

(d) No Infringements. To the best of its knowledge, with no investigation having been made or required to be made, Iroko’s practice of the iCeutica IP will not infringe any patent or other right of any third party.

(e) IP Payments. iCeutica has paid all patent and trademark maintenance fees for the iCeutica IP.

(f) No Other Warranties. Except as set forth in paragraphs 9(a) to 9.1(e), iCeutica makes no other representations or warranties whatsoever, and there is no warranty of merchantability or fitness for a particular purpose.

(g) Changed Circumstances. iCeutica shall notify Iroko promptly of any changed circumstances with respect to paragraphs 9(a), (b), and (c) .

10. Iroko Representations and Warranties.

10.1 Iroko represents and warrants to iCeutica that:

(a) Right and Power . It has the right and power to enter into and perform this agreement in accordance with its terms.

(b) Ownership . It owns all right, title, and interest in and to the TIVORBEX®, VIVLODEX® and ZORVOLEX® brand names.

11. Indemnification; Insurance.

11.1 Iroko Indemnity . Iroko shall indemnify, defend, and hold harmless iCeutica and iCeutica Inc. and each of their Affiliates, officers, directors, employees, agents, successors, and assigns (the “ iCeutica Indemnitees ”) against any claim, demand, liability or expense (including reasonable attorneys’ fees and expenses, whether incurred as the result of a third party claim or a claim to enforce this provision) incurred by or imposed upon any of the iCeutica Indemnitees in connection with any third party claims, suits, or judgments arising out of any theory of liability (including tort, warranty, or strict liability suits or claims and whether or not such suit or claim has a factual basis) concerning any Licensed Product (collectively, “ Claims ”), except to the extent that the damages claimed were caused by iCeutica Indemnitees.

11.2 iCeutica Indemnity . iCeutica shall indemnify, defend, and hold harmless Iroko and its Affiliates, officers, directors, employees, agents, successors, and assigns (the “ Iroko Indemnitees ”), against any claim, demand, liability or expense (including reasonable attorneys’ fees and expenses, whether incurred as the result of a third party claim or a claim to enforce this provision) incurred by or imposed upon any of the Iroko Indemnitees in connection with any third party claims, suits, or judgments arising out of any theory of liability (including tort, warranty, or strict liability suits or claims and whether or not such suit or claim has a factual basis) with respect to any breach of any representation or warranty set forth in paragraph 9.

11.3 Procedure. The iCeutica Indemnitees or the Iroko Indemnitees, as applicable, shall provide the indemnitor with prompt written notice of each Claim for which indemnification is sought. The indemnitor, at its expense, shall defend any such Claim. The Indemnitees shall cooperate fully in such defense and permit the indemnitor to conduct and control the defense and the disposition of the Claim (including all decisions relative to appeal, and settlement); provided , however , that any Indemnitee shall have the right to retain its own counsel, at the Indemnitee’s expense. The indemnitor shall keep the other Party informed of the progress in the defense and disposition of any Claim and shall consult with the other Party with regard to any proposed settlement. The indemnitor shall obtain the written consent, which shall not unreasonably be withheld, of the other Party to any settlement which would adversely affect the other party.

11.4 Insurance.

(a) Iroko and each Sublicensee shall maintain in full force and effect at all times from the Effective Date for the term of this Agreement and four (4) years thereafter with a reputable commercial insurance carrier, commercial general liability insurance of a type as may be necessary to protect their interests and fulfill its obligations under this Agreement, including without limitation contractual liability insurance, covering the marketing, sale, distribution, use and performance of products sold by Iroko containing the Licensed Compounds in an amount of at least Ten Million Dollars ($10,000,000) per occurrence and Twenty Million Dollars ($20,000,000) in the aggregate.

(b) The insurance of subparagraph 11.4(a): (A) shall be issued by an insurer licensed to practice in Delaware and otherwise in the countries in which Iroko undertakes activities in connection with the exercise of its rights, or an insurer pre-approved by iCeutica, such approval not to be unreasonably withheld; (B) shall be endorsed to include product liability coverage; and (C) shall require thirty (30) days’ written notice to iCeutica before any cancellation or material change.

(c) Iroko shall, upon request, provide iCeutica with a copy of the Certificate of Insurance and the underlying policy(ies) evidencing compliance with this paragraph 11.4.

12. Confidential Information.

12.1 During the term of this Agreement and for three (3) years thereafter, each Receiver will:

(a) use commercially reasonable efforts, but no less than the protection given to its own confidential information, to maintain in confidence all Confidential Information, including without limitation the financial terms of this Agreement; and

(b) disclose Confidential Information only:

(i) to the Receiver’s employees, consultants and legal, financial and business advisors who reasonably need to know such information for the Receiver to perform its obligations or otherwise conduct its activities hereunder; or

(ii) as required by court order, statute, governmental regulation or securities exchange rule, upon at least five (5) days prior notice to the Discloser.

13. Termination.

13.1 Duration of this Agreement. Unless terminated pursuant to paragraph 13.2 or 13.3, the term of this Agreement shall continue on a country-by-country basis until expiration of the last-to-expire of the Patent Rights in that country and, if there is no granted iCeutica patent in any country, for twenty (20) years from the date of the first commercial introduction of a Licensed Product for that country.

13.2 Termination by iCeutica. iCeutica may terminate this Agreement if Iroko breaches any material provision (other than the payment obligations contained in paragraph 5, for which iCeutica’s sole remedy shall be the pursuit of monetary damages) of this Agreement and has not cured the breach within ninety (90) days after notice from iCeutica specifying the nature of the breach in reasonable detail; provided , however , that a breach of a Sublicense by a Sublicensee shall not be deemed to be a breach of this Agreement.

13.3 Termination by Iroko. Iroko may terminate this Agreement if iCeutica breaches any material provision of this Agreement and has not cured the breach within ninety (90) days after notice from Iroko specifying the nature of the breach in reasonable detail.

13.4 Rights in Bankruptcy. All rights and licenses granted under or pursuant to this Agreement by iCeutica are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code (i.e., Title 11 of the U.S. Code) or analogous provisions of applicable Law outside the United States, licenses of rights to “intellectual property” as defined under Section 101 of the U.S. Bankruptcy Code or analogous provisions of applicable Law outside the United States. The Parties agree that Iroko, as licensee of such rights under this Agreement, shall retain and may fully exercise all of its rights and elections under the U.S. Bankruptcy Code or any other provisions of applicable Law outside the United States that provide similar protection for “intellectual property.” The Parties further agree that, in the event of the commencement of a bankruptcy proceeding by or against iCeutica under the U.S. Bankruptcy Code or analogous provisions of applicable Law outside the United States, Iroko shall be entitled to a complete duplicate of (or complete access to, as appropriate) any iCeutica IP, which, if not already in Iroko’s possession, shall be promptly delivered to it upon Iroko’s written request therefor. Any agreements supplemental hereto shall be deemed to be “agreements supplementary to” this Agreement for purposes of Section 365(n) of the U.S. Bankruptcy Code.

13.5 Effects of Termination.

(a) Nothing herein will release any Party from any obligation that matured prior to the effective date of any termination of this Agreement. Subject to the foregoing, paragraphs 6, 7, 8 (as to litigation then in process), 10.1(b), 11, 15 and 16 will survive termination of this Agreement.

(b) Iroko may, after termination, sell all Licensed Products then in inventory or work-in-process.

(c) All Sublicenses shall remain in full force and effect after termination of this Agreement for any reason; and the Sublicensee shall pay directly to iCeutica all post-termination payments that Iroko would otherwise have been obligated to make hereunder.

13.6 Return of Information. Upon termination of this Agreement, each Receiver will return all applicable Confidential Information supplied to Receiver, except that Receiver’s counsel may keep one archival copy.

14. General Compliance with Laws.

14.1 Compliance with Laws. iCeutica shall comply with all local, state, federal, and international laws and regulations relating to its performance under this Agreement, including but not limited to the development, manufacture, use, and sale of any Licensed Product, including export control laws. Without limiting the generality of this paragraph, Iroko shall be responsible for the preparation and submission of all applications relating to any required regulatory approval of any Licensed Product, whether by the FDA or other regulatory body.

14.2 Marking. Iroko shall mark the packaging and/or product inserts for all Licensed Products with the number of each applicable patent of the Patent Rights. Iroko shall provide iCeutica with written notice of compliance with this paragraph by December 31 of each year.

15. Governing Laws; Venue; Severability.

15.1 Delaware Law . This validity and interpretation of this Agreement shall be governed by Delaware law, without regard to conflicts of laws principles.

15.2 Consent to Service. Each Party consents to service of process by prepaid next- business-day delivery service at its last known address identified by proper notice.

15.3 Severability . If any provision of this Agreement is held invalid, unenforceable, void or unconscionable, that provision shall be enforced to the greatest extent permitted by law and the remainder of this Agreement and such provision shall remain in full force and effect.

16. Miscellaneous.

16.1 Negotiation of Disputes. If any dispute arises under or related to this Agreement, senior executives of the Parties, with decision-making authority, will meet in Philadelphia, PA within ten (10) days after notice and enter into good faith negotiations, for a period not to exceed twenty (20) days, aimed at resolving the dispute.

16.2 Notices. Any notices or other communications required or permitted by this Agreement shall be in writing and delivered (i) personally, (ii) via electronic mail, or (iii) sent by prepaid express courier service, signature requested. Notices shall be effective upon receipt. Notices shall be sent to the addresses of the Parties specified on the first page of this Agreement or such other address as given by proper notice.

16.3 Entire Agreement . This Agreement contains the entire agreement of the Parties with respect to its subject matter, and supersedes all previous agreements and understandings, written or oral, express or implied, including all provisions of the NSAID License Agreement, the Meloxicam License Agreement and the Trademark License Agreements. This Agreement may only be amended by a writing signed by the Parties.

16.4 Successors and Assigns. This Agreement is binding upon the Parties and their successors and permitted assigns. Neither Party may assign its rights or obligations under this Agreement without the prior written consent of the other, except that:

(a) iCeutica may assign its rights to receive payments hereunder and may pledge its IP, subject to the rights granted to Iroko in this Agreement;

(b) Iroko may assign its rights and obligations hereunder to an Affiliate, with written notice thereof to iCeutica Inc.; provided , however , that in the event of an assignment under this paragraph (b), notices shall be delivered pursuant to paragraph 16.2 hereof and the assignee and the assignor shall be jointly and severally liable for all of Iroko’s obligations under this Agreement;

(c) Iroko may assign all or a portion of its rights to one or more particular Licensed Products to an acquirer of all or substantially all of Iroko’s assets and IP relating to such Licensed Product, in which even the successor and iCeutica shall enter into an agreement as to the particular Licensed Product, substantially the same as this Agreement, mutatis mutandis; and

(d) Iroko or iCeutica may assign all of its rights to a successor by (A) merger, (B) acquisition of all or substantially all of the shares, members’ interests or other indicia of ownership of a Party, (C) as to Iroko, purchase of all or substantially all of Iroko’s assets relating to Selected Compounds or (D) as to iCeutica, purchase of all or substantially all of iCeutica’s assets relating to iCeutica Technology.

16.5 Counterparts. This Agreement may be signed in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. Signed signature pages may be exchanges by fax or e- mail and shall complete this Agreement, and shall be followed by the exchange of paper copies of the signed documents.

16.6 Headings. The headings contained in this Agreement are for reference purposes only and will not affect in any way the meaning or interpretation of this Agreement.

[ Signature page follows ]

In witness whereof, the Parties have executed this Agreement by their duly authorized representatives.


	iCeutica Inc.

	By:	/s/ SATYA BHAMIDIPATI
	Name:	Satya Bhamidipati
	Title:	COO

	iCeutica Pty Ltd.

	By:	/s/ MATT CALLAHAN
	Name:	Matt Callahan
	Title:	Director

	Iroko Pharmaceuticals, LLC

	By:	/s/ TODD SMITH
	Name:	Todd Smith
	Title:	Chief Executive Officer

	Iroko Properties Inc.

	By:	/s/ TODD SMITH
	Name:	Todd Smith
	Title:	Director

Exhibit A

[****][19 pages redacted]

Exhibit 31.1

Certification of Principal Executive Officer and Principal Financial Officer of Egalet Corporation

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Robert S. Radie, certify that:

I have reviewed this Quarterly Report on Form 10-Q of Egalet Corporation;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 17, 2019

and
	/s/ ROBERT S. RADIE
	Robert S. Radie
	President and Chief Executive Officer
	(Principal Executive Officer and Principal Financial Officer)

Exhibit 32.1

Certification Of

Principal Executive Officer and Principal Financial Officer

Pursuant To 18 U.S.C. Section 1350,

As Adopted Pursuant To

Section 906 Of The Sarbanes-Oxley Act Of 2002

In connection with the Quarterly Report of Egalet Corporation (the “Company”) on Form 10-Q for the period ended March 31, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert S. Radie, president and chief executive officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

The information contained in the Report fairly presents, in all material respects, the financial condition of the Company at the end of the period covered by the Report and results of operations of the Company for the period covered by the Report.


Date: May 17, 2019	/s/ ROBERT S. RADIE
	President and Chief Executive Officer
	(Principal Executive Officer and Principal Financial Officer)

This certification accompanies the Report and shall not be deemed “filed” by the Company with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Report), irrespective of any general incorporation language contained in such filing.