A.

PR Pharmaceuticals, Inc. (“PRP”) filed for reorganization under Chapter 11 of Title 11 of the United States Code, 11 U. S.C. § 101 et. seq., (the “Bankruptcy Code”) on November 14, 2008 (the “Petition Date”), in the United States Bankruptcy Court, District of Colorado (the “Bankruptcy Court”), Case Number 08-28223-SBB.

 

B.

The case was converted to a liquidation case under Chapter 7 of the Bankruptcy Code on November 30, 2011.

 

C.

Kimberley Tyson is the appointed the Chapter 7 Trustee (the “Chapter 7 Trustee”) for the estate of PRP.

 

D.

Buyer wishes to acquire certain assets related to the business of PRP upon the Bankruptcy Court’s approval of the terms of this Agreement.

 

E.

Seller and Buyer wish to enter into the Agreement under which Buyer will acquire certain assets from the Seller free and clear of liens, claims, encumbrances and interests pursuant to §363 of the Bankruptcy Code (the “Transaction”).

 

F.

On October 31, 2012, the Court entered its Order approving the Trustee’s Motion to (A) Approve Sale of Certain Assets Free and Clean of Liens Claims and Encumbrances and (B) the Assumption and Assignment of Certain of Debtor’s Executor Contracts and Unexpired Leases in Connection with Such Sale (the “AntriaBio Transfer”). The buyer of the assets that were the subject of the asset sale was AntriaBio. Among the consideration provided to the estate was certain contingent consideration as detailed below (the “AntriaBio Contingent Consideration”).

 

G.

The Buyer and Seller (together, the “Parties”) intend and agree that the sale shall be where-is and as-is.

 

 

 

 

 

 

 

The AntiaBio Contingent Consideration. The AntriaBio Contingent Consideration is detailed in the Asset Purchase Agreement between the Trustee and AntriaBio, a copy which is filed with the Bankruptcy Court and which the Buyer does hereby certify it has had an opportunity to review, comprised of:

 

 

(a)

Two million dollars ($2,000,000) after the initiation of a Phase 2b Clinical Trial, payable within thirty (30) days after successful completion of the first multiple ascending dose safety study in patients in a formal Phase 2b Clinical Trial;

 

(b)

Two million dollars ($2,000,000) to be paid within thirty (30) days after the exclusive license by Buyer of InsuLAR in the United States to a commercial pharmaceutical company.

 

(c)

Five million dollars ($5,000,000) after the initiation of Phase 3 Clinical Trial for InsuLAR by the Buyer or a licensee of the Buyer, payable 30 days after the first dosing of a patient in a formal Phase 3 clinical study.

 

(d)

Ten million dollars ($10,000,000) upon the FDA or EMEA Approval to allow the marketing and sales of InsuLAR by Buyer or a licensee of the Buyer, payable 30 days after the receipt of the approval letter or notice from the FDA or EMEA.

 

(e)

Twenty five million dollars ($25,000,000) if the twelve (12) month cumulative worldwide Sales of InsuLAR by the Buyer or a licensee of the Buyer reach five hundred million dollars ($500,000,000) in any consecutive twelve month period, so long as such period occurs during the life of the patents included in the Purchased Assets, payable ninety (90) days after the exclusion of such period.

 

 

 

 

(a)

“Phase 2b Clinical Trial” means a human clinical trial related to InsuLAR sponsored by Buyer, or one of its licensees, in any FDA or EMEA regulated country that would satisfy the requirements of 21 CFR 312.21(c) for a phase 2 clinical study.

 

(b)

“Phase 3 Clinical Trial” means a human clinical trial related to InsuLAR sponsored by Buyer, or one of its licensees, in any FDA or EMEA regulated country that would satisfy the requirements of 21 CFR 312.21(c), or an equivalent phase or clinical trial.

 

(c)

“FDA or EMEA Approval” means that the product is approved for sale either by the Food and Drug Administration (FDA) in the United States of America or the European Medicines Agency (EMEA) in Europe.

 

(d)

“Sales” shall mean the gross sales price of the products invoiced by Buyer, its sublicensee or their respective Affiliates to customers who are not Affiliates (or who are Affiliates but are the end users of the products) less, to the extent reasonable and customary in the pharmaceutical industry and actually paid or accrued by Buyer, its sublicensee or their respective Affiliates (as applicable), (a) credits, allowances, discounts and. rebates to, and chargebacks from the account of, such customers for spoiled, damaged, out-dated and returned products; (b) freight and insurance costs incurred by Buyer, its sublicensee or their respective Affiliates (as applicable) in transporting the products in final form to such customers; (c) cash, quantity and trade discounts, rebates and other price reductions for the products given to such customers under price reduction programs that are consistent with price reductions given for similar products by Buyer, its sublicensee or their respective Affiliates (as applicable); (d) sales, use, value-added and other direct taxes incurred on the sale of the Product in final form to such customers; and (e) customs duties, surcharges and other governmental charges incurred in exporting or importing the products in final form to such customers.

 

 

 

 

 

 

 

 

 

a.

The Purchased Assets shall be sold free and clear of all claims, interests, liens or other encumbrances to Buyer pursuant to Bankruptcy Code § 363;

 

b.

Notification of Bankruptcy Court approval of this Agreement shall be provided to AntriaBio, with notice of the assignment to Buyer of the AntriaBio Contingent Consideration.

 

c.

The Bankruptcy Court shall have approved the Transaction by order in form and substance acceptable to Buyer, which consent shall not be unreasonably withheld; and

 

d.

Any other consent required for Estate to consummate the Transaction on substantially the terms set forth herein shall have been obtained.

 

 

 

 

 

 

VII.	REPRESENTATIONS AND WARRANTIES OF BUYER.  Buyer hereby represents and warrants to Seller as follows:

 

 

 

 

 

 

 

 

 

1.

Interpretation and Construction.  In this Agreement:

 

(a)

The headings hereof are for reference purposes only and will not affect the meaning or interpretation of this Agreement;

 

(b)

Words such as “herein,” “hereof,” “hereunder” and similar words refer to this Agreement as a whole and not to the particular term or Section where they appear.

 

(c)

Terms used in the plural include the singular, and vice versa, unless the context clearly otherwise requires;

 

(d)

Unless expressly stated herein to the contrary, reference to any agreement, instrument or other document means such agreement, instrument or document as amended or modified and as in effect from time to time in accordance with the terms thereof;

 

(e)

“Include,” “including” and variations thereof are deemed to be followed by the words “without limitation” and will not limit the generality of any term accompanying such word;

 

(f)

“Or” is used in the inclusive sense of “and/or” and “any” is used in the non-exclusive sense;

 

(g)

Unless expressly stated herein to the contrary, reference to a Section, Schedule or Exhibit is to a section, schedule or exhibit, respectively, of this Agreement;

 

(h)

All dollar amounts are expressed in United States dollars and will be paid in cash in United States currency;

 

(i)

Each party was represented by legal counsel in connection with this Agreement and each party and each party’s counsel has reviewed and revised, or had ample opportunity to review and revise, this Agreement and any rule of construction to the effect that ambiguities are to be resolved against the drafting party will not be employed in the interpretation hereof; and

 

 

 

(j)

Each representation, warranty, covenant and agreement herein will have independent significance, and if any party has breached any representation, warranty, covenant or agreement herein in any respect, the fact that there exists another representation, warranty, covenant or agreement relating to the same subject matter (regardless of the relative levels of specificity) that such party has not breached will not detract from or mitigate the fact that such party is in breach of such first representation, warranty, covenant or agreement.

 

2.

Entire Agreement.  This Agreement, including the exhibits and schedules attached to this Agreement and the other Transaction Documents, constitute the entire agreement and understanding among Seller and Buyer with respect to the sale and purchase of the Purchased Assets and the other transactions contemplated by this Agreement. All prior representations, understandings and agreements between the parties with respect to the purchase and sale of the Purchased Assets and the other transactions contemplated by this Agreement are superseded by the terms of this Agreement and the other Transaction Documents.

 

3.

Severability.  The provisions of this Agreement shall, where possible, be interpreted so as to sustain their legality and enforceability, and for that purpose the provisions of this Agreement shall be read as if they cover only the specific situation to which they are being applied. The invalidity or unenforceability of any provision of this Agreement in a specific situation shall not affect the validity or enforceability of that provision in other situations or of other provisions of this Agreement.

 

4.

Amendment and Waiver.  Any provision of this Agreement may be amended or waived only by a writing signed by the party against which enforcement of the amendment or waiver is sought.

 

5.

Assignment. This Agreement may not be assigned by any party hereto without the prior written consent of the other party, except that Buyer may assign this Agreement to any of its Affiliates, whether currently in existence or created subsequent to the date hereof. No assignment by Buyer will relieve Buyer of responsibility for performance of its obligations hereunder. This Agreement shall be binding upon and. shall inure to the benefit of the parties hereto, their successors and permitted assigns, and no person, firm or corporation other than the parties, their successors and permitted assigns shall acquire or have any rights under or by virtue of this Agreement.

 

6.

Notices.  All notices given pursuant to this Agreement shall be in writing and shall be delivered by hand or sent by United States registered mail, postage prepaid, addressed as follows (or to another address or person as a party may specify on notice to the other):

 

 

 

 

 

 

 

 

 

 

 

 

7.

Expenses.  Each party shall pay all of the costs and expenses incurred by it in negotiating and preparing this Agreement (and all other agreements, certificates, instruments and documents executed in connection herewith), in performing its obligations under this Agreement, and in otherwise consummating the transactions contemplated by this Agreement, including its attorneys’ fees and accountants’ fees.

 

8.

Choice of Law.  This Agreement shall be construed and interpreted in accordance with the laws of the State of Colorado, without regard to the conflict of laws provisions thereof, as though all acts and omissions related to this Agreement occurred in the State of Colorado. The Parties to this Agreement irrevocably consent to the exclusive jurisdiction of the U.S. Bankruptcy Court for the District of Colorado in connection with any proceedings which may be brought by either Party arising from or relating to, or seeking to enforce, the provisions of this Agreement.

 

9.

Facsimile Signature; Counterparts.  This Agreement may be executed by facsimile signature and in counterparts, each of which shall be considered an original.

 

 

10.

Parties in Interest. This Agreement shall be binding upon and inure solely to the benefit of the parties hereto and their successors and permitted assigns, and nothing in this Agreement, expressed or implied, is intended to confer upon any other person any rights or remedies of any nature under or by reason of this Agreement.

 

 

 

 

By:	/s/ Morgan Fields
Name:	Morgan Fields
Title:	CAO