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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 8-K

 

 

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d) 

 of the Securities Exchange Act of 1934

 

November 10, 2025

Date of Report (Date of Earliest Event Reported)

 

 

 

Mallinckrodt plc

(Exact name of registrant as specified in its charter)

 

 

 

Ireland	001-35803	98-1088325
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

 

College Business & Technology Park, Cruiserath,
Blanchardstown, Dublin 15, Ireland

(Address of principal executive offices) (Zip Code)

 

Registrant’s telephone number, including area code: +353 1 696 0000

 

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

¨	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.

 

 

 

 

 

 

Introductory Note

 

This Current Report on Form 8-K is being filed in connection with the closing on November 10, 2025 (the “Redemption Date”), at 12:01 a.m. (Eastern Time in the United States) (the “Effective Time”) of the previously announced allocation by Mallinckrodt plc, a public limited company incorporated in Ireland (and that is in the process of changing its name to Keenova Therapeutics plc) (“Mallinckrodt” or the “Company”), of all of the issued and outstanding shares of common stock, par value $0.01 per share (“Par Health Common Stock”), of Par Health, Inc., a Delaware corporation (“Par Health”), to Mallinckrodt shareholders (the “Spin-off”). The Spin-off was implemented by way of a redemption (the “Redemption”) of all of Mallinckrodt’s issued and outstanding 2025 Preferred Shares, par value $0.001 per share (the “Mallinckrodt Preferred Shares”), comprising 1,796,196,578,472 Mallinckrodt Preferred Shares, upon which the Mallinckrodt Preferred Shares were automatically cancelled and as such are no longer outstanding. In connection with the Redemption and pursuant to Irish law, Mallinckrodt allocated the right to receive 39,421,398 shares of Par Health Common Stock, being one hundred percent (100%) of the outstanding shares of Par Health Common Stock as of the Redemption Date, to certain holders of record of Mallinckrodt Preferred Shares as of 5:30 p.m. (Eastern Time in the United States) on October 27, 2025 (the “Record Date”), as further described herein.

 

At the time of the Spin-off, Par Health held Mallinckrodt’s generic pharmaceuticals (including active pharmaceutical ingredients (APIs)) and sterile injectables businesses. As a result of the Spin-off, Par Health is now an independent, private company and is not listed on a securities exchange. Also as a result of the Spin-off, none of Mallinckrodt or its subsidiaries continue to be borrowers or guarantors of the indebtedness under the credit agreement, dated as of July 31, 2025, by and among ST 2020, Inc., as parent, MEH, Inc., as borrower, the lenders party thereto from time to time, Wilmington Savings Fund Society, FSB, as administrative agent and collateral agent, and OPY Credit Corp., as trading agent, a summary of which is included in the Amendment to the Current Report on Form 8-K filed with the United States Securities and Exchange Commission (the “SEC”) on July 31, 2025, which summary is incorporated herein by reference. All borrowers and guarantors in respect of such indebtedness are subsidiaries of Par Health.

 

On November 7, 2025, Mallinckrodt issued the Redemption Notice of 2025 Preferred Shares of the Company to all holders of the Mallinckrodt Preferred Shares notifying them that the Redemption has been effected on the terms set out in the Redemption Notice.

 

On the Redemption Date, the Mallinckrodt Preferred Shares were redeemed in exchange for the following, subject to compliance with the Certification Procedures (as defined below) and the terms of the Redemption (the “Redemption Consideration”):

 

·

the “Base Proceeds,” being (i) in the case of Qualified Shareholders (as defined below) only, the right to receive 0.0000219471513 shares of Par Health Common Stock for each Mallinckrodt Preferred Share, rounded down to the nearest whole number; and (ii) in the case of Non-Qualified Shareholders (as defined below) only, the right to receive $0.000424786467775745 in cash for each Mallinckrodt Preferred Share (the “Per Share Cash Amount”), which the board of directors of Mallinckrodt (the “Board”) determined is equal in value to the Par Health Common Stock allocated to Qualified Shareholders for each Mallinckrodt Preferred Share; and

 

·

the “Excess Proceeds,” being (i) in the case of Qualified Shareholders only, the right to receive the number of shares of Par Health Common Stock equal to the number of Mallinckrodt Preferred Shares held of record or beneficially, as applicable, by the relevant Qualified Shareholder as of the Record Date and certified on the Certification Form (as defined below) multiplied by the Per Share Excess Stock Amount (as defined below), rounded down to the nearest whole number; and (ii) in the case of Non-Qualified Shareholders only, the right to receive a cash amount equal to the number of Mallinckrodt Preferred Shares held of record or beneficially, as applicable, by the relevant Non-Qualified Shareholder as of the Record Date and certified on the Certification Form multiplied by the Per Share Excess Cash Amount (as defined below).

 

Entitlements to cash payments in respect of Base Proceeds and Excess Proceeds with entitlements to fractions of a cent will be rounded up or down to the nearest cent.

 

-2-

 

 

Eligible Mallinckrodt shareholders were required to, among other things, properly and timely complete the following documents (the “Certification Procedures”) no later than 5:30 p.m. (Eastern Time in the United States) on the business day (by reference to business days in the United States) before the Redemption Date (the “Pre-Redemption Notification Deadline”), being November 7, 2025, to receive the Base Proceeds to which they are entitled at or promptly following the Effective Time:

 

·

Certification Form: A certification form (a “Certification Form”) to be made available by the Redemption Agent (as defined below) that requires each Record Holder (as defined below) (and/or Street Name Holder (as defined below), where applicable) to certify, among other things, whether such person is a Qualified Shareholder or a Non-Qualified Shareholder; and

 

·

Tax Form: Such other documents as may reasonably be required by the Company, on the one hand, or Computershare, Inc. or Computershare Trust Company, N.A., the Company’s certification and redemption agent (the “Redemption Agent”), on the other hand, including a validly executed appropriate Internal Revenue Service (“IRS”) Form W-8 or IRS Form W-9, as applicable, and any other documentation and attachments as may be required to establish that any payment made to such Qualified Shareholder or Non-Qualified Shareholder (and any Record Holder that is a bank, brokerage firm or similar organization receiving such payment for the benefit of such Qualified Shareholder or Non-Qualified Shareholder, if applicable) is not subject to U.S. backup withholding tax.

 

On November 7, 2025, the Board determined that Mallinckrodt had received sufficient valid Certification Forms from Qualified Shareholders to proceed with the Spin-off and set the Redemption Date. At the Effective Time, shares of Par Health Common Stock were allocated to Qualified Shareholders who had also complied with all other applicable Certification Procedures prior to the Pre-Redemption Notification Deadline and all other shares of Par Health Common Stock were deposited in the Escrow Account (as defined below). Non-Qualified Shareholders who had also complied with all other applicable Certification Procedures prior to the Pre-Redemption Notification Deadline are allocated cash payments; in the aggregate, the cash amounts are estimated to be less than $5 million.

 

Qualified Shareholders and Non-Qualified Shareholders who comply with and satisfy the applicable Certification Procedures (including, where applicable, the satisfaction of the applicable Certification Procedures by any Record Holder that is a broker, bank or similar organization receiving Base Proceeds for the benefit of a Qualified Shareholder or Non-Qualified Shareholder) during the period of time beginning immediately after the Effective Time and ending at 11:59 p.m. (Eastern Time in the United States) on November 10, 2026, being the twelve-month anniversary of the Redemption Date (the “Escrow Period”), will be entitled to receive the Base Proceeds. THE RIGHT TO RECEIVE THE BASE PROCEEDS AND/OR EXCESS PROCEEDS, OR ANY OTHER CONSIDERATION, WILL IRREVOCABLY EXPIRE AND LAPSE IN THE CASE OF RECORD HOLDERS (AND/OR STREET NAME HOLDERS IDENTIFIED BY SUCH RECORD HOLDERS) THAT HAVE NOT COMPLIED WITH OR SATISFIED THE APPLICABLE CERTIFICATION PROCEDURES BEFORE THE EXPIRATION OF THE ESCROW PERIOD. Par Health will not be permitted to distribute cash or non-cash dividends until the expiration of the Escrow Period.

 

Promptly after the expiration of the Escrow Period:

 

·

the Redemption Agent will allocate any shares of Excess Par Health Common Stock (as defined below) remaining in the Escrow Account among Qualified Shareholders as of immediately before the expiration of the Escrow Period in accordance with their entitlement to receive the Excess Proceeds (as defined below) (to the extent not previously so allocated in accordance with the Board’s right to make certain interim distributions of Excess Proceeds during the Escrow Period); and

 

·

the Redemption Agent will promptly make a cash payment to all Non-Qualified Shareholders as of immediately before the expiration of the Escrow Period in accordance with their entitlement to receive the Excess Proceeds (to the extent not previously so paid in accordance with the Board’s right to make certain interim distributions of Excess Proceeds during the Escrow Period), and Mallinckrodt will deliver cash to the Redemption Agent to enable the Redemption Agent to make such cash payment.

 

-3-

 

 

Mallinckrodt will re-open the Mallinckrodt Register of Members with effect from 5:00 p.m. (Eastern Time in the United States) on November 11, 2025. The Mallinckrodt Register of Members was previously closed in accordance with section 174 of the Companies Act 2014 (as amended) of Ireland with effect from 5:00 p.m. (Eastern Time in the United States) on October 23, 2025. Transfers of shares in the capital of the Company will not be registered while the Mallinckrodt Register of Members remains closed.

 

For the purposes of the foregoing:

 

·

The “Escrow Account” is the escrow account established by Mallinckrodt with the Redemption Agent to receive any shares of Par Health Common Stock that have not been allocated to Qualified Shareholders at the Effective Time, and any such replacement account as may be approved by Mallinckrodt for such purposes from time to time.

 

·

The “Excess Par Health Common Stock” is the Par Health Common Stock in the Escrow Account not allocated to Qualified Shareholders before the expiration of the Escrow Period, being the Par Health Common Stock as of the Redemption Date that (a) would otherwise have been allocated to Non-Qualified Shareholders had they been Qualified Shareholders; or (b) would otherwise have been allocated to other Record Holders that have not satisfied the applicable Certification Procedures as Qualified Shareholders before the expiration of the Escrow Period.

 

·

A “Non-Qualified Shareholder” is a Record Holder or Street Name Holder as of the Record Date that has complied with the Certification Procedures and that has returned a Certification Form, duly, truthfully and accurately completed and validly executed in accordance with the instructions thereto, certifying (among other things) that such Record Holder or Street Name Holder (as the case may be) is not a Qualified Shareholder.

 

·

The “Par Health Value” is $763 million, the value ascribed by the Board to Par Health before the Effective Time for the purposes of determining the Per Share Cash Amount and the Per Share Excess Cash Amount (if any) to which Non-Qualified Shareholders are entitled pursuant to the Redemption.

 

·

The “Per Share Excess Cash Amount” is an amount in cash that the Board determined was equal to the value of the Per Share Excess Stock Amount as of the Redemption Date, being (a) (i) the Par Health Value divided by (ii) the total number of Mallinckrodt Preferred Shares on the Record Date held by Qualified Shareholders that have satisfied the applicable Certification Procedures before the expiration of the Escrow Period less (b) the Per Share Cash Amount.

 

·

The “Per Share Excess Stock Amount” is the number (“A”) of shares of Par Health Common Stock derived from the following formula:

 

A = B/C

 

where:

 

“B” is the total number of shares of Excess Par Health Common Stock; and

 

“C” is the total number of Mallinckrodt Preferred Shares on the Record Date held by Qualified Shareholders that have satisfied the applicable Certification Procedures before the expiration of the Escrow Period.

 

·

A “Qualified Shareholder” is a holder of Mallinckrodt Preferred Shares as of the Record Date, as reflected in the Mallinckrodt register of members (each, a “Record Holder”) (and/or beneficial holders identified by a Record Holder that is a broker, bank or similar organization as the beneficial holders of Mallinckrodt Preferred Shares held by such Record Holder in such capacity on the Record Date (each, a “Street Name Holder”)) that has complied with the Certification Procedures and that has returned a Certification Form, duly, truthfully and accurately completed and validly executed in accordance with the instructions thereto, certifying (among other things) that such Record Holder or Street Name Holder (as the case may be) is a qualified institutional buyer as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), an institutional accredited investor (an “accredited investor” as defined in clauses (1), (2), (3), (7), (8), (9), (12) and (13) of Rule 501(a) under the Securities Act) or a director or officer of the Company or Par Health as of the Redemption Date who is also an accredited investor (as defined in Rule 501(a) under the Securities Act).

 

-4-

 

 

This Current Report on Form 8-K is hereby incorporated by reference into the information statement, dated October 30, 2025, furnished as Exhibit 99.1 to Mallinckrodt’s Current Report on Form 8-K furnished to the SEC on October 30, 2025 (the “Information Statement”).

 

Item 1.01. Entry into a Material Definitive Agreement.

 

Transaction Documents

 

In connection with the Spin-off, Mallinckrodt entered into several agreements with Par Health that govern the relationship of the parties following the Spin-off, including a Separation Agreement, a Transition Services Agreement, a Tax Matters Agreement, an Employee Matters Agreement, a Manufacturing and Supply Agreement (each entered into on November 10, 2025) and an Amended and Restated Multi-Tenant Lease Agreement (entered into on November 1, 2025).

 

A summary of the material terms of the Separation Agreement, Transition Services Agreement, Tax Matters Agreement, Employee Matters Agreement, Manufacturing and Supply Agreement and Amended and Restated Multi-Tenant Lease Agreement can be found in the section entitled “Certain Relationships and Related-Party Transactions” in the Information Statement, which summary is incorporated herein by reference. For avoidance of doubt, such incorporation by reference shall solely include such summary. The summary is qualified in its entirety by reference to the Separation Agreement, Transition Services Agreement, Tax Matters Agreement, Employee Matters Agreement, Manufacturing and Supply Agreement and Amended and Restated Multi-Tenant Lease Agreement filed as Exhibits 2.1, 10.1, 10.2, 10.3, 10.4 and 10.5 respectively, to this Current Report on Form 8-K, each of which is incorporated herein by reference.

 

CVR Termination

 

The information set forth under Item 1.02 below is incorporated herein by reference.

 

Item 1.02. Termination of a Material Definitive Agreement.

 

As previously disclosed, on November 14, 2023, the Company entered into a contingent value right agreement (the “CVR Agreement”) with the Opioid Master Disbursement Trust II (the “Trust”). In connection with the consummation of the Spin-off, on November 10, 2025, the Company and the Trust entered into an agreement to cancel the contingent value rights issued under the CVR Agreement (the “CVRs”) and terminate the CVR Agreement in exchange for a payment by the Company of $35.0 million to the Trust (the “CVR Termination Agreement”). Pursuant to the CVR Termination Agreement, on November 10, 2025, the CVRs were cancelled and the CVR Agreement was terminated. The CVR Termination Agreement also included customary representations and warranties and a waiver of certain claims.

 

The foregoing descriptions of the CVR Agreement and the CVR Termination Agreement are not complete and are qualified in their entirety by reference to the CVR Agreement, a copy of which was previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 15, 2023 and the CVR Termination Agreement, a copy of which is filed as Exhibit 10.6 to this Current Report on Form 8-K, respectively, each of which is incorporated herein by reference.

 

Item 2.01. Completion of Acquisition or Disposition of Assets.

 

The disclosure set forth in the “Introductory Note” above is incorporated by reference into this Item 2.01.

 

-5-

 

 

Item 8.01. Other Events.

 

A copy of the press release issued by the Company on November 10, 2025, announcing the completion of the Spin-off is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

 

On November 10, 2025, the Company made a filing with the Irish Companies Registration Office to change its name to Keenova Therapeutics plc and is awaiting approval from the Irish Companies Registration Office for such name change.

 

Item 9.01. Financial Statements and Exhibits.

 

(b) Pro Forma Financial Information

 

The unaudited pro forma condensed combined financial information of the Company giving effect to the Spin-off, including the unaudited pro forma condensed combined balance sheet as of June 27, 2025 and the unaudited pro forma condensed combined statements of operations for the six months ended June 27, 2025, the year ended December 27, 2024, the period from November 15, 2023 through December 29, 2023 (Successor), the period from December 31, 2022 to November 14, 2023 (Predecessor), the period from June 17, 2022 through December 30, 2022 (Predecessor) and the period from January 1, 2022 through June 16, 2022 (Predecessor) are attached hereto as Exhibit 99.2 and incorporated herein by reference.

 

(d) Exhibits.

 

Exhibit No.		Description
2.1		Separation Agreement, dated as of November 10, 2025, by and between Mallinckrodt plc and Par Health, Inc.*
10.1		Transition Services Agreement, dated as of November 10, 2025, by and between Mallinckrodt plc and Par Health, Inc.*
10.2		Tax Matters Agreement, dated as of November 10, 2025, by and between Mallinckrodt plc and Par Health, Inc.
10.3		Employee Matters Agreement, dated as of November 10, 2025, by and between Mallinckrodt plc and Par Health, Inc.
10.4		Manufacturing and Supply Agreement, dated as of November 10, 2025, by and between Par Health USA, LLC and Endo Biologics Limited*
10.5		Amended and Restated Multi-Tenant Lease Agreement, dated as of November 1, 2025, by and between Mallinckrodt LLC and ST Shared Services LLC*
10.6		CVR Termination Agreement, dated as of November 10, 2025, by and between Mallinckrodt plc and Opioid Master Disbursement Trust II
99.1		Press Release, dated November 10, 2025
99.2		Unaudited Pro Forma Condensed Combined Financial Information
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

*Schedules and similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish to the SEC a copy of any schedule or similar attachment omitted upon request.

 

-6-

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	MALLINCKRODT PLC
Date: November 10, 2025	By:	/s/ Mark Tyndall
	Name:	Mark Tyndall
	Title:	Executive Vice President, Chief Legal Officer & Corporate Secretary

 

-7-

 

 

Exhibit 2.1

 

SEPARATION AGREEMENT

 

BY AND BETWEEN

 

MALLINCKRODT PLC

 

AND

 

PAR HEALTH, INC.

 

DATED AS OF NOVEMBER 10, 2025

 

 

TABLE OF CONTENTS

 

Page

 

ARTICLE I DEFINITIONS				2
	1.1		Certain Defined Terms	2
	1.2		Additional Defined Terms	16
ARTICLE II THE SEPARATION				18
	2.1		Transfer of Assets and Assumption of Liabilities	18
	2.2		SpinCo Assets; Parent Assets	21
	2.3		SpinCo Liabilities; Parent Liabilities	24
	2.4		Approvals and Notifications	26
	2.5		Novation of Liabilities	30
	2.6		Release of Guarantees	31
	2.7		Termination of Agreements	33
	2.8		Treatment of Shared Contracts	34
	2.9		Bank Accounts; Cash Balances	35
	2.10		Ancillary Agreements	35
	2.11		Disclaimer of Representations and Warranties	36
	2.12		SpinCo Financing Arrangements	36
	2.13		Transition Committee	37
ARTICLE III THE REDEMPTION				37
	3.1		Sole and Absolute Discretion; Cooperation	37
	3.2		Actions Prior to the Redemption	38
	3.3		Conditions to the Redemption	39
	3.4		The Redemption	41
ARTICLE IV MUTUAL RELEASES; INDEMNIFICATION				46
	4.1		Release of Pre-Redemption Claims	46
	4.2		Indemnification by SpinCo	49
	4.3		Indemnification by Parent	49
	4.4		Indemnification Obligations Net of Insurance Proceeds and Other Amounts	50
	4.5		Procedures for Indemnification of Third-Party Claims	51
	4.6		Additional Matters	54
	4.7		Right of Contribution	55
	4.8		Covenant Not to Sue	55
	4.9		Remedies Cumulative	56
	4.10		Survival of Indemnities	56
ARTICLE V CERTAIN OTHER MATTERS				56
	5.1		Insurance Matters	56
	5.2		Payment Terms	59
	5.3		Treatment of Payments for Tax Purposes	60

 

 

	5.4		Inducement	60
	5.5		Post-Effective Time Conduct	60
ARTICLE VI EXCHANGE OF INFORMATION; CONFIDENTIALITY				60
	6.1		Agreement for Exchange of Information	60
	6.2		Ownership of Information	62
	6.3		Compensation for Providing Information	62
	6.4		Record Retention	62
	6.5		Limitations of Liability	62
	6.6		Other Agreements Providing for Exchange of Information	63
	6.7		Production of Witnesses; Records; Cooperation	63
	6.8		Privileged Matters	64
	6.9		Confidentiality	66
	6.10		Protective Arrangements	67
	6.11		Commingled Records	68
ARTICLE VII DISPUTE RESOLUTION				68
	7.1		Transition Committee	68
	7.2		Good-Faith Officer Negotiation	69
	7.3		CEO Negotiation	69
	7.4		Mediation	69
	7.5		Litigation	70
	7.6		Conduct During Dispute Resolution Process	70
ARTICLE VIII FURTHER ASSURANCES AND ADDITIONAL COVENANTS				70
	8.1		Further Assurances	70
	8.2		Use of Marks	71
	8.3		Non-Competition	73
	8.4		Patent Covenant Not to Sue	77
	8.5		Other Intellectual Property Cross-License	78
ARTICLE IX TERMINATION				77
	9.1		Termination	77
	9.2		Effect of Termination	77
ARTICLE X MISCELLANEOUS				77
	10.1		Counterparts; Entire Agreement; Corporate Power	77
	10.2		Governing Law; Submission to Jurisdiction; Waiver of Jury Trial	78
	10.3		Assignability	79
	10.4		Third-Party Beneficiaries	80
	10.5		Notices	80
	10.6		Severability	81
	10.7		Force Majeure	81
	10.8		No Set-Off	82
	10.9		Expenses	82
	10.10		Headings	82
	10.11		Survival	82
	10.12		Waivers of Default	82
	10.13		Specific Performance	82
	10.14		Amendments	83

 

 

	10.15		Interpretation	83
	10.16		Limitations of Liability	83
	10.17		Performance	84
	10.18		Mutual Drafting; Precedence	84

 

 

SCHEDULES

 

Schedule 1.1	Parent Products
Schedule 1.2	Other SpinCo Contracts
Schedule 1.3(a)	SpinCo Registered Intellectual Property
Schedule 1.4	SpinCo Real Property Leases
Schedule 1.5	SpinCo Technology
Schedule 1.6	Exclusions from SpinCo Technology
Schedule 1.7	Transferred Entities
Schedule 2.1(a)	Separation Step Plan
Schedule 2.2(a)(xiv)	Other SpinCo Assets
Schedule 2.2(b)(iv)	Specified Parent Technology
Schedule 2.2(b)(xii)	Other Parent Assets
Schedule 2.3(a)(iv)	SpinCo Liabilities – Discontinued or Divested Businesses
Schedule 2.3(a)(vii)	Other SpinCo Liabilities
Schedule 2.3(b)	Parent Liabilities
Schedule 2.4(a)	Approvals and Notifications for SpinCo Assets and Liabilities
Schedule 2.4(b)	Delayed SpinCo Transfers
Schedule 2.6(a)(i)	Release of Guarantees – Obligations of Parent to be Released
Schedule 2.6(a)(ii)	Release of Guarantees – Obligations of SpinCo to be Released
Schedule 2.7(b)(ii)	Termination of Agreements – Agreements that Should Not Terminate
Schedule 2.8	Shared Contracts
Schedule 2.12(a)	SpinCo Financing Arrangements
Schedule 2.13	Initial Transition Committee Members
Schedule 4.3(e)	Specified Parent Information
Schedule 5.1(d)	D&O Insurance Policy
Schedule 8.2(a)(ii)	Specified Parent Marks
Schedule 8.2(b)(ii)	Specified SpinCo Marks

 

 

EXHIBITS

 

Exhibit A	Sample Certification Form
Exhibit B	Information Statement
Exhibit C	Form of Amended and Restated Bylaws of Par Health, Inc.
Exhibit D	Form of Amended and Restated Certificate of Incorporation of Par Health, Inc.

 

 

SEPARATION AGREEMENT

 

This SEPARATION AGREEMENT, dated as of November 10, 2025 (this “Agreement”), is by and between Mallinckrodt plc, a public limited company incorporated in Ireland (“Parent”), and Par Health, Inc., a Delaware corporation (“SpinCo”). Capitalized terms used herein and not otherwise defined shall have the respective meanings assigned to them in Article I.

 

R E C I T A L S

 

WHEREAS, Parent currently owns and operates both the Parent Business and the SpinCo Business;

 

WHEREAS, on March 13, 2025, Parent announced an intention to separate the SpinCo Business following the closing of the Merger (as defined below), if approved by the board of directors of Parent (the “Parent Board”) and subject to the satisfaction of certain other conditions;

 

WHEREAS, on July 31, 2025, pursuant to that certain Transaction Agreement, dated as of March 13, 2025, by and among Parent, Endo, Inc., a Delaware corporation (which has been converted into Endo LP, a Delaware limited partnership, “Endo”), and Salvare Merger Sub LLC, a wholly owned subsidiary of Parent (“Merger Sub”), Merger Sub merged with and into Endo, with Endo continuing as the surviving corporation and a wholly owned subsidiary of Parent (the “Merger”);

 

WHEREAS, the Parent Board has determined that it is in the best interests of Parent and its shareholders to create a new privately held company that shall operate the SpinCo Business;

 

WHEREAS, in furtherance of the foregoing, the Parent Board has determined that it is appropriate and desirable to separate the SpinCo Business from the Parent Business (the “Separation”), which Separation was substantially completed on or prior to July 31, 2025 pursuant to the Separation Step Plan, and, following the Separation, to effect the Redemption (as defined herein) and the other transactions contemplated by this Agreement, in each case, on the terms and subject to the conditions set forth herein;

 

WHEREAS, SpinCo has been incorporated solely for these purposes and has not engaged in activities except in connection with the Separation and the Redemption;

 

WHEREAS, for U.S. federal income tax purposes, (x)(i) the contribution by Parent of the SpinCo Assets to SpinCo in exchange for the assumption of the SpinCo Liabilities, and the actual or deemed issuance of additional SpinCo Shares (the “Contribution”) and the receipt of the SpinCo Allocation by the Qualified Shareholders pursuant to the Redemption, taken together, are intended to qualify as a “reorganization” under Sections 355(a) and 368(a)(1)(D) of the Code and (ii) accordingly, the receipt of the SpinCo Allocation by the Qualified Shareholders is intended to be generally tax-free to such Qualified Shareholders under Section 355(a) of the Code and (y) the receipt of the Cash Allocation by the Non-Qualified Shareholders is intended to constitute a distribution by Parent to the Non-Qualified Shareholders subject to Section 301 of the Code;

 

 

WHEREAS, for U.S. federal income tax purposes, this Agreement (including the Separation Step Plan attached hereto as Schedule 2.1(a)) is intended to be, and is hereby adopted as, a “plan of reorganization” within the meaning of Section 368 of the Code and Treasury Regulations Sections 1.368-2(g) and 1.368-3(a);

 

WHEREAS, SpinCo and Parent have prepared, and Parent has filed with the SEC on a Current Report on Form 8-K, an Information Statement which sets forth disclosure concerning SpinCo, the Separation and the Redemption;

 

WHEREAS, each of Parent and SpinCo has determined that it is appropriate and desirable to set forth the principal corporate transactions required to effect the Separation and the Redemption and certain other agreements that will govern certain matters relating to the Separation and the Redemption and the relationship of Parent, SpinCo and the members of their respective Groups following the Redemption; and

 

WHEREAS, the Parties acknowledge that this Agreement and the Ancillary Agreements represent the integrated agreement of Parent and SpinCo relating to the Separation and the Redemption, are being entered into together, and would not have been entered into independently.

 

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

 

Article I
DEFINITIONS

 

1.1            Certain Defined Terms.

 

For the purpose of this Agreement, the following terms shall have the following meanings.

 

“Action” shall mean any demand, action, claim, dispute, suit, countersuit, arbitration, inquiry, subpoena, proceeding or investigation of any nature (whether criminal, civil, legislative, administrative, regulatory, prosecutorial or otherwise) by or before any federal, state, local, foreign or international Governmental Authority or any arbitration or mediation tribunal.

 

“Actually Realized” shall have the meaning set forth in the Tax Matters Agreement.

 

 

“Affiliate” shall mean, when used with respect to a specified Person, a Person that, directly or indirectly, through one (1) or more intermediaries, controls, is controlled by or is under common control with such specified Person. For the purpose of this definition, “control” (including, with correlative meanings, “controlled by” and “under common control with”), when used with respect to any specified Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or other interests, by Contract or otherwise. It is expressly agreed that, prior to, at and after the Effective Time, solely for purposes of this Agreement and the Ancillary Agreements, (a) no member of the SpinCo Group shall be deemed to be an Affiliate of any member of the Parent Group and (b) no member of the Parent Group shall be deemed to be an Affiliate of any member of the SpinCo Group.

 

“Ancillary Agreements” shall mean all agreements (other than this Agreement) entered into by the Parties or the members of their respective Groups (as applicable) (but only agreements as to which no Third Party is a party) in connection with the Separation, the Redemption, or any other transactions contemplated by this Agreement, including the Transition Services Agreement, the Tax Matters Agreement, the Employee Matters Agreement, the Manufacturing and Supply Agreement, the Lease Agreement, the Transfer Documents and any other agreement that by its express terms provides that it shall be an Ancillary Agreement for purposes of this Agreement.

 

“Approvals or Notifications” shall mean any consents, waivers, approvals, permits or authorizations to be obtained from, notices, registrations or reports to be submitted to, or other filings to be made with, any Third Party, including any Governmental Authority.

 

“Articles of Association” shall mean the articles of association of Parent in effect as of the date of this Agreement, as may be amended from time to time;

 

“Assets” shall mean, with respect to any Person, the assets, properties, claims and rights (including goodwill) of such Person, wherever located (including in the possession of vendors or other Third Parties or elsewhere), of every kind, character and description, whether real, personal or mixed, tangible, intangible or contingent, in each case whether or not recorded or reflected or required to be recorded or reflected on the books and records or financial statements of such Person, including rights and benefits pursuant to any Contract, Permit or other arrangement.

 

“Business” shall mean either the SpinCo Business or the Parent Business, as the context requires.

 

“Certification Form” shall mean a certification form made available by the Redemption Agent, that requires each Record Holder (and/or Street Name Holder, where applicable) to certify, among other things, whether such Person is a Qualified Shareholder or a Non-Qualified Shareholder as of the Record Date (provided that any such certification may be executed in paper or by electronic format (as may be determined by Parent), including through a website, by PDF and/or using electronic signatures). A watermarked copy of the Certification Form made available in paper form is attached as Exhibit A hereto (as may be amended from time to time by Parent).

 

 

“Certification Procedures” means (i) the return by a Qualified Shareholder or a Non-Qualified Shareholder (and by a Record Holder that is a bank, broker or similar organization in the case of clauses (b) and (c)), and the receipt thereof by Parent, of (a) a Certification Form, duly, truthfully and accurately completed and validly executed in accordance with the instructions thereto (provided that any such certification may be executed in paper or by electronic format (as may be determined by Parent), including through a website, by PDF and/or using electronic signatures), (b) a validly executed appropriate IRS Form W-8 or IRS Form W-9, as applicable, and any other documentation and attachments as may be required to establish that any payment made to such Qualified Shareholder or Non-Qualified Shareholder (and any Record Holder that is a bank, broker or similar organization receiving such payment for the benefit of such Qualified Shareholder or Non-Qualified Shareholder, if applicable) is not subject to U.S. backup withholding tax, and (c) such other documents or confirmations as may be reasonably required by the Redemption Agent or Parent to facilitate the allotment or payment of the Redemption Consideration, in each case, prior to the expiration of the Escrow Period; (ii) the procedures of the Redemption Agent as approved by Parent from time to time relating to the verification of the satisfaction of the requirements described in clause (i) and the authenticity or veracity of a Certification Form or its contents; and (iii) such other procedures as may be approved by Parent from time to time for the purposes of facilitating or securing compliance with applicable Law in connection with the Redemption.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended.

 

“Companies Act 2014” shall mean the Companies Act 2014 of Ireland, as amended.

 

“Contract” shall mean any agreement, contract, subcontract, obligation, binding understanding, note, indenture, bond, mortgage, instrument, concession, option, lease, promise, arrangement, release, warranty, franchise, license, sublicense, insurance policy, benefit plan, purchase order or legally binding commitment or undertaking of any nature (whether written or oral and whether express or implied).

 

“Disclosure Document” shall mean any information statement (including the Information Statement), periodic report or similar disclosure document, whether or not filed with the SEC or any other Governmental Authority, in each case that describes the Contribution, the Separation or the Redemption or the SpinCo Group or primarily relates to the transactions contemplated hereby.

 

“Effective Time” shall mean 12:01 a.m., United States Eastern Standard Time, on the Redemption Date, or such other time on the Redemption Date as is approved by the Parent Board.

 

“Employee Matters Agreement” shall mean the Employee Matters Agreement to be entered into by and between Parent and SpinCo or the members of their respective Groups in connection with the Separation, the Redemption or any other transactions contemplated by this Agreement, as it may be amended from time to time.

 

“Environmental Law” shall mean any Law relating to pollution, protection or restoration of or prevention of harm to the environment or natural resources, including the use, handling, transportation, treatment, storage, disposal, Release or discharge of Hazardous Materials or the protection of or prevention of harm to human health and safety.

 

 

“Environmental Liabilities” shall mean all Liabilities relating to, arising out of or resulting from any Hazardous Materials, Environmental Law or Contract relating to environmental, health or safety matters (including all removal, remediation or cleanup costs, investigatory costs, response costs, natural resources damages, equipment upgrades or replacements, asbestos survey and removal costs, property damages, personal injury damages and costs of compliance, including with any product take back requirements or with any settlement, judgment or other determination of Liability and indemnity, contribution or similar obligations) and all costs and expenses, interest, fines, penalties or other monetary sanctions in connection therewith.

 

“Escrow Account” shall mean the escrow account established by Parent with the Redemption Agent to receive any SpinCo Shares that have not been allocated to Qualified Shareholders at the Effective Time and any such replacement account as may be approved by Parent for such purposes from time to time.

 

“Escrow Period” shall mean the period of time beginning immediately after the Effective Time and ending at 11:59 p.m., United States Eastern Standard Time on November 10, 2026 being the twelve month anniversary of the Redemption Date.

 

“Excess SpinCo Shares” shall mean the SpinCo Shares in the Escrow Account not allocated to Qualified Shareholders prior to the expiration of the Escrow Period, being the SpinCo Shares that (a) would otherwise have been allocated to Non-Qualified Shareholders had they been Qualified Shareholders; or (b) would otherwise have been allocated to other Record Holders that have not satisfied the applicable Certification Procedures as Qualified Shareholders prior to the expiration of the Escrow Period.

 

“Exchange Act” shall mean the U.S. Securities Exchange Act of 1934, as amended, together with the rules and regulations promulgated thereunder.

 

“Final Determination” shall have the meaning set forth in the Tax Matters Agreement.

 

“Force Majeure” shall mean, with respect to a Party, an event beyond the reasonable control of such Party (or any Person acting on its behalf), which event (a) does not arise or result from the fault or negligence of such Party (or any Person acting on its behalf) and (b) by its nature would not reasonably have been foreseen by such Party (or such Person), or, if it would reasonably have been foreseen, was unavoidable, and includes acts of God, acts of civil or military authority, acts of terrorism, cyberattacks, embargoes, epidemics, pandemics, war, riots, insurrections, fires, explosions, earthquakes, floods, unusually severe weather conditions, labor problems or unavailability of parts, or, in the case of computer systems, any significant and prolonged failure in electrical or air conditioning equipment. Notwithstanding the foregoing, the receipt by a Party of an unsolicited takeover offer or other acquisition proposal, even if unforeseen or unavoidable, and such Party’s response thereto shall not be deemed an event of Force Majeure.

 

“Governmental Approvals” shall mean any Approvals or Notifications to be made to, or obtained from, any Governmental Authority.

 

 

“Governmental Authority” shall mean any nation or government, any state, municipality or other political subdivision thereof, and any entity, body, agency, commission, department, board, bureau, court, tribunal or other instrumentality, whether federal, state, local, domestic, foreign or multinational, exercising executive, legislative, judicial, regulatory, administrative or other similar functions of, or pertaining to, a government and any executive official thereof.

 

“Group” shall mean either the SpinCo Group or the Parent Group, as the context requires.

 

“Hazardous Materials” shall mean any chemical, material, substance, waste, pollutant, emission, discharge, release or contaminant that could result in Liability under, or that is prohibited, limited or regulated by or pursuant to, any Environmental Law, and any natural or artificial substance (whether solid, liquid or gas, noise, ion, vapor or electromagnetic) that could cause harm to human health or the environment, including petroleum, petroleum products and byproducts, asbestos and asbestos-containing materials, urea formaldehyde foam insulation, electronic, medical or infectious wastes, polychlorinated biphenyls, radon gas, radioactive substances, chlorofluorocarbons and all other ozone-depleting substances.

 

“Information Statement” shall mean the information statement (including a copy of a sample Certification Form and the Notice of Intention to Redeem) made available to the holders of Parent Shares in connection with the Redemption, as filed with the SEC as an exhibit to a Current Report on Form 8-K of Parent on October 30, 2025, and attached as Exhibit B, as such information statement may be amended or supplemented from time to time prior to the Effective Time.

 

“Information Technology” shall mean all computer systems (including hardware, computers, servers, workstations, routers, hubs, switches, and data communication lines), network and telecommunications equipment, Internet-related information technology infrastructure, and other information technology equipment, and all documentation therefor.

 

“Insurance Proceeds” shall mean those monies (i) received by an insured from an insurance carrier, including due to premium adjustments, whether or not retrospectively rated, or (ii) paid by an insurance carrier on behalf of an insured, in either case net of any applicable premium deductible or self-insured retention. For the avoidance of doubt, “Insurance Proceeds” shall not include any costs or expenses incurred by a Party in pursuing insurance coverage.

 

“Intellectual Property Rights” shall mean any and all common law or statutory rights anywhere in the world arising under or associated with the following: (a) patents, patent applications, utility models, statutory invention registrations, certificates of invention, registered designs, utility models and similar or equivalent rights in inventions and designs (“Patents”), (b) trademarks, service marks, trade names, service names, trade dress, logos and other designations of origin, including any registrations and applications for registration of any of the foregoing (“Trademarks”), (c) rights in Internet domain names, uniform resource locators, Internet Protocol addresses, social media accounts, handles and other names, identifiers, and locators associated with Internet addresses, sites, and services (“Internet Properties”), (d) copyrights and any other equivalent rights in works of authorship (including rights in software or databases as a work of authorship) and any other related rights of authors, and all registrations and applications for registration of any of the foregoing, (e) trade secrets and industrial secret rights and rights in know-how, inventions, data, and any other confidential or proprietary business or technical information, that derive independent economic value, whether actual or potential, from not being known to other persons (“Trade Secrets”), and (f) all other similar or equivalent intellectual property or proprietary rights anywhere in the world.

 

 

“Law” shall mean any national, supranational, federal, state, provincial, local or similar law (including common law), statute, code, order, ordinance, rule, regulation, treaty (including any income tax treaty), license, Permit, decree, injunction, binding judicial or administrative interpretation or other requirement, in each case, enacted, promulgated, issued or entered by a Governmental Authority.

 

“Lease Agreement” shall mean the Lease Agreement to be entered into by and between Parent and SpinCo or the members of their respective Groups in connection with the Separation, the Redemption or any other transactions contemplated by this Agreement, as it may be amended from time to time.

 

“Liabilities” shall mean any and all debts, guarantees, assurances, commitments, liabilities, responsibilities, Losses, Taxes, remediation, deficiencies, reimbursement obligations in respect of letters of credit, fines, settlements, sanctions, costs, interest and obligations of any nature or kind, whether accrued or fixed, absolute or contingent, matured or unmatured, accrued or not accrued, asserted or unasserted, liquidated or unliquidated, foreseen or unforeseen, known or unknown, reserved or unreserved, or determined or determinable, including those arising under any Law, Action (including any Third-Party Claim) or order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority or arbitration tribunal, and those arising under any Contract, or any fines, damages or equitable relief that is imposed, in each case, including all costs and expenses relating thereto.

 

“Losses” shall mean actual losses (including any diminution in value), costs, damages (including any indirect, punitive, exemplary, remove, speculative or similar damages), penalties and expenses (including legal and accounting fees and expenses and costs of investigation and litigation), whether or not involving a Third-Party Claim.

 

“Manufacturing and Supply Agreement” shall mean the Manufacturing and Supply Agreement to be entered into by and between Par Health USA, LLC and Endo Biologics Limited in connection with the Separation, the Redemption or any other transactions contemplated by this Agreement, as it may be amended from time to time.

 

“Non-Qualified Shareholder” shall mean a Record Holder or Street Name Holder as of the Record Date that has complied with the Certification Procedures and that has returned a Certification Form, duly, truthfully and accurately completed and validly executed in accordance with the instructions thereto, certifying (among other things) that such Record Holder or Street Name Holder (as the case may be) is not a Qualified Shareholder.

 

“Notice of Intention to Redeem” shall mean the notice of intention to redeem issued by Parent on October 24, 2025 reflecting its non-binding intention to acquire, by way of a share redemption pursuant to the provisions of Section 105 of the Companies Act 2014 and pursuant to Article 3(d) of the Articles of Association, all of the Parent Preferred Shares in the issued share capital of Parent.

 

 

“Parent Business” shall mean all businesses, operations and activities (whether or not such businesses, operations or activities are or have been terminated, divested or discontinued) conducted at any time prior to the Effective Time by either Party or any member of its Group, other than the SpinCo Business, and shall include the business, operations and activities of the research, development, manufacture, commercialization, use, marketing or distribution of the products identified on Schedule 1.1 hereto.

 

“Parent Group” shall mean Parent and each Person that is a Subsidiary of Parent (other than SpinCo and any other member of the SpinCo Group).

 

“Parent Marks” shall mean the names, marks, and Trademarks of either Party or any member of its Group using, consisting of or containing “ENDO,” “ENDP,” or the Endo logo, either alone or in combination with other words or elements, and all names, marks, or Trademarks confusingly similar to or embodying any of the foregoing either alone or in combination with other words or elements, together with the goodwill associated with any of the foregoing.

 

“Parent Ordinary Shares” shall mean the ordinary shares, nominal value $0.01 per share, of Parent.

 

“Parent Policies” shall mean Policies and claim administration contracts of any kind in place as of the Effective Time for which one or more members of the Parent Group are named insureds as of immediately prior to the Effective Time.

 

“Parent Preferred Shares” shall mean the 2025 preferred shares, nominal value $0.001 per share, of Parent issued on or around October 10, 2025 and governed by the Parent Preferred Share Terms.

 

“Parent Preferred Share Terms” shall mean the terms governing the Parent Preferred Shares adopted pursuant to the resolutions of the Parent Board on September 10, 2025.

 

“Parent Register of Members” shall mean the relevant statutory register of members of Parent under applicable Laws, denoting the registered shareholders of Parent.

 

“Parent Shared Policies” shall mean Parent Policies for which one or more members of the SpinCo Group are additional insureds as of immediately prior to the Effective Time.

 

“Parent Shares” shall mean the Parent Ordinary Shares and the Parent Preferred Shares, together.

 

“Parties” shall mean the parties to this Agreement.

 

 

“Per Share Cash Amount” shall mean $0.000424786467775745, being the SpinCo Value divided by the total number of Parent Preferred Shares at the Record Date.

 

“Per Share Excess Cash Amount” shall mean an amount in cash that the Parent Board determines is equal to the value of the Per Share Excess Stock Amount as of the Redemption Date, being (a) (i) the SpinCo Value divided by (ii) the total number of Parent Preferred Shares on the Record Date held by Qualified Shareholders that have satisfied the applicable Certification Procedures prior to the expiration of the Escrow Period less (b) the Per Share Cash Amount.

 

“Per Share Excess Stock Amount” shall mean the number (“A”) of SpinCo Shares derived from the following formula:

 

 A = B/C

 

 where:

 

 “B” is the total number of Excess SpinCo Shares;

 

 “C” is the total number of Parent Preferred Shares on the Record Date held by Qualified Shareholders that have satisfied the applicable Certification Procedures prior to the expiration of the Escrow Period.

 

“Per Share Stock Amount” shall mean 0.0000219471513 SpinCo Shares.

 

“Permit” shall mean permits, approvals, authorizations, consents, licenses or certificates issued by any Governmental Authority.

 

“Person” shall mean an individual, a general or limited partnership, a corporation, a trust, a joint venture, an unincorporated organization, a limited liability entity, any other entity and any Governmental Authority.

 

“Policies” shall mean insurance policies and insurance Contracts of any kind, together with the rights, benefits and privileges thereunder.

 

“Prime Rate” shall mean the rate as published in The Wall Street Journal (or if not reported therein, as reported in another authoritative source reasonably selected by Parent).

 

“Privileged Information” shall mean any information, in written, oral, electronic or other tangible or intangible forms, including any communications by or to attorneys (including attorney-client privileged communications), memoranda and other materials prepared by attorneys or under their direction (including attorney work product), as to which a Party or any member of its Group would be entitled to assert or have asserted a privilege or other protection, including the attorney-client and attorney work product privileges.

 

 

“Qualified Shareholder” shall mean a Record Holder or Street Name Holder as of the Record Date that has complied with the Certification Procedures and that has returned a Certification Form, duly, truthfully and accurately completed and validly executed in accordance with the instructions thereto, certifying (among other things) that such Record Holder or Street Name Holder (as the case may be) is a qualified institutional buyer as defined in Rule 144A under the Securities Act (a “Qualified Institutional Buyer”), an institutional accredited investor (an “accredited investor” as defined in clauses (1), (2), (3), (7), (8), (9), (12) and (13) of Rule 501(a) under the Securities Act) (an “Institutional Accredited Investor”) or a director or officer of Parent or SpinCo as of the Redemption Date who is also an accredited investor (as defined in Rule 501(a) under the Securities Act).

 

“Real Property” shall mean land together with all easements, rights and interests arising out of the ownership thereof or appurtenant thereto and all buildings, structures, improvements and fixtures located thereon.

 

“Real Property Leases” shall mean all leases to Real Property and, to the extent covered by such leases, any and all buildings, structures, improvements and fixtures located thereon.

 

“Record Date” shall mean 5:30 p.m. (United States Eastern Standard Time) on October 27, 2025, or another time and/or date if determined by the Parent Board as the record date for determining holders of Parent Preferred Shares entitled to receive the right to SpinCo Shares or cash pursuant to the Redemption.

 

“Record Holders” shall mean the holders of record of Parent Preferred Shares as of the Record Date, as reflected in the Parent Register of Members.

 

“Redemption Agent” shall mean Computershare Trust Company, N.A. (or one or more affiliates thereof), or such other trust company or bank duly appointed by Parent to act as distribution agent, transfer agent and/or registrar for the SpinCo Shares in connection with the Redemption.

 

“Redemption Date” shall mean the date of the consummation of the Redemption, which shall be determined by the Parent Board in its sole and absolute discretion in accordance with the Articles of Association and the Parent Preferred Share Terms.

 

“Registered IP” shall mean all Intellectual Property Rights that are issued, registered or applied-for under the authority of any Governmental Authority, and all registered Internet Properties.

 

“Release” shall mean any release, spill, emission, discharge, leaking, pumping, pouring, dumping, injection, deposit, disposal, dispersal, leaching or migration of Hazardous Materials into the environment (including ambient air, surface water, groundwater and surface or subsurface strata).

 

“Representatives” shall mean, with respect to any Person, any of such Person’s directors, officers, employees, agents, consultants, advisors, accountants, attorneys or other representatives.

 

“SEC” shall mean the U.S. Securities and Exchange Commission.

 

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Security Interest” shall mean any mortgage, security interest, pledge, lien, charge, claim, option, right to acquire, voting or other restriction, right-of-way, covenant, condition, easement, encroachment, restriction on transfer, or other encumbrance of any nature whatsoever.

 

“Shared Contract” shall mean any Contract between a member of either Group and a Third Party existing as of immediately prior to the Effective Time that relates in any material respect to both the SpinCo Businesses and the Parent Business.

 

“Shared Policies” shall mean the Parent Shared Policies and the SpinCo Shared Policies.

 

“Specified Shared Contract” shall means any Shared Contract that (a) is set forth on Schedule 2.8 or (b) was identified in good faith prior to the Effective Time as a Shared Contract in connection with the Parties’ separation efforts and assigned to one Party or any member of its Group without assigning the portion of such Shared Contract that relates to the other Party’s business to such other Party or the applicable member(s) of its Group.

 

“SpinCo Balance Sheet” shall mean the pro forma combined balance sheet of the SpinCo Business, including any notes and subledgers thereto, as of June 27, 2025, as presented in the Information Statement.

 

“SpinCo Books and Records” shall mean all books and records to the extent used in or necessary, as of immediately prior to the Effective Time, for the operation of the SpinCo Business, including financial, employee, and general business operating documents, instruments, papers, books, books of account, records and files and data related thereto (including, among other things, regulatory dossiers, correspondence and related documentation, clinical data and study reports, pre-clinical data and study reports, analytical data and reports, formulation data and reports, lab notebooks, manufacturing processes and batch records); provided, that SpinCo Books and Records shall not include any board materials of Parent or any predecessor of Parent, including the board minutes of Parent or any such predecessor, material that Parent is not permitted by applicable Law or agreement to disclose or transfer to SpinCo; provided, further, that SpinCo Books and Records shall not include any Intellectual Property Rights or Technology.

 

 

“SpinCo Business” shall mean (a) the business, operations and activities of the generic pharmaceuticals (including active pharmaceutical ingredients (“APIs”)) and sterile injectables businesses of Parent as conducted immediately prior to the Effective Time by either Party or any of its Subsidiaries, which includes the development, manufacturing and distribution of (i) generics medicinal products and APIs and (ii) sterile injectables medicinal products, including supply chain planning and oversight, quality assurance and procurement functions in respect of such products and (b) any terminated, divested or discontinued businesses, operations and activities that, at the time of termination, divestiture or discontinuation, primarily related to the business, operations or activities described in clause (a) as then conducted; provided, that in no event shall the products researched, developed, commercialized, manufactured, used, marketed or distributed by the “SpinCo Business” include the products identified on Schedule 1.1 hereto.

 

“SpinCo Bylaws” shall mean the Amended and Restated Bylaws of SpinCo, substantially in the form of Exhibit C.

 

“SpinCo Certificate of Incorporation” shall mean the Amended and Restated Certificate of Incorporation of SpinCo, substantially in the form of Exhibit D.

 

“SpinCo Contracts” shall mean the following Contracts to which either Party or any member of its Group is a party or by which it or any member of its Group or any of their respective Assets is bound, whether or not in writing, in each case entered into prior to the Effective Time (provided that SpinCo Contracts shall not include any contract or agreement that is contemplated to be retained by Parent or any member of the Parent Group from and after the Effective Time pursuant to any provision of this Agreement or any Ancillary Agreement):

 

(a)            any vendor Contract with a Third Party pursuant to which such Third Party provides Information Technology, software, human resources or financial services to either Party or any member of its Group exclusively used or exclusively held for use in the SpinCo Business as of the Effective Time;

 

(b)            other than any vendor Contract with a Third Party pursuant to which such Third Party provides Information Technology, software, human resources or financial services to either Party or any member of its Group (which contracts and agreements are addressed in clause (a) above to the extent that they shall constitute a SpinCo Contract), (i) any customer, sales, distribution, purchase, rebate, reimbursement, payor, retail, development, research, collaboration, promotion, quality, regulatory, services, environmental, broker, warehouse, consultant, manufacturing, purchase order, statement of work, supply or vendor contract or agreement with a Third Party entered into prior to the Effective Time exclusively related to the SpinCo Business and (ii) with respect to any customer, sales, distribution, purchase, rebate, reimbursement, payor, retail, development, research, collaboration, promotion, quality, regulatory, services, environmental, broker, warehouse, consultant, manufacturing, purchase order, statement of work, supply or vendor contract or agreement with a Third Party entered into prior to the Effective Time that relates to the SpinCo Business but is not exclusively related to the SpinCo Business, that portion of any such contract or agreement that relates exclusively to the SpinCo Business;

 

 

(c)            other than any vendor Contract with a Third Party pursuant to which such Third Party provides Information Technology, software, human resources or financial services to either Party or any member of its Group (which contracts and agreements are addressed in clause (a) above to the extent that they shall constitute a SpinCo Contract), (i) any license agreement entered into prior to the Effective Time exclusively related to the SpinCo Business and (ii) with respect to any license agreement entered into prior to the Effective Time that relates to the SpinCo Business but is not exclusively related to the SpinCo Business, that portion of any such license agreement that relates exclusively to the SpinCo Business;

 

(d)            any guarantee, indemnity, representation, covenant, warranty or other Liability of either Party or any member of its Group in respect of any other SpinCo Contract, any SpinCo Liability or the SpinCo Business;

 

(e)            any Contract that is expressly contemplated by this Agreement or any of the Ancillary Agreements to be assigned to SpinCo or any member of the SpinCo Group;

 

(f)            any interest rate, currency, commodity or other swap, collar, cap or other hedging or similar Contract exclusively related to the SpinCo Business;

 

(g)            any credit agreement, indenture, note or other financing agreement or instrument entered into by SpinCo and/or any member of the SpinCo Group in connection with (or in contemplation of) the Separation, including any SpinCo Financing Arrangements;

 

(h)            any Contract entered into in the name of, or expressly on behalf of, any division, business unit or member of the SpinCo Group, subject to Section 2.8;

 

(i)             any employment, change of control, retention, consulting, indemnification, termination, severance or other similar Contract with any SpinCo Group Employee or consultants of the SpinCo Business that are in effect as of the Effective Time;

 

(j)             any consent order, decree or agreement with any third party (including any Governmental Authority) entered into in the name of, or expressly on behalf of, any division, business unit or member of the SpinCo Group;

 

(k)            the SpinCo Real Property Leases;

 

(l)             any other Contract exclusively related to the SpinCo Business or the SpinCo Assets;

 

(m)           the portion of any Shared Contract relating to the SpinCo Business and allocated to any member of the SpinCo Group in accordance with Section 2.8; and

 

(n)            any Contract set forth on Schedule 1.2, including the right to recover any amounts under such contracts, agreements or settlements.

 

Notwithstanding the foregoing, SpinCo Contracts shall not in any event include (x) any contract or agreement that is contemplated to be retained by Parent or any member of the Parent Group from and after the Effective Time pursuant to any provision of this Agreement or any Ancillary Agreement, or (y) any contract or agreement pursuant to which a Third Party licenses or supplies Information Technology, software, Technology or Intellectual Property Rights to either Party or any of the members of its Group that is not exclusively for the use and benefit of the SpinCo Business.

 

 

“SpinCo Designees” shall mean any and all entities (including corporations, general or limited partnerships, trusts, joint ventures, unincorporated organizations, limited liability entities or other entities) designated by Parent that will be members of the SpinCo Group as of the Effective Time.

 

“SpinCo Group” shall mean (a) prior to the Effective Time, SpinCo and each Person that will be a Subsidiary of SpinCo as of immediately after the Effective Time, including the Transferred Entities, even if, prior to the Effective Time, such Person is not a Subsidiary of SpinCo, and (b) on and after the Effective Time, SpinCo and each Person that is a Subsidiary of SpinCo.

 

“SpinCo Group Employee” shall have the meaning set forth in the Employee Matters Agreement.

 

“SpinCo Intellectual Property Rights” shall mean (a) the Patents, Trademarks, Internet Properties and other Registered IP set forth on Schedule 1.3(a), and (b) the Intellectual Property Rights (other than Patents, Trademarks, Internet Properties and other Registered IP) that are owned by either Party or any of the members of its Group as of the Effective Time and that are exclusively used, or held exclusively for use, in the operation of the SpinCo Business and embodied by the SpinCo Technology as of the Effective Time.

 

“SpinCo IT Assets” shall mean all Information Technology owned by either Party or any member of its Group as of the Effective Time (including all software loaded thereon but only to the extent such software is SpinCo Technology or, if licensed from a Third Party, only to the extent the license for such software has transferred to the SpinCo Group pursuant to the terms of this Agreement or the SpinCo Group otherwise independently has a license thereto) that is exclusively used, or held exclusive for use, in the operation of the SpinCo Business.

 

“SpinCo Marks” shall mean the names, marks, and Trademarks of either Party or any member of its Group using, consisting of or containing “MALLINCKRODT,” “MNK,” or the Mallinckrodt logo either alone or in combination with other words or elements, and all names, marks, or Trademarks confusingly similar to or embodying any of the foregoing either alone or in combination with other words or elements, together with the goodwill associated with any of the foregoing.

 

“SpinCo Permits” shall mean all Permits owned or licensed by either Party or any member of its Group exclusively used or exclusively held for use in the SpinCo Business as of the Effective Time.

 

“SpinCo Real Property” shall mean (a) all of the Real Property owned by SpinCo or any member of the SpinCo Group as of the Effective Time, (b) the Real Property Leases to which SpinCo or any member of the SpinCo Group is a party as of the Effective Time, including the Real Property Leases set forth on Schedule 1.4 (the “SpinCo Real Property Leases”), and (c) all recorded Real Property notices, easements, and obligations with respect to the Real Property and/or Real Property Leases described in the foregoing clauses (a) and (b).

 

 

“SpinCo Policies” shall mean Policies and claim administration contracts of any kind in place as of the Effective Time for which one or more members of the SpinCo Group are named insureds as of immediately prior to the Effective Time.

 

“SpinCo Shared Policies” shall mean SpinCo Policies for which one or more members of the Parent Group are additional insureds as of immediately prior to the Effective Time.

 

“SpinCo Shares” shall mean the shares of common stock, par value $0.01 per share, of SpinCo.

 

“SpinCo Technology” shall mean Technology with respect to which the Intellectual Property Rights therein are owned by either Party or any member of its Group to the extent that such Technology is (a) used in, held for use in or necessary for the operation of the SpinCo Business as of the Effective Time and capable of being copied without material cost (for example, databases, documentation or software), including Technology set forth on Schedule 1.5, and (b) the know-how of the SpinCo Group Employees to the extent related to the SpinCo Business, but in each case, excluding any Technology set forth on Schedule 1.6, any Information Technology and any SpinCo Books and Records. For clarity, SpinCo Technology does not include any Intellectual Property Rights.

 

“SpinCo Value” shall mean the value ascribed by the Parent Board to SpinCo prior to the Effective Time for the purposes of determining the Per Share Cash Amount and the Per Share Excess Cash Amount (if any) to which Non-Qualified Shareholders are entitled pursuant to the Redemption.

 

“Street Name Holder” shall mean a Person identified by a Record Holder (which Record Holder is a broker, bank or similar organization) as the beneficial holder of Parent Preferred Shares held by such Record Holder in such capacity on the Record Date.

 

“Subsidiary” shall mean, with respect to any Person, any corporation, limited liability company, joint venture or partnership of which such Person (a) beneficially owns, either directly or indirectly, more than fifty percent (50%) of (i) the total combined voting power of all classes of voting securities, (ii) the total combined equity interests or (iii) the capital or profit interests, in the case of a partnership, or (b) otherwise has the power to vote, either directly or indirectly, sufficient securities to elect a majority of the board of directors or similar governing body.

 

“Tangible Information” shall mean information that is contained in written, electronic or other tangible forms.

 

“Tax” shall have the meaning set forth in the Tax Matters Agreement.

 

“Tax Asset” shall have the meaning set forth in the Tax Matters Agreement.

 

 

“Tax Benefit” shall have the meaning set forth in the Tax Matters Agreement.

 

“Tax Matters Agreement” shall mean the Tax Matters Agreement to be entered into by and between Parent and SpinCo or the members of their respective Groups in connection with the Separation, the Redemption or any other transactions contemplated by this Agreement, as it may be amended from time to time.

 

“Tax Return” shall have the meaning set forth in the Tax Matters Agreement.

 

“Technology” shall mean embodiments of Intellectual Property Rights, including in the form of blueprints, designs, design protocols, technical documentation, specifications for materials, specifications for parts and devices, design tools, databases, software and know-how of employees; provided that “Technology” shall not include personal property, Information Technology, books and records or any Intellectual Property Rights.

 

“Third Party” shall mean any Person other than the Parties or any members of their respective Groups.

 

“Transferred Entities” shall mean the entities set forth on Schedule 1.7.

 

“Transition Services Agreement” shall mean the Transition Services Agreement to be entered into by and between Parent and SpinCo or any members of their respective Groups in connection with the Separation, the Redemption or any other transactions contemplated by this Agreement, as it may be amended from time to time.

 

1.2            Additional Defined Terms.

 

In addition, for the purpose of this Agreement, the following terms shall have the following meanings set forth in the Sections indicated:

 

Term	Section
Agreed Procedures	6.1(a)
Agreement	Preamble
APIs	See definition of SpinCo Business, 1.1
Authorized Representative	7.2
Bankruptcy Code	8.5(h)
Base Proceeds	3.4(e)
Bulk Request	6.1(b)
Cash Allocation	3.4(f)(ii)
CEO Negotiation Request	7.3
Chosen Courts	10.2(b)
Commingled Excluded Information	6.11
Contribution	Recitals
control	See definition of Affiliate, 1.1

 

 

controlled by	See definition of Affiliate, 1.1
Covered Parent Patent	8.4
Covered SpinCo Patent	8.4
CPR	7.4
Delayed Parent Asset	2.4(h)
Delayed Parent Liability	2.4(h)
Delayed SpinCo Asset	2.4(c)
Delayed SpinCo Liability	2.4(c)
Dispute	7.1
e-mail	10.5
Encumbrances	3.4(a)
Endo	Recitals
Excess Proceeds	3.4(f)
Final Stock Allocation	3.4(k)(i)
Indemnifying Party	4.4(a)
Indemnitee	4.4(a)
Indemnity Payment	4.4(a)
Initial Cash Allocation	3.4(e)(ii)
Initial Notice	7.1
Initial SpinCo Allocation	3.4(e)(i)
Institutional Accredited Investor	See definition of Qualified Shareholder, 1.1
Interim Excess Determination	3.4(l)
Interim Excess Proceeds	3.4(l)
Internet Properties	See definition of Intellectual Property Rights, 1.1
Licensees	8.5(d)
Licensors 8.5(d)
Mediation Request	7.4
Merger	Recitals
Merger Sub	Recitals
Officer Negotiation Request	7.2
Parent	Preamble
Parent Accounts	2.9(a)
Parent Assets	2.2(b)
Parent Board	Recitals
Parent Books and Records	2.2(a)(xiii)
Parent Indemnitees	4.2
Parent Liabilities	2.3(b)
Parent SpinCo Share	3.4(h)
Parent Transferred Entity/Subsidiary Liability	2.1(a)
Patents	See definition of Intellectual Property Rights, 1.1
Pre-Redemption Notification Deadline	3.4(g)
Procedure	7.4
Prohibited Business	8.3(c)

 

 

Qualified Institutional Buyer	See definition of Qualified Shareholder, 1.1
Redemption	3.4(a)
Redemption Consideration	3.4(c)
Removed Party	2.7(b)
Separation	Recitals
Separation Step Plan	2.1(a)
Specified Ancillary Agreement	10.18(b)
SpinCo	Preamble
SpinCo Accounts	2.9(a)
SpinCo Allocation	3.4(f)(i)
SpinCo Assets	2.2(a)
SpinCo Financing Arrangements	2.12
SpinCo Indemnitees	4.3
SpinCo Liabilities	2.3(a)
SpinCo Real Property Leases	See definition of SpinCo Real Property, 1.1
SpinCo Retained Cash Amount	2.2(b)(ix)
SpinCo Transferred Entity/Subsidiary Liability	2.1(a)
Third-Party Claim	4.5(a)
Trade Secrets	See definition of Intellectual Property Rights, 1.1
Trademarks	See definition of Intellectual Property Rights, 1.1
Transfer Documents	2.1(c)
Transition Committee	2.13
under common control with	See definition of Affiliate, 1.1
Unreleased Parent Liability	2.5(b)(ii)
Unreleased SpinCo Liability	2.5(a)(ii)
Valuation Advice	3.2(b)

 

Article II
THE SEPARATION

 

2.1           Transfer of Assets and Assumption of Liabilities.

 

(a)           Subject to Section 2.4 and Section 6.1(a), on or prior to the Effective Time and prior to the Redemption, including in connection with the plan and structure set forth on Schedule 2.1(a) (the “Separation Step Plan”) and to the extent not previously effected pursuant to the steps of the Separation Step Plan that have been completed prior to the date hereof, but in any event consistent with the Separation Step Plan (where applicable):

 

(i)            Transfer and Assignment of SpinCo Assets. Parent shall, and shall cause the applicable members of its Group to, contribute, assign, transfer, convey and deliver to SpinCo, or the applicable SpinCo Designees, and SpinCo or such SpinCo Designees shall accept from Parent and the applicable members of the Parent Group, all of Parent’s and such Parent Group member’s respective direct or indirect right, title and interest in and to all of the SpinCo Assets (it being understood that if any SpinCo Asset shall be held by a Transferred Entity or a wholly owned Subsidiary of a Transferred Entity, such SpinCo Asset shall be deemed assigned, transferred, conveyed and delivered to SpinCo as a result of the transfer of all of the equity interests in such Transferred Entity that are held by Parent or the applicable members of the Parent Group from Parent or the applicable members of the Parent Group to SpinCo or the applicable SpinCo Designee);

 

 

(ii)           Acceptance and Assumption of SpinCo Liabilities. SpinCo and the applicable SpinCo Designees shall accept, assume and agree faithfully to perform, discharge and fulfill all of the SpinCo Liabilities in accordance with their respective terms (it being understood and agreed that if any SpinCo Liability is a Liability of a Transferred Entity or a wholly owned Subsidiary of a Transferred Entity (a “SpinCo Transferred Entity/Subsidiary Liability”), the obligation to so assume such Transferred Entity/Subsidiary Liability shall be deemed satisfied as a result of the transfer of all of the equity interests in such Transferred Entity that are held by Parent or the applicable members of the Parent Group from Parent or the applicable members of the Parent Group to SpinCo or the applicable SpinCo Designee, and it being further understood and agreed that SpinCo shall not by virtue of this provision assume any liability to any third party for such SpinCo Transferred Entity/Subsidiary Liability). As between Parent and the members of the Parent Group, on the one hand, and SpinCo and the members of the SpinCo Group, on the other hand, SpinCo and members of the SpinCo Group shall be responsible for all SpinCo Liabilities, regardless of when or where such SpinCo Liabilities arose or arise, or whether the facts on which they are based occurred prior to or subsequent to the Effective Time, regardless of where or against whom such SpinCo Liabilities are asserted or determined (including any SpinCo Liabilities arising out of claims made by Parent’s or SpinCo’s respective directors, officers, employees, agents, Subsidiaries or Affiliates against any member of the Parent Group or the SpinCo Group) or whether asserted or determined prior to the date hereof, and regardless of whether arising from or alleged to arise from negligence, recklessness, violation of Law, fraud, misrepresentation or under any other legal theory by any member of the Parent Group or the SpinCo Group, or any of their respective directors, officers, employees, agents, Subsidiaries or Affiliates;

 

(iii)          Transfer and Assignment of Parent Assets. Parent and SpinCo shall cause SpinCo and the SpinCo Designees to contribute, assign, transfer, convey and deliver to Parent or certain members of the Parent Group designated by Parent, and Parent or such other members of the Parent Group shall accept from SpinCo and the SpinCo Designees, all of SpinCo’s and such SpinCo Designees’ respective direct or indirect right, title and interest in and to all Parent Assets held by SpinCo or a SpinCo Designee (it being understood and agreed that if any Parent Asset shall be held by an entity the equity interests of which will be transferred to a member of the Parent Group or a wholly owned Subsidiary of such an entity, such Excluded Asset shall be deemed assigned, transferred, conveyed and delivered to Parent as a result of the transfer of all of the equity interests in such entity that are held by SpinCo or the applicable members of the SpinCo Group from SpinCo or the applicable members of the SpinCo Group to Parent or the applicable members of the Parent Group designated by Parent); and

 

 

(iv)          Acceptance and Assumption of Parent Liabilities. Parent and certain members of the Parent Group designated by Parent shall accept and assume and agree faithfully to perform, discharge and fulfill all of the Parent Liabilities held by SpinCo or any SpinCo Designee and, as between Parent and the members of the Parent Group, on the one hand, and SpinCo and the members of the SpinCo Group, on the other hand, Parent and members of the Parent Group shall be responsible for all Parent Liabilities in accordance with their respective terms (it being understood and agreed that if any Parent Liability is a Liability of an entity the equity interests of which will be transferred to a member of the Parent Group or a wholly owned Subsidiary of such an entity (a “Parent Transferred Entity/Subsidiary Liability”), the obligation to so assume such Parent Transferred Entity/Subsidiary Liability shall be deemed satisfied as a result of the transfer of all of the equity interests in such entity that are held by SpinCo or the applicable members of the SpinCo Group from SpinCo or the applicable members of the SpinCo Group to Parent or the applicable member of the Parent Group designated by Parent, and it being further understood and agreed that Parent shall not by virtue of this provision assume liability to any third party for such Parent Transferred Entity/Subsidiary Liability), regardless of when or where such Parent Liabilities arose or arise, or whether the facts on which they are based occurred prior to or subsequent to the Effective Time, regardless of where or against whom such Parent Liabilities are asserted or determined (including any such Parent Liabilities arising out of claims made by Parent’s or SpinCo’s respective directors, officers, employees, agents, Subsidiaries or Affiliates against any member of the Parent Group or the SpinCo Group) or whether asserted or determined prior to the date hereof, and regardless of whether arising from or alleged to arise from negligence, recklessness, violation of Law, fraud, misrepresentation or under any other legal theory by any member of the Parent Group or the SpinCo Group, or any of their respective directors, officers, employees, agents, Subsidiaries or Affiliates.

 

(b)           Transfer Documents. In furtherance of the contribution, assignment, transfer, conveyance and delivery of the Assets and the assumption of the Liabilities in accordance with Section 2.1(a), (i) each Party shall execute and deliver, and shall cause the applicable members of its Group to execute and deliver, to the other Party, such bills of sale, quitclaim deeds, stock powers, certificates of title, assignments of contracts and other instruments of contribution, transfer, conveyance and assignment as and to the extent necessary to evidence the contribution, transfer, conveyance and assignment of all of such Party’s and the applicable members of its Group’s right, title and interest in and to such Assets to the other Party and/or the applicable members of its Group in accordance with Section 2.1(a), and (ii) each Party shall execute and deliver, and shall cause the applicable members of its Group to execute and deliver, to the other Party, such assumptions of contracts and other instruments of contribution, assumption as and to the extent necessary to evidence the valid and effective assumption of the Liabilities by such Party and the applicable members of its Group in accordance with Section 2.1(a). All of the foregoing documents contemplated by this Section 2.1(b) (including any documents entered into between or among any of the Parties or members of their respective Groups to implement or in furtherance of the Separation Step Plan prior to the date hereof) shall be referred to collectively herein as the “Transfer Documents.”

 

(c)           Misallocations. Subject to Section 2.4, in the event that at any time or from time to time (whether prior to, at or after the Effective Time), one Party (or any member of such Party’s Group) shall receive or otherwise possess any Asset that is allocated to the other Party (or any member of such Party’s Group) pursuant to this Agreement or any Ancillary Agreement, such first Party shall promptly transfer, or cause to be transferred, such Asset to the Party so entitled thereto (or to any member of such Party’s Group) for no further consideration and without reimbursement or set-off, and such Party (or member of such Party’s Group) so entitled thereto shall accept such Asset. Prior to any such transfer, the Person receiving or possessing such Asset shall hold such Asset in trust for the use and benefit of such other Person (at the expense of the Party entitled thereto). In the event that at any time or from time to time (whether prior to, at or after the Effective Time), one Party hereto (or any member of such Party’s Group) shall receive or otherwise assume or be subject to any Liability that is allocated to the other Party (or any member of such Party’s Group) pursuant to this Agreement or any Ancillary Agreement, such first Party shall promptly transfer, or cause to be transferred, such Liability to the Party responsible therefor (or to any member of such Party’s Group), and such Party (or member of such Party’s Group) responsible therefor shall accept, assume and agree to faithfully perform such Liability for no further consideration and without reimbursement or set-off. If reasonably practicable and permitted under applicable Law, any such transfer pursuant to this Section 2.1(c) may be effected by rescission of the applicable portion of a Transfer Document as may be agreed by the relevant Parties.

 

 

(d)           Waiver of Bulk-Sale and Bulk-Transfer Laws. To the extent permissible under applicable Law, SpinCo (on behalf of itself and each other member of the SpinCo Group) hereby waives compliance by each and every member of the Parent Group with the requirements and provisions of any “bulk-sale” or “bulk-transfer” Laws of any jurisdiction that may otherwise be applicable with respect to the transfer or sale of any or all of the SpinCo Assets to any member of the SpinCo Group. To the extent permissible under applicable Law, Parent (on behalf of itself and each other member of the Parent Group) hereby waives compliance by each and every member of the SpinCo Group with the requirements and provisions of any “bulk-sale” or “bulk-transfer” Laws of any jurisdiction that may otherwise be applicable with respect to the transfer or sale of any or all of the Parent Assets to any member of the Parent Group.

 

(e)           Electronic Transfer. All transferred SpinCo Assets and Parent Assets, including transferred Technology, that can be delivered by electronic transmission will be so delivered or made available to SpinCo, Parent or their respective designees (as applicable), in an electronic form to be reasonably determined by the Parties.

 

(f)            Physical delivery. All transferred SpinCo Assets and Parent Assets the title to which is capable of transfer by physical delivery will be so delivered or made available to SpinCo, Parent or their respective designees (as applicable); provided that to the extent any SpinCo Books and Records exist in hard copy or other physical form, they may be imaged for transmission to SpinCo in a form reasonably determined by Parent, at Parent’s cost, and Parent shall not be required at any time to deliver or retain any such SpinCo Books and Records in any physical form.

 

2.2           SpinCo Assets; Parent Assets.

 

(a)           SpinCo Assets. For purposes of this Agreement, “SpinCo Assets” shall mean (without duplication):

 

(i)            all issued and outstanding capital stock or other equity interests of the Transferred Entities that are owned by either Party or any members of its Group as of the Effective Time;

 

(ii)           all Assets (other than cash and cash equivalents, which is addressed in clause (iv) below) of either Party or any members of its Group included or reflected as assets of the SpinCo Group on the SpinCo Balance Sheet (including any inventory), subject to any dispositions of such Assets subsequent to the date of the SpinCo Balance Sheet; provided that the amounts set forth on the SpinCo Balance Sheet with respect to any Assets shall not be treated as minimum amounts or limitations on the amount of such Assets that are included in the definition of SpinCo Assets pursuant to this clause (ii);

 

 

 

(iii)           all Assets (other than cash and cash equivalents, which is addressed in clause (iv) below) of either Party or any of the members of its Group as of the Effective Time that are of a nature or type that would have resulted in such Assets being included as assets of the SpinCo Group on a pro forma combined balance sheet of the SpinCo Group or any notes or subledgers thereto as of the Effective Time, including any inventory (were such balance sheet, notes and subledgers to be prepared on a basis consistent with the determination of the Assets included on the SpinCo Balance Sheet), it being understood that (x) the SpinCo Balance Sheet shall be used to determine the types of, and methodologies used to determine, those Assets that are included in the definition of SpinCo Assets pursuant to this clause (iii); and (y) the amounts set forth on the SpinCo Balance Sheet with respect to any Assets shall not be treated as minimum amounts or limitations on the amount of such Assets that are included in the definition of SpinCo Assets pursuant to this clause (iii);

 

(iv)           subject to any post-Effective Time true-up mechanisms as may be provided in the Separation Step Plan, the SpinCo Retained Cash Amount;

 

(v)            all Assets of either Party or any of the members of its Group as of the Effective Time that are expressly provided by this Agreement or any Ancillary Agreement (or the Schedules hereto or thereto) as Assets to be transferred to SpinCo or any other member of the SpinCo Group;

 

(vi)           all SpinCo Contracts as of the Effective Time and all rights, interests or claims of either Party or any of the members of its Group thereunder as of the Effective Time;

 

(vii)          all SpinCo Intellectual Property Rights as of the Effective Time, including any goodwill appurtenant to any Trademarks included in the SpinCo Intellectual Property Rights, the right to seek, recover and retain damages for past or future infringement or violation of any SpinCo Intellectual Property Rights, and all rights of priority arising from any SpinCo Intellectual Property Rights;

 

(viii)         all SpinCo Technology as of the Effective Time;

 

(ix)            all SpinCo IT Assets as of the Effective Time;

 

(x)             all SpinCo Real Property as of the Effective Time;

 

(xi)            all SpinCo Permits as of the Effective Time and all rights, interests or claims of either Party or any of the members of its Group thereunder as of the Effective Time;

 

(xii)           all Assets of either Party or any of the members of its Group as of immediately prior to the Effective Time that are exclusively related to the SpinCo Business and that are of a type that is not addressed in subsections (i)-(xi) and (xiii) of this Section 2.2(a);

 

 

(xiii)          copies of any and all SpinCo Books and Records in the possession of either Party as of the Effective Time; provided, that Parent shall be permitted to retain copies of, and continue to use, subject to Section 6.9, (A) any SpinCo Books and Records that as of the Effective Time are used in or necessary for the operation or conduct of the Parent Business, (B) any SpinCo Books and Records that Parent is required by Law to retain (and if copies are not provided to SpinCo, then, to the extent permitted by Law, such copies will be made available to SpinCo upon SpinCo’s reasonable request), (C) any SpinCo Books and Records to the extent required to demonstrate compliance with applicable Law or pursuant to internal compliance procedures or related to any Parent Assets or Parent’s and/or its Affiliates’ obligations under this Agreement or any of the Ancillary Agreements and (D) “back-up” electronic tapes of such SpinCo Books and Records maintained by Parent in the ordinary course of business (such material in clauses (A) through (D), the “Parent Books and Records”);

 

(xiv)          any and all Assets set forth on Schedule 2.2(a)(xiv); and

 

(xv)           notwithstanding any other provision of this Section 2.2, any and all Tax Assets allocated to SpinCo or any member of the SpinCo Group pursuant to the Tax Matters Agreement.

 

Notwithstanding the foregoing, the Parties hereby acknowledge and agree that (A) while a single Asset may fall within more than one of the clauses (i) through (xv) in this Section 2.2(a), such fact does not imply that (x) such Asset, as applicable, shall be transferred more than once or (y) any duplication of such Asset is required, and (B) SpinCo Assets shall not in any event include any Asset or Tax Asset referred to in clauses (i) through (xii) of Section 2.2(b).

 

(b)            Parent Assets. For the purposes of this Agreement, “Parent Assets” shall mean all Assets of either Party or the members of its Group as of the Effective Time, other than the SpinCo Assets, it being understood that, notwithstanding anything herein to the contrary, the Parent Assets shall include (without duplication):

 

(i)             all Assets of either Party or any of the members of its Group as of the Effective Time that are contemplated by this Agreement or any Ancillary Agreement (or the Schedules hereto or thereto) as Assets to be retained by Parent or any other member of the Parent Group;

 

(ii)            all Contracts of either Party or any of the members of its Group as of the Effective Time other than the SpinCo Contracts;

 

(iii)           all Intellectual Property Rights owned by either Party or any of the members of its Group as of the Effective Time other than the SpinCo Intellectual Property Rights;

 

(iv)            (A) the Technology set forth on Schedule 2.2(b)(iv), (B) all Technology of either Party or any of the members of its Group as of the Effective Time, other than, in the case of this clause (B), the copies of such Technology that are SpinCo Technology, including (as Parent Assets) copies of any SpinCo Technology that are used in, held or use in or necessary for the operation of the Parent Business;

 

 

(v)            all Information Technology, other than SpinCo IT Assets, owned by either Party or any member of its Group as of the Effective Time;

 

(vi)           all Permits of either Party or any of the members of its Group as of the Effective Time other than the SpinCo Permits;

 

(vii)          all Real Property of either Party or any of the members of its Group as of the Effective Time (other than the SpinCo Real Property);

 

(viii)         all Parent Books and Records;

 

(ix)            subject to any post-Effective Time true-up mechanisms as may be provided in the Separation Step Plan, all cash and cash equivalents of either Party or any of the members of its Group as of the Effective Time, other than cash and cash equivalents held as of the Effective Time by the SpinCo Group in an aggregate amount equal to two hundred thirty million dollars ($230,000,000) (the “SpinCo Retained Cash Amount”);

 

(x)             all issued and outstanding capital stock or other equity interests held by Parent or its Subsidiaries in any Person other than the Transferred Entities;

 

(xi)            notwithstanding any other provision of this Section 2.2, any and all Tax Assets allocated to Parent or any member of the Parent Group pursuant to the Tax Matters Agreement; and

 

(xii)           any and all Assets set forth on Schedule 2.2(b)(xii).

 

2.3            SpinCo Liabilities; Parent Liabilities.

 

(a)            SpinCo Liabilities. For the purposes of this Agreement, “SpinCo Liabilities” shall mean the following Liabilities of either Party or any of the members of its Group (without duplication):

 

(i)             all Liabilities included or reflected as liabilities or obligations of SpinCo or the members of the SpinCo Group on the SpinCo Balance Sheet, subject to any discharge of such Liabilities subsequent to the date of the SpinCo Balance Sheet; provided that the amounts set forth on the SpinCo Balance Sheet with respect to any Liabilities shall not be treated as minimum amounts or limitations on the amount of such Liabilities that are included in the definition of SpinCo Liabilities pursuant to this clause (i);

 

(ii)            all Liabilities as of the Effective Time that are of a nature or type that would have resulted in such Liabilities being included or reflected as liabilities or obligations of SpinCo or the members of the SpinCo Group on a pro forma combined balance sheet of the SpinCo Group or any notes or subledgers thereto as of the Effective Time (were such balance sheet, notes and subledgers to be prepared on a basis consistent with the determination of the Liabilities included on the SpinCo Balance Sheet), it being understood that (x) the SpinCo Balance Sheet shall be used to determine the types of, and methodologies used to determine, those Liabilities that are included in the definition of SpinCo Liabilities pursuant to this clause (ii); and (y) the amounts set forth on the SpinCo Balance Sheet with respect to any Liabilities shall not be treated as minimum amounts or limitations on the amount of such Liabilities that are included in the definition of SpinCo Liabilities pursuant to this clause (ii);

 

 

(iii)            all Liabilities, including any Environmental Liabilities to the extent relating to, arising out of or resulting from (x) the SpinCo Business as conducted at any time prior to, at or after the Effective Time (whether or not such Liabilities cease being contingent, mature, become known, are asserted or foreseen, or accrue, in each case before, at or after the Effective Time) by either Party or any of its current or former Subsidiaries or (y) any SpinCo Asset;

 

(iv)            all Liabilities relating to, arising out of or resulting from any of the terminated, divested or discontinued business, operations and activities of the generic pharmaceuticals and sterile injectables businesses of Parent, including those set forth on Schedule 2.3(a)(iv);

 

(v)            any and all Liabilities of either Party or any of the members of its Group as of the Effective Time that are expressly provided by this Agreement or any Ancillary Agreement (or the Schedules hereto or thereto) as Liabilities to be assumed by SpinCo or any other member of the SpinCo Group, and all agreements, obligations and Liabilities of any member of the SpinCo Group under this Agreement or any of the Ancillary Agreements;

 

(vi)            all Liabilities to the extent relating to, arising out of or resulting from (and only such portion relating to, arising out of or resulting from) the SpinCo Contracts, the SpinCo Intellectual Property Rights, the SpinCo IT Assets, the SpinCo Technology, the SpinCo Permits, the SpinCo Real Property or the SpinCo Financing Arrangements;

 

(vii)           any and all Liabilities set forth on Schedule 2.3(a)(vii); and

 

(viii)          all Liabilities arising out of claims made by any Third Party (including Parent’s or SpinCo’s respective directors, officers, shareholders/stockholders, employees and agents) against any member of the Parent Group or the SpinCo Group to the extent relating to, arising out of or resulting from (and only such portion relating to, arising out of or resulting from) (x) the SpinCo Business (including any member of the Parent Group’s management, oversight, supervision or operation of the SpinCo Business, the SpinCo Assets or the SpinCo Liabilities prior to the Effective Time), (y) any SpinCo Asset or (z) the other businesses, operations, activities or Liabilities of SpinCo referred to in clauses (i) through (ix) of this Section 2.3(a);

 

provided that, notwithstanding the foregoing, the Parties hereby agree that (i) any Liabilities of any member of the Parent Group pursuant to the Ancillary Agreements shall not be SpinCo Liabilities but instead shall be Parent Liabilities and (ii) (A) while a single Liability may fall within more than one of clauses (i) through (viii) in this Section 2.3(a), such fact does not imply that (x) such Liability shall be transferred more than once or (y) any duplication of such Liability is required, and (B) the SpinCo Liabilities shall not in any event include any Liability referred to in clauses (i) through (iii) of Section 2.3(b).

 

 

(b)            Parent Liabilities. For the purposes of this Agreement, “Parent Liabilities” shall mean (without duplication):

 

(i)             all Liabilities of either Party or the members of its Group as of the Effective Time, in each case that are not SpinCo Liabilities, including all Liabilities set forth on Schedule 2.3(b); and

 

(ii)            all Liabilities arising out of claims made by any Third Party (including Parent’s or SpinCo’s respective directors, officers, shareholders/stockholders, employees and agents) against any member of the Parent Group or the SpinCo Group to the extent relating to, arising out of or resulting from (and only such portion relating to, arising out of or resulting from) the Parent Business or the Parent Assets;

 

provided that, notwithstanding the foregoing, the Parties hereby agree that any Liabilities of any member of the SpinCo Group pursuant to the Ancillary Agreements shall not be Parent Liabilities but instead shall be SpinCo Liabilities.

 

2.4            Approvals and Notifications.

 

(a)            Approvals and Notifications for SpinCo Assets and Liabilities. To the extent that the contribution, transfer, conveyance or assignment of any SpinCo Asset, the assumption of any SpinCo Liability, the Separation, or the Redemption requires any Approvals or Notifications, the Parties shall use their commercially reasonable efforts, which shall include the actions set forth on Schedule 2.4(a), to obtain or make such Approvals or Notifications as soon as reasonably practicable; provided, however, that, except to the extent expressly provided in this Agreement or any of the Ancillary Agreements or as otherwise agreed between Parent and SpinCo, neither Parent, SpinCo nor any member of their respective Groups shall be obligated to contribute capital or pay any consideration in any form (including providing any letter of credit, guaranty or other financial accommodation) to any Person in order to obtain or make such Approvals or Notifications.

 

(b)            Delayed SpinCo Transfers. Notwithstanding anything to the contrary in Section 2.1 or in any Ancillary Agreement, if and to the extent that the valid, complete and perfected contribution, transfer, conveyance or assignment to the SpinCo Group of any SpinCo Asset or assumption by the SpinCo Group of any SpinCo Liability in connection with the Separation or the Redemption, including those SpinCo Assets or SpinCo Liabilities set forth on Schedule 2.4(b), would be a violation of applicable Law or require any Approval or Notification that has not been obtained or made at or prior to the Effective Time then, unless the Parties shall otherwise mutually determine, the contribution, transfer, conveyance or assignment to the SpinCo Group of such SpinCo Assets or the assumption by the SpinCo Group of such SpinCo Liabilities, as the case may be, shall be automatically deemed deferred and any such purported contribution, transfer, conveyance assignment or assumption shall be null and void until such time as all legal impediments are removed or such Approval or Notification has been obtained or made. Notwithstanding the foregoing, any such SpinCo Assets or SpinCo Liabilities shall continue to constitute SpinCo Assets and SpinCo Liabilities for all other purposes of this Agreement.

 

 

(c)            Treatment of Delayed SpinCo Assets and Delayed SpinCo Liabilities. If any contribution, transfer, conveyance or assignment of any SpinCo Asset (or a portion thereof) or any assumption of any SpinCo Liability (or a portion thereof) intended to be contributed, transferred, conveyed, assigned or assumed hereunder, as the case may be, is not consummated at or prior to the Effective Time, whether as a result of the provisions of Section 2.4(b) or for any other reason (any such SpinCo Asset (or a portion thereof), a “Delayed SpinCo Asset” and any such SpinCo Liability (or a portion thereof), a “Delayed SpinCo Liability”), then, insofar as reasonably possible and subject to applicable Law, the member of the Parent Group retaining such Delayed SpinCo Asset or such Delayed SpinCo Liability, as the case may be, shall thereafter hold such Delayed SpinCo Asset or Delayed SpinCo Liability, as the case may be, for the use and benefit (or the performance and obligations, in the case of a Liability) of the member of the SpinCo Group entitled thereto or obligated therefor (at the expense of the member of the SpinCo Group entitled thereto or obligated therefor). In addition, the member of the Parent Group retaining such Delayed SpinCo Asset or such Delayed SpinCo Liability shall, insofar as reasonably possible and to the extent permitted by applicable Law, treat such Delayed SpinCo Asset or Delayed SpinCo Liability in the ordinary course of business in accordance with SpinCo Group past practice and take such other actions as may be reasonably requested by the member of the SpinCo Group to whom such Delayed SpinCo Asset is to be contributed, transferred, conveyed or assigned, or which will assume such Delayed SpinCo Liability, as the case may be, in order to place such member of the SpinCo Group in a substantially similar position as if such Delayed SpinCo Asset or Delayed SpinCo Liability had been so contributed transferred, conveyed, assigned or assumed as contemplated hereby and so that all the benefits and burdens relating to such Delayed SpinCo Asset or Delayed SpinCo Liability, as the case may be, including use, risk of loss, potential for gain, and dominion, control and command over such Delayed SpinCo Asset or Delayed SpinCo Liability, as the case may be, and all costs and expenses related thereto, shall inure from and after the Effective Time to the SpinCo Group. Except as otherwise required by applicable Law, determined by Parent in its reasonable discretion, or required pursuant to a Final Determination, each of Parent and SpinCo shall, and shall cause the members of its Group to, (i) treat for all Tax purposes (x) any Delayed SpinCo Asset as an Asset owned by the Party entitled to such Delayed SpinCo Asset, and (y) any Delayed SpinCo Liability as a Liability of the Party intended to be responsible for such Delayed SpinCo Liability, in each case not later than the Effective Time, and (ii) neither report nor take any Tax position (on a Tax Return or otherwise) inconsistent with such treatment.

 

(d)            Transfer of Delayed SpinCo Assets and Delayed SpinCo Liabilities. If and when the Approvals or Notifications, the absence of which caused the deferral of the contribution, transfer, conveyance or assignment of any Delayed SpinCo Asset or the deferral of assumption of any Delayed SpinCo Liability, are obtained or made, and, if and when any other legal impediments to the contribution, transfer, conveyance or assignment of any Delayed SpinCo Asset or the assumption of any Delayed SpinCo Liability have been removed, the transfer or assignment of the applicable Delayed SpinCo Asset or the assumption of the applicable Delayed SpinCo Liability, as the case may be, shall be effected in accordance with the terms of this Agreement and/or the applicable Ancillary Agreement.

 

 

(e)            Costs for Delayed SpinCo Assets and Delayed SpinCo Liabilities. Any member of the Parent Group retaining a Delayed SpinCo Asset or Delayed SpinCo Liability due to the deferral of the contribution, transfer, conveyance or assignment of such Delayed SpinCo Asset or the deferral of the assumption of such Delayed SpinCo Liability, as the case may be, shall not be obligated, in connection with the foregoing, to expend any money unless the necessary funds are advanced (or otherwise made available) by SpinCo or the member of the SpinCo Group entitled to the Delayed SpinCo Asset or obligated with respect to the Delayed SpinCo Liability, other than reasonable out-of-pocket expenses, attorneys’ fees and recording or similar fees, all of which shall be promptly reimbursed by SpinCo or the member of the SpinCo Group entitled to such Delayed SpinCo Asset or obligated with respect to such Delayed SpinCo Liability (but the SpinCo Group shall not be required to advance such funds prior to payment by the Parent Group); provided, however, that the Parent Group shall use its commercially reasonable efforts to provide the SpinCo Group with prior notice of any known or anticipated potential loss or diminution of value of any Delayed SpinCo Asset and to afford the SpinCo Group a commercially reasonable opportunity to take action to prevent such loss or diminution in value.

 

(f)            Approvals and Notifications for Parent Assets. To the extent that the contribution, transfer, conveyance or assignment of any Parent Asset, the assumption of any Parent Liability, the Separation or the Redemption requires any Approvals or Notifications, the Parties shall use their commercially reasonable efforts to obtain or make such Approvals or Notifications as soon as reasonably practicable; provided, however, that, except to the extent expressly provided in this Agreement or any of the Ancillary Agreements or as otherwise agreed between Parent and SpinCo, neither Parent, SpinCo nor any member of their respective Groups shall be obligated to contribute capital or pay any consideration in any form (including providing any letter of credit, guaranty or other financial accommodation) to any Person in order to obtain or make such Approvals or Notifications.

 

(g)            Delayed Parent Transfers. Notwithstanding anything to the contrary in Section 2.1 or in any Ancillary Agreement, if and to the extent that the valid, complete and perfected contribution, transfer, conveyance or assignment to the Parent Group of any Parent Asset or assumption by the Parent Group of any Parent Liability in connection with the Separation or the Redemption would be a violation of applicable Law or require any Approval or Notification that has not been obtained or made at or prior to the Effective Time then, unless the Parties shall otherwise mutually determine, the contribution, transfer, conveyance or assignment to the Parent Group of such Parent Assets or the assumption by the Parent Group of such Parent Liabilities, as the case may be, shall be automatically deemed deferred and any such purported contribution, transfer, conveyance, assignment or assumption shall be null and void until such time as all legal impediments are removed or such Approval or Notification has been obtained or made. Notwithstanding the foregoing, any such Parent Assets or Parent Liabilities shall continue to constitute Parent Assets and Parent Liabilities for all other purposes of this Agreement.

 

 

(h)            Treatment of Delayed Parent Assets and Delayed Parent Liabilities. If any contribution, transfer, conveyance or assignment of any Parent Asset (or a portion thereof) or any assumption of any Parent Liability (or a portion thereof) intended to be contributed, transferred, conveyed, assigned or assumed hereunder, as the case may be, is not consummated at or prior to the Effective Time whether as a result of the provisions of Section 2.4(g) or for any other reason (any such Parent Asset (or a portion thereof), a “Delayed Parent Asset” and any such Parent Liability (or a portion thereof), a “Delayed Parent Liability”), then, insofar as reasonably possible and subject to applicable Law, the member of the SpinCo Group retaining such Delayed Parent Asset or such Delayed Parent Liability, as the case may be, shall thereafter hold such Delayed Parent Asset or Delayed Parent Liability, as the case may be, for the use and benefit (or the performance and obligation, in the case of a Liability) of the member of the Parent Group entitled thereto or obligated therefor (at the expense of the member of the Parent Group entitled thereto or obligated therefor). In addition, the member of the SpinCo Group retaining such Delayed Parent Asset or such Delayed Parent Liability shall, insofar as reasonably possible and to the extent permitted by applicable Law, treat such Delayed Parent Asset or Delayed Parent Liability in the ordinary course of business in accordance with Parent Group past practice and take such other actions as may be reasonably requested by the member of the Parent Group to which such Delayed Parent Asset is to be contributed, transferred, conveyed or assigned, or which will assume such Delayed Parent Liability, as the case may be, in order to place such member of the Parent Group in a substantially similar position as if such Delayed Parent Asset or Delayed Parent Liability had been so contributed, transferred, conveyed, assigned or assumed and so that all the benefits and burdens relating to such Delayed Parent Asset or Delayed Parent Liability, as the case may be, including use, risk of loss, potential for gain, and dominion, control and command over such Delayed Parent Asset or Delayed Parent Liability, as the case may be, and all costs and expenses related thereto, shall inure from and after the Effective Time to the Parent Group. Except as otherwise required by applicable Law, determined by Parent in its reasonable discretion, or required pursuant to a Final Determination, each of Parent and SpinCo shall, and shall cause the members of its Group to, (i) treat for all Tax purposes (x) any Delayed Parent Asset as an Asset owned by the Party entitled to such Delayed Parent Asset, and (y) any Delayed Parent Liability as a Liability of the Party intended to be responsible for such Delayed Parent Liability, in each case not later than the Effective Time, and (ii) neither report nor take any Tax position (on a Tax Return or otherwise) inconsistent with such treatment.

 

(i)            Transfer of Delayed Parent Assets and Delayed Parent Liabilities. If and when the Approvals or Notifications, the absence of which caused the deferral of the contribution, transfer, conveyance or assignment of any Delayed Parent Asset or the deferral of assumption of any Delayed Parent Liability, are obtained or made, and, if and when any other legal impediments to the contribution, transfer, conveyance or assignment of any Delayed Parent Asset or the assumption of any Delayed Parent Liability have been removed, the contribution, transfer, conveyance or assignment of the applicable Delayed Parent Asset or the assumption of the applicable Delayed Parent Liability, as the case may be, shall be effected in accordance with the terms of this Agreement and/or the applicable Ancillary Agreement.

 

(j)            Costs for Delayed Parent Assets and Delayed Parent Liabilities. Any member of the SpinCo Group retaining a Delayed Parent Asset or Delayed Parent Liability due to the deferral of the contribution, transfer, conveyance or assignment of such Delayed Parent Asset or the deferral of the assumption of such Delayed Parent Liability, as the case may be, shall not be obligated, in connection with the foregoing, to expend any money unless the necessary funds are advanced (or otherwise made available) by Parent or the member of the Parent Group entitled to the Delayed Parent Asset or obligated with respect to the Delayed Parent Liability, other than reasonable out-of-pocket expenses, attorneys’ fees and recording or similar fees, all of which shall be promptly reimbursed by Parent or the member of the Parent Group entitled to such Delayed Parent Asset or Delayed Parent Liability (but the Parent Group shall not be required to advance such funds prior to payment by the SpinCo Group); provided, however, that the SpinCo Group shall use its commercially reasonable efforts to provide the Parent Group with prior notice of any known or anticipated potential diminution of value of any Delayed Parent Asset and to afford the Parent Group a commercially reasonable opportunity to take action to prevent such loss or diminution in value.

 

 

2.5            Novation of Liabilities.

 

(a)            Novation of SpinCo Liabilities.

 

(i)             Each of Parent and SpinCo, at the request of the other, shall use its commercially reasonable efforts to obtain, or to cause to be obtained, as soon as reasonably practicable, any consent, substitution, approval or amendment required to novate or assign all SpinCo Liabilities and obtain in writing the unconditional release of each member of the Parent Group that is a party to or otherwise obligated under any such arrangements, to the extent permitted by applicable Law and effective as of the Effective Time, so that, in any such case, the members of the SpinCo Group shall be solely responsible for such SpinCo Liabilities; provided, however, that, except as otherwise expressly provided in this Agreement or any of the Ancillary Agreements, neither Parent, SpinCo nor any member of their respective Groups shall be obligated to contribute any capital or pay any consideration in any form (including providing any letter of credit, guaranty or other financial accommodation) to any Third Party from whom any such consent, substitution, approval, amendment or release is requested. To the extent such substitution contemplated by the first sentence of this Section 2.5(a)(i) has been effected, the members of the Parent Group shall, from and after the Effective Time, cease to have any obligation whatsoever arising from or in connection with such SpinCo Liabilities.

 

(ii)            If Parent or SpinCo is unable to obtain, or to cause to be obtained, any such required consent, substitution, approval, amendment or release and the applicable member of the Parent Group continues to be bound by such agreement, lease, license or other obligation or Liability (each, an “Unreleased SpinCo Liability”), SpinCo shall, to the extent not prohibited by Law, (A) use its commercially reasonable efforts to effect such consent, substitution, approval, amendment or release as soon as practicable following the Effective Time, but in any event within six (6) months thereof, and (B) as indemnitor, guarantor, agent or subcontractor for such member of the Parent Group, as the case may be, (x) pay, perform and discharge fully all the obligations or other Liabilities of such member of the Parent Group that constitute Unreleased SpinCo Liabilities from and after the Effective Time and (y) use its commercially reasonable efforts to effect such payment, performance or discharge prior to any demand for such payment, performance or discharge is permitted to be made by the obligee thereunder on any member of the Parent Group. If and when any such consent, substitution, approval, amendment or release shall be obtained or the Unreleased SpinCo Liabilities shall otherwise become assignable or able to be novated, the applicable member of the Parent Group shall promptly assign, or cause to be assigned, and SpinCo or the applicable SpinCo Group member shall assume, such Unreleased SpinCo Liabilities without exchange of further consideration.

 

 

(b)            Novation of Parent Liabilities.

 

(i)             Each of Parent and SpinCo, at the request of the other, shall use its commercially reasonable efforts to obtain, or to cause to be obtained, as soon as reasonably practicable, any consent, substitution, approval or amendment required to novate or assign all Parent Liabilities and obtain in writing the unconditional release of each member of the SpinCo Group that is a party to or otherwise obligated under any such arrangements, to the extent permitted by applicable Law and effective as of the Effective Time, so that, in any such case, the members of the Parent Group shall be solely responsible for such Parent Liabilities; provided, however, that, except as otherwise expressly provided in this Agreement or any of the Ancillary Agreements, neither Parent, SpinCo or any member of their respective Groups shall be obligated to contribute any capital or pay any consideration in any form (including providing any letter of credit, guaranty or other financial accommodation) to any Third Party from whom any such consent, substitution, approval, amendment or release is requested. To the extent such substitution contemplated by the first sentence of this Section 2.5(b)(i) has been effected, the members of the SpinCo Group shall, from and after the Effective Time, cease to have any obligation whatsoever arising from or in connection with such Parent Liabilities.

 

(ii)            If Parent or SpinCo is unable to obtain, or to cause to be obtained, any such required consent, substitution, approval, amendment or release and the applicable member of the SpinCo Group continues to be bound by such agreement, lease, license or other obligation or Liability (each, an “Unreleased Parent Liability”), Parent shall, to the extent not prohibited by Law, (A) use its commercially reasonable efforts to effect such consent, substitution, approval, amendment or release as soon as practicable following the Effective Time, but in any event within six (6) months thereof, and (B) as indemnitor, guarantor, agent or subcontractor for such member of the SpinCo Group, as the case may be, (x) pay, perform and discharge fully all the obligations or other Liabilities of such member of the SpinCo Group that constitute Unreleased Parent Liabilities from and after the Effective Time and (y) use its commercially reasonable efforts to effect such payment, performance or discharge prior to any demand for such payment, performance or discharge is permitted to be made by the obligee thereunder on any member of the SpinCo Group. If and when any such consent, substitution, approval, amendment or release shall be obtained or the Unreleased Parent Liabilities shall otherwise become assignable or able to be novated, the applicable member of the SpinCo Group shall promptly assign, or cause to be assigned, and Parent or the applicable Parent Group member shall assume, such Unreleased Parent Liabilities without exchange of further consideration.

 

2.6            Release of Guarantees. In furtherance of, and not in limitation of, the obligations set forth in Section 2.5:

 

(a)            At or prior to the Effective Time or as soon as practicable thereafter, each of Parent and SpinCo shall, at the request of the other Party and with the reasonable cooperation of such other Party and the applicable member(s) of such other Party’s Group, use commercially reasonable efforts to (i) have any member(s) of the Parent Group removed as guarantor of or obligor for any SpinCo Liability, including the obligations set forth on Schedule 2.6(a)(i), to the extent that such guarantee or obligation relates to SpinCo Liabilities, including the removal of any Security Interest on or in any Parent Asset that may serve as collateral or security for any such SpinCo Liability; and (ii) have any member(s) of the SpinCo Group removed as guarantor of or obligor for any Parent Liability, including the obligations set forth on Schedule 2.6(a)(ii) to the extent that such guarantee or obligation relates to Parent Liabilities, including the removal of any Security Interest on or in any SpinCo Asset that may serve as collateral or security for any such Parent Liability.

 

 

(b)            To the extent required to obtain a release from a guarantee of:

 

(i)             any member of the Parent Group, SpinCo shall (or shall cause a member of the SpinCo Group to) execute a guarantee agreement in the form of the existing guarantee or such other form as is agreed to by the relevant parties to such guarantee agreement, which agreement shall include the removal of any Security Interest on or in any Parent Asset that may serve as collateral or security for any SpinCo Liability, except to the extent that such existing guarantee contains representations, covenants or other terms or provisions either (x) with which SpinCo (or any member of the SpinCo Group) would be reasonably unable to comply or (y) which SpinCo (or any member of the SpinCo Group) would not reasonably be able to avoid breaching; and

 

(ii)            any member of the SpinCo Group, Parent shall (or shall cause a member of the Parent Group to) execute a guarantee agreement in the form of the existing guarantee or such other form as is agreed to by the relevant parties to such guarantee agreement, which agreement shall include the removal of any Security Interest on or in any SpinCo Asset that may serve as collateral or security for any Parent Liability, except to the extent that such existing guarantee contains representations, covenants or other terms or provisions either (x) with which Parent (or any member of the Parent Group) would be reasonably unable to comply or (y) which Parent (or any member of the Parent Group) would not reasonably be able to avoid breaching.

 

(c)            If Parent or SpinCo is unable to obtain, or to cause to be obtained, any such required removal or release as set forth in clauses (a) and (b) of this Section 2.6, (i) the Party or the relevant member of its Group that has assumed the Liability with respect to such guarantee shall indemnify, defend and hold harmless the guarantor or obligor against or from any Liability arising from or relating thereto in accordance with the provisions of Article IV and shall, as agent or subcontractor for such guarantor or obligor, pay, perform and discharge fully all the obligations or other Liabilities of such guarantor or obligor thereunder; and (ii) each of Parent and SpinCo, on behalf of itself and the other members of their respective Groups, agrees not to renew or extend the term of, increase any obligations under, or transfer to a Third Party, any loan, guarantee, lease, contract or other obligation for which the other Party or a member of its Group is or may be liable unless all obligations of such other Party and the members of such other Party’s Group with respect thereto are thereupon terminated by documentation satisfactory in form and substance to such other Party.

 

 

2.7            Termination of Agreements.

 

(a)            Except as set forth in Section 2.7(b), in furtherance of the releases and other provisions of Section 4.1, SpinCo and each member of the SpinCo Group, on the one hand, and Parent and each member of the Parent Group, on the other hand, hereby terminate any and all agreements, arrangements, commitments or understandings, whether or not in writing, between or among SpinCo and/or any member of the SpinCo Group, on the one hand, and Parent and/or any member of the Parent Group, on the other hand, effective as of the Effective Time. No such terminated agreement, arrangement, commitment or understanding (including any provision thereof which purports to survive termination) shall be of any further force or effect after the Effective Time. Each Party shall, at the reasonable request of the other Party, take, or cause to be taken, such other actions as may be necessary to effect the foregoing.

 

(b)            The provisions of Section 2.7(a) shall not apply to any of the following agreements, arrangements, commitments or understandings (or to any of the provisions thereof): (i) this Agreement and the Ancillary Agreements (and each other agreement or instrument expressly contemplated by this Agreement or any Ancillary Agreement to be entered into by any of the Parties or any of the members of their respective Groups or to be continued from and after the Effective Time); (ii) any agreements, arrangements, commitments or understandings listed or described on Schedule 2.7(b)(ii), which shall be treated as described therein; (iii) any agreements, arrangements, commitments or understandings to which any Third Party is a party; (iv) any intercompany accounts payable or accounts receivable accrued as of the Effective Time that are reflected in the books and records of the Parties or otherwise documented in writing in accordance with past practices, which shall be settled in the manner contemplated by Section 2.7(c); (v) any agreements, arrangements, commitments or understandings to which any non-wholly owned Subsidiary of Parent or SpinCo, as the case may be, is a party (it being understood that directors’ qualifying shares or similar interests will be disregarded for purposes of determining whether a Subsidiary is wholly owned); (vi) any Shared Contracts; (vii) any agreements, arrangements, commitments or understandings relating to the purchase and sale of products in the ordinary course of business between any member of the SpinCo Group and any member of the Parent Group; and (viii) any agreements, arrangements, commitments or understandings among (i) two or more members of the Parent Group or the SpinCo Group, on the one hand, and one member of the SpinCo Group or the Parent Group, on the other hand (the “Removed Party”), it being understood that the members of the Removed Party shall be automatically removed from such agreements, arrangements, commitments or understandings at the Effective Time or (ii) two or more members of the Parent Group, on the one hand, and two or more members of the SpinCo Group, on the other hand, it being understood that any such agreements, arrangements, commitments or understandings will be automatically bifurcated at the Effective Time such that there is one agreement, arrangement, commitment or understanding applicable to the Parent Group and one agreement, arrangement, commitment or understanding applicable to the SpinCo Group.

 

(c)            All of the intercompany accounts receivable and accounts payable (except for intercompany accounts arising under the Ancillary Agreements or the agreements, arrangements, commitments or understandings listed on Schedule 2.7(b)(ii)) between any member of the Parent Group, on the one hand, and any member of the SpinCo Group, on the other hand, shall, prior to or as promptly as practicable following the Effective Time, be repaid, settled or otherwise eliminated by means of cash payments, a dividend, capital contribution, a combination of the foregoing, or otherwise as determined by Parent in its sole and absolute discretion. Any such intercompany accounts that are settled after the Effective Time, but in connection with the Separation and the Redemption shall be deemed for purposes of this Agreement to have been settled as of immediately prior to the Effective Time.

 

 

2.8            Treatment of Shared Contracts.

 

(a)            Subject to applicable Law and without limiting the generality of the obligations set forth in Section 2.1, unless the Parties otherwise agree or the benefits of any Contract described in this Section 2.8 are expressly conveyed to the applicable Party pursuant to this Agreement or an Ancillary Agreement, the Parties shall cause the portion of each Specified Shared Contract relating to the Parent Business to be assigned to the applicable member(s) of the Parent Group and the portion related to the SpinCo Business to be assigned to the applicable member(s) of the SpinCo Group, if so assignable, or shall cause the Specified Shared Contract to be appropriately amended or otherwise modified prior to, on or after the Effective Time, so that each Party or the other members of its Group shall, as of the Effective Time, be entitled to the rights and benefits, and shall assume the related portion of any Liabilities, inuring to its respective businesses; provided, however, that (i) in no event shall any member of any Group be required to assign (or amend) any Specified Shared Contract in its entirety or to assign (or amend) a portion of any Specified Shared Contract which is not assignable (or cannot be amended) by its terms (including any terms imposing consents or conditions on an assignment where such consents or conditions have not been obtained or fulfilled) and (ii) if any Specified Shared Contract cannot be so partially assigned by its terms or otherwise, or cannot be amended or if such assignment or amendment would impair the benefit the parties thereto derive from such Specified Shared Contract, then the Parties shall, and shall cause each of the members of their respective Groups to, take such other reasonable and permissible actions (including by providing prompt notice to the other Party with respect to any relevant claim of Liability or other relevant matters arising in connection with a Specified Shared Contract so as to allow such other Party the ability to exercise any applicable rights under such Specified Shared Contract) to cause a member of the SpinCo Group or the Parent Group, as the case may be, to receive the rights and benefits of that portion of each Specified Shared Contract that relates to the SpinCo Business or the Parent Business, as the case may be (in each case, to the extent so related), as if such Specified Shared Contract had been assigned to a member of the applicable Group (or amended to allow a member of the applicable Group to exercise applicable rights under such Specified Shared Contract) pursuant to this Section 2.8, and to bear the burden of the corresponding Liabilities (including any Liabilities that may arise by reason of such arrangement), as if such Liabilities had been assumed by a member of the applicable Group pursuant to this Section 2.8.

 

(b)            Except as otherwise required by applicable Law, determined by Parent in its reasonable discretion, or required pursuant to a Final Determination, each of Parent and SpinCo shall, and shall cause the members of its Group to, (i) treat for all Tax purposes the portion of each Specified Shared Contract inuring to its respective businesses as an Asset owned by, and/or a Liability of, as applicable, such Party, or the members of its Group, as applicable, not later than the Effective Time (or such earlier time as provided under a Transfer Document), and (ii) neither report nor take any Tax position (on a Tax Return or otherwise) inconsistent with such treatment.

 

 

(c)            Nothing in this Section 2.8 shall require any member of any Group to make any non-de minimis payment (except to the extent advanced, assumed or agreed in advance to be reimbursed by any member of the other Group), incur any non-de minimis obligation or grant any non-de minimis concession for the benefit of any member of any other Group in order to effect any transaction contemplated by this Section 2.8.

 

2.9            Bank Accounts; Cash Balances.

 

(a)            Each Party agrees to take, or cause the members of its Group to take, at or prior to the Effective Time (or such earlier time as the Parties may agree), all actions necessary to amend all Contracts governing each bank and brokerage account owned by SpinCo or any other member of the SpinCo Group (collectively, the “SpinCo Accounts”) and all Contracts governing each bank or brokerage account owned by Parent or any other member of the Parent Group (collectively, the “Parent Accounts”) so that each such SpinCo Account and Parent Account, if currently linked (whether by automatic withdrawal, automatic deposit or any other authorization to transfer funds from or to) to any Parent Account or SpinCo Account, respectively, is de-linked from such Parent Account or SpinCo Account, respectively.

 

(b)            It is intended that, following consummation of the actions contemplated by Section 2.9(a), there will be in place a cash management process pursuant to which the SpinCo Accounts will be managed and funds collected will be transferred into one (1) or more accounts maintained by SpinCo or a member of the SpinCo Group.

 

(c)            It is intended that, following consummation of the actions contemplated by Section 2.9(a), there will continue to be in place a cash management process pursuant to which the Parent Accounts will be managed and funds collected will be transferred into one (1) or more accounts maintained by Parent or a member of the Parent Group.

 

(d)            With respect to any outstanding checks issued or payments initiated by Parent, SpinCo, or any of the members of their respective Groups prior to the Effective Time, such outstanding checks and payments shall be honored following the Effective Time by the Person or Group owning the account on which the check is drawn or from which the payment was initiated, respectively.

 

(e)            As between Parent and SpinCo (and the members of their respective Groups), all payments made and reimbursements, credits, returns, or rebates received after the Effective Time by either Party (or member of its Group) that relate to a business, Asset or Liability of the other Party (or member of its Group), shall be held by such Party in trust for the use and benefit (or the performance and obligation, in the case of a Liability) of the Party entitled thereto or obligated therefor and, promptly following receipt by such Party of any such payment or reimbursement, credit, return or rebate such Party shall pay over, or shall cause the applicable member of its Group to pay over to the other Party the amount of such payment or reimbursement, credit, return or rebate without right of set-off.

 

2.10          Ancillary Agreements. Effective at or prior to the Effective Time, each of Parent and SpinCo will, or will cause the applicable members of their Groups to, execute and deliver all Ancillary Agreements to which it is a party.

 

 

2.11          Disclaimer of Representations and Warranties. EACH OF PARENT (ON BEHALF OF ITSELF AND EACH MEMBER OF THE PARENT GROUP) AND SPINCO (ON BEHALF OF ITSELF AND EACH MEMBER OF THE SPINCO GROUP) UNDERSTANDS AND AGREES THAT, EXCEPT AS EXPRESSLY SET FORTH HEREIN OR IN ANY ANCILLARY AGREEMENT, NO PARTY TO THIS AGREEMENT, ANY ANCILLARY AGREEMENT OR ANY OTHER AGREEMENT OR DOCUMENT CONTEMPLATED BY THIS AGREEMENT, ANY ANCILLARY AGREEMENT OR OTHERWISE, IS REPRESENTING OR WARRANTING IN ANY WAY AS TO: (A) THE ASSETS, BUSINESSES OR LIABILITIES TRANSFERRED OR ASSUMED AS CONTEMPLATED HEREBY OR THEREBY, (B) ANY CONSENTS, NOTIFICATIONS OR APPROVALS REQUIRED IN CONNECTION HEREWITH OR THEREWITH, (C) THE VALUE OR FREEDOM FROM ANY SECURITY INTERESTS OF, OR ANY OTHER MATTER CONCERNING, ANY ASSETS OR LIABILITIES OF SUCH PARTY, (D) THE ABSENCE OF ANY DEFENSES OR RIGHT OF SETOFF OR FREEDOM FROM COUNTERCLAIM WITH RESPECT TO ANY CLAIM OR OTHER ASSET, INCLUDING ANY ACCOUNTS RECEIVABLE, OF ANY PARTY, OR (E) THE LEGAL SUFFICIENCY OF ANY ASSIGNMENT, DOCUMENT OR INSTRUMENT DELIVERED HEREUNDER OR THEREUNDER TO CONVEY TITLE TO ANY ASSET OR THING OF VALUE UPON THE EXECUTION, DELIVERY AND FILING HEREOF OR THEREOF. EXCEPT AS MAY EXPRESSLY BE SET FORTH HEREIN OR IN ANY ANCILLARY AGREEMENT, ALL SUCH ASSETS ARE BEING TRANSFERRED ON AN “AS IS,” “WHERE IS” BASIS (AND, IN THE CASE OF ANY REAL PROPERTY, BY MEANS OF A QUITCLAIM OR SIMILAR FORM OF DEED OR CONVEYANCE) AND THE RESPECTIVE TRANSFEREES SHALL BEAR THE ECONOMIC AND LEGAL RISKS THAT (I) ANY CONVEYANCE WILL PROVE TO BE INSUFFICIENT TO VEST IN THE TRANSFEREE GOOD AND MARKETABLE TITLE, FREE AND CLEAR OF ANY SECURITY INTEREST, AND (II) ANY NECESSARY APPROVALS OR NOTIFICATIONS ARE NOT OBTAINED OR MADE OR THAT ANY REQUIREMENTS OF LAWS OR JUDGMENTS ARE NOT COMPLIED WITH.

 

2.12          SpinCo Financing Arrangements. On July 31, 2025 and in accordance with the Separation Step Plan, certain Persons that are, as of the Effective Time, Subsidiaries of SpinCo entered into one (1) or more financing arrangements and agreements as set forth on Schedule 2.12(a) (the “SpinCo Financing Arrangements”), pursuant to which they borrowed a principal amount of one billion, two hundred million dollars ($1,200,000,000) in the form of senior secured term loans and entered into a revolving credit facility with commitments equal to one hundred fifty million dollars ($150,000,000). Parent and SpinCo agree to take all necessary actions, if any, to assure the full release and discharge of Parent and the other members of the Parent Group from all obligations pursuant to the SpinCo Financing Arrangements as of no later than the Effective Time. The Parties agree that SpinCo or another member of the SpinCo Group, as the case may be, and not Parent or any member of the Parent Group, are and shall be responsible for all costs and expenses incurred in connection with the SpinCo Financing Arrangements. Prior to the Effective Time, Parent and SpinCo shall cooperate in the preparation of any additional materials as may be necessary or advisable in furtherance of the SpinCo Financing Arrangements.

 

 

2.13          Transition Committee. As promptly as practicable after the Effective Time, the Parties shall establish a transition committee (the “Transition Committee”) that shall consist of two (2) persons appointed by each of Parent and SpinCo. The initial Transition Members are set forth on Schedule 2.13. The Transition Committee shall be responsible for monitoring and managing all matters related to any of the transactions contemplated by this Agreement or any Ancillary Agreements. The Transition Committee shall have the authority to (a) establish one or more subcommittees from time to time as it deems appropriate or as may be described in any Ancillary Agreements, with each such subcommittee comprised of one or more members of the Transition Committee or one or more employees of either Party or any member of its respective Group, and each such subcommittee having such scope of responsibility as may be determined by the Transition Committee from time to time; (b) delegate to any such subcommittee any of the powers of the Transition Committee; and (c) combine, modify the scope of responsibility of, and disband any such subcommittee; and (d) modify or reverse any such delegations. The Transition Committee shall establish general procedures for managing the responsibilities delegated to it under this Section 2.13, and may modify such procedures from time to time. All decisions by the Transition Committee or any subcommittee thereof shall be effective only if mutually agreed by both Parties. The Parties shall use the procedures set forth in Article VII to resolve any matters as to which the Transition Committee is not able to reach a decision.

 

Article III
THE REDEMPTION

 

3.1            Sole and Absolute Discretion; Cooperation.

 

(a)            Parent shall, in its sole and absolute discretion, determine the terms of the Redemption, including the form, structure and terms of any transaction(s) and/or offering(s) to effect the Redemption and the timing and conditions to the consummation of the Redemption. In addition, Parent may, at any time and from time to time until the consummation of the Redemption, modify or change the terms of the Redemption in accordance with the Articles of Association, the Parent Preferred Share Terms and the Companies Act 2014, including by accelerating or delaying the timing of the consummation of all or part of the Redemption. Nothing shall in any way limit Parent’s right to terminate this Agreement or the Redemption as set forth in Article IX or alter the consequences of any such termination from those specified in Article IX.

 

(b)            SpinCo shall cooperate with Parent to accomplish the Redemption and shall, at Parent’s direction, promptly take any and all actions, necessary or desirable to effect the Redemption. Parent shall select any investment bank or manager in connection with the Redemption, if applicable, as well as any financial printer, escrow, solicitation and/or exchange agent and financial, legal, accounting and other advisors for Parent. SpinCo and Parent, as the case may be, will provide to the Redemption Agent any information reasonably required in order to complete the Redemption.

 

 

3.2            Actions Prior to the Redemption. Prior to the Effective Time and subject to the terms and conditions set forth herein, the Parties shall have taken, or shall take or cause to be taken, the following actions in connection with the Redemption:

 

(a)            Redemption Record Date. Prior to the Redemption Date, the Parent Board shall have determined the Record Date in accordance with the Articles of Association, the Parent Preferred Share Terms and the Companies Act 2014.

 

(b)            Valuation. Prior to the Redemption Date, the Parent Board shall have received a valuation analysis with respect to the SpinCo Group from Evercore Group L.L.C. (the “Valuation Advice”) and shall have determined the SpinCo Value.

 

(c)            Availability of Information Statement and Certification Form. Prior to the Redemption Date, Parent shall have (i) caused the Information Statement (including a copy of a sample Certification Form and a Notice of Intention to Redeem) to be furnished with the SEC on a Current Report on Form 8-K of Parent and made available to the Record Holders; and (ii) requested that all Record Holders (and any Street Name Holders, as applicable) comply with the Certification Procedures (as applicable) and return a validly completed Certification Form as promptly as practicable in accordance with the terms and conditions of this Agreement.

 

(d)            Distributable Reserves Position: Prior to the Redemption Date, Parent shall have determined, in its sole and absolute discretion, that at the Effective Time, Parent would have sufficient profits available for distribution (within the meaning of the Companies Act 2014) to effect the Redemption and that the Redemption will not otherwise breach section 1082 of Companies Act 2014.

 

(e)            Closing Share Register. Prior to the Redemption Date, in accordance with section 174 of the Companies Act 2014, the Parent Board shall have closed the register of members of Parent for up to 30 days, effective as of 5:00 p.m. (United States Eastern Standard Time) on October 23, 2025 and ending on the earlier of (i) 5:00 p.m. (United States Eastern Standard Time) on November 22, 2025 or (ii) such earlier date and/or time as may be notified by Parent, and Parent shall have published a notice of the closing thereof in some newspaper circulating in the district in which the registered office of Parent is situate.

 

(f)            Approval of Redemption. Prior to the Redemption Date, the Parent Board shall have evaluated the Certification Forms returned by the Record Holders (and any Street Name Holders, as applicable) and shall have determined to complete the Redemption, subject to Section 3.3 and without limitation of Section 3.1 or Section 9.1, on the basis of such Certification Forms, the SpinCo Value and such other information as the Parent Board determined to be relevant.

 

(g)            SpinCo Certificate of Incorporation and SpinCo Bylaws. On or prior to the Redemption Date, Parent and SpinCo shall take all necessary actions so that, as of the Effective Time, the SpinCo Certificate of Incorporation and the SpinCo Bylaws shall become the certificate of incorporation and bylaws of SpinCo, respectively.

 

 

(h)            SpinCo Directors and Officers. On or prior to the Redemption Date, Parent and SpinCo shall take all necessary actions so that as of the Effective Time: (i) the directors and executive officers of SpinCo shall be those set forth in the Information Statement made available to the Record Holders prior to the Redemption Date, unless otherwise agreed by the Parties; (ii) each individual referred to in clause (i) shall have resigned from his or her position, if any, as a member of the Parent Board and/or as an executive officer of Parent; and (iii) SpinCo shall have such other officers as SpinCo shall appoint.

 

(i)            Securities Law Matters. Parent and SpinCo will prepare, and SpinCo will, to the extent required under applicable Law, file with the SEC, any such documentation and any requisite no-action letters which Parent determines are necessary or desirable to effectuate the Redemption, and Parent and SpinCo shall each use its reasonable best efforts to obtain all necessary approvals from the SEC with respect thereto as soon as practicable. Parent and SpinCo shall take all such action as may be necessary or appropriate under the securities or blue sky laws of the United States (and any comparable Laws under any foreign jurisdiction) in connection with the Redemption.

 

(j)            The Redemption Agent. Parent shall enter into a certification and redemption agent agreement and an escrow agent agreement with the Redemption Agent or otherwise provide instructions to the Redemption Agent regarding the Redemption.

 

3.3            Conditions to the Redemption.

 

(a)            The consummation of the Redemption will be subject to the satisfaction, or waiver by Parent in its sole and absolute discretion, of the following conditions:

 

(i)              The SEC shall not have notified Parent that registration under the Securities Act or the Exchange Act is or may be required in connection with the Redemption or any related transactions; and, to Parent’s knowledge, no investigations or Actions for such purposes shall have been instituted or threatened by the SEC or any other Person;

 

(ii)             The Information Statement (including a copy of a sample Certification Form and the Notice of Intention to Redeem) shall have been made available to the Record Holders;

 

(iii)            The Parent Board shall have received Certification Forms from Persons who are Qualified Shareholders (or are reasonably expected to be Qualified Shareholders upon the satisfaction of the remaining Certification Procedures other than the return of a Certification Form) holding at least 75% of outstanding Parent Preferred Shares on the Record Date (or such greater or lesser percentage as may be determined by the Parent Board in its sole and absolute discretion), and the Parent Board shall be satisfied in its sole and absolute discretion, based on factors that it determines relevant, that (i) the cash payable to Non-Qualified Shareholders pursuant to the Redemption Consideration shall not exceed any maximum amount of cash that the Parent Board may determine in its discretion that Parent will be required to pay in connection with the Redemption; (ii) the Redemption Consideration shall not exceed Parent’s profits available for distribution (within the meaning of the Companies Act 2014) at the time of the Redemption and will not otherwise cause Parent to breach section 1082 of the Companies Act 2014; and (iii) the fair market value of the Redemption Consideration per Parent Preferred Share will not exceed the nominal value of a Parent Preferred Share;

 

 

(iv)            The transfer of the SpinCo Assets (other than any Delayed SpinCo Asset) and SpinCo Liabilities (other than any Delayed SpinCo Liability) contemplated to be transferred from Parent to SpinCo on or prior to the Redemption shall have occurred as contemplated by Section 2.1, and the transfer of the Parent Assets (other than any Delayed Parent Asset) and Parent Liabilities (other than any Delayed Parent Liability) contemplated to be transferred from SpinCo to Parent on or prior to the Redemption Date shall have occurred as contemplated by Section 2.1, in each case pursuant to the Separation Step Plan and this Agreement;

 

(v)            An independent appraisal firm acceptable to Parent shall have delivered one (1) or more opinions to the Parent Board confirming the solvency and financial viability of Parent prior to the Redemption and of Parent and SpinCo after consummation of the Redemption, and such opinions shall be acceptable to Parent in form and substance in Parent’s sole discretion and such opinions shall not have been withdrawn or rescinded;

 

(vi)            Evercore shall have delivered the Valuation Advice to the Parent Board;

 

(vii)          The actions and filings necessary or appropriate under applicable U.S. federal, U.S. state or other securities Laws or blue sky laws and the rules and regulations thereunder shall have been taken or made, and, where applicable, have become effective or been accepted by the applicable Governmental Authority;

 

(viii)         Each of the Ancillary Agreements shall have been duly executed and delivered by the applicable parties thereto;

 

(ix)            No order, injunction or decree issued by any Governmental Authority of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Separation, the Redemption or any of the transactions related thereto shall be pending or in effect;

 

(x)            SpinCo shall have consummated the SpinCo Financing Arrangements in accordance with Section 2.12(a), and Parent shall be satisfied in its sole and absolute discretion that, as of the Effective Time, it shall have no Liability whatsoever under the SpinCo Financing Arrangements; and

 

(xi)            No other events or developments shall exist or shall have occurred that, in the judgment of the Parent Board, in its sole and absolute discretion, makes it inadvisable to effect the Separation, the Redemption or the transactions contemplated by this Agreement or any Ancillary Agreement.

 

(b)            The foregoing conditions are for the sole benefit of Parent and shall not give rise to or create any duty on the part of Parent or the Parent Board to waive or not waive any such condition or in any way limit Parent’s right to terminate this Agreement as set forth in Article IX or alter the consequences of any such termination from those specified in Article IX. Any determination made by the Parent Board prior to the Redemption concerning the satisfaction or waiver of any or all of the conditions set forth in Section 3.3(a) shall be conclusive and binding on the Parties.

 

 

3.4            The Redemption.

 

(a)            Subject to Section 3.3, at the Effective Time, Parent shall redeem the Parent Preferred Shares, free and clear of all liens, claims, charges, mortgages, pledges, options, licenses, sublicenses, security interests, restrictions or other encumbrances of any kind (collectively, “Encumbrances”), other than Encumbrances arising under applicable securities laws, upon which the Parent Preferred Shares shall automatically be cancelled and no longer outstanding (such transaction, together with the other transactions contemplated by this Section 3.4, the “Redemption”).

 

(b)            In consideration of the Redemption of the Parent Preferred Shares, each Record Holder shall receive the Redemption Consideration at the Effective Time.

 

(c)            The “Redemption Consideration” is the right to receive (i) the Base Proceeds, plus (ii) the Excess Proceeds (if any), in each case, subject to the satisfaction of the terms of this Agreement 3.4.

 

(d)            For the avoidance of doubt, the Redemption Consideration comprises the right as set out in Section 3.4(c) above (as distinct from the receipt of the Base Proceeds or the Excess Proceeds themselves), which is subject in all respects to the satisfaction of the terms of this Agreement, including compliance with, and satisfaction of, the Certification Procedures and subject to the provisions of this Section 3.4, and accrues and is paid and discharged in full for all purposes at the Effective Time (irrespective of when or if the Base Proceeds and/or Excess Proceeds are allocated or paid to the relevant recipient thereof), and shall constitute good and valuable consideration for the Redemption at the Effective Time (and the sole entitlement to consideration in respect of the Redemption) irrespective of whether or not the Certification Procedures are complied with and satisfied by the relevant recipient thereof, or the time that such Certification Procedures are complied with and satisfied (including if complied with and satisfied after the Pre-Redemption Notification Deadline or after the Effective Time), and any subsequent lapse or expiry of such right, due to non-compliance with, or non-satisfaction of, the Certification Procedures in the time required or otherwise, shall not in any way affect the effectiveness of the Redemption at the Effective Time or the position of such right as good and valuable consideration for the Redemption irrespective of whether or not the right comprised by the Redemption Consideration results in the person entitled to such right receiving Base Proceeds or Excess Proceeds. Entitlements to cash payments in respect of Base Proceeds or Excess Proceeds with entitlements to fractions of a cent will be rounded up or down to the nearest cent.

 

 

(e)            The “Base Proceeds” means:

 

(i)            in the case of Qualified Shareholders, the number of SpinCo Shares equal to the number of Parent Preferred Shares held of record or beneficially, as applicable, by the relevant Qualified Shareholder as of the Record Date and certified on the Certification Form multiplied by the Per Share Stock Amount, rounded down to the nearest whole number (“Initial SpinCo Allocation”); and

 

(ii)            in the case of Non-Qualified Shareholders, a cash amount equal to the number of Parent Preferred Shares held of record or beneficially, as applicable, by the relevant Non-Qualified Shareholder as of the Record Date and certified on the Certification Form multiplied by the Per Share Cash Amount (“Initial Cash Allocation”).

 

(f)            The “Excess Proceeds” means:

 

(i)            in the case of Qualified Shareholders, the number of SpinCo Shares equal to the number of Parent Preferred Shares held of record or beneficially, as applicable, by the relevant Qualified Shareholder as of the Record Date and certified on the Certification Form multiplied by the Per Share Excess Stock Amount, rounded down to the nearest whole number (together with the Initial SpinCo Allocation, the “SpinCo Allocation”); and

 

(ii)            in the case of Non-Qualified Shareholders, a cash amount equal to the number of Parent Preferred Shares held of record or beneficially, as applicable, by the relevant Non-Qualified Shareholder as of the Record Date and certified on the Certification Form multiplied by the Per Share Excess Cash Amount (together with the Initial Cash Allocation, the “Cash Allocation”).

 

(g)            To receive the aggregate Base Proceeds to which they are entitled pursuant to Section 3.4(b) to (f) (inclusive) at or promptly following the Effective Time, Qualified Shareholders and Non-Qualified Shareholders (and, as applicable, Record Holders that are brokers, banks or similar organizations receiving Base Proceeds for the benefit of a Qualified Shareholder or Non-Qualified Shareholder) must have complied with and satisfied the applicable Certification Procedures no later than 5:30 p.m. (United States Eastern Standard Time) on the business day (by reference to business days in the United States) prior to the Redemption Date (the “Pre-Redemption Notification Deadline”).

 

(h)            Prior to the Effective Time, (1) Parent shall and shall cause SpinCo to (i) issue and deliver to the Redemption Agent, for the benefit of the Qualified Shareholders, 39,421,398 SpinCo Shares (being one hundred percent (100%) of the outstanding SpinCo Shares as of the Redemption Date following the cancellation of the Parent SpinCo Share described below), (ii) cause the transfer agent for the Parent Shares to instruct the Redemption Agent to allocate at the Effective Time the appropriate number of SpinCo Shares to each Qualified Shareholder as of the Pre-Redemption Notification Deadline in book-entry form and (iii) take such other necessary actions such that the one (1) SpinCo Share held by Parent as of immediately prior to the Effective Time (the “Parent SpinCo Share”) shall be cancelled and retired and shall cease to exist as of the Effective Time; and (2) Parent shall deliver to the Redemption Agent, for the benefit of the Non-Qualified Shareholders, such amount of cash as is necessary to effect the Redemption with respect to Non-Qualified Shareholders as of the Pre-Redemption Notification Deadline, and shall instruct the Redemption Agent to allocate at the Effective Time the appropriate amount of cash to each such Non-Qualified Shareholder, by wire transfer of immediately available funds. SpinCo will not issue paper stock certificates in respect of the SpinCo Shares.

 

 

(i)            Promptly following the Effective Time, any SpinCo Shares not allocated to Qualified Shareholders at the Effective Time (and not otherwise allocated previously pursuant to an Interim Excess Determination) shall be delivered to the Escrow Account. During the Escrow Period, Qualified Shareholders and Non-Qualified Shareholders that did not comply with the applicable Certification Procedures by the Pre-Redemption Notification Deadline shall be entitled to receive the aggregate Base Proceeds to which they are entitled pursuant to Section 3.4(b) to (f) (inclusive) upon compliance with and satisfaction of the applicable Certification Procedures (including, where applicable, the satisfaction of the applicable Certification Procedures by any Record Holder that is a broker, bank or similar organization receiving Base Proceeds for the benefit of a Qualified Shareholder or Non-Qualified Shareholder). The Redemption Agent shall promptly make allocations from the Escrow Account or cash payments (as applicable) to such Qualified Shareholders and Non-Qualified Shareholders that have complied with and satisfied the applicable Certification Procedures during the Escrow Period (or that returned a Certification Form after the Pre-Redemption Notification Deadline and prior to the Effective Time) (and, in each case, where an applicable Record Holder that is a broker, bank or similar organization receiving Base Proceeds for the benefit of a Qualified Shareholder or Non-Qualified Shareholder has complied with and satisfied the applicable Certification Procedures), and Parent shall deliver such amount of cash to the Redemption Agent from time to time as is necessary to enable the Redemption Agent to make any such required cash payments to such Non-Qualified Shareholders that have complied with and satisfied the applicable Certification Procedures during the Escrow Period (or that returned a Certification Form after the Pre-Redemption Notification Deadline and prior to the Effective Time) (and, in each case, where an applicable Record Holder receiving Base Proceeds for the benefit of a Qualified Shareholder or Non-Qualified Shareholder has complied with and satisfied the applicable Certification Procedures).

 

(j)            As described in the Information Statement, the right to receive Base Proceeds and/or Excess Proceeds, or any other consideration, shall irrevocably expire and lapse in the case of Record Holders (and/or any Street Name Holders identified by such Record Holders) that have not complied with or satisfied the applicable Certification Procedures prior to the expiration of the Escrow Period, and any such right to receive Base Proceeds and/or Excess Proceeds, or any other consideration, will irrevocably be forfeited at such time, and such expiry, lapse and forfeiture shall not affect the validity of the Redemption or result in the Redemption Consideration not constituting good and valuable consideration for the Redemption of the Parent Preferred Shares of such persons, and neither Parent nor SpinCo, nor any of their respective affiliates or Representatives, shall have any Liability with respect thereto.

 

 

(k)            Promptly following the expiration of the Escrow Period:

 

(i)            the Redemption Agent shall allocate any Excess SpinCo Shares remaining in the Escrow Account among the Qualified Shareholders as of immediately prior to the expiration of the Escrow Period in accordance with their entitlement to Excess Proceeds as provided for in Section 3.4(f) to the extent not previously so allocated (including pursuant to any Interim Excess Determination) (the “Final Stock Allocation”); and

 

(ii)            the Redemption Agent shall promptly make the cash payment to all Non-Qualified Shareholders as of immediately prior to the expiration of the Escrow Period in accordance with their entitlement to Excess Proceeds as provided for in Section 3.4(f) to the extent not previously so paid (including pursuant to any Interim Excess Determination), and Parent shall deliver such amount of cash to the Redemption Agent as is necessary to enable the Redemption Agent to make such cash payment.

 

(l)            At any time following the Pre-Redemption Notification Deadline (including prior to the Effective Time) but prior to the expiration of the Escrow Period, Parent may make a determination (by reference to the Qualified Shareholders and Non-Qualified Shareholders (and, where applicable, Record Holders that are brokers, banks or similar organizations receiving Interim Excess Proceeds for the benefit of Qualified Shareholders or Non-Qualified Shareholders) that have complied with and satisfied the Certification Procedures prior to the time of such determination) that a specified amount of Excess Proceeds has been established with certainty that will be due as part (or full) discharge of the entitlements under Section 3.4(f), notwithstanding that the Escrow Period has not expired, and in such circumstances Parent may direct an interim discharge of part or all (as the case may be) of the Excess Proceeds in the amount specified in its determination (the “Interim Excess Proceeds” and the “Interim Excess Determination”, respectively) and where such a determination is made, Section 3.4(k) shall apply to the allocation and payment of the Interim Excess Proceeds as if references in Section 3.4(k) to Excess Proceeds were to Interim Excess Proceeds and as if the time for allocation or payment is the time as set out in the Interim Excess Determination or as otherwise agreed by the Parent and the Redemption Agent. The decision as to whether to issue any (or no) Interim Excess Determinations shall be at the sole and absolute discretion of Parent. Parent may elect to issue more than one Interim Excess Determination. The Parent may issue an Interim Excess Determination to coincide with the allocation of the relevant Interim Excess Proceeds at the Effective Time (by reference to the Qualified Shareholders and Non-Qualified Shareholders (and, where applicable, Record Holders that are brokers, banks or similar organizations receiving Interim Excess Proceeds for the benefit of Qualified Shareholders or Non-Qualified Shareholders) that have complied with and satisfied the Certification Procedures prior to the Pre-Redemption Notification Deadline), in which case such Interim Excess Proceeds shall be allocated and/or paid to the relevant Qualified Shareholders and Non-Qualified Shareholders at the same time as the Base Proceeds are allocated and/or paid under Section 3.4(h). For the avoidance of doubt, any allocation or payment of Interim Excess Proceeds constitutes a discharge of the obligations to allocate/pay Excess Proceeds to the extent of the Interim Excess Proceeds so allocated or paid, and no amount shall be double counted in any entitlement to Excess Proceeds where discharged in whole or in part by Interim Excess Proceeds.

 

 

(m)            Whether or not the Certification Procedures have been complied with and satisfied, whether in a specified case or as a general principle, shall be determined in the sole and absolute discretion of the Parent. Where the Parent or the Redemption Agent is not satisfied for any reason as to the completeness, accuracy or veracity of a Certification Form or that a completed Certification Form has not accurately, sufficiently or fully served to verify the status of the applicable Record Holder or Street Name Holder, such as to determine whether or not the Record Holder is a Qualified Shareholder or a Non-Qualified Shareholder (as the case may be), or where the Parent or the Redemption Agent is not (in its absolute discretion) satisfied as to the completeness, accuracy or veracity of any certification, representation, warranty or statement made in a Certification Form (including in respect of whether or not any relevant person is a Qualified Institutional Buyer, an Institutional Accredited Investor or a director or officer of Parent or SpinCo as of the Redemption Date who is also an accredited investor (as defined in Rule 501(a) under the Securities Act)), the Certification Form may (i) be rejected or queried by the Parent or the Redemption Agent, and the Certification Procedures shall not be deemed to have been satisfied in respect of such Certification Form notwithstanding any other provision of this Agreement or (ii) be modified by Parent or the Redemption Agent (in its absolute discretion).

 

(n)            Parent may amend the Certification Procedures at any time, including after the Effective Time, but no such amendment shall affect the validity of any allocation of SpinCo Shares or cash payments prior to such amendment to Qualified Shareholders or Non-Qualified Shareholders satisfying the Certification Procedures at the time of allocation.

 

(o)            For the avoidance of doubt, (i) the Parent shall have no liability to any person for the value of SpinCo differing in any respect from the SpinCo Value (or the Valuation Advice), whether at any time before, on or subsequent to the SpinCo Value (or Valuation Advice) being established, and (ii) any entitlements to cash payments of Non-Qualified Shareholders shall not be subject to adjustment or fluctuation by reason of the value of SpinCo at any time (whether before, on or subsequent to the SpinCo Value (or the Valuation Advice) being established) being greater or lesser than the SpinCo Value (or the Valuation Advice), and neither Parent or SpinCo, nor any of their respective affiliates or Representatives, shall have any liability for any such difference, adjustment or fluctuation.

 

(p)            The Redemption Consideration is not assignable, and no Record Holder may assign its rights to the Redemption Consideration without the express prior written consent of Parent or as expressly permitted pursuant to the Certification Procedures.

 

(q)            Notwithstanding anything to the contrary herein, no fractional SpinCo Shares will be allocated or credited to book-entry accounts in connection with the Redemption, nor will any cash payments be made in lieu of any such fractional share interests, and any such fractional share interests to which a Qualified Shareholder would otherwise be entitled pursuant to Section 3.4(b) to Section 3.4(f) shall not entitle such Record Holder to vote or to any other rights as a stockholder of SpinCo. If there are Excess SpinCo Shares in the Escrow Account representing fractional interests that cannot be allocated after the expiration of the Escrow Period pursuant to the Final Stock Allocation, then SpinCo shall take such action as it deems necessary to cancel such Excess SpinCo Shares.

 

 

(r)            SpinCo shall not distribute cash or non-cash dividends until the expiration of the Escrow Period, and any breach of this Section 3.4.(r) shall not create any additional or further liability for Parent or SpinCo in respect of the Redemption Consideration (including in respect of the Base Proceeds or Excess Proceeds (as applicable)).

 

(s)            Until the SpinCo Shares are duly allocated in accordance with this Section 3.4 and applicable Law, from and after the Effective Time, SpinCo will regard the Qualified Shareholders that have (and, where applicable, Record Holders receiving Base Proceeds and, if applicable, Excess Proceeds for the benefit of such Qualified Shareholders have) satisfied the Certification Procedures entitled to receive such SpinCo Shares as Record Holders of SpinCo Shares in accordance with the terms of the Redemption without requiring any action on the part of such Persons. SpinCo agrees that, subject to Section 3.4(h) and any transfers of such shares, from and after the Effective Time (i) each such holder will be entitled to receive all dividends, if any, payable on, and exercise voting rights and all other rights and privileges with respect to, the SpinCo Shares then held by such holder, and (ii) each such holder will be entitled, without any action on the part of such holder, to receive evidence of ownership of the SpinCo Shares then held by such holder.

 

(t)            Notwithstanding anything herein to the contrary, Parent, the Redemption Agent and any other applicable withholding agent shall be entitled to deduct and withhold with respect to any consideration payable pursuant to the Redemption such amounts as it is required to deduct or withhold with respect to the making of such payment under any applicable Tax Law. To the extent that any amounts are so deducted or withheld, such amounts shall be treated for all purposes of this Agreement and the Redemption as having been paid to the Person in respect of which such deduction or withholding was made.

 

Article IV
MUTUAL RELEASES; INDEMNIFICATION

 

4.1            Release of Pre-Redemption Claims.

 

(a)            SpinCo Release of Parent. Except as provided in Sections 4.1(c) and 4.1(d), effective as of the Effective Time, SpinCo does hereby, for itself and each other member of the SpinCo Group, and their respective successors and assigns, and, to the extent permitted by Law, all Persons who at any time prior to the Effective Time have been shareholders, stockholders, directors, officers, agents or employees of any member of the SpinCo Group (in each case, in their respective capacities as such), remise, release and forever discharge (i) Parent and the members of the Parent Group, and their respective successors and assigns, (ii) all Persons who at any time prior to the Effective Time have been shareholders, directors, officers, agents or employees of any member of the Parent Group (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, and (iii) all Persons who at any time prior to the Effective Time are or have been shareholders, stockholders, directors, officers, agents or employees of any member of the SpinCo Group and who are not, as of immediately following the Effective Time, directors, officers or employees of SpinCo or a member of the SpinCo Group, in each case from: (A) all SpinCo Liabilities, (B) all Liabilities arising from or in connection with the transactions and all other activities to implement the Separation and the Redemption (including all decisions as to any allocation of Assets and Liabilities between the Parent Group and SpinCo Group and all agreements and arrangements implemented in connection with the pre-Separation reorganization) and (C) all Liabilities arising from or in connection with actions, inactions, events, omissions, conditions, facts or circumstances occurring or existing prior to the Effective Time (whether or not such Liabilities cease being contingent, mature, become known, are asserted or foreseen, or accrue, in each case before, at or after the Effective Time), in each case to the extent relating to, arising out of or resulting from the SpinCo Business, the SpinCo Assets or the SpinCo Liabilities.

 

 

(b)            Parent Release of SpinCo. Except as provided in Sections 4.1(c) and 4.1(d), effective as of the Effective Time, Parent does hereby, for itself and each other member of the Parent Group, and their respective successors and assigns, and, to the extent permitted by Law, all Persons who at any time prior to the Effective Time have been shareholders, stockholders, directors, officers, agents or employees of any member of the Parent Group (in each case, in their respective capacities as such), remise, release and forever discharge (i) SpinCo and the members of the SpinCo Group and their respective successors and assigns, and (ii) all Persons who at any time prior to the Effective Time have been shareholders, stockholders, directors, officers, agents or employees of any member of the SpinCo Group (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, from (A) all Parent Liabilities, (B) all Liabilities arising from or in connection with the transactions and all other activities to implement the Separation and the Redemption and (C) all Liabilities arising from or in connection with actions, inactions, events, omissions, conditions, facts or circumstances occurring or existing prior to the Effective Time (whether or not such Liabilities cease being contingent, mature, become known, are asserted or foreseen, or accrue, in each case before, at or after the Effective Time), in each case to the extent relating to, arising out of or resulting from the Parent Business, the Parent Assets or the Parent Liabilities.

 

(c)            Obligations Not Affected. Nothing contained in Section 4.1(a) or 4.1(b) shall impair any right of any Person to enforce this Agreement, any Ancillary Agreement or any agreements, arrangements, commitments or understandings that are specified in Section 2.7(b) as not to terminate as of the Effective Time, in each case in accordance with its terms. Nothing contained in Section 4.1(a) or 4.1(b) shall release any Person from:

 

(i)             any Liability provided in or resulting from any agreement among any members of the Parent Group or any members of the SpinCo Group that is specified in Section 2.7(b) as not to terminate as of the Effective Time, or any other Liability specified in Section 2.7(b) as not to terminate as of the Effective Time;

 

(ii)            any Liability, contingent or otherwise, assumed, transferred, assigned or allocated to the Group of which such Person is a member in accordance with, or any other Liability of any member of any Group under, this Agreement or any Ancillary Agreement;

 

 

(iii)            any Liability for the sale, lease, construction or receipt of goods, property or services purchased, obtained or used in the ordinary course of business by a member of one Group from a member of the other Group prior to the Effective Time;

 

(iv)            any Liability provided in or resulting from any other contract or agreement that is entered into after the Effective Time between one Party (or a member of such Party’s Group), on the one hand, and the other Party (or a member of such Party’s Group), on the other hand;

 

(v)            any Liability that the Parties may have with respect to indemnification or contribution or other obligation pursuant to this Agreement, any Ancillary Agreement or otherwise for claims brought against the Parties by Third Parties, which Liability shall be governed by the provisions of this Article IV and Article V and, if applicable, the appropriate provisions of the Ancillary Agreements; or

 

(vi)            any Liability the release of which would result in the release of any Person other than a Person released pursuant to this Section 4.1.

 

In addition, nothing contained in Section 4.1(a) shall release any member of the Parent Group from honoring its existing obligations to indemnify any director, officer or employee of SpinCo who was a director, officer or employee of any member of the Parent Group at or prior to the Effective Time, to the extent such director, officer or employee is or becomes a named defendant in any Action with respect to which such director, officer or employee was entitled to such indemnification pursuant to such existing obligations; it being understood that, if any portion of the underlying obligation giving rise to such Action is a SpinCo Liability, SpinCo shall indemnify, or procure from a Subsidiary the effective indemnification of, Parent for such portion of such Liability (including Parent’s costs to indemnify the director, officer or employee) in accordance with the provisions set forth in this Article IV.

 

(d)            No Claims. SpinCo shall not make, and shall not permit any other member of the SpinCo Group to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or indemnification, against Parent or any other member of the Parent Group, or any other Person released pursuant to Section 4.1(a), with respect to any Liabilities released pursuant to Section 4.1(a). Parent shall not make, and shall not permit any other member of the Parent Group to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or indemnification, against SpinCo or any other member of the SpinCo Group, or any other Person released pursuant to Section 4.1(b), with respect to any Liabilities released pursuant to Section 4.1(b).

 

(e)            Execution of Further Releases. At any time at or after the Effective Time, at the request of either Party, the other Party shall cause each member of its respective Group to execute and deliver releases reflecting the provisions of this Section 4.1.

 

 

4.2            Indemnification by SpinCo. Except as otherwise specifically set forth in this Agreement or in any Ancillary Agreement, to the fullest extent permitted by Law, SpinCo shall, and shall cause the other members of the SpinCo Group to, indemnify, defend and hold harmless Parent, each member of the Parent Group and each of their respective past, present and future directors, officers, employees and agents, in each case in their respective capacities as such, and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the “Parent Indemnitees”), from and against any and all Liabilities of the Parent Indemnitees relating to, arising out of or resulting from, directly or indirectly, any of the following items (without duplication):

 

(a)            any SpinCo Liability;

 

(b)            any failure of SpinCo, any other member of the SpinCo Group or any other Person to pay, perform or otherwise promptly discharge any SpinCo Liabilities in accordance with their terms, whether prior to, at or after the Effective Time;

 

(c)            any breach by SpinCo or any other member of the SpinCo Group of this Agreement or any of the Ancillary Agreements;

 

(d)            except to the extent it relates to a Parent Liability, any guarantee, indemnification or contribution obligation, surety bond or other credit support agreement, arrangement, commitment or understanding for the benefit of any member of the SpinCo Group by any member of the Parent Group that survives following the Redemption; and

 

(e)            any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, with respect to all information contained in the Information Statement (as amended or supplemented if SpinCo shall have furnished any amendments or supplements thereto) or any other Disclosure Document, other than the matters described in clause (e) of Section 4.3.

 

4.3            Indemnification by Parent. Except as otherwise specifically set forth in this Agreement or in any Ancillary Agreement, to the fullest extent permitted by Law, Parent shall, and shall cause the other members of the Parent Group to, indemnify, defend and hold harmless SpinCo, each member of the SpinCo Group and each of their respective past, present and future directors, officers, employees or agents, in each case in their respective capacities as such, and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the “SpinCo Indemnitees”), from and against any and all Liabilities of the SpinCo Indemnitees relating to, arising out of or resulting from, directly or indirectly, any of the following items (without duplication):

 

(a)            any Parent Liability;

 

(b)            any failure of Parent, any other member of the Parent Group or any other Person to pay, perform or otherwise promptly discharge any Parent Liabilities in accordance with their terms, whether prior to, at or after the Effective Time;

 

(c)            any breach by Parent or any other member of the Parent Group of this Agreement or any of the Ancillary Agreements;

 

 

(d)            except to the extent it relates to a SpinCo Liability, any guarantee, indemnification or contribution obligation, surety bond or other credit support agreement, arrangement, commitment or understanding for the benefit of any member of the Parent Group by any member of the SpinCo Group that survives following the Redemption; and

 

(e)            any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, with respect to statements made explicitly in Parent’s name in the Information Statement (as amended or supplemented if SpinCo shall have furnished any amendments or supplements thereto) or any other Disclosure Document; it being agreed that the statements set forth on Schedule 4.3(e) shall be the only statements made explicitly in Parent’s name in the Information Statement or any other Disclosure Document, and all other information contained in the Information Statement or any other Disclosure Document shall be deemed to be information supplied by SpinCo.

 

4.4            Indemnification Obligations Net of Insurance Proceeds and Other Amounts.

 

(a)            The Parties intend that any Liability subject to indemnification, contribution or reimbursement pursuant to this Article IV or Article II or Article V will be net of Insurance Proceeds or other amounts actually recovered (net of any out-of-pocket costs or expenses incurred in, or Taxes imposed with respect to, the collection thereof) from any Person by or on behalf of the Indemnitee in respect of any indemnifiable Liability. Accordingly, the amount which either Party (an “Indemnifying Party”) is required to pay to any Person entitled to indemnification or contribution hereunder (an “Indemnitee”) will be reduced by any Insurance Proceeds or other amounts actually recovered (net of any out-of-pocket costs or expenses incurred in, or Taxes imposed with respect to, the collection thereof) from any Person by or on behalf of the Indemnitee in respect of the related Liability. If an Indemnitee receives a payment (an “Indemnity Payment”) required by this Agreement from an Indemnifying Party in respect of any Liability and subsequently receives Insurance Proceeds or any other amounts in respect of such Liability, then within ten (10) days of receipt of such Insurance Proceeds, the Indemnitee will pay to the Indemnifying Party an amount equal to the excess of the Indemnity Payment received over the amount of the Indemnity Payment that would have been due if the Insurance Proceeds or such other amounts (net of any out-of-pocket costs or expenses incurred in, or Taxes imposed with respect to, the collection thereof) had been received, realized or recovered before the Indemnity Payment was made.

 

(b)            The Parties agree that an insurer that would otherwise be obligated to pay any claim shall not be relieved of the responsibility with respect thereto or, solely by virtue of any provision contained in this Agreement or any Ancillary Agreement, have any subrogation rights with respect thereto, it being understood that no insurer or any other Third Party shall be entitled to a “windfall” (i.e., a benefit they would not be entitled to receive in the absence of the indemnification provisions) by virtue of the indemnification and contribution provisions hereof. Each Party shall, and shall cause the members of its Group to, use commercially reasonable efforts (taking into account the probability of success on the merits and the cost of expending such efforts, including attorneys’ fees and expenses) to collect or recover any Insurance Proceeds that may be collectible or recoverable respecting the Liabilities for which indemnification or contribution may be available under this Article IV. Notwithstanding the foregoing, an Indemnifying Party may not delay making any indemnification payment required under the terms of this Agreement, or otherwise satisfying any indemnification obligation, pending the outcome of any Action to collect or recover Insurance Proceeds, and an Indemnitee need not attempt to collect any Insurance Proceeds prior to making a claim for indemnification or contribution or receiving any Indemnity Payment otherwise owed to it under this Agreement or any Ancillary Agreement.

 

 

(c)            The Parties intend that (i) any Liability subject to indemnification, contribution or reimbursement pursuant to Article II, this Article IV or Article V shall be increased to take into account any Taxes imposed on the Indemnitee (or any of its Affiliates) with respect to the receipt or accrual of an Indemnity Payment in respect of such Liability pursuant to and in accordance with Section 13.02 of the Tax Matters Agreement and (ii) Section 6.01 of the Tax Matters Agreement shall apply with respect to any Tax Benefit Actually Realized by an Indemnitee (or any of its Affiliates) as a result of incurring a Liability subject to indemnification.

 

4.5            Procedures for Indemnification of Third-Party Claims.

 

(a)            Notice of Claims. If, at or following the Effective Time, an Indemnitee shall receive notice or otherwise learn of the assertion by a Person (including any Governmental Authority) who is not a member of the Parent Group or the SpinCo Group of any claim or of the commencement by any such Person of any Action (collectively, a “Third-Party Claim”) with respect to which an Indemnifying Party may be obligated to provide indemnification to such Indemnitee pursuant to Section 4.2 or Section 4.3, or any other Section of this Agreement or any Ancillary Agreement, such Indemnitee shall give such Indemnifying Party written notice thereof as soon as practicable, but in any event within thirty (30) days (or sooner if the nature of the Third-Party Claim so requires) after becoming aware of such Third-Party Claim. Any such notice shall describe the Third-Party Claim in reasonable detail, including the facts and circumstances giving rise to such claim for indemnification, and include copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. Notwithstanding the foregoing, the failure of an Indemnitee to provide notice in accordance with this Section 4.5(a) shall not relieve an Indemnifying Party of its indemnification obligations under this Agreement, except to the extent to which the Indemnifying Party is actually prejudiced by the Indemnitee’s failure to provide notice in accordance with this Section 4.5(a).

 

 

(b)            Control of Defense. An Indemnifying Party may elect to defend (and seek to settle or compromise), at its own expense and with its own counsel, any Third-Party Claim; provided that, prior to the Indemnifying Party assuming and controlling the defense of such Third-Party Claim, it shall first confirm to the Indemnitee in writing that, assuming the facts presented to the Indemnifying Party by the Indemnitee are true in all material respects, the Indemnifying Party shall indemnify the Indemnitee for any such damages to the extent resulting from, or arising out of, such Third-Party-Claim; provided, further, that notwithstanding the foregoing, Parent shall have the right to assume control of any such Third-Party Claim: (i) relating to any actual or potential criminal matter or indictment; (ii) seeking an admission, finding or determination of wrongdoing or violation of Law by a Parent Indemnitee; (iii) initiated by a Governmental Authority; (iv) where a Parent Indemnitee has been advised by external counsel in writing that a conflict exists under applicable standards of professional conduct between a Parent Indemnitee and the Indemnifying Party in connection with the defense of such Third-Party Claim such that the Indemnifying Party cannot adequately represent the interests of a Parent Indemnitee; (v) where an adverse determination with respect to, or the Indemnifying Party’s conduct of the defense of, such Third-Party Claim is reasonably likely to be materially adverse to a Parent Indemnitee’s reputation or continuing business interests; (vi) where the Parent Indemnitee reasonably believes that a Parent Indemnitee will not be indemnified hereunder with respect to such Third-Party Claim or (vii) relating to the matters described in Item 3 of Schedule 2.3(a)(vii) for which indemnification may be sought by a Parent Indemnitee. Notwithstanding the foregoing, if the Indemnifying Party assumes such defense and, in the course of defending such Third-Party Claim, (i) the Indemnifying Party discovers that the facts presented at the time the Indemnifying Party acknowledged its indemnification obligation in respect of such Third-Party Claim were not true in any or all material respects and (ii) such untruth provides a reasonable basis for asserting that the Indemnifying Party does not have an indemnification obligation in respect of such Third-Party Claim, then (A) the Indemnifying Party shall not be bound by such acknowledgment, (B) the Indemnifying Party shall promptly thereafter provide the Indemnitee written notice of its assertion that it does not have an indemnification obligation in respect of such Third-Party Claim and (C) the Indemnitee shall have the right to assume the defense of such Third-Party Claim. Within thirty (30) days after the receipt of a notice from an Indemnitee in accordance with Section 4.5(a) (or sooner, if the nature of the Third-Party Claim so requires), the Indemnifying Party shall provide written notice to the Indemnitee indicating whether the Indemnifying Party shall assume responsibility for defending the Third-Party Claim and specifying any reservations or exceptions to its defense. If an Indemnifying Party elects not to assume responsibility for defending any Third-Party Claim or fails to notify an Indemnitee of its election within thirty (30) days after receipt of the notice from an Indemnitee as provided in Section 4.5(a), then the Indemnitee that is the subject of such Third-Party Claim shall be entitled to continue to conduct and control the defense of such Third-Party Claim. If an Indemnifying Party has failed to assume the defense of such Third-Party Claim in accordance with this Section 4.5(b), it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability.

 

(c)            Allocation of Defense Costs. If an Indemnifying Party has elected to assume the defense of a Third-Party Claim, then such Indemnifying Party shall be solely liable for all fees and expenses incurred by it in connection with the defense of such Third-Party Claim and shall not be entitled to seek any indemnification or reimbursement from the Indemnitee for any such fees or expenses incurred by the Indemnifying Party during the course of the defense of such Third-Party Claim by such Indemnifying Party, regardless of any subsequent decision by the Indemnifying Party to reject or otherwise abandon its assumption of such defense. If an Indemnifying Party elects not to assume responsibility for defending any Third-Party Claim or fails to notify an Indemnitee of its election within thirty (30) days after receipt of a notice from an Indemnitee as provided in Section 4.5(a), and the Indemnitee conducts and controls the defense of such Third-Party Claim and the Indemnifying Party has an indemnification obligation with respect to such Third-Party Claim, then the Indemnifying Party shall be liable for all reasonable and documented fees and expenses incurred by the Indemnitee in connection with the defense of such Third-Party Claim.

 

 

(d)            Right to Monitor and Participate. An Indemnitee that does not conduct and control the defense of any Third-Party Claim, or an Indemnifying Party that does not elect to defend any Third-Party Claim as contemplated hereby, nevertheless shall have the right to employ separate counsel (including local counsel as necessary) of its own choosing to monitor and participate in (but not control) the defense of any Third-Party Claim for which it is a potential Indemnitee or Indemnifying Party, but the fees and expenses of such counsel shall be at the expense of such Indemnitee or Indemnifying Party, as the case may be, and the provisions of Section 4.5(c) shall not apply to such fees and expenses. Notwithstanding the foregoing, but subject to Sections 6.7 and 6.8, such Party shall cooperate with the Party entitled to conduct and control the defense of such Third-Party Claim in such defense and make available to the controlling Party, at the non-controlling Party’s expense, all witnesses, information and materials in such Party’s possession or under such Party’s control relating thereto as are reasonably required by the controlling Party. In addition to the foregoing, and without limiting the rights of the Parent Indemnitee pursuant to the first sentence of Section 4.5(b), if outside legal counsel to the Indemnitee reasonably determines in good faith that such Indemnitee and the Indemnifying Party have actual or potential differing defenses or conflicts of interest between them that make joint representation inappropriate, then the Indemnitee shall have the right to employ separate counsel (including local counsel as necessary) and to participate in (but not control) the defense, compromise, or settlement thereof, and in such case the Indemnifying Party shall bear the reasonable and documented fees and expenses of such counsel for all Indemnitees.

 

(e)            No Settlement. Neither Party may settle or compromise any Third-Party Claim for which either Party may seek to be indemnified hereunder without the prior written consent of the other Party, which consent may not be unreasonably withheld, unless such settlement or compromise is solely for monetary damages that are fully payable by the settling or compromising Party, does not involve any admission, finding or determination of wrongdoing or violation of Law by the other Party and provides for a full, unconditional and irrevocable release of the other Party from all Liability in connection with the Third-Party Claim; provided that, notwithstanding the foregoing, neither SpinCo nor any of its Affiliates may settle or compromise any Third-Party Claim that is related to the matters described in Item 3 of Schedule 2.3(a)(vii) for which indemnification is being sought by a Parent Indemnitee without the prior written consent of Parent. The Parties hereby agree that if a Party delivers the other Party a written notice containing a proposal to settle or compromise a Third-Party Claim for which either Party is seeking to be indemnified hereunder and the Party receiving such proposal does not respond in any manner to the Party presenting such proposal within thirty (30) days (or within any such shorter time period that may be required by applicable Law or court order) of receipt of such proposal, then the Party receiving such proposal shall be deemed to have consented to the terms of such proposal.

 

(f)            Tax Matters Agreement Governs. The above provisions of this Section 4.5 and the provisions of Section 4.6 do not apply to Taxes (it being understood and agreed that Taxes and Tax matters, including the control of Tax-related proceedings, shall be governed by the Tax Matters Agreement). Notwithstanding anything in this Agreement to the contrary, in the case of any conflict between this Agreement and the Tax Matters Agreement in relation to any matters addressed by the Tax Matters Agreement, the Tax Matters Agreement shall prevail.

 

 

4.6            Additional Matters.

 

(a)            Timing of Payments. Indemnification or contribution payments in respect of any Liabilities for which an Indemnitee is entitled to indemnification or contribution under this Article IV shall be paid reasonably promptly (but in any event within forty-five (45) days of the final determination of the amount that the Indemnitee is entitled to indemnification or contribution under this Article IV) by the Indemnifying Party to the Indemnitee as such Liabilities are incurred upon demand by the Indemnitee, including reasonably satisfactory documentation setting forth the basis for the amount of such indemnification or contribution payment, including documentation with respect to calculations made and consideration of any Insurance Proceeds that actually reduce the amount of such Liabilities. The indemnity and contribution provisions contained in this Article IV shall remain operative and in full force and effect, regardless of (i) any investigation made by or on behalf of any Indemnitee and (ii) the knowledge by the Indemnitee of Liabilities for which it might be entitled to indemnification hereunder.

 

(b)            Notice of Direct Claims. Any claim for indemnification or contribution under this Agreement or any Ancillary Agreement that does not result from a Third-Party Claim shall be asserted by written notice given by the Indemnitee to the applicable Indemnifying Party; provided that the failure by an Indemnitee to so assert any such claim shall not prejudice the ability of the Indemnitee to do so at a later time, except to the extent (if any) that the Indemnifying Party is actually prejudiced thereby. Such Indemnifying Party shall have a period of thirty (30) days after the receipt of such notice within which to respond thereto. If such Indemnifying Party does not respond within such thirty (30)-day period, such specified claim shall be conclusively deemed a Liability of the Indemnifying Party under this Section 4.6(b) or, in the case of any written notice in which the amount of the claim (or any portion thereof) is estimated, on such later date when the amount of the claim (or such portion thereof) becomes finally determined. If such Indemnifying Party does not respond within such thirty (30)-day period or rejects such claim in whole or in part, such Indemnitee shall, subject to the provisions of Article VII, be free to pursue such remedies as may be available to such party as contemplated by this Agreement and the Ancillary Agreements, as applicable, without prejudice to its continuing rights to pursue indemnification or contribution hereunder.

 

(c)            Pursuit of Claims Against Third Parties. If (i) a Party incurs any Liability arising out of this Agreement or any Ancillary Agreement; (ii) an adequate legal or equitable remedy is not available for any reason against the other Party to satisfy the Liability incurred by the incurring Party; and (iii) a legal or equitable remedy may be available to the other Party against a Third Party for such Liability, then the other Party shall use its commercially reasonable efforts to cooperate with the incurring Party, at the incurring Party’s expense, to permit the incurring Party to obtain the benefits of such legal or equitable remedy against the Third Party.

 

 

 

(d)            Subrogation. In the event of payment by or on behalf of any Indemnifying Party to any Indemnitee in connection with any Third-Party Claim, such Indemnifying Party shall be subrogated to and shall stand in the place of such Indemnitee as to any events or circumstances in respect of which such Indemnitee may have any right, defense or claim relating to such Third-Party Claim against any claimant or plaintiff asserting such Third-Party Claim or against any other Person. Such Indemnitee shall cooperate with such Indemnifying Party in a reasonable manner, and at the cost and expense of such Indemnifying Party, in prosecuting any subrogated right, defense or claim.

 

(e)            Substitution. In the event of an Action in which the Indemnifying Party is not a named defendant, if either the Indemnitee or Indemnifying Party shall so request, the Parties shall endeavor to substitute the Indemnifying Party for the named defendant. If such substitution or addition cannot be achieved for any reason or is not requested, the named defendant shall allow the Indemnifying Party to manage the Action as set forth in Section 4.5 and this Section 4.6, and the Indemnifying Party shall fully indemnify the named defendant against all reasonable costs of defending the Action (including court costs, sanctions imposed by a court, attorneys’ fees, experts fees and all other external expenses), the costs of any judgment or settlement and the cost of any interest or penalties relating to any judgment or settlement.

 

4.7            Right of Contribution.

 

(a)            Contribution. If any right of indemnification contained in Section 4.2 or Section 4.3 is held unenforceable or is unavailable for any reason, or is insufficient to hold harmless an Indemnitee in respect of any Liability for which such Indemnitee is entitled to indemnification hereunder, then the Indemnifying Party shall contribute to the amounts paid or payable by the Indemnitees as a result of such Liability (or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and the members of its Group, on the one hand, and the Indemnitees entitled to contribution, on the other hand, as well as any other relevant equitable considerations.

 

(b)            Allocation of Relative Fault. Solely for purposes of determining relative fault pursuant to this Section 4.7: (i) any fault associated with the business conducted with the Delayed SpinCo Assets or Delayed SpinCo Liabilities (except for the gross negligence or intentional misconduct of a member of the Parent Group) or with the ownership, operation or activities of the SpinCo Business prior to the Effective Time shall be deemed to be the fault of SpinCo and the other members of the SpinCo Group, and no such fault shall be deemed to be the fault of Parent or any other member of the Parent Group; (ii) any fault associated with the business conducted with Delayed Parent Assets or Delayed Parent Liabilities (except for the gross negligence or intentional misconduct of a member of the SpinCo Group) shall be deemed to be the fault of Parent and the other members of the Parent Group, and no such fault shall be deemed to be the fault of SpinCo or any other member of the SpinCo Group; and (iii) any fault associated with the ownership, operation or activities of the Parent Business prior to the Effective Time shall be deemed to be the fault of Parent and the other members of the Parent Group, and no such fault shall be deemed to be the fault of SpinCo or any other member of the SpinCo Group.

 

4.8            Covenant Not to Sue. Each Party hereby covenants and agrees that none of it, the members of such Party’s Group or any Person claiming through it shall bring suit or otherwise assert any claim against any Indemnitee, or assert a defense against any claim asserted by any Indemnitee, before any court, arbitrator, mediator or administrative agency anywhere in the world, alleging that: (a) the assumption of any SpinCo Liabilities by SpinCo or a member of the SpinCo Group on the terms and conditions set forth in this Agreement and the Ancillary Agreements is void or unenforceable for any reason; (b) the retention of any Parent Liabilities by Parent or a member of the Parent Group on the terms and conditions set forth in this Agreement and the Ancillary Agreements is void or unenforceable for any reason or (c) the provisions of this Article IV are void or unenforceable for any reason.

 

 

4.9            Remedies Cumulative. The remedies provided in this Article IV shall be cumulative and, subject to the provisions of Article VII, shall not preclude assertion by any Indemnitee of any other rights or the seeking of any and all other remedies against any Indemnifying Party.

 

4.10            Survival of Indemnities. The rights and obligations of each of Parent and SpinCo and their respective Indemnitees under this Article IV shall survive (a) the sale or other transfer by either Party or any member of its Group of any assets or businesses or the assignment by it of any Liabilities; or (b) any merger, consolidation, business combination, sale of all or substantially all of its Assets, restructuring, recapitalization, reorganization or similar transaction involving either Party or any of the members of its Group.

 

Article V
CERTAIN OTHER MATTERS

 

5.1            Insurance Matters.

 

(a)            Cooperation. Parent and SpinCo agree to cooperate in good faith to provide for an orderly transition of insurance coverage. Other than in respect of any breach by Parent of Section 5.1(d), in no event shall Parent, any other member of the Parent Group or any Parent Indemnitee have any liability or obligation whatsoever to any member of the SpinCo Group in the event that any insurance policy or other contract or policy of insurance shall be terminated or otherwise cease to be in effect for any reason, shall be unavailable or inadequate to cover any Liability of any member of the SpinCo Group for any reason whatsoever or shall not be renewed or extended beyond the current expiration date.

 

(b)            Ownership of Policies. From and after the Effective Time, Parent or one (1) or more members of the Parent Group shall own all Parent Policies. From and after the Effective Time, SpinCo or one (1) or more members of the SpinCo Group shall own all SpinCo Policies. Nothing contained herein shall be construed to be an attempted assignment of or a change to any part of the ownership of the Parent Policies or shall be construed to waive any right or remedy of any member of the Parent Group in respect thereof. Nothing contained herein shall be construed to be an attempted assignment of or a change to any part of the ownership of the SpinCo Policies or shall be construed to waive any right or remedy of any member of the SpinCo Group in respect thereof. No provision of this Agreement is intended to relieve any insurer of any Liability under any Policy.

 

 

(c)            Shared Policies.

 

(i)            From and after the Effective Time, with respect to any Liability incurred prior to the Effective Time by any member of the SpinCo Group that constitutes a SpinCo Liability, Parent will provide SpinCo with access to, and SpinCo may make claims under (and be entitled to applicable Insurance Proceeds resulting from or arising out of any such claims), the Parent Shared Policies, but solely to the extent that such policies provided coverage for members of the SpinCo Group or the SpinCo Business prior to the Effective Time; provided that such access to, and the right to make claims under, such insurance policies, shall be subject to the terms, conditions and exclusions of such insurance policies, including but not limited to any limits on coverage or scope, any deductibles, self-insured retentions and other fees and expenses, and shall be subject to the following additional conditions:

 

(A)            SpinCo shall notify Parent, as promptly as practicable, of any claim made by SpinCo pursuant to this Section 5.1(c)(i);

 

(B)            SpinCo and the members of the SpinCo Group shall indemnify, hold harmless and reimburse Parent and the other members of the Parent Group for any deductibles, self-insured retention, fees, indemnity payments, settlements, judgments, legal fees, allocated claims expenses and claim handling fees, and other expenses incurred by Parent or any members of the Parent Group to the extent resulting from any access to, or any claims made by SpinCo or any other members of the SpinCo Group under, any insurance provided pursuant to this Section 5.1(c)(i), whether such claims are made by SpinCo, its employees or third Persons; and

 

(C)            SpinCo shall exclusively bear (and neither Parent nor any members of the Parent Group shall have any obligation to repay or reimburse SpinCo or any member of the SpinCo Group for) and shall be liable for all excluded, uninsured, uncovered, unavailable or uncollectible amounts of all such claims made by SpinCo or any member of the SpinCo Group under the policies as provided for in this Section 5.1(c)(i). In the event an insurance policy aggregate is exhausted, or believed likely to be exhausted, due to noticed claims, the SpinCo Group, on the one hand, and the Parent Group, on the other hand, shall be responsible for their pro rata portion of the reinstatement premium, if any, based upon the losses of such Group submitted to Parent’s insurance carrier(s) (including any submissions prior to the Effective Time). To the extent that the Parent Group or the SpinCo Group is allocated more than its pro rata portion of such premium due to the timing of losses submitted to Parent’s insurance carrier(s), the other party shall promptly pay the first party an amount so that each Group has been properly allocated its pro rata portion of the reinstatement premium. Subject to the following sentence, a Party may elect not to reinstate the policy aggregate. In the event that a Party elects not to reinstate the policy aggregate, it shall provide prompt written notice to the other Party. A Party which elects to reinstate the policy aggregate shall be responsible for all reinstatement premiums and other costs associated with such reinstatement.

 

 

(D)            In the event that any member of the Parent Group incurs any Liability prior to or in respect of the period prior to the Effective Time for which such member of the Parent Group is entitled to coverage under the SpinCo Shared Policies, the same process pursuant to this Section 5.1(c)(i) shall apply, substituting “Parent” for “SpinCo” and “SpinCo” for “Parent”, including for purposes of the first sentence of Section 5.1(c)(iv).

 

(ii)            Except as provided in Section 5.1(c)(i), from and after the Effective Time, neither SpinCo nor any member of the SpinCo Group shall have any rights to or under any of the Policies of Parent or any other member of the Parent Group. At the Effective Time, SpinCo shall have in effect all insurance programs required to comply with SpinCo’s contractual obligations and such other Policies required by Law or as reasonably necessary or appropriate for companies operating a business similar to the SpinCo Business.

 

(iii)            Neither SpinCo nor any member of the SpinCo Group, in connection with making a claim under any Policies of Parent or any member of the Parent Group pursuant to this Section 5.1(c), shall take any action that would be reasonably likely to (i) have a material and adverse impact on the then-current relationship between Parent or any member of the Parent Group, on the one hand, and the applicable insurance company, on the other hand; (ii) result in the applicable insurance company terminating or materially reducing coverage, or materially increasing the amount of any premium owed by Parent or any member of the Parent Group under the applicable Policies; or (iii) otherwise compromise, jeopardize or interfere in any material respect with the rights of Parent or any member of the Parent Group under the applicable Policies.

 

(iv)            All payments and reimbursements by SpinCo pursuant to this Section 5.1(c) will be made within forty-five (45) days after SpinCo’s receipt of an invoice therefor from Parent. Parent shall retain the exclusive right to control its Policies and insurance programs, including the right to exhaust, settle, release, commute, buyback or otherwise resolve disputes with respect to any of its Policies and insurance programs and to amend, modify or waive any rights under any such Policies and insurance programs, notwithstanding whether any such Policies or insurance programs apply to any SpinCo Liabilities or claims SpinCo has made or could make in the future, and no member of the SpinCo Group shall erode, exhaust, settle, release, commute, buyback or otherwise resolve disputes with Parent’s insurers with respect to any of the Parent Policies and insurance programs, or amend, modify or waive any rights under any such Parent Policies and insurance programs. SpinCo shall cooperate with Parent and share such information as is reasonably necessary in order to permit Parent to manage and conduct its insurance matters as Parent deems appropriate. For the avoidance of doubt, each Party and any member of its applicable Group has the sole right to settle or otherwise resolve third-party claims made against it or any member of its applicable Group covered under an applicable Policy.

 

 

(v)            SpinCo does hereby, for itself and each other member of the SpinCo Group, agree that no member of the Parent Group shall have any Liability whatsoever as a result of the Policies and insurance practices of Parent and the other members of the Parent Group as in effect at any time, including as a result of the level or scope of any such insurance, the creditworthiness of any insurance carrier, the terms and conditions of any Policy, or the adequacy or timeliness of any notice to any insurance carrier with respect to any claim or potential claim or otherwise.

 

(d)            Director and Officers Liability Insurance Policies.    Parent shall not amend the terms of, nor cancel, terminate or permit the cancellation or termination of, the directors and officers liability insurance Policy set forth on Schedule 5.1(d) (or any replacement policy in accordance with clauses (iii) or (iv) of this Section 5.1(d)) except (i) upon at least ninety (90) days’ prior written notice to SpinCo, (ii) with SpinCo’s prior written consent, not to be unreasonably withheld, conditioned or delayed, (iii) to the extent Parent obtains replacement coverage with terms, conditions, retentions and limits of liability that are substantially comparable to the directors and officers liability insurance Policy set forth on Schedule 5.1(d) with respect to any matter claimed against a director, manager or officer of any member of the SpinCo Group by reason of him or her serving in such capacity that existed or occurred at or prior to the Effective Time, or (iv) in connection with the cancellation and replacement or amendment of the directors and officers liability insurance Policy set forth on Schedule 5.1(d) following any future public listing of Parent’s ordinary shares on any national stock exchange.

 

5.2            Payment Terms.

 

(a)            Except as expressly provided to the contrary in this Agreement or in any Ancillary Agreement, any amount to be paid or reimbursed by a Party (or a member of such Party’s Group), on the one hand, to the other Party (or a member of such Party’s Group), on the other hand, under this Agreement shall be paid or reimbursed hereunder within thirty (30) days after presentation of an invoice or a written demand therefor and setting forth, or accompanied by, reasonable documentation or other reasonable explanation supporting such amount.

 

(b)            Without the written consent of the Party receiving any payment under this Agreement specifying otherwise, all payments to be made by any Party under this Agreement shall be made in U.S. dollars. Except as expressly provided in this Agreement, for all purposes of this Agreement (including, for the avoidance of doubt, the calculation of the SpinCo Retained Cash Amount), any amount which is not expressed in U.S. dollars shall be converted into U.S. dollars by using the exchange rate published on Bloomberg at 5:00 p.m., United States Eastern Standard Time two (2) Business Days prior to the relevant date or in The Wall Street Journal on such date if not so published on Bloomberg. Except as expressly provided in this Agreement, in the event that any indemnification payment required to be made hereunder or under any Ancillary Agreement may be denominated in a currency other than U.S. dollars, the amount of such payment shall be converted into U.S. Dollars on the date in which notice of the claim is given to the Indemnifying Party.

 

 

(c)            Except as expressly provided to the contrary in this Agreement or in any Ancillary Agreement and except of any amount payable pursuant to or in connection with the Redemption Consideration, any amount not paid when due pursuant to this Agreement or any Ancillary Agreement (and any amounts billed or otherwise invoiced or demanded and properly payable that are not paid within forty-five (45) days of a notice of non-payment) shall accrue interest at a rate per annum equal to the Prime Rate plus two percent (2%).

 

5.3            Treatment of Payments for Tax Purposes. For all applicable Tax purposes, the Parties agree to treat any payment required by this Agreement as set forth in Section 13.01 of the Tax Matters Agreement.

 

5.4            Inducement. SpinCo acknowledges and agrees that Parent’s willingness to cause, effect and consummate the Separation and the Redemption has been conditioned upon and induced by SpinCo’s covenants and agreements in this Agreement and the Ancillary Agreements, including SpinCo’s assumption of the SpinCo Liabilities pursuant to the Separation and the provisions of this Agreement and SpinCo’s covenants and agreements contained in Article IV.

 

5.5            Post-Effective Time Conduct. The Parties acknowledge that, after the Effective Time, each Party shall be independent of the other Party, with responsibility for its own actions and inactions and its own Liabilities relating to, arising out of or resulting from the conduct of its business, operations and activities following the Effective Time, except as may otherwise be provided in any Ancillary Agreement, and each Party shall (except as otherwise provided in Article IV) use commercially reasonable efforts to prevent such Liabilities from being inappropriately borne by the other Party.

 

Article VI
EXCHANGE OF INFORMATION; CONFIDENTIALITY

 

6.1            Agreement for Exchange of Information.

 

(a)            Parent and SpinCo shall use commercially reasonable efforts to transfer the SpinCo Books and Records and the Parent Books and Records, as applicable, to the other Party or another member of its Group prior to or at the Effective Time. To the extent any SpinCo Books and Records or Parent Books and Records are not so transferred at the Effective Time, the Transition Committee shall work in good faith to determine procedures for the delivery of such SpinCo Books and Records or Parent Books and Records, as applicable (the “Agreed Procedures”); provided that, unless otherwise mutually agreed by the Parties, the Parties will only be required to provide the SpinCo Books and Records and Parent Books and Records, as applicable, (i) in electronic form (unless such records only exist in non-electronic form, it being understood that neither Party shall be obligated to create electronic copies of any such records) and (ii) in the form, condition and format in which they then exist, and will not be required to perform any improvement, modification, conversion, updating or reformatting of any SpinCo Books and Records or Parent Books and Records. Following the Effective Time, the Parties shall, and shall cause the members of their respective Groups to, deliver the SpinCo Books and Records and the Parent Books and Records, as applicable, in accordance with the Agreed Procedures.

 

 

(b)            Subject to Section 6.9 and any other applicable confidentiality obligations, each of Parent and SpinCo, on behalf of itself and each member of its Group, agrees to use commercially reasonable efforts to provide or make available, or cause to be provided or made available, to the other Party and the members of such other Party’s Group, at any time before, at or after the Effective Time, as soon as reasonably practicable after written request therefor, any information (or a copy thereof) in the possession or under the control of such Party or its Group which the requesting Party or its Group requests to the extent that (i) such information relates to the SpinCo Business, or any SpinCo Asset or SpinCo Liability, if SpinCo is the requesting Party, or to the Parent Business, or any Parent Asset or Parent Liability, if Parent is the requesting Party; (ii) such information is required by the requesting Party to comply with its obligations under this Agreement or any Ancillary Agreement; or (iii) such information is required by the requesting Party to comply with any obligation imposed by any Governmental Authority; provided, however, that, in the event that the Party to whom the request has been made determines that any such provision of information could be detrimental to the Party providing the information, violate any Law or agreement, or waive any privilege available under applicable Law, including any attorney-client privilege, then the Parties shall use commercially reasonable efforts to permit compliance with such obligations to the extent and in a manner that avoids any such harm or consequence.  The Party providing information pursuant to this Section 6.1 shall only be obligated to provide such information in the form, condition and format in which it then exists, and in no event shall such Party be required to perform any improvement, modification, conversion, updating or reformatting of any such information, and nothing in this Section 6.1 shall expand the obligations of either Party under Section 6.4. Further, if either Party desires to make a Bulk Request, the requesting Party shall submit a written request to the other Party specifying in detail the information being requested and, following receipt of such written Bulk Request, the requested Party shall prepare and deliver a written response to the requesting Party within ten (10) business days of such receipt of such written Bulk Request, which response shall include the time period that the requested Party needs for delivery of the information included in such Bulk Request. “Bulk Request” shall mean a request (or series of related requests) (x) during the ninety (90) days immediately following the Closing, for more than one hundred (100) documents in a week and (y) thereafter, for more than one hundred (100) documents in a month.

 

(c)            Without limiting the generality of the foregoing, until the end of the SpinCo fiscal year during which the Redemption Date occurs (and for a reasonable period of time afterwards as required for each Party to prepare consolidated financial statements or complete a financial statement audit for the fiscal year during which the Redemption Date occurs), each Party shall use its commercially reasonable efforts to cooperate with the other Party’s information requests to enable, as applicable, (i) the other Party to meet its timetable for dissemination of its earnings releases, financial statements and management’s assessment of the effectiveness of its disclosure controls and procedures and its internal control over financial reporting in accordance with Items 307 and 308, respectively, of Regulation S-K promulgated under the Exchange Act, or other applicable reporting obligations; and (ii) the other Party’s accountants to timely complete their review of the quarterly financial statements and audit of the annual financial statements, including, to the extent applicable to such Party, its auditor’s audit of its internal control over financial reporting and management’s assessment thereof in accordance with Section 404 of the Sarbanes-Oxley Act of 2002, the SEC’s and Public Company Accounting Oversight Board’s rules and auditing standards thereunder and any other applicable Laws.

 

 

6.2            Ownership of Information. The provision of any information pursuant to Section 6.1 or Section 6.7 shall not affect the ownership of such information (which shall be determined solely in accordance with the terms of this Agreement and the Ancillary Agreements) or constitute a grant of rights in or to any such information.

 

6.3            Compensation for Providing Information. The Party requesting information agrees to reimburse the other Party for the reasonable costs, if any, of creating, gathering, copying, transporting and otherwise complying with the request with respect to such information (including any reasonable costs and expenses incurred in any review of information for purposes of protecting the Privileged Information of the providing Party or in connection with the restoration of backup media for purposes of providing the requested information). Except as may be otherwise specifically provided elsewhere in this Agreement, any Ancillary Agreement or any other agreement between the Parties, such costs shall be computed in accordance with the providing Party’s standard methodology and procedures.

 

6.4            Record Retention. To facilitate the possible exchange of information pursuant to this Article VI and other provisions of this Agreement after the Effective Time, the Parties agree to use their commercially reasonable efforts, which shall be no less rigorous than those used for retention of such Party’s own information, to retain all information of the other Party in their respective possession or control at the Effective Time (including all information stored in applicable servers, databases and physical archival locations) in substantial accordance with the policies of Parent as in effect at the Effective Time, including any legal hold or other document preservation obligation or such other policies as may be adopted by Parent after the Effective Time (provided that Parent notifies SpinCo in writing of any such change that is material, and such policies do not intentionally materially adversely discriminate against information of SpinCo as compared to information of Parent). No Party will destroy, or permit any of its Subsidiaries to destroy, any information which the other Party may have the right to obtain pursuant to this Agreement prior to the end of the retention period set forth in such policies without first notifying the other Party of the proposed destruction and giving the other Party the opportunity to take possession of such information prior to such destruction. Notwithstanding the foregoing, the Tax Matters Agreement will exclusively govern the retention of Tax-related records and the exchange of Tax-related information, and the Employee Matters Agreement will exclusively govern the retention of employment and benefits related records.

 

6.5            Limitations of Liability. Neither Party shall have any Liability to the other Party in the event that any information exchanged or provided pursuant to this Agreement is found to be inaccurate in the absence of gross negligence, bad faith, fraud or willful misconduct by the Party providing such information. Neither Party shall have any Liability to any other Party if any information is destroyed after commercially reasonable efforts by such Party to comply with the provisions of Section 6.4.

 

 

6.6            Other Agreements Providing for Exchange of Information.

 

(a)            The rights and obligations granted under this Article VI are subject to any specific limitations, qualifications or additional provisions on the sharing, exchange, retention or confidential treatment of information set forth in any Ancillary Agreement.

 

(b)            Any party that receives, pursuant to a request for information in accordance with this Article VI, Tangible Information that is not relevant to its request shall use commercially reasonable efforts to (i) return it to the providing Party or, at the providing Party’s request, destroy such Tangible Information; and (ii) thereafter, deliver to the providing Party written confirmation that such Tangible Information was returned or destroyed, as the case may be, which confirmation shall be signed by an authorized representative of the requesting Party.

 

6.7            Production of Witnesses; Records; Cooperation.

 

(a)            After the Effective Time, except in the case of a Dispute between Parent and SpinCo, or any members of their respective Groups, each Party shall use its commercially reasonable efforts to make available to the other Party, upon written request, the former, current and future directors, officers, employees, other personnel and agents of the members of its respective Group as witnesses or to provide information and any books, records or other documents within its control or which it otherwise has the ability to make available without undue burden, to the extent that any such person (giving consideration to business demands of such directors, officers, employees, other personnel and agents) or books, records or other documents may reasonably be required in connection with any Action in which the requesting Party (or member of its Group) may from time to time be involved, regardless of whether such Action is a matter with respect to which indemnification may be sought hereunder. The requesting Party shall bear all costs and expenses in connection therewith.

 

(b)            If an Indemnifying Party chooses to defend or to seek to compromise or settle any Third-Party Claim, the other Party shall make available to such Indemnifying Party, upon written request, the former, current and future directors, officers, employees, other personnel and agents of the members of its respective Group as witnesses or to provide information and any books, records or other documents within its control or which it otherwise has the ability to make available without undue burden, to the extent that any such person (giving consideration to business demands of such directors, officers, employees, other personnel and agents) or books, records or other documents may reasonably be required in connection with such defense, settlement or compromise, or such prosecution, evaluation or pursuit, as the case may be, and shall otherwise cooperate in such defense, settlement or compromise, or such prosecution, evaluation or pursuit, as the case may be.

 

(c)            Without limiting the foregoing, the Parties shall cooperate and consult to the extent reasonably necessary with respect to any Actions described in clauses (a) or (b) of this Section 6.7.

 

 

(d)            The obligation of the Parties to provide witnesses and information pursuant to this Section 6.7 is intended to be interpreted in a manner so as to facilitate cooperation and shall include the obligation to provide directors, officers, employees, other personnel and agents as witnesses or to provide information without regard to whether such person or the employer of such person could assert a possible business conflict (subject to the exception set forth in the first sentence of Section 6.7(a)).

 

6.8            Privileged Matters.

 

(a)            The Parties recognize that legal and other professional services that have been and will be provided prior to the Effective Time have been and will be rendered for the collective benefit of each of the members of the Parent Group and the SpinCo Group, and that each of the members of the Parent Group and the SpinCo Group should be deemed to be the client with respect to such services for the purposes of asserting all privileges which may be asserted under applicable Law in connection therewith. The Parties recognize that legal and other professional services will be provided following the Effective Time, which services will be rendered solely for the benefit of the Parent Group or the SpinCo Group, as the case may be. In furtherance of the foregoing, each Party shall authorize the delivery to and/or retention by the other Party of materials existing as of the Effective Time that are necessary for such other Party to perform or receive such services.

 

(b)            The Parties agree as follows:

 

(i)            Parent shall be entitled, in perpetuity, to control the assertion or waiver of all privileges and immunities in connection with any Privileged Information that relates solely to the Parent Business and not to the SpinCo Business, whether or not the Privileged Information is in the possession or under the control of any member of the Parent Group or any member of the SpinCo Group. Parent shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges and immunities in connection with any Privileged Information that relates solely to any Parent Liabilities resulting from any Actions that are now pending or may be asserted in the future, whether or not the Privileged Information is in the possession or under the control of any member of the Parent Group or any member of the SpinCo Group;

 

(ii)            SpinCo shall be entitled, in perpetuity, to control the assertion or waiver of all privileges and immunities in connection with any Privileged Information that relates solely to the SpinCo Business and not to the Parent Business, whether or not the Privileged Information is in the possession or under the control of any member of the SpinCo Group or any member of the Parent Group. SpinCo shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges and immunities in connection with any Privileged Information that relates solely to any SpinCo Liabilities resulting from any Actions that are now pending or may be asserted in the future, whether or not the Privileged Information is in the possession or under the control of any member of the SpinCo Group or any member of the Parent Group; and

 

(iii)            If the Parties do not agree as to whether certain information is Privileged Information, then such information shall be treated as Privileged Information, and the Party that believes that such information is Privileged Information shall be entitled to control the assertion or waiver of all privileges and immunities in connection with any such information unless the Parties otherwise agree.  The Parties shall use the procedures set forth in Article VII to resolve any disputes as to whether any information relates solely to the Parent Business, solely to the SpinCo Business, or to both the Parent Business and the SpinCo Business.

 

 

(c)            Subject to the remaining provisions of this Section 6.8, the Parties agree that they shall have a shared privilege or immunity with respect to all privileges and immunities not allocated pursuant to Section 6.8(b) and all privileges and immunities relating to any Actions or other matters that involve both Parties (or one (1) or more members of their respective Groups) and in respect of which both Parties have Liabilities under this Agreement, and that no such shared privilege or immunity may be waived by either Party without the consent of the other Party.

 

(d)            If any Dispute arises between the Parties or any members of their respective Groups regarding whether a privilege or immunity should be waived to protect or advance the interests of either Party and/or any member of their respective Groups, each Party agrees that it shall (i) negotiate with the other Party in good faith; (ii) endeavor to minimize any prejudice to the rights of the other Party; and (iii) not unreasonably withhold consent to any request for waiver by the other Party.  Further, each Party specifically agrees that it shall not withhold its consent to the waiver of a privilege or immunity for any purpose except in good faith to protect its own legitimate interests.

 

(e)            In the event of any Dispute between Parent and SpinCo, or any members of their respective Groups, either Party may waive a privilege in which the other Party or member of such other Party’s Group has a shared privilege, without obtaining consent pursuant to Section 6.8(c); provided that the Parties intend such waiver of a shared privilege to be effective only as to the use of information with respect to the Action between the Parties and/or the applicable members of their respective Groups, and is not intended to operate as a waiver of the shared privilege with respect to any Third Party.

 

(f)            Upon receipt by either Party, or by any member of its respective Group, of any subpoena, discovery or other request that may reasonably be expected to result in the production or disclosure of Privileged Information subject to a shared privilege or immunity or as to which another Party has the sole right hereunder to assert a privilege or immunity, or if either Party obtains knowledge that any of its, or any member of its respective Group’s, current or former directors, officers, agents or employees have received any subpoena, discovery or other requests that may reasonably be expected to result in the production or disclosure of such Privileged Information, such Party shall promptly notify the other Party of the existence of the request (which notice shall be delivered to such other Party no later than five (5) business days following the receipt of any such subpoena, discovery or other request) and shall provide the other Party a reasonable opportunity to review the Privileged Information and to assert any rights it or they may have under this Section 6.8 or otherwise, to prevent the production or disclosure of such Privileged Information.

 

 

(g)            Any furnishing of, or access or transfer of, any information pursuant to this Agreement is made in reliance on the agreement of Parent and SpinCo set forth in this Section 6.8 and in Section 6.9 to maintain the confidentiality of Privileged Information and to assert and maintain all applicable privileges and immunities. The Parties agree that their respective rights to any access to information, witnesses and other Persons, the furnishing of notices and documents and other cooperative efforts between the Parties contemplated by this Agreement, and the transfer of Privileged Information between the Parties and members of their respective Groups as needed pursuant to this Agreement, shall not be deemed a waiver of any privilege that has been or may be asserted under this Agreement or otherwise.

 

(h)            In connection with any matter contemplated by Section 6.7 or this Section 6.8, the Parties agree to, and to cause the applicable members of their Group to, use commercially reasonable efforts to maintain their respective separate and joint privileges and immunities, including by executing joint defense and/or common interest agreements where necessary or useful for this purpose.

 

6.9            Confidentiality.

 

(a)            Confidentiality. Subject to Section 6.10, and without prejudice to any longer period or separate provisions that may be provided for in any of the Ancillary Agreements, from and after the Effective Time until the three (3)-year anniversary of the Effective Time, each of Parent and SpinCo, on behalf of itself and each member of its respective Group, agrees to hold, and to cause its respective Representatives to hold, in strict confidence, with at least the same degree of care that applies to Parent’s confidential and proprietary information pursuant to policies in effect as of the Effective Time, all confidential and proprietary information concerning the other Party or any member of the other Party’s Group or their respective businesses that is either in its possession (including confidential and proprietary information in its possession prior to the Redemption Date) or furnished by any such other Party or any member of such Party’s Group or their respective Representatives at any time pursuant to this Agreement, any Ancillary Agreement or otherwise, and shall not use any such confidential and proprietary information other than for such purposes as may be expressly permitted hereunder or thereunder, except, in each case, to the extent that such confidential and proprietary information has been (i) in the public domain or generally available to the public, other than as a result of a disclosure by such Party or any member of such Party’s Group or any of their respective Representatives in violation of this Agreement, (ii) later lawfully acquired from other sources by such Party (or any member of such Party’s Group) which sources are not themselves known by such Party (or any member of such Party’s Group) to be bound by a confidentiality obligation or other contractual, legal or fiduciary obligation of confidentiality with respect to such confidential and proprietary information, or (iii) independently developed or generated without reference to or use of any proprietary or confidential information of the other Party or any member of such Party’s Group. Notwithstanding the foregoing three (3)-year period, Parent’s and SpinCo’s obligations with respect to confidential and proprietary information that constitutes Trade Secrets shall survive and continue for so long as such confidential and proprietary information retains its status as a Trade Secret. Unless otherwise specified in this Agreement or any Ancillary Agreement, if any confidential and proprietary information of one Party or any member of its Group is disclosed to the other Party or any member of such other Party’s Group in connection with providing services to such first Party or any member of such first Party’s Group under this Agreement or any Ancillary Agreement, then such disclosed confidential and proprietary information shall be used only as required to perform such services. Each Party shall be liable for any failure by its respective Representatives to comply with the restrictions on use and disclosure of confidential information contained in this Agreement.

 

 

(b)            No Release; Return or Destruction. Each Party agrees not to release or disclose, or permit to be released or disclosed, any information addressed in Section 6.9(a) to any other Person, except its Representatives who need to know such information in their capacities as such (who shall be advised of their obligations hereunder with respect to such information), and except in compliance with Section 6.10. Without limiting the foregoing, when any such information is no longer needed for the purposes contemplated by this Agreement or any Ancillary Agreement, and is no longer subject to any legal hold or other document preservation obligation, each Party will promptly after request of the other Party either return to the other Party all such information in a tangible form (including all copies thereof and all notes, extracts or summaries based thereon) or notify the other Party in writing that it has destroyed such information (and such copies thereof and such notes, extracts or summaries based thereon); provided, that the Parties may retain electronic back-up versions of such information maintained on routine computer system backup tapes, disks or other backup storage devices or physical archival back-up versions of such information maintained in storage locations; provided further, that any such information so retained shall remain subject to the confidentiality provisions of this Agreement or any Ancillary Agreement.

 

(c)            Third-Party Information; Privacy or Data Protection Laws. Each Party acknowledges that it and members of its Group may presently have and, following the Effective Time, may gain access to or possession of confidential or proprietary information of, or legally-protected personal information (including personal health information) relating to, Third Parties (i) that was received under privacy policies or notices and/or confidentiality or non-disclosure agreements entered into between such Third Parties, on the one hand, and the other Party or members of such other Party’s Group, on the other hand, prior to the Effective Time; or (ii) that, as between the two Parties, was originally collected by the other Party or members of such other Party’s Group and that may be subject to and protected by privacy policies or notices, as well as applicable data privacy Laws or other applicable Laws. Each Party agrees that it shall hold, protect and use, and shall cause the members of its Group and its and their respective Representatives to hold, protect and use, in strict confidence the confidential and proprietary information of, or legally-protected personal information (including personal health information) relating to, Third Parties in accordance with the applicable privacy policies or notices and applicable data privacy Laws or other applicable Laws and the terms of any agreements that were either entered into before the Effective Time or affirmative commitments or representations that were made before the Effective Time by, between or among the other Party or members of the other Party’s Group, on the one hand, and such Third Parties, on the other hand.

 

6.10            Protective Arrangements. In the event that a Party or any member of its Group either determines on the advice of its counsel that it is required to disclose any information pursuant to applicable Law or receives any request or demand under lawful process or from any Governmental Authority to disclose or provide information of the other Party (or any member of the other Party’s Group) that is subject to the confidentiality provisions hereof, such Party shall notify the other Party (to the extent legally permitted) as promptly as practicable under the circumstances prior to disclosing or providing such information and shall cooperate, at the expense of the other Party, in seeking any appropriate protective order requested by the other Party. In the event that such other Party fails to receive such appropriate protective order in a timely manner and the Party receiving the request or demand reasonably determines that its failure to disclose or provide such information shall actually prejudice the Party receiving the request or demand, then the Party that received such request or demand may thereafter disclose or provide information to the extent required by such Law (as so advised by its counsel) or by lawful process or such Governmental Authority, and the disclosing Party shall promptly provide the other Party with a copy of the information so disclosed, in the same form and format so disclosed, together with a list of all Persons to whom such information was disclosed, in each case to the extent legally permitted.

 

 

6.11            Commingled Records. The Parties acknowledge and agree that, as a result of the historical association of the SpinCo Business and the Parent Business, there exist significant quantities of books and records and other Tangible Information that include both Tangible Information pertaining to the SpinCo Business and Tangible Information pertaining to the Parent Business in such a manner that the Tangible Information relating to one may not readily or practically be separable from the Tangible Information relating to the other (such as emails and other unstructured data and physical archival documents) and, further, that it may be the case that each Group, following the Effective Time, will control, possess or have access to Tangible Information that relates exclusively to the Business of the other Group (such Tangible Information controlled or possessed by or available to a Group that relates exclusively to the business of the other Group, the “Commingled Excluded Information”). While the Parties acknowledge and agree that it is not practicable or necessary for a Group to sort, separate, purge, delete, redact or return all of its Commingled Excluded Information, each Party shall use commercially reasonable efforts to (i) at least once following the Effective Time, reasonably inform its respective employees or other personnel who may have access to Commingled Excluded Information of their obligations with respect to such Commingled Excluded Information, including under Section 6.9 hereof, and (ii) upon identifying Tangible Information that contains or is commingled with Commingled Excluded Information, avoid using or disclosing Commingled Excluded Information other than in accordance with this Article VI.

 

Article VII
DISPUTE RESOLUTION

 

7.1            Transition Committee. Subject to Section 7.5, either Party seeking resolution of any dispute, controversy or claim arising out of or relating to this Agreement or any Ancillary Agreement (including regarding whether any Assets are SpinCo Assets or Parent Assets, any Liabilities are SpinCo Liabilities or Parent Liabilities or the validity, interpretation, breach or termination of this Agreement or any Ancillary Agreement) (a “Dispute”), shall provide written notice thereof to the Transition Committee (the “Initial Notice”). Following the delivery of the Initial Notice, the Transition Committee shall attempt to resolve the Dispute through the procedures it is empowered to adopt in accordance with Section 2.13. If the Transition Committee is unable for any reason to resolve a Dispute within thirty (30) days after the delivery of the Initial Notice, the Parties shall enter into good-faith negotiations in accordance with Section 7.2 and Section 7.3.

 

 

7.2            Good-Faith Officer Negotiation. If a Dispute is not resolved pursuant to Section 7.1 and the Transition Committee does not include at least one Authorized Representative from each Party, the Transition Committee shall provide written notice thereof to each Party (the “Officer Negotiation Request”). Within thirty (30) days of the delivery of the Officer Negotiation Request, the Parties shall attempt to resolve the Dispute through good faith negotiation. All such negotiations shall be conducted by executives who hold, at a minimum, the title of Senior Vice President and who have authority to settle the Dispute (each, an “Authorized Representative”). All such negotiations shall be confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence. If the Parties are unable for any reason to resolve a Dispute within thirty (30) days of receipt of the Officer Negotiation Request, and such thirty (30) day period is not extended by mutual written consent of the Parties, the Chief Executive Officers of the Parties shall enter into good faith negotiations in accordance with Section 7.3.

 

7.3            CEO Negotiation. If any Dispute is not resolved pursuant to Section 7.2, the Transition Committee shall provide written notice of such Dispute to the Chief Executive Representative of each Party (a “CEO Negotiation Request”). As soon as reasonably practicable but no later than twenty (20) days following receipt of a CEO Negotiation Request, the Chief Executive Officers of the Parties shall begin conducting good faith negotiations with respect to such Dispute. All such negotiations shall be confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence. If the Chief Executive Officers of the Parties are unable for any reason to resolve a Dispute within thirty (30) days of receipt of a CEO Negotiation Request, and such thirty (30) day period is not extended by mutual written consent of the Parties, the Dispute shall be submitted to mediation in accordance with Section 7.4.

 

7.4            Mediation. In the event that a Dispute has not been resolved within thirty (30) days of the receipt of a CEO Negotiation Request in accordance with Section 7.3, or within such longer period as the Parties may agree to in writing, then such Dispute shall, upon the written request of a Party (the “Mediation Request”), be submitted to mandatory mediation in accordance with the International Institute for Conflict Prevention & Resolution (“CPR”) Mediation Procedure (the “Procedure”) then in effect, except as modified herein. The mediation shall be held in (i) New York City, New York, or (ii) such other place as the Parties may mutually agree in writing. The Parties shall have fifteen (15) days from receipt of a Mediation Request to agree on a mediator. If no mediator has been agreed upon by the Parties within fifteen (15) days of receipt of a Mediation Request, then any Party may request (on written notice to the other Party) that CPR appoint a mediator in accordance with the Procedure. If the Dispute has not been resolved within thirty (30) days of the appointment of a mediator, or within such longer period as the Parties may agree to in writing, either Party may commence litigation in accordance with Section 10.2; provided, however, that if one Party fails to participate in the mediation, the other Party may commence litigation in accordance with Section 10.2 prior to the expiration of the time periods set forth above.

 

 

7.5            Litigation. Notwithstanding the foregoing provisions of this Article VII, a Party may seek preliminary provisional or injunctive judicial relief with respect to a Dispute without first complying with the procedures set forth in Section 7.1, Section 7.2, Section 7.3 and Section 7.4 if such action is reasonably necessary to avoid irreparable damage.

 

7.6            Conduct During Dispute Resolution Process. Unless otherwise agreed in writing, the Parties shall, and shall cause the respective members of their Groups to, continue to honor all commitments under this Agreement and each Ancillary Agreement to the extent required by such agreements during the course of dispute resolution pursuant to the provisions of this Article VII, unless such commitments are the specific subject of the Dispute at issue.

 

Article VIII
FURTHER ASSURANCES AND ADDITIONAL COVENANTS

 

8.1            Further Assurances.

 

(a)            In addition to the actions specifically provided for elsewhere in this Agreement, each of the Parties shall use its reasonable best efforts, prior to, on and after the Effective Time, to take, or cause to be taken, all actions, and to do, or cause to be done, all things, reasonably necessary, proper or advisable under applicable Laws, regulations and agreements to consummate and make effective the transactions contemplated by this Agreement and the Ancillary Agreements.

 

(b)            Without limiting the foregoing, prior to, on and after the Effective Time, each Party hereto shall cooperate with the other Party, and without any further consideration, but at the expense of the requesting Party, to execute and deliver, or use its reasonable best efforts to cause to be executed and delivered, all instruments, including instruments of conveyance, assignment and transfer, and to make all filings with, and to obtain all Approvals or Notifications of, any Governmental Authority or any other Person under any Permit, license, agreement, indenture or other instrument (including any consents or Governmental Approvals), and to take all such other actions as such Party may reasonably be requested to take by the other Party from time to time, consistent with the terms of this Agreement and the Ancillary Agreements, in order to effectuate the provisions and purposes of this Agreement and the Ancillary Agreements and the transfers of the SpinCo Assets and the Parent Assets and the assignment and assumption of the SpinCo Liabilities and the Parent Liabilities and the other transactions contemplated hereby and thereby. Without limiting the foregoing, each Party will, at the reasonable request, cost and expense of the requesting Party, take such other actions as may be reasonably necessary to vest in such other Party good and marketable title to the Assets allocated to such Party under this Agreement or any of the Ancillary Agreements, free and clear of any Security Interest, if and to the extent it is practicable to do so.

 

(c)            On or prior to the Effective Time, Parent and SpinCo in their respective capacities as direct and indirect stockholders of the members of their Groups, shall each ratify any actions which are reasonably necessary or desirable to be taken by Parent, SpinCo or any of the members of their respective Groups, as the case may be, to effectuate the transactions contemplated by this Agreement and the Ancillary Agreements.

 

 

(d)            Parent and SpinCo, and each of the members of their respective Groups, waive (and agree not to assert against any of the others) any claim or demand that any of them may have against any of the others for any Liabilities or other claims relating to or arising out of: (i) the failure of SpinCo or any other member of the SpinCo Group, on the one hand, or of Parent or any other member of the Parent Group, on the other hand, to provide any notification or disclosure required under any state Environmental Law in connection with the Separation or the other transactions contemplated by this Agreement, including the transfer by any member of any Group to any member of the other Group of ownership or operational control of any Assets not previously owned or operated by such transferee; or (ii) any inadequate, incorrect or incomplete notification or disclosure under any such state Environmental Law by the applicable transferor. To the extent any Liability to any Governmental Authority or any Third Party arises out of any action or inaction described in clause (i) or (ii) above, the transferee of the applicable Asset hereby assumes and agrees to pay any such Liability.

 

8.2            Use of Marks.

 

(a)            Parent Marks.

 

(i)            Neither SpinCo nor any member of the SpinCo Group shall have any rights in or to the Parent Marks under this Agreement, except as expressly provided in this Section 8.2 and subject to the terms and conditions hereof. The SpinCo Business may temporarily (except as provided in Section 8.2(a)(ii)) continue to use the Trademarks included in the Parent Marks following the Effective Time, solely to the extent not prohibited by applicable Law, and solely to the extent and in the same manner as used by the SpinCo Business prior to the Effective Time, so long as SpinCo shall, and shall cause each member of the SpinCo Group to, (A) immediately after the Effective Time cease to hold itself and each other member of the SpinCo Group out as having any affiliation with Parent or any member of the Parent Group, (B) use the Parent Marks with goods and services and otherwise in a manner associated, in each case, with at least as high a degree of quality as immediately prior to the Effective Time, and (C) use reasonable best efforts to minimize and eliminate use of the Parent Marks by the SpinCo Business from and after the Effective Time; provided, that as soon as reasonably practicable after the Closing Date (and in any event within twelve (12) months thereafter) SpinCo shall, and shall cause each member of the SpinCo Group to, (X) cease and discontinue use, as a Trademark, of all Parent Marks and (Y) complete the removal of the Parent Marks from all products, signage, vehicles, properties, technical information and promotional or other marketing materials and other assets; provided, further, that products of the SpinCo Business in finished goods inventory (to the extent the same bear any of the Parent Marks on or within twelve (12) months of the Effective Time) may be disposed of without remarking in the ordinary course of business until the date that is eighteen (18) months following the Effective Time or until the supply is exhausted, whichever is the first to occur; provided, further, that to the extent a particular use by SpinCo or any member of the SpinCo Group of a Parent Mark is required by applicable Law or may be necessary to maintain the necessary Permits to continue to manufacture, commercialize, distribute or sell SpinCo Business products, SpinCo or such member shall be permitted to continue to use such Parent Mark for such use solely to the extent and for such period as such use is required by applicable Law so long as SpinCo and each applicable member of the SpinCo Group uses reasonable best efforts to cease use of such Parent Mark throughout such period of use, including to obtain any Approvals or Notifications required to cease such use.

 

 

(ii)            Subject to Section 8.2(c), the temporary nature of the rights granted in this Section 8.2(a) and the obligation in this Section 8.2(a) for the SpinCo Business to minimize, eliminate, and cease and discontinue use of, or remove, the Parent Marks shall not apply to its use of the items identified on Schedule 8.2(a)(ii) hereof (subject to Parent’s continued right to enforce reasonable quality control measures with respect to the use of such items to the extent incorporating a Parent Mark).

 

(iii)            Subject to Section 8.2(c), to the extent any member of the SpinCo Group has any rights in any Parent Marks, each member of the Parent Group shall be licensed under such rights to use the Parent Marks in the ordinary course of business consistent with its manner of use of the other Parent Marks.

 

(iv)            Any and all goodwill that arises from use of the Parent Marks by SpinCo or any member of the SpinCo Group shall inure solely to the benefit of Parent or the other members of the Parent Group, as applicable.

 

(b)            SpinCo Marks.

 

(i)            Neither Parent nor any member of the Parent Group shall have any rights in or to the SpinCo Marks under this Agreement, except as expressly provided in this Section 8.2(b) and subject to the terms and conditions hereof. The Parent Business may temporarily (except as provided in Section 8.2(b)(ii)) continue to use the Trademarks included in the SpinCo Marks following the Effective Time, solely to the extent not prohibited by applicable Law, and solely to the extent and in the same manner as used by the Parent Business prior to the Effective Time, so long as Parent shall, and shall cause each member of the Parent Group to, (A) immediately after the Effective Time cease to hold itself and each other member of the Parent Group out as having any affiliation with SpinCo or any member of the SpinCo Group, (B) use the SpinCo Marks with goods and services and otherwise in a manner associated, in each case, with at least as high a degree of quality as immediately prior to the Effective Time, and (C) use reasonable best efforts to minimize and eliminate use of the SpinCo Marks by the Parent Business from and after the Effective Time; provided, that as soon as reasonably practicable after the Closing Date (and in any event within twelve (12) months thereafter) Parent shall, and shall cause each member of the Parent Group to, (X) cease and discontinue use, as a Trademark, of all SpinCo Marks and (Y) to the extent practicable complete the removal of the SpinCo Marks from all products, signage, vehicles, properties, technical information and promotional or other marketing materials and other assets; provided, further, that products of the Parent Business in finished goods inventory (to the extent the same bear any of the SpinCo Marks on or within twelve (12) months of the Effective Time) may be disposed of without remarking in the ordinary course of business until the date that is eighteen (18) months following the Effective Time or until the supply is exhausted, whichever is the first to occur; provided, further, that to the extent a particular use by Parent or any member of the Parent Group of a SpinCo Mark is required by applicable Law or may be necessary to maintain the necessary Permits to continue to manufacture, commercialize, distribute or sell Parent Business products or services, Parent or such member shall be permitted to continue to use such SpinCo Mark for such use solely to the extent and for such period as such use is required by applicable Law so long as Parent and each applicable member of the Parent Group uses reasonable best efforts to cease use of such SpinCo Mark throughout such period of use, including to obtain any Approvals or Notifications required to cease such use.

 

 

(ii)            Subject to Section 8.2(c), the temporary nature of the rights granted in this Section 8.2(b) and the obligation in this Section 8.2(b) for the Parent Business to minimize, eliminate, and cease and discontinue use of, or remove, the SpinCo Marks shall not apply to its use of the items identified on Schedule 8.2(b)(ii) hereof (subject to SpinCo’s continued right to enforce reasonable quality control measures with respect to the use of such items to the extent incorporating a SpinCo Mark).

 

(iii)            Subject to Section 8.2(c), to the extent any member of the Parent Group has any rights in any SpinCo Marks, each member of the SpinCo Group shall be licensed under such rights to use the SpinCo Marks in the ordinary course of business consistent with its manner of use of the other SpinCo Marks.

 

(iv)            Any and all goodwill that arises from use of the SpinCo Marks by Parent or any member of the Parent Group shall inure solely to the benefit of SpinCo or the other members of the SpinCo Group, as applicable.

 

(c)            The Parties hereto acknowledge and agree that, as a result of the historic use by the SpinCo Business and the Parent Business of the Parent Marks and the SpinCo Marks, including as corporate names, in connection with products and marketing materials, and otherwise, the Parties and their Group members have historically been associated with the Parent Marks and the SpinCo Marks. Notwithstanding any allocation of rights or ownership of the Parent Marks or the SpinCo Marks as between the Parent Group and SpinCo Group, the Parties intend to avoid, and will cooperate in good faith to address, any confusion or other issues that may arise in connection with either Party’s or members of its Group’s use of or historic association with the Parent Marks or the SpinCo Marks, including by the decision of each of the Parties to re-brand and transition away from significant Trademark usage of the Parent Marks and the SpinCo Marks.

 

8.3            Non-Competition.

 

(a)            Non-Competition. SpinCo covenants and agrees that, from the Effective Time until the second (2nd) anniversary of the Redemption Date, it will not, and will cause each other member of the SpinCo Group not to, directly or indirectly, own, invest in, operate, manage, control, participate or engage in any Prohibited Business without the prior written consent of Parent; provided, that nothing in this Section 8.3(a) will prohibit (i) the ownership by SpinCo or any member of the SpinCo Group of debt, equity or any other class of securities of any Person that owns, invests in, operates, manages, controls, participates or engages directly or indirectly in a Prohibited Business, provided ownership of such securities (either directly, indirectly or upon conversion) is less than 5% of such class of securities of such Person, (ii) SpinCo from engaging in a Prohibited Business to the extent that SpinCo’s revenues in respect of the Prohibited Business represent no more than 1% of SpinCo’s consolidated revenues or (iii) any member of the SpinCo Group from exercising its rights or performing or complying with its obligations under this Agreement or any Ancillary Agreement.

 

 

(b)            Remedies; Enforcement. SpinCo acknowledges and agrees that (i) injury to Parent from any breach of the obligations of SpinCo set forth in this Section 8.3 would be irreparable and impossible to measure and (ii) the remedies at law for any breach or threatened breach of this Section 8.3, including monetary damages, would therefore be inadequate compensation for any loss and Parent shall have the right to specific performance and injunctive or other equitable relief in accordance with Section 10.13, in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative. SpinCo understands and acknowledges that the restrictive covenants and other agreements contained in this Section 8.3 are an essential part of this Agreement and the transactions contemplated hereby. It is the intent of the Parties that the provisions of this Section 8.3 shall be enforced to the fullest extent permissible under applicable Law applied in each jurisdiction in which enforcement is sought. If any particular provision or portion of this Section 8.3 shall be adjudicated to be invalid or unenforceable, such provision or portion thereof shall be deemed amended to the minimum extent necessary to render such provision or portion valid and enforceable, such amendment to apply only with respect to the operation of such provision or portion thereof in the particular jurisdiction in which such adjudication is made. Any such adjudication of invalidity or unenforceability shall not affect the validity or enforceability of such provision or portion thereof in any other jurisdiction where it remains lawful and enforceable.

 

(c)            The term “Prohibited Business” shall mean, for purposes of this Section 8.3, the research, commercialization, development, manufacture, use, marketing or distribution of Acthar® Gel or Xiaflex®, including any product containing corticotropin or collagenase as an active ingredient, and any analog, reformulation, improvement, enhancement, combination, refinement, recombinant form, fragment, or modified form of any of the foregoing, or any product that is a generic or biosimilar, generically equivalent or functionally or therapeutically equivalent or similar to, or intended for the same or any similar therapeutic indication, use or patient population as either such product.

 

8.4            Patent Covenant Not to Sue. It is the current understanding of the Parties that neither the conduct of the SpinCo Business as of the Effective Time practices any Patents included in the Parent Assets nor the conduct of the Parent Business as of the Effective Time practices any Patents included in the SpinCo Assets. Notwithstanding the foregoing, each Party hereby covenants and agrees, effective as of the Effective Time, that neither it nor its Group shall bring any Action against the other Party or its Group or their direct customers or suppliers alleging that (i) (where such Action is brought against any member of the SpinCo Group or its direct customers or suppliers) the conduct of the businesses of any member of the SpinCo Group that is substantially the same as the conduct of the SpinCo Business as of the Effective Time infringes a Covered Parent Patent or (ii) (where such Action is brought against any member of the Parent Group or its direct customers or suppliers) the conduct of the businesses of the Parent Group that is substantially the same as the conduct of the Parent Business as of the Effective Time infringes any Covered SpinCo Patent. A “Covered Parent Patent” means a Patent included in the Parent Assets that was practiced, or absent a right thereto would have been infringed, by the conduct of the SpinCo Business as of the Effective Time. A “Covered SpinCo Patent” means a Patent included in the SpinCo Assets that was practiced, or absent a right thereto would have been infringed, by the conduct of the Parent Business as of the Effective Time.

 

 

8.5            Other Intellectual Property Cross-License.

 

(a)            Effective as of the Effective Time, Parent, on behalf of itself and the Parent Group, hereby grants to each member of the SpinCo Group a worldwide, irrevocable, non-terminable, non-exclusive, fully-paid, royalty-free, non-transferable (except as provided pursuant to Section 8.5(g)), non-sublicensable (except as provided pursuant to Section 8.5(e)) license under all Intellectual Property Rights (other than Patents, Marks, Internet Properties and Registered IP) included in the Parent Assets that are owned by the Parent Group and that are used or held for use in and related to the SpinCo Business to use, reproduce, distribute, disclose, make, modify, improve, display, perform, create derivative works of and otherwise exploit the SpinCo Technology, in each case, solely with respect to the SpinCo Business and natural evolutions thereof; it being understood that the foregoing license does not require the delivery or disclosure to the SpinCo Group of any assets, know-how or Technology.

 

(b)            Effective as of the Effective Time, SpinCo, on behalf of itself and the SpinCo Group, hereby grants to each member of the Parent Group a worldwide, irrevocable, non-terminable, non-exclusive, fully-paid, royalty-free, non-transferable (except as provided pursuant to Section 8.5(g)), non-sublicensable (except as provided pursuant to Section 8.5(e)) license under all Intellectual Property Rights (other than Patents, Marks, Internet Properties and Registered IP) included in the SpinCo Assets that are owned by the SpinCo Group and that are used or held for use in and related to the Parent Business to use, reproduce, distribute, disclose, make, modify, improve, display, perform, create derivative works of and otherwise exploit the Technology included in the Parent Assets, in each case, solely with respect to the Parent Business and natural evolutions thereof; it being understood that the foregoing license does not require the delivery or disclosure to the Parent Group of any assets know-how or Technology.

 

(c)            License Term. Each license granted under Section 8.5(a) and Section 8.5(b), respectively, will continue until the final expiration, abandonment, or entering into the public domain of all Intellectual Property Rights licensed under such license.

 

(d)            Transfer of Licenses by Licensors. Nothing set forth herein shall restrict the Parent Group or SpinCo Group, as the case may be (each, in their capacities as licensors under this Section 8.5, the “Licensors”), from transferring, abandoning, assigning, pledging or licensing any Intellectual Property Rights owned by them and licensed hereunder to the SpinCo Group or Parent Group, respectively (each, in their capacities as licensees under this Section 8.5, the “Licensees”); provided that any transfer, assignment, pledge or license of such Intellectual Property Rights shall be subject to the licenses granted in this Section 8.5.

 

(e)            Sublicensing. No Licensee may sublicense the license granted to them under this Section 8.5 to a third party except (i) as provided pursuant to Section 8.5(f), or (ii) in connection with the operation of their business in the ordinary course and on terms that are no less protective and restrictive than the terms under which Licensee licenses its own like Intellectual Property Rights. Without limiting the foregoing, any sublicense, distribution, display, performance or other disclosure to a third party by any Licensee of any Trade Secrets or confidential information licensed to them under this Section 8.5 shall be subject to the following: (A) each Licensee shall, and shall require its sublicensees or other third parties to whom it provides or discloses the Trade Secrets and confidential information licensed to the Licensee under this Section 8.5, to treat such Trade Secrets and confidential information with at least the same degree of care as such Licensee treats their own similar Trade Secrets and confidential information, but in no event with less than reasonable care; and (B) shall not disclose any Trade Secrets or confidential information licensed to Licensee under this Section 8.5 to a third party, except in connection with the disclosure of such Licensee’s own confidential information or Trade Secrets of at least comparable importance and value; and

 

 

(f)            Rights of Subsidiaries. Any licenses granted pursuant to this Section 8.5 extend to each entity that is Parent or SpinCo’s Subsidiary, as applicable, but only for so long as such entity is a Subsidiary of Parent or SpinCo, respectively, and, accordingly, except as provided in this Section 8.5(f), the license to such entity shall terminate upon such entity ceasing to be a Subsidiary of such Party. If a Party divests a Subsidiary, or business unit, actively engaged in a business (including in a sale to a third party or in a public offering) such that such entity is no longer a Subsidiary of, or such business unit is no longer owned by, such Party, upon providing written notice of such divestiture to the other Party, such Party may grant the divested entity or new owner of such business unit a sublicense under the licenses granted to such Party pursuant to this Section 8.5, provided that such sublicense shall only extend to the products, services and other business operations of such divested entity or business unit at the time it ceased to be a Subsidiary or business unit of such Party, and natural evolutions thereof that are of the same general type, and not to the products, services or other business operations of any third party. Such sublicense granted to the divested entity or new owner of such business unit in accordance with the foregoing shall not affect or limit the licenses granted to the Licensees or the obligations and duties of the Licensees hereunder.

 

(g)            Transfer of Licenses by Licensees. Except as expressly set forth herein, no Licensee may assign, transfer, or permit the assumption of the licenses nor any of the rights or benefits granted to them pursuant to this Section 8.5 directly or indirectly, in whole or in part, whether voluntarily or involuntarily or by operation of law or otherwise, without the prior written consent of, in the case of assignment or transfer by the Parent Group Licensees, SpinCo or, in the case of the assignment or transfer by the SpinCo Group Licensees, Parent. Notwithstanding the foregoing, a Licensee Party may assign such licenses to a third party, or permit a third party to assume such licenses, in whole or in relevant part, in connection with, or as a result of, the acquisition of such Licensee Party (whether by equity or asset sale or merger or otherwise) by, or the sale of substantially all of the assets of such Licensee Party to which the license relates to, such third party; provided that such third party assumes all of the applicable obligations of such Licensee Party by operation of law or by express assignment, as the case may be. Any purported assignment or transfer of such licenses, rights or benefits in violation of this Section 8.5(g) shall be null and void ab initio.

 

(h)            Rights in Bankruptcy. All rights and licenses granted to a Licensee Party as licensee under this Section 8.5 are, for purposes of section 365(n) of the United States Bankruptcy Code (the “Bankruptcy Code”), licenses of intellectual property within the scope of section 101 of the Bankruptcy Code. Each Licensor acknowledges that each Licensee, as a licensee of such rights and licenses hereunder, will retain and may fully exercise all of its rights and elections under the Bankruptcy Code. Each Licensor Party irrevocably waives all arguments and defenses arising under 11 U.S.C. § 365(c)(1) or successor provisions to the effect that applicable Law excuses such Party from accepting performance from or rendering performance to an entity other than the debtor or debtor-in-possession as a basis for opposing assumption of this Agreement in a case under Chapter 11 of the Bankruptcy Code to the extent that such consent is required under 11 U.S.C. § 365(c)(1) or any successor statute.

 

 

(i)            Except for the rights and licenses to Intellectual Property Rights expressly set forth in Section 8.2, Section 8.4 or this Section 8.5 (which rights and licenses are, for the avoidance of doubt, non-exclusive), no rights or licenses to Intellectual Property Rights are granted hereunder by a Party or Licensor to the other Party or Licensee by implication, estoppel or otherwise. None of the rights or licenses to Intellectual Property Rights granted to the SpinCo Group under Section 8.4 or this Section 8.5 shall extend to the research, development, manufacture, commercialization, use, marketing or distribution of Acthar® Gel or Xiaflex®, including any product containing corticotropin or collagenase as an active ingredient, and any analog, reformulation, improvement, enhancement, combination, refinement, recombinant form, fragment, or modified form of any of the foregoing, or any product that is a generic or biosimilar, generically equivalent or functionally or therapeutically equivalent or similar to either such product.

 

Article IX
TERMINATION

 

9.1            Termination. This Agreement and all Ancillary Agreements may be terminated and the Redemption may be amended, modified or abandoned at any time prior to the Effective Time by Parent, in its sole and absolute discretion, without the approval or consent of any other Person, including SpinCo. After the Effective Time, this Agreement may not be terminated except by an agreement in writing signed by a duly authorized officer of each of the Parties.

 

9.2            Effect of Termination. In the event of any termination of this Agreement prior to the Effective Time, no Party (nor any of its directors, officers or employees) shall have any Liability or further obligation to the other Party by reason of this Agreement.

 

Article X
MISCELLANEOUS

 

10.1          Counterparts; Entire Agreement; Corporate Power.

 

(a)            This Agreement and each Ancillary Agreement may be executed in one (1) or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one (1) or more counterparts have been signed by each of the Parties and delivered to the other Party.

 

(b)            This Agreement, the Ancillary Agreements and the Exhibits, Schedules and appendices hereto and thereto contain the entire agreement between the Parties with respect to the subject matter hereof, supersede all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter, and there are no agreements or understandings between the Parties other than those set forth or referred to herein or therein. This Agreement and the Ancillary Agreements together govern the arrangements in connection with the Separation and the Redemption and would not have been entered into independently.

 

 

(c)            Parent represents on behalf of itself and each other member of the Parent Group, and SpinCo represents on behalf of itself and each other member of the SpinCo Group, as follows:

 

(i)            each such Person has the requisite corporate or other power and authority and has taken all corporate or other action necessary in order to execute, deliver and perform this Agreement and each Ancillary Agreement to which it is a party and to consummate the transactions contemplated hereby and thereby; and

 

(ii)            this Agreement and each Ancillary Agreement to which it is a party have been duly executed and delivered by it and constitute valid and binding agreements of it enforceable in accordance with the terms thereof.

 

(d)            Each Party acknowledges that it and each other Party may execute this Agreement and certain of the Ancillary Agreements by facsimile, stamp, electronic or mechanical signature, and that delivery of an executed counterpart of a signature page to this Agreement or any Ancillary Agreement (whether executed by manual, stamp, electronic or mechanical signature) by facsimile or by e-mail in portable document format (PDF) shall be effective as delivery of such executed counterpart of this Agreement or such Ancillary Agreement. Each Party expressly adopts and confirms each such facsimile, stamp, electronic or mechanical signature (regardless of whether delivered in person, by mail, by courier, by facsimile or by e-mail in portable document format (PDF)) made in its respective name as if it were a manual signature delivered in person, agrees that it will not assert that any such signature or delivery is not adequate to bind such Party to the same extent as if it were signed manually and delivered in person and agrees that, at the reasonable request of the other Party at any time, it will as promptly as reasonably practicable cause this Agreement or any Ancillary Agreement to be manually executed (any such execution to be as of the date of the initial date thereof) and delivered in person, by mail or by courier.

 

10.2          Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.

 

(a)            This Agreement and, unless expressly provided therein, each Ancillary Agreement (and any claims or disputes arising out of or related hereto or thereto or to the transactions contemplated hereby and thereby or to the inducement of any party to enter herein and therein, whether for breach of contract, tortious conduct or otherwise and whether predicated on common law, statute or otherwise) shall be governed by and construed and interpreted in accordance with the Laws of the State of Delaware irrespective of the choice of laws principles of the State of Delaware including all matters of validity, construction, effect, enforceability, performance and remedies.

 

 

(b)            Each Party hereto irrevocably agrees that any litigation relating to any Dispute with respect to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder brought by the other Party hereto or its successors or assigns, shall be brought and determined exclusively in the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware (or, solely in the case that the Delaware Court of Chancery declines to accept jurisdiction over a particular matter, any state or federal court within the State of Delaware) (the “Chosen Courts”). Each of the Parties hereto hereby irrevocably submits with regard to any such Dispute for itself and in respect of its property, generally and unconditionally, to the personal jurisdiction of the Chosen Courts and agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than the Chosen Courts. Each of the Parties hereto hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any Dispute with respect to this Agreement, (i) any claim that it is not personally subject to the jurisdiction of the Chosen Courts, (ii) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (iii) to the fullest extent permitted by applicable Law, any claim that (A) the Dispute in such court is brought in an inconvenient forum, (B) the venue of such Dispute is improper or (C) this Agreement, or the subject matter hereof, may not be enforced in or by such courts. To the fullest extent permitted by applicable Law, each Party hereto hereby consents to the service of process in accordance with Section 10.5; provided that (I) nothing herein shall affect the right of any Party to serve legal process in any other manner permitted by Law and (II) each such Party’s consent to jurisdiction and service contained in this Section 10.2(b) is solely for the purpose referred to in this Section 10.2(b) and shall not be deemed to be a general submission to said courts or in the State of Delaware other than for such purpose.

 

(c)            EACH PARTY HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

10.3           Assignability. Except as set forth in any Ancillary Agreement, this Agreement and each Ancillary Agreement shall be binding upon and inure to the benefit of the Parties and the parties thereto, respectively, and their respective successors and permitted assigns; provided, however, that neither Party nor any such party thereto may assign its rights or delegate its obligations under this Agreement or any Ancillary Agreement without the express prior written consent of the other Party hereto or other parties thereto, as applicable. Notwithstanding the foregoing, no such consent shall be required for the assignment of a Party’s rights and obligations under this Agreement and the Ancillary Agreements (except as may be otherwise provided in any such Ancillary Agreement) in whole (i.e., the assignment of a Party’s rights and obligations under this Agreement and all Ancillary Agreements at the same time) in connection with a change of control of a Party so long as the resulting, surviving or transferee Person assumes all the obligations of the relevant party thereto by operation of Law or pursuant to an agreement in form and substance reasonably satisfactory to the other Party.

 

 

10.4         Third-Party Beneficiaries. Except for the indemnification rights under this Agreement and each Ancillary Agreement of any Parent Indemnitee or SpinCo Indemnitee in their respective capacities as such, (a) the provisions of this Agreement and each Ancillary Agreement are solely for the benefit of the Parties and are not intended to confer upon any Person except the Parties any rights or remedies hereunder, and (b) there are no third-party beneficiaries of this Agreement or any Ancillary Agreement and neither this Agreement nor any Ancillary Agreement shall provide any Third Party with any remedy, claim, Liability, reimbursement, claim of action or other right in excess of those existing without reference to this Agreement or any Ancillary Agreement. Without limitation of the foregoing sentence of this Section 10.4, the provisions of this Agreement are not intended to confer on any Record Holder or Street Name Holder any rights or remedies hereunder and this Agreement shall not provide any such person with any remedy, claim, Liability, reimbursement, claim or action or other right.

 

10.5          Notices. All notices, requests, claims, demands or other communications under this Agreement and, to the extent applicable and unless otherwise provided therein, under each of the Ancillary Agreements, shall be in writing and shall be given or made (and except as provided herein, shall be deemed to have been duly given or made upon receipt) by delivery in person, by overnight courier service, by certified mail, return receipt requested, by electronic mail (“e-mail”), so long as confirmation of receipt of such e-mail is requested and received, to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 10.5):

 

	If to Parent, to:
	Mallinckrodt plc
	College Business & Technology Park
	Cruiserath, Blanchardstown
	Dublin 15, Ireland
	Attention:	Executive Vice President and Chief Legal Officer
	E-mail:	Mark.Tyndall@mnk.com
	with a copy (which shall not constitute notice) to:
	Wachtell, Lipton, Rosen & Katz
	51 West 52nd Street
	New York, New York 10019
	Attention:	Adam O. Emmerich
		Victor Goldfeld
	Email:	AOEmmerich@wlrk.com
		VGoldfeld@wlrk.com
	and
	Arthur Cox LLP
	Ten Earlsfort Terrace
	Dublin 2, Ireland

	Attention:	Stephen Ranalow
	Email:	stephen.ranalow@arthurcox.com

 

 

	If to SpinCo, to:
	Par Health, Inc.
	675 McDonnell Blvd
	Hazelwood, MO 63042
	Attention:	Chief Legal Officer and Corporate Secretary
	E-mail:	maletta.matthew@endo.com
	with a copy (which shall not constitute notice) to:
	Wachtell, Lipton, Rosen & Katz
	51 West 52nd Street
	New York, New York 10019
	Attention:	Adam O. Emmerich
		Victor Goldfeld
	Email:	AOEmmerich@wlrk.com
		VGoldfeld@wlrk.com
	and
	Arthur Cox LLP
	Ten Earlsfort Terrace
	Dublin 2, Ireland
	Attention:	Stephen Ranalow
	Email:	stephen.ranalow@arthurcox.com

 

A Party may, by notice to the other Party, change the address to which such notices are to be given or made.

 

10.6          Severability. If any provision of this Agreement or any Ancillary Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof or thereof, or the application of such provision to Persons or circumstances or in jurisdictions other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby. Upon such determination, the Parties shall negotiate in good faith in an effort to agree upon such a suitable and equitable provision to effect the original intent of the Parties.

 

10.7          Force Majeure. No Party shall be deemed in default of this Agreement or, unless otherwise expressly provided therein, any Ancillary Agreement for any delay or failure to fulfill any obligation (other than a payment obligation) hereunder or thereunder so long as and to the extent to which any delay or failure in the fulfillment of such obligation is prevented, frustrated, hindered or delayed as a consequence of circumstances of Force Majeure. In the event of any such excused delay, the time for performance of such obligations (other than a payment obligation) shall be extended for a period equal to the time lost by reason of the delay. A Party claiming the benefit of this provision shall, as soon as reasonably practicable after the occurrence of any such event, (a) provide written notice to the other Party of the nature and extent of any such Force Majeure condition; and (b) use commercially reasonable efforts to remove any such causes and resume performance under this Agreement and the Ancillary Agreements, as applicable, as soon as reasonably practicable.

 

 

10.8          No Set-Off. Except as expressly set forth in any Ancillary Agreement or as otherwise mutually agreed to in writing by the Parties, neither Party nor any member of such Party’s Group shall have any right of set-off or other similar rights with respect to (a) any amounts received pursuant to this Agreement or any Ancillary Agreement; or (b) any other amounts claimed to be owed to the other Party or any member of its Group arising out of this Agreement or any Ancillary Agreement.

 

10.9          Expenses. Except as otherwise expressly set forth in this Agreement or any Ancillary Agreement, or as otherwise agreed to in writing by the Parties, all fees, costs and expenses incurred on or prior to the Effective Time in connection with the preparation, execution, delivery and implementation of this Agreement, including the Separation and the Redemption, and any Ancillary Agreement, the Separation, the Information Statement, the Separation Step Plan and the consummation of the transactions contemplated hereby and thereby will be borne by the Party or its applicable Subsidiary incurring such fees, costs or expenses.

 

10.10         Headings. The article, section and paragraph headings contained in this Agreement and in the Ancillary Agreements are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement or any Ancillary Agreement.

 

10.11        Survival. Except as expressly set forth in this Agreement or any Ancillary Agreement, the covenants, representations and warranties contained in this Agreement and each Ancillary Agreement, and Liability for the breach of any obligations contained herein, shall survive the Separation and the Redemption and shall remain in full force and effect.

 

10.12        Waivers of Default. Waiver by a Party of any default by the other Party of any provision of this Agreement or any Ancillary Agreement shall not be deemed a waiver by the waiving Party of any subsequent or other default, nor shall it prejudice the rights of the other Party. No failure or delay by a Party in exercising any right, power or privilege under this Agreement or any Ancillary Agreement shall operate as a waiver thereof, nor shall a single or partial exercise thereof prejudice any other or further exercise thereof or the exercise of any other right, power or privilege.

 

10.13        Specific Performance. Subject to the provisions of Article VII, in the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement or any Ancillary Agreement, the Party or Parties who are, or are to be, thereby aggrieved shall have the right to specific performance and injunctive or other equitable relief in respect of its or their rights under this Agreement or such Ancillary Agreement, in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative. The Parties agree that the remedies at law for any breach or threatened breach, including monetary damages, are inadequate compensation for any loss and that any defense in any action for specific performance that a remedy at law would be adequate is waived. Any requirements for the securing or posting of any bond with such remedy are waived by each of the Parties.

 

 

10.14        Amendments. No provisions of this Agreement or any Ancillary Agreement shall be deemed waived, amended, supplemented or modified by a Party, unless such waiver, amendment, supplement or modification is in writing and signed by the authorized representative of the Party against whom it is sought to enforce such waiver, amendment, supplement or modification.

 

10.15        Interpretation. In this Agreement and any Ancillary Agreement, (a) words in the singular shall be deemed to include the plural and vice versa and words of one gender shall be deemed to include the other genders as the context requires; (b) the terms “hereof,” “herein,” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement (or the applicable Ancillary Agreement) as a whole (including all of the Schedules, Exhibits and Appendices hereto and thereto) and not to any particular provision of this Agreement (or such Ancillary Agreement); (c) Article, Section, Schedule, Exhibit and Appendix references are to the Articles, Sections, Schedules, Exhibits and Appendices to this Agreement (or the applicable Ancillary Agreement) unless otherwise specified; (d) unless otherwise stated, all references to any agreement (including this Agreement and each Ancillary Agreement) shall be deemed to include the exhibits, schedules and annexes (including all Schedules, Exhibits and Appendices) to such agreement; (e) the word “including” and words of similar import when used in this Agreement (or the applicable Ancillary Agreement) shall mean “including, without limitation,” unless otherwise specified; (f) the word “or” shall not be exclusive; (g) the word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if”; (h) unless otherwise specified in a particular case, the word “days” refers to calendar days; (i) references to “business day” shall mean any day other than a Saturday, a Sunday or a day on which banking institutions are generally authorized or required by Law to close in the United States; (j) references herein to this Agreement or any other agreement contemplated herein shall be deemed to refer to this Agreement or such other agreement as of the date on which it is executed and as it may be amended, modified or supplemented thereafter, unless otherwise specified; and (k) unless expressly stated to the contrary in this Agreement or in any Ancillary Agreement, all references to “the date hereof,” “the date of this Agreement,” “hereby” and “hereupon” and words of similar import shall all be references to November 10, 2025.

 

10.16         Limitations of Liability. Notwithstanding anything in this Agreement to the contrary, neither SpinCo or any member of the SpinCo Group, on the one hand, nor Parent or any member of the Parent Group, on the other hand, shall be liable under this Agreement to the other for any consequential, indirect, incidental, punitive, exemplary, remote, speculative or similar damages (including lost revenue or profits, diminution of value, or damages calculated on multiples of revenue, earnings or other metrics approaches) in excess of compensatory damages of the other arising in connection with the transactions contemplated hereby (other than any such Liability with respect to a Third-Party Claim).

 

 

10.17        Performance. Parent will cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth in this Agreement or in any Ancillary Agreement to be performed by any member of the Parent Group. SpinCo will cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth in this Agreement or in any Ancillary Agreement to be performed by any member of the SpinCo Group. Each Party (including its permitted successors and assigns) further agrees that it will (a) give timely notice of the terms, conditions and continuing obligations contained in this Agreement and any applicable Ancillary Agreement to all of the other members of its Group and (b) cause all of the other members of its Group not to take any action or fail to take any such action inconsistent with such Party’s obligations under this Agreement, any Ancillary Agreement or the transactions contemplated hereby or thereby.

 

10.18        Mutual Drafting; Precedence.

 

(a)            This Agreement and the Ancillary Agreements shall be deemed to be the joint work product of the Parties and any rule of construction that a document shall be interpreted or construed against a drafter of such document shall not be applicable.

 

(b)            In the event of any conflict or inconsistency between, on the one hand, the terms of this Agreement and, on the other hand, the terms of the Ancillary Agreements (other than the Transfer Documents) (each, a “Specified Ancillary Agreement”), the terms of the applicable Specified Ancillary Agreement shall control with respect to the subject matter addressed by such Specified Ancillary Agreement to the extent of such conflict or inconsistency. In the event of any conflict or inconsistency between the terms of this Agreement and the terms of the Transfer Agreements, the terms of this Agreement shall control to the extent of such conflict or inconsistency. In the event of any conflict or inconsistency between the terms of this Agreement or any Specified Ancillary Agreement, on the one hand, and any Transfer Document, on the other hand, including with respect to the allocation of Assets and Liabilities as among the Parties or the members of their respective Groups, this Agreement or such Specified Ancillary Agreement shall control.

 

[Remainder of page intentionally left blank]

 

 

IN WITNESS WHEREOF, the Parties have caused this Separation Agreement to be executed by their duly authorized representatives as of the date first written above.

 

	MALLINCKRODT PLC
	By:	/s/ Sigurdur Olafsson
		Name:	Sigurdur Olafsson
		Title:	President and Chief Executive Officer
	PAR HEALTH, INC.
	By:	/s/ Stephen Welch
		Name:	Stephen Welch
		Title:	President and Chief Executive Officer

 

[Signature Page to Separation Agreement]

 

 

 

Exhibit 10.1

 

TRANSITION SERVICES AGREEMENT

 

BY AND BETWEEN

 

MALLINCKRODT PLC

 

AND

 

PAR HEALTH, INC.

 

DATED AS OF NOVEMBER 10, 2025

 

 

TABLE OF CONTENTS

 

Page

 

Article I DEFINITIONS		2
Section 1.01.	Definitions	2
Article II SERVICES		5
Section 2.01.	Services	5
Section 2.02.	Performance of Services	6
Section 2.03.	Charges for Services	7
Section 2.04.	Reimbursement for Out-of-Pocket Costs and Expenses	7
Section 2.05.	Changes in the Performance of Services	8
Section 2.06.	Transitional Nature of Services	9
Section 2.07.	Subcontracting	9
Section 2.08.	TSA Committee; TSA Committee Members	9
Section 2.09.	Service Limitations	10
Section 2.10.	Use of Services	11
Article III BILLING; TAXES		11
Section 3.01.	Procedure	11
Section 3.02.	Late Payments	11
Section 3.03.	Taxes	12
Section 3.04.	No Set-Off	12
Article IV TERM AND TERMINATION		12
Section 4.01.	Term	12
Section 4.02.	Early Termination	13
Section 4.03.	Extension of Services	14
Section 4.04.	Interdependencies	14
Section 4.05.	Effect of Termination	15
Section 4.06.	Return of Provider Equipment	15
Section 4.07.	Information Transmission	15
Article V CONFIDENTIALITY; PROTECTIVE ARRANGEMENTS		16
Section 5.01.	Parent and SpinCo Obligations	16
Section 5.02.	No Release; Return or Destruction	16
Section 5.03.	Privacy and Data Protection Laws	17
Section 5.04.	Protective Arrangements	19
Article VI LIMITED LIABILITY AND INDEMNIFICATION		20
Section 6.01.	Limitations on Liability	20

 

 

Section 6.02.	Obligation to Re-Perform; Liabilities	21
Section 6.03.	Third-Party Claims	21
Section 6.04.	Indemnification Procedures	21
Article VII MISCELLANEOUS		21
Section 7.01.	Mutual Cooperation	21
Section 7.02.	Further Assurances	21
Section 7.03.	Audit Assistance	22
Section 7.04.	Intellectual Property	22
Section 7.05.	Independent Contractors	22
Section 7.06.	Counterparts; Entire Agreement; Corporate Power	23
Section 7.07.	Governing Law	23
Section 7.08.	Assignability	24
Section 7.09.	Third-Party Beneficiaries	24
Section 7.10.	Notices	24
Section 7.11.	Severability	25
Section 7.12.	Force Majeure	26
Section 7.13.	Headings	26
Section 7.14.	Survival of Covenants	26
Section 7.15.	Waivers of Default	26
Section 7.16.	Dispute Resolution	26
Section 7.17.	Specific Performance	27
Section 7.18.	Amendments	27
Section 7.19.	Precedence of Schedules	27
Section 7.20.	Interpretation	28
Section 7.21.	Mutual Drafting	28

 

 

TRANSITION SERVICES AGREEMENT

 

This TRANSITION SERVICES AGREEMENT, dated as of November 10, 2025 (this “Agreement”), by and between Mallinckrodt plc, an Irish public limited company (and that is in the process of changing its name to Keenova Therapeutics plc) (“Parent” or “Keenova”), and Par Health, Inc., a Delaware corporation and a subsidiary of Parent (“SpinCo” or “Par Health”).

 

R E C I T A L S

 

WHEREAS, the Board of Directors of Parent (the “Parent Board”) has determined that it is in the best interests of Parent and its stockholders to have created a new privately held company that shall operate the SpinCo Business;

 

WHEREAS, in furtherance of the foregoing, the Parent Board has determined that it is appropriate and desirable to separate the SpinCo Business from the Parent Business (the “Separation”) and, following the Separation, to effect the Redemption and the other transactions contemplated by the Separation Agreement, in each case, on the terms and subject to the conditions set forth in the Separation Agreement;

 

WHEREAS, SpinCo has been incorporated solely for these purposes and has not engaged in activities, except in connection with the Separation and the Redemption;

 

WHEREAS, in order to effectuate the Separation and the Redemption, Parent and SpinCo have entered into that certain Separation Agreement, dated as of November 10, 2025 (together with the schedules, exhibits and appendices thereto, the “Separation Agreement”);

 

WHEREAS, SpinCo and Parent have prepared, and Parent has filed with the SEC on a Current Report on Form 8-K, an Information Statement that sets forth disclosures concerning SpinCo, the Separation and the Redemption;

 

WHEREAS, in order to facilitate and provide for an orderly transition in connection with the Separation, the Parties desire to enter into this Agreement to set forth the terms and conditions pursuant to which each of the Parties shall provide Services to the other Party for a transitional period; and

 

WHEREAS, the Parties acknowledge that this Agreement, the Separation Agreement, and the other Ancillary Agreements represent the integrated agreement of Parent and SpinCo relating to the Separation and the Redemption, are being entered into together, and would not have been entered into independently.

 

 

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

 

Article I
DEFINITIONS

 

Section 1.01.         Definitions. For purposes of this Agreement (including the Recitals hereof), the following terms shall have the following meanings, and capitalized terms used but not otherwise defined herein shall have the meaning ascribed to them in the Separation Agreement:

 

“Action” shall have the meaning set forth in the Separation Agreement.

 

“Additional Services” shall have the meaning set forth in Section 2.01(b).

 

“Affiliate” shall have the meaning set forth in the Separation Agreement.

 

“Agreement” shall have the meaning set forth in the Preamble.

 

“Ancillary Agreements” shall have the meaning set forth in the Separation Agreement.

 

“CCPA” shall have the meaning set forth in Section 5.03(c).

 

“Charge” and “Charges” shall have the meaning set forth in Section 2.03.

 

“Confidential Information” shall mean all Information that is confidential and proprietary.

 

“Dispute” shall have the meaning set forth in Section 7.16(a).

 

“DPA” shall mean that certain Data Processing Addendum, dated November 10, 2025, by and between the Parties.

 

“e-mail” shall have the meaning set forth in Section 7.10.

 

“Effective Time” shall mean 12:01 A.M., United States Eastern Standard Time, on the Redemption Date, or such other time on the Redemption Date as is approved by the Parent Board.

 

“Excluded Service” shall mean any service or function set forth and designated as such in the Schedules hereto or any other service or function that the Parties have mutually agreed in writing will not be provided pursuant to this Agreement.

 

“Force Majeure” shall have the meaning set forth in the Separation Agreement.

 

“Governmental Authority” shall have the meaning set forth in the Separation Agreement.

 

“Information” shall mean information, whether or not patentable or copyrightable, in written, oral, electronic or other tangible or intangible forms, stored in any medium, including studies, reports, records, books, contracts, instruments, surveys, discoveries, ideas, concepts, know-how, techniques, designs, specifications, drawings, blueprints, diagrams, models, prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes, computer programs or other software, marketing plans, customer names, communications by or to attorneys (including attorney-client privileged communications), memos and other materials prepared by attorneys or under their direction (including attorney work product), and other technical, financial, employee or business information or data; provided that “Information” shall not include Intellectual Property Rights.

 

 

“Information Security Incident” shall have the meaning set forth in Section 5.03(h)(i).

 

“Intellectual Property Rights” has the meaning set forth in the Separation Agreement.

 

“Interest Payment” shall have the meaning set forth in Section 3.02.

 

“Law” shall have the meaning set forth in the Separation Agreement.

 

“Level of Service” shall have the meaning set forth in Section 2.02(c).

 

“Liabilities” shall have the meaning set forth in the Separation Agreement.

 

“Losses” shall have the meaning set forth in the Separation Agreement.

 

“Minimum Service Period” shall mean the period commencing on the Redemption Date and ending sixty (60) days after the Redemption Date, unless otherwise specified with respect to a particular service on the Schedules hereto.

 

“Monthly Invoice” shall have the meaning set forth in Section 3.01(b).

 

“Parent” shall have the meaning set forth in the Preamble.

 

“Parent Board” shall have the meaning set forth in the Recitals.

 

“Parent Business” shall have the meaning set forth in the Separation Agreement.

 

“Party” or “Parties” shall mean the parties to this Agreement.

 

“Person” shall have the meaning set forth in the Separation Agreement.

 

“Personal Information” shall have the meaning set forth in Section 5.03(a).

 

“Privacy and Security Rules” shall have the meaning set forth in Section 5.03.

 

“Provider” shall mean, with respect to any Service, the Party (or the Affiliate of such Party) providing (or causing to be provided) such Service.

 

“Provider Indemnitees” shall have the meaning set forth in Section 6.03.

 

“Recipient” shall mean, with respect to any Service, the Party (or the Affiliate of such Party) receiving such Service.

 

 

“Redemption” shall have the meaning set forth in the Separation Agreement.

 

“Redemption Date” shall have the meaning set forth in the Separation Agreement.

 

“Representatives” shall have the meaning set forth in the Separation Agreement.

 

“Reversion Notice” shall have the meaning set forth in Section 4.02(a)(i).

 

“Sales and Services Taxes” shall have the meaning set forth in Section 3.03.

 

“Separation” shall have the meaning set forth in the Recitals.

 

“Separation Agreement” shall have the meaning set forth in the Recitals.

 

“Service Extension” shall have the meaning set forth in Section 4.03.

 

“Service Period” shall mean, with respect to any Service, the period commencing on the Redemption Date and ending on the earliest of (a) the date that a Party terminates the provision of such Service pursuant to Section 4.02 and (b) the date specified for termination of such Service on the Schedules hereto.

 

“Service Suspension Period” shall have the meaning set forth in Section 4.03.

 

“Services” shall have the meaning set forth in Section 2.01(a).

 

“SpinCo” shall have the meaning set forth in the Preamble.

 

“SpinCo Business” shall have the meaning set forth in the Separation Agreement.

 

“SpinCo Shares” shall have the meaning set forth in the Separation Agreement.

 

“Subsidiary” shall have the meaning set forth in the Separation Agreement.

 

“Tax” shall have the meaning set forth in the Tax Matters Agreement.

 

“Taxing Authority” shall mean a Governmental Authority responsible for the administration of any Tax.

 

“Term” shall have the meaning set forth in Section 4.01.

 

“Termination Charges” shall mean, with respect to the termination of any Service pursuant to Section 4.02(a)(i), any and all costs, fees and expenses (including the costs of terminating or maintaining any IT applications or systems or applicable licenses solely used in connection with the provision of the applicable Service and excluding any severance or retention costs) unless otherwise specified with respect to a particular Service on the Schedules hereto, or in the other Ancillary Agreements, payable by Provider to a Third Party to the extent resulting from or required to be borne by Provider following or in connection with the early termination of such Service.

 

 

“Third Party” shall have the meaning set forth in the Separation Agreement.

 

“Third-Party Claim” shall mean any Action commenced by any Third Party against any Party or any of its Affiliates.

 

“TSA Committee” shall have the meaning set forth in Section 2.08(a).

 

“TSA Committee Member” shall have the meaning set forth in Section 2.08(b).

 

Article II
SERVICES

 

Section 2.01.         Services.

 

(a)            Commencing as of the Effective Time, Provider agrees to provide, or to cause one (1) or more of its Subsidiaries to provide, to Recipient, or any Subsidiary of Recipient, the applicable services (the “Services”) set forth on the Schedules hereto.

 

(b)            If, after the date of this Agreement, Recipient identifies a service that Provider provided to Recipient within twelve (12) months prior to the Redemption Date that Recipient reasonably needs in order for the SpinCo Business or the Parent Business, as applicable, to continue to operate in substantially the same manner in which the SpinCo Business or the Parent Business, as applicable, operated prior to the Redemption Date, and such service was not included on the Schedules hereto (other than an Excluded Service) and Recipient provides written notice to Provider within seventy-five (75) days after the Redemption Date requesting such additional services, then Provider shall use its commercially reasonable efforts to provide such requested additional services (such requested additional services, the “Additional Services”); provided, however, that Provider shall not be obligated to provide any Additional Service (A) if Provider does not, in its commercially reasonable judgment, have adequate resources to provide such Additional Service (taking into consideration any offer by Recipient to pay for such additional resources, subject to the limitations set forth in Section 2.09), (B) if the provision of such Additional Service would significantly disrupt the operation of Provider’s or its Subsidiaries’ businesses, (C) if the Parties, acting reasonably and in good faith, are unable to reach agreement on the terms thereof (including with respect to Charges therefor), (D) if Recipient is reasonably in a position to provide such Additional Services to itself or obtain such Additional Services from a Third Party on the same time frame as such services would be available from Provider, or (E) if the Parties, despite the use of commercially reasonable efforts, are unable to obtain a required Third-Party consent, license or approval for such Additional Service or the performance of such Additional Service by Provider would constitute a violation of any applicable Law. In connection with any request for Additional Services in accordance with this Section 2.01(b), the Parties shall negotiate in good faith the terms of a supplement to the applicable Schedule, which terms shall be consistent with the terms of, and the pricing methodology used for, similar Services provided under this Agreement, if applicable. Upon the mutual written agreement of the Parties, the supplement to the applicable Schedule shall describe in reasonable detail the nature, scope, Service Period(s), termination provisions and other terms applicable to such Additional Services in a manner similar to that in which the Services are described in the existing Schedules. Each supplement to the applicable Schedule, as agreed to in writing by the Parties, shall be deemed part of this Agreement as of the date of such agreement and the Additional Services set forth therein shall be deemed “Services” provided under this Agreement, in each case subject to the terms and conditions of this Agreement.

 

 

Section 2.02.         Performance of Services.

 

(a)            Subject to Section 2.05, Provider shall perform, or cause to be performed (directly, through one or more of its Subsidiaries, or through a Third-Party service provider in accordance herewith) all Services in a manner that is based on its past practice and that is substantially similar in nature, quality and timeliness to analogous services provided by or on behalf of Provider prior to the Effective Time, if applicable.

 

(b)            Nothing in this Agreement shall require Provider to perform or cause to be performed any Service to the extent that the manner of such performance would constitute a violation of any applicable Law or any existing contract or agreement with a Third Party. If Provider is or becomes aware of the potential for any such violation, Provider shall promptly advise Recipient of such potential violation, and the Parties will use commercially reasonable efforts to mutually seek an alternative that addresses such potential violation. The Parties agree to cooperate in good faith and use commercially reasonable efforts to obtain any necessary Third-Party consents, licenses or approvals required under any existing contract or agreement with a Third Party to allow Provider to perform, or cause to be performed, all Services to be provided hereunder in accordance with the standards set forth in this Section 2.02. Recipient shall reimburse Provider for all reasonable and documented out-of-pocket costs and expenses (if any) incurred by Provider or any of its Subsidiaries in connection with obtaining any such Third-Party consent, license or approval that is required to allow Provider to perform or cause to be performed such Services. If, with respect to a Service, the Parties, despite the use of such commercially reasonable efforts, are unable to obtain a required Third-Party consent, license or approval or the performance of such Service by Provider would constitute a violation of any applicable Law, Provider shall have no obligation whatsoever to perform or cause to be performed such Service.

 

(c)            Unless otherwise provided with respect to a specific Service on the Schedules hereto, Provider shall not be obligated to perform or cause to be performed any Service in a manner that is materially more burdensome (with respect to service quality, quantity or timeliness) than analogous services provided by Provider or its applicable functional group or Subsidiary (collectively referred to as the “Level of Service”) during the twelve (12) month period ending on the date of the Redemption Date.

 

(d)            EXCEPT AS EXPRESSLY SET FORTH HEREIN, RECIPIENT ACKNOWLEDGES AND AGREES THAT ALL SERVICES ARE PROVIDED ON AN “AS- IS” BASIS, THAT RECIPIENT ASSUMES ALL RISK AND LIABILITY ARISING FROM OR RELATING TO ITS USE OF AND RELIANCE UPON THE SERVICES, AND THAT PROVIDER, ITS AFFILIATES, OR ANY OTHER PERSON ON THEIR BEHALF MAKE NO OTHER REPRESENTATIONS, STATEMENTS OR COVENANTS, OR GRANT ANY WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, WITH RESPECT TO THE SERVICES. PROVIDER SPECIFICALLY DISCLAIMS ANY OTHER WARRANTIES, WHETHER WRITTEN OR ORAL, OR EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR USE OR PURPOSE OR THE NON-INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.

 

 

(e)            Each Party shall be responsible for its own compliance with any and all Laws applicable to its performance under this Agreement. No Party shall knowingly take any action in violation of any such applicable Law that results in Liability being imposed on the other Party.

 

Section 2.03.         Charges for Services. Unless otherwise provided with respect to a specific Service on the Schedules hereto, Recipient shall or shall cause one of its Subsidiaries to pay Provider (or its applicable Subsidiary, as directed by Provider) a fee (either one (1)-time or recurring) for such Services (or category of Services, as applicable) (each fee, constituting a “Charge” and, collectively, “Charges”), which Charges shall (i) be set forth on the applicable Schedules hereto, or if not so set forth, then, unless otherwise provided with respect to a specific Service on the Schedule hereto, the Parties shall negotiate in good faith a Charge which shall be consistent with the pricing methodology used for similar Services provided under this Agreement, if applicable and (ii) also include any reasonable and documented costs incurred by Provider to the extent not otherwise included in clause (i) above. During the term of this Agreement, the amount of a Charge for any Service may be modified in good faith to the extent of (a) any adjustments mutually agreed to by the Parties, (b) any adjustments due to a change in Level of Service requested by Recipient and agreed upon by Provider, (c) any adjustment in the rates or charges imposed by any Third-Party provider that is providing, or is related to the provision of, Services and (d) any adjustments due to error(s) in determining the amount of a Charge, as determined by Provider acting in good faith; provided that Provider will notify Recipient in writing of any such change in rates at least forty-five (45) days prior to the effective date of such rate change, unless the Service Period for such Service is less than forty-five (45) days, in which case the forty-five (45) day notification period shall be reduced to the number of days of the respective Service Period for such Service minus 15 days. Together with any invoice for Charges, Provider shall provide Recipient with reasonable documentation, including any additional documentation reasonably requested by Recipient to the extent that such documentation is in Provider’s or its Subsidiaries’ possession or control, to support the calculation of such Charges. If Recipient disputes any such change, such dispute shall be resolved in accordance with Section 7.16. Charges shown as charges for a specific period of time, e.g., monthly, quarterly, yearly, etc., shall be prorated for any period of less than such specific period of time as may be permitted hereunder.

 

Section 2.04.         Reimbursement for Out-of-Pocket Costs and Expenses. Recipient shall reimburse Provider for reasonable and documented out-of-pocket costs and expenses incurred by Provider or any of its Subsidiaries in connection with providing the Services (including reasonable travel-related expenses) to the extent that such costs and expenses are not reflected in the Charges for such Services; provided, however, that any such cost or expense in excess of one thousand dollars ($1,000) individually, or ten thousand dollars ($10,000) in the aggregate, shall be submitted to Recipient in writing at least five (5) business days in advance of the incurrence of such cost or expense, and Recipient shall have forty-eight (48) hours upon receipt to reject the incurrence of such cost or expense in writing; provided, further, that if Recipient rejects the incurrence of such cost or expense and the incurrence of such cost or expense is reasonably necessary for Provider to provide such Service in accordance with the standards set forth in this Agreement, Provider shall not be required to perform such Service. Any authorized travel-related expenses incurred in performing the Services shall be charged to Recipient in accordance with Provider’s then-applicable business travel policies.

 

 

Section 2.05.         Changes in the Performance of Services.

 

(a)            Subject to the performance standards for Services set forth in Sections 2.02(a), 2.02(b) and 2.02(c), Provider may from time to time, in its good faith determination, modify, change or enhance the manner, nature, quality and/or standard of care of any Service provided to Recipient to the extent Provider is making similar changes in performing analogous services for itself or its Affiliates or to the extent that such change is in connection with the relocation of Provider’s employees and if Provider furnishes to Recipient reasonable prior written notice (in content and timing) of such changes; provided that if such change shall materially and adversely affect the timeliness or quality of, or the Charges for, the applicable Service, the Parties shall cooperate in good faith to agree on modifications to such Services as are commercially reasonable in consideration of the circumstances. Without limiting the generality of the foregoing, Recipient acknowledges and agrees that the provision of the Services is subject to any upgrades, changes and modifications that Provider may implement to its information technology services in the ordinary course or otherwise in connection with the relocation of its employees (including, for the avoidance of doubt, any such upgrades, changes and modifications pursuant to the requirements of a Third Party). Notwithstanding the foregoing, if as a result of requirements of applicable Law (including any changes under the requirements of applicable Law) or guidance by any Governmental Authority, Provider must, in its good-faith determination, modify, change or enhance the manner, nature, quality and/or standard of care of any Service provided to Recipient, Provider shall provide reasonably prompt notice to such Recipient and shall have the right to make such modifications, changes or enhancements, in each case solely to the extent necessary to comply with such applicable Law or guidance and, to the extent legally permissible, provide the Recipient with advance notice, as promptly as practicable, setting forth in reasonable detail the modifications contemplated and the reasons therefor. Any incremental cost or expense incurred by Provider (for the avoidance of doubt, in excess of any cost or expense that would be incurred in the absence of the performance of the Services hereunder) in making any such good-faith modification, change or enhancement to the Services performed hereunder or in providing such Services on an ongoing basis shall be paid by Recipient to the Provider in accordance with Article III in addition to the charges for the Services included on the applicable Schedule.

 

(b)            Subject to the limitations on Additional Services set forth in Section 2.01(b), Recipient may request a change to a Service by submitting a request in writing to Provider describing the proposed change in reasonable detail. Provider shall respond to the request as soon as reasonably practicable, but in any event within ten (10) days and the Parties shall use commercially reasonable efforts to agree to such request, unless the change requested would adversely impact the liability or risk associated with providing or receiving the applicable Service, or cause any other disruption or adverse impact on the business or operations of Provider or its Affiliates. Each agreed upon change shall be documented by an amendment in writing to the applicable Schedule.

 

 

Section 2.06.         Transitional Nature of Services. The Parties acknowledge the transitional nature of the Services and that Recipient shall be responsible with respect to transitioning off of the provision of Services. Provider agrees to reasonably cooperate with Recipient, upon Recipient’s written request, in the transition of the Services from Provider to Recipient (or its designee). Recipient agrees to use commercially reasonable efforts to reduce or eliminate its and its Affiliates’ dependency on each Service to the extent and as soon as is reasonably practicable. Recipient shall transition responsibility for the performance of Services from Provider to Recipient in a manner that minimizes, to the extent reasonably possible, disruption to the Parent Business or the SpinCo Business, as applicable, and the continuing operations of Provider and its relevant Affiliates. Provider shall have no obligation to perform any Services following the Term. The Parties acknowledge and agree that time is of the essence with respect to the foregoing in this Section 2.06.

 

Section 2.07.         Subcontracting. Provider may hire or engage one (1) or more Third Parties to perform any or all of its obligations under this Agreement; provided, however, that (a) Provider shall use the same degree of care (but at least reasonable care) in selecting each such Third Party as it would if such Third Party was being retained to provide similar services to Provider, (b) Provider shall in all cases remain responsible (as primary obligor) for all of its obligations under this Agreement with respect to the scope of the Services, the performance standard for Services set forth in Sections 2.02(a), 2.02(b) and 2.02(c) and the content of the Services provided to Recipient and (c) if the Charge for a Service provided by a Third Party is less than the Charge contemplated by this Agreement, Recipient shall be responsible, for such Service, only for such lesser charge. Provider shall be liable for any breach of its obligations under this Agreement by any Third-Party service provider engaged by Provider, unless such Third Party service provider was required to be used by the Recipient, in which case, the Recipient shall be liable for breach of the obligations of such Third Party service provider. Subject to the confidentiality provisions set forth in Article V and any bona fide confidentiality obligations owed by Provider to a Third Party, Provider shall, and shall cause its Affiliates to, provide, upon fifteen (15) business days’ prior written notice, any Information within Provider’s or its Affiliates’ control that Recipient reasonably requests in connection with any Services being provided to Recipient by a Third Party, including any applicable invoices, agreements documenting the arrangements between such Third Party and Provider and other supporting documentation; provided, further, that Recipient shall make no more than one (1) such request per Third Party during any calendar quarter.

 

Section 2.08.         TSA Committee; TSA Committee Members.

 

(a)           The Parties shall establish a committee, consisting of two (2) persons appointed by Parent and two (2) persons appointed by SpinCo, to oversee the management and coordination of the provision and receipt of Services pursuant to this Agreement (the “TSA Committee”) (it being understood that the TSA Committee shall be established solely for the purpose of serving as a forum for interaction between the Parties and their Subsidiaries, and not as an independent entity with authority to act on its own).

 

(b)          The individuals designated to serve on the TSA Committee (each such person, a “TSA Committee Member”) shall act as the primary point of contact for the administration and operation of this Agreement and shall have overall responsibility for coordinating all activities undertaken by their respective Party hereunder (including, but not limited, to billing matters, consideration of any proposed Service change or Service Extension), for acting as a day-to-day contact for any communication with the respective other Party, and for making available to the respective other Party the Information, data, facilities, resources and other support services required for the performance of the Services in accordance with the terms of this Agreement. The initial TSA Committee Members for the Parties are set forth on Schedule 2.08(b). The Parties may change their respective TSA Committee Members (or their designees with respect to specific Services) from time to time upon notice to the other Party in accordance herewith.

 

 

(c)           For each Service, the TSA Committee Members of a Party shall be permitted to delegate the day-to-day communication and provision of Information, facilities, resources and other support services with respect to such Service to other employees of the applicable Party.

 

(d)          The TSA Committee shall meet as often as reasonably necessary and at least monthly in an effort to resolve disputes without the necessity of any formal proceeding relating thereto. If the Parties’ respective TSA Committee Members do not resolve a dispute within fifteen (15) days following a TSA Committee Member’s receipt of a written notice from any of the other Party’s TSA Committee Members indicating a dispute, and the period is not extended by mutual written consent, the Parties shall promptly escalate such dispute to the Chief Executive Officer of each Party to attempt to resolve such dispute through good faith discussions. Only if the Chief Executive Officers fail to promptly resolve such dispute within twenty (20) business days of such escalation may a Party initiate a formal proceeding as permitted by this Agreement in accordance with Section 7.16 of this Agreement. The foregoing requirements and limitations shall not, however, prevent a party from: (i) seeking any and all remedies available at law, including injunctive relief in circumstances permitted by this Agreement, or (ii) terminating this Agreement (in whole or in part) in accordance with Article IV.

 

Section 2.09.         Service Limitations. Notwithstanding any provision of this Agreement to the contrary:

 

(a)            Provider shall not be obligated to provide and shall not be deemed to be providing any advisory services (including advice with respect to legal, financial, accounting, insurance, regulatory or tax matters) to Recipient or any of its Subsidiaries as part of or in connection with the Services or otherwise;

 

(b)            Provider shall have no obligation to prepare or deliver any notification or report to any Governmental Authority or other Person on behalf of Recipient or any of its Subsidiaries except as specifically set forth on the Schedules hereto; provided that Provider shall not deliver any such notification or report without Recipient’s prior written consent; in no event shall Provider or its Subsidiaries have any obligation to favor Recipient or any of its Subsidiaries’ operation of its businesses over its own business operations or those of its Subsidiaries; and

 

(c)            Provider shall not be required to bear or pay any costs related to the conversion of the Recipient’s Information at Recipient’s request (other than any costs mutually agreed by Provider and Recipient, it being understood that, in agreeing to any such costs, the Parties shall take into account the time, effort and complexity of any action of Provider).

 

 

Section 2.10.         Use of Services. Neither Provider nor any of its Subsidiaries shall be required to provide or to cause to be provided any of the Services to any Person other than Recipient and its Subsidiaries. Recipient shall not, and shall not permit its or any of its Subsidiaries’ Representatives to, resell any Services to any Third Party or permit the use of any Services by any Third Party.

 

Article III
BILLING; TAXES

 

Section 3.01.         Procedure.

 

(a)            Charges for the Services shall be charged to and payable by Recipient. Amounts payable pursuant to this Agreement shall be paid by wire transfer or Automated Clearing House payment (or such other method of payment as may be agreed between the Parties from time to time) to Provider (as directed by Provider). All amounts due and payable hereunder shall be paid in U.S. dollars. If Recipient disputes any Charge for Services, Recipient shall nonetheless promptly pay the full amount of such Charge and any such dispute shall be resolved in accordance with Section 7.16.

 

(b)            At the beginning of each month during the Term, beginning with December, 2025, Provider shall provide to Recipient an invoice (the “Monthly Invoice”) for the full amount of any Charges anticipated to be payable for such month (and any other costs, fees, expenses, taxes and reimbursements payable by Recipient pursuant to this Agreement, except for any Taxes accounted directly to the applicable Taxing Authority by the Recipient pursuant to Section 3.03). The Monthly Invoice shall also reflect any discrepancies from the Charges invoiced in the prior Monthly Invoice to the Charges and other amounts payable for the recently elapsed month, as applicable, due to any modifications to Charges pursuant to Section 2.03 or otherwise and such discrepancy shall be reconciled in the Monthly Invoice with the amount of any Charges anticipated to be payable for the upcoming month. The amount stated in the Monthly Invoice shall be paid by Recipient within forty-five (45) days of Recipient’s receipt of the Monthly Invoice, including reasonable documentation pursuant to Section 2.03.

 

Section 3.02.         Late Payments. Charges not paid when due pursuant to this Agreement and which are not disputed in good faith (and any amounts billed or otherwise invoiced or demanded and properly payable that are not paid within ten (10) days of the receipt of such bill, invoice or other demand) shall accrue interest at a rate per annum equal to the prime rate set forth in The Wall Street Journal in effect on the date such payment was required to be made plus two percent (2%) (the “Interest Payment”). Failure to pay such Charges due hereunder within ten (10) days from receipt of a non-payment notice from Provider pursuant to the terms of this Agreement shall constitute Recipient’s failure to perform a material obligation under Section 4.02(b) and Provider may terminate this Agreement with respect to the applicable Service for which such payment failure applies under Section 4.02(b) (after the applicable cure period set forth therein).

 

 

Section 3.03.         Taxes. Without limiting any provisions of this Agreement, in addition to any Charges, reimbursements or other amounts otherwise payable by Recipient hereunder, Recipient shall bear any and all Taxes and other similar charges (and any related interest and penalties) imposed on, or payable with respect to, any Services provided to Recipient or any of its Subsidiaries pursuant to, and any fees, payments, reimbursements or charges, including any Charges, payable by Recipient pursuant to this Agreement, including all sales, use, excise, value-added, goods and services, consumption and similar Taxes, but excluding, any and all income Taxes, Taxes imposed in lieu of an income Tax, franchise Taxes, branch profits Taxes and any and all other Taxes imposed on or measured by the Provider’s (or any of its Subsidiaries’) net income (however denominated) (“Sales and Services Taxes”). Provider shall deliver or cause to be delivered to Recipient (or its applicable Subsidiary) a valid invoice reflecting any Sales and Services Taxes to the extent such invoice is required by applicable law. Any and all payments hereunder shall be made free and clear of, and without deduction or withholding for or on account of, any Taxes; provided, that if Recipient (or its applicable Subsidiary) is required by applicable Law to deduct or withhold any amounts in respect of Taxes from any payments otherwise required to be made to Provider (or its applicable Subsidiary) pursuant to this Agreement, then (a) Recipient (or its applicable Subsidiary) shall make such deductions or withholdings as are required by applicable Law, (b) Recipient (or its applicable Subsidiary) shall timely pay such deducted or withheld amounts to the applicable Taxing Authority, and (c) to the extent such withholding or deduction is made on account of Sales and Services Taxes, the amount payable by Recipient (or its applicable Subsidiary) to Provider (or its applicable Subsidiary) shall be increased as necessary so that after all such required deductions and withholdings with respect to Sales and Service Taxes have been made (including deductions or withholdings applicable to additional sums payable hereunder) Provider (or its applicable Subsidiary) shall receive an amount equal to the sum it would have received had no such deductions or withholdings with respect to Sales and Service Taxes been made. Each Party agrees to, and shall cause its Affiliates to, cooperate in good faith to reduce or eliminate any applicable Sales and Services Taxes and any withholding applicable to amounts payable hereunder and to comply with all laws applicable to the collection, withholding and payment of Taxes hereunder and to provide (or cause to be provided) the other with any relevant Tax forms or other information necessary for the furtherance thereof.

 

Section 3.04.         No Set-Off. Except as mutually agreed in writing by the Parties, no Party nor any of its Affiliates shall have any right of set-off or other similar rights with respect to (a) any amounts received pursuant to this Agreement or (b) any other amounts claimed to be owed to the other Party or any of its Subsidiaries arising out of this Agreement.

 

Article IV
TERM AND TERMINATION

 

Section 4.01.         Term. This Agreement shall commence at the Effective Time and shall terminate upon the earliest to occur of (a) the last date on which Provider is obligated to provide any Service to Recipient in accordance with the terms of this Agreement; (b) the mutual written agreement of the Parties to terminate this Agreement in its entirety; and (c) the date that is the twenty-four (24) month anniversary of the Redemption Date (the “Term”). Unless otherwise terminated pursuant to Section 4.02, this Agreement shall terminate with respect to each Service as of the close of business on the last day of the Service Period for such Service.

 

 

Section 4.02.         Early Termination.

 

(a)            Without prejudice to Recipient’s rights with respect to Force Majeure, Recipient may from time to time terminate this Agreement with respect to the entirety of any Service or, with Provider’s prior written consent (not to be unreasonably withheld, conditioned or delayed) a portion of any Service:

 

(i)            for any reason or no reason, upon the giving of at least forty-five (45) days’ prior written notice (or such other number of days specified in the Schedules hereto) to Provider, unless prohibited by the applicable Schedule hereto; provided, however, that any such termination (x) may not be effective prior to the end of the Minimum Service Period, (y) may only be effective as of the last day of a calendar month or such other period as may be set forth on the applicable Schedule and (z) shall be subject to the obligation to pay any applicable Termination Charges pursuant to Section 4.05; provided, further, that if after the giving of prior written notice by Recipient pursuant to the foregoing, Recipient gives written notice to Provider that it no longer desires to terminate any such Service (a “Reversion Notice”), Provider must use commercially reasonable efforts to continue to perform such Services, in which case the Service Period for such Service shall be such Service Period as was in effect immediately prior to the giving of the Reversion Notice and the performance standards for Services set forth in Sections 2.02(a), 2.02(b) and 2.02(c) shall thereafter be adjusted to reflect the level of performance able to be performed by Provider in its commercially reasonable efforts upon the receipt of a Reversion Notice (for the avoidance of doubt any Termination Charges incurred in connection with the continued performance of such Service shall be borne by Recipient); or

 

(ii)            if Provider has failed to perform any of its material obligations under this Agreement with respect to such Service, and such failure to perform materially and adversely affects the provision of such Service or Recipient or an Affiliate thereof or the SpinCo Business or the Parent Business, as applicable, and such failure shall continue to be uncured by Provider for a period of at least thirty (30) days after receipt by Provider of written notice of such failure from Recipient; provided, however, that Recipient shall not be entitled to terminate this Agreement with respect to the applicable Service if, as of the end of such period, there remains a good-faith Dispute between the Parties (undertaken in accordance with the terms of Section 7.16) as to whether Provider has cured the applicable breach.

 

(b)            Provider may terminate this Agreement with respect to the entirety or portion of any Service at any time upon prior written notice to Recipient if Recipient has failed to perform any of its material obligations under this Agreement with respect to such Service, including making payment of Charges, which are not disputed in good faith, for such Service when due, and such failure shall continue to be uncured by Recipient for a period of at least thirty (30) days after receipt by Recipient of a written notice of such failure from Provider; provided, however, that Provider shall not be entitled to terminate this Agreement with respect to the applicable Service if, as of the end of such period, there remains a good-faith Dispute between the Parties (undertaken in accordance with the terms of Section 7.16) as to whether Recipient has cured the applicable breach.

 

(c)            The Schedules hereto shall be updated to reflect any terminated Service.

 

 

Section 4.03.         Extension of Services. Upon written notice by Recipient to Provider at least (i) thirty (30) days prior to the end of any Service Period lasting less than or equal to three (3) months for any Service and (ii) forty five (45) days prior to the end of any other Service Period for any other Service (unless the Schedules hereto specify that such Service is not eligible for extension), Recipient shall have the right to extend the Service Period of any Service so that such Service ends on the earlier of (a) a number of days equal to the initial Service Period (not to exceed ninety (90) days) following the last date on which Service Provider is obligated to provide such Service in accordance with the terms of this Agreement and (b) the Term (each such extension, a “Service Extension”). In the event of a Service Extension, (i) the Parties shall in good faith negotiate the terms of an amendment to the Schedules hereto and (ii) the Charge for such Service during the Service Extension period shall be at least equal to one hundred twenty-five percent (125%) of the Charge for such Service for the first Service Extension and one hundred fifty percent (150%) for any second Service Extension plus all costs, fees and expenses unless otherwise specified with respect to a particular Service on the Schedules hereto, or in the other Ancillary Agreements, payable by Provider or its Subsidiaries to a Third Party to the extent resulting from such Service Extension (to the extent not already included in such Charge); provided that, if such Service Extension is the result of Provider’s failure to provide the Service during the applicable Service Period (the amount of time that Provider so failed to provide such Service, the “Service Suspension Period”), then the Charge for such Service during the Service Extension period shall be equal to (x) one hundred percent (100%) of the Charge for such Service, for a number of days equal to the Service Suspension Period and (y) one hundred twenty-five percent (125%) of the Charge for such Service (during a first Service Extension) or one hundred fifty percent (150%) of the Charge for such Service (during any second Service Extension) plus all costs, fees and expenses unless otherwise specified with respect to a particular Service on the Schedules hereto, or in the other Ancillary Agreements, payable by Provider to a Third Party to the extent resulting from such Service Extension (to the extent not already included in such Charge), for the remaining days of the Service Extension period, if any. Notwithstanding the foregoing, the Service Period of any particular Service (1) may not be extended more than once without Provider’s consent (in Provider’s sole discretion) and (2) may not be extended later than the Term. Each amendment of the Schedules hereto, as agreed to in writing by the Parties, shall be deemed part of this Agreement as of the date of such agreement and any Services provided pursuant to such Service Extensions shall be deemed “Services” provided under this Agreement, in each case subject to the terms and conditions of this Agreement.

 

Section 4.04.         Interdependencies. The Parties acknowledge and agree that (a) there may be interdependencies among the Services being provided under this Agreement; (b) upon the request of either Party, the Parties shall cooperate and act in good faith to determine whether (i) any such interdependencies exist with respect to the particular Service that Recipient is seeking to terminate pursuant to Section 4.02, and (ii) in the case of such termination, Provider’s ability to provide a particular Service in accordance with this Agreement would be materially and adversely affected by such termination of another Service; and (c) in the event that the Parties have determined that such interdependencies exist and such termination would materially and adversely affect Provider’s ability to provide a particular Service in accordance with this Agreement, the Parties shall (i) negotiate in good faith to amend the Schedules hereto with respect to such impacted Service prior to such termination, which amendment shall be consistent with the terms of comparable Services, and (ii) if after such negotiation, the Parties are unable to agree on such amendment, Provider’s obligation to provide such Service shall terminate automatically with such termination.

 

 

Section 4.05.         Effect of Termination. Upon the termination of any Service pursuant to this Agreement, Provider shall have no further obligation to provide the terminated Service, and Recipient shall have no obligation to pay any future Charges relating to such Service; provided, however, that Recipient shall remain obligated to Provider for (a) the Charges owed and payable in respect of Services provided prior to the effective date of termination for such Service and (b) any applicable Termination Charges (which, in the case of clause (b), shall not be payable in the event that Recipient terminates any Service pursuant to Section 4.02(a)(ii)). In connection with the termination of any Service, the provisions of this Agreement not relating solely to such terminated Service shall survive any such termination, and in connection with a termination of this Agreement, Article I (Definitions), this Article IV (Term and Termination), Article VI (Limited Liability and Indemnification) and Article VII (Miscellaneous), all confidentiality obligations under this Agreement and Liability for all due and unpaid Charges and Termination Charges shall continue to survive indefinitely.

 

Section 4.06.         Return of Provider Equipment. Upon termination of this Agreement (or, if earlier, upon the termination of the applicable Service Period with respect to a Service), Recipient shall promptly return or cause to be returned (in substantially the same working order as it was in when it was provided to Recipient, ordinary wear and tear excepted, taking substantially the same level of care exercised by Recipient with respect to its own property) to Provider any property provided by Provider to Recipient in connection with the provision of Services under this Agreement.

 

Section 4.07.         Information Transmission. Provider, on behalf of itself and its Subsidiaries, shall use commercially reasonable efforts to provide or make available, or cause to be provided or made available, to Recipient, in accordance with Section 6.1 of the Separation Agreement, any Information received or computed by Provider for the benefit of Recipient concerning the relevant Service during the Service Period; provided, however, that, except as otherwise agreed in writing by the Parties, (a) Provider shall not have any obligation to provide, or cause to be provided, Information in any nonstandard format, (b) Provider and its Subsidiaries shall be reimbursed for their reasonable costs in accordance with Section 6.3 of the Separation Agreement for creating, gathering, copying, transporting and otherwise providing such Information, (c) Provider shall use commercially reasonable efforts to maintain any such Information in accordance with Section 6.4 of the Separation Agreement and (d) Provider shall not have any obligation to provide, or cause to be provided, Information which may not be provided pursuant to bona fide Third Party confidentiality restrictions.

 

 

Article V
CONFIDENTIALITY; PROTECTIVE ARRANGEMENTS

 

Section 5.01.         Parent and SpinCo Obligations. Subject to Section 5.04, until the three (3)-year anniversary of the date of the Effective Time, each of Parent and SpinCo, on behalf of itself and each of its Subsidiaries, agrees to hold, and to cause its respective Representatives to hold, in strict confidence, with at least the same degree of care that applies to Parent’s Confidential Information pursuant to policies in effect as of the Effective Time, all Confidential Information concerning the other Party or its Subsidiaries or their respective businesses that is furnished or made available by such other Party or such other Party’s Subsidiaries or their respective Representatives at any time pursuant to this Agreement, shall not access any such Confidential Information except on a need-to-know basis, and shall not use any such Confidential Information other than for such purposes as shall be expressly permitted hereunder, except, in each case, to the extent that such Confidential Information has been (a) in the public domain or is generally available to the public, other than as a result of a disclosure by such Party or any of its Subsidiaries or any of their respective Representatives in violation of this Agreement; (b) later lawfully acquired from other sources by such Party or any of its Subsidiaries, which sources are not themselves known by such Party or any of its Subsidiaries to be bound by a confidentiality obligation or other contractual, legal or fiduciary obligation of confidentiality with respect to such Confidential Information; (c) independently developed or generated without reference to or use of any Confidential Information of the other Party or any of its Subsidiaries; or (d) in such Party’s or its Subsidiaries’ possession on a non-confidential basis prior to the time of disclosure to such Party and at the time of such disclosure was not known by such Party or any of its Subsidiaries to be prohibited from being disclosed by a confidentiality obligation or other contractual, legal or fiduciary obligation of confidentiality with respect to such Confidential Information. If any Confidential Information of a Party or any of its Subsidiaries is disclosed to the other Party or any of its Subsidiaries in connection with providing the Services to such Party or its Subsidiaries, then such disclosed Confidential Information shall be used by such other Party and its Subsidiaries only as required to perform such Services. Each Party shall be liable for its failure and any failure by its Subsidiaries and its and their respective Representatives to comply with the restrictions on use and disclosure of Confidential Information contained in this Agreement.

 

Section 5.02.         No Release; Return or Destruction. Each Party agrees (a) not to release or disclose, or permit to be released or disclosed, any Confidential Information addressed in Section 5.01 to any other Person, except its Representatives, Subsidiaries or Third Parties hired or engaged pursuant to Section 2.07, in each case, who need to know such Confidential Information in their capacities as providers or recipients of Services hereunder (who shall be advised of and required to comply with their obligations hereunder with respect to such Confidential Information) and except in compliance with Section 5.04, and (b) to use commercially reasonable efforts to maintain such Confidential Information in accordance with Section 6.4 of the Separation Agreement. Without limiting the foregoing, when any such Confidential Information is no longer needed for the purposes contemplated by the Separation Agreement, this Agreement or any other Ancillary Agreements (which, for such Confidential Information, shall be deemed to be no later than the end of the Term), and is no longer subject to any legal hold or other document preservation obligation, each Party will promptly after request of the other Party either return to the other Party all such Confidential Information in a tangible form (including all copies thereof and all notes, extracts or summaries based thereon) or notify the other Party in writing that it has destroyed such information (and such copies thereof and such notes, extracts or summaries based thereon); provided that the Parties may retain electronic back-up versions of such Confidential Information maintained on routine computer system back-up tapes, disks or other back-up storage devices; and provided, further, that any such information so retained shall remain subject to the confidentiality provisions of this Agreement.

 

 

Section 5.03.         Privacy and Data Protection Laws. Each Party shall comply with all applicable state, federal and foreign privacy and data protection Laws that are or that may in the future be applicable to the provision or receipt of the Services under this Agreement including, as applicable, the EU GDPR, the UK GDPR, the FADP (as each defined in the DPA) and the CCPA (“Privacy and Security Rules”).

 

(a)            Each Party represents and warrants that it shall: (i) maintain adequate physical, electronic and administrative security, at least to the level of industry standards, to prevent the unauthorized disclosure of any Information provided or made available to such Party by or on behalf of the other Party hereunder that identifies, relates to, describes, is capable of being associated with, or could reasonably be linked, directly or indirectly, with a particular individual or household (such Information, “Personal Information”); (ii) comply with all Privacy and Security Rules; and (iii) notify the other Party promptly, but in every instance in less than forty-eight (48) hours, of any known or reasonably suspected Information Security Incident, as defined below.

 

(b)            The specific business purpose for Provider’s processing of Personal Information hereunder is to facilitate the provision of the applicable Services involving the processing of such Personal Information. Provider shall not process for marketing purposes, sell, aggregate, analyze or anonymize, or otherwise use, any Personal Information unless (and solely to the extent) necessary for the provision of the Services or as otherwise approved by the providing Party in writing. Provider shall not knowingly perform the Services in a manner that causes Recipient to violate any Privacy and Security Rules. Where Provider believes that compliance with any instruction from Recipient infringes any Privacy and Security Rules, Provider shall immediately notify Recipient.

 

(c)            Provider shall: (i) not retain, use, or disclose Personal Information for any purpose other than for its provision of the Services hereunder; (ii) not “sell” or “share” Personal Information, as such terms are defined in the California Consumer Privacy Act, as it may be amended or supplemented from time to time (“CCPA”); (iii) not retain, use, or disclose Personal Information outside of the direct business relationship between the Parties; (iv) permit Recipient to take reasonable and appropriate steps to ensure that Provider uses the Personal Information in a manner consistent with Provider’s obligations under the CCPA; (v) notify Recipient promptly after Provider makes a determination it can no longer meet its obligations under the CCPA; (vi) permit Recipient to, upon notice, take reasonable and appropriate steps to stop and remediate Provider’s unauthorized use of Personal Information; (vi) enable Recipient to comply with consumer requests made pursuant to the CCPA with respect to Personal Information; (vii) combine Personal Information with personal information received from other persons (or from its own interactions with consumers); and (viii) not use Personal Information for another business or person unless necessary to detect information security incidents, or protect against fraudulent or illegal activity.

 

(d)            To the extent Provider processes aggregated and anonymized, or otherwise deidentified, Personal Information, Provider shall (i) not attempt to re-identify such Personal Information (except solely to determine if its identification processes comply with Privacy and Security Rules), and (ii) take reasonable measures to prohibit re-identification of such Personal Information.

 

 

(e)            Promptly after Provider no longer needs to process Personal Information to perform the Services or its other obligations hereunder (which shall be deemed to be no later than the end of the Term), Provider shall return to Recipient, or (at Recipient’s discretion) securely dispose of, all originals and copies of such Personal Information and provide a written statement to Recipient certifying that it has complied with the requirements in this Section 5.03(e). Notwithstanding the foregoing, Provider shall not be required to return, destroy, or erase any Personal Information to the extent prohibited by applicable law or (to the extent not inconsistent with Privacy and Security Rules) material commercial impracticability, in which case Provider shall retain, in its then current state, all such Personal Information within its control or possession in accordance with this Agreement and perform its obligations under this Agreement as soon as such law or commercial impracticability no longer prevents it from doing so, provided that for as long as Personal Information is stored by Provider, Provider shall be subject to the obligations concerning such Personal Information set forth herein.

 

(f)            In the event a Party or its Subsidiaries will have access to the other Party’s or its Subsidiaries’ Information Technology in connection with this Agreement, each Party shall access (and shall cause its Subsidiaries to access) such other Party’s and its Subsidiaries’ Information Technology solely for the purpose of receiving or providing the Services, as applicable, and shall only provide access to its Recipient or Provider personnel and other resources, as applicable, with a legitimate business need in order to receive or provide such Services, as applicable, in each case, in accordance with the terms of this Agreement. Each Party shall periodically review its access controls to confirm that its access hereunder to the other Party’s Information Technology is limited to its authorized Recipient or Provider personnel and resources, as applicable. Each Party shall maintain the confidentiality of its access credentials to the other Party’s Information Technology made available to it hereunder, and promptly notify the other Party of any potential loss, disclosure, or unauthorized access of or to such access credentials. Neither Party shall knowingly introduce into the other Party’s Information Technology any malware or any other code that is designed to disrupt, disable, erase, alter, harm or otherwise impair such Information Technology.

 

(g)            Information Security Incident; Outages.

 

(i)            In the event of any actual or reasonably suspected: (A) loss, theft of or unauthorized use, disclosure, destruction, loss, alteration, acquisition or processing of, or access to, Personal Information or Confidential Information of a Party received by the other Party hereunder; or (B) unauthorized access to or use of, inability to access, or malicious infection of a Party’s Information Technology that compromises or could reasonably be expected to compromise the privacy or confidentiality of Personal Information or Confidential Information of a Party received by the other Party hereunder (an “Information Security Incident”), such other Party shall as soon as reasonably practicable notify the Party which had provided such Personal Information or Confidential Information and appoint a primary contact of reasonable seniority to assist the providing Party in resolving issues associated with the Information Security Incident and send the providing Party the primary contact’s name and contact information.

 

 

(ii)            Each Party shall keep a reasonable record of any Information Security Incidents, sufficient to meet the other Party’s obligations under Privacy and Security Rules, and provide such record to the other Party upon request.

 

(iii)            Each Party shall promptly take, in reasonable cooperation with the other Party, reasonable steps to investigate, remedy and prevent the recurrence of any Information Security Incident affecting Personal Information or Confidential Information provided to such Party by the other Party, including properly documenting responsive actions taken.

 

(iv)            Except as may be strictly required by any Privacy and Security Rules or applicable Law, no Party will inform any third party of any Information Security Incident to the extent affecting Personal Information or Confidential Information provided or made available to such Party by or on behalf of the other Party without first obtaining the other Party’s prior written consent. If any Privacy and Security Rules require a Party to independently notify a third party of an Information Security Incident to the extent affecting Personal Information or Confidential Information provided or made available to such Party by or on behalf of the other Party, and do not permit such Party to delegate such duty to the other Party, such Party will inform the other Party in writing of such obligation prior to notifying the third party. Each Party will fully cooperate with the other Party in connection with issuing any notice related to the Information Security Incident to the extent affecting Personal Information or Confidential Information provided or made available to such Party by or on behalf of the other Party. To the extent affecting its Personal Information or Confidential Information, each Party will have the sole right to determine: (A) whether notice of the Information Security Incident is to be made; (B) the contents of such notice; (C) whether any type of remediation may be offered to affected persons; and (D) the nature and extent of any such remediation.

 

(v)            Each Party shall reasonably cooperate with the other Party in any litigation or other formal action by or against third parties arising from an Information Security Incident.

 

(vi)            Provider shall use commercially reasonable efforts to notify Recipient reasonably in advance of any planned outages of Provider’s Information Technology where such outages are expected to affect the provision of the Services hereunder. In the event of an unplanned outage of Provider’s Information Technology that causes a material adverse effect to the provision of the Services hereunder, Provider shall notify Recipient as soon as reasonably practicable of such outage and shall keep Recipient reasonably apprised of the status of the outage and Provider’s efforts to resolve the outage.

 

Section 5.04.         Protective Arrangements. In the event that a Party or any of its Subsidiaries either determines on the advice of its counsel that it is required to disclose any Confidential Information or Personal Information of the other Party pursuant to applicable Law or receives any request or demand under lawful process or from any Governmental Authority to disclose or provide such Information of the other Party (or any of its Subsidiaries) that is subject to the confidentiality provisions hereof, such Party shall notify the other Party (to the extent legally permitted) as promptly as practicable under the circumstances prior to disclosing or providing such information and shall cooperate, at the expense of the other Party, in seeking any appropriate protective order requested by the other Party. In the event that such other Party fails to receive such appropriate protective order in a timely manner and the Party receiving the request or demand reasonably determines that its failure to disclose or provide such Information shall actually prejudice the Party receiving the request or demand, then the Party that received such request or demand may thereafter disclose or provide information to the extent required by such Law (as so advised by its counsel) or by lawful process or such Governmental Authority and will exercise reasonable efforts to obtain assurance that confidential treatment will be accorded to such Information, and the disclosing Party shall promptly provide the other Party with a copy of the information so disclosed, in the same form and format so disclosed, together with a list of all Persons to whom such Information was disclosed, in each case to the extent legally permitted.

 

 

The obligations in this Article V shall survive any expiration or termination of this Agreement until the three (3) year anniversary of the date of the Effective Time; provided, however, that, with respect to Information constituting a Trade Secret, such obligations shall survive and continue for so long as such Information retains its status as a Trade Secret.

 

Article VI
LIMITED LIABILITY AND INDEMNIFICATION

 

Section 6.01.         Limitations on Liability.

 

(a)            SUBJECT TO SECTION 6.02, THE LIABILITIES OF PROVIDER AND ITS SUBSIDIARIES AND THEIR RESPECTIVE REPRESENTATIVES, COLLECTIVELY, UNDER THIS AGREEMENT FOR ANY ACT OR FAILURE TO ACT IN CONNECTION HEREWITH (INCLUDING THE PERFORMANCE OR BREACH OF THIS AGREEMENT), OR FROM THE SALE, DELIVERY, PROVISION OR USE OF ANY SERVICES PROVIDED UNDER OR CONTEMPLATED BY THIS AGREEMENT, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY) OR OTHERWISE, SHALL NOT EXCEED THE AGGREGATE CHARGES PAID OR PAYABLE TO SUCH PROVIDER UNDER THIS AGREEMENT OVER THE PREVIOUS TWELVE (12) MONTHS OR SINCE THE DATE OF THIS AGREEMENT (IF PRIOR TO THE FIRST ANNIVERSARY OF THIS AGREEMENT) WITH RESPECT TO THE SERVICES GIVING RISE TO SUCH LIABILITY.

 

(b)            IN NO EVENT SHALL EITHER PARTY, ITS SUBSIDIARIES OR THEIR RESPECTIVE REPRESENTATIVES BE LIABLE TO THE OTHER PARTY FOR ANY LOST PROFITS, SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE, EXEMPLARY, REMOTE, SPECULATIVE OR SIMILAR DAMAGES IN EXCESS OF COMPENSATORY DAMAGES OF THE OTHER PARTY IN CONNECTION WITH THE PERFORMANCE OF THIS AGREEMENT REGARDLESS OF WHETHER SUCH PARTY HAS BEEN NOTIFIED OF THE POSSIBILITY OF, OR THE FORESEEABILITY OF, SUCH DAMAGES (OTHER THAN ANY SUCH LIABILITY WITH RESPECT TO A THIRD-PARTY CLAIM), AND EACH PARTY HEREBY WAIVES ON BEHALF OF ITSELF, ITS SUBSIDIARIES AND ITS REPRESENTATIVES ANY CLAIM FOR SUCH DAMAGES, WHETHER ARISING IN CONTRACT, TORT OR OTHERWISE.

 

 

(c)            The limitations in Section 6.01(a) and Section 6.01(b) shall not apply in respect of any Liability arising out of or in connection with (i) either Party’s Liability for breaches of confidentiality under Article V, (ii) the Parties’ respective obligations under Section 6.03 or (iii) the willful misconduct or fraud of or by the Party to be charged.

 

Section 6.02.         Obligation to Re-Perform; Liabilities. In the event of any breach of this Agreement by Provider with respect to the provision of any Services (with respect to which Provider can reasonably be expected to re-perform in a commercially reasonable manner), Provider shall, at the request of Recipient, promptly correct in all material respects such error, defect or breach or re-perform in all material respects such Services at the sole cost and expense of Provider. The remedy set forth in this Section 6.02 shall be the sole and exclusive remedy of Recipient for any such breach of this Agreement; provided, however, that the foregoing shall not prohibit Recipient from exercising its right to terminate this Agreement in accordance with the provisions of Section 4.02(a) or seeking specific performance in accordance with Section 7.17. Any request for re-performance in accordance with this Section 6.02 by Recipient must be in writing and specify in reasonable detail the particular error, defect or breach, and such request must be made no more than one (1) month from the later of (a) the date on which such breach occurred and (b) the date on which such breach was reasonably discovered by Recipient.

 

Section 6.03.         Third-Party Claims. In addition to (but not in duplication of) its other indemnification obligations (if any) under the Separation Agreement, this Agreement or any other Ancillary Agreement, Recipient shall indemnify, defend and hold harmless Provider, its Subsidiaries and each of their respective Representatives, and each of the successors and assigns of any of the foregoing (collectively, the “Provider Indemnitees”), from and against any and all claims of Third Parties relating to, arising out of or resulting from Recipient’s use or receipt of the Services provided by Provider hereunder, other than Third-Party Claims arising out of the gross negligence, willful misconduct or fraud of any Provider Indemnitee.

 

Section 6.04.         Indemnification Procedures. The procedures for indemnification set forth in Article IV of the Separation Agreement shall govern claims for indemnification under this Agreement.

 

Article VII
MISCELLANEOUS

 

Section 7.01.         Mutual Cooperation. Each Party shall, and shall cause its Subsidiaries to, cooperate with the other Party and its Subsidiaries in connection with the performance of the Services hereunder; provided, however, that such cooperation shall not unreasonably disrupt the normal operations of such Party or its Subsidiaries; and, provided, further, that this Section 7.01 shall not require such Party to incur any out-of-pocket costs or expenses, unless and except as expressly provided in this Agreement or otherwise agreed in writing by the Parties.

 

Section 7.02.         Further Assurances. Subject to the terms of this Agreement, each Party shall take, or cause to be taken, any and all reasonable actions, including the execution, acknowledgment, filing and delivery of any and all documents and instruments that any other Party may reasonably request in order to effect the intent and purpose of this Agreement and the transactions contemplated hereby.

 

 

Section 7.03.         Audit Assistance. Each of the Parties and their respective Subsidiaries are or may be subject to regulation and audit by a Governmental Authority (including a Taxing Authority), standards organizations, customers or other parties to contracts with such Parties or their respective Subsidiaries under applicable Law, standards or contract provisions. If a Governmental Authority, standards organization, customer or other party to a contract with a Party or its Subsidiary exercises its right to examine or audit such Party’s or its Subsidiary’s books, records, documents or accounting practices and procedures pursuant to such applicable Law, standards or contract provisions, and such examination or audit relates to the Services, then the other Party shall provide, at the sole cost and expense of the requesting Party, all assistance reasonably requested by the Party that is subject to the examination or audit in responding to such examination or audits or requests for Information, to the extent that such assistance or Information is within the reasonable control of the cooperating Party and is related to the Services.

 

Section 7.04.         Intellectual Property.

 

(a)            Nothing set forth in this Agreement shall or is intended to transfer or assign ownership of any Intellectual Property Rights from one Party to the other Party. Except as expressly set forth in Section 7.04(b) or Section 7.04(c), no license or any other right, express or implied, in or to Intellectual Property Rights is being granted or transferred to either Party or any of their Affiliates under this Agreement, whether by implication, estoppel, exhaustion or otherwise, and each Party retains and reserves any and all such right, title and interest not expressly granted under this Agreement.

 

(b)            With respect to each Service, Provider hereby grants to Recipient a personal, limited, non-exclusive, royalty-free, non-sublicensable, non-assignable (except as expressly provided in Section 7.08) license on an “as is,” warranty-free basis under any Intellectual Property Rights (other than Internet Properties or Trademarks) of Provider solely for the purpose of, and only to the extent necessary, (i) solely during the Service Period of a Service, for Recipient’s receipt and use of such Service as provided for and in accordance with this Agreement and (ii) after the Service Period of a Service, except for deliverables for which other license terms are set forth on the Schedules hereto, for Recipient’s continued use of any deliverables provided to Recipient as part of such Service for their intended purpose.

 

(c)            With respect to each Service, Recipient hereby grants to Provider a personal, limited, non-exclusive, royalty-free, non-sublicensable (except to Provider’s Subsidiaries or Third Parties hired or engaged pursuant to Section 2.07), non-assignable (except as expressly provided in Section 7.08) license on an “as is,” warranty-free basis, solely during the Service Period of such Service, under any Intellectual Property Rights (other than Internet Properties or Trademarks) of Recipient solely for the purpose of, and only to the extent necessary for, Provider’s provision of such Service as provided for and in accordance with this Agreement.

 

Section 7.05.         Independent Contractors. The Parties each acknowledge and agree that they are separate entities, each of which has entered into this Agreement for independent business reasons. The relationships of the Parties hereunder are those of independent contractors and nothing contained herein shall be deemed to create a joint venture, partnership or any other relationship between the Parties. Employees or Representatives performing Services hereunder do so on behalf of, under the direction of, and as employees or Representatives of, Provider, and Recipient shall have no right, power or authority to direct such employees or Representatives, unless otherwise specified with respect to a particular Service on the Schedules hereto.

 

 

Section 7.06.         Counterparts; Entire Agreement; Corporate Power.

 

(a)            This Agreement may be executed in one (1) or more counterparts, all of which shall be considered one (1) and the same agreement, and shall become effective when one (1) or more counterparts have been signed by each of the Parties and delivered to the other Party.

 

(b)            This Agreement, the Separation Agreement and the other Ancillary Agreements and the Exhibits, Schedules and appendices hereto and thereto contain the entire agreement between the Parties with respect to the subject matter hereof, supersede all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter, and there are no agreements or understandings between the Parties other than those set forth or referred to herein or therein. This Agreement, the Separation Agreement, and the other Ancillary Agreements govern the arrangements in connection with the Separation and the Redemption and would not have been entered into independently.

 

(c)            Parent represents on behalf of itself and, to the extent applicable, each of its Subsidiaries, and SpinCo represents on behalf of itself and, to the extent applicable, each of its Subsidiaries, as follows:

 

(i)            each such Person has the requisite corporate or other power and authority and has taken all corporate or other action necessary in order to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby; and

 

(ii)            this Agreement has been duly executed and delivered by it and constitutes a valid and binding agreement of it and is enforceable in accordance with the terms hereof.

 

(d)            Each Party acknowledges and agrees that delivery of an executed counterpart of a signature page to this Agreement (whether executed by manual, stamp or mechanical signature) by facsimile or by e-mail in portable document format (PDF) shall be effective as delivery of such executed counterpart of this Agreement. Each Party expressly adopts and confirms each such facsimile, stamp or mechanical signature (regardless of whether delivered in person, by mail, by courier, by facsimile or by e-mail in PDF) made in its respective name as if it were a manual signature delivered in person, agrees that it will not assert that any such signature or delivery is not adequate to bind such Party to the same extent as if it were signed manually and delivered in person and agrees that, at the reasonable request of the other Party at any time, it will as promptly as reasonably practicable cause this Agreement to be manually executed (any such execution to be as of the date of the initial date thereof) and delivered in person, by mail or by courier.

 

Section 7.07.         Governing Law. This Agreement (and any claims or disputes arising out of or related hereto or to the transactions contemplated hereby or to the inducement of any Party to enter herein, whether for breach of contract, tortious conduct or otherwise and whether predicated on common law, statute or otherwise) shall be governed by and construed and interpreted in accordance with the Laws of the State of Delaware, irrespective of the choice of Laws principles of the State of Delaware, including all matters of validity, construction, effect, enforceability, performance and remedies.

 

 

Section 7.08.         Assignability. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns; provided, however, that neither Party may assign its rights or delegate its obligations under this Agreement without the express prior written consent of the other Party. Notwithstanding the foregoing, Provider may assign this Agreement or all of its rights or obligations hereunder to any Affiliate without Recipient’s prior written consent solely to the extent such Affiliate can continue to deliver the Services hereunder without interruption, and Provider shall deliver prompt written notice to Recipient of any such assignment.

 

Section 7.09.         Third-Party Beneficiaries. Except as provided in Article VI with respect to the Provider Indemnitees and the Recipient Indemnitees in their respective capacities as such, (a) the provisions of this Agreement are solely for the benefit of the Parties and are not intended to confer upon any other Person except the Parties any rights or remedies hereunder; and (b) there are no other third-party beneficiaries of this Agreement and this Agreement shall not provide any other Third Party with any remedy, claim, Liability, reimbursement, claim of action or other right in excess of those existing without reference to this Agreement.

 

Section 7.10.         Notices. All notices, requests, claims, demands or other communications under this Agreement shall be in writing and shall be given or made (and except as provided herein shall be deemed to have been duly given or made upon receipt) by delivery in person, by overnight courier service, by certified mail, return receipt requested, by facsimile, or by electronic mail (“e-mail”), so long as confirmation of receipt of such e-mail is requested and received, to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 7.10):

 

	If to Parent, to:
	Mallinckrodt plc
	College Business & Technology Park
	Cruiserath, Blanchardstown
	Dublin 15, Ireland
	Attention:	Mark Tyndall
	E-mail:	Mark.Tyndall@mnk.com
	with a copy (which shall not constitute notice) to:
	Wachtell, Lipton, Rosen & Katz
	51 West 52nd Street
	New York, New York 10019
	Attention:	Adam O. Emmerich
		Victor Goldfeld
	Email:	AOEmmerich@wlrk.com
		VGoldfeld@wlrk.com

 

 

	and
	Arthur Cox LLP
	Ten Earlsfort Terrace
	Dublin 2, Ireland

	Attention:	Stephen Ranalow
	Email:	stephen.ranalow@arthurcox.com

 

	If to SpinCo, to:
	Par Health, Inc.
	675 McDonnell Blvd
	Hazelwood, MO 63042
	Attention:	Matthew Maletta
	E-mail:	maletta.matthew@endo.com
	with a copy (which shall not constitute notice) to:
	Wachtell, Lipton, Rosen & Katz
	51 West 52nd Street
	New York, New York 10019
	Attention:	Adam O. Emmerich
		Victor Goldfeld
	Email:	AOEmmerich@wlrk.com
		VGoldfeld@wlrk.com
	and
	Arthur Cox LLP
	Ten Earlsfort Terrace
	Dublin 2, Ireland
	Attention:	Stephen Ranalow
	Email:	stephen.ranalow@arthurcox.com

 

Any Party may, by notice to the other Party, change the address to which such notices are to be given.

 

Section 7.11.         Severability. If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances or in jurisdictions other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby. Upon such determination, the Parties shall negotiate in good faith in an effort to agree upon such a suitable and equitable provision to effect the original intent of the Parties.

 

 

Section 7.12.         Force Majeure. No Party shall be deemed in default of this Agreement for any delay or failure to fulfill any obligation hereunder (other than a payment obligation) so long as and to the extent to which any delay or failure in the fulfillment of such obligation is prevented, frustrated, hindered or delayed as a consequence of circumstances of Force Majeure. Without limiting the termination rights contained in this Agreement, in the event of any such excused delay, the time for performance of such obligation (other than a payment obligation) shall be extended for a period equal to the time lost by reason of the delay. A Party claiming the benefit of this provision shall, as soon as reasonably practicable after the occurrence of any such event, (a) provide written notice to the other Party of the nature and extent of any such Force Majeure condition; and (b) use commercially reasonable efforts to remove any such causes and resume performance under this Agreement as soon as reasonably practicable (and in no event later than the date that the affected Party resumes analogous performance under any other agreement for itself, its Affiliates or any Third Party), unless this Agreement has previously been terminated under Article IV or this Section 7.12.

 

Section 7.13.         Headings. The Article, Section and Paragraph headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

 

Section 7.14.         Survival of Covenants. Except as expressly set forth in this Agreement, the covenants, representations and warranties and other agreements contained in this Agreement, and Liability for the breach of any obligations contained herein, shall survive the Effective Time and shall remain in full force and effect thereafter.

 

Section 7.15.         Waivers of Default. Waiver by any Party of any default by the other Party of any provision of this Agreement shall not be deemed a waiver by the waiving Party of any subsequent or other default, nor shall it prejudice the rights of the waiving Party. No failure or delay by any Party in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof, nor shall a single or partial exercise thereof prejudice any other right or further exercise thereof or the exercise of any other right, power or privilege.

 

Section 7.16.         Dispute Resolution.

 

(a)            In the event of any controversy, dispute or claim (a “Dispute”) arising out of or relating to any Party’s rights or obligations under this Agreement (whether arising in contract, tort or otherwise), calculation or allocation of the costs of any Service or otherwise arising out of or relating in any way to this Agreement (including the interpretation or validity of this Agreement), such Dispute shall be resolved in accordance with Section 2.08(d) and the dispute resolution process referred to in Article VII of the Separation Agreement.

 

 

(b)            In any Dispute regarding the amount of a Charge or a Termination Charge, if such Dispute is finally resolved pursuant to the dispute resolution process set forth or referred to in Section 7.16(a) and it is determined that the Charge or the Termination Charge, as applicable, that Provider has invoiced Recipient, and that Recipient has paid to Provider, is greater or less than the amount that the Charge or the Termination Charge, as applicable, should have been, then (i) if it is determined that Recipient has overpaid the Charge or the Termination Charge, as applicable, Provider shall within twenty (20) calendar days after such determination reimburse Recipient an amount of cash equal to such overpayment, plus the Interest Payment, accruing from the date of payment by Recipient to the time of reimbursement by Provider; and (ii) if it is determined that Recipient has underpaid the Charge or the Termination Charge, as applicable, Recipient shall within ten (10) calendar days after such determination reimburse Provider an amount of cash equal to such underpayment, plus the Interest Payment, accruing from the date such payment originally should have been made by Recipient to the time of payment by Recipient.

 

Section 7.17.         Specific Performance. Subject to Section 7.16, in the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement, the Party or Parties who are, or are to be, thereby aggrieved shall have the right to specific performance and injunctive or other equitable relief in respect of its rights or their rights under this Agreement, in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative. The Parties agree that the remedies at law for any breach or threatened breach, including monetary damages, are inadequate compensation for any loss and that any defense in any Action for specific performance that a remedy at law would be adequate is waived. Any requirements for the securing or posting of any bond with such remedy are hereby waived by each of the Parties. Unless otherwise agreed in writing, Provider shall continue to provide Services and the Parties shall honor all other commitments under this Agreement during the course of dispute resolution pursuant to the provisions of Section 7.16 and this Section 7.17 with respect to all matters not subject to such Dispute; provided, however, that this obligation shall only exist during the term of this Agreement.

 

Section 7.18.         Amendments. No provisions of this Agreement shall be deemed waived, amended, supplemented or modified by a Party, unless such waiver, amendment, supplement or modification is in writing and signed by the authorized representative of the Party against whom enforcement of such waiver, amendment, supplement or modification is sought.

 

Section 7.19.         Precedence of Schedules.

 

(a)            Each Schedule attached to or referenced in this Agreement is hereby incorporated into and shall form a part of this Agreement; provided, however, that the terms contained in such Schedule shall only apply with respect to the Services provided under that Schedule. In the event of a conflict between the terms contained in an individual Schedule and the terms in the body of this Agreement, the terms in the Schedule shall take precedence with respect to the Services under such Schedule only. No terms contained in individual Schedules shall otherwise modify the terms of this Agreement.

 

 

Section 7.20.         Interpretation. In this Agreement, (a) words in the singular shall be deemed to include the plural and vice versa and words of one gender shall be deemed to include the other genders as the context requires; (b) the terms “hereof,” “herein” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole (including all of the Schedules, Annexes and Exhibits hereto) and not to any particular provision of this Agreement; (c) Article, Section, Exhibit, Annex and Schedule references are to the Articles, Sections, Exhibits, Annexes and Schedules to this Agreement, unless otherwise specified; (d) unless otherwise stated, all references to any agreement shall be deemed to include the exhibits, schedules and annexes to such agreement; (e) the word “including” and words of similar import when used in this Agreement shall mean “including, without limitation,” unless otherwise specified; (f) the word “or” shall not be exclusive; (g) the word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if”; (h) unless otherwise specified in a particular case, the word “days” refers to calendar days; (i) references to “business day” shall mean any day other than a Saturday, a Sunday or a day on which banking institutions are generally authorized or required by Law to close in New York, New York; (j) references herein to this Agreement or any other agreement contemplated herein shall be deemed to refer to this Agreement or such other agreement as of the date on which it is executed and as it may be amended, modified or supplemented thereafter, unless otherwise specified; and (k) unless expressly stated to the contrary in this Agreement, all references to “the date hereof,” “the date of this Agreement,” “hereby” and “hereupon” and words of similar import shall all be references to September 29, 2023.

 

Section 7.21.         Mutual Drafting. This Agreement shall be deemed to be the joint work product of the Parties and any rule of construction that a document shall be interpreted or construed against a drafter of such document shall not be applicable to this Agreement.

 

[Remainder of page intentionally left blank]

 

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives as of the date first written above.

 

	MALLINCKRODT PLC
	By:	/s/ Sigurdur Olafsson
		Name:	Sigurdur Olafsson
		Title:	President and Chief Executive Officer

 

 

	PAR HEALTH, INC.
	By:	/s/ Stephen Welch
		Name:	Stephen Welch
		Title:	President and Chief Executive Officer

 

[Signature Page to Transition Services Agreement]

 

 

Exhibit 10.2

 

TAX MATTERS AGREEMENT

 

by and between

 

MALLINCKRODT PLC

 

and

 

PAR HEALTH, INC.

 

Dated as of November 10, 2025

 

 

TABLE OF CONTENTS

 

Page

 

Article 1.	Definition of Terms	2
Article 2.	Allocation of Tax Liabilities	11

Section 2.01	General Rules	11
Section 2.02	Allocation of Federal Taxes	12
Section 2.03	Allocation of State Taxes	12
Section 2.04	Allocation of Foreign Taxes	12
Section 2.05	Separation Transaction Transfer Taxes and VAT	12
Section 2.06	Additional Liability.	13

 

Article 3.

Proration of Taxes for Straddle Periods.

13

 

Section 3.01	General Method of Proration	13
Section 3.02	Transactions Treated as Extraordinary Item	13

 

Article 4.

Preparation and Filing of Tax Returns

14

 

Section 4.01	General	14
Section 4.02	Parent Returns	14
Section 4.03	SpinCo Returns	14
Section 4.04	Tax Accounting Practices	15
Section 4.05	Consolidated or Combined Tax Returns	16
Section 4.06	Preparation and Review of Tax Returns	16
Section 4.07	Adjustment Requests and Carrybacks	17
Section 4.08	Apportionment of Earnings and Profits and Tax Assets	17
Section 4.09	Transfer Pricing	18
Section 4.10	Section 245A Election	18

 

Article 5.

Tax Payments

19

 

Section 5.01	Payment of Taxes	19
Section 5.02	Indemnification Payments	19

 

Article 6.

Tax Benefits

19

 

Section 6.01	Tax Benefits	19
Section 6.02	Parent and SpinCo Tax Deductions in Respect of Certain Equity Awards and Incentive Compensation	22
Section 6.03	Group Relief	22

 

Article 7.

Tax-Free Status

23

 

Section 7.01

Representations

23

 

 

Section 7.02	Notice	23
Section 7.03	Rulings and Tax Opinions	24

 

Article 8.

Assistance and Cooperation

24

 

Section 8.01	Assistance and Cooperation	24
Section 8.02	Tax Return Information	25
Section 8.03	Reliance by Parent	25
Section 8.04	Reliance by SpinCo	25

 

Article 9.

Tax Records

26

 

Section 9.01	Retention of Tax Records	26
Section 9.02	Access to Tax Records	26
Section 9.03	Preservation of Privilege	26

 

Article 10.

Tax Contests

27

 

Section 10.01	Notice	27
Section 10.02	Control of Tax Contests	27

 

Article 11.	Effective Date; Termination of Prior Intercompany Tax Allocation Agreements	28
Article 12.	Survival of Obligations	29
Article 13.	Treatment of Payments; Tax Gross-Up	29

 

Section 13.01	Treatment of Indemnity Payments	29
Section 13.02	Tax Gross-Up	29
Section 13.03	Interest	29

 

Article 14.	Dispute Resolution	30
Article 15.	Expenses	30
Article 16.	Late Payments	30
Article 17.	General Provisions	31

 

Section 17.01	Counterparts; Entire Agreement; Corporate Power	31
Section 17.02	Governing Law; Submission to Jurisdiction; Waiver of Jury Trial	32
Section 17.03	Assignability	33
Section 17.04	Third-Party Beneficiaries	33
Section 17.05	Notices	33
Section 17.06	Severability	35
Section 17.07	Force Majeure	35
Section 17.08	Headings	35

 

 

Section 17.09	Survival of Covenants	35
Section 17.10	Waivers of Default	36
Section 17.11	Specific Performance	36
Section 17.12	Amendments	36
Section 17.13	Interpretation	36
Section 17.14	Limitations of Liability	37
Section 17.15	Performance	37
Section 17.16	No Set-Off	37
Section 17.17	Expenses	37
Section 17.18	Mutual Drafting; Precedence	37

 

 

TAX MATTERS AGREEMENT

 

This TAX MATTERS AGREEMENT (this “Agreement”) is entered into as of November 10, 2025, by and between Mallinckrodt plc, a public limited company incorporated in Ireland (“Parent”), and Par Health, Inc., a Delaware corporation (“SpinCo” and collectively with Parent, the “Companies” and each, a “Company”).

 

RECITALS

 

WHEREAS, the Parent Board has determined that it is in the best interests of Parent and its shareholders to create a new privately held company that shall operate the SpinCo Business;

 

WHEREAS, (i) Parent and SpinCo have entered into a Separation Agreement, dated as of the date hereof (including the Separation Step Plan set forth on Schedule 2.1(a) thereto, the “Separation Agreement”), providing for the separation of the SpinCo Business from the Parent Business (the “Separation”), as well as a Transition Services Agreement, dated as of the date hereof (the “Transition Services Agreement”) and an Employee Matters Agreement, dated as of the date hereof (the “Employee Matters Agreement”), (ii)  Par Health USA, LLC and Endo Biologics Limited have entered into a Manufacturing and Supply Agreement, dated as of the date hereof, (iii) Mallinckrodt LLC and ST Shared Services LLC have entered into the Amended and Restated Multi-Tenant Lease Agreement, dated as of November 1, 2025, and (iv) Parent, SpinCo and members of their respective groups have entered into the Transfer Documents;

 

WHEREAS, Parent and its Subsidiaries have engaged in certain restructuring transactions to facilitate the Separation as set forth in the Separation Step Plan;

 

WHEREAS, pursuant to the Separation Step Plan and the terms of the Separation Agreement, among other things, Parent has contributed or will contribute the SpinCo Assets to SpinCo in exchange for the assumption of the SpinCo Liabilities and the actual or deemed issuance of additional SpinCo Shares (the “Contribution”);

 

WHEREAS, Parent currently intends that it will, in connection with and following the Contribution and at the Effective Time, redeem the Parent Preferred Shares (A) in the case of Qualified Shareholders, in exchange for the SpinCo Allocation, and (B) in the case of the Non-Qualified Holders, in exchange for the Cash Allocation, in each case, as more fully described in the Separation Agreement (the “Redemption”);

 

WHEREAS, for Federal Income Tax purposes, (A) (i) the Contribution and the receipt of the SpinCo Allocation by the Qualified Shareholders pursuant to the Redemption, taken together, are intended to qualify as a “reorganization” under Sections 355(a) and 368(a)(1)(D) of the Code and (ii) accordingly, the receipt of the SpinCo Allocation by the Qualified Shareholders is intended to be generally tax-free to such Qualified Shareholders under Section 355(a) of the Code; and (B) the receipt of the Cash Allocation by the Non-Qualified Shareholders is intended to constitute a distribution by Parent to the Non-Qualified Shareholders subject to Section 301 of the Code;

 

 

WHEREAS, the Companies desire to provide for and agree upon the allocation between them of liabilities for certain Taxes and entitlement to Refunds thereof, allocate responsibility for, and cooperation in, the filing of Tax Returns, and provide for and agree upon other matters relating to Taxes.

 

NOW, THEREFORE, in consideration of the mutual agreements contained herein, the Companies hereby agree as follows:

 

Article 1.          Definition of Terms. For purposes of this Agreement (including the recitals hereof), the following terms have the following meanings:

 

“Actually Realized” or “Actually Realizes” means actually incurred or realized (or actually incurs or realizes), and for purposes of determining the timing of the incurrence of any Tax liability or the realization of a Refund or other Tax Benefit (or any related Tax cost or benefit), whether by receipt or as a credit or other offset to Taxes payable, by a Person in respect of any payment, transaction, occurrence or event, such Tax liability, Refund, other Tax Benefit (or any related Tax cost or benefit) shall be Actually Realized at the time at which the amount of Taxes paid, or if earlier, the due date for payment of such Taxes (taking into account extensions), or Refund realized, by such Person is increased above (or reduced below) the amount of Taxes that such Person would have been required to pay (or Refund that such Person would have realized) but for such payment, transaction, occurrence or event.

 

“Adjustment Request” means any formal or informal claim or request filed with any Tax Authority, or with any administrative agency or court, for the adjustment, Refund, or credit of Taxes, including (a) any amended Tax Return claiming adjustment to the Taxes as reported on the Tax Return or, if applicable, as previously adjusted, (b) any claim for equitable recoupment or other offset and (c) any claim for a Tax Benefit with respect to Taxes previously paid.

 

“Affiliate” has the meaning set forth in the Separation Agreement.

 

“Agreement” has the meaning set forth in the preamble.

 

“Ancillary Agreements” has the meaning set forth in the Separation Agreement.

 

“Carryback” means any net operating loss, net capital loss, excess tax credit, or other similar Tax Asset of any member of the SpinCo Group or the Parent Group which may or must be carried from a Post-Deconsolidation Period to a Pre-Deconsolidation Period or a Post-Redemption Period to a Pre-Redemption Period, as applicable, during which Pre-Deconsolidation Period or Pre-Redemption Period, as applicable, such member of such Group was included in a Joint Return filed for such period.

 

“Cash Allocation” has the meaning set forth in the Separation Agreement.

 

“Chosen Courts” has the meaning set forth in the Separation Agreement.

 

“Code” means the U.S. Internal Revenue Code of 1986, as amended.

 

“Company” and “Companies” have the meaning set forth in the preamble.

 

“Compensatory Equity Interests” has the meaning set forth in Section 6.02(a).

 

 

“Contribution” has the meaning set forth in the recitals.

 

“Deconsolidation Date” means, with respect to each Parent Affiliated Group that included a member of the SpinCo Group and each SpinCo Affiliated Group that included a member of the Parent Group, the last date on which such member of the SpinCo Group or Parent Group, respectively, qualified as a member of such Parent Affiliated Group or SpinCo Affiliated Group, respectively (and any similar date with respect to any non-U.S. federal income tax group similar to a Parent Affiliated Group or SpinCo Affiliated Group, as applicable, to the extent such similar date occurs before the date on which the Effective Time occurs).

 

“Deconsolidation Straddle Period” means any Tax Period that begins on or before and ends after a Deconsolidation Date.

 

“Dispute” has the meaning set forth in the Separation Agreement.

 

“Effective Time” has the meaning set forth in the Separation Agreement.

 

“Employee Matters Agreement” has the meaning set forth in the recitals.

 

“Excess Relievable Loss” has the meaning set forth in Section 6.03(b).

 

“Federal Income Tax” means any Tax imposed by Subtitle A of the Code (and, for the avoidance of doubt, any interest, penalties, additions to Tax, or additional amounts in respect of the foregoing).

 

“Federal Other Tax” means any Tax imposed by the federal government of the United States other than any Federal Income Tax and any interest, penalties, additions to Tax, or additional amounts in respect of the foregoing.

 

“Federal Tax” means any Federal Income Tax or Federal Other Tax.

 

“Filer” means with respect to any Tax Return, the Company having responsibility for filing such Tax Return under this Agreement.

 

“Final Determination” means the final resolution of liability for any Tax in connection with a Tax Contest, which resolution may be for a specific issue or adjustment or for a Tax Period, by (a) IRS Form 870 or 870-AD (or any successor forms thereto), on the date of acceptance by or on behalf of the taxpayer, or by a comparable form under the Laws of a state, local, or foreign taxing jurisdiction, except that a Form 870 or 870-AD or comparable form shall not constitute a Final Determination to the extent that it reserves (whether by its terms, by operation of law or in normal practice) the right of the taxpayer to file a claim for Tax Benefit or the right of the Tax Authority to assert a further deficiency in respect of such issue or adjustment or for such Tax Period (as the case may be); (b) a decision, judgment, decree or other order by a court of competent jurisdiction, which has become final and unappealable; (c) a closing agreement or accepted offer in compromise under Section 7121 or 7122 of the Code, or a comparable agreement under the Laws of a state, local, or foreign taxing jurisdiction; (d) any allowance of a Refund or credit in respect of an overpayment of Tax, but only after the expiration of all Tax Periods during which such Refund may be recovered (including by way of offset) by the jurisdiction imposing such Tax; or (e) any other final disposition, including by reason of the expiration of the applicable statute of limitations or by mutual agreement of the Companies, including the expiry of any time limit for appealing a notice of assessment issued by the Revenue Commissioners of Ireland.

 

 

“Force Majeure” has the meaning set forth in the Separation Agreement.

 

“Foreign Income Tax” means any Tax imposed by any possession of the United States or any country other than the United States, or by any political subdivision of any possession of the United States or any country other than the United States, which is an income Tax as defined in Treasury Regulations Section 1.901-2, including Irish corporation tax on income and Irish tax on chargeable gains and any Tax imposed in compliance with EU Council Directive 2022/2523 of 15 December 2022, and any interest, penalties, additions to Tax or additional amounts in respect of the foregoing.

 

“Foreign Other Tax” means any Tax imposed by any possession of the United States or any country other than the United States, or by any political subdivision of any possession of the United States or any country other than the United States, other than any Foreign Income Tax, and any interest, penalties, additions to Tax or additional amounts in respect of the foregoing.

 

“Foreign Tax” means any Foreign Income Taxes or Foreign Other Taxes.

 

“Group” means the Parent Group or the SpinCo Group, as the context requires.

 

“Group Relief Surrender” means the surrender, transfer or allocation of any Relievable Losses in accordance with the applicable provisions of non-U.S. Tax Law governing the use of such Relievable Losses.

 

“Income Taxes” means any Federal Income Taxes, State Income Taxes or Foreign Income Taxes.

 

“Indemnitee” has the meaning set forth in Section 5.02(a).

 

“Indemnitor” has the meaning set forth in Section 5.02(a).

 

“IRS” means the United States Internal Revenue Service.

 

“Joint Return” means any Tax Return of a member of the Parent Group or the SpinCo Group that is not a Separate Return.

 

“Law” has the meaning set forth in the Separation Agreement.

 

“Loss” has the meaning set forth in Section 6.01(b).

 

“Non-Preparer” means the Company that is not the Preparer.

 

“Non-Qualified Shareholder” has the meaning set forth in the Separation Agreement.

 

 

“Non-Tax Dispute” means any Dispute or disagreement with respect to the parties’ respective rights and obligations under this Agreement, including any amendments hereto (including any Dispute or disagreement as to the interpretation of any provision of this Agreement or the application or performance of any rights or obligations hereunder), if such Dispute or disagreement primarily relates to matters of contractual interpretation the resolution of which does not involve tax computations or require extensive tax expertise.

 

“Other Claimant Member” has the meaning set forth in Section 6.03(c).

 

“Other Claimant Member Parent” has the meaning set forth in Section 6.03(c).

 

“Parent” has the meaning set forth in the preamble.

 

“Parent Affiliated Group” means an affiliated group (as defined in Section 1504 of the Code and the regulations thereunder) of which Parent or any other member of the Parent Group is the common parent.

 

“Parent Business” has the meaning set forth in the Separation Agreement.

 

“Parent Carryback” means any net operating loss, net capital loss, excess tax credit, or other similar Tax Asset of any member of the Parent Group which may or must be carried from a Post-Deconsolidation Period to a Pre-Deconsolidation Period or a Post-Redemption Period to a Pre-Redemption Period, as applicable, during which Pre-Deconsolidation Period or Pre-Redemption Period, as applicable, such member of the Parent Group was included in a Joint Return filed for such period.

 

“Parent Federal Consolidated Income Tax Return” means any Federal Income Tax Return of a Parent Affiliated Group.

 

“Parent Group” means Parent and each of its Subsidiaries (including, for the avoidance of doubt, (a) any Subsidiary acquired or created by Parent after the Redemption, (b) any entity to which Parent or any of its Subsidiaries is a successor for Federal Income Tax purposes and (c) any entity that was a Subsidiary of Parent immediately prior to the termination of such Subsidiary’s legal existence) other than any member of the SpinCo Group.

 

“Parent Group Employees” has the meaning set forth in the Employee Matters Agreement.

 

“Parent Non-Employee Director” has the meaning set forth in the Employee Matters Agreement.

 

“Parent Ordinary Shares” has the meaning set forth in the Separation Agreement.

 

“Parent Preferred Shares” has the meaning set forth in the Separation Agreement.

 

“Parent Return” has the meaning set forth in Section 4.02.

 

 

“Parent Separate Return” means any Separate Return of Parent or any member of the Parent Group.

 

“Parent Tax Asset” means any Tax Asset generated by, or attributable to or arising with respect to or as a result of any Taxes allocated pursuant to this Agreement to, any member of the Parent Group.

 

“Past Practices” has the meaning set forth in Section 4.04(a).

 

“Payment Date” means (a) with respect to any Tax Return of an affiliated group (as defined in Section 1504 of the Code and the regulations thereunder) or any other U.S. federal Income Tax Return, (i) the due date for any required installment of estimated Taxes determined under Section 6655 of the Code, (ii) the due date (determined without regard to extensions) for filing such Tax Return determined under Section 6072 of the Code, or (iii) if earlier than the date described in clause (ii), the date such Tax Return is filed, as the case may be, and (b) with respect to any other Tax Return, the corresponding dates determined under applicable Tax Law; in each case, taking into account any automatic or validly elected extensions, deferrals, or postponements of the due date for payment of any such estimated Taxes or any Tax shown on such Tax Return, as applicable.

 

“Person” means any individual, partnership, corporation, limited liability company, association, joint stock company, trust, joint venture, unincorporated organization or a governmental entity or any department, agency or political subdivision thereof, without regard to whether any entity is treated as disregarded for Income Tax purposes.

 

“Post-Deconsolidation Period” means any Tax Period beginning after a Deconsolidation Date, and, in the case of any Deconsolidation Straddle Period, the portion of such Deconsolidation Straddle Period beginning the day after the applicable Deconsolidation Date.

 

“Post-Redemption Claimant Member” has the meaning set forth in Section 6.03(b).

 

“Post-Redemption Period” means any Tax Period beginning after the Redemption Date, and, in the case of any Straddle Period, the portion of such Straddle Period beginning the day after the Redemption Date.

 

“Post-Redemption Ruling” means a private letter ruling (or other ruling) from the IRS and/or any other applicable Tax Authority (or, if applicable, a supplemental private letter ruling or other ruling) regarding the treatment of (x) the Redemption or (y) any of the Separation Transactions intended to qualify for the Tax treatment described in the Separation Step Plan and/or relevant Transfer Document.

 

“Pre-Deconsolidation Period” means any Tax Period ending on or prior a Deconsolidation Date, and, in the case of any Deconsolidation Straddle Period, the portion of such Deconsolidation Straddle Period ending on the applicable Deconsolidation Date.

 

“Pre-Redemption Period” means any Tax Period ending on or before the Redemption Date, and, in the case of any Straddle Period, the portion of such Straddle Period ending on the Redemption Date.

 

 

“Preparer” means, with respect to any Tax Return, the Company having responsibility for preparing such Tax Return under this Agreement.

 

“Prime Rate” has the meaning set forth in the Separation Agreement.

 

“Privilege” means any privilege that may be asserted under applicable Law, including, any privilege arising under or relating to the attorney-client relationship (including the attorney-client and work product privileges), the accountant-client privilege and any privilege relating to internal evaluation processes.

 

“Qualified Shareholder” has the meaning set forth in the Separation Agreement.

 

“Record Holder” has the meaning set forth in the Separation Agreement.

 

“Redemption” has the meaning set forth in the Separation Agreement.

 

“Redemption Date” has the meaning set forth in the Separation Agreement.

 

“Refund” means any refund (or credit in lieu thereof) of Taxes (including any overpayment of Taxes that can be refunded or, alternatively, applied to or against other Taxes payable), including any interest paid on or with respect to such refund (or credit or overpayment).

 

“Relievable Losses” means any loss, relief, allowance, credit, deduction, exemption or set-off from or in respect of any Tax, or relevant to the computation of any income, profits or gains for the purposes of any Tax, and any right to a repayment of Tax, which may be surrendered, transferred, allocated or claimed between companies treated as members of the same group or otherwise associated for any non-U.S. Tax purpose (other than as part of a consolidated group, fiscal unity or equivalent regime under which Tax is computed by reference to the income, profits or gains of the group as a whole rather than on an entity-by-entity basis), and any reference to the use of a Relievable Loss includes the use of a Relievable Loss as a loss, relief, allowance, credit, deduction, exemption or set off in respect of any Tax, or in the computation of any income, profits or gains for the purposes of any Tax, or to obtain a repayment of or saving of Tax.

 

“Retention Date” has the meaning set forth in Section 9.01.

 

“Separate Return” means (a) in the case of any Tax Return of any member of the SpinCo Group (including any consolidated, combined, unitary or other similar Tax Return), any such Tax Return that does not include any member of the Parent Group and (b) in the case of any Tax Return of any member of the Parent Group (including any consolidated, combined, unitary or other similar Tax Return), any such Tax Return that does not include any member of the SpinCo Group.

 

“Separation” has the meaning set forth in the recitals.

 

“Separation Agreement” has the meaning set forth in the recitals.

 

 

“Separation Step Plan” has the meaning set forth in the Separation Agreement.

 

“Separation Transactions” means the Contribution, Redemption, and other transactions contemplated by the Separation Agreement and the Separation Step Plan.

 

“Separation Transaction Transfer Taxes” means all sales, use, transfer, real property transfer, intangible, recordation, registration, documentary, stamp, notarize, filing, or similar Taxes (other than VAT) imposed on any transfer of assets (including equity interests) or liabilities occurring pursuant to the Separation Transactions.

 

“Specified State Return” means any consolidated, combined, unitary or similar State Income Tax Return (a) that is a Joint Return and (b) with respect to which ST Shared Services LLC is the entity obligated to file such Return under applicable Tax Law.

 

“SpinCo” has the meaning set forth in the preamble.

 

“SpinCo Affiliated Group” means (a) the affiliated group (as defined in Section 1504 of the Code and the regulations thereunder) of which SpinCo is the common parent (and, (x) prior to the contribution MEH, Inc. to ST 2020, Inc., the affiliated group (as defined in Section 1504 of the Code and the regulations thereunder) of which MEH, Inc. was the common parent and (y) prior to the contribution of ST 2020, Inc. to SpinCo, the affiliated group (as defined in Section 1504 of the Code and the regulations thereunder) of which ST 2020, Inc. was the common parent) and (b) and any other affiliated group (as defined in Section 1504 of the Code and the regulations thereunder) of which SpinCo or another member of the SpinCo group is the common parent.

 

“SpinCo Allocation” has the meaning set forth in the Separation Agreement.

 

“SpinCo Assets” has the meaning set forth in the Separation Agreement.

 

“SpinCo Business” has the meaning set forth in the Separation Agreement.

 

“SpinCo Capital Stock” means all classes or series of capital stock of SpinCo, including (a) the SpinCo Shares, (b) all options, warrants and other rights to acquire such capital stock and (c) all instruments properly treated as stock in SpinCo for Federal Income Tax purposes.

 

“SpinCo Carryback” means any net operating loss, net capital loss, excess tax credit, or other similar Tax Asset of any member of the SpinCo Group which may or must be carried from a Post-Deconsolidation Period to a Pre-Deconsolidation Period or a Post-Redemption Period to a Pre-Redemption Period, as applicable, during which Pre-Deconsolidation Period or Pre-Redemption Period, as applicable, such member of the SpinCo Group was included in a Joint Return filed for such period.

 

“SpinCo Federal Consolidated Income Tax Return” means any Federal Income Tax Return for the SpinCo Affiliated Group.

 

 

“SpinCo Group” means SpinCo and each of its Subsidiaries (including, for the avoidance of doubt, (a) any Subsidiary acquired or created by SpinCo after the Redemption, (b) any entity to which SpinCo or any of its Subsidiaries is a successor for Federal Income Tax purposes and (c) any entity that was a Subsidiary of SpinCo immediately prior to the termination of such Subsidiary’s legal existence).

 

“SpinCo Group Employee” has the meaning set forth in the Employee Matters Agreement.

 

“SpinCo Liabilities” has the meaning set forth in the Separation Agreement.

 

“SpinCo Non-Employee Director” means an individual who serves as a non-employee director of the board of directors of SpinCo.

 

“SpinCo Return” has the meaning set forth in Section 4.03.

 

“SpinCo Separate Return” means any Separate Return of SpinCo or any member of the SpinCo Group.

 

“SpinCo Shares” has the meaning set forth in the Separation Agreement.

 

“SpinCo Tax Asset” means any Tax Asset generated by, or attributable to or arising with respect to or as a result of any Taxes allocated pursuant to this Agreement to, any member of the SpinCo Group.

 

“State Income Tax” means any Tax imposed by any state of the United States (or by any political subdivision of any such state) or the District of Columbia, or any city or municipality located therein, which is imposed on or measured by income, including state or local franchise or similar Taxes measured by income, as well as any state or local franchise, capital, or similar Taxes imposed in lieu of or in addition to a Tax imposed on or measured by income (and, for the avoidance of doubt, any interest, penalties, additions to tax, or additional amounts in respect of the foregoing).

 

“State Other Tax” means any Tax imposed by any state of the United States or by any political subdivision of any such state or the District of Columbia, or any city or municipality located therein, other than any State Income Tax, and any interest, penalties, additions to Tax or additional amounts in respect of the foregoing.

 

“State Tax” means any State Income Tax or State Other Tax.

 

“Straddle Period” means any Tax Period that begins on or before and ends after the Redemption Date.

 

“Street Name Holder” has the meaning set forth in the Separation Agreement.

 

“Subsidiary” has the meaning set forth in the Separation Agreement.

 

“Surrendering Member” has the meaning set forth in Section 6.03(b).

 

 

“Surrendering Member Parent” has the meaning set forth in Section 6.03(b).

 

“Tax” or “Taxes” means (a) all taxes, charges, fees, duties, levies, imposts, rates, or other assessments or governmental charges of any kind imposed by any U.S. federal, state, local, or foreign Tax Authority, including income, gross income, gross receipts, profits, capital stock, franchise, registration, withholding, payroll, social security (or similar), workers’ compensation, employment, unemployment, disability, property, ad valorem, stamp, excise, severance, occupation, premium, windfall profits, environmental, custom duties, property, service, sales, use, license, lease, transfer, import, export, value-added, alternative or add-on minimum, estimated or other tax (including any fee, assessment, or other charge in the nature of or in lieu of any tax), whether disputed or not, and (b) any interest, penalties, additions to tax, or additional amounts in respect of the foregoing. For the avoidance of doubt, Tax includes any increase in Tax as a result of a Final Determination.

 

“Tax Advisor” means a tax accountant or tax counsel of recognized national standing in the relevant jurisdiction.

 

“Tax Asset” means a net operating loss, net capital loss, unused investment credit, unused foreign tax credit, overall foreign loss, excess charitable contribution, general business credit, research and development credit, earnings and profits, basis, or any other Tax Item that could reduce a Tax or create a Tax Benefit.

 

“Tax Authority” means, with respect to any Tax, the governmental entity or political subdivision thereof that imposes such Tax, and the agency (if any) charged with the collection of such Tax for such entity or subdivision.

 

“Tax Benefit” means any reduction in liability for Tax as a result of any loss, deduction, Refund, reimbursement, offset, credit, or other item reducing any Taxes otherwise paid or payable. For purposes of this Agreement, the amount of any Tax Benefit Actually Realized by a Person as a result of any Tax Item shall be determined on a “with and without basis.”

 

“Tax Contest” means an audit, review, examination, or any other administrative or judicial proceeding with the purpose or effect of redetermining Taxes (including any administrative or judicial review of any claim for any Tax Benefit with respect to Taxes previously paid).

 

“Tax Dispute” has the meaning set forth in Article 14.

 

“Tax-Free Status” means the qualification of the Contribution and the receipt of the SpinCo Allocation by the Qualified Shareholders pursuant to the Redemption, taken together, as a transaction described in Section 368(a)(1)(D) and Section 355(a) of the Code.

 

“Tax Item” means, with respect to any Tax, any item of income, gain, loss, deduction, credit, recapture of credit, or any other item that increases or decreases Taxes paid or payable.

 

“Tax Law” means the Law of any governmental entity or political subdivision thereof relating to any Tax.

 

 

“Tax Period” means, with respect to any Tax, the period for which the Tax is reported as provided under the Code or other applicable Tax Law.

 

“Tax Records” means any Tax Returns, Tax Return workpapers, documentation relating to any Tax Contests, and any other books of account or records (whether or not in written, electronic or other tangible or intangible forms and whether or not stored on electronic or any other medium) required to be maintained under the Code or other applicable Tax Laws or under any record retention agreement with any Tax Authority.

 

“Tax Return” or “Return” means any report of Taxes due, any claim for a Tax Benefit, any information return or estimated Tax return with respect to Taxes, or any other similar report, statement, declaration, or document filed or required to be filed under the Code or other Tax Law with respect to Taxes, including any attachments, exhibits, schedules or other materials submitted (or which ought or are deemed to be submitted) with any of the foregoing, and including any amendments or supplements to any of the foregoing.

 

“Third-Party Claim” has the meaning set forth in the Separation Agreement.

 

“Transfer Documents” has the meaning set forth in the Separation Agreement.

 

“Transition Services Agreement” has the meaning set forth in the recitals.

 

“Treasury Regulations” means the regulations promulgated from time to time under the Code as in effect for the relevant Tax Period.

 

“TP Requesting Party” has the meaning set forth in Section 4.09.

 

“VAT” means (a) any Tax imposed in compliance with the Council Directive of November 28, 2006, on the common system of value added tax (EC Directive 2006/112) and (b) any other Tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or in addition to, such Tax referred to in clause (a) above, or imposed elsewhere. For the avoidance of doubt, VAT includes goods and services tax, harmonized sales tax, consumption tax, and other similar Taxes.

 

Article 2.          Allocation of Tax Liabilities.

 

Section 2.01          General Rules.

 

(a)            Parent Liability. Parent shall be liable for, and shall indemnify and hold harmless the SpinCo Group from and against any liability for, Taxes that are allocated to Parent under this Article 2.

 

(b)            SpinCo Liability. SpinCo shall be liable for, and shall indemnify and hold harmless the Parent Group from and against any liability for, Taxes that are allocated to SpinCo under this Article 2.

 

 

(c)            Costs and Expenses. The amounts for which Parent or SpinCo, as applicable, is liable pursuant to Section 2.01(a) and (b), respectively, shall include all accounting, legal and other professional fees, and court costs incurred in connection with the relevant Taxes.

 

Section 2.02          Allocation of Federal Taxes. Except as otherwise provided in Section 2.05 or Section 2.06, Federal Taxes shall be allocated as follows:

 

(a)            Parent Liability. Parent shall be responsible for any and all Federal Taxes due with respect to or required to be reported on any (A) Parent Separate Return or (B) Joint Return that Parent or any member of the Parent Group is obligated to file under the Code.

 

(b)            SpinCo Liability. SpinCo shall be responsible for any and all Federal Taxes due with respect to or required to be reported on any (A) SpinCo Separate Return or (B) Joint Return that SpinCo or any member of the SpinCo Group is obligated to file under the Code.

 

Section 2.03          Allocation of State Taxes. Except as otherwise provided in Section 2.05 or Section 2.06, State Taxes shall be allocated as follows:

 

(a)            Parent Liability. Parent shall be responsible for any and all State Taxes due with respect to or required to be reported on any (A) Parent Separate Return or (B) Joint Return that Parent or any member of the Parent Group is obligated to file under applicable Tax Law.

 

(b)            SpinCo Liability. SpinCo shall be responsible for any and all State Taxes due with respect to or required to be reported on any (A) SpinCo Separate Return or (B) Joint Return that SpinCo or any member of the SpinCo Group is obligated to file under applicable Tax Law.

 

Section 2.04          Allocation of Foreign Taxes. Except as otherwise provided in Section 2.05 or Section 2.06, Foreign Taxes shall be allocated as follows:

 

(a)            Parent Liability. Parent shall be responsible for any and all Foreign Taxes due with respect to or required to be reported on any (A) Parent Separate Return or (B) Joint Return that Parent or any member of the Parent Group is obligated to file under applicable Tax Law.

 

(b)            SpinCo Liability. SpinCo shall be responsible for any and all Foreign Taxes due with respect to or required to be reported on any (A) SpinCo Separate Return or (B) Joint Return that SpinCo or any member of the SpinCo Group is obligated to file under applicable Tax Law.

 

Section 2.05          Separation Transaction Transfer Taxes and VAT.

 

(a)            Parent Liability. Parent shall be liable for, and shall indemnify and hold harmless the SpinCo Group from and against any liability for:

 

(i)            any Separation Transaction Transfer Taxes imposed by any Tax Authority on any member of the Parent Group (if such member is primarily liable for such Tax); and

 

 

(ii)            any VAT imposed by any Tax Authority on any transfer occurring pursuant to the Separation Transactions to the extent any member of the Parent Group is the transferee with respect to the relevant transfer.

 

(b)            SpinCo Liability. SpinCo shall be liable for, and shall indemnify and hold harmless the Parent Group from and against any liability for:

 

(i)            any Separation Transaction Transfer Taxes imposed by any Tax Authority on any member of the SpinCo Group other than any such Taxes for which Parent is liable pursuant to Section 2.05(a)(i); and

 

(ii)            any VAT imposed by any Tax Authority on any transfer occurring pursuant to the Separation Transactions to the extent any member of the SpinCo Group is the transferee with respect to the relevant transfer.

 

Section 2.06          Additional Liability.

 

(a)            Parent Liability. Parent shall be liable for, and shall indemnify and hold harmless the SpinCo Group from and against any liability for any Tax of SpinCo or any member of the SpinCo Group resulting from a breach by Parent of any representation or covenant made by Parent in the Separation Agreement, this Agreement or any other Ancillary Agreement.

 

(b)            SpinCo Liability. SpinCo shall be liable for, and shall indemnify and hold harmless the Parent Group from and against any liability for any Tax of Parent or any member of the Parent Group resulting from a breach by SpinCo of any representation or covenant made by SpinCo in the Separation Agreement, this Agreement or any other Ancillary Agreement.

 

Article 3.          Proration of Taxes for Straddle Periods.

 

Section 3.01          General Method of Proration(a). In the case of any Deconsolidation Straddle Period for a Parent Affiliated Group or SpinCo Affiliated Group, Tax Items shall be apportioned between Pre-Deconsolidation Periods and Post-Deconsolidation Periods in accordance with the principles of Treasury Regulations Section 1.1502-76(b) and any other applicable Tax Law as reasonably interpreted and applied by Parent in its good faith discretion.

 

Section 3.02          Transactions Treated as Extraordinary Item. In determining the apportionment of Tax Items between Pre-Deconsolidation Periods and Post-Deconsolidation Periods for a Parent Affiliated Group or SpinCo Affiliated Group, any Tax Items relating to the Separation Transactions shall be treated as extraordinary items described in Treasury Regulations Section 1.1502-76(b)(2)(ii)(C) and shall (to the extent occurring on or prior to the applicable Deconsolidation Date) be allocated to Pre-Deconsolidation Periods, and any Taxes related to such items shall be treated under Treasury Regulations Section 1.1502-76(b)(2)(iv) as relating to such extraordinary item and shall (to the extent occurring on or prior to the applicable Deconsolidation Date) be allocated to Pre-Deconsolidation Periods.

 

 

Article 4.          Preparation and Filing of Tax Returns.

 

Section 4.01          General(a). Except as otherwise provided in this Article 4, Tax Returns shall be prepared and filed when due (taking into account extensions) by the Person obligated to file such Tax Returns under the Code or applicable Tax Law. The Companies shall, and shall cause their respective Affiliates to, provide assistance and cooperation to one another in accordance with Article 8 with respect to the preparation and filing of Tax Returns (including by providing information required to be provided pursuant to Article 9). For the avoidance of doubt, with respect to any Joint Return, references in this Agreement to the Person obligated to file such Joint Return under the Code or applicable Tax Law shall mean the named filing entity in circumstances where, pursuant to Section 4.02, Section 4.03 and/or Section 4.05, Parent reasonably determines that the named filing entity is required to file such Joint Return or Parent chooses for such Joint Return to be filed by the named filing entity.

 

Section 4.02          Parent Returns(a). Parent has the exclusive obligation and right to (a) prepare and file, or cause to be prepared and filed, any (x) Parent Separate Returns that Parent determines are required to be filed by Parent or any member of the Parent Group for Tax Periods ending before, on or after the Redemption Date and (y) Joint Returns that Parent reasonably determines are required to be filed (or that Parent chooses to be filed) by Parent or any member of the Parent Group for Tax Periods ending before, on or after the Redemption Date (other than any Specified State Returns) and (b) file, or cause to be filed, any Specified State Returns (each of clauses (a) and (b), a “Parent Return”). Except as otherwise required pursuant to Section 4.04, Parent shall prepare any Tax Return that it has the obligation and right to prepare, or cause to be prepared, under this Section 4.02, in accordance with reasonable Tax accounting practices selected by Parent.

 

Section 4.03          SpinCo Returns. SpinCo shall (a) prepare and file, or cause to be prepared and filed, all Tax Returns required to be filed (or, with respect to Joint Returns, that Parent reasonably determines are required to be filed (or that Parent chooses to be filed)) by or with respect to members of the SpinCo Group other than those Tax Returns which Parent is required or entitled to prepare and file pursuant to Section 4.02 (each, a “SpinCo Return”) and (b) prepare, or cause to be prepared, any Specified State Returns. The Tax Returns required to be prepared and filed by SpinCo under this Section 4.03 shall include (i) any SpinCo Federal Consolidated Income Tax Return and (ii) SpinCo Separate Returns. With respect to any SpinCo Federal Consolidated Income Tax Return for a Tax Period that ends prior to or includes the Redemption Date, without limiting the generality of and notwithstanding anything to the contrary in Section 4.05 (or in this Agreement), Parent may determine in its sole discretion whether to make, as applicable, (i) a ratable election under Treasury Regulations Section 1.1502-76(b)(2)(ii), (ii) an election under Section 362(e)(2)(C) of the Code (or the regulations thereunder), (iii) any election pursuant to Section 168(k) of the Code (or the regulations thereunder), and/or (iv) any election pursuant to Section 179 of the Code (or the regulations thereunder). SpinCo shall, and shall cause each member of the SpinCo Group to, take all actions necessary to give effect to any such election. Except as otherwise required pursuant to Section 4.04, SpinCo shall prepare any Joint Return or Specified State Return that is has the obligation and right to prepare, or cause to be prepared, under this Section 4.03, in accordance with reasonable Tax accounting practices selected by Parent.

 

 

Section 4.04          Tax Accounting Practices.

 

(a)            General Rule. Except as otherwise provided in Section 4.04(b), with respect to any (x) Tax Return that SpinCo has the obligation and right to prepare and file or prepare (but not file), or cause to be prepared and filed or cause to be prepared (but not filed), pursuant to Section 4.03, for any Tax Period ending on or before the Redemption Date or any Straddle Period (or any Tax Period beginning after the Redemption Date to the extent Tax Items reported on such Tax Return could reasonably be expected to affect Tax Items reported on any Parent Return for any Tax Period) or (y) Tax Return that Parent has the obligation and right to prepare and file, or cause to be prepared and filed, pursuant to Section 4.02, for any Tax Period ending on or before the Redemption Date or any Straddle Period (or any Tax Period beginning after the Redemption Date to the extent Tax Items reported on such Tax Return could reasonably be expected to affect Tax Items reported on any SpinCo Return for any Tax Period), (i) such Tax Return shall be prepared in accordance with past practices (including, for the avoidance of doubt, any past practices with respect to transfer pricing methodologies), accounting methods, elections or conventions (“Past Practices”) used with respect to such Tax Items (or related Tax Items) on Parent Returns, except as otherwise required by a subsequent change in Law, and to the extent there is no Past Practice with respect to any such Tax Item or in the event of a subsequent change in Law, in accordance with reasonable Tax practices, accounting methods, elections or conventions selected by Parent (and, in the case of SpinCo Returns, reasonably acceptable to SpinCo); and (ii) notwithstanding anything to the contrary in clause (i), SpinCo shall not, and shall not permit or cause any member of its Group to, take any position with respect to any material Tax Item on any such Tax Return, or otherwise treat such Tax Item, in a manner that is inconsistent with the manner in which such Tax Item (or related Tax Items) is (or are) reported on a Parent Return (including, without limitation, the claiming of a deduction previously claimed on any such Tax Return).

 

(b)            Reporting of Transactions. Except to the extent otherwise required (x) by a change in applicable Tax Law or (y) as a result of a Final Determination, neither Parent nor SpinCo shall, and neither shall permit or cause any member of its respective Group to, take any position that is inconsistent with the treatment of (i) the Redemption as having Tax-Free Status (or analogous status under state, local or foreign Law) or (ii) any of the Separation Transactions having the Tax treatment described in the Separation Step Plan and/or relevant Transfer Document; provided, however, that, notwithstanding anything to the contrary herein, if (A) Parent determines that (x) the Redemption does not qualify for Tax-Free Status or any such Separation Transaction does not qualify for the relevant Tax treatment or (y) there has been a change in relevant facts after the Redemption Date as a result of which the Redemption does not qualify for Tax-Free Status or any such Separation Transaction does not qualify for the relevant Tax treatment, then (B) Parent shall promptly notify SpinCo in writing and, following such notice, each of the Companies shall report the relevant Separation Transaction in the manner set forth in such notice (and shall not be permitted to take positions inconsistent with such notice).

 

 

Section 4.05          Consolidated or Combined Tax Returns. Except as otherwise required by Section 4.04, Parent shall determine in its good faith discretion (x) whether a Tax Return for any Tax Period shall be filed as a Joint Return, (y) the entities to be included in any such Joint Return, and (z) the named filing entity with respect to any such Joint Return, and (a) if such Tax Return is a Parent Return, Parent shall (and shall be entitled to), in its good faith discretion, make or revoke any Tax elections, adopt or change any Tax accounting methods, and determine any other position taken on or in respect of any Joint Return and (b) without prejudice and subject to the last three sentences of Section 4.03, if such Tax Return is a SpinCo Return, (i) Parent shall be entitled to, in its good faith discretion, determine whether to make or revoke any Tax elections, determine whether to adopt or change any Tax accounting methods, and determine any other position taken on or in respect of any Joint Return, in each case, to the extent such determination could reasonably be expected to affect Tax Items reported on any Parent Return for any Tax Period, and SpinCo shall (and shall cause the relevant members of the SpinCo Group to) reflect such determinations on the relevant Joint Return, and (ii) except as described in clause (i), SpinCo shall (and shall be entitled to), in its good faith discretion, make or revoke any Tax elections, adopt or change any Tax accounting methods, and determine any other position taken on or in respect of any other SpinCo Return. SpinCo shall elect to join (and take any other action necessary to give effect to such election), and shall cause its respective Affiliates to elect to join (and take any other action necessary to give effect to such election), in filing any Joint Returns that Parent determines are to be filed.

 

Section 4.06          Preparation and Review of Tax Returns.

 

(a)            General. In the case of any Tax Return (i) which relates to Taxes for which the Non-Preparer (or any of its Affiliates) is or would reasonably be expected to be liable, (ii) an adjustment in respect of which would or would reasonably be expected to result in the Non-Preparer (or any of its Affiliates) being liable in whole or in part for any additional Taxes (including, for the avoidance of doubt, (x) with respect to any such adjustments that may be made in connection with intercompany transfer pricing matters and (y) without regard to any indemnification for such matters pursuant to Section 4.09), (iii) which relates to Tax Items for which the Non-Preparer would reasonably be expected to have a claim for Tax Benefits under this Agreement or (iv) with respect to which the Non-Preparer is the Filer, the Preparer shall deliver to the Non-Preparer for its review and comment a copy of such Tax Return (or relevant portions thereof), workpapers and other supporting documents available for review forty-five (45) days prior to the due date for filing of such Tax Return (taking into account extensions) or, if later, as soon as reasonably practicable. If for any reason the Non-Preparer does not agree with the preparation of such Tax Return (or portion thereof), the Non-Preparer shall notify the Preparer of such disagreement within twenty-one (21) days of receiving such Tax Return (or portion thereof). The Companies shall attempt in good faith to resolve any such disagreement, consistent with the provisions of this Article 4, as promptly as practicable and prior to the due date for filing such Tax Return (taking into account extensions). If the Preparer and Non-Preparer are unable to resolve any such disagreement prior to the due date for filing such Tax Return (taking into account extensions), the Filer shall (x) in the case of a Specified State Return, file such Tax Return reflecting the Filer’s comments and (y) in all other cases, file such Tax Return as originally prepared (but, in each the case of each of clauses (x) and (y), reflecting any items on which the Preparer and the Non-Preparer have agreed) and any disagreement shall be resolved in accordance with the dispute resolution provisions of Article 14. Without limiting the foregoing provisions of this Section 4.06(a) or of Article 8, if requested, the Preparer shall reasonably promptly make any Tax Return (or the relevant portions thereof) and related workpapers and other supporting documents available for review by the Non-Preparer to the extent such review is reasonably necessary for the Non-Preparer to confirm compliance with the terms of this Agreement (including, if applicable, such Non-Preparer’s obligations and rights as Filer of such Tax Return).

 

 

(b)            Execution of Tax Returns Prepared by Other Company. In the case of any Tax Return required by Law to be signed by the Non-Preparer (or by its authorized representative), the Non-Preparer (or its authorized representative) shall not be required to sign such Tax Return under this Agreement unless there is at least a reasonable basis (or comparable standard under state, local or foreign Law) for the Tax treatment of each material item reported on the Tax Return.

 

Section 4.07          Adjustment Requests and Carrybacks. Unless Parent or SpinCo, as applicable, otherwise consents in writing, SpinCo and Parent shall (and each shall cause each member of its respective Group to) (i) not file any Adjustment Request with respect to any Joint Return, (ii) make any available election to relinquish, waive or otherwise forgo the right to claim in any Pre-Deconsolidation Period or Pre-Redemption Period, as applicable, with respect to any Joint Return any Carryback arising in a Post-Deconsolidation Period or Post-Redemption Period, respectively, and (iii) not make any affirmative election to claim any such Carryback; provided, however, that any such Adjustment Request shall be made with respect to, and Parent or SpinCo, as applicable, shall consent to, any Carryback upon the reasonable request of a Company if (x) such Carryback is necessary to prevent the loss of the Tax Benefit of such Carryback and (y) such Adjustment Request will cause no Tax detriment to the other Company or any of its Affiliates. Any Adjustment Request to which a Company consents pursuant to this Section 4.07 shall be prepared by the Company requesting that such Adjustment Request be made (the “Adjustment Requesting Company”); provided, that if the Adjustment Requesting Company is not responsible for the preparation and filing of the Tax Return to which such Adjustment Requests relates pursuant to Section 4.02 or Section 4.03, as applicable, then the provisions of Section 4.06 shall apply, mutatis mutandis, with respect to the preparation and filing of such Adjustment Request (for this purposes, treating the Adjustment Requesting Company as the Preparer and the other Company as the Non-Preparer).

 

Section 4.08          Apportionment of Earnings and Profits and Tax Assets.

 

(a)            If a SpinCo Affiliated Group or Parent Affiliated Group has a Tax Asset, the portion, if any, of such Tax Asset apportioned to members of the Parent Group or SpinCo Group, respectively, and treated as a carryover to the first applicable Post-Deconsolidation Period of such member of the Parent Group or SpinCo Group, respectively, shall be determined by Parent in accordance with (or otherwise in a manner that is not inconsistent with) the Code, Treasury Regulations and other administrative guidance, including (i) in the case of a Tax Asset other than earnings and profits, Treasury Regulations Sections 1.1502-9(c), 1.1502-21, 1.1502-22 and 1.1502-79 and (ii) in the case of earnings and profits, in accordance with Section 312(h) of the Code and Treasury Regulations Section 1.312-10.

 

(b)            Parent (or its designee) shall determine the portion, if any, of any Tax Asset (including, for the avoidance of doubt, any Section 382 limitation adjustments) to be (absent a Final Determination to the contrary) apportioned to Parent or any other member of the Parent Group or SpinCo or any other member of the SpinCo Group, as applicable, in accordance with this Section 4.08 and applicable Tax Law and the amount of Tax basis and earnings and profits to be apportioned to Parent or any other member of the Parent Group or SpinCo or any other member of the SpinCo Group, as applicable, in accordance with this Section 4.08 and applicable Tax Law, and shall provide written notice of the calculation thereof to SpinCo as soon as reasonably practicable after the information necessary to make such calculation becomes available to Parent. For the avoidance of doubt, Parent shall not be liable to SpinCo or any member of the SpinCo Group for any failure of any determination under this Section 4.08 to be accurate or sustained under applicable Tax Law, including as the result of any Final Determination.

 

 

(c)            The written notice delivered by Parent pursuant to Section 4.08(b) shall be binding on SpinCo and each member of the SpinCo Group and shall not be subject to dispute resolution. Except to the extent otherwise required by a change in applicable Tax Law or pursuant to a Final Determination, SpinCo shall not take any position (whether on a Tax Return or otherwise) that is inconsistent with the information contained in such written notice.

 

(d)            Notwithstanding any of the above, the foregoing provisions of this Section 4.08 shall not be construed as obligating Parent to undertake any determination described therein. In the event that SpinCo requests that Parent undertake any such determination and Parent determines not to undertake such determination and so advises SpinCo, SpinCo shall be permitted to undertake such determination at its own cost and expense and shall notify Parent of its determination (which determination shall not be binding on Parent).

 

Section 4.09          Transfer Pricing. If, as the result of any Final Determination relating to intercompany transfer pricing (or any comparable intercompany arrangement) with respect to any item or items reflected on any Income Tax Return of a member of the Parent Group or the SpinCo Group for a Pre-Redemption Period, there is an increase in Income Taxes payable for such Tax Period by any member of the Parent Group or the SpinCo Group, respectively, then, upon the reasonable written request of, and at the expense of, Parent or SpinCo, respectively (the “TP Requesting Party”), the other Company shall (and shall cause its respective Affiliates to) amend any Tax Returns of it or any member of its Group, to the extent such amendment would result in a corresponding or correlative reduction in Taxes otherwise payable by it a member of its Group, and shall promptly pay over to the TP Requesting Party any Tax Benefit Actually Realized in cash as a result of such amendment; provided, however, that neither Company (nor any Affiliates of either Company) shall (a) have any obligation to amend any Tax Return pursuant to this Section 4.09 to the extent doing so would have an adverse effect on such Company or any of its Affiliates that is material or (b) be obligated to make a payment otherwise required pursuant to this Section 4.09 to the extent making such payment would place such Company (or any of its Affiliates) in a less favorable net after-Tax position than such Company (or such Affiliate) would have been in if the relevant Tax Benefit had not been realized. If a Company or one of its Affiliates pays over any amount pursuant to the preceding sentence and such Tax Benefit is subsequently disallowed or adjusted, the Parties shall promptly make appropriate payments (including in respect of any interest paid or imposed by any Tax Authority) to reflect such disallowance or adjustment.

 

Section 4.10          Section 245A Election. With respect to any member of the SpinCo Group that was a “controlled foreign corporation” within the meaning of Section 957(a) of the Code prior to the Redemption, Parent may, in its sole discretion, make or cause to be made (and, if directed by Parent, SpinCo shall make or cause to be made) the election under Treasury Regulations Section 1.245A-5(e)(3)(i) (or any successor provision of Tax Law that allows a closing of the books election) to close such entity’s Tax year for Federal Income Tax purposes as of the Effective Time or such other applicable date as Parent may determine.

 

 

Article 5.          Tax Payments.

 

Section 5.01          Payment of Taxes. The Filer shall pay, (a) on or before the relevant Payment Date, any Tax required to be paid to the applicable Tax Authority with respect to any Tax Return required to be filed by the Filer and (b) when due (taking into account automatic or validly elected extensions, deferrals, or postponements) any additional Tax required to be paid with respect to any Tax Return required to be filed by the Filer as a result of any adjustment pursuant to a Final Determination.

 

Section 5.02          Indemnification Payments.

 

(a)            If a Company (the “Indemnitee”) is required pursuant to Section 5.01 (or otherwise under applicable Tax Law) to pay a Tax Authority a Tax for which the other Company (the “Indemnitor”) is liable, in whole or in part, under this Agreement (including for the avoidance of doubt, any administrative or judicial deposit required to be paid by the Indemnitee to a Tax Authority to pursue any Tax Contest, to the extent the Indemnitor would be liable under this Agreement for any Tax resulting from such Tax Contest), then the Indemnitor shall reimburse the Indemnitee within twenty (20) business days of the delivery by the Indemnitee to the Indemnitor of a written notice and demand for payment of such amount, accompanied by a statement detailing the Taxes paid and the calculation of the amount payable by the Indemnitor and describing in reasonable detail the particulars relating thereto and evidence of payment of such amounts by the Indemnitee to the relevant Tax Authority, provided that, in the case of any indemnification payment in respect of any Tax to be paid to a Tax Authority, no such payment shall be required to be made any earlier than five (5) business days prior to the date the relevant Tax is required to be paid to the applicable Tax Authority, taking into account any automatic or validly elected extensions, deferrals or postponements. All indemnification payments shall be treated in the manner described in Section 13.01.

 

(b)            All indemnification payments required to be made under this Agreement shall be made by Parent directly to SpinCo and vice versa; provided, however, that, if the Companies mutually agree with respect to any such indemnification payment, any member of the Parent Group, on the one hand, may make such indemnification payment to any member of the SpinCo Group, on the other hand, and vice versa.

 

Article 6.          Tax Benefits.

 

Section 6.01          Tax Benefits.

 

(a)            Except as otherwise provided herein, (i) Parent shall be entitled to any Refund (and any interest thereon received from the applicable Tax Authority) of Taxes for which Parent is liable hereunder and SpinCo shall be entitled to any Refund (and any interest thereon received from the applicable Tax Authority) of Taxes for which SpinCo is liable hereunder. The Company receiving a Refund to which the other Company is entitled hereunder, in whole or in part, shall pay over the amount of such Refund (or portion thereof), and any interest on such amount received from the applicable Tax Authority but net of any costs and expenses (including professional fees) incurred by the Company (or a member of its Group) receiving such Refund in connection with obtaining or securing such Refund, to such other Company within thirty (30) business days after the receipt of such Refund or application of such Refund against Taxes otherwise payable. To the extent that any Refund (or portion thereof) in respect of which any amounts were paid over pursuant to the immediately preceding sentence is subsequently disallowed by the applicable Tax Authority, the Company that received such amounts shall promptly repay such amounts (together with any penalties, interest or other charges imposed by the relevant Tax Authority) to the other Company.

 

 

(b)            If (i) a member of the SpinCo Group Actually Realizes any Tax Benefit (A) as a result of the utilization of any Parent Tax Asset or (B) as a result of any liability, obligation, loss or payment (each, a “Loss”) for which a member of the Parent Group is required to indemnify any member of the SpinCo Group pursuant to the Separation Agreement, this Agreement or any other Ancillary Agreement (in each case, without duplication of any amounts payable or taken into account under the Separation Agreement, this Agreement or any other Ancillary Agreement) or (ii) a member of the Parent Group Actually Realizes any Tax Benefit (A) as a result of the utilization of any SpinCo Tax Asset or (B) as a result of any Loss for which a member of the SpinCo Group is required to indemnify any member of the Parent Group pursuant to the Separation Agreement, this Agreement or any other Ancillary Agreement (in each case, without duplication of any amounts payable or taken into account under the Separation Agreement, this Agreement or any other Ancillary Agreement), and (iii) the aggregate Tax Benefit realized or realizable by the relevant member of the SpinCo Group (in the case of clause (i)) or the relevant member of the Parent Group (in the case of clause (ii)) as a result of such utilization or Loss would reasonably be expected to exceed one hundred thousand dollars ($100,000), then SpinCo or Parent, as the case may be, shall make a payment to the other Company in an amount equal to the amount of such Actually Realized Tax Benefit (including any Tax Benefit Actually Realized as a result of the payment) in cash within thirty (30) business days of Actually Realizing such Tax Benefit. To the extent that any Tax Benefit (or portion thereof) in respect of which any amounts were paid over pursuant to the foregoing provisions of this Section 6.01(b) is subsequently disallowed by the applicable Tax Authority, the Company that received such amounts shall promptly repay such amounts (together with any penalties, interest or other charges imposed by the relevant Tax Authority) to the other Company.

 

(c)            Notwithstanding anything in this Agreement to the contrary, neither Company shall be obligated to make a payment otherwise required pursuant to Section 6.01(a) or Section 6.01(b) to the extent making such payment would place such Company (or any member of its Group) in a less favorable net after-Tax position than such Company (or such member) would have been in if the relevant Tax Benefit had not been realized.

 

(d)            No later than twenty (20) business days after a Tax Benefit described in Section 6.01(b) is Actually Realized by a member of the Parent Group or a member of the SpinCo Group, Parent (if a member of the Parent Group Actually Realizes such Tax Benefit) or SpinCo (if a member of the SpinCo Group Actually Realizes such Tax Benefit), as the case may be, shall provide the other Company with a written statement detailing the amount payable to the other Company pursuant to Section 6.01(b) and describing in reasonable detail the particulars relating thereto. In the event that Parent or SpinCo, as the case may be, disagrees with the written statement described in this Section 6.01(d) (or any calculation or component thereof), Parent or SpinCo shall so notify the other Company in writing within fifteen (15) business days of receiving such written statement. Parent and SpinCo shall endeavor in good faith to resolve such disagreement, and, failing that, the amount payable under this Article 6 shall be determined in accordance with the dispute resolution provisions of Article 14 as promptly as practicable.

 

 

(e)

 

(i)            SpinCo shall be entitled to any Refund Actually Realized by a member of the Parent Group that is attributable to, and would not have arisen but for, a SpinCo Carryback that is required under applicable Tax Law and is not effected in violation of Section 4.07; provided, however, that SpinCo shall indemnify and hold the members of the Parent Group harmless from and against any and all collateral Tax consequences resulting from, attributable to or caused by any such SpinCo Carryback, including (but not limited to) the loss or postponement of any benefit from the use of any Parent Tax Asset if (x) such Parent Tax Asset expires unutilized, but would have been utilized but for such SpinCo Carryback, or (y) the use of such Parent Tax Asset is postponed to a later Tax Period than the Tax Period in which such Parent Tax Asset would have been utilized but for such SpinCo Carryback. Any such payment of such Refund made by any member of the Parent Group to SpinCo pursuant to this Section 6.01(e)(i) shall be recalculated as appropriate in light of any Final Determination (or any other facts that may arise or come to light after such payment is made, such as a carryback of a Tax Asset of the Parent Group to a Tax Period in respect of which such Refund is received) that would affect the amount to which SpinCo is entitled, and an appropriate adjusting payment shall be made by SpinCo to Parent or by Parent to SpinCo, as applicable, such that the aggregate amount paid pursuant to this Section 6.01(e)(i) equals such recalculated amount.

 

(ii)            Parent shall be entitled to any Refund Actually Realized by a member of the SpinCo Group that is attributable to, and would not have arisen but for, a Parent Carryback that is required under applicable Tax Law and is not effected in violation of Section 4.07; provided, however, that Parent shall indemnify and hold the members of the SpinCo Group harmless from and against any and all collateral Tax consequences resulting from, attributable to or caused by any such Parent Carryback, including (but not limited to) the loss or postponement of any benefit from the use of any SpinCo Tax Asset if (x) such SpinCo Tax Asset expires unutilized, but would have been utilized but for such Parent Carryback, or (y) the use of such SpinCo Tax Asset is postponed to a later Tax Period than the Tax Period in which such SpinCo Tax Asset would have been utilized but for such Parent Carryback. Any such payment of such Refund made by any member of the SpinCo Group to Parent pursuant to this Section 6.01(e)(ii) shall be recalculated as appropriate in light of any Final Determination (or any other facts that may arise or come to light after such payment is made, such as a carryback of a Tax Asset of the SpinCo Group to a Tax Period in respect of which such Refund is received) that would affect the amount to which Parent is entitled, and an appropriate adjusting payment shall be made by Parent to SpinCo or by SpinCo to Parent, as applicable, such that the aggregate amount paid pursuant to this Section 6.01(e)(ii) equals such recalculated amount.

 

 

(f)            Any determinations with respect to any Refund or other Tax Benefit to which a Group may be entitled pursuant to any of the foregoing provisions of Section 6.01 shall be made without duplication of any Refund, Tax Benefit or Tax Item to the extent already taken into account (i) in determining any entitlement of such Group to any amounts pursuant to any other provision of this Agreement (including any other provision of this Section 6.01) or (ii) to reduce any Liability for Taxes of such Group pursuant to Article 2.

 

(g)            For purposes of this Agreement, the amount of any Refund required to be paid to another Company shall be reduced by the net amount of any Taxes imposed on, related to, or attributable to, the receipt or accrual of such Refund.

 

Section 6.02          Parent and SpinCo Tax Deductions in Respect of Certain Equity Awards and Incentive Compensation.

 

(a)            Allocation of Deductions. To the extent permitted by applicable Tax Law, Tax deductions arising from exercises of compensatory options, settlement of restricted stock unit awards, or exercises, vesting or settlement of any other compensatory equity or equity-based award, in each case, with respect to Parent Ordinary Shares or SpinCo Shares, and in each case following the Redemption (such options, restricted share awards, restricted stock unit awards, and other compensatory equity or equity-based awards, collectively, “Compensatory Equity Interests”), shall be claimed (i) in the case of a Parent Group Employee, solely by the Parent Group, (ii) in the case of a SpinCo Group Employee, solely by the SpinCo Group, and (iii) in the case of a Parent Non-Employee Director or a SpinCo Non-Employee Director, if the relevant Compensatory Equity Interest is issued (x) in respect of Parent Ordinary Shares, solely by the Parent Group and (y) in respect of SpinCo Shares, solely by the SpinCo Group.

 

(b)            Withholding and Reporting. Tax reporting and withholding with respect to Compensatory Equity Interests shall be governed by Section 4.02(c) of the Employee Matters Agreement. Certain Tax reporting and withholding matters with respect to SpinCo Group Employees for the Tax Period that includes the Redemption are addressed in, and shall be governed by, Section 3.01(g) of the Employee Matters Agreement. In the event of any conflict between this Agreement and the Employee Matters Agreement with respect to Tax withholding and reporting obligations relating to compensation or compensatory matters, the Employee Matters Agreement shall control.

 

Section 6.03          Group Relief.

 

(a)            Parent and SpinCo shall procure that after the Redemption, no claim, election, surrender, transfer, allocation, notice or consent is made in respect of any Group Relief Surrender by a member of a Parent Group to a member of a SpinCo Group (or vice versa) other than pursuant to this Section 6.03.

 

(b)            With respect to each Tax Period, to the extent that a member of the Parent Group or SpinCo Group has a Relievable Loss for such Tax Period in excess of the amount such member is able to use for such Tax Period (such member, the “Surrendering Member”, and such excess Relievable Loss, an “Excess Relievable Loss”), then Parent or SpinCo, as applicable (the “Surrendering Member Parent”) may cause such Surrendering Member to make a Group Relief Surrender to any other member of the same Group that is able to use some or all of such Excess Relievable Loss for that Tax Period pursuant to applicable Law (such member, a “Post-Redemption Claimant Member”).

 

 

(c)            To the extent that, for any Excess Relievable Loss, (x) there is no applicable Post-Redemption Claimant Member or (y) the Surrendering Member Parent elects not to cause the Surrendering Member to make a Group Relief Surrender of such Excess Relievable Loss to any applicable Post-Redemption Claimant Member, then the Surrendering Member Parent shall notify the other Company (such other Company, the “Other Claimant Member Parent”) in writing of the availability of such remaining Excess Relievable Loss, and if there exists a member of the Group of such Other Claimant Member Parent that is able to use some or all of such Excess Relievable Loss pursuant to applicable Law in the Tax Period described in Section 6.03(b) (such member, a “Other Claimant Member”), then (i) upon the Other Claimant Member Parent’s written request, the Surrendering Member Parent shall as soon as reasonably practicable cause the Surrendering Member to make a Group Relief Surrender of the requested amount of such Excess Relievable Loss to the applicable Other Claimant Member and (ii) the Other Claimant Member Parent shall pay an amount equal to the Tax Benefit Actually Realized by it or any member of its Group as a result of such Excess Relievable Loss to the Surrendering Member Parent as soon as reasonably practicable after such Tax Benefit is Actually Realized.

 

Article 7.          Tax-Free Status.

 

Section 7.01          Representations.

 

(a)            SpinCo hereby represents and warrants that it has no plan or intention of taking any action, or failing to take any action (or causing or permitting any member of its Group to take or fail to take any action), and that it knows of no circumstance that would or could reasonably be expected to (i) cause any representation or factual statement made in the Separation Agreement, this Agreement or any other Ancillary Agreement to be untrue or (ii) adversely affect, jeopardize or prevent the Tax-Free Status or the qualification of any Separation Transaction for the Tax treatment described in the Separation Step Plan and/or relevant Transfer Document.

 

(b)            Parent hereby represents and warrants that it has no plan or intention of taking any action, or failing to take any action (or causing or permitting any member of its Group to take or fail to take any action), and that it knows of no circumstance that would or could reasonably be expected to (i) cause any representation or factual statement made in the Separation Agreement, this Agreement or any other Ancillary Agreement to be untrue or (ii) adversely affect, jeopardize or prevent the qualification of any Separation Transaction for the Tax treatment described in the Separation Step Plan and/or relevant Transfer Document.

 

Section 7.02          Notice.

 

(a)            SpinCo shall promptly notify Parent in writing if (x) it takes any action, or fails to take any action (or causes or permits any member of its Group to take or fail to take any action) or (y) it learns of any circumstance, in each case, that would or could reasonably be expected to adversely affect, jeopardize or prevent the Tax-Free Status or the qualification of any Separation Transaction for the Tax treatment described in the Separation Step Plan and/or relevant Transfer Document.

 

 

(b)            Parent shall promptly notify SpinCo in writing if (x) it takes any action, or fails to take any action (or causes or permits any member of its Group to take or fail to take any action) or (y) it learns of any circumstance, in each case, that would or could reasonably be expected to adversely affect, jeopardize or prevent the qualification of any Separation Transaction for the Tax treatment described in the Separation Step Plan and/or relevant Transfer Document.

 

Section 7.03          Rulings and Tax Opinions.

 

(a)            Parent shall have the right to seek and obtain a Post-Redemption Ruling or an opinion of a Tax Advisor with respect to any of the Separation Transactions at any time in its sole and absolute discretion. If Parent determines to seek and obtain a Post-Redemption Ruling or such an opinion, SpinCo shall (and shall cause its Affiliates to) cooperate with Parent and take any and all actions reasonably requested by Parent in connection with obtaining the Post-Redemption Ruling or opinion (including, without limitation, by making any representation or covenant or providing any materials or information requested by the IRS, any other applicable Tax Authority or a Tax Advisor; provided, that SpinCo shall not be required to make (or cause any of its Affiliate to make) any representation or covenant that is inconsistent with historical facts or as to future matters or events over which it has no control). Parent and SpinCo shall each bear its own costs and expenses incurred in seeking and obtaining a Post-Redemption Ruling or opinion requested by Parent.

 

(b)            Parent shall have sole and exclusive control over the process of obtaining any Post-Redemption Ruling, and only Parent shall be permitted to apply for a Post-Redemption Ruling. SpinCo shall not, nor shall SpinCo permit any of its Affiliates to, seek any guidance from the IRS or any other Tax Authority (whether written, oral or otherwise) at any time concerning the Contribution, the Redemption or any of the other Separation Transactions (including the impact of any action or transaction on any of the foregoing).

 

Article 8.          Assistance and Cooperation.

 

Section 8.01          Assistance and Cooperation.

 

(a)            Each of the Companies shall reasonably cooperate (and cause its Affiliates to reasonably cooperate) with the other Company and its agents, including accounting firms and legal counsel, in connection with Tax matters relating to the Companies and their Affiliates, including (i) preparing and filing Tax Returns (including amended Tax Returns), (ii) determining the liability for and amount of any Taxes due (including estimated Taxes) or the right to and amount of any Tax Benefit, (iii) examinations of Tax Returns, and (iv) any administrative or judicial proceeding in respect of Taxes assessed or proposed to be assessed. Such cooperation shall include making available, upon reasonable notice, all information and documents in their possession relating to the other Company and its Affiliates as provided in Article 9. Each of the Companies shall also make available to the other, as reasonably requested and on a mutually convenient basis, personnel (including officers, directors, employees and agents of the Companies or their respective Affiliates) responsible for preparing, maintaining and interpreting information and documents relevant to Taxes, and personnel reasonably required as witnesses or for purposes of providing information or documents in connection with any administrative or judicial proceeding relating to Taxes.

 

 

(b)            Any information or documents provided under this Article 8 or Article 9 shall be kept confidential by the Company receiving the information or documents, except as may otherwise be necessary in connection with the filing of Tax Returns, in connection with any administrative or judicial proceedings relating to Taxes. Notwithstanding any other provision of this Agreement or any other agreement, in no event shall either of the Companies or any of its respective Affiliates be required to provide the other Company or any of its respective Affiliates or any other Person access to or copies of any information, documents, or procedures (including the proceedings of any Tax Contest) (i) other than information, documents, or procedures that relate solely to a member of the relevant Group, its business, or its assets or (ii) if such action would or reasonably could be expected to result in the waiver of any Privilege. In addition, in the event that either Company determines that the provision of access to any information, documents or procedures to the other Company or its Affiliates could be commercially detrimental, violate any Law or agreement or waive any Privilege, the Companies shall use reasonable best efforts to permit compliance with their obligations under this Article 8 or Article 9 in a manner that avoids any such harm or consequence.

 

Section 8.02          Tax Return Information. SpinCo and Parent acknowledge that time is of the essence in relation to any request for information, assistance or cooperation made by Parent or SpinCo pursuant to Section 8.01 or this Section 8.02. SpinCo and Parent acknowledge that failure to conform to the deadlines set forth herein or reasonable deadlines otherwise set by Parent or SpinCo could cause irreparable harm. Each Company shall provide to the other Company information and documents relating to its Group (including by providing access to any Tax preparation software) reasonably required by the other Company to prepare Tax Returns (including amended Tax Returns). Any information or documents the Preparer requires to prepare any Tax Returns shall be provided in such form as the Preparer reasonably requests and in sufficient time for the Preparer to prepare and the Filer to file such Tax Returns on a timely basis; provided that this Section 8.02 shall not apply to information governed by Section 4.08.

 

Section 8.03          Reliance by Parent. If any member of the SpinCo Group supplies information to a member of the Parent Group in connection with Taxes and an officer of a member of the Parent Group signs a statement or other document under penalties of perjury in reliance upon the accuracy of such information, then upon the written request of such member of the Parent Group identifying the information being so relied upon, the Chief Financial Officer of SpinCo (or any officer of SpinCo as designated by the Chief Financial Officer of SpinCo) shall certify in writing that to his or her knowledge (based upon consultation with appropriate employees) the information so supplied is accurate and complete. SpinCo agrees to indemnify and hold harmless each member of the Parent Group and its directors, officers and employees from and against any fine, penalty, or other cost or expense of any kind attributable to a member of the SpinCo Group having supplied, pursuant to this Article 8, a member of the Parent Group with inaccurate or incomplete information in connection with Taxes.

 

Section 8.04          Reliance by SpinCo. If any member of the Parent Group supplies information to a member of the SpinCo Group in connection with Taxes and an officer of a member of the SpinCo Group signs a statement or other document under penalties of perjury in reliance upon the accuracy of such information, then upon the written request of such member of the SpinCo Group identifying the information being so relied upon, the Chief Financial Officer of Parent (or any officer of Parent as designated by the Chief Financial Officer of Parent) shall certify in writing that to his or her knowledge (based upon consultation with appropriate employees) the information so supplied is accurate and complete. Parent agrees to indemnify and hold harmless each member of the SpinCo Group and its directors, officers and employees from and against any fine, penalty, or other cost or expense of any kind attributable to a member of the Parent Group having supplied, pursuant to this Article 8, a member of the SpinCo Group with inaccurate or incomplete information in connection with Taxes; provided that this Section 8.04 shall not apply to information governed by Section 4.08.

 

 

Article 9.          Tax Records.

 

Section 9.01          Retention of Tax Records. Each Company shall preserve and keep all Tax Records and related work papers and other documentation in its possession as of the date hereof exclusively relating to the assets and activities of its Group for Pre-Redemption Periods, in each case, for so long as the contents thereof may become material in the administration of any matter under the Code or other applicable Tax Law, but in any event until the later of (a) the expiration of any applicable statutes of limitations (taking into account waivers or extensions thereof), or (b) seven (7) years after the Redemption Date (such later date, the “Retention Date”). After the Retention Date, each Company may dispose of such Tax Records upon ninety (90) days’ prior written notice to the other Company. If, prior to the Retention Date, a Company reasonably determines that any Tax Records which it would otherwise be required to preserve and keep under this Article 9 are no longer material in the administration of any matter under the Code or other applicable Tax Law and the other Company agrees, then such first Company may dispose of such Tax Records upon ninety (90) days’ prior notice to the other Company. Any notice of an intent to dispose given pursuant to this Section 9.01 shall include a list of the Tax Records to be disposed of describing in reasonable detail each file, book or other record accumulation being disposed. The notified Company shall have the opportunity, at its cost and expense, to copy or remove, within such ninety (90)-day period, all or any part of such Tax Records.

 

Section 9.02          Access to Tax Records. The Companies and their respective Affiliates shall make available to each other for inspection and copying/scanning during normal business hours upon reasonable notice all Tax Records in their possession pertaining to Pre-Redemption Periods (including by allowing each other access to any Tax preparation software) to the extent reasonably required by the other Company in connection with the preparation of financial accounting statements, audits, litigation, or the resolution of items under this Agreement.

 

Section 9.03          Preservation of Privilege. The Companies and their respective Affiliates shall not provide access to, copies of, or otherwise disclose to any Person any documentation relating to Taxes existing prior to the Redemption Date to which Privilege may reasonably be asserted without the prior written consent of the other Company, such consent not to be unreasonably withheld, conditioned, or delayed.

 

 

Article 10.          Tax Contests.

 

Section 10.01          Notice. Each of the Companies shall provide prompt notice to the other Company of any written communication from a Tax Authority regarding any pending or threatened Tax audit, assessment or proceeding or other Tax Contest relating to Taxes or Refunds or Tax Benefits for which it may be entitled to indemnification or payment by the other Company hereunder or for which it may be required to indemnify or pay the other Company hereunder. Such notice shall include copies of the pertinent portion of any written communication from a Tax Authority and contain factual information (to the extent known) describing any asserted Tax liability in reasonable detail and shall be accompanied by copies of any notice and other documents received from any Tax Authority in respect of such matters. The failure of one Company to notify the other of such communication in accordance with the immediately preceding sentences shall not relieve such other Company of any liability or obligation to pay such Tax, pay over such Tax Benefits or make indemnification payments under this Agreement, except to the extent that the failure to timely provide such notification actually prejudices the ability of such other Company to contest such Tax liability (or contest any determination in respect of any Refund or Tax Benefit) or increases the amount of such Tax liability (or reduces the amount of such Refund or Tax Benefit).

 

Section 10.02          Control of Tax Contests.

 

(a)            General Rule. In the case of any Tax Contest with respect to any Tax Return, the Filer shall have exclusive control over the Tax Contest, including exclusive authority with respect to any settlement of such Tax liability, subject to Section 10.02(b) and Section 10.02(c).

 

(b)            Parent-Controlled Tax Contests. In the case of any Tax Contest with respect to any Parent Return, Parent shall have exclusive control over such Tax Contest, including exclusive authority with respect to any settlement of such Tax Contest, provided, however, that to the extent the result of any such Tax Contest with respect to a Tax period ending on prior to (or including) the Redemption Date (x) could reasonably be expected to (1) cause SpinCo or any members of the SpinCo Group to (A) become liable for any material Tax or (B) lose any material SpinCo Tax Asset or other material Tax Benefit, or (2) involve any adjustment relating to intercompany transfer pricing (or any comparable intercompany arrangement) for a Pre-Redemption Period that would result in a Tax Benefit to the Parent Group and a detriment to the SpinCo Group, or (y) relates to the qualification of the Redemption for Tax-Free Status (or analogous status under state, local or foreign Law) or the qualification of any of the Separation Transactions for the Tax treatment described in the Separation Step Plan and/or relevant Transfer Documents, then (i) Parent shall provide SpinCo with copies of any written materials relating to such Tax Contest received from the relevant Tax Authority, (ii) Parent shall consult with SpinCo reasonably in advance of taking any significant action in connection with such Tax Contest, (iii) Parent shall offer SpinCo a reasonable opportunity to comment before submitting any written materials prepared or furnished in connection with such Tax Contest, (iv) Parent shall defend such Tax Contest diligently and in good faith as if it were the only party in interest in connection with such Tax Contest, and (v) to the extent the result of such Tax Contest could be reasonably expected to materially adversely affect SpinCo or any of members of the SpinCo Group, SpinCo shall be entitled to participate in such Tax Contest and Parent shall not settle, compromise or abandon any such Tax Contest without obtaining the prior written consent of SpinCo, which consent shall not be unreasonably withheld, conditioned or delayed.

 

 

(c)            SpinCo-Controlled Tax Contests. In the case of any Tax Contest with respect to any SpinCo Return, SpinCo shall have exclusive control over such Tax Contest, including exclusive authority with respect to any settlement of such Tax Contest, provided, however, that to the extent the result of any such Tax Contest with respect to a Tax period ending on or prior to (or including) the Redemption Date (x) could reasonably be expected to (1) cause Parent or any members of the SpinCo Group to (A) become liable for any material Tax or (B) lose any material Parent Tax Asset or other material Tax Benefit, or (2) involve any adjustment relating to intercompany transfer pricing (or any comparable intercompany arrangement) for a Pre-Redemption Period that would result in a Tax Benefit to the SpinCo Group and a detriment to the Parent Group, or (y) relates to qualification of the Redemption for Tax-Free Status (or analogous status under state, local or foreign Law) or the qualification of any of the Separation Transactions for the Tax treatment described in the Separation Step Plan and/or relevant Transfer Documents, then (i) SpinCo shall provide SpinCo with copies of any written materials relating to such Tax Contest received from the relevant Tax Authority, (ii) SpinCo shall consult with Parent reasonably in advance of taking any significant action in connection with such Tax Contest, (iii) SpinCo shall offer Parent a reasonable opportunity to comment before submitting any written materials prepared or furnished in connection with such Tax Contest, (iv) SpinCo shall defend such Tax Contest diligently and in good faith as if it were the only party in interest in connection with such Tax Contest, and (v) to the extent the result of such Tax Contest could be reasonably expected to materially adversely affect Parent or any members of the Parent Group, Parent shall be entitled to participate in such Tax Contest, and SpinCo shall not settle, compromise or abandon any such Tax Contest without obtaining the prior written consent of Parent, which consent shall not be unreasonably withheld, conditioned or delayed.

 

(d)            Power of Attorney. SpinCo shall (and shall cause each member of the SpinCo Group to) execute and deliver to Parent (or such member of the Parent Group as Parent shall designate) any power of attorney or other similar document reasonably requested by Parent (or such designee) in connection with any Tax Contest controlled by Parent described in this Article 10 within five (5) business days of such request. Parent shall (and shall cause each member of the Parent Group to) execute and deliver to SpinCo (or such member of the SpinCo Group as SpinCo shall designate) any power of attorney or other similar document reasonably requested by SpinCo (or such designee) in connection with any Tax Contest controlled by SpinCo described in this Article 10 within five (5) business days of such request.

 

Article 11.          Effective Date; Termination of Prior Intercompany Tax Allocation Agreements. This Agreement shall be effective as of the Effective Time. As of the Effective Time, (a) all prior intercompany Tax allocation agreements or arrangements solely between or among any member(s) of the Parent Group, on the one hand, and any member(s) of the SpinCo Group, on the other hand, shall be terminated, and (b) amounts due under such agreements or arrangements as of the Redemption Date shall be settled as determined by Parent in its good faith discretion. Upon such termination and settlement, no further payments by or to any members of the Parent Group, or by or to any members of the SpinCo Group, with respect to such agreements or arrangements shall be made, and all other rights and obligations resulting from such agreements or arrangements between the Companies and their Affiliates shall cease at such time. Any payments pursuant to such agreements or arrangements shall be disregarded for purposes of computing amounts due under this Agreement.

 

 

Article 12.          Survival of Obligations. The representations, warranties, covenants and agreements set forth in this Agreement and liability for the breach of any obligations contained herein shall be unconditional and absolute and shall remain in effect without limitation as to time.

 

Article 13.          Treatment of Payments; Tax Gross-Up.

 

Section 13.01          Treatment of Indemnity Payments. In the absence of any change in Tax treatment under the Code or other applicable Tax Law and except as otherwise agreed between the Companies or as otherwise required by applicable Law, for Tax purposes, the Companies agree to treat, and to cause their respective Affiliates to treat, (a) any indemnity payment required by this Agreement or by the Separation Agreement (other than any payment of interest or State Income Taxes by or to a Tax Authority) as, as applicable, (i) a contribution by Parent to SpinCo (if such payment is made by Parent to SpinCo) or a distribution by SpinCo to Parent (if such payment is made by SpinCo to Parent), as the case may be, occurring immediately prior to the Redemption (but only to the extent the payment does not relate to a Tax allocated to the Indemnitor in accordance with Section 1552 of the Code or the Treasury Regulations thereunder or Treasury Regulations Section 1.1502-33(d) (or under corresponding principles of other applicable Tax Laws)), (ii) an adjustment to the purchase price, or (iii) as payments of an assumed or retained liability, as determined by Parent in its good faith discretion; and (b) any payment of interest or State Income Taxes by or to a Tax Authority, as taxable or deductible, as the case may be, to the Company entitled under this Agreement to retain such payment or required under this Agreement to make such payment. The Companies shall cooperate in good faith (including, where relevant, by using commercially reasonable efforts to establish local payment arrangements between each Company’s Subsidiaries) to minimize or eliminate, to the extent permissible under applicable Law, any Tax that would otherwise be imposed with respect to any payment required by this Agreement or by the Separation Agreement (or maximize the ability to obtain a credit for, or refund of, any such Tax).

 

Section 13.02          Tax Gross-Up. If, notwithstanding the manner in which payments described in Section 13.01(a) were reported, there is a Tax liability or an adjustment to a Tax liability of a Company or a member of its Group as a result of its receipt of an indemnity payment pursuant to this Agreement or the Separation Agreement, such payment shall be appropriately adjusted so that the amount of such payment, reduced by the amount of all Income Taxes payable with respect to the receipt thereof (but taking into account all correlative Tax Benefits resulting from the payment of such Income Taxes) and irrecoverable VAT, shall equal the amount of the payment which the Company receiving such payment would otherwise be entitled to receive.

 

Section 13.03          Interest. Anything herein to the contrary notwithstanding, to the extent the Indemnitor makes a payment of interest to the Indemnitee under this Agreement with respect to the period from the date that the Indemnitor was required to make a payment to the Indemnitee to the date that the Indemnitor reimbursed the Indemnitee for such Tax payment, the interest payment shall be treated as interest expense to the Indemnitor (deductible to the extent provided by Law) and as interest income by the Indemnitee (includible in income to the extent provided by Law). The amount of the payment shall not be adjusted to take into account any associated Tax Benefit to the Indemnitor or increase in Tax to the Indemnitee.

 

 

Article 14.          Dispute Resolution. The Companies desire that collaboration will continue between them. Accordingly, they will endeavor, and they will cause their respective Group members to endeavor, to resolve in good faith all Disputes or disagreements regarding their respective rights and obligations under this Agreement, including any amendments hereto. In furtherance thereof, in the event of any such Dispute or disagreement (other than a Non-Tax Dispute) between Parent and SpinCo as to the interpretation of any provision of this Agreement or the application or performance of any rights or obligations hereunder (a “Tax Dispute”), the Tax departments of the Companies shall negotiate in good faith to resolve such Tax Dispute. If such good faith negotiations do not resolve such Tax Dispute, then the matter will be referred to a Tax Advisor mutually acceptable to each of Parent and SpinCo. The Tax Advisor may, in its discretion, obtain the services of any third-party appraiser, accounting firm or consultant that the Tax Advisor deems necessary to assist it in resolving such Dispute or disagreement. The Tax Advisor shall resolve the Tax Dispute according to such procedures as the Tax Advisor deems advisable and shall furnish written notice to Parent and SpinCo of its resolution of any such Tax Dispute as soon as practicable, but in any event no later than forty-five (45) days after its acceptance of the matter for resolution. Any such resolution by the Tax Advisor shall be consistent with the terms of this Agreement, and if so consistent, shall be conclusive and binding on the Companies. Following receipt of the Tax Advisor’s written notice to the Companies of its resolution of the Tax Dispute, the Companies shall each take or cause to be taken any action necessary to implement such resolution of the Tax Advisor. In accordance with Article 15 (and except as provided in the immediately following sentence), each Company shall pay its own fees and expenses (including the fees and expenses of its representatives) incurred in connection with the referral of the matter to the Tax Advisor. All fees and expenses of the Tax Advisor in connection with such referral shall be shared equally by the Companies. In the case of a Tax Dispute, the procedures of this Article 14 shall apply in lieu of the procedures set forth in Article VII of the Separation Agreement (other than those procedures set forth in Section 7.5 or Section 7.6 of the Separation Agreement); provided, that notwithstanding the foregoing, the Companies may commence mediation pursuant to Section 7.4 of the Separation Agreement with respect to a Tax Dispute if there is a Dispute or disagreement about whether any resolution by the Tax Advisor is consistent with the terms of this Agreement. Any Non-Tax Dispute shall be resolved pursuant to the procedures set forth in Article VII of the Separation Agreement. Notwithstanding anything to the contrary in the Separation Agreement, this Agreement or any other Ancillary Agreement, each of Parent and SpinCo is the only member of its respective Group entitled to commence a dispute resolution procedure under this Agreement, and each of Parent and SpinCo will cause its respective Group members not to commence any dispute resolution procedure other than through such Company as provided in this Article 14.

 

Article 15.          Expenses. Except as otherwise provided in this Agreement or the Transition Services Agreement, each Company and its Affiliates shall bear their own expenses incurred in connection with the preparation of Tax Returns, Tax Contests, and other matters related to Taxes under the provisions of this Agreement.

 

Article 16.          Late Payments. Any amount owed by one Company to another Company under this Agreement which is not paid when due shall bear interest at the Prime Rate plus two percent (2%), compounded annually, from the due date of the payment to the date paid. To the extent interest required to be paid under this Article 16 duplicates interest required to be paid under any other provision of this Agreement, interest shall be computed at the higher of the interest rate provided under this Article 16 or the interest rate provided under such other provision.

 

 

Article 17.          General Provisions.

 

Section 17.01          Counterparts; Entire Agreement; Corporate Power.

 

(a)            This Agreement may be executed in one (1) or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one (1) or more counterparts have been signed by each of the Companies and delivered to the other Company.

 

(b)            This Agreement, the other Ancillary Agreements, the Separation Agreement and the Exhibits, Schedules and appendices thereto contain the entire agreement between the Companies with respect to the subject matter hereof, supersede all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter, and there are no agreements or understandings between the Companies other than those set forth or referred to herein or therein. This Agreement, the other Ancillary Agreements and the Separation Agreement together govern the arrangements in connection with the Separation and Redemption and would not have been entered into independently. Except as otherwise provided in this Agreement, in the event of any conflict between this Agreement and the Separation Agreement (or any other Ancillary Agreement), with respect to matters addressed herein, the provisions of this Agreement shall control.

 

(c)            Parent represents on behalf of itself and each other member of the Parent Group, and SpinCo represents on behalf of itself and each other member of the SpinCo Group, as follows:

 

(i)            each such Person has the requisite corporate or other power and authority and has taken all corporate or other action necessary in order to execute, deliver and perform this Agreement, the Separation Agreement and the other Ancillary Agreements and to consummate the transactions contemplated hereby and thereby; and

 

(ii)            this Agreement, the Separation Agreement and the other Ancillary Agreements to which it is a party has been duly executed and delivered by it and constitute valid and binding agreements of it enforceable in accordance with the terms thereof.

 

(d)            Each Company acknowledges that it and each other Party may execute this Agreement, the Separation Agreement and certain of the other Ancillary Agreements by facsimile, stamp, electronic or mechanical signature, and that delivery of an executed counterpart of a signature page to this Agreement, the Separation Agreement or any other Ancillary Agreement (whether executed by manual, stamp, electronic or mechanical signature) by facsimile or by e-mail in portable document format (PDF) shall be effective as delivery of such executed counterpart of this Agreement, the Separation Agreement or such other Ancillary Agreement. Each Company expressly adopts and confirms each such facsimile, stamp, electronic or mechanical signature (regardless of whether delivered in person, by mail, by courier, by facsimile or by e-mail in portable document format (PDF)) made in its respective name as if it were a manual signature delivered in person, agrees that it will not assert that any such signature or delivery is not adequate to bind such Company to the same extent as if it were signed manually and delivered in person and agrees that, at the reasonable request of the other Company at any time, it will as promptly as reasonably practicable cause this Agreement, the Separation Agreement or any other Ancillary Agreement to be manually executed (any such execution to be as of the date of the initial date thereof) and delivered in person, by mail or by courier.

 

 

Section 17.02          Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.

 

(a)            This Agreement (and any claims or disputes arising out of or related hereto or to the transactions contemplated hereby or to the inducement of any party to enter herein, whether for breach of contract, tortious conduct or otherwise and whether predicated on common law, statute or otherwise) shall be governed and construed and interpreted in accordance with the Laws of the State of Delaware irrespective of the choice of laws principles of the State of Delaware including all matters of validity, construction, effect, enforceability, performance and remedies.

 

(b)            Each of Parent and SpinCo, on behalf of itself and the members of its Group, hereby irrevocably agrees that any litigation with respect to any Dispute with respect to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgement in respect of this Agreement and the rights and obligations arising hereunder brought by the other Company (or any member of such Company’s respective Group) hereto or its successors or assigns, shall be brought and determined exclusively in the Chosen Courts. Each of the Companies hereby irrevocably submits with regard to any such Dispute for itself and in respect of its property, generally and unconditionally, to the personal jurisdiction of the Chosen Courts and agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than the Chosen Courts. Each of the Parties hereto hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any Dispute with respect to this Agreement, (i) any claim that it is not personally subject to the jurisdiction of the Chosen Courts, (ii) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (iii) to the fullest extent permitted by applicable Law, any claim that (A) the Dispute in such court is brought in an inconvenient forum, (B) the venue of such Dispute is improper or (C) this Agreement, or the subject matter hereof, may not be enforced in or by such courts. To the fullest extent permitted by applicable Law, each Company hereto hereby consents to the service of process in accordance with Section 17.05; provided that (I) nothing herein shall affect the right of any Company to serve legal process in any other manner permitted by Law and (II) each such Company’s consent to jurisdiction and service contained in this Section 17.02(b) is solely for the purpose referred to in this Section 17.02(b) and shall not be deemed to be a general submission to said courts or in the State of Delaware other than for such purpose.

 

 

(c)            EACH COMPANY HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

Section 17.03          Assignability. This Agreement shall be binding upon and inure to the benefit of the Companies, and their respective successors and permitted assigns; provided, however, that neither Company may assign its rights or delegate its obligations under this Agreement without the express prior written consent of the other Company. Notwithstanding the foregoing, no such consent shall be required for the assignment of a Company’s rights and obligations under this Agreement in whole (i.e., the assignment of a Company’s rights and obligations under this Agreement, the other Ancillary Agreements and the Separation Agreement at the same time) in connection with a change of control of a Company so long as the resulting, surviving or transferee Person assumes all the obligations of the relevant party thereto by operation of Law or pursuant to an agreement in form and substance reasonably satisfactory to the other Company.

 

Section 17.04          Third-Party Beneficiaries. Except for the indemnification rights under this Agreement of any Indemnitee in their capacities as such, (a) the provisions of this Agreement are solely for the benefit of the Companies and their respective Groups and are not intended to confer upon any Person except the Company and their respective Groups any rights or remedies hereunder, and (b) there are no third-party beneficiaries of this Agreement and this Agreement shall not provide any third party with any remedy, claim, liability, reimbursement, claim of action or other right in excess of those existing without reference to this Agreement. Without limitation of the foregoing sentence of this Section 17.04, the provisions of this Agreement are not intended to confer on any Record Holder or Street Name Holder any rights or remedies hereunder and this Agreement shall not provide any such person with any remedy, claim, liability, reimbursement, claim or action or other right.

 

Section 17.05          Notices. All notices, requests, claims, demands or other communications under this Agreement shall be in writing and shall be given or made (and except as provided herein, shall be deemed to have been duly given or made upon receipt) by delivery in person, by overnight courier service, by facsimile or electronic transmission with receipt confirmed or by registered or certified mail (postage prepaid, return receipt requested), by electronic mail (so long as confirmation of receipt of such electronic mail is requested and received) to the respective Companies at the following addresses (or at such other address for a Company as shall be specified in a notice given in accordance with this Section 17.05):

 

If to Parent, to:

 

Mallinckrodt plc
College Business & Technology Park
Cruiserath, Blanchardstown
Dublin 15, Ireland

 

	Attention:	Executive Vice President and Chief Legal Officer
	E-mail:	Mark.Tyndall@mnk.com

 

 

	with a copy (which shall not constitute notice) to:
	Wachtell, Lipton, Rosen & Katz
	51 W 52nd Street
	New York, New York 10019
	Attention:	Adam O. Emmerich
		Victor Goldfeld
	E-mail:	AOEmmerich@wlrk.com
		VGoldfeld@wlrk.com
	and
	Arthur Cox LLP
	Ten Earlsfort Terrace
	Dublin 2, Ireland
	Attention:	Stephen Ranalow
	E-mail:	Stephen.ranalow@arthurcox.com
	If to SpinCo to:
	Par Health, Inc.
	675 McDonnell Blvd
	Hazelwood, MO 63042
	Attention:	Chief Legal Officer and Corporate Secretary
	E-mail:	maletta.matthew@endo.com
	with a copy (which shall not constitute notice) to:
	Wachtell, Lipton, Rosen & Katz
	51 West 52nd Street
	New York, New York 10019

 

 

	Attention:	Adam O. Emmerich
		Victor Goldfeld
	Email:	AOEmmerich@wlrk.com
		VGoldfeld@wlrk.com
	and
	Arthur Cox LLP
	Ten Earlsfort Terrace
	Dublin 2, Ireland
	Attention:	Stephen Ranalow
	Email:	stephen.ranalow@arthurcox.com

 

 

Any Company may, by notice to the other Company, change the address to which any such notices are to be given or made.

 

Section 17.06          Severability. If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances or in jurisdictions other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby. Upon such determination, the Companies shall negotiate in good faith in an effort to agree upon such a suitable and equitable provision to effect the original intent of the Companies.

 

Section 17.07          Force Majeure. No Company shall be deemed in default of this Agreement for any delay or failure to fulfill any obligation (other than a payment obligation) hereunder so long as and to the extent to which any delay or failure in the fulfillment of such obligation is prevented, frustrated, hindered or delayed as a consequence of circumstances of Force Majeure. In the event of any such excused delay, the time for performance of such obligations (other than a payment obligation) shall be extended for a period equal to the time lost by reason of the delay. A Company claiming the benefit of this provision shall, as soon as reasonably practicable after the occurrence of any such Force Majeure, (a) provide written notice to the other Company of the nature and extent of any such Force Majeure and (b) use commercially reasonable efforts to remove any such causes and resume performance under this Agreement as soon as reasonably practicable.

 

Section 17.08          Headings. The article, section and paragraph headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

 

Section 17.09          Survival of Covenants. Except as expressly set forth in this Agreement, the covenants, representations and warranties contained in this Agreement, and liability for the breach of any obligations contained herein, shall survive the Separation and the Redemption and shall remain in full force and effect.

 

 

Section 17.10          Waivers of Default. Waiver by any Company of any default by the other Company of any provision of this Agreement shall not be deemed a waiver by the waiving Company of any subsequent or other default, nor shall it prejudice the rights of the other Company. No failure or delay by any Company in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof, nor shall a single or partial exercise thereof prejudice any other or further exercise thereof or the exercise of any other right, power or privilege.

 

Section 17.11          Specific Performance. Subject to the provisions of Article 14, in the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement, the Company or Companies who are, or are to be, thereby aggrieved shall have the right to specific performance and injunctive or other equitable relief in respect of its or their rights under this Agreement, in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative. The Companies agree that the remedies at law for any breach or threatened breach, including monetary damages, are inadequate compensation for any loss and that any defense in any action for specific performance that a remedy at law would be adequate is waived. Any requirements for the securing or posting of any bond with such remedy are waived by each of the Companies.

 

Section 17.12          Amendments. No provisions of this Agreement shall be deemed waived, amended, supplemented or modified by any Company, unless such waiver, amendment, supplement or modification is in writing and signed by the authorized representative of the Company against whom it is sought to enforce such waiver, amendment, supplement or modification.

 

Section 17.13          Interpretation. In this Agreement, (a) words in the singular shall be deemed to include the plural and vice versa and words of one gender shall be deemed to include the other genders as the context requires; (b) the terms “hereof,” “herein,” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole (including all of the Schedules, Exhibits and Appendices hereto) and not to any particular provision of this Agreement; (c) Article, Section, Exhibit, Schedule and Appendix references are to the Articles, Sections, Exhibits, Schedules and Appendices of or to this Agreement unless otherwise specified; (d) unless otherwise stated, all references to any agreement (including this Agreement, the other Ancillary Agreements and the Separation Agreement) shall be deemed to include the exhibits, schedules and annexes (including all schedules, exhibits and appendices) to such agreement; (e) the word “including” and words of similar import when used in this Agreement shall mean “including, without limitation”; (f) the word “or” shall not be exclusive; (g) the word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if”; (h) unless otherwise specified in a particular case, the word “days” refers to calendar days; (i) references to “business day” shall mean any day other than a Saturday, a Sunday or a day on which banking institutions are generally authorized or required by Law to close in the United States; (j) references herein to this Agreement or any other agreement contemplated herein shall be deemed to refer to this Agreement or such other agreement as of the date on which it is executed and as it may be amended, modified or supplemented thereafter, unless otherwise specified; (k) unless expressly stated to the contrary in this Agreement, all references to “the date hereof,” “the date of this Agreement,” “hereby” and “hereupon” and words of similar import shall all be references to November 10, 2025, regardless of any amendment or restatement hereof; and (l) except where the context otherwise requires, references to Subsidiaries of SpinCo are to Persons that will be Subsidiaries of SpinCo upon consummation of the Redemption.

 

 

Section 17.14          Limitations of Liability. Notwithstanding anything in this Agreement to the contrary, neither SpinCo or its Affiliates, on the one hand, nor Parent or its Affiliates, on the other hand, shall be liable under this Agreement to the other for any consequential, indirect, incidental, punitive, exemplary, remote, speculative or similar damages (including lost revenue or profits, diminution of value, or damages calculated on multiples of revenue, earnings or other metrics approaches) in excess of compensatory damages of the other arising in connection with the transactions contemplated hereby (other than any such damages to the extent awarded to a third party with respect to a Third-Party Claim).

 

Section 17.15          Performance. Parent will cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth in this Agreement to be performed by any member of the Parent Group. SpinCo will cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth in this Agreement to be performed by any member of the SpinCo Group. Each Company (including its permitted successors and assigns) further agrees that it will (a) give timely notice of the terms, conditions and continuing obligations contained in this Section 17.15 to all of the other members of its Group and (b) cause all of the other members of its Group not to take any action or fail to take any such action inconsistent with such Company’s obligations under this Agreement or the transactions contemplated hereby.

 

Section 17.16          No Set-Off. Except as mutually agreed to in writing by the Companies, neither Company nor any member of such Company’s Group shall have any right of set-off or other similar rights with respect to (a) any amounts received pursuant to this Agreement; or (b) any other amounts claimed to be owed to the other Company or any member of its Group arising out of this Agreement.

 

Section 17.17          Expenses. Except as otherwise expressly set forth in this Agreement, or as otherwise agreed to in writing by the Companies, all fees, costs and expenses incurred on or prior to the Effective Time in connection with the preparation, execution, delivery and implementation of this Agreement, including the Separation and the Redemption, consummation of the transactions contemplated hereby will be borne by the Company or its applicable Subsidiary incurring such fees, costs or expenses.

 

Section 17.18          Mutual Drafting; Precedence.

 

(a)            This Agreement shall be deemed to be the joint work product of the Companies and any rule of construction that a document shall be interpreted or construed against a drafter of such document shall not be applicable.

 

[Remainder of page left intentionally blank]

 

 

IN WITNESS WHEREOF, the Companies have duly executed this Agreement as of the date first written above.

 

 

	MALLINCKRODT PLC
	By:	/s/ Sigurdur Olafsson
		Name:	Sigurdur Olafsson
		Title:	President and Chief Executive Officer
	PAR HEALTH, INC.
	By:	/s/ Stephen Welch
		Name:	Stephen Welch
		Title:	President and Chief Executive Officer

 

[Signature page to the Tax Matters Agreement]

 

 

 

Exhibit 10.3

 

EMPLOYEE MATTERS AGREEMENT

 

BY AND BETWEEN

 

MALLINCKRODT PLC

 

AND

 

PAR HEALTH, INC.

 

DATED AS OF NOVEMBER 10, 2025

 

 

TABLE OF CONTENTS

 

Article I DEFINITIONS		1
Section 1.01.	Definitions	1
Article II GENERAL PRINCIPLES FOR ALLOCATION OF LIABILITIES		5
Section 2.01.	General Principles	5
Section 2.02.	Benefit Continuation; Service Credit	7
Section 2.03.	Adoption and Transfer and Assumption of Benefit Plans	7
Article III ASSIGNMENT OF EMPLOYEES		9
Section 3.01.	Active and Inactive Employees	9
Section 3.02.	Individual Agreements	11
Section 3.03.	SpinCo Delayed Transfer Employees	12
Section 3.04.	Consultation with Labor Representatives; Labor Agreements	12
Section 3.05.	Non-Solicitation	13
Article IV EQUITY, INCENTIVE AND EXECUTIVE COMPENSATION		14
Section 4.01.	Generally	14
Section 4.02.	Equity Incentive Awards	14
Section 4.03.	Non-Equity Incentive Plans	16
Section 4.04.	Director Compensation	16
Article V RETIREMENT PLANS		16
Section 5.01.	401(k) Plans	16
Section 5.02.	No Distributions	18
Article VI NONQUALIFIED DEFERRED COMPENSATION PLANS		18
Section 6.01.	Nonqualified Deferred Compensation Plan	18
Section 6.02.	Legacy Rabbi Trust	19
Article VII WELFARE BENEFIT PLANS		19
Section 7.01.	Welfare Plans	19
Section 7.02.	Vacation, Holidays and Leaves of Absence	20
Section 7.03.	Severance and Unemployment Compensation	20
Section 7.04.	Workers’ Compensation	21
Section 7.05.	COBRA	21
Section 7.06.	Post-Retirement Welfare Benefits	21

 

 

Article VIII NON-U.S. EMPLOYEES		22
Article IX MISCELLANEOUS		23
Section 9.01.	Information Sharing and Access	23
Section 9.02.	Preservation of Rights to Amend	24
Section 9.03.	Fiduciary Matters	24
Section 9.04.	Further Assurances	24
Section 9.05.	Reimbursement of Costs and Expenses	24
Section 9.06.	Dispute Resolution	24
Section 9.07.	Third-Party Beneficiaries	25
Section 9.08.	Incorporation of Separation Agreement Provisions	25

 

  

EMPLOYEE MATTERS AGREEMENT

 

This EMPLOYEE MATTERS AGREEMENT, dated as of November 10, 2025 (this “Agreement”), is by and between Mallinckrodt plc, a public limited company incorporated in Ireland (“Parent”), and Par Health, Inc., a Delaware corporation (“SpinCo”).

 

R E C I T A L S:

 

WHEREAS, the board of directors of Parent (the “Parent Board”) has determined that it is in the best interests of Parent and its shareholders to create a new privately held company that shall operate the SpinCo Business;

 

WHEREAS, in furtherance of the foregoing, the Parent Board has determined that it is appropriate and desirable to separate the SpinCo Business from the Parent Business (the “Separation”), which Separation was substantially completed on or prior to July 31, 2025 pursuant to the Separation Step Plan, and, following the Separation, to effect the Redemption and the other transactions contemplated by the Separation Agreement, dated as of November 10, 2025, by and between Parent and SpinCo (the “Separation Agreement”), in each case on the terms and subject to the conditions set forth in the Separation Agreement;

 

WHEREAS, in addition to the matters addressed by the Separation Agreement, the Parties desire to enter into this Agreement to set forth the terms and conditions of certain employment, compensation and benefit matters; and

 

WHEREAS, the Parties acknowledge that this Agreement, the Separation Agreement and the other Ancillary Agreements represent the integrated agreement of Parent and SpinCo relating to the Separation and Redemption, are being entered into together and would not have been entered into independently.

 

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

 

Article I
DEFINITIONS

 

Section 1.01.      Definitions. For purposes of this Agreement, the following terms have the meanings set forth below, and capitalized terms used but not otherwise defined herein shall have the meaning ascribed to them in the Separation Agreement.

 

“Agreement” shall have the meaning set forth in the Preamble to this Agreement and shall include all schedules hereto and all amendments, modifications, and changes hereto entered into pursuant to Section 9.08.

 

 

“Benefit Plan” shall mean any contract, agreement, policy, practice, program, plan, trust, commitment or arrangement providing for benefits, perquisites or compensation of any nature from an employer to any Employee or Former Employee, or to any family member, dependent, or beneficiary of any such Employee or Former Employee, including cash or deferred arrangement plans, profit sharing plans, post-employment programs, pension plans, thrift plans, supplemental pension plans, Welfare Plans, stock option, stock purchase, stock appreciation rights, restricted stock, restricted stock units, performance stock units, other equity-based compensation and contracts, agreements, policies, practices, programs, plans, trusts, commitments and arrangements providing for terms of employment, fringe benefits, severance benefits, change in control protections or benefits, travel and accident, life, accidental death and dismemberment, disability and accident insurance, tuition reimbursement, adoption assistance, travel reimbursement, vacation, sick, personal or bereavement days, leaves of absences and holidays; provided, however, that the term “Benefit Plan” does not include any government-sponsored benefits, such as workers’ compensation, unemployment or any similar plans, programs, policies or individual agreements.

 

“COBRA” shall mean the U.S. Consolidated Omnibus Budget Reconciliation Act of 1985, as codified at Section 601 et seq. of ERISA and at Section 4980B of the Code.

 

“Employee” shall mean any Parent Group Employee or SpinCo Group Employee.

 

“ERISA” shall mean the U.S. Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.

 

“Former Employee” shall mean any individual who is a former employee of Parent or any of its Subsidiaries as of immediately prior to the Effective Time.

 

“Former Parent Group Employee” shall mean any Former Employee who is not a Former SpinCo Group Employee.

 

“Former SpinCo Group Employee” shall mean any Former Employee who was primarily engaged in the SpinCo Business (other than a Former Employee who was internally classified by Parent in anticipation of the Effective Time to be a Parent Group Employee) or was internally classified by Parent in anticipation of the Effective Time to be a SpinCo Group Employee, in each case as of immediately prior to his or her termination of employment with Parent or its Subsidiaries.

 

“HIPAA” shall mean the U.S. Health Insurance Portability and Accountability Act of 1996, as amended, and the regulations promulgated thereunder.

 

“Inactive Employee” means any Employee who is not actively working as of the Effective Time as a result of an illness, injury or approved leave of absence.

 

“Individual Agreement” shall mean any individual (a) employment contract or offer letter, (b) retention, severance or change in control agreement, (c) expatriate (including any international assignee) contract or agreement (including agreements and obligations regarding repatriation, relocation, equalization of Taxes and living standards in the host country), or (d) other agreement containing restrictive covenants (including confidentiality, non-competition and non-solicitation provisions), as in effect immediately prior to the Effective Time.

 

“Labor Agreement” shall have the meaning set forth in Section 2.01.

 

 

“Parent” shall have the meaning set forth in the Preamble.

 

“Parent 401(k) Plan” shall mean the Mallinckrodt Pharmaceuticals Retirement Savings and Investment Plan.

 

“Parent Benefit Plan” shall mean any Benefit Plan established, sponsored or maintained by Parent or any of its Subsidiaries immediately prior to the Effective Time, but excluding any SpinCo Benefit Plan.

 

“Parent Board” shall have the meaning set forth in the Recitals.

 

“Parent Compensation Committee” shall mean the Human Resources and Compensation Committee of the Parent Board.

 

“Parent Deferred Compensation Plan” shall mean the Mallinckrodt Pharmaceuticals Supplemental Savings and Retirement Plan.

 

“Parent Group Employees” shall have the meaning set forth in Section 3.01(a)(ii).

 

“Parent Non-Employee Director” means an individual who serves or served as a non-employee director of the Parent Board.

 

“Parent Ratio” shall mean the quotient obtained by dividing (a) the Pre-Separation Parent Stock Value by (b) the Post-Separation Parent Stock Value.

 

“Parent Retiree Welfare Plan” shall have the meaning set forth in Section 7.06.

 

“Parent RSU Award” shall mean an award of time-based restricted stock units in respect of Parent Ordinary Shares that is outstanding as of immediately prior to the Effective Time.

 

“Parent Welfare Plan” shall mean any Parent Benefit Plan which is a Welfare Plan.

 

“Parties” shall mean the parties to this Agreement.

 

“Post-Separation Parent RSU Award” shall mean a Parent RSU Award adjusted as of the Effective Time in accordance with Section 4.02(a).

 

“Post-Separation Parent Stock Value” shall be determined by the Parent Board in its discretion on or following the Effective Time.

 

“Pre-Separation Parent Stock Value” shall mean $90.50.

 

“Requesting Party” shall have the meaning set forth in Section 9.05.

 

“Restricted Employees” shall have the meaning set forth in Section 3.05.

 

“Separation” shall have the meaning set forth in the Recitals.

 

“Separation Agreement” shall have the meaning set forth in the Recitals.

 

 

“SpinCo” shall have the meaning set forth in the Preamble.

 

“SpinCo 401(k) Plan” shall mean the Endo Pharmaceuticals Savings and Investment Plan.

 

“SpinCo 401(k) Trust” shall have the meaning set forth in Section 5.01(a).

 

“SpinCo Benefit Plan” shall mean any Benefit Plan established, sponsored, maintained or contributed to by a member of the SpinCo Group as of or after the Effective Time, including any Benefit Plans retained or adopted by SpinCo pursuant to Section 2.03(a) and Section 2.03(b).

 

“SpinCo Deferred Compensation Plan” shall mean the SpinCo Deferred Compensation Plan, to be adopted by SpinCo as of the Effective Time pursuant to Section 2.03(a) and Article VI.

 

“SpinCo Delayed Employment Period” shall have the meaning set forth in Section 3.03.

 

“SpinCo Delayed Transfer Employee” shall have the meaning set forth in Section 3.03.

 

“SpinCo Group Employees” shall have the meaning set forth in Section 3.01(a)(i).

 

“SpinCo Ratio” shall mean the quotient obtained by dividing (a) the Pre-Separation Parent Stock Value by (b) the SpinCo Stock Value.

 

“SpinCo RSU Award” shall mean an award of time-based restricted stock units in respect of SpinCo Shares granted in accordance with Section 4.02(a).

 

“SpinCo Stock Value” shall mean $19.066.

 

“SpinCo Welfare Plan” shall mean a Welfare Plan established, sponsored, maintained or contributed to by any member of the SpinCo Group for the benefit of SpinCo Group Employees.

 

“Welfare Plan” shall mean any “welfare plan” (as defined in Section 3(1) of ERISA) or a “cafeteria plan” under Section 125 of the Code, and any benefits offered thereunder, and any other plan offering health benefits (including medical, prescription drug, dental, vision, mental health, substance abuse and retiree health), disability benefits, or life, accidental death and dismemberment, and business travel insurance, pre-Tax premium conversion benefits, dependent care assistance programs, employee assistance programs, contribution funding toward a health savings account, or flexible spending accounts.

 

 

Article II
GENERAL PRINCIPLES FOR ALLOCATION OF LIABILITIES

 

Section 2.01.      General Principles

 

. All provisions herein shall be subject to the requirements of all applicable Law and any collective bargaining, works council or similar agreement or arrangement with any labor union, works council or other labor representative (each, a “Labor Agreement”). Notwithstanding anything in this Agreement to the contrary, if the terms of a Labor Agreement or applicable Law require that any Assets or Liabilities be retained or assumed by, or transferred to, a Party in a manner that is different than what is set forth in this Agreement, such retention, assumption or transfer shall be made in accordance with the terms of such Labor Agreement and applicable Law and shall not be made as otherwise set forth in this Agreement; provided that, in such case, the Parties shall take all necessary actions to preserve the economic terms of the allocation of Assets and Liabilities contemplated by this Agreement. The provisions of this Agreement shall apply in respect of all jurisdictions.

 

(a)            Acceptance and Assumption of SpinCo Liabilities. Except as otherwise provided by this Agreement (and without limitation of Parent’s and SpinCo’s obligations under the Transition Services Agreement), on or prior to the Effective Time, but in any case prior to the Redemption, SpinCo and the applicable SpinCo Designees shall accept, assume and agree faithfully to perform, discharge and fulfill all of the following Liabilities in accordance with their respective terms (each of which shall be considered a SpinCo Liability), regardless of when or where such Liabilities arose or arise, or whether the facts on which they are based occurred prior to, at or subsequent to the Effective Time, regardless of where or against whom such Liabilities are asserted or determined (including any Liabilities arising out of claims made by Parent’s or SpinCo’s respective directors, officers, Employees, Former Employees, agents, Subsidiaries or Affiliates against any member of the Parent Group or the SpinCo Group) or whether asserted or determined prior to the date hereof, and regardless of whether arising from or alleged to arise from negligence, recklessness, violation of Law, fraud or misrepresentation by any member of the Parent Group or the SpinCo Group, or any of their respective directors, officers, Employees, Former Employees, agents, Subsidiaries or Affiliates:

 

(i)            any and all wages, salaries, incentive compensation, equity compensation, commissions, bonuses and any other employee compensation or benefits payable to or on behalf of any SpinCo Group Employees or Former SpinCo Group Employees after the Effective Time, without regard to when such wages, salaries, incentive compensation, equity compensation, commissions, bonuses or other employee compensation or benefits are or may have been awarded or earned;

 

(ii)            any and all Liabilities whatsoever with respect to claims under a SpinCo Benefit Plan, including the SpinCo Benefit Plan’s assumption of Liabilities with respect to SpinCo Group Employees or Former SpinCo Group Employees that were originally the Liabilities of the corresponding Parent Benefit Plan with respect to periods prior to the Effective Time;

 

(iii)            any and all Liabilities arising out of, relating to or resulting from the employment or termination of employment of any SpinCo Group Employees or Former SpinCo Group Employees; and

 

 

(iv)            any and all Liabilities expressly assumed or retained by any member of the SpinCo Group pursuant to this Agreement.

 

(b)            Acceptance and Assumption of Parent Liabilities. Except as otherwise provided by this Agreement, on or prior to the Effective Time, but in any case prior to the Redemption, Parent and certain members of the Parent Group designated by Parent shall accept, assume and agree faithfully to perform, discharge and fulfill all of the following Liabilities in accordance with their respective terms (each of which shall be considered a Parent Liability), regardless of when or where such Liabilities arose or arise, or whether the facts on which they are based occurred prior to, at or subsequent to the Effective Time, regardless of where or against whom such Liabilities are asserted or determined (including any Liabilities arising out of claims made by Parent’s or SpinCo’s respective directors, officers, Employees, Former Employees, agents, Subsidiaries or Affiliates against any member of the Parent Group or the SpinCo Group) or whether asserted or determined prior to the date hereof, and regardless of whether arising from or alleged to arise from negligence, recklessness, violation of Law, fraud or misrepresentation by any member of the Parent Group or the SpinCo Group, or any of their respective directors, officers, Employees, Former Employees, agents, Subsidiaries or Affiliates:

 

(i)            any and all wages, salaries, incentive compensation, equity compensation, commissions, bonuses and any other employee compensation or benefits payable to or on behalf of any Parent Group Employees or Former Parent Group Employees after the Effective Time, without regard to when such wages, salaries, incentive compensation, equity compensation, commissions, bonuses or other employee compensation or benefits are or may have been awarded or earned;

 

(ii)            any and all Liabilities whatsoever with respect to claims under a Parent Benefit Plan, including a corresponding SpinCo Benefit Plan’s assumption of Liabilities with respect to SpinCo Group Employees or Former SpinCo Group Employees that were originally the Liabilities of such Parent Benefit Plan with respect to periods prior to the Effective Time;

 

(iii)            any and all Liabilities arising out of, relating to or resulting from the employment or termination of employment of any Parent Group Employees or Former Parent Group Employees; and

 

(iv)            any and all Liabilities expressly assumed or retained by any member of the Parent Group pursuant to this Agreement.

 

(c)            Unaddressed Liabilities. Nothing in this Agreement shall require a transfer of Liabilities with respect to a Benefit Plan except as specifically set forth herein or as otherwise required by applicable Law. To the extent that this Agreement does not address particular Liabilities under any Benefit Plan and the Parties later determine that they should be allocated in connection with the Redemption, the Parties shall agree in good faith on the allocation, taking into account the handling of comparable Liabilities under this Agreement.

 

 

(d)            Non-U.S. Employees. SpinCo Group Employees who are residents outside of the United States or otherwise are subject to non-U.S. Law and their related benefits and Liabilities shall be treated in the same manner as the SpinCo Group Employees, respectively, who are residents of the United States and are not subject to non-U.S. Law. Notwithstanding anything in this Agreement to the contrary, all actions taken with respect to non-U.S. Employees or U.S. Employees working in non-U.S. jurisdictions, including any action under a Benefit Plan, shall be subject to and accomplished in accordance with applicable Law in the custom of the applicable jurisdictions and SpinCo may make such changes, modifications or amendments to the SpinCo Benefit Plans as may be required by applicable Law, vendor limitations or as are necessary to reflect the Separation.

 

Section 2.02.      Benefit Continuation; Service Credit.

 

(a)            Benefit Continuation. From the Redemption Date through August 1, 2026, the SpinCo Group shall maintain for the benefit of each SpinCo Group Employee employed by Parent or its Subsidiaries as of immediately following the closing of the Merger (i) a base salary or wage rate that is no less favorable than that in effect for such employee as of the Redemption Date, (ii) target annual (or other short-term periodic) cash incentive opportunities (including annual bonus and commission) and target long-term (including cash, equity and equity-based) incentive opportunities (provided that the SpinCo Group may elect to substitute cash incentive opportunities for equity and equity-based incentive opportunities and may set performance metrics and goals) that are no less favorable in the aggregate than those in effect for such employee as of the Redemption Date, and (iii) severance benefits that are no less favorable than the benefits provided under the applicable Benefit Plan as of the Redemption Date; provided that clause (ii) to the extent relating to target long term (including cash, equity and equity-based) incentive opportunities shall not apply with respect to members of the Eagle Senior Executive Team (as defined in the Transaction Agreement) or members of the Mallinckrodt Executive Committee.

 

(b)            Service Credit. Effective as of the Redemption Date and thereafter, the SpinCo Group shall provide or cause to be provided that periods of employment with the Parent Group (including any current or former affiliate or predecessor thereof) shall be taken into account for all purposes under all Benefit Plans maintained by the SpinCo Group for the benefit of the SpinCo Group Employees following the Redemption Date, as applicable, including paid-time-off plans or arrangements, 401(k), pension or other retirement plans and any severance or Welfare Plans (other than as would result in a duplication of benefits or for any purpose under any defined benefit pension plan, postretirement welfare plan, or plan that is grandfathered or frozen, in each case, in which the applicable employee did not participate prior to the Redemption Date).

 

Section 2.03.      Adoption and Transfer and Assumption of Benefit Plans.

 

(a)            Adoption by SpinCo of Benefit Plans. As of no later than the Effective Time (or such other time as is set forth herein), SpinCo shall, or shall cause the members of the SpinCo Group to, adopt or assume Benefit Plans (and related trusts), to the extent applicable, as contemplated and in accordance with the terms of this Agreement.

 

(b)            Retention by SpinCo of SpinCo Plans. From and after the Effective Time, SpinCo shall retain all of the SpinCo Benefits Plans, including all related Liabilities and Assets, and any related trusts and other funding vehicles and insurance contracts of any of such plans other than as specifically provided in this Agreement; provided, however, that SpinCo may make such changes, modifications or amendments to the SpinCo Benefit Plans as may be required by applicable Law or to reflect the Separation Agreement, including limiting participation in any such SpinCo Benefit Plan to SpinCo Group Employees who participated in the corresponding Parent Benefit Plan immediately prior to the Effective Time. Without limiting the requirements of Section 2.02, nothing in this Agreement shall preclude SpinCo, at any time after the Effective Time, from amending, merging, modifying, terminating, eliminating, reducing, or otherwise altering in any respect any SpinCo Benefit Plan, any benefit under any SpinCo Benefit Plan or any trust, insurance policy or funding vehicle related to any SpinCo Benefit Plan, or any employment or other service arrangement with SpinCo Group Employees, independent contractors or vendors (to the extent permitted by law).

 

 

(c)            Plans Not Required to Be Adopted. With respect to any Benefit Plan not addressed in this Agreement, the Parties shall agree in good faith on the treatment of such plan taking into account the handling of any comparable plan under this Agreement and, notwithstanding that SpinCo shall not have an obligation to continue to maintain any such plan with respect to the provision of future benefits from and after the Effective Time, SpinCo shall remain obligated to pay or provide any previously accrued or incurred benefits to the SpinCo Group Employees consistent with Section 2.01(a) of this Agreement.

 

(d)            Information and Operation. Each Party shall use its commercially reasonable efforts to provide the other Party with information describing each Benefit Plan election made by an Employee or Former Employee that may have application to such Party’s Benefit Plans from and after the Effective Time, and each Party shall use its commercially reasonable efforts to administer its Benefit Plans using those elections, including any beneficiary designations. Each Party shall, upon reasonable request, use its commercially reasonable efforts to provide the other Party and the other Party’s respective Affiliates, agents, and vendors all information reasonably necessary to the other Party’s operation or administration of its Benefit Plans.

 

(e)            No Duplication or Acceleration of Benefits. Notwithstanding anything to the contrary in this Agreement, the Separation Agreement or any Ancillary Agreement, no participant in any Benefit Plan shall receive service credit or benefits to the extent that receipt of such service credit or benefits would result in duplication of benefits provided to such participant by the corresponding Benefit Plan or any other plan, program or arrangement sponsored or maintained by a member of the Group that sponsors the corresponding Benefit Plan. Furthermore, unless expressly provided for in this Agreement, the Separation Agreement or in any Ancillary Agreement or required by applicable Law, no provision in this Agreement shall be construed to create any right to accelerate vesting distributions or entitlements under any Benefit Plan sponsored or maintained by a member of the Parent Group or member of the SpinCo Group on the part of any Employee or Former Employee.

 

(f)            Transition Services. The Parties acknowledge that the Parent Group or the SpinCo Group may provide administrative or other services for certain of the other Party’s compensation and benefit programs for a transitional period under the terms of the Transition Services Agreement. The Parties agree to enter into a business associate agreement (if required by HIPAA or other applicable health information privacy Laws) in connection with such Transition Services Agreement.

 

 

(g)            Beneficiaries. References to Parent Group Employees, Former Employees, SpinCo Group Employees, and current and former non-employee directors of either Parent or SpinCo shall be deemed to refer to their beneficiaries, dependents, survivors and alternate payees, as applicable.

 

Article III
ASSIGNMENT OF EMPLOYEES

 

Section 3.01.      Active and Inactive Employees.

 

(a)            Assignment and Transfer of Employees. Effective as of no later than the Effective Time and except as otherwise agreed by the Parties, (i) the applicable member of the Parent Group shall have taken such actions as are necessary to ensure that each individual who is intended to be an employee of the SpinCo Group as of immediately after the Effective Time (including any such individual who is an Inactive Employee) (collectively, the “SpinCo Group Employees”) is employed by a member of the SpinCo Group as of immediately after the Effective Time and (ii) the applicable member of the Parent Group shall have taken such actions as are necessary to ensure that each individual who is intended to be an employee of the Parent Group as of immediately after the Effective Time (including any such individual who is an Inactive Employee) and any other individual employed by the Parent Group as of the Effective Time who is not a SpinCo Group Employee (collectively, the “Parent Group Employees”) is employed by a member of the Parent Group as of immediately after the Effective Time. Each of the Parties agrees to execute, and to seek to have the applicable Employees execute, such documentation, if any, as may be necessary to reflect such assignment and/or transfer.

 

(b)            Certain Inactive Employees. Notwithstanding Section 3.01(a), with respect to Inactive Employees, (i) effective as of no later than the Effective Time and except as otherwise agreed by the Parties, each Inactive Employee shall, to the extent necessary to enable such Inactive Employee to continue to receive Welfare Plan benefits following the Effective Time, be transferred to a member of the Parent Group or the SpinCo Group to the extent necessary to ensure continued participation in the Welfare Plans in which such Inactive Employee then participates, and (ii) if and when an Inactive Employee returns to active employment, the Parties shall cooperate to cause the employment of such Inactive Employee to be transferred through such means as are appropriate to a member of the SpinCo Group (if such Inactive Employee is a SpinCo Group Employee) or the Parent Group (if such Inactive Employee is a Parent Group Employee), as applicable, on terms that meet the requirements of this Agreement, unless such Inactive Employee is already employed by a member of the applicable Group. For clarity, except as otherwise specifically provided, (x) any SpinCo Group Employee who is an Inactive Employee employed by the Parent Group for a period of time following the Effective Time pursuant to the immediately preceding sentence shall be considered a SpinCo Group Employee for purposes of Section 2.01 (with any associated Liabilities incurred or paid by the Parent Group subject to reimbursement by the SpinCo Group in accordance with Section 9.05), and (y) any Parent Group Employee who is an Inactive Employee employed by the SpinCo Group for a period of time following the Effective Time pursuant to the immediately preceding sentence shall be considered a Parent Group Employee for purposes of Section 2.01 (with any associated Liabilities incurred or paid by the SpinCo Group subject to reimbursement by the Parent Group in accordance with Section 9.05).

 

 

(c)            Employees with Work Visas or Permits; License To Do Business. Notwithstanding anything to the contrary in this Section 3.01, any SpinCo Group Employee who, immediately prior to the Effective Time, is employed pursuant to a work or training visa or permit that authorizes employment only by a member of the Parent Group shall remain employed by such member of the Parent Group following the Effective Time until the visa or permit is amended or a new visa or permit is granted to authorize employment by a member of the SpinCo Group. Any such SpinCo Group Employee shall be treated as a SpinCo Delayed Transfer Employee for purposes of this Agreement. As of the Effective Time, the applicable member of the Parent Group shall cease to serve and SpinCo shall commence to serve as the sponsoring and petitioning employer for U.S. immigration law purposes with respect to such SpinCo Delayed Transfer Employees. SpinCo shall assume all immigration-related obligations and liabilities that have arisen or will hereafter arise in connection with the submission of petitions, applications or other filings to certain U.S. government authorities within the U.S. Department of Homeland Security (U.S. Citizenship and Immigration Services, Immigration and Customs Enforcement, and Customs and Border Protection), the U.S. Department of Labor or the U.S. Department of State (including any U.S. embassy or consular post) requesting the grant of employment-based nonimmigrant and immigrant visa benefits on behalf of these persons. The Parties intend that SpinCo (by agreeing to employ the SpinCo Group Employees and agreeing, as a sponsoring employer, to assume the immigration-related obligations and liabilities described above) shall be considered the successor in interest to the applicable member of the Parent Group for U.S. immigration law.

 

(d)            At-Will Status. Nothing in this Agreement shall create any obligation on the part of any member of the Parent Group or any member of the SpinCo Group to (i) continue the employment of any Employee or permit the return from a leave of absence for any period after the date of this Agreement (except as required by applicable Law) or (ii) change the employment status of any Employee from “at-will,” to the extent that such Employee is an “at-will” employee under applicable Law. Except as provided in this Agreement, this Agreement shall not limit the ability of the Parent Group or the SpinCo Group to change the position, compensation or benefits of any Employees for performance-related, business or any other reason.

 

(e)            Severance. The Parties acknowledge and agree that the Separation, the Redemption and the assignment, transfer or continuation of the employment of Employees as contemplated by this Section 3.01 shall not be deemed an involuntary termination of employment entitling any SpinCo Group Employee or Parent Group Employee to severance payments or benefits (including any accelerated vesting of compensation or benefits), except as otherwise required by applicable Laws.

 

(f)            Not a Change in Control. The Parties acknowledge and agree that neither the consummation of the Separation, the Redemption nor any transaction contemplated by this Agreement, the Separation Agreement or any other Ancillary Agreement shall be deemed a “change in control,” “change of control” or term of similar import for purposes of any Benefit Plan sponsored or maintained by any member of the Parent Group or member of the SpinCo Group and except as provided in this Agreement or as otherwise required by applicable law or Individual Agreement, no provision of this Agreement shall be construed to accelerate any vesting or create a right or entitlement to any compensation or benefits on the part of any Employee.

 

 

(g)            Payroll and Related Taxes. SpinCo shall (i) be responsible for all payroll obligations, Tax withholding and reporting obligations, and associated government audit assessments; and (ii) furnish a Form W-2 or similar earnings statement, in each case, for all Employees and Former Employees employed by a member of the SpinCo Group with respect to the period during which they were employed by a member of the SpinCo Group before the Redemption Date and for all SpinCo Group Employees following the Effective Time. Parent shall (x) be responsible for all payroll obligations, Tax withholding and reporting obligations, and associated government audit assessments; and (y) furnish a Form W-2 or similar earnings statement, in each case, for all Employees and Former Employees employed by a member of the Parent Group with respect to the period during which they were employed by a member of the Parent Group before the Redemption Date and for all Parent Group Employees following the Effective Time.

 

Section 3.02.      Individual Agreements.

 

(a)            Assignment by Parent or SpinCo. To the extent necessary, Parent shall assign, or cause an applicable member of the Parent Group to assign, to SpinCo or another member of the SpinCo Group, as designated by SpinCo, Individual Agreements between a member of the Parent Group and a SpinCo Group Employee, with such assignment to be effective as of no later than the Redemption Date; provided, however, that to the extent that assignment of any such Individual Agreement is not permitted by the terms of such agreement or by applicable Law, effective as of the Redemption Date, each member of the SpinCo Group shall be considered to be a successor to each member of the Parent Group, for purposes of, and a third-party beneficiary with respect to, such agreement, such that each member of the SpinCo Group shall enjoy all of the rights and benefits under such agreement (including rights and benefits as a third-party beneficiary), with respect to the business operations of the SpinCo Group; provided, further, that in no event shall Parent be permitted to enforce any such Individual Agreement (including any agreement containing non-competition or non-solicitation covenants) against a SpinCo Group Employee for action taken in such individual’s capacity as a SpinCo Group Employee other than on behalf of the SpinCo Group as requested by the SpinCo Group in its capacity as a third-party beneficiary. To the extent necessary, SpinCo shall assign, or cause an applicable member of the SpinCo Group to assign, to Parent or another member of the Parent Group, as designated by Parent, Individual Agreements between a member of the SpinCo Group and a Parent Group Employee, with such assignment to be effective as of no later than the Redemption Date; provided, however, that to the extent that assignment of any such Individual Agreement is not permitted by the terms of such agreement or by applicable Law, effective as of the Redemption Date, each member of the Parent Group shall be considered to be a successor to each member of the SpinCo Group, for purposes of, and a third-party beneficiary with respect to, such agreement, such that each member of the Parent Group shall enjoy all of the rights and benefits under such agreement (including rights and benefits as a third-party beneficiary), with respect to the business operations of the Parent Group; provided, further, that in no event shall SpinCo be permitted to enforce any such Individual Agreement (including any agreement containing non-competition or non-solicitation covenants) against a Parent Group Employee for action taken in such individual’s capacity as a Parent Group Employee other than on behalf of the Parent Group as requested by the Parent Group in its capacity as a third-party beneficiary.

 

 

(b)            Assumption by SpinCo and Parent. Effective as of no later than the Redemption Date, SpinCo shall, or shall cause the members of the SpinCo Group to, assume and honor any Individual Agreement between a member of the Parent Group and a SpinCo Group Employee, including any obligations thereunder. Effective as of no later than the Redemption Date, Parent shall, or shall cause the members of the Parent Group to, assume and honor any Individual Agreement between a member of the SpinCo Group and a Parent Group Employee, including any obligations thereunder.

 

Section 3.03.      SpinCo Delayed Transfer Employees. In the case of a SpinCo Group Employee who is employed by a member of the Parent Group as of immediately prior to the Effective Time and whose employment cannot commence with, or be transferred to, the SpinCo Group or whose transfer of employment to the SpinCo Group is otherwise delayed (a “SpinCo Delayed Transfer Employee”), the Parties shall cooperate in good faith to cause such SpinCo Delayed Transfer Employee to provide services to the SpinCo Group while remaining employed by the Parent Group until such time as such SpinCo Delayed Transfer Employee’s employment can be transferred to the SpinCo Group or otherwise terminates with the Parent Group. The Parties shall cooperate in good faith to cause each SpinCo Delayed Transfer Employee to commence employment with a member of the SpinCo Group as soon as reasonably practicable following the Redemption Date as permitted by applicable Law in such a manner that, to the maximum extent practical, does not trigger the right of such SpinCo Group Employee to redundancy, severance, termination or similar pay and is otherwise consistent with the terms and conditions of this Agreement and applicable Law or Labor Agreement. In respect of the SpinCo Delayed Transfer Employees, unless otherwise specified or the context otherwise implies, references to “Effective Time” and “Redemption Date” shall be treated as references to the first date and time at which the applicable SpinCo Delayed Transfer Employee’s employment commences with or transfers to a member of the SpinCo Group. Notwithstanding the delayed transfer of a SpinCo Delayed Transfer Employee, from and after the Effective Time through the date of commencement of employment with a member of the SpinCo Group (or, if earlier, the date of the applicable SpinCo Delayed Transfer Employee’s termination of employment) (the “SpinCo Delayed Employment Period”), any Liability related to a SpinCo Delayed Transfer Employee in respect of the SpinCo Delayed Employment Period (including with respect to compensation and benefits paid by Parent) shall be considered a SpinCo Liability; provided that, during such period, the SpinCo Group shall receive the benefit of such SpinCo Delayed Transfer Employee’s services.

 

Section 3.04.      Consultation with Labor Representatives; Labor Agreements. The Parties shall cooperate to notify, inform and/or consult with any labor union, works council or other labor representative regarding the Separation and the Redemption to the extent required by Law or a Labor Agreement. No later than as of immediately before the Effective Time, (a) SpinCo shall have taken, or caused another member of the SpinCo Group to take, all actions that are necessary (if any) for SpinCo or another member of the SpinCo Group to (i) assume any Labor Agreements in effect with respect to SpinCo Group Employees and Former SpinCo Group Employees (excluding obligations thereunder with respect to any Parent Group Employees or Former Parent Group Employees, to the extent applicable) and (ii) unless otherwise provided in this Agreement, assume and honor any obligations of the Parent Group under any Labor Agreements as such obligations relate to SpinCo Group Employees and Former SpinCo Group Employees, and (b) Parent shall have taken, or caused another member of the Parent Group to take, all actions that are necessary (if any) for Parent or another member of the Parent Group to (i) assume any Labor Agreements in effect with respect to Parent Group Employees and Former Parent Group Employees (excluding obligations thereunder with respect to any SpinCo Group Employees or Former SpinCo Group Employees) and (ii) assume and honor any obligations of the SpinCo Group under any Labor Agreements as such obligations relate to Parent Group Employees and Former Parent Group Employees.

 

 

Section 3.05.      Non-Solicitation.

 

(a)            Each Party agrees that, for a period of 24 months from the Effective Time, such Party shall, and shall cause each member in its Group to, not solicit for employment or hire any individual who is an employee of a member of the other Group as of immediately prior to the Effective Time (“Restricted Employees”); provided that the foregoing restrictions shall not apply to:  (i) any Restricted Employee who terminates employment at least 18 months prior to the applicable solicitation or hire, (ii) the solicitation or hire of a Person whose employment was involuntarily terminated by the employing Party in a severance qualifying termination before the employment discussions with the soliciting or hiring Party commenced, and (iii) any Restricted Employee whose prospective employment is agreed to in writing by both the Chief Human Resources Officer (or equivalent officer) of the soliciting Party and the Chief Human Resources Officer (or equivalent officer) of the employing Party, or in the case of a Restricted Employee who is not currently employed, the Party who last employed Restricted Employee; provided, further, that it shall not be deemed to be a violation of this Section 3.05 for either Party, or the members of its Group, to post a general solicitation that is not targeted at Restricted Employees of the other Party and the members of its Group.

 

(b)            Remedies; Enforcement. Each Party acknowledges and agrees that (i) injury to the employing Party from any breach by the other Party of the obligations set forth in this Section 3.05 would be irreparable and impossible to measure and (ii) the remedies at Law for any breach or threatened breach of this Section 3.05, including monetary damages, would therefore be inadequate compensation for any loss and the employing Party shall have the right to specific performance and injunctive or other equitable relief in accordance with this Section 3.05 in addition to any and all other rights and remedies at Law or in equity, and all such rights and remedies shall be cumulative. Each Party understands and acknowledges that the restrictive covenants and other agreements contained in this Section 3.05 are an essential part of this Agreement and the transactions contemplated hereby. It is the intent of the Parties that the provisions of this Section 3.05 shall be enforced to the fullest extent permissible under applicable Law applied in each jurisdiction in which enforcement is sought. If any particular provision or portion of this Section 3.05 shall be adjudicated to be invalid or unenforceable, such provision or portion thereof shall be deemed amended to the minimum extent necessary to render such provision or portion valid and enforceable, such amendment to apply only with respect to the operation of such provision or portion thereof in the particular jurisdiction in which such adjudication is made.

 

 

Article IV
EQUITY, INCENTIVE AND EXECUTIVE COMPENSATION

 

Section 4.01.      Generally. Each Parent RSU Award that is outstanding as of immediately prior to the Effective Time shall be adjusted as described below; provided, however, effective immediately prior to the Effective Time, the Parent Compensation Committee may provide for different adjustments with respect to some or all Parent RSU Awards to the extent that the Parent Compensation Committee deems such adjustments necessary and appropriate. Any adjustments made by the Parent Compensation Committee pursuant to the foregoing sentence shall be deemed incorporated by reference herein as if fully set forth below and shall be binding on the Parties and their respective Affiliates.

 

Section 4.02.      Equity Incentive Awards.

 

(a)            RSU Awards. Each Parent RSU Award that is outstanding as of immediately prior to the Effective Time shall be treated as follows:

 

(i)            Parent Group Employee and Parent Non-Employee Director. If the holder is a Parent Group Employee or Parent Non-Employee Director, such award shall be converted, as of the Effective Time, into a Post-Separation Parent RSU Award and shall, except as otherwise provided in this Section 4.02, be subject to the same terms and conditions (including with respect to vesting and settlement) after the Effective Time as were applicable to such Parent RSU Award immediately prior to the Effective Time; provided, however, that from and after the Effective Time, the number of Parent Ordinary Shares subject to such Post-Separation Parent RSU Award shall be equal to the product, rounded to the nearest whole share, of (A) the number of Parent Ordinary Shares subject to the corresponding Parent RSU Award immediately prior to the Effective Time, multiplied by (B) the Parent Ratio.

 

(ii)            SpinCo Group Employee. If the holder is a SpinCo Group Employee, such award shall be converted, as of the Effective Time, into a SpinCo RSU Award and shall, except as otherwise provided in this Section 4.02, be subject to the same terms and conditions (including with respect to settlement and vesting) after the Effective Time as were applicable to such Parent RSU Award immediately prior to the Effective Time; provided, however, that from and after the Effective Time, the number of SpinCo Shares subject to such SpinCo RSU Award shall be equal to the product, rounded to the nearest whole share, of (A) the number of Parent Ordinary Shares subject to the corresponding Parent RSU Award immediately prior to the Effective Time, multiplied by (B) the SpinCo Ratio.

 

(b)            Miscellaneous Award Terms.

 

(i)            None of the Separation, the Redemption or any employment transfer described in Section 3.01 shall constitute a termination of employment for any Employee for purposes of any Post-Separation Parent RSU Award or any SpinCo RSU Award.

 

(ii)            After the Effective Time, for any award adjusted under this Section 4.02, any reference to a “change in control,” “change of control” or similar definition in an award agreement, employment agreement or Parent equity plan applicable to such award, (x) with respect to Post-Separation Parent RSU Awards, shall be deemed to refer to a “change in control,” “change of control” or similar definition as set forth in the applicable award agreement, employment agreement or Parent equity plan, and (y) with respect to SpinCo RSU Awards, shall be deemed to refer to a “change in control,” “change of control” or similar definition of SpinCo.

 

 

(iii)            For purposes of rounding fractional shares under Section 4.02(a), a fractional share which equals less than one-half of a share shall be rounded down to the nearest whole share and a fractional share that is equal to or greater than one-half of a share shall be rounded up to the nearest whole share.

 

(c)            Settlement; Tax Reporting and Withholding.

 

(i)            After the Effective Time, Post-Separation Parent RSU Awards, regardless of by whom held, shall be settled by Parent, and SpinCo RSU Awards, regardless of by whom held, shall be settled by SpinCo.

 

(ii)            Upon the vesting, payment or settlement, as applicable, of Post-Separation Parent RSU Awards, Parent shall be solely responsible for ensuring the satisfaction of all applicable Tax withholding requirements on behalf of each holder. Upon the vesting, payment or settlement, as applicable, of SpinCo RSU Awards, SpinCo shall be solely responsible for ensuring the satisfaction of all applicable Tax withholding requirements on behalf of each holder. Following the Effective Time, if any Post-Separation Parent RSU Award shall fail to become vested, such Post-Separation Parent RSU Award shall be forfeited to Parent, and if any SpinCo RSU Award shall fail to become vested, such SpinCo RSU Award shall be forfeited to SpinCo.

 

(iii)            Without limiting the generality of Section 3.01(g), Parent shall be responsible for all Liabilities (and entitled to the tax deduction) associated with awards that relate to Parent Ordinary Shares following the Effective Time, and SpinCo shall be responsible for all Liabilities (and entitled to the tax deduction) associated with awards that relate to SpinCo Shares following the Effective Time. In the event the treatment specified in this Section 4.02(c)(iii) does not comply with applicable Law or results in the Party who bore the economic Liability associated with the award not being the Party entitled to the corresponding tax deduction under applicable Law, the Parties agree to negotiate in good faith an alternative treatment that complies with applicable Law and does not result in such adverse economic consequence to a Party.

 

(d)            Administration. Parent and SpinCo shall establish an appropriate administration system to administer, in an orderly manner, the vesting and forfeiture of, and the withholding and reporting requirements with respect to, Post-Separation Parent RSU Awards and SpinCo RSU Awards, respectively.

 

(e)            Regulatory Requirements. The Parties shall take such actions as are deemed necessary or advisable to effectuate the provisions of this Section 4.02, including, to the extent applicable, compliance with securities Laws and other applicable Laws or legal requirements (including any such requirements associated with equity compensation awards in affected non-U.S. jurisdictions).

 

 

Section 4.03.      Non-Equity Incentive Plans.

 

(a)            The SpinCo Group shall assume or retain all Liabilities with respect to all non-equity incentive awards that would otherwise be payable to SpinCo Group Employees for any performance periods that are open as of the Effective Time. The SpinCo Group shall also determine for SpinCo Group Employees (i) the extent to which established performance criteria (as interpreted by the SpinCo Group, in its sole discretion) have been met, and (ii) the payment level for each SpinCo Group Employee. The SpinCo Group shall assume all Liabilities with respect to any such incentive awards payable to SpinCo Group Employees for any performance periods that are open as of the Effective Time and thereafter, and no member of the Parent Group shall have any obligations with respect thereto.

 

(b)            The Parent Group shall assume or retain all Liabilities with respect to any non-equity incentive awards that would otherwise be payable to Parent Group Employees for any performance periods that are open as of the Effective Time. The Parent Group shall also determine for Parent Group Employees (i) the extent to which established performance criteria (as interpreted by the Parent Group, in its sole discretion) have been met, and (ii) the payment level for each Parent Group Employee. The Parent Group shall retain (or assume as necessary) all Liabilities with respect to any such incentive awards payable to Parent Group Employees for any performance periods that are open as of the Effective Time and thereafter, and no member of the SpinCo Group shall have any obligations with respect thereto.

 

(c)            From and following the Effective Time, the SpinCo Group shall assume or retain pursuant to Section 2.03(b) any incentive plan for the exclusive benefit of SpinCo Group Employees, whether or not sponsored by the SpinCo Group, and, from and after the Effective Time, shall be solely responsible for all Liabilities thereunder.

 

Section 4.04.      Director Compensation. Parent shall be responsible for the payment of any fees for service on the Parent Board that are earned at, before, or after the Effective Time, and SpinCo shall not have any responsibility for any such payments. With respect to any SpinCo non-employee director, SpinCo shall be responsible for the payment of any fees for service on the Board of Directors of SpinCo that are earned at any time after the Effective Time and Parent shall not have any responsibility for any such payments.

 

Article V
RETIREMENT PLANS

 

Section 5.01.      401(k) Plans.

 

(a)            Establishment of Plan. Effective on or before the Redemption Date, SpinCo shall or shall cause the members of the SpinCo Group to assume the SpinCo 401(k) Plan and the related trust (the “SpinCo 401(k) Trust”), which shall be intended to meet the tax qualification requirements of Section 401(a) of the Code, the tax exemption requirement of Section 501(a) of the Code, and the requirements described in Sections 401(k) and (m) of the Code.

 

 

(b)            Transfers and Vesting of Account Balances. As of a date following the Effective Time determined by Parent (the “401(k) Transfer Date”), Parent shall cause the trustee of the Parent 401(k) Plan to transfer from the trust which forms a part of the Parent 401(k) Plan (the “Parent 401(k) Trust”) to the SpinCo 401(k) Trust the account balances under the Parent 401(k) Plan of SpinCo Group Employees who participated in the Parent 401(k) Plan prior to the Effective Time, determined as of the 401(k) Transfer Date, and shall cause all such account balances to be fully vested (to the extent unvested) as of immediately prior to the transfer. As of the 401(k) Transfer Date, SpinCo shall cause the trustee of the SpinCo 401(k) Plan to transfer from the SpinCo 401(k) Trust to the Parent 401(k) Trust the account balances under the SpinCo 401(k) Plan of Parent Group Employees who participated in the SpinCo 401(k) Plan prior to the Effective Time, determined as of the 401(k) Transfer Date, and shall cause all such account balances to be fully vested (to the extent unvested) as of immediately prior to the transfer. Unless otherwise agreed by the parties, the foregoing transfers shall be made in kind, including promissory notes evidencing the transfer of outstanding loans. Any Asset and Liability transfers pursuant to this Section 5.01 shall comply in all respects with Sections 414(l) and 411(d)(6) of the Code and if required, shall be made not less than 30 days after the notice under Section 6058(b) of the Code have been filed with respect to the applicable plan. The parties agree that to the extent that any Assets are not transferred in kind, the Assets transferred will be mapped into an appropriate investment vehicle which may include the qualified default investment alternative under the SpinCo 401(k) Plan or Parent 401(k) Plan, as applicable.

 

(c)            Transfer of Liabilities. Effective as of the Effective Time but subject to the Asset transfers specified in Section 5.01(b) above, the SpinCo 401(k) Plan shall assume and be solely responsible for all the Liabilities for or relating to SpinCo Group Employees under the Parent 401(k) Plan (excluding the obligation, if any, to make employer contributions that have not been made in respect of any time period ending on or prior to the Effective Time, which obligation shall remain the responsibility of the Parent 401(k) Plan), and the Parent 401(k) Plan shall assume and be solely responsible for all the Liabilities for or relating to Parent Group Employees under the SpinCo 401(k) Plan (excluding the obligation, if any, to make employer contributions that have not been made in respect of any time period ending on or prior to the Effective Time, which obligation shall remain the responsibility of the SpinCo 401(k) Plan). SpinCo shall be responsible for all ongoing rights of or relating to SpinCo Group Employees for future participation (including the right to make payroll deductions) in the SpinCo 401(k) Plan, and Parent shall be responsible for all ongoing rights of or relating to Parent Group Employees for future participation (including the right to make payroll deductions) in the Parent 401(k) Plan. Notwithstanding anything to the contrary in this Section 5.01, (i) SpinCo Group Employees who are Inactive Employees and remain employed by a member of the Parent Group for a period of time following the Effective Time pursuant to Section 3.01(b) shall continue to participate in the Parent 401(k) Plan during such period and, consistent with Section 2.01 and Section 3.01(b), any employer contributions made by the Parent Group during such period under and in accordance with the terms of the Parent 401(k) Plan shall be subject to reimbursement by the SpinCo Group in accordance with Section 9.05, and (ii) Parent Group Employees who are Inactive Employees and remain employed by a member of the SpinCo Group for a period of time following the Effective Time pursuant to Section 3.01(b) shall continue to participate in the SpinCo 401(k) Plan during such period and, consistent with Section 2.01 and Section 3.01(b), any employer contributions made by the SpinCo Group during such period under and in accordance with the terms of the SpinCo 401(k) Plan shall be subject to reimbursement by the Parent Group in accordance with Section 9.05.

 

 

(d)            401(k) Plan Provisions. The SpinCo 401(k) Plan shall provide that the account balance under the Parent 401(k) Plan of each SpinCo Group Employee who participated in the Parent 401(k) Plan prior to the Effective Time as of the date of the transfer of Assets from the Parent 401(k) Plan (including any outstanding promissory notes relating to outstanding loans) shall be credited to such individual’s account under the SpinCo 401(k) Plan. The Parent 401(k) Plan shall provide that the account balance under the SpinCo 401(k) Plan of each Parent Group Employee who participated in the SpinCo 401(k) Plan prior to the Effective Time as of the date of the transfer of Assets from the SpinCo 401(k) Plan (including any outstanding promissory notes relating to outstanding loans) shall be credited to such individual’s account under the Parent 401(k) Plan.

 

(e)            Plan Fiduciaries. For all periods at and after the Effective Time, the parties agree that the applicable fiduciaries of each of the Parent 401(k) Plan and the SpinCo 401(k) Plans, respectively, shall have the authority with respect to the Parent 401(k) Plans and the SpinCo 401(k) Plan, respectively, to determine the investment alternatives, the terms and conditions with respect to those investment alternatives and such other matters as are within the scope of their duties under ERISA and the terms of the applicable plan documents.

 

Section 5.02.      No Distributions. No Employee shall be entitled to a right to a distribution of his or her benefit under the Parent 401(k) Plan or the SpinCo 401(k) Plan as a result of the Separation, Redemption or the assignment of his or her transfer of employment contemplated by Section 3.01.

 

Article VI
NONQUALIFIED DEFERRED COMPENSATION PLANS

 

Section 6.01.      Nonqualified Deferred Compensation Plan.

 

(a)            Establishment of SpinCo Deferred Compensation Plan. Effective as of no later than the Effective Time, (i) the SpinCo Group shall establish the SpinCo Deferred Compensation Plan, which shall have substantially the same terms as of immediately prior to the Effective Time as the Parent Deferred Compensation Plan; and (ii) SpinCo shall and shall cause the SpinCo Group Deferred Compensation Plan to assume, as of no later than the Effective Time, all Liabilities under the Parent Deferred Compensation Plan related to the SpinCo Group Employees and Former SpinCo Group Employees (including without limitation any obligation to make employer contributions that have not been made in respect of any time period ending on or prior to the Effective Time) and the Parent Deferred Compensation Plan shall have no further obligations related to the SpinCo Group Employees and Former SpinCo Group Employees from and following the Effective Time. Notwithstanding the foregoing, SpinCo may make such changes, modifications or amendments to the SpinCo Deferred Compensation Plan as may be required by applicable Law or as are necessary and appropriate to reflect the Separation and the Redemption or as SpinCo otherwise determines to be advisable.

 

(b)            Parent Nonqualified Plans. From and after the Effective Time, no SpinCo Group Employees or Former SpinCo Group Employees shall participate in or accrue any benefits under the Parent Deferred Compensation Plan and Parent shall continue to be responsible for Liabilities in respect of Parent Group Employees and Former Parent Group Employees under the Parent Nonqualified Deferred Compensation Plan.

 

 

(c)            Endo Nonqualified Deferred Compensation Plans. Effective as of no later than the Effective Time, the SpinCo Group shall assume or retain, as applicable, all Liabilities under the Endo USA, Inc. Amended and Restated Executive Deferred Compensation Plan, Endo USA, Inc. Directors Deferred Compensation Plan and Endo USA, Inc. Amended and Restated 401(k) Restoration Plan.

 

(d)            Distributions. The parties acknowledge that none of the transactions contemplated by this Agreement, the Separation Agreement or any Transaction Document will trigger a payment or distribution of compensation under the Parent Deferred Compensation Plan or SpinCo Deferred Compensation Plan.

 

Section 6.02.      Legacy Rabbi Trust. Effective as of no later than the Effective Time, SpinCo shall assume or retain, as applicable, all Assets and Liabilities under the Legacy Rabbi Trust and the following plans and arrangements: (a) Supplemental Plan for Participants of Mallinckrodt Inc. Retirement Plan and Mallinckrodt Cash Balance Pension Plans; (b) Mallinckrodt Inc. SERP; (c) Nellcor Puritan Bennett SERP Make-Up Plan; (d) Puritan Bennett Directors Pension Plan; and (e) the Mallinckrodt Executive Life Insurance Plan and Mallinckrodt Supplemental Life Insurance Plan, and in each case any associated corporate owned life insurance policies. “Legacy Rabbi Trust” means the trust established by the Agreement of Trust, dated August 16, 1996, by and between Parent and Wachovia Bank.

 

Article VII
WELFARE BENEFIT PLANS

 

Section 7.01.      Welfare Plans.

 

(a)            Establishment of SpinCo Welfare Plans. Except as otherwise provided in this Article VII, as of no later than the Redemption Date, SpinCo shall, or shall cause the members of the SpinCo Group to, establish or retain the SpinCo Welfare Plans (it being understood that SpinCo may assume existing Parent Welfare Plans in lieu of establishing new plans and the assumed plans shall constitute SpinCo Welfare Plans as of the date of assumption and thereafter). As of no later than the Redemption Date, SpinCo Group Employees who are employed by SpinCo or members of the SpinCo Group as of such date shall cease participation in all Parent Welfare Plans. With respect to any Liabilities incurred or paid by the Parent Group on or after the Redemption Date under the Parent Welfare Plans in respect of SpinCo Group Employees (for clarity including Inactive Employees), (i) any such Liabilities arising out of claims incurred prior to the Redemption Date under Parent Welfare Plans (x) that are medical, dental or vision plans shall be retained by the Parent Group without reimbursement by the SpinCo Group and (y) that are not medical, dental or vision plans shall be subject to reimbursement by the SpinCo Group in accordance with Section 9.05; and (ii) any such Liabilities arising out of claims incurred on or after the Redemption Date shall be subject to reimbursement by the SpinCo Group in accordance with Section 9.05 (it being understood that this clause (ii) is only relevant in the case of SpinCo Group Employees who are Inactive Employees and remain employed by a member of the Parent Group for a period of time following the Effective Time pursuant to Section 3.01(b)). With respect to any Liabilities incurred or paid by the SpinCo Group on or after the Redemption Date under the SpinCo Welfare Plans in respect of Parent Group Employees (for clarity including Inactive Employees), (I) any such Liabilities arising out of claims incurred prior to the Redemption Date under SpinCo Welfare Plans (X) that are medical, dental or vision plans shall be retained by the SpinCo Group without reimbursement by the Parent Group and (Y) that are not medical, dental or vision plans shall be subject to reimbursement by the Parent Group in accordance with Section 9.05; and (II) any such Liabilities arising out of claims incurred on or after the Redemption Date shall be subject to reimbursement by the Parent Group in accordance with Section 9.05 (it being understood that this clause (II) is only relevant in the case of Parent Group Employees who are Inactive Employees and remain employed by a member of the SpinCo Group for a period of time following the Effective Time pursuant to Section 3.01(b)). Notwithstanding anything to the contrary herein, SpinCo Group Employees who are participants in Parent Group’s Executive Long Term Disability Plan as of immediately prior to the Effective Time shall continue to participate in such plan following the Effective Time until the SpinCo Group establishes a corresponding plan, and any associated premiums or other related costs paid by the Parent Group following the Effective Time shall be subject to reimbursement by the SpinCo Group in accordance with Section 9.05. Without limiting the generality of Section 9.02, SpinCo may modify the terms of the SpinCo Welfare Plans as it deems necessary and appropriate.

 

 

(b)            Waiting Periods; Deductibles. Effective as of the Redemption Date and thereafter, the Parent Group and the SpinCo Group shall use commercially reasonable efforts to (i) ensure that no eligibility waiting periods, actively-at-work requirements or pre-existing condition limitations or exclusions shall apply with respect to the Employees under the applicable Welfare Plan of the Parent Group and the SpinCo Group (except to the extent applicable under the applicable Welfare Plan immediately prior to the Effective Time), (ii) waive any and all evidence of insurability requirements with respect to Employees to the extent that such evidence of insurability requirements were not applicable to the Employees under the applicable Benefit Plan immediately prior to the Effective Time, and (iii) credit each active Employee with all deductible payments, out-of-pocket or other co-payments paid by such employee under the applicable Benefit Plan prior to the Redemption Date during the year in which the Redemption Date occurs for the purpose of determining the extent to which any such employee has satisfied his or her deductible and whether he or she has reached the out-of-pocket maximum under any health benefit plan of the Parent Group or the SpinCo Group, as applicable, for such year.

 

Section 7.02.      Vacation, Holidays and Leaves of Absence. From and following the Effective Time, (a) the SpinCo Group shall retain all Liabilities with respect to vacation, holiday, annual leave or other leave of absence, and required payments related thereto, for each SpinCo Group Employee, unless otherwise required by applicable Law, and (b) the Parent Group shall retain all Liabilities with respect to vacation, holiday, annual leave or other leave of absence, and required payments related thereto, for each Parent Group Employee.

 

Section 7.03.      Severance and Unemployment Compensation. From and following the Effective Time, (a) the SpinCo Group shall retain any and all Liabilities to, or relating to, SpinCo Group Employees and Former SpinCo Group Employees in respect of severance and unemployment compensation, regardless of whether the event giving rise to the Liability occurred before, at or after the Effective Time, and (b) the Parent Group shall retain any and all Liabilities to, or relating to, Parent Group Employees and Former Parent Group Employees in respect of severance and unemployment compensation, regardless of whether the event giving rise to the Liability occurred before, at or after the Effective Time.

 

 

Section 7.04.      Workers’ Compensation. With respect to claims for workers’ compensation, (a) the SpinCo Group shall be responsible for claims in respect of SpinCo Group Employees, whether occurring before, at or after the Effective Time, and (b) the Parent Group shall be responsible for all claims in respect of Parent Group Employees, whether occurring before, at or after the Effective Time; provided that any Liabilities for workers’ compensation that arise at or after the Effective Time in respect of claims incurred prior to the Effective Time shall be retained by the Party that owns the insurance policy covering such claims, subject to reimbursement by the other Party in accordance with Section 9.05 if such claims relate to employees of members of such other Party. Any Liabilities for workers’ compensation that arise at or after the Effective Time in respect of claims incurred prior to the Effective Time that relate to Former Employees shall be retained by the Party that owns the insurance policy covering such claims without reimbursement by the other Party.

 

Section 7.05.      COBRA. The Parent Group shall be responsible for complying with, and providing coverage pursuant to, the healthcare continuation requirements of COBRA with respect to any Parent Group Employees (and their covered dependents) who incur a qualifying event under COBRA prior to, on or after the Redemption Date. Effective as of no later than the Redemption Date, the SpinCo Group shall assume responsibility for complying with, and providing coverage pursuant to, the health care continuation requirements of COBRA with respect to any SpinCo Group Employees (and their covered dependents) who incur a qualifying event under COBRA prior to, on or after the Redemption Date. For purposes of this Section 7.05, (a) any Former Employee who participated in the SpinCo Welfare Plans (or the Parent Welfare Plans that are assumed by SpinCo and become SpinCo Welfare Plans as contemplated under Section 7.01(a)) as of the date of such Former Employee’s qualifying event under COBRA shall be considered a SpinCo Group Employee, and (b) any Former Employee who participated in the Parent Welfare Plans (other than the Parent Welfare Plans that are assumed by SpinCo and become SpinCo Welfare Plans as contemplated under Section 7.01(a)) as of the date of such Former Employee’s qualifying event under COBRA shall be considered a Parent Group Employee. The Parties agree that the consummation of the transactions contemplated by the Separation Agreement shall not constitute a COBRA qualifying event for any purpose under COBRA. Notwithstanding the foregoing provisions of this Section 7.05, to the extent required by COBRA, (i) the SpinCo Group shall offer COBRA to a Parent Group Employee who is an Inactive Employee and remains employed by a member of the SpinCo Group for a period of time following the Effective Time pursuant to Section 3.01(b) if such individual has a qualifying event due to a termination of employment with a member of the SpinCo Group upon return from leave of absence, and (ii) the Parent Group shall offer COBRA to a SpinCo Group Employee who is an Inactive Employee and remains employed by a member of the Parent Group for a period of time following the Effective Time pursuant to Section 3.01(b) if such individual has a qualifying event due to a termination of employment with a member of the Parent Group upon return from leave of absence.

 

Section 7.06.      Post-Retirement Welfare Benefits. Effective as of no later than the Effective Time, SpinCo shall assume or retain, as applicable, all Assets and Liabilities under the Parent Retiree Welfare Plan, which includes the post-retirement life insurance, medical, dental and vision benefits for SpinCo Group Employees and Former Employees located in the United States who are eligible to receive such benefits under Parent Benefit Plans as of immediately prior to the Effective Time (or if earlier, as of immediately prior to the transfer of the applicable employee in contemplation of the Separation). As of no later than the Effective Time, SpinCo shall, or shall cause the members of the SpinCo Group to, assume all Liabilities and receive a transfer of related Assets, if any, with respect to the benefits under the Parent Retiree Welfare Plan relating to any SpinCo Group Employee or Former Employee located in the United States who is eligible for such benefits under the Parent Benefit Plans as of immediately prior to the Effective Time (or if earlier, as of immediately prior to the transfer of the applicable employee in contemplation of the Separation), and the Parent Group and Parent Benefit Plans shall be relieved of all Liabilities related to such benefits; provided that, if Parent determines it to be administratively impracticable to disentangle and transfer the applicable insurance contracts (or relevant portions thereof) prior to the Effective Time, then the Parties shall cooperate in good faith to take such actions following the Effective Time necessary to effectuate the economic terms of the allocation of Assets and Liabilities contemplated by this Section 7.06. “Parent Retiree Welfare Plan” means the Mallinckrodt Pharmaceuticals Retiree Welfare Benefit Plan.

 

 

Article VIII
NON-U.S. EMPLOYEES

 

(a)            Generally. All actions taken under this Agreement with respect to benefits and Liabilities related to SpinCo Group Employees who are residents outside of the United States or otherwise subject to non-U.S. Law shall be subject to and accomplished in accordance with applicable Laws or regulations of countries outside of the United States in the custom of the applicable jurisdictions (including, as set forth in Section 2.01 above, as required by any applicable Labor Agreement). Except as otherwise may be expressly set forth in this Agreement, in the event that such applicable Law does not require Parent and/or SpinCo to take any specific action with respect to any such benefit or Liability, such benefits and Liabilities shall be treated in the same manner as those related to SpinCo Group Employees, respectively, who are residents of the United States and are not subject to non-U.S. Law. For the avoidance of doubt, Parent shall, in consultation with SpinCo, have the authority to adjust any treatment described in this Agreement with respect to SpinCo Group Employees who are located outside of the United States in order to ensure compliance with the applicable Laws or regulations of countries outside of the United States or to preserve the tax benefits provided under local tax law or regulation before the Redemption; provided that the Parties shall take all necessary action to preserve the economic terms of the allocation of Assets and Liabilities contemplated by this Agreement.

 

(b)            Certain Employees in Ireland. With respect to SpinCo Group Employees intended to be employed by PH Health Limited on and following the Redemption Date who are employed by Endo Operations Limited prior to the Redemption Date, Endo Operations Limited will be responsible for making payroll payments for the month during which the Redemption Date occurs, with the portion of such payments that corresponds to the post-Redemption portion of such month subject to reimbursement by the SpinCo Group in accordance with Section 9.05.

 

(c)            Germany Defined Benefit Plans. Effective as of no later than the Effective Time, (i) the SpinCo Group shall assume or retain, as applicable, all Liabilities of Dritte Corsa Gmbh in respect of defined benefit pension, and (ii) the Parent Group shall assume or retain, as applicable, all Liabilities of Mallinckrodt Medical Holdings (UK) Ltd., Zweigniederlassung Deutschland in respect of defined benefit pension.

 

 

Article IX
MISCELLANEOUS

 

Section 9.01.      Information Sharing and Access.

 

(a)            Sharing of Information. Subject to any limitations imposed by applicable Law, each of Parent and SpinCo (acting directly or through members of the Parent Group or the SpinCo Group, respectively) shall provide to the other Party and its authorized agents and vendors all information necessary (including information for purposes of determining benefit eligibility, participation, vesting, calculation of benefits) on a timely basis under the circumstances for the Party to perform its duties under this Agreement. Such information shall include information relating to equity awards under equity plans. To the extent that such information is maintained by a third-party vendor, each Party shall use its commercially reasonable efforts to require the third-party vendor to provide the necessary information and assist in resolving discrepancies or obtaining missing data.

 

(b)            Transfer of Personnel Records and Authorization. Subject to any limitation imposed by applicable Law and to the extent that it has not done so before the Effective Time, Parent shall transfer to SpinCo any and all employment records (including any Form I-9, Form W-2 or other IRS forms) with respect to SpinCo Group Employees and other records reasonably required by SpinCo to enable SpinCo properly to carry out its obligations under this Agreement. Such transfer of records generally shall occur as soon as administratively practicable at or after the Effective Time. Each Party shall permit the other Party reasonable access to its Employee records, to the extent reasonably necessary for such accessing Party to carry out its obligations hereunder.

 

(c)            Access to Records. To the extent not inconsistent with this Agreement, the Separation Agreement or any applicable privacy protection Laws or regulations, reasonable access to Employee-related and benefit plan related records after the Effective Time shall be provided to members of the Parent Group and members of the SpinCo Group pursuant to the terms and conditions of Article VI of the Separation Agreement.

 

(d)            Maintenance of Records. With respect to retaining, destroying, transferring, sharing, copying and permitting access to all Employee-related information, Parent and SpinCo shall comply with all applicable Laws, regulations and internal policies, and shall indemnify and hold harmless each other from and against any and all Liability, Actions, and damages that arise from a failure (by the indemnifying Party or its Subsidiaries or their respective agents) to so comply with all applicable Laws, regulations and internal policies applicable to such information.

 

(e)            Cooperation. Each Party shall use commercially reasonable efforts to cooperate and work together to unify, consolidate and share (to the extent permissible under applicable privacy/data protection Laws) all relevant documents, resolutions, government filings, data, payroll, employment and benefit plan information on regular timetables and cooperate as needed with respect to (i) any claims under or audit of or litigation with respect to any employee benefit plan, policy or arrangement contemplated by this Agreement, (ii) efforts to seek a determination letter, private letter ruling or advisory opinion from the IRS or U.S. Department of Labor on behalf of any employee benefit plan, policy or arrangement contemplated by this Agreement, (iii) any filings that are required to be made or supplemented to the IRS, U.S. Pension Benefit Guaranty Corporation, U.S. Department of Labor or any other Governmental Authority, and (iv) any audits by a Governmental Authority or corrective actions, relating to any Benefit Plan, labor or payroll practices; provided, however, that requests for cooperation must be reasonable and not interfere with daily business operations.

 

 

(f)            Confidentiality. Notwithstanding anything in this Agreement to the contrary, all confidential records and data relating to Employees to be shared or transferred pursuant to this Agreement shall be subject to Section 6.9 of the Separation Agreement and the requirements of applicable Law.

 

Section 9.02.      Preservation of Rights to Amend. Except as specifically set forth in this Agreement, the rights of each member of the Parent Group and each member of the SpinCo Group to amend, waive, or terminate any plan, arrangement, agreement, program, or policy referred to herein shall not be limited in any way by this Agreement.

 

Section 9.03.      Fiduciary Matters. Parent and SpinCo each acknowledges that actions required to be taken pursuant to this Agreement may be subject to fiduciary duties or standards of conduct under ERISA or other applicable Law, and no Party shall be deemed to be in violation of this Agreement if it fails to comply with any provisions hereof based upon its good-faith determination (as supported by advice from counsel experienced in such matters) that to do so would violate such a fiduciary duty or standard. Each Party shall be responsible for taking such actions as are deemed necessary and appropriate to comply with its own fiduciary responsibilities and shall fully release and indemnify the other Party for any Liabilities caused by the failure to satisfy any such responsibility.

 

Section 9.04.      Further Assurances. Each Party hereto shall take, or cause to be taken, any and all reasonable actions, including the execution, acknowledgment, filing and delivery of any and all documents and instruments that any other Party hereto may reasonably request in order to effect the intent and purpose of this Agreement and the transactions contemplated hereby.

 

Section 9.05.      Reimbursement of Costs and Expenses. The Parties shall promptly reimburse one another, upon reasonable request of the Party requesting reimbursement (the “Requesting Party”) as soon as practicable, but in any event within 30 days of receipt of an invoice detailing all costs, expenses and other Liabilities paid or incurred by the Requesting Party (or any of its Affiliates), and any other substantiating documentation as the other Party shall reasonably request, that are, or have been made pursuant to this Agreement, the responsibility of the other Party (or any of its Affiliates). Each Party shall provide 30 days’ notice if it anticipates sending an invoice hereunder.

 

Section 9.06.      Dispute Resolution. The dispute resolution procedures set forth in Article VII of the Separation Agreement shall apply to any dispute, controversy or claim arising out of or relating to this Agreement.

 

 

Section 9.07.      Third-Party Beneficiaries. The provisions of this Agreement are solely for the benefit of the Parties and are not intended to confer upon any other Person except the Parties any rights or remedies hereunder. There are no third-party beneficiaries of this Agreement and this Agreement shall not provide any third Person with any remedy, claim, Liability, reimbursement, claim of action or other right in excess of those existing without reference to this Agreement. Without limiting the generality of the foregoing, (a) nothing in this Agreement is intended to amend any employee benefit plan or affect the applicable plan sponsor’s right to amend or terminate any employee benefit plan pursuant to the terms of such plan and (b) the provisions of this Agreement are solely for the benefit of the Parties, and no current or former Employee, officer, director, or independent contractor or any other individual associated therewith shall be regarded for any purpose as a third-party beneficiary of this Agreement.

 

Section 9.08.      Incorporation of Separation Agreement Provisions

 

. Article X of the Separation Agreement is incorporated herein by reference and shall apply to this Agreement as if set forth herein mutatis mutandis.

 

[Remainder of page intentionally left blank]

 

 

IN WITNESS WHEREOF, the Parties have caused this Employee Matters Agreement to be executed by their duly authorized representatives as of the date first written above.

 

	MALLINCKRODT PLC
	By:	/s/ Sigurdur Olafsson
		Name:	Sigurdur Olafsson
		Title:	President and Chief Executive Officer
	PAR HEALTH, INC.
	By:	/s/ Stephen Welch
		Name:	Stephen Welch
		Title:	President and Chief Executive Officer

 

[Signature Page to Employee Matters Agreement]

 

 

 

Exhibit 10.4

 

Execution Version

 

MANUFACTURING AND SUPPLY AGREEMENT

 

BY AND BETWEEN

 

PAR HEALTH USA, LLC

 

AND

 

ENDO BIOLOGICS LIMITED

 

DATED AS OF 10 NOVEMBER 2025

 

 

THIS MANUFACTURING AND SUPPLY AGREEMENT (this “Agreement”) is hereby entered into and effective as of 10 November 2025 (the “Effective Date”) by and between:

 

(a)

PAR HEALTH USA, LLC, a company existing under the Laws of Delaware and with a registered address at 675 James S. McDonnell Blvd., Hazelwood, MO 63042 (“Supplier”); and

 

(b)

ENDO BIOLOGICS LIMITED, a company existing under the Laws of Ireland and with a registered address at First Floor, Minerva House, Simmonscourt Road, Ballsbridge, Dublin 4, Ireland (“Buyer”).

 

Supplier and Buyer are hereinafter referred to individually as a “Party” or collectively as the “Parties”.

 

Capitalized words used herein have the meanings given to those terms in Annex A.

 

BACKGROUND

 

WHEREAS, Buyer is engaged in the research, development, manufacture, and/or commercialization of pharmaceutical products and has developed and/or holds the Product Regulatory Approvals in respect of the Products.

 

WHEREAS, Supplier is engaged in the manufacture, and/or commercialization of pharmaceutical products.

 

WHEREAS, prior to the Effective Date, Buyer and Supplier were Affiliates and part of the Endo, Inc. group of companies (the “Endo Group”).

 

WHEREAS, prior to the Effective Date, Supplier manufactured and supplied Product(s) to Buyer, as part of an intercompany agreement.

 

WHEREAS, pursuant to a merger transaction agreement dated on or about 13 March 2025 between Endo, Inc. (“Endo”), Mallinckrodt plc (“MNK”) and Salvare Merger Sub LLC, Buyer and MNK agreed to amalgamate the entire of the businesses of (A) the Endo Group; and (B) the MNK group of companies (the “Merged Business”) through a merger which was completed on 1 August 2025 (the “Merger”).

 

WHEREAS, following completion of the Merger, it was agreed to split the branded part of the Merged Business out from the generics and sterile injectables part of the Merged Business, in order to form two entirely separate businesses, with the branded part of the Merged Business becoming, “Keenova” and the generics and sterile injectables part of the Merged Business becoming, “Par Health” (the “Spin”), which such Spin completed on or about the date of this Agreement.

 

WHEREAS, following completion of the Spin, Buyer is part of Keenova and Supplier is part of Par Health.

 

WHEREAS, Buyer desires to engage Supplier to manufacture and supply commercial quantities of the Finished Product(s) to Buyer, subject to the terms and conditions of this Agreement.

 

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements of the Parties contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

1.

INITIAL PRODUCT AND MOQ

 

1.1.

As of the Effective Date, the Finished Products to be Manufactured and supplied under this Agreement are the Xiaflex Product and the Diluent. The Parties may agree to Supplier Manufacturing and supplying of other Drug Products in accordance with the process described in Section 10.6 of this Agreement, and upon execution of an applicable amendment or PSS, such Drug Product shall become then, upon agreement of the Supplier and Buyer, a “Product” for purposes of this Agreement, subject to any additional terms set forth in such amendment or PSS.

 

1.2.

Buyer hereby grants to Supplier, or will procure the grant from its applicable Affiliate(s), for the Term of this Agreement, a limited royalty-free license to use the Buyer Intellectual Property, including the Product Intellectual Property, solely to perform its obligations under this Agreement (the “Supplier License”). The license granted to Supplier under this Section 1.2 is sublicensable in whole or in part, solely to Affiliates or subcontractors of Supplier, where such Affiliates or subcontractors are fulfilling obligations of Supplier, whether whole or in part, hereunder, use of such Affiliates or subcontractors is otherwise permitted under and consistent with the terms of this Agreement (including, as applicable, after obtaining Buyer’s consent to use of such Affiliates or subcontractors), and such sublicense is granted solely for purposes of enabling, and to the extent necessary to enable, such Affiliates or subcontractors to provide such services to Supplier and is otherwise consistent with all provisions of this Agreement applicable to the Supplier License and the Buyer Intellectual Property. Supplier shall provide Buyer with written notice of any intended sub-license; however, consent of Buyer shall not be required, so long as such sublicense to such Affiliate or subcontractor is otherwise authorized to pursuant to and is consistent with the above.

 

1.3.

Supplier grants to Buyer (for the benefit of Buyer and its Affiliates), for the Term of this Agreement, a limited royalty-free license to use any Supplier Intellectual Property to the extent necessary to enable Buyer and its Affiliates to receive the benefit of any Manufacturing Services provided under this Agreement and of sufficient scope to permit and otherwise not exclude Buyer’s use, sale and offer for sale of the salient Product(s).

 

 

1.4.

During the Term of this Agreement, the Parties each agree that:

 

(a)

Buyer shall be free to acquire any of the Products from any Third Party supplier of a Product, provided however, that Buyer shall be required to order a minimum quantity of batches of each Finished Product hereunder (an “MOQ”) in every contract year of the Term of this Agreement, and Supplier shall fulfil orders for such MOQ. The MOQs for the Xiaflex Product, as Finished Product, are set out in Schedule 1, Part 1 to this Agreement. In the case of any other Drug Product that hereafter becomes a Product under this Agreement, the applicable amendment or PSS shall include the MOQ for such Product as Finished Product; and

 

(b)

The Manufacture and supply terms of this Agreement are made on a non-exclusive basis by each Party; provided, however, that the foregoing does not and shall not grant Supplier or any of its Affiliates or sub-contractors any rights to use any Product Intellectual Property or other Buyer Intellectual Property or under any Product Regulatory Approvals in connection with Manufacturing or supplying any product to any third party.

 

2.

REGULATORY AND TECHNICAL SUPPORT

 

2.1.

Buyer (or its Affiliates) agree that it shall be exclusively responsible for maintenance of its Product Regulatory Approvals in respect of each of the Products hereunder (including any requirement to update or amend or supplement existing Product Regulatory Approvals with FDA (which for the avoidance of doubt, includes any communications with FDA in respect of the Product Regulatory Approvals). Supplier, hereby undertakes that it shall:

 

(a)

provide Buyer with all reasonable regulatory support and assistance, as Buyer may reasonably request and require in connection with such activities, including in order to:

 

(i)

address any queries or data or reporting requirements of the FDA in connection with the Product Regulatory Approvals to the extent that Supplier has knowledge and information;

 

(ii)

comply with any requirements (on an ongoing basis) of FDA in relation to the Product Regulatory Approvals (including but not limited to, any co-operation required in order to make any updates or supplements to the Product Regulatory Approvals (from time to time) and co-operation for any actions required to be taken in respect the Product Regulatory Approvals), the costs for which shall be discussed in good faith at such relevant time;

 

 

(iii)

provide a right of reference to Supplier’s drug manufacturing file (DMF) applicable to its Manufacture of any Product; and

 

(iv)

support, reasonably, any annual regulatory audit required by FDA in respect of a Finished Product hereunder.

 

(b)

Buyer or its Affiliates shall exclusively own and control the Product Regulatory Approvals within the Territory (including all associated contents) and applications therefor related to the Products, and any other marketing authorizations for the Products within the Territory. Buyer or its Affiliates shall obtain and maintain, at its own expense but with the co-operation of Supplier (as set out in this Agreement), the Product Regulatory Approvals related to the Products to ensure such Product Regulatory Approvals are sufficient to allow Supplier to Manufacture and supply the Finished Products and to allow Buyer to market and sell the Finished Products in the Territory and Supplier will provide all reasonable information and co-operation reasonably requested to assist with such compliance.

 

2.2

Supplier acknowledges that the Technical Dossiers for the Xiaflex Product and the Diluent are, on the Effective Date, in the possession of Supplier and that such Technical Dossiers form part of Buyer Intellectual Property. Supplier agrees that it shall provide the Technical Dossiers to Buyer. Supplier further agrees that it shall, during the Term of this Agreement, provide commercially reasonable co- operation with Buyer, during business hours of Supplier, to support Buyer’s technical review and understanding of the Technical Dossiers, including such assistance as may be reasonably necessary in order to support Buyer’s maintenance of the applicable Product Regulatory Approvals in accordance with Section 2.1 and to effect a knowledge transfer of the Technical Dossiers to Buyer and the Manufacture of the Xiaflex Product and the Diluent.

 

3.

API AND MATERIALS SUPPLY

 

3.1.

For the Term of this Agreement:

 

(a)

Buyer shall supply, or arrange for a Third Party to supply, to Supplier all API necessary to manufacture the Finished Products hereunder. All such API shall be supplied by Buyer to Supplier at the Facility, for no charge, and shall be used by Supplier exclusively for the Manufacture and supply of the Finished Products hereunder for Buyer. Buyer shall use commercially reasonable efforts to ensure that API supplied to Supplier in respect of the Finished Products hereunder shall conform to the Technical Requirements (as defined below in Annex A) and is manufactured in compliance with relevant GMP requirements. Supplier shall store API in accordance with the storage instructions provided by Buyer, GMP and the Technical Requirements therefor;

 

 

(b)

Where in respect of any Product hereunder, API is procured by Buyer, Buyer shall be responsible for:

 

(i)

any required testing (including, but not limited to, release testing, stability or sterility testing) required in respect of such API in accordance with Applicable Law, GMP and the Technical Requirements;

 

(ii)

releasing such API from such Third Party prior to delivery to the Facility; and

 

(iii)

storing and handling all API received from such Third Party in respect of any Product hereunder, in accordance with Applicable Law during the period between release and delivery of the API to Supplier.

 

(c)

Buyer shall be responsible for delivery of all required API to the Facility (including any costs, taxes, duties, or other expenses incurred in connection therewith);

 

(d)

Buyer shall ensure that, at the time of delivery to Supplier, all API provided to Supplier hereunder shall have no less than the Required Dating Months. To the extent that API does not have Required Dating Months, then Supplier and Buyer may meet to discuss and consider, in good faith, if, in the particular circumstances, such API is capable of being utilized in the Manufacture of the Finished Product, provided however, that Supplier shall not be obliged in any circumstance to accept such API if it falls below the Required Dating Months;

 

(e)

Supplier shall inspect all API shipments within five (5) business days of receipt for visible damage upon inspection of API, and shall promptly inform Buyer of any such visible defects in or damage to the API or other visible non-conformity to the applicable Specifications discoverable upon visual inspection made with reasonable care. Buyer shall use its reasonable efforts to have all damaged or defective API shipments replaced or corrected as soon as practicable, and Supplier shall provide assistance in the investigation of any damaged shipment. In the case of an alleged latent defect or any alleged defect to API shipment that is not obvious and could not be readily discovered upon visual inspection made with reasonable care, Supplier shall deliver written notice to Buyer within thirty (30) days after the date on which Supplier discovers such latent defect. If Buyer does not agree with Manufacturer that any lot of API fails to meet applicable Specifications, Buyer shall inform Supplier of such belief within ten (10) days of Supplier’s notice of such alleged failure, and the Parties will arrange for the lot in question to be tested by a mutually acceptable independent laboratory for non-conformity with the applicable agreed specifications in respect of such API. The determination by such laboratory will be final and binding upon the Parties, absent manifest error. The cost of any such testing by the mutually agreed independent laboratory shall be borne by the Party whose judgment in respect of the relevant API non- conformity was incorrect;

 

 

(f)

Supplier shall store and handle all API received, in respect of any Product hereunder, in accordance with Applicable Law, GMP and the Technical Requirements;

 

(g)

Title to all API supplied to Supplier under this Agreement and each purchase order for API shall at all times remain with Buyer. Supplier shall not at any time sell or offer for sale, assign, mortgage, pledge or allow any lien to be created upon any API provided by Buyer, excluding any liens given by Buyer;

 

(h)

The Minimum API Yield for the Xiaflex Product is included on Schedule 1, Part 1 of this Agreement and, in respect of any other Product for which Buyer supplies the API, the applicable PSS will include a Minimum API Yield. Supplier shall perform a monthly reconciliation exercise in respect of any such API to report (i) the amount of API delivered to Supplier pursuant to this Agreement during the relevant calendar month, (ii) the amount of API used by Supplier in Manufacturing the Finished Products hereunder during the relevant calendar month, (iii) the then current on hand amount of API delivered to Supplier pursuant to this Agreement, (iv) the then current on hand amount of work in progress and, to the extent applicable, Finished Products at the Facility for the relevant calendar month, (v) calculation of the actual API yield for the relevant calendar month, and (vi) any shortfall in such actual yield as compared to the Minimum API Yield, as such calculations may be more specifically described in an applicable PSS, and Supplier shall compensate to Buyer for shortfall in yield, as compared to the applicable Minimum API Yield, based on the API Cost, as a credit on its next invoice or as otherwise provided in an applicable PSS; provided, however, that in respect of any particular calendar month, such credit shall not exceed ten percent (10%) of the total API Cost of the amount of API used by Supplier pursuant to this Agreement during such calendar month; or, on a calendar year basis, a maximum of one hundred and fifty thousand dollars ($150,000), and any such credits shall be included, on a calendar year basis, in any calculation of Maximum Cap Amount applicable to such calendar year;

 

 

(i)

Supplier shall be responsible, at its cost, for procuring and managing the Materials necessary to Manufacture the Products hereunder. Supplier will purchase and inspect all Materials as required by the Technical Requirements and hold in inventory sufficient Materials to meet Firm Purchase Commitments (as defined below in Annex A). Buyer shall have no liability to Supplier whatsoever for Materials purchased by Supplier in excess of the foregoing. No changes shall be made to the Materials unless mutually agreed by Buyer and Supplier, including, without limitation, any such changes that may require Buyer to provide notification to Regulatory Authorities; and

 

(j)

To the extent that any PSS is executed hereunder between the Parties in respect of a particular Finished Product, any additional terms of such PSS as they relate to API, shall also be applicable for such Finished Product, and in the event of any inconsistency between a PSS for a particular Finished Product and this Agreement in so far as such inconsistency relates to API, then the terms of the applicable PSS shall control as to such relevant Finished Product.

 

4.

MANUFACTURE, SUPPLY AND SALE

 

4.1.

For the Term of this Agreement:

 

(a)

Supplier shall Manufacture, supply and sell (and Buyer shall purchase from Supplier) each Finished Product to Buyer for sale in the Territory in accordance with the applicable purchase order (and to the extent relevant, PSS), Specifications, Technical Dossier, GMP and the terms of this Agreement and the Quality Agreement (the “Technical Requirements”);

 

(b)

Supplier shall Manufacture and store each of the Finished Products in accordance with Applicable Laws, and in a manner consistent with the Technical Requirements;

 

(c)

To the extent applicable, Supplier shall be responsible for all sales, use or analogous taxes imposed or assessed as a result of the sale of each Product to Buyer or its Affiliates. It is, however, acknowledged and agreed that in respect of the Xiaflex Product, such Finished Product version of Xiaflex Product is intended and expected to be exempt from sales and use tax; and

 

 

(d)

Supplier shall, during the Term of this Agreement, hold and maintain all necessary manufacturing and regulatory licenses required under Applicable Law in the Territory to Manufacture and supply each Finished Product hereunder.

 

The Parties agree that, in the case of Xiaflex Product, the Xiaflex Manufacturing Services shall be undertaken in respect of the Manufacture of Xiaflex Product hereunder, but such agreed upon Xiaflex Manufacturing Services are based upon drug product production and Diluent manufacturing of the Xiaflex Product by Supplier, being carried out using Supplier’s production line 10 and 9 (respectively) at the Facility (the “Existing Par Production Lines”). If and to the extent that, during the Term of this Agreement, any of the Xiaflex Manufacturing Services are not capable of being continued to be provided on any of the Existing Par Production Lines, by reason of compliance or regulatory requirements (a “Line Issue”), then the Parties shall co-operate, in good faith, to try to reach resolution with respect to such Line Issue in order to enable and facilitate the continued provision of such Xiaflex Manufacturing Services hereunder, including, any potential mitigation strategies that may be considered between the Parties, taking into account the relevant circumstances as exist as at such time, including, but not limited to, any then-available inventory on hand as at such time, any alternative supply options or a bridging supply strategy. To the extent, despite attempts to resolve such Line Issue, it is ultimately required that such the relevant Xiaflex Manufacturing Services are required to be transferred from an Existing Par Production Line to another production line (a “Line Transfer”), then the Parties shall negotiate, in good faith, to execute a definitive agreement with respect to such Line Transfer, including the scope of work and timing required in order to effect such Line Transfer. It is agreed that the allocation of costs of any such Line Transfer shall be negotiated between the Parties, in good faith, as at such time.

 

During the Manufacture of the Finished Product hereunder, Buyer shall be permitted to request to Supplier to have, at no additional cost, one employee, representative or agent of Buyer located at the Facility (i.e., a “person-in-plant”), , which Supplier shall reasonably consider and whose consent shall not be unreasonably withheld, conditioned or delayed. Such person-in-plant shall have the function of providing quality and operational oversight with respect to Manufacture of the Finished Product, which may include, but not be limited to, observing, reporting on, and consulting as to such Manufacturing efforts in respect of relevant Finished Product. Such person-in-plant shall be subject to substantively equivalent confidentiality obligations with Buyer as Buyer is subject to hereunder. Supplier shall reasonably co-operate with Buyer in order to enable such person- in-plant to carry out their responsibilities It is further acknowledged that Supplier shall not be under any obligation to change scheduling or intending planning or timings of production and/or Manufacturing by virtue of a person-in-plant desiring to be present at Facility.

 

 

5.

PURCHASE PRICE, PAYMENT TERMS AND FORECASTS

 

5.1.

The purchase price per Sellable Unit of each Finished Product hereunder shall be the commercial purchase price of the relevant Finished Product as set out in Schedule 1, Part 1 to this Agreement (the “Purchase Price”).Commencing on 1 January 2026 (the “Reference Date”) and on each anniversary of the Reference Date thereafter, the Purchase Price for each particular Finished Product and/or Manufacturing Services and any additional services set forth in Schedule 1 Part 1 may be increased, in respect of the following calendar year and consistently with this Section 5.1, by Supplier by way of written notification from Supplier to Buyer, and, for clarity, the first increase of the Purchase Price shall not be effective until January 1, 2027. Any changes to the Purchase Price will be based upon the percentage change in the Producer Price Index Industry, Pharmaceutical preparations manufacturing currently available at http://data.bls.gov/PDQ/outside.jsp?survey=pc, industry code 325412, product code 325412325412, as published by the U.S. Department of Labor, Bureau of Labor Statistics; provided that any such price increase shall not, in a given year, exceed four percent (4%) of the previous year’s Purchase Price (the “Annual Increase”). For the purposes of determining the amount of an Annual Increase, the index value for the preceding August of a relevant year in question shall be used. Additionally, Supplier may, in addition to the Annual Increase described above, increase the pricing for a particular Finished Product if Supplier experiences a significant increase in direct manufacturing costs (being a verifiable increase) due to a change in the Technical Requirements or Applicable Laws or due to any other change required by or on behalf of Buyer, according to a process described in Section 10.5 or 10.6. (each of the foregoing, an “Additional Increase”). Supplier will notify Buyer in writing of the requirement for such Additional Increase, and, subject to the requirements of any confidentiality obligations that Supplier has, in relation to any third parties, provide suitable justification and verification data for any such increase prior to the implementation of such Additional Increase.

 

5.2.

Supplier shall submit invoices to Buyer for the Purchase Price of a Finished Product upon delivery of the Finished Product in accordance with Section 8. Buyer shall pay the applicable Purchase Price for the relevant Finished Product within sixty (60) days after receipt of such invoice for the relevant Finished Product from Supplier. All payments required to be paid hereunder shall be in US Dollars and shall be made by wire transfer in immediately available funds to an account designated in writing by Supplier.

 

 

5.3.

Within the first five (5) business days of each calendar month during the Term of this Agreement, Buyer shall submit a good faith rolling forecast of estimated quantities of each Finished Product for the lesser of twenty four (24) months and the number of months remaining in the Term (each, a “Forecast”), the first six months of such Forecast (the “Firm Zone”) will represent a firm commitment to purchase the quantities of the Finished Product set forth in such Forecast (a “Firm Purchase Commitment”) and the remaining months of such Forecast will be non- binding estimates of future demand.

 

6.

PURCHASE ORDERS

 

6.1.

Buyer shall place purchase orders with Supplier setting forth the quantity of the Finished Product required in Sellable Units, requested delivery dates and shipping instructions with respect to each shipment of relevant Finished Product for delivery. Each firm order submitted by Buyer to Supplier shall include delivery dates that provide Supplier with a lead time of not less than the Required Lead Time (as defined below in Annex A) in respect of such relevant Product (i.e. from the date on which the applicable purchase order is submitted by Buyer to Supplier). Supplier shall confirm its acceptance or rejection of such purchase order within ten (10) business days of its receipt of that purchase order; provided that any such acceptance or rejection must be consistent with this Section 6.

 

6.2.

So long as submitted purchase orders are consistent with any applicable Firm Zone and Required Lead Times, Supplier shall accept such purchase orders and Manufacture and deliver to Buyer (in accordance with Section 8.2), by the requested delivery date, the amount of relevant Finished Product(s) that Buyer has ordered pursuant to such purchase orders. To the extent that Buyer wishes to order any quantities of a relevant Finished Product, in excess of the amount of such Finished Product that were forecasted for the Firm Zone of the most recent Forecast, then Supplier will use its commercially reasonable efforts to co-operate in good faith with Buyer to discuss possible options for supply of such excess amounts (or a portion thereof), but Supplier shall be under no obligation to reach agreement on supplying such excess amounts so (and for avoidance of doubt, any failure to reach any such agreement shall not be deemed as a breach of this Agreement).

 

 

6.3.

Once a purchase order is accepted, purchase orders may be amended only by mutual written agreement of the Parties; provided, that Supplier shall exercise its commercially reasonable efforts to comply with proposed amendments to purchase orders that Buyer may request after sending a purchase order to Supplier; provided, further, that Supplier shall not be liable in any way for its inability to do so. If it is agreed that Buyer may modify an accepted purchase order under this Agreement, then Buyer shall be required to reimburse Supplier for any non- cancellable and documented costs incurred by Supplier in respect of the relevant order as accrued up to the time of notice to Supplier of the modification and any non-modifiable costs (including, but not limited to any reasonable non-cancellable costs of up to six (6) months’ of Materials (relating to such relevant Finished Product) provided however that such Materials cannot be repurposed elsewhere in Supplier’s business). Any costs to be reimbursed by Buyer to Supplier shall be verified by written evidence.

 

6.4.

Buyer’s purchase orders shall be submitted pursuant to its customary purchase order form, except that ANY TERMS OR CONDITIONS INCLUDED BY BUYER OR SUPPLIER IN ANY PURCHASE ORDER, ACKNOWLEDGMENT OR SIMILAR STANDARDIZED FORM GIVEN OR RECEIVED THAT ARE ADDITIONAL TO OR INCONSISTENT WITH THIS AGREEMENT SHALL HAVE NO EFFECT AND SUCH TERMS AND CONDITIONS ARE HEREBY EXCLUDED, unless each Party agrees in writing that such terms are intended to modify this Agreement.

 

7.

INABILITY TO SUPPLY

 

7.1.

Supplier shall maintain sufficient capacity to Manufacture, Package, Label and serialize Buyer’s projected requirements for each Finished Product hereunder, based on any Firm Purchase Commitment submitted pursuant to Section 5.4.

 

7.2.

Supplier shall notify Buyer as promptly as possible in the event that:

 

(a)

Supplier foresees that it will be unable to timely (as determined consistently with Section 8.1) deliver to Buyer the quantity of relevant Finished Product that Buyer has ordered pursuant to relevant accepted purchase orders for any reason (an “Inability to Supply”); or

 

(b)

upon Supplier becoming aware of a Force Majeure Event,

 

Such notice shall include the expected duration of such Inability to Supply or Force Majeure Event (as the case may be), and Supplier shall use commercially reasonable efforts to eliminate, cure or overcome such Inability to Supply or resolve such Force Majeure Event and to resume performance of its obligations hereunder as soon as reasonably possible.

 

 

7.3.

If, despite Supplier’s commercially reasonable efforts, an Inability to Supply or Force Majeure Event, will continue, or is likely to continue for a period more than 6 (six) months (a “Supply Event”), then Supplier shall be promptly required to notify Buyer of such Supply Event. Following such notification (or occurrence of a Supply Event, if Supplier fails to provide such notice), then Buyer and Supplier agree that they will cooperate to establish and mutually agree, in good faith, the terms upon which Supplier will effect a transfer of the know-how and technical information that is used in or relates to the then-current process for the Manufacture of the relevant Product that is impacted by such Supply Event, transferred to a new third party contract manufacturer, to be identified and selected by Buyer (a “Manufacturing Tech Transfer”). The Parties shall mutually agree in good faith and document their agreement for such Manufacturing Tech Transfer in writing, which shall include terms for Supplier’s commercially reasonable knowledge transfer support and co-operation that may be required to be provided by Supplier to Buyer in order to effect such Manufacturing Tech Transfer, with such agreement setting out, inter alios, commercially reasonable provisions with respect to scope of such supports, timing and duration of such required support and any cost allocation in connection with same.

 

7.4.

In the event Supplier fails to ship the quantities of relevant Finished Product(s) ordered by Buyer pursuant to this Agreement (or any purchase order hereunder) or the Finished Product(s) shipped does not meet the Specifications, then in addition to other remedies available to Buyer as a result of any such failure, the Parties shall meet within five (5) business days of the first such occurrence to establish a commercially reasonable recovery plan designed to resolve the situation as quickly as reasonably possible.

 

8.

DELIVERY

 

8.1.

All Finished Product delivered hereunder by Supplier shall be accompanied by appropriate certificates of analysis (COAs), certificates of conformity (COCs) and batch records demonstrating compliance with this Agreement and the Quality Agreement. Supplier shall keep Buyer reasonably updated with respect to progress of delivery of a purchase order of Finished Product hereunder and use shall commercially reasonable efforts to provide at least forty-five (45) days advance notice to Buyer of the date on which Finished Product ordered pursuant to a particular purchase order will be delivered, provided however, that the Parties acknowledge that there may be particular circumstances where a 45 day prior notice period shall not, be possible, based on those particular circumstances, and in such scenario, Supplier will provide prior notice to Buyer of such circumstances and the intended date of delivery of relevant order of Finished Product as soon as is reasonably practicable. The Parties acknowledge and agree that a delivery date that is within plus or minus fourteen (14) days of the agreed upon delivery date in the purchase order shall constitute compliance with Supplier’s delivery obligations hereunder.

 

 

8.2.

All Finished Product shall be delivered by Supplier Ex-Works (Incoterms® 2020). Title to and risk of loss and/or damage to the Finished Product shall pass to Buyer when Finished Product is loaded onto Buyer designated carrier, which is preceded by Buyer’s written authorization to ship. The relevant Finished Product shall have, as of the date of delivery in accordance with this Section 8, at least the Required Finished Product Shelf Life (as defined below in Annex A) in respect of such relevant Finished Product.

 

8.3.

Buyer may test, or cause to be tested, the relevant Finished Product in accordance with the applicable Technical Requirements within thirty (30) days (or such other period as may be set out in the Quality Agreement) of receipt of a particular shipment of Finished Product at Buyer’s or its Affiliates’ facilities. During such thirty (30) day period (or other specified period), Buyer shall store and handle (or cause the storage and handling of) the relevant Finished Product in accordance with the requirements contained in the Technical Requirements. Buyer or its designee shall have the right to, within that thirty (30) day period (or other specified period), reject any shipment of relevant Finished Product made to it under this Agreement that does not conform to the applicable Technical Requirements then in effect when received by it (any such Product, a “Defective Product”).

 

8.4.

Buyer may also reject Defective Product delivered to Buyer hereunder if:

 

(a)

in the case of alleged defects that are readily discoverable upon a physical inspection of a relevant Finished Product shipment, by Buyer providing written notice thereof to Supplier not later than thirty (30) days after Buyer’s receipt of a given shipment; or

 

(b)

in the case of an alleged latent defect or any alleged defect that was not obvious and could not be readily discovered upon a physical inspection of a shipment, by Buyer delivering written notice thereof to Supplier within thirty (30) days after the date on which Buyer discovers such defect,

 

in each such case, such notice specifying the delivery, purchase order number and the nature of the failure of such shipment to conform, along with reasonable evidence of such non-conformity. Finished Product not timely rejected pursuant to Section 8.3 or 8.4 shall be deemed to have been accepted, and Buyer shall have no further right to reject such Finished Product as Defective Product; provided, however, that the foregoing shall not be deemed to limit, eliminate or otherwise modify Buyer’s rights or Supplier’s obligations under Section 12.

 

 

8.5.

If Supplier confirms such non-conformity, and provided that such non-conformity is not due to a Buyer API Responsibility, then Supplier shall promptly, replace such shipment for Buyer by Manufacturing a replacement batch of applicable Finished Product, using API supplied by Buyer, but at no other cost to Buyer, and shall issue a credit to Buyer of an amount equal to ten percent (10%) of the total API Cost of the API used in Manufacturing such defective batch; provided that the total amount of any such credits, on a calendar year basis, shall in no case exceed a maximum of one hundred and fifty thousand dollars ($150,000). If, after its own analysis, Supplier does not confirm such non-conformity, the Parties shall agree to re-test, as soon practicable, the shipment or otherwise in good faith attempt to agree upon a settlement of the issue. In the event that the Parties cannot resolve the issue, the Parties shall submit the samples of the disputed Finished Product to an independent testing laboratory, to be agreed upon by the Parties within a reasonable period of time, for testing in accordance with the Specifications; provided, however, that during the pendency of such testing, upon Buyer’s request, Supplier shall promptly replace such shipment, subject to payment therefor by Buyer (which shall be credited toward any subsequent purchases in the event such shipment is determined by such testing to not meet the Specifications then in effect). Notwithstanding anything contained in this Agreement to the contrary, the findings of such laboratory shall be binding on the Parties, absent manifest error. Expenses of such testing shall be for the account of Buyer, save that, if and to the extent that (a) the findings confirm non-conformity to the Specifications, and provided that such non-conformity did not result from a Buyer API Responsibility, then Supplier shall reimburse Buyer for the cost of such testing; or (b) the findings are inconclusive, then the costs of such testing shall be split equally between the Parties. In the event that any such shipment of relevant Finished Product hereunder, or samples thereof, is ultimately agreed or found not to meet the Specifications, Buyer shall, as instructed by Supplier, return to Supplier or destroy any such rejected shipment. Supplier shall pay for such return or destruction costs unless the non-conformity resulted from a Buyer API Responsibility. If the findings are inconclusive, the return or destruction costs shall be split evenly between the Parties.

 

8.6.

Buyer shall not be required to pay for any Finished Product (including samples thereof) that fails to meet the Specifications (or otherwise comply with any applicable Technical Requirements), but Buyer shall be obligated to pay in full for any rejected shipment of Finished Product that is subsequently determined or found to conform to the Specifications, according to the process described in Section 8.5. Any refund or credit for shipment deemed non-conforming in accordance with Section 8.5 shall be applied against the relevant Purchase Price or future purchase orders.

 

 

9.

INSPECTIONS

 

9.1.

Buyer (or any designee of Buyer) shall have the right, during normal business hours and upon not less than thirty (30) days’ prior notice to Supplier, to inspect the Facility at which the Products are Processed or Manufactured or Labeled to confirm compliance with the terms of this Agreement, but no more than once in any year of the Term of this Agreement, unless a prior inspection(s) or an event(s) identified outside the course of external or regulatory inspections reveals discrepancies relating to compliance with Applicable Laws or Technical Requirement, in which case, such once-a-year restriction shall not apply. Such inspections shall be on mutually agreed upon dates (within the 30-day notice period); there shall be no more than two (2) individuals performing such inspections; and such inspections shall be limited to a maximum of three (3) business days per inspection.

 

9.2.

Supplier shall permit representatives of any Regulatory Authority with jurisdiction over the manufacture and sale of an applicable Product to gain access to the Facility at which such Product is Manufactured and Processed, and any books and records related thereto, as may be necessary or required. Supplier shall promptly notify Buyer of any proposed inspection, including general inspections (or if prior notice is not commercially reasonable, shall notify Buyer within 48 hours after such inspection) and provide Buyer with copies of any correspondence and reports with or from any Regulatory Authority directly relating to any Product or Finished Product or any proposed or actual inspection directly relating to any Product/Finished Product. Supplier shall use commercially reasonable efforts to the extent practicable to do so, to provide a draft of any proposed response to any Regulatory Authority in respect of any matters specifically related to such matters prior to submitting such response to the Regulatory Authority and shall give consideration to any comments or suggestions Buyer may provide in respect of any such response. At Buyer’s request and subject to Supplier’s consent (which shall not be unreasonably withheld), Supplier shall permit Buyer (or a designee reasonably acceptable to Supplier) to observe any such inspection.

 

10.

FURTHER REGULATORY MATTERS AND FURTHER SERVICES

 

10.1.

Supplier shall maintain and operate the Facility and equipment used in the Processing and Manufacture of the Product into Finished Product, and shall perform all of Supplier’s other obligations under this Agreement, in compliance with Applicable Laws in the Territory.

 

 

10.2.

Supplier shall notify Buyer of Product or process related incidents pertaining to the Processing and/or Manufacture and/or Packaging and/or Labeling of any of the Products into Finished Products hereunder that would or reasonably may require notification to the FDA and/or any other Regulatory Authority promptly after the occurrence of such incident (but in no event later than five (5) business days thereafter), and shall promptly provide Buyer with a copy of any FDA Form 483 or similar warning, citation, form or report provided by an analogous Regulatory Authority received that relates to the Facility in which the relevant Product is Manufactured, Packaged, Labeled or tested, subject to any appropriate redactions necessary to protect the confidentiality of the contents thereof but only to the extent not relating to the relevant Product.

 

10.3.

The Parties shall execute and deliver a quality agreement related to the manufacture, storage, and testing of each of the APIs, Materials, and Products/Finished Products (the “Quality Agreement”) within a reasonable time following execution of this Agreement. In the event of a conflict between this Agreement and the Quality Agreement, the Quality Agreement shall prevail for matters of quality and this Agreement shall control for all other matters.

 

10.4.

The Parties shall further execute and deliver a pharmacovigilance agreement in relation to the Finished Products hereunder within a reasonable time following execution of this Agreement.

 

10.5.

The Parties acknowledge that it is possible that changes in Applicable Laws or actions of a Regulatory Authority may require changes to be made in the Specifications for a Finished Product. Should this occur, then upon becoming aware of its occurrence, each Party will immediately notify the other Party in writing of the nature of and reason for any such Specification changes, and subject to Buyer (i) paying an increased Purchase Price for the applicable Finished Product in respect of increased costs resulting therefrom, and (ii) reimbursing Supplier for the costs of any Materials procured by Supplier for the applicable Finished Product that are rendered obsolete as a result of such Specification change and any associated destruction costs, and (iii) agreeing to any scheduling changes or other adjustments, of which Buyer is notified in writing and in advance by Supplier, that may be necessitated by such Specification changes, any will be implemented by Supplier, but strictly only to the extent that it is both commercially and operationally reasonable to do (but not earlier than required). Supplier shall not be required to implement such changes where it is unreasonable from a commercial and operational perspective to do so; provided, however, that in such circumstance, a Supply Event shall be deemed to have occurred and, upon Buyer’s request, the Supplier shall cooperate with Buyer to effect a Manufacturing Tech Transfer upon mutually agreeable terms and in good faith, as described in Section 7.3.

 

 

10.6.

To the extent that Buyer requests to Supplier to perform additional services (i.e. other than those required to Manufacture and supply Product/Finished Product or otherwise specifically set forth in this Agreement, and other than pursuant to Section 10.5 above) for Buyer on a Product-by-Product basis, then the Supplier shall consider such request, subject to Supplier’s then committed present and future capacity constraints affecting equipment, personnel, and other resources, and subject to Supplier’s then business objectives. To the extent that the Parties agree to proceed with the provision of such additional services, then the Parties shall either (A) negotiate and execute a mutually agreed upon amendment to this Agreement; or (B) negotiate and execute a PSS, that sets forth the scope and costs of such additional services, as well as other additional terms and any usual and customary terms and conditions which shall apply to such additional services, including the relevant fee schedule and timelines for such additional services. For avoidance of doubt, any request for changes to the volumes, batch sizes, strengths, dosages or Specifications in respect of any Finished Product hereunder, other than Specification changes described in Section 10.5, shall be treated as an “additional service” and subject to the terms of this Section 10.6.

 

10.7.

Buyer shall have the right to designate, a maximum of one time in any contract year of the Term of this Agreement, one or more representatives of Buyer to be present at the Facility in order to observe the Manufacturing of any Finished Product under this Agreement and observe Supplier’s performance of any services provided under this Agreement. While at the Facility, such representative(s) of Buyer shall (a) have access to provide any guidance to Supplier in connection with the Manufacturing of the relevant Product and performance of such services, and (b) be restricted to such areas as are directly relevant to the manufacture of the relevant Product and such other areas as may be otherwise authorized by Supplier, and shall comply with all applicable written policies and procedures provided in advance by Supplier to Buyer, and may, at Supplier’s option, be escorted by Supplier personnel. Such representative shall be bound by the confidentiality provisions in this Agreement as well as site safety and security protocols. Buyer shall be required to provide Supplier with at least 30 days’ prior written notice of its intention to designate any representative of Buyer to be present at the Facility.

 

10.8.

The Parties acknowledge that Buyer intends to fulfill its obligation to supply API for the Xiaflex Product with API produced at Buyer’s facility located in Horsham, Pennsylvania (the “Horsham Facility”) and that, as of the Effective Date, Supplier is supporting scale-up operations for the production of API at the Horsham Facility, which will include qualification thereof by the applicable Regulatory Authorities. The Parties agree that shortly following the execution of this Agreement and in any event within 150 days of the Effective Date (or such other date as may be agreed mutually between the Parties hereto), the Parties shall negotiate in good faith to enter into an agreement or PSS with respect to such support that may be required by Buyer from Supplier in respect of such scale-up, with such agreement including terms with respect to scope of support, timing and duration of such support and prices to be paid by Buyer to Supplier in respect of such support.

 

 

11.

PACKAGING AND LABELLING

 

11.1.

Supplier shall supply each Finished Product hereunder to Buyer or one of its Affiliates. Supplier shall Label and Package and serialize each Product hereunder in accordance with the Drug Supply Chain Security Act (DSCSA), GMP and Specifications which are provided by Buyer to Supplier.

 

11.2.

Buyer shall be responsible for the regulatory compliance of all package Labels, Product inserts and Packaging used in connection with each of the Finished Products.

 

11.3.

Buyer or its Affiliates shall be primarily responsible for adverse event reporting (“ADER”) to the FDA and/or any other applicable Regulatory Authorities and investigation and analysis of end-user complaints with respect to each of the Finished Products. Buyer or its Affiliates shall maintain ADER and other product performance monitoring systems for the Finished Products. Buyer shall have primary responsibility for communicating with the end-users to support the complaint handling process with respect to the Finished Products. Supplier shall co-operate with Buyer or its Affiliates in connection with Buyer’s or its Affiliates’ obligations under this Section 11.3 and provide to Buyer or its Affiliates, on a timely basis to permit Buyer or its Affiliates to fulfill its regulatory obligations, as reasonably requested by Buyer, including by providing reports relating to complaints and product performance issues relating to the Products and notifying Buyer within three (3) business days of Supplier’s receipt of any adverse events and/or product complaints regarding the Finished Products.

 

 

12.

PRODUCT RECALLS

 

12.1.

In the event that any recall, end-user notice, restriction, corrective action or market action or a product change of a Finished Product hereunder shall be required by Regulatory Authorities, or Buyer voluntarily determines to recall a Finished Product hereunder or take any other market withdrawal action with respect to any Finished Product, Buyer shall conduct the recall or market withdrawal and be responsible for the overall management of such recall or market withdrawal, including dealing with Governmental Authorities and Regulatory Authorities with respect thereto. Buyer shall be responsible for all recall or market withdrawal expenses, except to the extent such recall, market withdrawal or other required action directly and/or primarily results, from such Finished Product being a Defective Product (other than due to a Buyer API Responsibility), or from any other breach of this Agreement by Supplier (a “Supplier Recall Responsibility”), in which case such costs and expenses shall be shared according to each Party’s contribution to the problem. Said determination may be made by the Regulatory Authority involved, or by mutual agreement of the Parties following examination and review of all records pertinent to the manufacture of the Finished Product subject to such recall. Supplier shall reasonably co-operate with Buyer in effecting any recall of a Product pursuant to this Section 12.1, including communications with any end-users or to the public. In respect of any recall due in whole or material part, to a Supplier Recall Responsibility, Supplier shall reimburse the Buyer for an amount equal to the lesser of (i) ten percent (10%) of the total API Cost of the amount of API consumed in the recalled Product or (ii) on a calendar year basis, a maximum of one hundred and fifty thousand dollars ($150,000). Supplier’s maximum liability in connection with any recall hereunder, including in respect of any obligation to reimburse Buyer for API Costs as provided above, shall be limited, on a calendar year basis, to the Maximum Cap Amount (and for avoidance of doubt, any amounts paid by Supplier in connection with a recall hereunder shall be included in any determination on whether Maximum Cap Amount has been reached.

 

13.

DISTRIBUTION AND MARKETING

 

13.1.

Buyer shall have the sole and exclusive right to make determinations regarding the commercialization of the Products (including Finished Products) in the Territory, including the responsibility for all import, promotion, marketing, sales and distribution of the Finished Products in the Territory.

 

13.2.

The Finished Products shall be marketed and sold under the Buyer name and trademark (or, to the extent applicable, under a third party customer’s private label); provided that Supplier shall be identified as the manufacturer thereof to the extent required by Applicable Laws.

 

 

14.

CONFIDENTIALITY AND PUBLIC DISCLOSURE AND DATA PROTECTION

 

14.1.

A Receiving Party shall retain in strict confidence, and not disclose, divulge or otherwise communicate to any other Person, any Confidential Information of the Disclosing Party, whether received prior to or after the Effective Date, and shall not use any such Confidential Information for any purpose, except pursuant to the terms of, and as required to carry out such Receiving Party’s obligations under, this Agreement, except that each Receiving Party may disclose Confidential Information of the Disclosing Party to the officers, directors, employees, agents, accountants, attorneys, consultants, sub-contractors or other representatives of the Receiving Party or its Affiliates (the “Representatives”) who, in each case, (i) need to know such Confidential Information for the limited purposes of the implementation and performance by the Receiving Party of this Agreement, (ii) will use the Confidential Information only for such limited purposes, and (iii) are bound by confidentiality obligations no less protective than those set forth in this Agreement.

 

14.2.

A Receiving Party shall use at least the same standard of care in complying with its confidentiality obligations hereunder as it uses to protect its own Confidential Information of comparable sensitivity and to prevent and restrain the unauthorized disclosure of such Confidential Information by any of its Representatives, but in no event less than a reasonable standard of care. The Receiving Party shall be liable for any breach by any of its Representatives of the restrictions set forth in this Agreement.

 

14.3.

Without limiting the generality of any of the foregoing, the Parties shall not make any disclosure of Confidential Information that would be reasonably likely to preclude the Disclosing Party from obtaining U.S. or foreign patents on any patentable invention or discovery described or otherwise embodied in such Party’s Confidential Information.

 

14.4.

Release from Restrictions.

 

(a)

A Receiving Party may disclose Confidential Information to the extent that such Confidential Information disclosure is made in response to a valid order or subpoena of a court of competent jurisdiction in the Territory or other Governmental Authority of competent jurisdiction or otherwise required by law, in the reasonable opinion of counsel to the Receiving Party; provided, however, that, to the extent practicable, the Receiving Party shall first, to the extent lawfully permissible to do so, provide written notice to the Disclosing Party reasonably in advance under the circumstances in order to give the Disclosing Party a reasonable opportunity to quash such order or subpoena or to obtain a protective order requiring that the Confidential Information or documents that are the subject of such order or subpoena to be held in confidence by such court or Governmental Authority or, if disclosed, be used only for the purposes for which such order or subpoena was issued; and provided further that whether a disclosure order or subpoena is quashed or a protective order is obtained, any Confidential Information that may be disclosed in response to such court or Governmental Authority order or subpoena shall be limited to information that, in the opinion of counsel to the Receiving Party, is legally required to be disclosed in such response to such order or subpoena.

 

 

(b)

A Receiving Party may also disclose Confidential Information to the extent that such disclosure is made to (i) a Governmental Authority as required in connection with any filing, application or request for Regulatory Approval with respect to the applicable Product or under the reporting requirements of any securities exchange on which the securities of the Receiving Party or its Affiliates are traded, or (ii) a Third Party to which a Receiving Party has a contractual obligation related to the applicable Product, but only to the extent such information is required by such contractual obligation, provided that in each case (clauses (i) and (ii)), reasonable measures are taken to ensure confidential treatment of such Confidential Information.

 

(c)

A Receiving Party may disclose this Agreement to a Third Party in connection with or in conjunction with (i) a proposed merger, consolidation, sale of assets that includes those related to this Agreement, (ii) a permitted assignment of this Agreement, or (iii) loan financing, raising of capital, or sale of securities; provided, however, that the disclosing Party obtains an agreement for confidential treatment thereof on terms no less protective than those contained herein.

 

(d)

Any Confidential Information disclosed pursuant to this Section 14.4 shall maintain its confidentiality protection and non-use restrictions for all purposes other than such disclosure.

 

14.5.

No Implied Rights. Except as otherwise expressly set forth in this Agreement, nothing herein shall be construed as granting any Receiving Party any right, title, interest in or ownership of the Confidential Information, proprietary information or Intellectual Property of the Disclosing Party. For the avoidance of doubt, specific information disclosed as part of Confidential Information shall not be deemed to be in the public domain or in the prior possession of the Receiving Party merely because it is embraced by more general information in the public domain or by more general information in the prior possession of the Receiving Party.

 

14.6.

Survival of Confidentiality Obligations. The confidentiality obligations of the Parties contained in this Section 14 shall remain binding on both Parties during the Term and for a period of five (5) years after the expiration of the Term or the termination of this Agreement, regardless of the cause of such expiration or termination; provided that the confidentiality obligations of a Receiving Party shall extend indefinitely with respect to any Confidential Information reasonably designated by a Disclosing Party as a trade secret prior to the end of such five (5) year period.

 

 

14.7.

Disclosure of Terms and Use of Party’s Name.

 

(a)

No press release, public announcement, confirmation or other communication to the public or Third Parties regarding the terms of this Agreement or related matters shall be made by either Party without the prior written consent of the other Party, including with respect to the form, content and timing of such press release, public announcement, confirmation or other communication to the public or Third Parties.

 

(b)

Except as required by Applicable Laws or as to Labeling activities, no right, express or implied, is granted by this Agreement to either Party to use in any manner the name of the other Party or any other trade name or trademark of such other Party in connection with the performance of this Agreement. For clarity, it is understood that nothing herein shall prohibit either Party from using the name of the other Party (i) in certain of such Party’s disclosure documents, including those filed or disclosed in order to comply with its obligations under Applicable Laws or the listing standards or agreements of any national or international securities exchange, The New York Stock Exchange, The NASDAQ Stock Market or other similar laws of a Governmental Authority, (ii) to respond to an inquiry of a Governmental Authority, or (iii) in a judicial, administrative or arbitration Proceeding.

 

14.8.

Data Protection.

 

(a)

The Parties agree to the terms of Schedule 2 of this Agreement with respect to any Protected Personal Information relating to an individual natural person in the European Union. The Parties shall use good-faith efforts to agree upon and implement any security protocols and information-handling guidelines that their respective legal advisors recommend in connection with the Parties’ compliance with Data Protection Laws.

 

(b)

If either Party discovers any accidental, unauthorized or unlawful access to, acquisition of, loss of, alteration to, disclosure of or other processing of Protected Personal Information (“Security Incident”), the discovering Party shall, at its own cost and expense, (i) investigate the Security Incident and promptly remediate or mitigate the effects of the Security Incident; (ii) timely provide any legally-required notifications to Governmental Authorities or individuals affected by the Security Incident, and (iii) notify the other Party of the Security Incident within twenty-four (24) hours, including a reasonably-detailed summary of the Security Incident and the corrective action taken or to be taken to remediate the Security Incident.

 

 

(c)

Upon termination of the Agreement, each Party will return or destroy (i.e., render it unreadable, unusable and indecipherable) all Protected Personal Information received from the other Party except as required for legal or regulatory purposes. All Protected Personal Information retained for legal or regulatory purposes after the expiration or any earlier termination of this Agreement, shall be protected pursuant to the terms of this Agreement until such time as the Protected Personal Information is no longer needed for such legal or regulatory purposes.

 

(d)

The Parties agree that any breach of this Section 14.8 is a material breach incapable of cure, for which either Party may terminate this Agreement upon delivery of written notice to the other Party.

 

(e)

Each Party acknowledges and agrees that (i) it will be too speculative to measure the damages that would be suffered by the other Party if such Party fails to comply with the obligations set forth in this Section 14.8 and that, in the event of any such failure, such other Party will be irreparably harmed and will not have an adequate remedy at law, and (b) such other Party shall, therefore, be entitled, in addition to any other rights and remedies, to seek to obtain specific performance of such Party’s obligations and to seek to obtain immediate injunctive relief without having to post a bond.

 

15.

INTELLECTUAL PROPERTY

 

15.1.

Buyer Intellectual Property. All right, title and interest in Buyer Intellectual Property, including all Product Intellectual Property, shall continue to be owned by Buyer, subject only to the license granted under Section 1.2 above.

 

15.2.

Supplier Intellectual Property. Supplier will continue to own the Supplier Intellectual Property, subject only to the license granted under Section 1.3 above. In addition, to the extent that any Manufacturing Tech Transfer is agreed to be effected (as set out in Section 7.3), Supplier (on behalf of itself and its Affiliates) shall, as at such time, and based on the particular circumstances that exist as at such time, agree to grant to Buyer a non-exclusive, license under any Supplier Intellectual Property that is strictly required to be transferred pursuant to the Manufacturing Tech Transfer or that would be infringed, misappropriated or otherwise violated, absent a license thereto, by the use or practice of the applicable Manufacturing process(es) that are the subject of such Manufacturing Tech Transfer to manufacture, use or commercialize such Product(s), for any and all purposes, including in connection with the Manufacture of the applicable Product(s), the terms of which license shall be mutually agreed between the Parties in good faith as at such time as the Manufacturing Tech Transfer is executed.

 

 

15.3.

Supplier Improvements. Supplier hereby assigns and agrees to assign to Buyer (or Buyer’s designee), and to procure assignments from its Affiliates and any sub- contractors, its and their entire right, title and interest in and to any and all Supplier Improvements and to execute such documents and provide such assistance as Buyer may reasonably request to enable Buyer or its designee to effect, perfect, enforce and maintain its ownership of any such Supplier Improvements.

 

16.

REPRESENTATIONS AND WARRANTIES

 

16.1.

By Buyer. Buyer hereby represents, warrants and covenants that:

 

(a)

Buyer is a private limited liability company, duly organized, validly existing and in good standing under the laws of Ireland;

 

(b)

Buyer has the requisite power and authority to enter into and be bound by the terms and conditions of this Agreement and to perform its obligations hereunder;

 

(c)

Buyer has taken all necessary action on its part to authorize the execution and delivery of this Agreement and this Agreement has been duly executed and delivered on behalf of Buyer and constitutes a legal, valid, binding obligation, enforceable against Buyer in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforceability of creditors’ rights generally and other general equitable principles which may limit the right to obtain certain remedies;

 

(d)

Buyer is not subject to any legal, contractual or other restrictions, limitations or conditions that might affect adversely its ability to perform hereunder;

 

(e)

Buyer's performance of its obligations under this Agreement will not be in violation of Applicable Laws;

 

(f)

Buyer has not misappropriated and will not misappropriate trade secrets of any Third Party in the performance of this Agreement;

 

 

(g)

Buyer will, during the Term, maintain appropriate skilled personnel and facilities to carry out its obligations under this Agreement;

 

(h)

No Buyer employees or other Persons performing services on behalf of Buyer under this Agreement have been debarred, or are the subject of debarment Proceedings, under Section 306 of the FD&C Act; and if Buyer becomes aware that a Person performing on its behalf under this Agreement has been debarred, or has become the subject of debarment Proceedings, under Section 306 of the FD&C Act, Buyer shall promptly notify Supplier and shall prohibit such Person from performing on its behalf under this Agreement; and

 

(i)

Buyer has or will have, during the Term, all applicable licenses, registrations and permits (“Permits”) that it is lawfully required to hold in order to perform its obligations hereunder.

 

16.2.

By Supplier. Supplier hereby represents and warrants that:

 

(a)

Supplier is a limited liability company duly organized, validly existing and in good standing under the laws of Delaware, United States;

 

(b)

Supplier has the corporate power and authority to enter into and be bound by the terms and conditions of this Agreement and to perform its obligations hereunder;

 

(c)

Supplier has taken all corporate action on its part to authorize the execution and delivery of this Agreement and this Agreement has been duly executed and delivered on behalf of Supplier and constitutes a legal, valid, binding obligation, enforceable against Supplier in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforceability of creditors’ rights generally and other general equitable principles which may limit the right to obtain certain remedies;

 

(d)

Supplier is subject to no legal, contractual or other restrictions, limitations or conditions which materially conflict with its rights and obligations under this Agreement or which might affect adversely its ability to perform hereunder;

 

(e)

Supplier’s performance of its obligations hereunder, including provision of any Manufacturing Services hereunder, will not be in violation of any Applicable Laws;

 

(f)

Supplier will maintain appropriate skilled personnel and facilities to carry out its obligations under this Agreement, including sufficient storage capacity for storage of the API, Materials, work-in-progress and the Finished Products;

 

 

(g)

no Supplier employees or other Persons performing services on behalf of Supplier under this Agreement have been debarred, or are the subject of debarment Proceedings, under Section 306 of the FD&C Act; and if Supplier becomes aware that a Person performing on its behalf under this Agreement has been debarred, or has become the subject of debarment Proceedings, under Section 306 of the FD&C Act, Supplier shall promptly notify Buyer and shall prohibit such Person from performing on its behalf under this Agreement;

 

(h)

Supplier has all necessary rights to use and otherwise exploit any Supplier Intellectual Property used in the performance of its obligations under this Agreement;

 

(i)

as of the date of delivery, each Finished Product being delivered by Supplier under a relevant purchase order shall conform to Specifications and other Technical Requirements; and

 

(j)

Supplier has all applicable Permits necessary to perform its obligations hereunder, including, but not limited to, any manufacturing licenses which are required under laws of the jurisdiction in which it is operating.

 

17.

INDEMNIFICATION AND LIMITATION OF LIABILITY

 

17.1.

Indemnification by Supplier. Subject to Section 17.3, Supplier shall defend, indemnify and hold harmless each of Buyer, and its Affiliates, and each of their respective directors, officers and employees (each, an “Buyer Indemnitee”) from and against any and all liabilities, damages, settlements, penalties, fines, costs or expenses (including reasonable attorneys’ fees and other expenses of litigation) (collectively, “Liabilities”) arising, directly or indirectly, out of or in connection with Third Party claims, suits, actions, demands or judgments to the extent relating to or arising out of:

 

17.1.1.

any breach by the Supplier or its Affiliates of any representation, warranty, agreement, undertaking or covenant under this Agreement; or

 

17.1.2.

any negligence or intentional misconduct by the Supplier or its Affiliates, past or present employees or agents;

 

17.1.3.

any actual or alleged infringement or misappropriation of a Third Party’s intellectual property rights arising out of use or other exploitation, as permitted under this Agreement, of Supplier Intellectual Property licensed to Buyer under this Agreement;

 

17.1.4.

except, in each case, for those Liabilities for which Buyer has an obligation to indemnify the Supplier Indemnitees pursuant to Section 17.2, as to which Liabilities each Party shall indemnify the other Party to the extent of its respective liability for such Liabilities.

 

 

17.2.

Indemnification by Buyer. Subject to Section 17.3, Buyer shall defend, indemnify and hold harmless each of Supplier and its Affiliates, and each of their respective directors, officers and employees (each, a “Supplier Indemnitee”) from and against any and all Liabilities arising, directly or indirectly, out of or in connection with Third Party claims, suits, actions, demands or judgments to the extent relating to or arising out of:

 

17.2.1.

any breach by Buyer or its Affiliates of any representation, warranty, agreement, undertaking or covenant under this Agreement;

 

17.2.2.

any negligence or intentional misconduct by Buyer or its Affiliates, past or present employees or agents;

 

17.1.1.

any actual or alleged infringement or misappropriation of a Third Party’s intellectual property rights arising out of use or other exploitation, as permitted under this Agreement, of Buyer Intellectual Property licensed to Supplier under this Agreement;

 

17.1.2.

except, in each case, for those Liabilities for which Supplier has an obligation to indemnify the Buyer Indemnitees pursuant to Section 17.1, as to which Liabilities each Party shall indemnify the other Party to the extent of its respective liability for such Liabilities;

 

17.2.

Notice and Procedures. If a Supplier Indemnitee or a Buyer Indemnitee (the “Indemnitee”) intends to claim indemnification under this Section 17.3, it shall promptly notify the other Party (the “Indemnitor”) in writing of any such alleged Liabilities. The failure to deliver written notice to the Indemnitor within a reasonable time after the commencement of any claim or action shall not relieve the Indemnitor of any obligation to the Indemnitee under this Section 17.3 except to the extent the Indemnitor is materially prejudiced by such delay.

 

17.3.

In the event that the Indemnitor does not, after having been provided the written notice required by Section 17.3, assume and pursue in a timely and diligent manner the defense of any Third Party claim (but in no event later than thirty (30) days, or such shorter period as required under Applicable Laws), then the Indemnitor shall be deemed to have ceded control of such claim and the Indemnitee shall be entitled to appoint counsel of its own choice for such defense, at the cost and expense of the Indemnitor.

 

 

17.4.

In the event that the Indemnitor assumes such defense, the Indemnitor shall have the right to control the defense thereof with counsel of its choice, provided that such counsel is reasonably acceptable to Indemnitee; and provided further that any Indemnitee shall have the right to retain its own counsel at its own expense, or if representation of the Indemnitee by the counsel retained by the Indemnitor would be inappropriate due to actual or potential conflicts or differing interests between such Indemnitee and such Indemnitor, at the Indemnitor’s expense. The Indemnitee, its employees and agents, shall reasonably cooperate with the Indemnitor and its legal representatives in the investigation of any Liabilities covered by this Section 17.

 

17.5.

The obligations of this Section 17 shall not apply to amounts paid in settlement of any claim, demand, action or other proceeding if such settlement is effected without the consent of the Indemnitor (unless the Indemnitor is deemed to have ceded control of the applicable Third Party claim under this Section 17). Only Supplier or Buyer may claim indemnity under this Section 17 (on its own behalf or on behalf of its Indemnitees), and other Persons may not directly claim indemnity hereunder. For the avoidance of doubt, a permitted assignee under this Agreement is eligible to claim indemnity hereunder.

 

17.6.

The rights of the Buyer Indemnitees and the Supplier Indemnitees under this Section 17 shall be the sole and exclusive remedy of the Buyer Indemnitees and the Supplier Indemnitees, respectively, with respect to Third Party claims covered hereunder.

 

 

17.7.

Limitation of Liability. EXCEPT FOR THE INDEMNIFICATION OBLIGATIONS SET FORTH IN THIS ARTICLE 17 AND VIOLATIONS OF ARTICLE 14, AND UNLESS OTHERWISE EXPRESSLY STATED IN THIS AGREEMENT, IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY CONSEQUENTIAL, INCIDENTAL, SPECIAL, EXEMPLARY OR PUNITIVE DAMAGES TO THE OTHER PARTY, HOWEVER CAUSED, IN CONNECTION WITH THIS AGREEMENT, EVEN IF THE PARTY HAS NOTICE OF THE POSSIBILITY OF SUCH DAMAGES. EXCEPT FOR THE INDEMNIFICATION OBLIGATIONS SET FORTH IN THIS ARTICLE 17, VIOLATIONS OF ARTICLE 14, OR TO THE EXTENT RESULTING FROM SUPPLIER’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, TO THE FULLEST EXTENT PERMITTED BY LAW, AND NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, THE TOTAL LIABILITY, IN THE AGGREGATE, OF SUPPLIER , FOR ANY AND ALL CLAIMS, LOSSES, COSTS OR DAMAGES, INCLUDING WITHOUT LIMITATION, ATTORNEYS’ FEES AND COSTS AND EXPERT-WITNESS OR THIRD PARTY FEES AND COSTS OF ANY NATURE WHATSOEVER OR EXPENSES RESULTING FROM OR IN ANY WAY RELATED TO THIS AGREEMENT FROM ANY CAUSE OR CAUSES IN RESPECT OF CLAIMS MADE IN ANY CALENDAR YEAR DURING THE TERM OF THIS AGREEMENT SHALL NOT EXCEED: (A) 75% OF THE AGGREGATE PAYMENTS RECEIVED BY SUPPLIER FROM BUYER DURING THE SIX (6) CALENDAR MONTH PERIOD IMMEDIATELY PRECEDING SUCH RELEVANT CALENDAR YEAR; and (B) 75% OF THE AGGREGATE PAYMENTS PROJECTED TO BE RECEIVED BY SUPPLIER FROM BUYER (AS FORECASTED) IN THE RESPECT OF THE FIRST SIX (6) CALENDAR MONTH PERIOD OF SUCH YEAR ; (the “MAXIMUM CAP AMOUNT”); PROVIDED THAT, IN RESPECT OF CLAIMS MADE IN THE FIRST YEAR OF THIS AGREEMENT, BEING THE PERIOD COMMENCING ON THE EFFECTIVE DATE AND ENDING ON DECEMBER 31, 2026 (“Year 1”), THE APPLICABLE MAXIMUM CAP AMOUNT SHALL BE INITIALLY DETERMINED BASED ON AGGREGATE PAYMENTS PROJECTED TO BE RECEIVED BY SUPPLIER FROM BUYER IN RESPECT OF YEAR 1, TO BE RECONCILED AND CONFIRMED FOLLOWING THE END OF YEAR 1. In respect of any other calendar year of the Term of this Agreement, being any calendar year commencing following the end of Year 1, the applicable Maximum Cap Amount shall be initially determined based on (a) the total aggregate payments actually received by Supplier in the immediately preceding six month period prior to such applicable calendar year; and (b) any the aggregate payments projected to be received by Supplier from Buyer (as forecasted) in respect of the first six months of such relevant calendar year, to be reconciled and confirmed following the end of such six (6) month period. Any liability of Supplier in respect of any such claim or claims shall be dealt with by issuance of a credit note for the applicable amount, taking into consideration the applicable Maximum Cap Amount, and, in respect of any such liability in respect of such relevant calendar year, such credit note shall be trued up against the actual payments received by Supplier from Buyer during the relevant period. Each credit note shall be applied against the next invoice(s) issued to Buyer, until fully exhausted, and, upon any termination or expiration of this Agreement, if or to the extent any credit note has not been fully applied against invoices as of the date of such termination or expiration, Supplier shall remit to Buyer an amount equal to such unapplied credit note within thirty (30) days of the date of such termination or expiration. To the extent that the terms of this Agreement shall be applied to any Product/Finished Product (other than those envisaged as on the Effective Date, being the Xiaflex Product and/or Diluent), then an applicable limit on liability shall be mutually agreed in a relevant PSS to be agreed and entered into in respect of such Product/Finished Product.

 

 

18.

TERM AND TERMINATION

 

18.1.

Term. Unless earlier terminated pursuant to this Section 18 or provided otherwise with respect to a particular Finished Product, as set out in the applicable PSS, the initial term of this Agreement shall continue in force from the Effective Date until the date that is five (5) years from the Effective Date (the “Initial Term”); thereafter, the term of this Agreement shall automatically renew for additional twenty four (24) month periods (each, a “Renewal Term” and, together with the Initial Term, the “Term”), unless (a) terminated sooner in accordance with the terms of this Section 18, or (b) either Party provides the other Party with at least twelve (12) months’ written notice of non-renewal prior to the expiration date of the Initial Term or the then current Renewal Term, and any such notice of non- renewal shall state whether for all Products or an individual PSS as applied only to the applicable Product. Notwithstanding the foregoing, if any accepted purchase order or PSS extends beyond the expiration or termination of this Agreement, at Buyer’s request, the Term shall be extended until delivery of the relevant Finished Product under that purchase order or PSS.

 

18.2.

Termination for Breach. Either Party may terminate or suspend performance under this Agreement (or an individual PSS) upon written notice to the other Party at any time during the Term, if the other Party is in material breach of this Agreement (or a PSS), as the case may be, and such other Party has not cured such material breach within forty-five (45) days after notice requesting cure of such breach, which notice sets forth the alleged breach in detail and states whether such Party is proposing to terminate or suspend performance and whether under this Agreement generally, as applied to all Products, or an individual PSS as applied only to the applicable Product; provided, however, that if such breach is not capable of cure within forty-five (45) days, but is capable of cure, and the breaching Party has promptly commenced, and is and continues diligently pursuing in good faith the remedy of any such breach, then such cure period shall be extended for such period as may be reasonably required to effectuate such cure; provided further, however, that if such breach is not capable of cure, the non- breaching Party may terminate this Agreement (or relevant PSS), or suspend performance under this Agreement (or relevant PSS), immediately by delivery of written notice thereof to such breaching Party.

 

18.3.

Termination for Insolvency. Either Party may terminate this Agreement in the event that the other Party suffers an Insolvency Event, by delivery of written notice thereof by the other Party.

 

 

18.4.

Termination for Change in Conditions.

 

(a)

Finished Product Withdrawal. Either Party may terminate the applicability of this Agreement to a particular Finished Product (or a particular PSS relating to a particular Finished Product), effective immediately upon notice to the other Party, if the Finished Product or Product is withdrawn as a result of FDA (or other Regulatory Authority with jurisdiction) actions or voluntarily withdrawn by Buyer.

 

(b)

At Will Termination. This Agreement (or any PSS) may be terminated at any time for any reason by either Party with two (2) years prior written notice to the other Party.

 

(c)

Changes Required by Applicable Law. If Supplier is required to change the Specifications in order to comply with Applicable Law or Governmental Agency, Supplier will promptly notify Buyer of such changes and the cost of such changes. If either Party is unable or unwilling to make such changes, either Party will have the option of terminating this Agreement (or PSS to the extent relevant) with twelve (12) months’ notice to the other Party, and any such termination shall be deemed to be termination for a Supplier Event for purposes of Section 18.5(c).

 

18.5.

Effect of Expiration or Termination; Manufacturing Technology Transfer.:

 

(a)

If this Agreement is terminated or expires as to a particular Product, as provided above, it shall remain in force until the expiration of the Term (or earlier termination) with respect to all other Products then subject to this Agreement.

 

(b)

Expiration of the Term or termination of this Agreement for any reason shall be without prejudice to Supplier’s right to receive all payments due and payable from Buyer as of the effective date of such termination, if any, pursuant to the terms of this Agreement or any PSS and any other legal, equitable, or administrative remedies as to which a Party is or may become entitled.

 

(c)

Upon expiration or termination of this Agreement by reason of a Supplier Event and it is agreed that a Manufacturing Tech Transfer shall be undertaken, then the provisions of Section 7.3 shall apply and the Parties shall co-operate to negotiate and enter into in good faith an agreement in order to effect such Manufacturing Tech Transfer. Upon termination or expiration of this Agreement for any other reason, then upon Buyer’s request, the Parties will cooperate in good faith to establish terms for a Manufacturing Tech Transfer.

 

 

18.6.

Survival. In addition to specific indications throughout this Agreement that Articles and Sections of this Agreement shall survive expiration and termination of this Agreement, Annex A, Section 14, Section 15, Section 16, Section 17, Section 18.5 and Section 18.6, Section 19, Section 20, Section 22 and any other provisions necessary and proper to give effect to the intention of the Parties as to the effect of the Agreement after termination shall survive any expiration or termination of this Agreement or any PSS. In addition, unless otherwise expressly set forth herein, no expiration of the Term or termination of this Agreement (or PSS) shall have any effect on any payment, obligation accruing or arising prior to such expiration or termination or relieve any Party from obligations that are expressly indicated to survive termination or expiration of this Agreement.

 

19.

INSURANCE

 

19.1.

Insurance.

 

(a)

Each Party shall, at its own cost and expense, obtain and maintain in full force and effect at all times during the Term, and for a period of three (3) years thereafter:

 

(i)

commercial general liability insurance covering bodily injury and property damage with limits of One Million Dollars ($1,000,000) per occurrence and Two Million Dollars ($2,000,000) in the aggregate;

 

(ii)

products and completed operations liability insurance with limits of Five Million Dollars ($ 5,000,000) per occurrence and Ten Million Dollars ($10,000,000) in the aggregate; and

 

(iii)

workers’ compensation with statutory limits as required by law and employers’ liability insurance with a limit of One Million Dollars ($1,000,000) per accident,

 

(collectively, the “Insurance Limits”)

 

(b)

All of the foregoing insurance policies shall be obtained from an insurance carrier or carriers having a current A.M. Best rating of at least A- Class VIII.

 

(c)

Upon written request, a Party shall provide the other Party with a certificate of insurance evidencing such coverage. Each Party shall provide the other Party with written notice within thirty (30) days’ of any material change in the terms or coverage of such insurance policies or their lapse, cancellation or termination.

 

 

(d)

All insurance policies obtained by each Party pursuant to this Agreement (other than Buyer’s insurance coverage requirement under Section 19.1(a)(ii)) shall be primary and not contributing to any other insurance, self-insurance or captive insurance maintained by the other party to the extent of such Party’s indemnification obligations hereunder; provided, however, that notwithstanding the foregoing, the insurance policies required under Section 19.1(a) shall not be construed to limit a Party’s liability with respect to its indemnification obligations under this Agreement.

 

20.

COMPLIANCE WITH LAWS

 

20.1.

Applicable Laws; Anti-Corruption Laws. Each Party represents and warrants to the other Party that, to the knowledge of such Party, such Party, with respect to the conduct of its business as of the date of this Agreement, has been and is in compliance in all material respects with all Applicable Laws. Each Party shall comply, and shall cause its employees and sub-contractors to comply, with all Applicable Laws in its performance of activities contemplated under this Agreement. Without limiting the generality of the foregoing, each Party agrees that it will comply with, and will not take any action that will cause the other Party or its Affiliates to be in breach of all Applicable Laws for the prevention of fraud, kickbacks, bribery, corruption, racketeering, money laundering or terrorism, including the FCPA, each, as amended from time to time (collectively, “Anti-Corruption Laws”). Each Party agrees that it has not, and covenants that it will not, in connection with the performance of this Agreement, give, promise, authorize, ratify or offer, or take any act in furtherance of offering or giving anything of value, directly or indirectly: (a) to any individual, including Government Officials, (b) to an intermediary for payment to any individual, including Government Officials, (c) or to any sick fund, health insurer Healthcare Entity or Healthcare Professional or employee or officer of such sick fund, health insurer, Healthcare Entity or Healthcare Professional, or (d) to any political party. It is the intent of the Parties that no payments or transfers of value shall be made, promised, authorized, ratified or offered with the purpose or effect of public or commercial bribery, acceptance or acquiescence in extortion, kickbacks or other unlawful or improper means of security an improper advantage or obtaining or retaining business.

 

20.2.

Data Protection Laws. Each Party acknowledges and agrees that it will comply (and will cause its agents, accountants, attorneys, consultants, sub-contractors and other representatives to comply) with all Data Protection Laws and Schedule 2 to this Agreement. Each Party agrees that, for the purpose of Data Protection Laws, they each operate as separate and independent controllers in respect of the personal data processed pursuant to this Agreement.

 

 

20.3.

OFAC Compliance. Each Party acknowledges and expressly agrees that certain laws of the United States of America and other countries, including the United States Export Control Regulations, the United States Anti-Money Laundering laws, the United States Anti-Terrorism laws and the Foreign Corrupt Practices Act (collectively, the “Legislation”), and U.S. sanctions programs administered by the Office of Foreign Assets Control (“OFAC”) and the Bureau of Industry and Security, among others, may result in the imposition of sanctions on the other Party or its Affiliates in the event that, directly or indirectly, products are exported to or imported from, or payments are sent to or received from various countries or regions, including without limitation Iran, North Korea, Syria, Sudan, the Crimea region of Ukraine, or any country embargoed by Executive Order or otherwise, or to or from certain individuals designated or identified as sanctioned by the U.S. government, including persons in Russia and Ukraine. Each Party warrants that it has searched OFAC's Consolidated Sanctions List, available at https://sanctionssearch.ofac.treas.gov/ in order to ensure compliance with all applicable sanctions regulations.

 

20.4.

Compliance Event Reporting. Each Party agrees that if it learns of any violation of Data Protection Laws, Applicable Laws, Export Control Laws or Anti- Corruption Laws by an employee or sub-contractor that performs any function under this Agreement (a “Compliance Event”), it will use commercially reasonable efforts to promptly notify the other Party in writing of such Compliance Event and the measures it has taken and intends to take to remedy such Compliance Event and to prevent its recurrence.

 

21.

MEETINGS

 

21.1.

Meetings

 

(a)

The Parties shall hold and attend supply chain meetings quarterly during the Term (or at such other time or intervals as the Parties may reasonably agree in writing) in order to discuss the Manufacturing and other activities set out hereunder.

 

(b)

The Parties shall also hold meetings each Calendar Quarter during the Term (or at such other time or intervals as the Parties may reasonably agree in writing) in order to review and discuss the Parties’ respective obligations hereunder (including but not limited to business review meetings, joint steering committees, etc.).

 

 

22.

MISCELLANEOUS

 

22.1.

Interpretation and Construction. Unless the context of this Agreement otherwise requires (a) the terms “include,” “includes,” or “including” shall be deemed to be followed by the words “without limitation” unless otherwise indicated, (b) the terms “hereof,” “herein,” “hereby,” and derivative or similar words refer to this entire Agreement, and (c) the terms “Article,” “Section”, “Schedule” “Annex” and “Exhibit” refer to the specified Article, Section, Schedule, Annex and Exhibit of this Agreement. All annexures, schedules, exhibits and documents expressly incorporated into this Agreement are hereby incorporated into this Agreement and made a part hereof as if set out in full in this Agreement. Whenever this Agreement refers to a number of days, unless otherwise specified, such number shall refer to calendar days. The headings and paragraph captions in this Agreement are for reference and convenience purposes only and shall not affect the meaning or interpretation of this Agreement. This Agreement shall not be interpreted or constructed in favor of or against either Party because of its effort in preparing it. Any capitalized terms used, but not otherwise defined, shall have the meanings given to those terms in Annex A.

 

22.2.

Independent Contractor Status. It is understood and agreed that nothing in this Agreement nor any agreement related hereto is intended to nor shall create a partnership or joint venture between the Parties. The Parties are independent contractors and are engaged in the operation of their own respective businesses, and neither Party is to be considered the agent, partner, joint venturer or employee of the other Party for any purpose whatsoever and neither Party shall have any authority to enter into any contracts or assume any obligations for the other Party nor make any representations or warranties on behalf of such other Party.

 

22.3.

Performance by Affiliates. If, with respect to a particular Product, Supplier is permitted to perform some or all of its obligations under this Agreement through one (1) or more of its Affiliates, provided, however, that Supplier shall remain responsible for and shall guarantee such performance by its Affiliates and shall cause its Affiliates to comply with the provisions of this Agreement in connection with such performance as if it were a party hereto. Each Party hereby expressly waives any requirement that the other Party exhaust any right, power or remedy, or proceed against an Affiliate for any obligation or performance hereunder prior to proceeding directly against such Party.

 

22.4.

Waiver. The waiver by either Party of a breach of any term or provision contained herein shall be in writing and shall in no way be construed as a waiver of any succeeding breach of such term or provision or the waiver of such term or provision itself.

 

 

22.5.

Assignment. This Agreement shall be binding upon and inure to the benefit of each of the Parties and their respective successors and approved assigns; provided, however, that neither Party may assign this Agreement, in whole or in part, without the prior written consent of the other Party, unless such assignment is to an Affiliate; provided further, however, that notwithstanding the foregoing, each Party shall provide written notice, at least ten (10) days in advance, of any assignment of this Agreement in accordance with the terms hereof to the other Party. Any assignment of this Agreement not in accordance with this provision shall be null and void ab initio.

 

22.6.

Modification. This Agreement may not be changed, modified, amended or supplemented except by an express written instrument signed by both Parties.

 

22.7.

Severability. If any provision of this Agreement shall be held illegal or unenforceable, that provision shall be limited or eliminated to the minimum extent necessary so that this Agreement shall otherwise remain in full force and effect and enforceable.

 

22.8.

Further Assurances. Each Party shall execute, acknowledge and deliver such further instruments and documents, and to do all such other acts, as may be reasonably necessary or appropriate in order to carry out the purposes and intent of this Agreement.

 

22.9.

Notices. Any notice or other communication to be given under this Agreement by any Party to the other Party shall be in writing and shall be either (i) personally delivered, (ii) mailed by registered or certified mail, postage prepaid with return receipt requested, (iii) delivered by overnight express delivery service or same- day local courier service, or (iv) delivered by or e-mail (followed by a copy by the preceding methods in clause (i), (ii) or (iii)), to the address of the applicable Party as set forth below, or to such other address as may be designated by the Parties from time to time in accordance with this Section 22.9. Notices delivered personally, by overnight express delivery service or by local courier service shall be deemed given as of actual receipt. Mailed notices shall be deemed given five (5) business days after mailing. Notices delivered by email shall be deemed given upon transmission (in the case of e-mail) if transmitted before 5:00 p.m. (recipient’s local time) on a business day, and otherwise on the following business day.

 

If to Buyer:        Endo Biologics Limited

 

Attention: Legal Department

 

E-mail: bobby.torgoley@mallinckrodt.com

 

 

If to Supplier: Par Health USA, LLC at address above.

 

Attention:          Legal Department

 

E-mail: Maletta.Matthew@endo.com

 

22.10.

Governing Law and Jurisdiction and Dispute Resolution. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without reference to the choice of law principles that would result in the application of the laws of any other jurisdiction. The Parties irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement. In the event of a dispute between the Parties relating to this Agreement, the Parties agree that they will work together in good faith first to diligently pursue, for a reasonable period of time, the resolution of the matter internally by escalating it to higher levels of management who can and will provide input into the resolution of the matter prior to resorting to formal dispute resolution; provided that if either Party believes in good faith that it will suffer material prejudice by submitting to such informal dispute resolution with regard to a breach of an obligation of confidentiality, an infringement or misappropriation of a Party’s intellectual property, or a claim for which the principal remedy sought is an equitable remedy, such Party need not submit to such informal dispute resolution and may proceed directly to formal dispute resolution.

 

22.11.

Force Majeure. A Party shall not be liable for nonperformance or delay in performance of its obligations hereunder to the extent that and solely for so long as such nonperformance or delay in performance is caused by any event reasonably beyond the control of such Party, including wars, hostilities, revolutions, riots, civil commotion, national emergency, epidemics, pandemics, fire, flood, earthquake, force of nature, explosion, terrorist act, embargo, or any other Act of God, or any law, proclamation, regulation, ordinance, or other act or order of any court or Governmental Authority (each a “Force Majeure Event”). In the event of any such Force Majeure Event, the delayed Party may defer its performance for the duration of such Force Majeure Event, provided that the delayed Party gives the other Party, written notice thereof promptly and, in any event, within two (2) business days of discovery thereof, and uses its good faith efforts to cure the excused breach. If either Party is unable to perform its obligations hereunder as a result of a Force Majeure Event for a period of ninety (90) days or longer, then the other Party shall have the right, upon issuance of written notice to the other Party, to terminate this Agreement.

 

 

22.12.

Entire Agreement. This Agreement (together with the Schedules, annexures and exhibits hereto), any Quality Agreement and pharmacovigilance agreement entered into hereunder constitute the entire agreement between Buyer and Supplier with respect to the Products and supersedes all prior representations, understandings and agreements with respect to the Products. In the event of a conflict between this Agreement and any Schedule attached hereto, this Agreement shall prevail over any such Schedule.

 

22.13.

Counterparts. This Agreement may be executed in one or more counterparts, including in multiple original, PDF, DocuSign and/or similar electronic signature technology counterparts, each of which shall for all purposes are deemed to be an original and all of which shall constitute an instrument. Each executed signature page to this Agreement and to each agreement and certificate delivered by a Party pursuant to this Agreement may be delivered by any of the methods described in Section 22.9, including via e-mail, provided that such delivery is effected in accordance with the notice information provided for in Section 22.9. In the event that any signature to this Agreement or any agreement or certificate delivered pursuant hereto, or any amendment thereof, is delivered by electronic delivery (i.e. by e-mail delivery of a “.pdf” format data file or by DocuSign or similar electronic signature technology), such signature shall create a valid and binding obligation of the Party executing (or on whose behalf such signature is executed) with the same force and effect as if such “.pdf” signature page or DocuSign or similar electronic signature technology were an original thereof. No Party shall raise the use of e-mail delivery of a “.pdf” format data file or DocuSign or similar electronic signature technology to deliver any such signature page or the fact that such signature was transmitted or communicated through the use of e-mail delivery of a “.pdf” format data file or DocuSign or similar electronic signature technology as a defense to the formation or enforceability of a contract and each Party forever waives any such defense.

 

22.14.

Third Party Beneficiaries. Except as provided in Section 17.1 and Section 17.2, (a) no term or provision of this Agreement is intended to be, or shall be, for the benefit of any Person that is not a party hereto, and (b) no such other Person shall have any right or cause of action hereunder.

 

22.15.

Cumulative Rights. The rights and remedies of each of the Parties under or pursuant to this Agreement are cumulative, may be exercised as often as such Party considers appropriate and are in addition to its rights and remedies under general law.

 

[Signature page follows]

 

 

IN WITNESS WHEREOF, the Parties hereto have executed this Manufacturing and Supply Agreement to be effective as of the Effective Date.

 

PAR HEALTH USA, LLC
By:	/s/ Deanna Voss
Name:	Deanna Voss
Title:	Assistant Secretary

 

Signature Page to Supply Agreement

 

 

IN WITNESS WHEREOF, the Parties hereto have executed this Manufacturing and Supply Agreement to be effective as of the Effective Date.

 

ENDO BIOLOGICS LIMITED
By:	/s/ Glenn Carroll
Name:	Glenn Carroll
Title:	Director

 

Signature Page to Supply Agreement

 

 

ANNEX A

 

Definitions

 

Capitalized terms used in this Agreement have the following meanings:

 

“ADER” has the meaning set forth in Section 11.3.

 

“Affiliate(s)” means, with respect to either Party, any Person that is directly or indirectly controlled by, controlling, or under common control with such Party. For purposes of this definition only, a Person shall be regarded as in control of another Person if it owns or directly or indirectly controls at least fifty (50%) of the voting interests of the other Person, or, in the absence of the ownership of at least fifty percent (50%) of the voting interests of an entity, has the power to direct or cause the direction of the management and policies of such Person, as applicable.

 

“Agreement” has the meaning given to such term in the Preamble.

 

“ANDA” means an Abbreviated New Drug Application with FDA in respect of a Product.

 

“Anti-Corruption Laws” has the meaning set forth in Section 20.1.

 

“API” means any key starting materials or active pharmaceutical ingredient or bulk drug substance ingredient(s) in a Product hereunder that are to be supplied by Buyer, which, for the Xiaflex Product is further detailed in Schedule 1, Part 1 of this Agreement and for any other Drug Product that becomes a Product under this Agreement, will be as detailed in the applicable PSS for such Product.

 

“API Cost” means, in respect of a particular API, Buyer’s per-liter costs in manufacturing and supplying such API to Supplier.

 

“Applicable Laws” means all laws, rules, regulations and guidelines of any Governmental Authority with jurisdiction over the manufacturing, exportation, importation, marketing, sale or distribution of each of the respective Products and/or the performance of a Party’s obligations under this Agreement, including specifically all GMP or similar standards or guidelines of the FDA and other applicable Regulatory Authorities and compendial guidelines (e.g., United States Pharmacopeia or European Pharmacopeia), as well as Export Control Laws, the FCPA and other Anti-Corruption Laws, in each case to the extent applicable to the performance of a Party’s obligations under this Agreement.

 

“Buyer” has the meaning given to such term in the Preamble.

 

“Buyer API Responsibility” means Finished Product non-conformity to applicable Specifications or other Technical Requirements due to API provided by Buyer to Supplier being non-conforming or defective and in respect of which Supplier performed all inspection required under the Technical Requirements and that was not detected prior to or at the time of the Manufacture of relevant Finished Product by Supplier.

 

 

“Buyer Indemnitee” has the meaning set forth in Section 17.1.

 

“Buyer Intellectual Property” means Intellectual Property that is (a) (i) Controlled by Buyer or its Affiliates as of the Effective Date, or (ii) developed solely by Buyer or its Affiliates and Controlled by Buyer or its Affiliates thereafter, and (b) reasonably necessary for Supplier to perform its obligations under this Agreement.

 

“Compliance Event” has the meaning set forth in Section 20.4.

 

“Confidential Information” means, with respect to a Disclosing Party, all non-public information of any kind whatsoever (including data, materials, compilations, formulae, models, patent disclosures, procedures, processes, projections, protocols, results of experimentation and testing, specifications, strategies, techniques and all non-public Intellectual Property as defined herein), and all tangible and intangible embodiments thereof of any kind whatsoever (including materials, samples, compositions, documents, drawings, patent applications, records and reports), that are disclosed by or on behalf of the Disclosing Party to the Receiving Party and/or its Representatives, including any and all copies, replication or embodiments thereof. Confidential Information of both Parties includes the terms, conditions and provisions of this Agreement and Protected Personal Information.

 

Notwithstanding the foregoing and except for Protected Personal Information, Confidential Information of a Disclosing Party shall not include information that the Receiving Party can establish by competent proof to have (a) been publicly known prior to disclosure of such information by the Disclosing Party to the Receiving Party, (b) become publicly known, without fault on the part of the Receiving Party, subsequent to disclosure of such information by the Disclosing Party to the Receiving Party, (c) been received by the Receiving Party from a source rightfully having possession of, and the right to disclose, such information free of an obligation of confidentiality, (d) been otherwise rightfully known by the Receiving Party prior to disclosure of such information by the Disclosing Party to the Receiving Party, or (e) been independently developed by employees or agents of the Receiving Party without the use of Confidential Information of the Disclosing Party.

 

“Controlled” means the legal or regulatory right (whether by ownership, license or otherwise) to grant access, right, title, a license or a sublicense to Intellectual Property without violating the terms of any Third Party agreement, court order, or other arrangement or legal obligation.

 

“Data Protection Laws” means all applicable data privacy, data protection, information security and other related laws, rules, regulations that are applicable to Protected Personal Information, including without implied limitation the General Data Protection Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data (and any updates or amendments thereto from time to time), and repealing Directive 95/46/EC.

 

 

“Defective Product” has the meaning set forth in Section 8.3.

 

“Diluent” means the Xiaflex diluent to be Manufactured and supplied as a stand-alone Finished Product hereunder (as compared to the diluent Manufactured and supplied as a component of the Xiaflex Product) in accordance with the terms of this Agreement (or the Diluent PSS), further details of which are included in Schedule 1, Part 1 hereto.

 

“Disclosing Party” means the Party disclosing Confidential Information hereunder to the other Party.

 

“Dollars” means United States Dollars.

 

“Drug Product” means a drug product, as defined in 21 C.F.R. § 314.3, for administration to human subjects.

 

“Effective Date” has the meaning given to such term in the Preamble.

 

“Existing Par Production Line” has the meaning set forth in Section 4.2

 

“Export Control Laws” means: (I) all applicable U.S. laws and regulations relating to (a) economic and trade sanctions and embargoes imposed by the Office of Foreign Assets Control of the U.S. Department of Treasury or (b) the export or re-export of commodities, technologies, or services, including the Export Administration Act of 1979, 24 U.S.C. §§ 2401-2420, the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701-1706, the International Traffic in Arms Regulations, 22 C.F.R. parts 120-130, the Trading with the Enemy Act, 50 U.S.C. §§ 1 et. seq., the Arms Export Control Act, 22 U.S.C. §§ 2778 and 2779, and the International Boycott Provisions of Section 999 of the U.S. Internal Revenue Code of 1986 (as amended); and (II) all applicable economic and trade sanctions and embargoes that may be imposed by a Governmental Authority with jurisdiction over a Party hereto.

 

“Facility” means the facility of Supplier located at 870 Parkdale Road, Rochester, MI 48307 Rochester, Michigan.

 

“FCPA” means the U.S. Foreign Corrupt Practices Act (15 U.S.C. Section 78dd-1, et. seq.) as amended.

 

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

 

“FD&C Act” means the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq.

 

“Finished Product” or “Finished Products” means, as the context requires, any or all of the Products hereunder in finished form that has been Manufactured, Labeled, Packaged and serialized.

 

 

“Firm Purchase Commitment” has the meaning set forth in Section 5.4.

 

“Firm Zone” has the meaning set forth in Section 5.4.

 

“Force Majeure Event” has the meaning set forth in Section 22.11.

 

“Forecast” has the meaning set forth in Section 5.4.

 

“GMP” means all current good manufacturing practices as may be applicable, including but not limited to: (a) as required by the provisions of 21 C.F.R., parts 210 and 211 and all applicable rules, regulations, orders and guidances of the FDA and other applicable Regulatory Authorities, and (b) ICH, Guidance for Industry Q7a Good Manufacturing Practice Guidance for Active Pharmaceutical Ingredients.

 

“Government Official” means (a) any officer, employee of a government or any department, agency or instrument of a government; (b) any person acting in an official capacity for or on behalf of a government or any department, agency, or instrument of a government; (c) any officer or employee of a company or business owned in whole or part by a government; (d) any officer or employee of a public international organization such as the World Bank or United Nations; (e) any officer or employee of a political party or any person acting in an official capacity on behalf of a political party; and/or (f) any candidate or relative of any candidate for political office.

 

“Governmental Authority” means any (i) nation, region, state, province, county, city or other jurisdiction, (ii) federal, state, local, municipal, foreign or other government or political subdivision thereof, (iii) governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal), whether foreign or domestic, or (iv) body exercising or entitled to exercise any executive, judicial, legislative, regulatory, self-regulatory or taxing authority or power of any nature, whether foreign or domestic, including any arbitral tribunal.

 

“Healthcare Entity” means any hospital, provider-sponsored organization, or any other kind of healthcare facility or organization that provides healthcare services, including the purchase, supply or administration of a medicinal or pharmaceutical product.

 

“Healthcare Professional” means any member of the medical, pharmacy or nursing professions or any other person who in the course of his or her professional activities may prescribe, purchase, supply or administer a medicinal or pharmaceutical product.

 

“Horsham Facility” has the meaning set forth in Section 10.8.

 

“Indemnitee” has the meaning set forth in Section 17.3.

 

“Indemnitor” has the meaning set forth in Section 17.3.

 

“Initial Term” has the meaning set forth in Section 18.1.

 

 

“Insolvency Event” means, with respect to a Party:

 

(a)

a voluntary case or proceeding under any applicable bankruptcy, insolvency, or other similar law is commenced by such Person, or such Person consents to the entry of an order for relief in an involuntary case or proceeding under any such law or against such Person, or such Person consents to the appointment of or taking possession by a receiver, liquidator, examiner, assignee, trustee, custodian, sequestrator, conservator, supervisor, rehabilitator (or other similar official) of such Person or for any material portion of such Person’s assets and properties, or such Person makes a general assignment for the benefit of creditors, or such Person fails generally to pay, or admits in writing its inability to pay, its debts as they become due or takes any company action in furtherance of the foregoing;

 

(b)

the commencement of an involuntary case or proceeding under any applicable bankruptcy, insolvency, or other similar law against such Person, and such case or proceeding is not dismissed within sixty (60) days;

 

(c)

the entry by a Governmental Authority having jurisdiction over such Person of a decree or order appointing a receiver, liquidator, examiner, assignee, custodian, trustee, sequestrator, conservator, supervisor, rehabilitator (or similar official) for such Person or for any material portion of such Person’s assets and properties, or ordering the winding-up, supervision, or liquidation of such Person’s affairs; or

 

(d)

the taking of any formal action by such Person, its board of directors (or similar governing body) or holders of its voting securities authorizing any of the foregoing.

 

“Intellectual Property” means all of the following: (a) patent applications, continuation applications, continuation-in-part applications, divisional applications, and United States patents corresponding to any of the foregoing that may grant or may have been granted on any of the foregoing, including reissues, re-examinations and extensions and any supplemental protection certificates, or the like, (b) all Know-How, work product, trade secrets, inventions (whether patentable or otherwise), data, processes, techniques, procedures, compositions, devices, methods, formulas, protocols and information, whether patentable or not, (c) copyrightable works, copyrights and applications, registrations and renewals, (d) logos, trademarks, service marks, and all applications and registrations relating thereto, (e) other proprietary rights, (f) any regulatory exclusivities or the like, and (g) copies and tangible embodiments of any one or more of the foregoing.

 

“Know-How” means all of the following: manufacturing protocols and methods, product specifications, analytical methods and assays, processes, product designs, plans, trade secrets, ideas, concepts, manufacturing information, engineering and other manuals and drawings, standard operating procedures, flow diagrams, chemical data, pharmacological data, pharmacokinetic data, toxicological data, pharmaceutical data, physical and analytical data, safety data, quality assurance data, quality control and clinical data, technical information, other data, and research records.

 

 

“Label,” “Labeled” or “Labeling” refers to such labels and other written, printed or graphic matter, (a) upon any container or wrapper utilized with Product, including serialization, or (b) accompanying Product, including Package inserts or any additional labeling services which may be agreed in an individual PSS in respect of a Product.

 

“Legislation” has the meaning set forth in Section 20.3.

 

“Liabilities” has the meaning set forth in Section 17.1.

 

“Manufacture,” “Manufactured” or “Manufacturing” means the operations performed by Supplier in the production of a Product into Finished Product hereunder in accordance with the Specifications, GMP and Applicable Law, which may include, as the context requires, any Manufacturing Services agreed in respect of a Product.

 

“Manufacturing Services” shall mean (A) in respect of Xiaflex Product, the Xiaflex Manufacturing Services and any additional services which may be agreed upon between the Parties in an individual PSS in relation to Xiaflex Product, or (B) in respect of any other Finished Product hereunder, any other manufacturing services not outlined in this Agreement but which may be agreed upon between the Parties in a separate PSS and subject to the terms and conditions of that PSS.

 

“Manufacturing Tech Transfer” has the meaning set forth in Section 7.3.

 

“Materials” means any materials, excipients, primary or secondary packaging, labels and other consumables, other than API, used in connection with a Finished Product hereunder.

 

“Minimum API Yield” means the minimum number of Sellable Units of Finished Product per volume of API, as set out in the table in Schedule 1, Part 1 in respect of each of Xiaflex Product and, in respect of any other Drug Product that becomes a Product under this Agreement, the minimum number, as detailed in the applicable PSS for such Product.

 

“NDA” means a New Drug Application, as defined in 21 U.S.C. § 355(b) et seq., and the regulations promulgated thereunder, as such application may be amended or supplemented from time to time.

 

“NDA/ANDA Filing” filing means any NDA or ANDA filing (as relevant) submitted by Buyer to FDA in respect of any of the Products/Finished Products hereunder.

 

“OFAC” has the meaning set forth in Section 20.3.

 

“Package,” “Packaged” or “Packaging” means all containers, including bottles, pails, vials, syringes, drums, cartons, shipping cases, or any other like matter used in packaging or accompanying each or any of the Products hereunder and any additional packaging requirements as may be agreed between the Parties in a particular PSS relating to a particular Product.

 

 

“Party” means Buyer or Supplier, as applicable, and “Parties” means both Buyer and Supplier.

 

“Person” means an individual, corporation, partnership, limited liability company, firm, association, joint venture, estate, trust, governmental or administrative body or agency, or any other entity.

 

“Proceedings” means governmental, judicial, administrative or adversarial proceedings (public or private), litigation, suits, patent oppositions, arbitration, disputes, claims, causes of action or investigations.

 

“Process” or “Processing” means the compounding, filling and production of the API and Materials into and packaging, Labeling and visual inspection of, a Product, in accordance with GMP, the Specifications, the Technical Dossier and the terms of this Agreement (and the Quality Agreement).

 

“Products”, as of the Effective Date, has the meaning given in Schedule 1, Part 1 of this Agreement and, thereafter, shall include any other Drug Product that becomes a “Product” under this Agreement in accordance with Section 1.1 above; references to a Product or Products include such Product(s) as Finished Products.

 

“Product Intellectual Property” means all Intellectual Property developed or held and/or Controlled by Buyer, in relation to a Product or Finished Product hereunder or the manufacturing thereof.

 

“Product Regulatory Approvals” means the Regulatory Approvals from the FDA of the NDA/ANDA Filings (as applicable) in respect of each Product/Finished Product hereunder and includes and any and all updates, supplementary filings or amendments related thereto.

 

“Protected Personal Information” means information relating to an identified or identifiable natural person that is (a) provided by one Party to the other Party in connection with this Agreement and (b) protected under Data Protection Laws.

 

“PSS” means (a) in respect of Xiaflex Product, a product scope supply agreement entered into hereunder and agreed between the Parties which is substantially in the form set out in Schedule 1, Part 2 (a “Xiaflex PSS”); (b) in respect of the Diluent, a product scope supply agreement entered into hereunder and agreed between the Parties which is substantially in the form set out in Schedule 1, Part 3 (a “Diluent PSS”); or (b) in respect of any Product (other than Xiaflex Product or Diluent), a product scope supply agreement entered into hereunder and agreed between the Parties which is substantially in the form set out in Schedule 3 and more particularly describes any additional Manufacturing Services to be supplied by Supplier to Buyer (to the extent agreed) in respect of such Finished Product, as well as any other usual and customary terms.

 

“Purchase Price” has the meaning set forth in Section 5.1.

 

 

“Quality Agreement” has the meaning set forth in Section 10.3.

 

“Receiving Party” means the Party receiving Confidential Information hereunder from the other Party.

 

“Regulatory Approval” means the applicable approval(s) necessary to market the respective Products/Finished Products and/or an active pharmaceutical ingredient, including all applicable product and/or establishment licenses, registrations, permits or other authorizations as may be necessary for the commercial manufacture, commercialization, use, storage, importation, transport, pricing, distribution or sale thereof.

 

“Regulatory Authority(ies)” means the Governmental Authority(ies) in the Territory with authority over the manufacture, market approval, sale, distribution, packaging or use of a Product/Finished Product in the Territory (including the grant of Regulatory Approval).

 

“Renewal Term” has the meaning set forth in Section 18.1.

 

“Representatives” has the meaning set forth in Section 14.1.

 

“Required Dating Months” means in respect of each API relating to each Product hereunder, the number of months remaining prior to the expiry of such API, which for API relating to Xiaflex Product shall be six (6) months and for any other API for any other Product, the amount of Required Dating Months that are specified in such relevant PSS in respect of such Product.

 

“Required Finished Product Shelf Life” means in respect of each Finished Product hereunder, the amount of shelf life that such Finished Product shall have at time of delivery by Supplier, as detailed in respect of each of Xiaflex Product and Diluent as Finished Product, in Schedule 1, Part 1 and with respect to any other Drug Product that becomes a Product under this Agreement, as detailed in the applicable PSS for such Product, as Finished Product.

 

“Required Lead Time” means in respect of each Finished Product, the amount of lead time required between the order and delivery of such Finished Product, as detailed in respect of each of Xiaflex Product and Diluent as Finished Product in Schedule 1, Part 1 and with respect to any other Drug Product that becomes a Product under this Agreement, as detailed in the applicable PSS for such Product.

 

“Security Incident” has the meaning set forth in Section 14.8(b).

 

“Sellable Unit” has the meaning set out in the table in Schedule 1, Part 1 in respect of each of Xiaflex Product and Diluent as Finished Product hereunder and with respect to any other Drug Product that becomes a Product under this Agreement, as detailed in the applicable PSS for such Product.

 

“Specifications” means the specifications for the manufacture of a Product hereunder (a) as set forth in the applicable NDA/ANDA Filing for such Product (or relevant Product Regulatory Approval) submitted for Regulatory Approval as amended from time to time, (b) as set forth in a Quality Agreement in respect of such Product, or (c) as provided in writing by Buyer or its Affiliate to Supplier, in each case subject to and as revised pursuant to Section 10.5 or 10.6. As and applicable, Specifications will include specifications for API.

 

 

“Supplier” has the meaning given to such term in the Preamble.

 

“Supplier Indemnitee” has the meaning set forth in Section 17.2.

 

“Supplier Improvement” means all Intellectual Property created, conceived or otherwise developed by or for Supplier (including via any of its Affiliates or sub-contractors) after the Effective Date (i) with the use of any Product Intellectual Property or other Buyer Intellectual Property, (ii) that would be infringed, misappropriated or otherwise violated by the use or commercialization of any Product or Finished Product Manufactured and supplied to Buyer hereunder or any other Drug Product that includes the API or (iii) that is created, conceived or otherwise developed in connection with Supplier’s performance (directly or via any Affiliates or sub-contractors) of Manufacturing Services or other obligations under this Agreement and that is used in connection with the Manufacture of any Products or that otherwise relates to any Products or API.

 

“Supplier Intellectual Property” means all Intellectual Property (i) owned or Controlled by Supplier as of the Effective Date of this Agreement; or (ii) developed by Supplier or its Affiliates and Controlled by Supplier or its Affiliates thereafter, provided that such Intellectual Property was developed independently of this Agreement and without the use of any Product Intellectual Property or other Buyer Intellectual Property and is not otherwise a Supplier Improvement.

 

“Supplier Recall Responsibility” has the meaning set forth in Section 12.1.

 

“Technical Dossier” means, in respect of a particular Product, the document or documents that detail the chemical, manufacturing and controls information applicable to such Product and its Manufacture, including as set forth in any applicable Regulatory Approval for such Product.

 

“Term” has the meaning set forth in Section 18.1.

 

“Territory” means the United States of America, and its commonwealths, territories, districts and possessions, including the District of Columbia, Commonwealth of Puerto Rico; and any installation, territory, location or jurisdiction under the purview of the FDA or control of the United States government; and any United States military bases and installations worldwide.

 

“Third Party” or “Third Parties” means any Person other than a Party or its Affiliates.

 

“Xiaflex Manufacturing Services” means the following manufacturing services which are agreed to be provided by Supplier to Buyer in the Supplier’s Manufacture of Xiaflex Product hereunder: (i) API ID testing (in 30 day cycle time); (ii) sterility, in-process, bioburden testing at the Facility; (iii) drug product and diluent production and drug filling; and (iv) any other manufacturing services agreed between the Parties in a Xiaflex PSS or the Quality Agreement.

 

“Xiaflex Product” means the Xiaflex product to be Manufactured into a Finished Product hereunder in accordance with the terms of this Agreement (or a Xiaflex PSS), further details of which are included in Schedule 1, Part 1 hereto.

 

 

 

Exhibit 10.5

 

AMENDED AND RESTATED MULTI-TENANT LEASE AGREEMENT

 

THIS AMENDED AND RESTATED MULTI-TENANT LEASE AGREEMENT (this “Lease”) is entered into as of November 1, 2025 (the “Effective Date”), between Mallinckrodt LLC, a Delaware limited liability company (“Landlord”), and ST Shared Services LLC, a Delaware limited liability company (“Tenant”).

 

W I TN E S S E T H:

 

WHEREAS, Landlord is the owner of a corporate campus located at 675 James S. McDonnell Boulevard, Hazelwood, Missouri 63042, which consists of approximately 158.09 acres of real property described on Exhibit A attached hereto (the “Land”) together with all buildings, improvements, fixtures, equipment, furniture, and appurtenances, awards, licenses, permits and all other rights, benefits and personal (other than the Retained Personal Property, as defined below) or real property of any kind or type whatsoever located thereon or used in connection therewith, and subject to the existing easements, servitudes, licenses, reservations and rights-of-way thereon (collectively, the “Campus”);

 

WHEREAS, the Campus contains the following buildings (collectively, the “Buildings”): (a) Building 10, which contains approximately 114,500 square feet of space (“Building 10”) and is shown on Exhibit A-1; (b) Building 20, which contains approximately 106,500 square feet of space (“Building 20”) and is shown on Exhibit A-1; (c) Building 30, which contains approximately 31,000 square feet of space; (d) Building 55; (e) a maintenance shed; and (f) a security guard building located at the entrance to the parking lot for the Campus;

 

WHEREAS, Landlord and Tenant are parties to that certain Net Lease Agreement dated July 13, 2020, as amended by that certain First Amendment to Lease dated June 24, 2025 (collectively, the “Original Lease”), pursuant to which Landlord leases the Campus to Tenant;

 

WHEREAS, as of November 1, 2025 (the “Commencement Date”), Tenant will lease only the following portion of the Campus containing approximately 124,172 square feet (the “Premises”): (i) all of the area on the second floor of Building 10 that is shown in green on Exhibit B, including Suite 201 containing approximately 7,563 rentable square feet (the “Suite 201 Premises”), Suite 202 containing approximately 7,535 rentable square feet (the “Suite 202 Premises”), Conference Room 235, the external audit room, the mini suites and the supply room (collectively, the “Building 10 Premises”), and (ii) all of Building 20;

 

WHEREAS, Landlord, at its sole cost and expense, shall complete the work necessary to demise the Suite 201 Premises and the Suite 202 Premises from the rest of the second floor of Building 10 and performed other work necessary to convert Building 10 into a multi-tenant building (the “Demising Work”), which Demising Work is more particularly described on Exhibit C;

 

WHEREAS, Tenant is the owner of certain personal property listed on Exhibit D (the “Retained Personal Property”) it uses in connection with its operations located at the Premises;

 

WHEREAS, Landlord and Tenant desire to convert the Original Lease into this Lease to reflect how the Campus will be managed and occupied after the area leased by Tenant is revised from the Campus to the Premises;

 

WHEREAS, the board of directors of Mallinckrodt plc, a public limited company incorporated in Ireland (“ParentCo”) previously determined that it was in the best interests of ParentCo and its shareholders to enter into the Original Lease and to complete certain internal reorganizations to separate the business of Landlord from the business of Tenant;

 

 

WHEREAS, Landlord and Tenant intend to separate into unrelated companies, and this Lease is necessary in order to facilitate and provide for an orderly transition of such separation; and

 

WHEREAS, as of the Commencement Date, Landlord and Tenant desire to amend, restate and supersede the Original Lease in its entirety as set forth in this Lease, and Tenant will vacate the portion of the Campus that is not included within the Premises.

 

NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants and agreements in this Lease, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby enter into this Lease as of the Effective Date, and amend and restate the Original Lease in its entirety as of the Commencement Date.

 

1.

Lease of Premises; Completion of Demising Work.

 

(a)           As of the Commencement Date, Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the Premises. The lease of the Premises includes the right to use, in common with others, the Common Areas (defined below). For purposes of this Lease, the term “Common Areas” means all areas of the Campus that are for the general use of occupants and tenants of the Campus, including without limitation, the lobby of Building 10, parking areas (subject to the terms of this Lease), outdoor plazas and walking trails within the Campus, streets, driveways, sidewalks, curbs, delivery passages, loading docks, corridors, elevators and elevator foyers, stairwells, entrances, lobbies, restrooms, amenity areas, vending rooms and other similar areas of the Campus to the extent designated by Landlord from time to time for the common use of all tenants or occupants of the Campus. Notwithstanding the foregoing, the term “Common Areas” shall exclude any portions of the Campus that Landlord deems “leasable areas” or not for general use of all occupants and tenants (including without limitation restrooms in leased areas or reserved parking areas). Tenant shall comply with all reasonable rules and regulations with respect to the Common Areas established by Landlord from time to time, including, without limitation, the rules and regulations set forth on Exhibit E attached hereto.

 

(b)            Landlord shall use commercially reasonable efforts to complete the Demising Work as soon as practicable after the Effective Date of this Lease, but in no event later than December 31, 2025. Landlord shall complete the Demising Work using contractors selected by Landlord, in a good and workmanlike conduct, and in accordance with all applicable laws. Tenant shall reasonably cooperate with Landlord and its contractors to enable the efficient performance of the Demising Work. Tenant acknowledges that the Demising Work may be performed during Normal Building Hours, and that during the performance of the Demising Work, Tenant and the Premises may be subject to noise, dust, odors and vibrations, none of which will subject Landlord to any claim for damages, breach of the covenant of quiet enjoyment or constructive eviction.

 

2.

Term.

 

(a)           The term of this Lease shall commence on the Commencement Date and shall expire (unless renewed in accordance with Section 2(c) hereof) at 11:59 p.m. on the date that is the earlier of (a) October 31, 2027, and (b) any earlier termination of this Lease pursuant to any provision hereof (as the same may be extended, the “Term”).

 

(b)            Tenant shall have the right to terminate this Lease at any time on six (6) months’ advance written notice to Landlord.

 

 

(c)           Tenant shall have the one time right and option to reduce the Premises by removing either (i) all of the Building 10 Premises or (ii) Building 20, which contraction, if Tenant exercises this option, shall be effective as of the Contraction Date (defined below). The portion of space removed from the Premises (i.e., either the Building 10 Premises or Building 20) is the “Contraction Space”. If Tenant desires to exercise this contraction option, then Tenant must provide written notice to Landlord (“Contraction Notice”) and specify the effective date of such contraction, which date must be at least one hundred eighty (180) days after the date of Landlord’s receipt of the Contraction Notice (the “Contraction Date”). Such Contraction Notice must also specify whether the Contraction Space is the Building 10 Premises or Building 20. If Tenant exercises this contraction option and the Contraction Space is the Building 10 Premises, then as of the Contraction Date, the Premises shall be Building 20, Tenant shall have 40 parking spaces, the Rent shall be $2,581,861 and Tenant shall remove all signage that was installed by Tenant in Building 10. If Tenant exercises this contraction option and the Contraction Space is Building 20, then as of the Contraction Date, the Premises shall be the Building 10 Premises, Tenant shall have 80 parking spaces, the Rent shall be $434,489, the references to Building 20 shall be deleted from Section 8 and Section 18 of this Lease, and Tenant shall remove all signage that was installed by Tenant on or in Building 20. On or before the Contraction Date, Tenant shall surrender the Contraction Space in the required condition and in accordance with this Lease. After the Contraction Date, any reference to the “Premises” in this Lease shall refer to the Premises minus the Contraction Space, and neither party shall have any rights or obligations with respect to the Contraction Space after the Contraction Date.

 

(d)           The Term may be extended by Tenant for up to three (3) renewal terms (each, a “Renewal Term”) of one (1) year each if: (i) at least three (3), but not more than six (6) months prior to the end of the then current Term, Tenant delivers to Landlord a “Renewal Notice” that Tenant desires to exercise its right to extend this Lease for such Renewal Term; and (ii) no Event of Default by Tenant shall have occurred and be continuing on the date Landlord receives such Renewal Notice or on the last day of the then current Term. During any such Renewal Term, except as otherwise specifically provided for herein, all of the terms and conditions of this Lease shall remain in full force and effect. For the avoidance of doubt, Tenant shall continue to pay the same Rent during a Renewal Term.

 

3.

Rent.

 

(a)           Gross rent during the Term shall be $2,852,003 per annum (the “Rent”), payable in advance in quarterly installments of $713,000, due on the first business day of each calendar quarter, prorated for any partial quarter during the Term, with the Rent through the end of the first calendar quarter of the Term being due on the Commencement Date.

 

(b)           It is the purpose and intent of Landlord and Tenant that the Rent hereunder shall be a gross amount of all expenses, costs fees, Impositions and taxes incurred for the Premises, unless Tenant requests extra services

 

(c)           Tenant hereby acknowledges that any non-payment by Tenant of Rent could cause Landlord to incur costs not contemplated hereunder, the exact amount of which is presently anticipated to be extremely difficult to ascertain. Accordingly, if any Rent is not paid when due, then Tenant shall pay Landlord on demand a late charge equal to three percent (3%) of the delinquent amount. The parties agree that the late charge represents a fair and reasonable estimate of the costs that Landlord will incur by reason of late payment by Tenant. The parties further agree that such late charge does not constitute a lender or borrower/creditor relationship between Landlord and Tenant. The payment of such late charge shall not constitute waiver of, nor excuse or cure, any default under this Lease, nor prevent Landlord from exercising any other rights and remedies available to Landlord. Notwithstanding the foregoing, the aggregate amount of late charges shall not exceed the maximum amount permitted by law; and Tenant has no obligation to pay a late charge unless Landlord has given Tenant at least five (5) days written notice of the delinquent payment (which may be given at any time during the delinquency) and Tenant fails to cure the outstanding payment within that time period.

 

 

4.             Impositions. During the Term, Landlord shall timely pay all taxes (including, without limitation, all ad valorem property taxes against the Campus, and, sales and use, occupancy, single business, gross receipts, transaction privilege, rent or similar taxes as the same relate to or are imposed upon Landlord or the Campus), assessments (including, without limitation, all assessments for public improvements or benefit, whether or not commenced or completed prior to the Commencement Date and whether or not to be completed within the Term), water, sewer or other rents and charges, excises, tax inspection, authorization and similar fees and all other governmental charges, in each case whether general or special, ordinary or extraordinary, or foreseen or unforeseen, of every character in respect of the Campus (collectively, “Impositions”). Landlord shall pay all such Impositions as the same become due and payable and before any fine, penalty, interest or cost may be added for non-payment (and shall pay all such fines, penalties, interest and costs), such payments to be made directly to the taxing or other authorities where feasible. Tenant shall be responsible for and shall pay before delinquent all municipal, county, federal or state taxes coming due during the Term against Tenant’s interest in the Retained Personal Property or against any other personal property owned by Tenant and placed in, upon or about the Premises by Tenant.

 

5.             Use of Premises. Tenant may occupy and use the Premises for any lawful purpose consistent with its past practice and use immediately prior to the Commencement Date of this Lease. Tenant shall have access to the Premises twenty-four (24) hours per day, seven (7) days per week, three hundred sixty-five (365) days per year, subject to the terms and conditions set forth in this Lease. Tenant shall comply with all laws, regulations and ordinances from time to time concerning the Premises or the use thereof. Tenant shall not do, bring, or keep anything in or about the Premises that may reasonably be expected to cause a cancellation of or increase in premium for any insurance covering the Premises. Tenant shall be obligated to comply with any law with respect to its use of the Premises and shall not use the Premises in any manner that would reasonably be expected to constitute waste or nuisance or in a manner inconsistent with past use that would reduce the saleable value of the Premises. Landlord shall be solely responsible for compliance with the Americans with Disabilities Act of 1990, as amended, and any similar state or local requirements (collectively, the “ADA”) with respect to all portions of the Campus outside of the Premises, including all Common Areas; and Tenant shall be responsible for compliance with the ADA with respect to the Premises. As used in this Lease, the word “law” shall mean any judicial decision, statute, constitution, ordinance, resolution, regulation, rule, administrative order, or other requirement of any municipal, county, state, federal, or other governmental agency or authority having jurisdiction over the parties or the Campus in effect either as of the Effective Date of this Lease or at any time during the Term, including, without limitation, any regulation or order of a quasi-official entity or body (e.g., the board of fire examiners or public utilities).

 

6.             Condition of the Premises. Tenant acknowledges receipt and delivery of possession of the Premises. Tenant has examined and otherwise has knowledge of the condition of the Premises and has found the same to be satisfactory for its purposes hereunder. Except as expressly set forth in this Lease, Tenant agrees to take the Premises in its present condition “as is”, “where is” and “with all faults”, and acknowledges and agrees that Landlord has not made, is not making and will not make any warranty or representation of any kind, express or implied, in law or by contract, including any warranties regarding design, condition or fitness for use or otherwise, with respect to the use, state of title, liens or encumbrances, nature, physical or environmental condition, suitability for use or any other matter of the Premises or any portion thereof.

 

7.

Maintenance and Repairs.

 

(a)            Landlord, at its sole cost and expense, shall maintain the Campus (except as expressly provided in Section 7(b) below) in a good and clean condition consistent with past practice and in substantially the same condition as of the Effective Date. Landlord shall promptly make all repairs, maintenance and replacements necessary to so maintain the Campus, including without limitation the Common Areas, heating, ventilation and air-conditioning systems and all other mechanical, electrical, and plumbing facilities and equipment serving the Buildings and Campus, exterior walls, roof, foundation, plumbing and wiring in the Buildings, all structure of the Buildings, windows, lobbies and entrances, drive lanes, sidewalks, landscaping, parking areas and all other parts of the Campus and the Buildings other than the Premises. All maintenance and repairs shall be performed in a good and workmanlike manner to a standard not less than the condition of the Premises as of the Effective Date.

 

 

(b)           Except for systems that service other parts of Building 10, Building 20 or the Campus, as applicable, and except for all components and portions of the Building 10, Building 20 and the Campus that Landlord is required to maintain, repair or replace pursuant to this Lease, Tenant, at its sole cost and expense, shall maintain the Premises consistent with past practice and in substantially the same condition as of the Effective Date, and make all repairs and replacements necessary to so maintain the Premises, reasonable wear and tear and casualty excepted (the “Maintenance and Repair Standard”). If Tenant fails to commence necessary maintenance or repairs to the Premises within ten (10) days’ written notice from Landlord and prosecute their completion in a diligent manner, then Landlord may enter the Premises and perform such repair and maintenance on behalf of Tenant. Upon completion thereof, Tenant shall pay Landlord’s costs for making such repairs plus ten percent (10%) for overhead, upon presentation of an invoice therefor.

 

(c)           In the event of a dispute under this Section 7, such dispute shall be settled by arbitration conducted by a single arbitrator mutually acceptable to Landlord and Tenant in St. Louis, Missouri in accordance with the then-existing Rules of Arbitration of the International Chamber of Commerce. If the parties fail to agree on the selection of an arbitrator within thirty (30) days of the receipt of the request for arbitration, the parties shall request the International Chamber of Commerce to make the appointment. The arbitrator shall be a lawyer admitted to the practice of law in the State of Missouri. All other terms of and performance under this Lease shall continue if reasonably possible during any arbitration proceedings.

 

8.             Alterations. Tenant shall not make any alterations to the Premises that either (i) are structural in nature, or (ii) exceed a cost of $100,000, in either case, without prior written consent of Landlord, such consent to not be unreasonably withheld, delayed or conditioned. Tenant shall have the right without prior written consent of Landlord, to perform nonstructural alterations to the exterior of Building 20 and the interior of the Premises, consistent with past use and practice that do not exceed a cost of $100,000. Tenant shall make any such alterations approved by Landlord, or such alterations that do not require the consent of Landlord, in a lien-free and good and workmanlike manner in compliance with all applicable laws and shall pay all costs and expenses incurred in connection with such alterations. All alterations, additions, substitutions and leasehold improvements (other than those Tenant notifies Landlord shall be treated as Retained Personal Property, it being agreed that any and all alterations after the Effective Date hereof comprising of fixtures will not be removed at the end of Term) made and installed for Tenant pursuant to this Section, shall become Landlord’s property at the expiration or earlier termination of the Term. Notwithstanding the foregoing, Tenant shall have the right to remove from the Premises prior to the expiration of the Term any movable trade fixtures and furniture as long as (i) Tenant is not then in an Event of Default hereunder and (ii) the removal will not cause any damage to the Premises or as long as Tenant repairs any damage caused by such removal.

 

9.

Liens.

 

(a)           Tenant shall pay all costs for construction, work or services done by it or caused to be done by it on the Premises, and Tenant shall keep the Premises free and clear of all liens and encumbrances resulting from or purported to be due for, any labor, services, materials, supplies, or equipment furnished to or for Tenant in, upon or about the Premises. Tenant agrees, subject to Tenant’s right to contest the correctness or the validity of any such lien or encumbrance as set forth in Section 9(b) below, to discharge of record (either by payment or by bonding over or otherwise) any mechanics’, materialmen’s, or other lien against the Premises and/or Landlord’s interest therein, which liens may arise out of any payment due for, or purported to be due for, any labor, services, materials, supplies, or equipment furnished to or for Tenant in, upon or about the Premises. If Tenant shall fail to cause such lien to be discharged or bonded within sixty (60) days after being notified of the filing thereof, and Tenant is not contesting such liens as set forth in Section 9(b) below, then, in addition to any other right or remedy of Landlord, Landlord may bond over the same, and the amount so paid by Landlord to do so, including reasonable attorneys’ fees incurred by Landlord either in defending against such lien or in procuring the bonding of such lien, shall be paid by Tenant to Landlord upon demand.

 

 

(b)           Notwithstanding the foregoing, Tenant may contest the validity of any liens so long as (i) Tenant notifies Landlord in writing that it intends to contest such liens, (ii) Tenant provides Landlord with an indemnity, bond or other security reasonably satisfactory to Landlord assuring the discharge of Tenant’s obligations for such liens, including interest and penalties, in an amount no greater than one hundred ten percent (110%) of the contested amount, and (iii) Tenant is diligently contesting the same by appropriate legal proceedings in good faith and at its own expense.

 

10.           Utilities and Services. Landlord shall be solely responsible for obtaining, maintaining and furnishing to the Common Areas and the Premises gas, electricity, water and sewer, trash collection and any other utilities or services used at the Premises during the Term and consistent with its past practice and use immediately prior to the Effective Date of this Lease (the “Utilities”). In addition to the Utilities, Landlord will furnish the following services, which, unless specific provision is made therefor, shall be of the manner and at levels customary for similarly-situated buildings: (a) elevator service, hot and cold water for lavatory and drinking purposes (at all points of supply for drinking, pantry, kitchen and lavatory purposes), and electricity, (b) janitorial and cleaning services on weekdays after Normal Building Hours (defined below) (excluding the Holidays defined below), (c) building security for the Premises on a 24/7 basis, with after-hours access via card reader, and (d) heating, ventilation and air conditioning (“HVAC”) as necessary for the comfortable use and occupancy of the Premises between 8:00 a.m. and 6:00 p.m. on Monday through Friday and between 8:00 a.m. and 1:00 p.m. on Saturday (“Normal Building Hours”), except on New Year’s Day, Memorial Day, Fourth of July, Labor Day, Thanksgiving Day, the day after Thanksgiving Day, and Christmas Day (“Holidays”). Tenant may request from time to time, and Landlord shall furnish, HVAC service on days and at times other than Normal Building Hours. Tenant agrees to reimburse Landlord for the actual cost of this after-hours service within thirty (30) days of receipt of invoice for the same from Landlord. Tenant is responsible, at its sole cost and expense, for its data and telephone services. If Tenant wishes to install a separate security system or additional security equipment for the Premises, then such system or equipment must be compatible with the access control systems for the Building, and Tenant will be solely responsible for any costs incurred in the installation of such system or equipment. Landlord shall keep and maintain the Common Areas in good working order and good condition and repair at all times. If any Utilities are suspended or curtailed due to accident, emergency, mechanical breakdown or any other cause, Landlord will use commercially reasonable efforts to restore the services with reasonable dispatch, but Landlord will not have liability for the curtailment or suspension of services that are outside of Landlord’s reasonable control. Notwithstanding the foregoing, if (i) any service to be furnished under this Lease is interrupted because of the acts of Landlord, its employees, agents or contractors; (ii) such interruption is not caused by a fire or other casualty governed by Section 13 hereof; and (iii) as a result of such interruption, all or a material portion of the Premises is rendered untenantable (meaning that Tenant is unable to use all or a portion of the Premises in the normal course of its business), then Tenant’s sole remedy for such interruption shall be as follows: on the third (3rd) consecutive business day following the date the Premises (or material portion thereof) becomes untenantable, the Rent payable hereunder shall be abated on a per diem basis for each day after such three (3) business day period based upon the percentage of the Premises rendered untenantable, and such abatement shall continue until the date the Premises become tenantable again.

 

 

11.

Indemnity.

 

(a)           To the fullest extent permitted by law, but subject to Section 12(e) of this Lease, Tenant shall indemnify, protect, defend, release and hold Landlord and its directors, shareholders, investment managers, partners, lenders, members, managers, contractors, affiliates, employees, trustees, principals, beneficiaries, officers, mortgagees and agents (each a “Landlord Party” and collectively, “Landlord Parties”) harmless from all liabilities, obligations, claims, damages, penalties, causes of action, costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) brought by third parties (collectively, “Losses”), imposed upon or incurred by or asserted against Landlord Parties to the extent arising from (i) any occurrence or activity permitted or suffered by Tenant in the Premises, (ii) the negligence or intentional acts or omissions of Tenant or any Tenant Parties (defined below) in connection with the use or occupancy of the Premises or the Campus; and (iii) any breach or default on the part of Tenant under this Lease, except and to the extent any of the foregoing are caused by the negligence or intentional misconduct of the Landlord Parties.

 

(b)           To the fullest extent permitted by law, but subject to Section 12(e) of this Lease Landlord shall indemnify, protect, defend, release and hold Tenant and its directors, shareholders, investment managers, partners, members, managers, affiliates, employees, trustees, principals, beneficiaries, officers (each a “Tenant Party” and collectively, “Tenant Parties”) harmless from all Losses imposed upon or incurred by or asserted against Tenant Parties to the extent arising from (i) the negligence or intentional acts or omissions of Landlord or any Landlord Parties, and (ii) any breach or default on the part of Landlord under this Lease, except and to the extent any of the foregoing are caused by the negligence or intentional misconduct of the Tenant Parties.

 

12.

Insurance.

 

(a)           Tenant’s Insurance. Tenant agrees to maintain, at its own cost and expense, in full force and effect from the Commencement Date throughout the Term, and thereafter so long as Tenant is in occupancy of any part of the Premises, the following insurance policies:

 

i.            Commercial General Liability insurance written on an occurrence basis, including coverage for bodily injury (including death and mental anguish), broad form property damage, products-completed operations hazard and contractual liability coverage. Such coverage shall be written on an occurrence basis and allow for severability of interest. The minimum limits of liability of such insurance shall be $1,000,000 per occurrence, $2,000,000 annual aggregate per location, and $1,000,000 personal and advertising injury. Tenant shall name Landlord as an additional insured, and such insurance shall be written on a primary basis and will not contribute with supplemental coverage that may be maintained from time to time by Landlord or any additional insured.

 

ii.           Workers’ compensation and employers’ liability insurance. The limit of liability as respects Employers’ Liability coverage shall be no less than $1,000,000 per accident, $1,000,000 per disease, and $1,000,000 policy limit.

 

iii.         Automobile liability insurance in the amount of $1,000,000 combined single limit per occurrence or bodily injury and property damage, providing coverage for any owned, non- owned, or hired automobiles.

 

iv.         Umbrella/excess liability in the amount of $10,000,000 written on a follow-form basis. Tenant shall by specific endorsement or otherwise cause the umbrella/excess policy to be first tier umbrella coverage and sit in excess of the primary coverage afforded within Section 12(a)(i) of this Lease. Such umbrella/excess liability policy(ies) must be endorsed or otherwise provide that such umbrella/excess liability policy(ies) is primary and non- contributory with any other insurance on which Landlord, or the additional insureds is or required herein to be an insured whether such other insurance is primary excess, self-insurance, or insurance on any other basis.

 

 

v.          Property damage insurance written on all-risk or special form basis in an amount at least equal to the full replacement cost of Tenant’s personal property and fixtures of Tenant (including, without limitation, the Retained Personal Property) and all improvements, additions or alterations made by Tenant to the Premises after the Commencement Date. Landlord will be added as a loss payee only to the extent of its interest in improvements, additions or alterations made by Tenant to the Premises after the Commencement Date. Such property insurance will provide protection against loss by fire and other casualties and risks, including, but not limited to, fire, lightning, explosion, windstorm or hail, smoke, aircraft. or vehicles, riot or civil, commotion, vandalism, sprinkler leakage, fire following earthquake, sinkhole, collapse, volcanic action, falling objects, weight of snow, ice or sleet, water damage, earthquake, and flood. Tenant shall also maintain business interruption on the same all-risk and special cause of loss form with minimum limits at least equal to the rental value of the Premises for twelve (12) months.

 

vi.         In the event Tenant performs any major repairs or alterations in the Premises, builders risk insurance shall be procured by Tenant or its contractors on an all-risk or special form basis in accordance with the provisions of Section 12(a)(v) of this Lease. Such insurance shall either be written on a completed value form or full replacement cost basis, covering all work, materials, and equipment incorporated in or about the Premises.

 

vii.        If Tenant shall hire or bring a contractor onto the Premises to perform any alterations, work or improvements, Tenant agrees to require said contractor to carry Commercial General Liability (including professional liability in respect of any professional design and engineering) insurance written on an occurrence basis, in an amount not less than $1,000,000 and otherwise shall satisfy all the provisions in this Section 12(a) and Sections 12(b) and 12(c). Landlord, Tenant, and all other applicable additional insureds required within this Lease shall be included as additional insureds under the contractor’s insurance liability policies.

 

(b)           Other Insurance Matters. All the insurance required under this Lease to be provided by Tenant shall comply with all of the following requirements:

 

i.            Be underwritten by insurance companies licensed to do business in the state in which the Premises are located and shall have an A.M. Best rating of not less than A-VIII.

 

ii.           All deductibles and self-insured retentions shall be in commercially reasonable amounts and the sole responsibility of Tenant.

 

iii.          The limits required of Tenant herein are minimum limits only and not intended to restrict the liability imposed on Tenant in connection with this Lease.

 

iv.         If Tenant maintains broader coverage and/or higher limits than the minimums shown above, Landlord shall automatically be entitled to the broader coverage and/or higher limits maintained by Tenant. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to Landlord.

 

v.          Insurance limits can be provided through any combination of primary and umbrella/excess policies.

 

(c)           Evidence of Insurance. A valid certificate of each policy to be provided by Tenant hereunder, together with evidence of payment of premium, shall be deposited with Landlord at the Commencement Date of the Term, and thereafter upon request from Landlord (but no more than once per year).

 

 

(d)           Landlord’s Insurance. All insurance maintained by Landlord shall be at Landlord’s sole cost and expense. Landlord shall keep in force throughout the Term (“Landlord’s Insurance”) ISO causes of loss—special form (formerly “all risk”) policies of insurance covering loss or damage to the Campus in an amount equal to the full replacement cost of the Buildings and all related improvements (collectively, the “Insurable Improvements”), which shall provide protection against loss by fire and other all-risk casualties including explosion, windstorm, hail, vandalism, earthquake and flood; and (ii) commercial general liability insurance against claims for bodily injury, personal injury, death or property damage occurring on, in or about the Buildings, Common Areas, and Campus, or as a result of ownership of improvements located at the Campus in an amount not less than $1,000,000 for any one occurrence, with a general aggregate limit of $3,000,000. Landlord shall not be obligated to insure, and shall have no responsibility whatsoever for any damage to, any furniture, machinery, goods, inventory or supplies, or other personal property or fixtures that Tenant may keep or maintain in the Premises, or any leasehold improvements, additions or alterations constructed by Tenant within the Premises.

 

(e)           Waiver of Subrogation. Landlord hereby releases Tenant, and its employees, agents and representatives, from any claims for damage to any person or to the Campus and to the fixtures, personal property, improvements, and alterations in or on the Campus that are caused by or result from risks insured against under any insurance policies carried by Landlord and in force at the time of any such damage (or is required to be insured against under the terms of this Lease). Tenant hereby releases Landlord, and its employees, agents and representatives, from any claims for damage to any person or to the Premises and to the fixtures, personal property, improvements, and alterations in or on the Premises that are caused by or result from risks insured against under any insurance policies carried by Tenant and in force at the time of any such damage (or is required to be insured against under the terms of this Lease). Where permitted by law Landlord and Tenant shall cause each insurance carrier to waive all right of recovery by way of subrogation against the other in connection with any damage covered by any policy. In no event shall Landlord or Tenant be liable to the other for any damage, liability or injury caused by fire or any of the risks insured against under any insurance policy required by this Lease.

 

13.           Damage or Destruction. If, during the Term, a portion of Building 10, Building 20 or the Premises is damaged or destroyed or rendered totally or substantially inaccessible or unusable by fire, casualty or any other cause, which would reasonably require less than ninety (90) days to restore, then Landlord shall restore the damaged portion of the Building and Premises to substantially the same or better condition as it was in before the damage or destruction. Such damage or destruction shall not terminate this Lease. If, during the Term, all or a portion of Building 10, Building 20 or the Premises is damaged or destroyed by fire, casualty, or any other cause rendering Building 10, Building 20 or the Premises totally or substantially inaccessible or unusable, or is subject to damage or destruction which would reasonably require more than ninety (90) days to restore, then Landlord and Tenant shall have the right to terminate this Lease. If neither party exercises such termination right, then Landlord shall restore or replace the damaged or destroyed portions of Building 10, Building 20, the Premises and/or the Campus within one hundred and eighty (180) days following the date of the damage or destruction or as soon as commercially reasonable; Tenant shall thereafter restore or replace the improvements to the Premises required to be insured by Tenant hereunder within a commercially reasonable time period; and this Lease shall continue in full force and effect. Rent shall be abated for the portion of the Premises damaged or destroyed or rendered totally or substantially inaccessible or unusable until Landlord completes the repairs and restoration, or, if this Lease is terminated, until the effective date of such termination. If either party elects to terminate this Lease as provided in this Section, then this Lease shall terminate on the date which is thirty (30) days following the date of the notice of termination as if the Term had been scheduled to expire on such date, and, except for obligations which are expressly stated herein to survive the expiration or earlier termination of this Lease, neither party shall have any liability to the other party as a result of such termination.

 

 

14.           Condemnation. If Building 10, Building 20 or all of the Campus is taken by condemnation or agreement in lieu thereof, this Lease shall terminate on the date the condemning authority has the right to possession of the property being condemned. If less than all, but a substantial part, of the Premises or Campus shall be taken by condemnation or agreement in lieu thereof, each of the Landlord and Tenant shall have the right to terminate this Lease effective on the date the condemning authority has the right to possession of the property being condemned, by providing written notice to the other party at least 60 days prior to the effective date of the proposed taking. In the event of a taking of a substantial part of the Premises or Campus, and neither party has exercised its right to terminate, the Lease shall continue in full force and effect, provided that Rent shall be proportionately reduced. The entire award for any taking shall belong to the Landlord, except for any award that is specifically allocated to Tenant’s Retained Personal Property or moving expenses (if any), which may be claimed by Tenant. For purposes hereof, a portion of the Premises will be deemed “substantial” if the taking of such portion of the Premises renders the remaining Premises unsuitable for its primary intended use.

 

15.           Assignment. Except as expressly set forth in this Section 15, Tenant shall not assign, sublet, mortgage, encumber or otherwise transfer or dispose of any portion of its interest in this Lease. Tenant shall have the right, with Landlord’s prior written consent not to be unreasonably withheld, to assign its interest in this Lease (subject to the terms of this Lease) to any third party that agrees to assume the obligations of Tenant under this Lease. Notwithstanding anything in this Lease to the contrary, Tenant has the right to assign its interest in this Lease to any corporation, partnership or other entity that controls, is controlled by, or is under common control (direct or indirect), directly or indirectly, with Tenant without Landlord’s prior written consent (subject to the terms of this Lease). Tenant shall not be permitted to assign this Lease, in whole or in part, for security purposes, to any lender providing financing to Tenant or any of Tenant’s affiliates. Any assignment (whether requiring and obtaining or not requiring Landlord’s consent) shall not release Tenant from its obligations under this Lease as primary obligor. A change of control in Tenant shall not be deemed an assignment under this Lease. Landlord shall have the right without consent of Tenant to sell its fee interest in the Premises and its rights under this Lease to any third party in Landlord’s sole discretion, subject to Tenant’s rights under the terms of this Lease and the purchaser’s assumption thereof.

 

16.           Tenant’s Default. The occurrence of either of the following shall constitute an “Event of Default” by Tenant:

 

(a)           failure to pay Rent or any other monetary obligation when due, if the failure continues for five (5) days after notice has been given to Tenant; provided, however, Tenant shall only have three (3) opportunities to cure any such monetary obligation under this Section 16(a) during any consecutive twelve (12) month period, and any subsequent monetary default within such twelve (12) month period shall constitute an Event of Default, without the five (5) day grace period;

 

(b)

any violation of Section 15 hereof by Tenant;

 

(c)           Tenant’s breach or failure to comply with Section 9 and such default continues for twenty one (21) days after notice thereof in writing to Tenant;

 

(d)           failure to perform any other provision of this Lease if the failure to perform is not cured within thirty (30) days after notice has been given to Tenant. If the default cannot reasonably be cured within thirty (30) days, an Event of Default shall not exist under this Lease if Tenant commences to cure the default within the thirty (30) day period and diligently and in good faith continues to cure the default; provided however the period within which such default may be cured shall not exceed one hundred fifty (150) days in the aggregate. Notices given under this Section shall specify in reasonable detail the alleged default; or

 

 

(e)           Except to the extent the same are directed or consented to by Landlord or its direct or indirect parent entities:

 

i.            Tenant shall be adjudged an involuntary bankrupt, or a decree or order approving, as properly filed, a petition or answer filed against Tenant seeking the reorganization of Tenant under the Federal bankruptcy laws as now or hereafter amended, or under the laws of any state, shall be entered, and any such decree or judgment or order shall not have been vacated or set aside within ninety (90) days from the date of the entry or granting thereof;

 

ii.           Tenant shall file any petition in bankruptcy or any petition pursuant to the Federal bankruptcy laws as now or hereafter amended, or Tenant shall institute any proceeding or shall give its consent to the institution of any proceedings for any relief of Tenant under any bankruptcy or insolvency laws or any laws relating to the relief of debtors, readjustment or indebtedness, reorganization, arrangements, composition or extension;

 

iii.          Tenant shall make any assignment for the benefit of creditors; or

 

iv.          A decree or order appointing a receiver of the property of Tenant shall be made and such decree or order shall not have been vacated or set aside within thirty (30) days from the date of entry or granting thereof.

 

17.           Landlord’s Remedies. Following the occurrence of an Event of Default, Landlord shall thereupon be entitled to terminate this Lease, in which event Tenant shall immediately surrender the Premises to Landlord, and if Tenant fails to do so, Landlord may obtain any and all rights and remedies available to it according to law or equity. Pursuit of the any remedies shall not preclude pursuit of any other remedies herein provided or any other remedies provided by law, nor shall pursuit of any remedy herein provided constitute a forfeiture or waiver of any rent or other money obligation due to Landlord hereunder or of any damages accruing to Landlord by reason of the violation of any of the covenants and provisions herein contained. Forbearance by Landlord to enforce one or more of the remedies herein provided upon an Event of Default shall not be deemed or construed to constitute a waiver of such Event of Default.

 

18.           Signage. Landlord, at its cost and expense, shall provide Tenant with a listing on the main Building 10 directory in the lobby, if any. Any changes requested by Tenant to the initial directory shall be made at Tenant’s sole cost and expense and shall be subject to Landlord’s approval. Landlord agrees that Tenant has the right to install Building standard (i) suite identification signage on the second floor of Building 10 at the entry to the Suite 201 Premises and the Suite 202 Premises, (ii) directional signage in the elevator lobby on the second floor of Building 10 and (iii) signage at the entrance to Building 20, all in a location and with the size, color, and other aesthetics determined reasonably approved by Landlord. Such signage shall be at Tenant’s cost and expense. Landlord may install such other signs, advertisements, notices or tenant identification information on the Building 10 directory, tenant access doors or other areas of Building 10, as it shall deem necessary or proper. Tenant shall not place any exterior signs on the Premises or any other signs in the Premises (that are visible from outside the Premises) or Building 10 without the prior written consent of Landlord. Notwithstanding any other provision of this Lease to the contrary, Landlord may immediately remove any sign(s) placed by Tenant in violation of this Section.

 

19.           Notice. Any notice, demand, request, consent, approval, or communication that either party desires or is required to give to the other party or any other person shall be in writing, shall be addressed to the other party at the address set forth by the signatures on this Lease, and shall be either served personally or sent by overnight courier (e.g., FedEx or UPS). Either party may change its address by notifying the other party of the change of address at least thirty (30) days in advance. Notice shall be deemed effective as of the time of delivery (or upon refusal of delivery) if sent as provided in this Section, provided that a copy thereof is also sent by email to the email addresses set forth on the signature page of this Lease.

 

 

20.           Surrender of Premises; Holding Over. Upon expiration or termination of the Term, the following provisions of this Section 20 shall apply. Tenant shall surrender to Landlord the Premises and all Tenant’s improvements and alterations in broom clean condition and at the Maintenance and Repair Standard (except in respect of destruction to the Premises covered by Section 13 hereof), except for alterations that Tenant has the right, or is obligated, to remove. Except for the Retained Personal Property that Tenant removes from the Premises at the end of the Term, all furniture, fixtures and equipment and other items of personal property shall become the property of Landlord at the end of the Term. Tenant shall remove all its Retained Personal Property prior to or upon expiration of the Term, except as indicated to the contrary on Exhibit D. If there is any unrestored damage or destruction to the improvements within the Premises for which Tenant is responsible for insuring and repairing under this Lease, then Tenant shall remain liable for all such restoration obligation after the termination of this Lease. Tenant shall perform all restoration made necessary by the removal of any alterations, if any, or Tenant’s personal property within the time period stated in this Section in accordance with the Maintenance and Repairs Standard. Landlord can elect to retain or dispose of in any manner any alterations or Retained Personal Property that Tenant does not remove from the Premises on expiration or termination of the Term. Title to any such alterations or Retained Personal Property or Tenant’s other personal property it does not remove from the Premises at the end of the Term that Landlord elects to retain or dispose of on expiration of the Term shall vest in Landlord. If Tenant, with Landlord’s prior written consent, remains in possession of the Premises after expiration or termination of the Term, or after the date in any notice given by Landlord to Tenant terminating this Lease, such possession by Tenant shall be deemed to be a month-to-month tenancy at a rental equal to $231,666.91 per month, payable to Landlord. During any such month-to-month tenancy, Tenant shall pay such Rent required by this Lease. All provisions of this Lease shall apply to the month-to-month tenancy.

 

21.           Environmental Liability. Except to the extent caused by any act or omission in breach of this Lease after the Effective Date by Tenant or its affiliates, agents, contractors, employees, suppliers, licensees or invitees, members, lenders, or successors or assigns, liability for environmental, structural and any other matter related to the conditions of and on the Premises that exist as of the Effective Date shall be the responsibility of Landlord.

 

22.           Parking. Tenant shall be entitled to the non-exclusive use of the parking area at the Campus, provided that (i) Tenant shall not use more than a total of 100 parking spaces at the Campus and (ii) of such total parking spaces, Tenant shall have the right to use one (1) double/tandem reserved parking space (i.e., two spaces) in the underground parking garage located under Building 10, which double/tandem parking space shall be in a location designated by Landlord (such space, the “Tenant Reserved Space”). Except with respect to the Tenant Reserved Space, Tenant’s parking rights shall be provided on an unreserved, “first-come, first served” basis. Tenant agrees not to exceed Tenant’s parking space allocation herein and agrees to cooperate with Landlord and other tenants in the use of the parking facilities. Landlord reserves the right to adopt, modify and enforce reasonable rules and regulations governing the use of the parking areas from time to time including designation of assigned parking spaces, requiring use of any pass, key- card, sticker, or other identification or entrance systems and charging a fee for replacement of any such pass, key-card, sticker, or other item used in connection with any such system and hours of operations or charging fees for the use of electric vehicle charging stations based upon electricity consumption. If Landlord institutes a parking access control system, then Landlord shall provide passes, key-cards, stickers, or other access control devices, as applicable, to Tenant to be distributed to Tenant’s employees at the Premises, provided that in no event shall the total number of access control devices issued to Tenant’s employees at any given time exceed the number of parking spaces allocated to Tenant. Tenant’s use of the parking area shall comply with such rules and regulations and with all laws. Landlord may refuse to permit any person who violates such rules and regulations to park at the Campus, and any violation of the rules and regulations shall subject the car to removal. Landlord reserves the right to validate visitor parking by such method or methods as Landlord may reasonably approve, if such validation becomes necessary in Landlord’s reasonable discretion. Landlord reserves the right in its absolute discretion, however, to allocate parking spaces between Tenant and other occupants and tenants, provided that the number of parking spaces allocated to Tenant shall not be decreased. No vehicle may be repaired or serviced at the Campus and any vehicle brought into the Campus by Tenant and deemed abandoned by Landlord will be towed and all costs thereof shall be borne by Tenant. All driveways, ingress and egress, and all parking spaces are for the joint use of all tenants of the Campus. There shall be no parking permitted on any of the streets or roadways located on the Campus. In addition, Tenant agrees that its employees will not park in the spaces designated for visitor parking. All motor vehicles (including all contents thereof) shall be parked at the Campus at the sole risk of Tenant, it being expressly understood Landlord has no duty to insure any of said motor vehicles (including the contents thereof), and Landlord is not responsible for the protection and security of such vehicles. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS LEASE, LANDLORD SHALL HAVE NO LIABILITY WHATSOEVER FOR ANY PROPERTY DAMAGE OR LOSS WHICH MIGHT OCCUR ON IN THE PARKING AREAS OR AS A RESULT OF OR IN CONNECTION WITH THE PARKING OF MOTOR VEHICLES.

 

 

23.           Common Amenities. So long as a fitness center is offered by Landlord at the Campus (the “Fitness Center”), Tenant’s employees shall have access to such Fitness Center. Tenant’s use of the Fitness Center shall be subject to availability and governed by Landlord’s rules and regulations that are then in effect. Tenant’s use of the Fitness Center is voluntary and shall be undertaken by Tenant at its sole risk. Tenant understands that a condition to an employee’s use of the Fitness Center is that each person using the Fitness Center must execute a release on Landlord’s standard form prior to such employee’s use thereof. During the Term, Landlord shall use commercially reasonable efforts to operate the cafeteria located on the first floor of Building 10 (the “Building 10 Cafeteria”) at least four days a week during Normal Building Hours in a manner consistent with past practice before the Effective Date. If the number of Tenant employees regularly utilizing the Building 10 Cafeteria on a weekly basis is insufficient in Landlord’s reasonable opinion to justify such continued operation of the Building 10 Cafeteria, then Landlord and Tenant shall meet and discuss a mutual plan for the future operation of the Building 10 Cafeteria, both parties being reasonable.

 

24.

Time of Essence. Time is of the essence of each provision of this Lease.

 

25.           Successors. This Lease shall be binding on and inure to the benefit of the parties and their successors and permitted assigns.

 

26.           Real Estate Brokers. Each party represents that it has not had any dealings with any real estate broker, finder, or other person with respect to this Lease in any manner. Each party shall hold harmless the other party from all damages resulting from any claims that may be asserted against the other party by any broker, finder, or other person with whom the other party has or purportedly has dealt.

 

27.

Exhibit. Any exhibit referred to is attached to this Lease and incorporated by reference.

 

28.           Governing Law. This Lease shall be construed and interpreted in accordance with the laws of the State of Missouri.

 

29.           Severability. Any term or provision of this Lease that is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Lease in any other jurisdiction. If any provision of this Lease is so broad as to be unenforceable, such provision shall be interpreted to be only so broad as is enforceable.

 

30.           Estoppel. Upon ten (10) business days following a request by a party, the other party shall provide to the requesting party and any designee of requesting party, an estoppel certificate stating the Rent, Term and whether Landlord or Tenant, as applicable, has defaulted in the performance of any of its obligations under the terms of this Lease, and if so, specifying each such default, and such other information as may be reasonably requested by the requesting Party.

 

 

31.           Quiet Enjoyment. Landlord represents and warrants that it will provide to Tenant quiet enjoyment of the Premises throughout the Term free of any claim or other action by Landlord or anyone claiming by, through or under Landlord, but subject to all liens and encumbrances affecting the Premises on or after the Effective Date.

 

32.           Exculpation. Tenant agrees that it shall look solely to Landlord’s interest in the Campus and the sale, property insurance, and condemnation proceeds thereof for recovery in the event of any default in the performance or observance of any of the terms or conditions of this Lease and nothing in this Lease shall impose any personal liability upon Landlord or any entity or person who at any time may, in whole or in part, comprise Landlord or any successor thereto or any other person having or acquiring any right, title or interest in the Premises and, in the event of default under this Lease, no deficiency or any other money judgment shall be rendered or entered against Landlord personally or any such other entity or person.

 

33.           Subordination. This Lease and Tenant’s interests hereunder shall at all times be subject and subordinate to the lien and security title of any ground or underlying leases (if any) and to all mortgages or deeds of trust or deeds to secure debt and related loan documents (collectively, “Security Instruments”) and to any and all advances to be made thereunder and to all renewals, modifications, consolidations, replacements, substitutions and extensions thereof and to all of the terms and conditions of the other documents evidencing and securing the loan secured by any Security Instrument. In confirmation of such subordination, Tenant shall, at Landlord’s request, promptly execute, acknowledge and deliver any instrument which may be required to evidence such subordination to any Security Instrument or other loan documents and to the holder thereof. In the event of Tenant’s failure to deliver such subordination, Landlord may, in addition to any other remedies for breach of covenant hereunder, execute, acknowledge and deliver the instrument as the agent or attorney-in-fact of Tenant, and Tenant hereby irrevocably constitutes Landlord its attorney-in-fact for such purpose, Tenant acknowledging that the appointment is coupled with an interest and is irrevocable. Tenant hereby waives and releases any claim it might have against Landlord or any other party for any actions lawfully taken by the holder of any Security Instrument or other loan document.

 

34.           Attorneys’ Fees. In any proceeding (including any arbitration proceeding pursuant to Section 7) between the parties arising out of or in connection with this Lease, the non-prevailing party shall pay to the prevailing party any out-of-pocket costs and reasonable attorneys’ fees which may be incurred by the prevailing party in such action.

 

35.           Counterparts; Electronic Signature. This Lease may be executed in counterparts. All executed counterparts shall constitute one agreement, and each counterpart shall be deemed an original. The parties hereby acknowledge and agree that electronic signatures, facsimile signatures or signatures transmitted by electronic mail in so-called “pdf” format shall be legal and binding and shall have the same full force and effect as if an original of this Lease had been delivered.

 

[Remainder of page intentionally left blank]

 

 

IN WITNESS WHEREOF, the parties have executed this Lease as of the day and year first above written.

 

	LANDLORD:
	Mallinckrodt LLC
	By:	/s/ Stephen A. Welch
	Name:	Stephen A. Welch
	Title:	President
	Address:
	Mallinckrodt LLC
	c/o SpecGx LLC
	385 Marshall Avenue
	Webster Groves, Missouri 63119
	Attn: Legal Department
	Email: cathi.ponciroli@mnk.com
	TENANT:
	ST Shared Services LLC
	By:	/s/ Matthew T. Peters
	Name:	Matthew T. Peters
	Title:	Vice President of Tax and Treasurer
	Address:
	ST Shared Services LLC
	675 McDonnell Boulevard
	Hazelwood, Missouri 63042
	Attn: Legal Department
	Email: bobby.torgoley@mnk.com

 

[Signature Page to Lease]

 

 

Exhibit 10.6

 

EXECUTION VERSION

 

CVR TERMINATION AGREEMENT

 

This CVR TERMINATION AGREEMENT (this “Agreement”) is entered into as of November 10, 2025, by and among Opioid Master Disbursement Trust II, the master disbursement trust referred to in the Plan (as defined in the CVR Agreement (as defined below)) as MDT II (the “Holder”) and Mallinckrodt plc, a public limited company incorporated in Ireland having registered number 522227 (the “Company”). Capitalized terms used but not defined herein shall have the meanings ascribed to them in the CVR Agreement.

 

R E C I T A L S

 

WHEREAS, on November 14, 2023, on the terms and subject to the conditions of that certain CVR Agreement (the “CVR Agreement”), dated as of November 14, 2023, between the Company and the Holder, the Company issued 1,036,649 CVRs to the Holder;

 

WHEREAS, the CVR Agreement provides that, in the case of a Specified Fundamental Transaction (as defined therein), the Holder shall be entitled, for each CVR held by the Holder upon the cancellation thereof, to receive an amount of cash equal to the Black Scholes Value;

 

WHEREAS, the Company is in the process of separating its generic pharmaceuticals (including active pharmaceutical ingredients) and sterile injectables businesses through a spin-off of all of the issued and outstanding shares of common stock of Par Health, Inc. (the “Spin-off”);

 

WHEREAS, in connection with the Spin-off, the Company and the Holder desire to cancel each of the CVRs and to terminate the CVR Agreement in exchange for the Cancellation Payment (as defined below).

 

NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants and agreements set forth in this Agreement, the parties agree as follows:

 

ARTICLE I
The Closing

 

1.1            Closing. On the terms and conditions set forth in this Agreement, at the closing (the “Closing”) of the Transactions (as defined below), which shall occur at 10:00 a.m., Eastern Standard Time, on the Redemption Date (as defined in the Information Statement, dated October 30, 2025, furnished by the Company with the U.S. Securities and Exchange Commission (the “SEC”) as Exhibit 99.1 to its current report on Form 8-K, dated October 30, 2025), or at such other time as the parties may agree in writing (provided, that this Agreement shall automatically terminate and be of no further force or effect if the Closing does not occur by November 19, 2025, unless the parties otherwise agree in writing):

 

(a) The Company shall deliver, by wire transfer in accordance with the wire instructions set forth in Exhibit A hereto, immediately available funds in U.S. dollars in an amount equal to $35,000,000 (the “Cancellation Payment”); and

 

 

(b) All CVRs issued under the CVR Agreement shall be deemed automatically cancelled and the CVR Agreement shall be deemed automatically terminated, with no payments or other amounts due or payable in connection with the CVRs or the CVR Agreement or otherwise to the Holder, other than the Cancellation Payment. Notwithstanding anything to the contrary in the CVR Agreement, all terms of the CVR Agreement shall terminate at the Closing and the parties thereto shall have no further obligations or liabilities under the CVR Agreement.

 

ARTICLE II
Representations and Warranties of the Company

 

The Company hereby represents and warrants to the Holder as follows:

 

2.1            Corporate Power and Authority. The Company is duly organized, validly existing and in good standing under the laws of Ireland. The Company has all requisite corporate power and authority to enter into and deliver this Agreement, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby (the “Transactions”). The execution, delivery and performance of this Agreement by the Company have been duly authorized by all necessary corporate action on the part of the Company. This Agreement has been duly executed and delivered by the Company and (assuming due authorization, execution and delivery by the Holder) constitutes the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms subject to (a) applicable bankruptcy, insolvency, fraudulent conveyance and other similar laws and (b) general principles of equity, including equitable defenses and limits as to the availability of equitable remedies, whether such principles are considered in a proceeding at law or in equity.

 

2.2            Conflicts; Consents and Approvals. The execution, delivery and performance of this Agreement and the consummation of the Transactions do not and will not (a) violate any provision of, or constitute a default under, the Company’s articles of association or other governing or organizational documents; (b) violate any law, order, writ, injunction, decree, statute, rule or regulation applicable to the Company; or (c) require any action or consent or approval of, or review by, or registration or filing by it with, any governmental authority, other than pursuant to United States securities laws and regulations; except, in the case of clauses (b) and (c), where not reasonably likely to have a material adverse effect on the ability of the Company to perform its obligations under this Agreement or to consummate the Transactions.

 

2.3            SEC Filings. The Company has filed with or furnished to the SEC all reports required to be filed with or furnished to the SEC by the Company pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, subsequent to the filing of the Company’s Annual Report on Form 10-K for fiscal year 2024 (the “2024 Form 10-K”) and prior to the date hereof (collectively, together with the 2024 Form 10-K, the “Company SEC Documents”). As of their respective filing dates (or, if amended or supplemented, as of the date of the most recent amendment or supplement filed or furnished prior to the date hereof), the Company SEC Documents did not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to any projected information, the foregoing representation and warranty is only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.

 

 

ARTICLE III
Representations and Warranties of the Holder

 

The Holder represents and warrants to the Company as follows:

 

3.1            Title to CVRs. The Holder is the sole record and beneficial owner of, and has good and valid title to, each of the 1,036,649 CVRs, free and clear of any liens, security interests, options, hypothecations, restrictions, claims or other rights or encumbrances of any kind or character, and none of the CVRs have been exercised in whole or in part.

 

3.2            Power and Authority. The Holder is duly organized, validly existing and in good standing under the laws of the State of Delaware. The Holder has all requisite entity power and authority to enter into and deliver this Agreement and to perform its obligations hereunder and to consummate the Transactions. The execution, delivery and performance of this Agreement by the Holder have each been duly authorized by all necessary entity action on the part of the Holder, and do not require any consent or approval (including any entity action) of the MNK Opioid Abatement Fund, LLC, a Delaware limited liability company (the “Opioid Fund”), any of the Trust Beneficiaries (as defined in that certain Opioid Master Disbursement Trust II Agreement, dated as of June 16, 2022, by and among the Company and certain of its subsidiaries, the trustees party thereto and Wilmington Trust, N.A., as resident trustee (the “Trust Agreement”)) or any of the Interest Holders (as defined in that certain Amended and Restated Limited Liability Company Operating Agreement of the Opioid Fund, dated as of June 16, 2022, by and among the Opioid Fund and the Interest Holders (the “Operating Agreement”)) or any person or body acting on behalf of any such Interest Holders. This Agreement has been duly executed and delivered by the Holder, and (assuming due authorization, execution and delivery by the Company) constitutes the legal, valid and binding obligation of the Holder, enforceable against them, as applicable, in accordance with its terms subject to (a) applicable bankruptcy, insolvency, fraudulent conveyance and other similar laws and (b) general principles of equity, including equitable defenses and limits as to the availability of equitable remedies, whether such principles are considered in a proceeding at law or in equity.

 

3.3            Conflicts; Consents and Approvals. The execution, delivery and performance of this Agreement and the consummation of the Transactions do not and will not (a) violate, conflict with, or result in a breach of any provision of, or constitute a default under, the Trust Agreement, the Operating Agreement or any of the Holder’s or the Opioid Fund’s other governing or organizational documents; (b) violate any law, order, writ, injunction, decree, statute, rule or regulation applicable to the Holder; or (c) require any action or consent or approval of, or review by, or registration or filing by any of them with, any governmental authority; except, in the case of clauses (b) and (c), where not reasonably likely to have a material adverse effect on the ability of the Holder to perform its obligations under this Agreement or to consummate the Transactions. For the avoidance of doubt without limiting the terms of Section 4.2, the Holder acknowledges, on behalf of itself and the Opioid Fund, that the Opioid Fund has no rights or interests or otherwise has any Claims, and the Company has no obligations to the Opioid Fund, in connection with the CVRs, the CVR Agreement, this Agreement or the Transactions.

 

 

3.4            Non-Reliance. The Holder acknowledges that (a) the Company may be in possession of information about the Company (including material non-public information) that may impact the value of the CVRs, and may not be included in the information available to the Holder, (b) notwithstanding any such informational disparity, the Holder has independently evaluated the risks and merits regarding the Transactions and wishes to enter into and perform this Agreement and to consummate the Transactions in accordance with the terms hereof and thereof, and (c) neither the Company nor any other Person has made or is making, and the Holder is not relying upon, have not relied upon and hereby disclaim, any representation or warranty, whether express or implied, of any kind or character (including, without limitation, as to the accuracy or completeness of any information or the value of the CVRs), except, in the case of the Holder, for the express representations and warranties of the Company made to (and only to) the Holder contained in Article II of this Agreement. Without limiting the foregoing, the Holder further acknowledges that, in connection with discussions with the Company regarding the negotiation and execution of this Agreement, it has independently determined in consultation with its financial advisor, which included a review of the terms and conditions of this Agreement, including the express representations and warranties of the Company made to (and only to) the Holder contained in Article II of this Agreement, and such other publicly available information as it and the financial advisor deemed appropriate, that the Cancellation Payment is fair consideration for the undertakings and agreements set forth in this Agreement.

 

ARTICLE IV
Additional Agreements

 

4.1            Transfer Taxes. The Company shall be responsible for the payment of any documentary stamp taxes and charges in connection with the Transactions.

 

4.2            Waiver and Disclaimer. Each of the parties hereto hereby agrees that, effective as of the Closing, each of the parties hereto, on behalf of itself and, to the fullest extent permitted by law, each of such party’s Affiliates (including, for the avoidance of doubt, in the case of the Holder, the Opioid Fund) and its and their respective directors, managers, trustees, executors, administrators, fiduciaries, officers, agents, employees, partners, members, beneficiaries, grantees, other direct and indirect equity holders and controlling persons and representatives, and the heirs, successors and assigns of the foregoing, and any other Person claiming through or on behalf of any of the foregoing (collectively, the “Waiving Parties”) hereby waives and discharges, absolutely, unconditionally, irrevocably and forever each other party and its Affiliates and its and their respective directors, managers, executors, administrators, fiduciaries, officers, agents, employees, partners, members, grantees, other direct and indirect equity holders, controlling persons, attorneys, advisors, consultants and representatives, and the heirs, successors and assigns of the foregoing (collectively, the “Waiver Parties”), of and from any and all claims, actions, causes of action, suits, damages, debts, liabilities, obligations, losses, costs or expenses, whether known or unknown, matured or unmatured, suspected or unsuspected, liquidated or unliquidated, absolute or contingent, direct or derivative, whether or not involving insolvency or bankruptcy (including, without limitation, at law or in equity, whether arising out of any contract or tort or based on negligence or strict liability, whether under the Plan or any Plan Supplement (as defined in the Plan), or otherwise) (together, the “Claims”), which any of such Waiving Parties ever had, now has, or ever may have, or claim to have, in each case against the Waiver Parties to the extent based on, in relation to or arising from, in whole or in part, the CVR Agreement (including the CVRs) (the “Waived Claims”), in each case except for Claims arising under this Agreement.

 

 

4.3            Further Assurances. Each of the parties hereto shall use its reasonable best efforts to take, or cause to be taken, all appropriate action, to do or cause to be done all things necessary, proper or advisable under applicable law, and to execute and deliver such documents, as may be reasonably required to carry out the provisions of this Agreement and to consummate and make effective the Transactions.

 

ARTICLE V
Miscellaneous

 

5.1            Counterparts; Entire Agreement. This Agreement may be executed by facsimile or other electronic transmission and in any number of counterparts, which together shall constitute one and the same Agreement. The parties may execute more than one copy of the Agreement, each of which shall constitute an original. This Agreement constitutes the entire agreement between the parties and supersedes all prior agreements, understandings, arrangements or representations by or between the parties, written and oral, with respect to the subject matter hereof. Facsimile copies or “PDF” or similar electronic data format copies of signatures shall constitute original signatures for all purposes of this Agreement and any enforcement hereof.

 

5.2            Assignment; Third Party Beneficiaries. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties (whether by operation of law or otherwise) without the prior written consent of the other parties. Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and permitted assigns. Except as provided in Section 4.2 hereof, nothing in this Agreement, express or implied, is intended to or shall be construed to create any third party beneficiaries. Any assignment in violation of the foregoing shall be null and void ab initio.

 

5.3            Governing Law; Waiver of Trial by Jury; Jurisdiction. This Agreement shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be governed by and construed in accordance with the laws of such state. Each party hereto consents and submits to the jurisdiction of the courts of the State of New York and of the federal courts of the Southern District of New York in connection with any action or proceeding brought against it that arises out of or in connection with, that is based upon, or that relates to this Agreement or the Transactions. In connection with any such action or proceeding in any such court, each party hereto hereby waives personal service of any summons, complaint or other process and hereby agrees that service thereof may be made in accordance with the procedures for giving notice set forth in Section 5.8 hereof. Each party hereto hereby waives any objection to jurisdiction or venue in any such court in any such action or proceeding and agrees not to assert any defense based on lack of jurisdiction or venue in any such court in any such action or proceeding. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any action, proceeding or counterclaim as between the parties directly or indirectly arising out of, under or in connection with this Agreement or the Transactions or disputes relating hereto. Each party hereto (i) certifies that no representative, agent or attorney of any other party hereto has represented, expressly or otherwise that such other party hereto would not, in the event of litigation, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other parties hereto have been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section 5.3.

 

 

5.4            Remedies. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties will be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any court of appropriate jurisdiction, this being in addition to any other remedy to which they are entitled at law or in equity. Except as otherwise provided in this Agreement, any and all remedies in this Agreement expressly conferred upon a party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the exercise by a party of any one remedy will not preclude the exercise of any other remedy.

 

5.5            Severability. If any term or other provision of this Agreement is determined to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other terms and provisions of this Agreement will nevertheless remain in full force and effect so long as the economic or legal substance of the Transactions is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties will negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the Transactions are fulfilled to the extent possible.

 

5.6            Amendment; Waiver. This Agreement may not be altered, amended or supplemented, or any provision herein waived, except by an agreement in writing signed by each of the parties hereto.

 

5.7            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.

 

5.8            Notices. Any notices or other communications required or permitted under, or otherwise given in connection with, this Agreement will be in writing and will be deemed to have been duly given (i) when delivered or sent if delivered in person by courier service or messenger or sent by email or (ii) on the next business day if transmitted by international overnight courier, in each case as follows.

 

If to the Company, addressed to:

 

Mallinckrodt plc

c/o ST Shared Services LLC
440 Route 22 East, Suite 302
Bridgewater, NJ 08807

	Attention:	Mark Tyndall
	Email:	Mark.Tyndall@mnk.com

 

 

with a copy to (for informational purposes only):

 

Wachtell, Lipton, Rosen & Katz

51 West 52nd Street

New York, New York 10019

	Attention:	Victor Goldfeld and Neil (Mac) M. Snyder
	Email:	VGoldfeld@wlrk.com and NMSnyder@wlrk.com

 

If to the Holder, addressed to:

 

Opioid Master Disbursement Trust II

c/o Brown Rudnick LLP

7 Times Square

New York, NY 10036

	Attn:	David J. Molton, Esq., Gerard Cicero, Jane Motter, Esq., and General Counsel
	Email:	JPeacock@MDTAdmin.com, MAtkinson@MDTAdmin.com, and AFerazzi@MDTAdmin.com

 

with a copy to (for informational purposes only):

 

Brown Rudnick LLP

7 Times Square

New York, NY 11036

	Attn:	David J. Molton, Esq., Gerard T. Cicero Esq. and Jane Motter, Esq.
	Email:	dmolton@brownrudnick.com, gcicero@brownrudnick.com and jmotter@brownrudnick.com

 

5.9            Survival of Representations and Warranties. The representations and warranties in this Agreement shall survive until the applicable statute of limitations; provided that the representations and warranties in Section 2.3 shall survive until the date that is two (2) years after the Closing. It is understood and agreed that (a) no Claim in respect of any representation or warranty may be brought after the applicable survival date therefor set forth in the preceding sentence and (b) the survival period in the preceding sentence in respect of the representations and warranties in Section 2.3 is intended to supersede any statute of limitations applicable to any Claim in respect thereof under law.

 

[Remainder of Page Intentionally Left Blank]

 

 

IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be executed as of the date first written above.

 

	MALLINCKRODT PLC
	/s/ Mark Tyndall
	Name:	Mark Tyndall
	Title:	Executive Vice President, Chief Legal Officer & Corporate Secretary
	OPIOID MASTER DISBURSEMENT TRUST II
	/s/ Jennifer E. Peacock
	Name:	Jennifer E. Peacock
	Title:	Trustee
	/s/ Michael Atkinson
	Name:	Michael Atkinson
	Title:	Trustee
	/s/ Anne Ferazzi
	Name:	Anne Ferazzi
	Title:	Trustee

 

[Signature Page to CVR Termination Agreement]

 

 

 

Exhibit 99.1

 

Mallinckrodt Completes Spin-Off of Par Health, Introduces Keenova Therapeutics

 

Keenova Focused on Advancing Therapies to Address Unmet Patient Needs

 

Company Intends to Pursue Public Equity Listing in 2026

 

DUBLIN, Nov. 10, 2025 -- Mallinckrodt plc ("Mallinckrodt") today announced the completion of the planned spin-off of its Par Health generic pharmaceuticals and sterile injectables businesses. Moving ahead, Mallinckrodt will be known as Keenova Therapeutics ("Keenova" or the "Company") and will focus on developing, manufacturing, and commercializing branded therapeutics that help patients with rare or unaddressed conditions live happier and healthier lives.

 

"We are proud to introduce Keenova Therapeutics as a new company with a new identity and a new future," said Siggi Olafsson, President and Chief Executive Officer. "The name 'Keenova' reflects two complementary attributes of our Company – a keen focus on helping patients receive the care they deserve and the innovation required to develop our therapeutics. Our tagline – 'Keen to Solve, Keen to Serve' – underscores our commitment to solving the challenges our patients face and serving them with integrity."

 

Keenova currently intends to pursue a listing of its ordinary shares on the New York Stock Exchange in 2026, subject to approval by Keenova's Board of Directors and other considerations and conditions. The Company expects to conduct a public offering of its ordinary shares to facilitate the listing at that time.

 

Mr. Olafsson added, "On behalf of our Board and leadership team, I thank our team members for the extraordinary effort required to make Keenova a reality. We are excited about the tremendous opportunities we see ahead to support patients and providers and to create value for our shareholders, employees, customers, and other stakeholders."

 

Portfolio Positioned for Growth

 

Keenova consists of the branded businesses of Mallinckrodt and Endo, Inc., which completed their merger in July 2025. The Company had 2024 pro-forma combined revenue of $1.7 billion and employs more than 1,600 team members. Keenova is globally headquartered in Dublin, Ireland, with a U.S.-focused commercial and manufacturing footprint.

 

Keenova's leading therapeutics include Acthar^® Gel, a corticotropin treatment for people living with certain chronic or acute inflammatory or autoimmune conditions, and XIAFLEX^®, a nonsurgical injectable biologic that selectively targets collagen in adults with Dupuytren's contracture and Peyronie's disease.

 

 

Moving forward, Keenova's strategic focus is on building on its strong foundation by pursuing opportunities to grow its pipeline and expand its diversified brands portfolio across a wide range of therapeutic areas of significant unmet need, including rheumatology, ophthalmology, nephrology, pulmonology, neurology, urology, and orthopedics. This strategy is supported by strong commercial capabilities, a robust quality and compliance culture, financial flexibility and an experienced leadership team.

 

Advisors

 

Wachtell, Lipton, Rosen & Katz served as the Company's lead counsel, and Arthur Cox served as Irish counsel. Hogan Lovells also served as counsel to the Company.

 

About Keenova

 

Keenova Therapeutics is a leading global developer and manufacturer of branded therapeutics that strives to help patients with rare or unaddressed conditions live happier and healthier lives.

 

The Company's diversified brands portfolio is focused across a wide range of therapeutic areas of significant unmet need, including endocrinology, gastroenterology, hepatology, immunology, neonatal respiratory critical care, nephrology, neurology, pulmonology, ophthalmology, orthopedics, rheumatology and urology. Globally headquartered in Dublin, Ireland, Keenova benefits from a strong U.S. manufacturing footprint with facilities in Louisiana, New Jersey, New York, Pennsylvania and Wisconsin. To learn more, please visit www.keenova.com.

 

Keenova uses its website as a channel of distribution of important company information, such as press releases, investor presentations and other financial information. It also uses its website to expedite public access to time-critical information regarding the Company in advance of or in lieu of distributing a press release or a filing with the U.S. Securities and Exchange Commission ("SEC") disclosing the same information. Therefore, investors should look to the Investor Relations page of the website for important and time-critical information. Visitors to the website can also register to receive automatic e-mail and other notifications alerting them when new information is made available on the Investor Relations page of the website.

 

 

Information Regarding Forward-Looking Statements

 

Statements in this press release that are not strictly historical, including statements regarding future financial condition and operating results of the Company, expected product launches, legal, economic, business, competitive and/or regulatory factors affecting the Company's business and any other statements regarding events or developments the Company believes or anticipates will or may occur in the future, may be "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995, and involve a number of risks and uncertainties.

 

There are a number of important factors that could cause actual events to differ materially from those suggested or indicated by such forward-looking statements and you should not place undue reliance on any such forward-looking statements. These factors include risks and uncertainties related to, among other things: the expected benefits and synergies of the business combination with Endo ("Business Combination") may not be fully realized in a timely manner, or at all; the Company's increased indebtedness as a result of the Business Combination and significant transaction costs related to the Business Combination; the expected growth opportunities, profit improvements, cost savings and other benefits as a result of the spin-off of Par Health may not be fully realized in a timely manner, or at all; unanticipated costs, litigation and/or regulatory inquiries and investigations as a result of the spin-off of Par Health; risks associated with being a smaller, less diversified company as a result of the spin-off of Par Health; potential changes in the Company's business strategy and performance; exposure to global economic conditions and market uncertainty; governmental investigations and inquiries, regulatory actions, and lawsuits, in each case related to the Company's or its officers; the Company's contractual and court-ordered compliance obligations that, if violated, could result in penalties; compliance with and restrictions under the global settlement to resolve all opioid-related claims; matters related to Acthar Gel, including the settlement with governmental parties to resolve certain disputes and compliance with and restrictions under the related corporate integrity agreement; the ability to maintain relationships with the Company's suppliers, customers, employees and other third parties; scrutiny from governments, legislative bodies and enforcement agencies related to sales, marketing and pricing practices; pricing pressure on certain of the Company's products due to legal changes or changes in insurers' or other payers' reimbursement practices resulting from recent increased public scrutiny of healthcare and pharmaceutical costs; the reimbursement practices of governmental health administration authorities, private health coverage insurers and other third-party payers; complex reporting and payment obligations under the Medicare and Medicaid rebate programs and other governmental purchasing and rebate programs; cost containment efforts of customers, purchasing groups, third-party payers and governmental organizations; changes in or failure to comply with relevant laws and regulations; any undesirable side effects caused by the Company's approved and investigational products, which could limit their commercial profile or result in other negative consequences; the Company's and its partners' ability to successfully develop, commercialize or launch new products or expand commercial opportunities of existing products, including Acthar Gel (repository corticotropin injection) SelfJect, the INOmax Evolve DS delivery system, and XIAFLEX; the Company's ability to successfully identify or discover additional products or product candidates; the Company's ability to navigate price fluctuations and pressures, including the ability to achieve anticipated benefits of price increases of its products; competition; the Company's and its partners' ability to protect intellectual property rights, including in relation to ongoing and future litigation; limited clinical trial data for Acthar Gel; the timing, expense and uncertainty associated with clinical studies and related regulatory processes; product liability losses and other litigation liability; material health, safety and environmental laws and related liabilities; business development activities or other strategic transactions; attraction and retention of key personnel; the effectiveness of information technology infrastructure, including risks of external attacks or failures; customer concentration; the Company's reliance on certain individual products that are material to its financial performance; the Company's ability to receive sufficient procurement and production quotas granted by the U.S. Drug Enforcement Administration; complex manufacturing processes; reliance on third-party manufacturers and supply chain providers and related market disruptions; conducting business internationally; the Company's significant levels of intangible assets and related impairment testing; natural disasters or other catastrophic events; the Company's substantial indebtedness and settlement obligation, its ability to generate sufficient cash to reduce its indebtedness and its potential need and ability to incur further indebtedness; restrictions contained in the agreements governing the Company's indebtedness and settlement obligation on the Company's operations, future financings and use of proceeds; the Company's variable rate indebtedness; the Company's tax treatment by the Internal Revenue Service under Section 7874 and Section 382 of the Internal Revenue Code of 1986, as amended; future changes to applicable tax laws or the impact of disputes with governmental tax authorities; the impact of Irish laws; the comparability of the Company's post-emergence financial results and the projections filed with the U.S. Bankruptcy Court for the District of Delaware and the lack of comparability of the Company's historical financial statements and information contained in its financial statements after the adoption of fresh-start accounting following emergence from Mallinckrodt's and Endo's respective bankruptcy proceedings.

 

 

The "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's Annual Report on Form 10-K for the fiscal year ended December 27, 2024, its Quarterly Report on Form 10-Q for the quarterly period ended March 28, 2025, its Quarterly Report for the quarterly period ended June 27, 2025, and its Quarterly Report for the quarterly period ended September 26, 2025 to be filed with the SEC, its Registration Statement on Form S-4, as amended, filed with the SEC, and other filings with the SEC, all of which are on file with the SEC and available from the SEC's website (www.sec.gov) and the Company's website (www.keenova.com), identify and describe in more detail the risks and uncertainties to which the Company's businesses are subject. There may be other risks and uncertainties that we are unable to predict at this time or that we currently do not expect to have a material adverse effect on our business. The forward-looking statements made herein speak only as of the date hereof and the Company does not assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events and developments or otherwise, except as required by law. Given these uncertainties, one should not put undue reliance on any forward-looking statements.

 

No Offer of Securities

 

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities. Any such offering would be made pursuant to a registration statement to be filed with the SEC. The price and number of the ordinary shares to be sold in any such offering have not yet been determined. The timing of any such offering would be subject to market and other conditions and the completion of the SEC's review process. Any offers, solicitations or offers to buy, or any sales of securities will be made in accordance with the registration requirements of the Securities Act of 1933, as amended.

 

Contacts

 

Investors
Juan Avendano
avendano.juan@endo.com

 

Government Affairs & Patient Advocacy
Derek Naten
Derek.Naten@mnk.com

 

Media
Linda Huss
huss.linda@endo.com

 

or

 

Michael Freitag / Aura Reinhard / Catherine Simon
Joele Frank, Wilkinson Brimmer Katcher
212-355-4449

 

 

Pro Forma Combined Net Sales

 

Amounts in millions

 

Mallinckrodt plc				Endo, Inc.
Specialty Brands				Branded Pharmaceuticals
				Predecessor Period				Successor Period								Non-GAAP Pro Forma Combined
Year Ended December 27, 2024				January 1, 2024 - April 23, 2024				January 1, 2024 - December 31, 2024				Pro Forma Adjustment (1)				Year Ended December 27, 2024
$	841.8			$	279.7			$	610.2			$	(2.9	)		$	1,728.8

 

(1) Reflects the elimination of Amitiza sales by Mallinckrodt to Endo during the period

 

SOURCE: Keenova Therapeutics

 

 

 

Exhibit 99.2 

 

Disclaimer

 

Ernst & Young LLP (EY) prepared the attached Report only for Mallinckrodt Plc (the "Client") pursuant to an agreement solely between EY and Client. EY did not perform its services on behalf of or to serve the needs of any other person or entity. Accordingly, EY expressly disclaims any duties or obligations to any other person or entity based on its use of the attached Report. Any other person or entity must perform its own due diligence inquiries and procedures for all purposes, including, but not limited to, satisfying itself as to the financial condition and control environment of Client, as well as the appropriateness of the accounting for any particular situation addressed by the Report.

 

EY did not perform an audit, review, examination or other form of attestation (as those terms are identified by the American Institute of Certified Public Accountants or by the Public Company Accounting Oversight Board) of Client’s financial statements. Accordingly, EY did not express any form of assurance on Client’s accounting matters, financial statements, any financial or other information or internal controls. EY did not conclude on the appropriate accounting treatment based on specific facts or recommend which accounting policy/treatment Client should select or adopt.

 

The observations relating to accounting matters that EY provided to Client were designed to assist Client in reaching its own conclusions and do not constitute our concurrence with or support of Client’s accounting or reporting. Client alone is responsible for the preparation of its financial statements, including all of the judgments inherent in preparing them.

 

This information is not intended or written to be used, and it may not be used, for the purpose of avoiding penalties that may be imposed on a taxpayer.

 

 

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

The following unaudited pro forma condensed combined financial information (“Pro Forma Financial Information”) is derived from the historical consolidated financial statements of Mallinckrodt plc (“Mallinckrodt” or the “Company”), Endo, Inc. (“Endo”), and Endo International Plc (“Endo’s Predecessor”). The unaudited Pro Forma Financial Information is informational and presented to illustrate the pro forma effects of the separation of Mallinckrodt’s Specialty Generics business and Endo’s Generic Pharmaceuticals and Sterile Injectables businesses as an independent entity named Par Health (the “Spin-off”), which was completed on November 10, 2025 and certain other transactions (as described in Note 1 and Note 3). The unaudited Pro Forma Financial Information is not necessarily indicative of the financial results that would have occurred if the transactions described below occurred on the dates indicated, nor is such unaudited Pro Forma Financial Information necessarily indicative of the financial position or results of operations in future periods.

 

The unaudited Pro Forma Financial Information should be read in conjunction with the accompanying notes to the Pro Forma Financial Information, and the historical financial statements and accompanying notes of Mallinckrodt, Endo, and Endo’s Predecessor as described in Note 2.

 

The unaudited Pro Forma Financial Information has been prepared in accordance with Article 11 of Regulation S-X. After the date of the Spin-off, the historical financial results of Mallinckrodt’s Specialty Generics business and Endo’s Generic Pharmaceuticals and Sterile Injectables businesses will be reflected in the Company’s consolidated financial statements as discontinued operations under U.S. generally accepted accounting principles (“GAAP”) for all periods. The unaudited Pro Forma Financial Information has been presented to reflect Mallinckrodt’s Specialty Generics business and Endo’s Generic Pharmaceuticals and Sterile Injectables businesses as discontinued operations in accordance with Accounting Standards Codification (“ASC”) Topic 205-20, Discontinued Operations (“ASC 205-20”), for all relevant periods presented.

 

The merger between Mallinckrodt and Endo (the “Business Combination”), which was completed on July 31, 2025, is reflected in the unaudited Pro Forma Financial Information using the acquisition method of accounting under ASC Topic 805, Business Combinations (“ASC 805”), which requires that one of the two companies in the Business Combination be designated as the acquirer for accounting purposes. Mallinckrodt is the acquirer in the Business Combination for accounting purposes. The assets and liabilities of Endo have been measured based on various preliminary estimates, using assumptions that Mallinckrodt believes are reasonable based on information that is currently available. As of the date of this filing, the valuation of the identifiable assets acquired and liabilities assumed remains ongoing and material adjustments may be made. The allocation of the merger consideration is preliminary, pending finalization of various estimates and analyses. Since the unaudited Pro Forma Financial Information has been prepared based on preliminary fair values, the final amounts recorded for the acquisition date fair values, including goodwill, may differ materially from the information presented.

 

The unaudited Pro Forma Financial Information does not reflect future events that may occur after the Spin-off, including potential impacts of any cost or growth synergies or dis-synergies related to the Business Combination or the Spin-off, any cost savings that the combined company may achieve as a result of the Business Combination, or the costs required to integrate the operations of Mallinckrodt and Endo or to achieve these cost or growth synergies. As such, the unaudited Pro Forma Financial Information should not be used to project Mallinckrodt’s financial performance for any future period. A number of factors may affect the results.

 

 

MALLINCKRODT PLC
PRO FORMA CONDENSED COMBINED BALANCE SHEET
As of June 27, 2025
(unaudited; in millions, except per share data)
		Pro Forma (Note 3)				Discontinued Operations													Pro Forma Combined
		Mallinckrodt plc				Specialty Generics (Note 4(a))				Sterile Injectables and Generic Pharmaceuticals (Note 4(b))				Transaction Accounting Adjustments (Note 5)					Mallinckrodt plc
ASSETS
Current assets:
Cash and cash equivalents		$	971.2			$	(230.0	)		$	-			$	(12.0	)	5(a)		$	729.2
Restricted cash and cash equivalents			112.6				-				(0.2	)			-					112.4
Accounts receivable, net			819.4				(272.0	)			(244.4	)			-					303.0
Inventories			1,421.0				(245.6	)			(250.6	)			-					924.8
Prepaid expenses and other current assets			193.9				(14.2	)			(23.5	)			-					156.2
Total Current assets:		$	3,518.1			$	(761.8	)		$	(518.7	)		$	(12.0	)			$	2,225.6
Property, plant and equipment, net			825.6				(290.2	)			(369.0	)			-					166.4
Inventories, long-term			561.0				-				-				-					561.0
Operating Lease Assets			90.0				(32.0	)			(4.0	)			4.9		5(b)			58.9
Intangible assets, net			2,608.1				(240.6	)			(102.0	)			-					2,265.5
Goodwill			10.2				-				(2.0	)			-					8.2
Deferred income taxes			809.3				(125.3	)			(94.7	)			-					589.3
Other assets			166.7				(103.5	)			(11.7	)			-					51.5
Total Assets		$	8,589.0			$	(1,553.4	)		$	(1,102.1	)		$	(7.1	)			$	5,926.4
Liabilities and Shareholders’ Equity
Current liabilities:
Current maturities of long-term debt			37.5				(22.5	)			-				-					15.0
Accounts payable			140.6				(32.9	)			(31.9	)			-					75.8
Accrued payroll and payroll-related costs			257.2				(28.0	)			(23.6	)			-					205.6
Accrued interest			18.2				-				-				-					18.2
Acthar Gel-Related Settlement			33.7				-				-				-					33.7
Current Portion of Operating Lease Liabilities			14.6				(4.7	)			(1.3	)			2.5		5(b)			11.1
Accrued and other current liabilities			562.7				(80.0	)			(125.7	)			-					357.0
Total Current liabilities:		$	1,064.5			$	(168.1	)		$	(182.5	)		$	2.5				$	716.4
Long-term debt			3,695.7				(1,150.7	)			-				-					2,545.0
Acthar Gel-Related Settlement			102.7				-				-				-					102.7
Operating Lease Liabilities			75.8				(27.0	)			(2.8	)			2.4		5(b)			48.4
Pension and postretirement benefits			27.1				(26.0	)			-				-					1.1
Environmental liabilities			34.0				(34.0	)			-				-					-
Other income tax liabilities			170.3				-				(10.5	)			-					159.8
Other liabilities			154.8				(30.0	)			(66.6	)			-					58.2
Total Liabilities		$	5,324.9			$	(1,435.8	)		$	(262.4	)		$	4.9				$	3,631.6
Shareholders’ Equity:
Ordinary shares, $ 0.01 par value, 500,000,000 authorized; 19,762,306 issued; 19,736,759 outstanding			0.4				-				-				-					0.4

 

 

MALLINCKRODT PLC
PRO FORMA CONDENSED COMBINED BALANCE SHEET
As of June 27, 2025 (unaudited; in millions, except per share data)
		Pro Forma (Note 3)				Discontinued Operations													Pro Forma Combined
			Mallinckrodt plc				Specialty Generics (Note 4(a))				Sterile Injectables and Generic Pharmaceuticals (Note 4(b))				Transaction Accounting Adjustments (Note 5)					Mallinckrodt plc
Ordinary shares held in treasury at cost, 25,547			(1.9	)			-				-				-					(1.9	)
Additional paid-in capital			2,997.2				(105.7	)			(585.2	)			(12.0	)	5(a)			2,294.3
Accumulated other comprehensive income			13.9				(11.9	)			-				-					2.0
Retained earnings (deficit)			254.5				-				(254.5	)			-					-
Total Shareholders' Equity (Deficit)		$	3,264.1			$	(117.6	)		$	(839.7	)		$	(12.0	)			$	2,294.8
Total Liabilities and Shareholders' Equity (Deficit)		$	8,589.0			$	(1,553.4	)		$	(1,102.1	)		$	(7.1	)			$	5,926.4

 

The accompanying notes are an integral part of this unaudited pro forma condensed combined financial information.

 

 

MALLINCKRODT PLC
PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
Six Months Ended June 27, 2025
(unaudited; in millions, except per share data)
		Pro Forma (Note 3)				Discontinued Operations								Spin-off and Other Spin-off Related Transactions					Pro Forma Combined
		Mallinckrodt plc				Specialty Generics (Note 4(a))				Generic Pharmaceuticals and Sterile Injectables (Note 4(b))				Transaction Adjustments (Note 5)					Mallinckrodt plc
Net Sales		$	1,716.3			$	(433.5	)		$	(376.8	)		$	-				$	906.0
Cost of Sales			942.4				(261.5	)			(276.1	)			-					404.8
Gross Profit		$	773.9			$	(172.0	)		$	(100.7	)		$	-				$	501.2
Selling, general and administrative expenses			541.3				(66.4	)			(34.1	)			3.0		5(c)			443.8
Combination, integration, and other related expenses			98.8				-				-				-					98.8
Research and development expenses			103.3				(10.8	)			(37.7	)			-					54.8
Restructuring charges, net			(2.2	)			-				-				-					(2.2	)
Non-restructuring impairment charges			1.0				-				(1.0	)			-					-
Liabilities management and separation costs			3.6				(2.6	)			-				-					1.0
Operating income (loss)		$	28.1			$	(92.2	)		$	(27.9	)		$	(3.0	)			$	(95.0	)
Interest expense			(189.8	)			69.9				0.1				-					(119.8	)
Interest income			16.8				(3.8	)			-				-					13.0
Loss on divestiture			(6.7	)			-				-				-					(6.7	)
Other income (expense), net			(2.6	)			1.0				0.6				0.2		5(d)			(0.8	)
Loss from continuing operations before income taxes		$	(154.2	)		$	(25.1	)		$	(27.2	)		$	(2.8	)			$	(209.3	)
Income tax expense (benefit)			1.9				(3.2	)			(3.6	)			(0.7	)	5(e)			(5.6	)
Loss from continuing operations		$	(156.1	)		$	(21.9	)		$	(23.6	)		$	(2.1	)			$	(203.7	)
Basic loss per share:
Loss from continuing operations		$	(3.96	)															$	(5.17	)
Basic weighted-average shares outstanding			39.4																	39.4
Diluted loss per share (Note 6):
Loss from continuing operations		$	(3.96	)															$	(5.17	)
Diluted weighted-average shares outstanding			39.4																	39.4

 

The accompanying notes are an integral part of this unaudited pro forma condensed combined financial information.

 

 

MALLINCKRODT PLC
PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
Year Ended December 27, 2024
(unaudited; in millions, except per share data)
		Pro Forma (Note 3)				Discontinued Operations								Spin-off and Other Spin-off Related Transactions					Pro Forma Combined
		Mallinckrodt plc				Specialty Generics (Note 4(a))				Generic Pharmaceuticals and Sterile Injectables (Note 4(b))				Transaction Adjustments (Note 5)					Mallinckrodt plc
Net Sales		$	3,421.7			$	(896.1	)		$	(796.5	)		$	-				$	1,729.1
Cost of Sales			2,434.2				(608.3	)			(575.8	)			-					1,250.1
Gross Profit		$	987.5			$	(287.8	)		$	(220.7	)		$	-				$	479.0
Selling, general and administrative expenses			1,195.5				(113.9	)			(72.4	)			14.1		5(f)			1,023.3
Research and development expenses			198.2				(26.4	)			(51.5	)			-					120.3
Restructuring charges, net			10.5				-				-				-					10.5
Non-restructuring impairment charges			245.7				-				(245.7	)			-					-
Combination, integration and other related expenses			113.4				-				-				-					113.4
Liabilities management and separation costs			43.9				-				-				-					43.9
Operating income (loss)		$	(819.7	)		$	(147.5	)		$	148.9			$	(14.1	)			$	(832.4	)
Interest expense			(306.6	)			152.2				0.1				-					(154.3	)
Interest income			29.7				(3.9	)			-				-					25.8
Gain on divestiture			782.0				-				-				-					782.0
(Loss) gain on debt extinguishment, net			(5.3	)			-				-				-					(5.3	)
Other income (expense), net			(2.7	)			2.6				(0.1	)			9.7		5(g)			9.5
(Loss) income from continuing operations before income taxes		$	(322.6	)		$	3.4			$	148.9			$	(4.4	)			$	(174.7	)
Income tax expense (benefit)			2.2				(3.3	)			21.7				(1.1	)	5(h)			19.5
(Loss) income from continuing operations		$	(324.8	)		$	6.7			$	127.2			$	(3.3	)			$	(194.2	)
Basic loss per share:
Loss from continuing operations		$	(8.24	)															$	(4.93	)
Basic weighted-average shares outstanding			39.4																	39.4
Diluted loss per share (Note 6):
Loss from continuing operations		$	(8.24	)															$	(4.93	)
Diluted weighted-average shares outstanding			39.4																	39.4

 

The accompanying notes are an integral part of this unaudited pro forma condensed combined financial information.

 

 

 

 

MALLINCKRODT PLC
PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
(unaudited; in millions, except per share data)
		Successor Period from November 15, 2023 through December 29, 2023												Predecessor Period from December 31, 2022 through November 14, 2023
		Historical				Discontinued Operations				Pro Forma				Historical				Discontinued Operations				Pro Forma
		Mallinckrodt plc				Specialty Generics (Note 4(a))				Mallinckrodt plc				Mallinckrodt plc				Specialty Generics (Note 4(a))				Mallinckrodt plc
Net Sales		$	243.0			$	(103.1	)		$	139.9			$	1,622.9			$	(673.7	)		$	949.2
Cost of Sales			179.1				(94.1	)			85.0				1,300.5				(453.2	)			847.3
Gross Profit		$	63.9			$	(9.0	)		$	54.9			$	322.4			$	(220.5	)		$	101.9
Selling, general and administrative expenses			64.2				(8.2	)			56.0				448.2				(82.6	)			365.6
Research and development expenses			15.9				(4.1	)			11.8				97.1				(22.6	)			74.5
Restructuring charges, net			-				-				-				0.9				-				0.9
Non-restructuring impairment charges			2.6				-				2.6				135.9				(85.8	)			50.1
Liabilities management and separation costs			1.4				-				1.4				157.7				(4.9	)			152.8
Operating income (loss)		$	(20.2	)		$	3.3			$	(16.9	)		$	(517.4	)		$	(24.6	)		$	(542.0	)
Interest expense			(28.3	)			-				(28.3	)			(507.2	)			96.5				(410.7	)
Interest income			0.9				(0.5	)			0.4				14.7				(3.5	)			11.2
Other income (expense), net			5.4				-				5.4				(6.5	)			(0.2	)			(6.7	)
Reorganization items, net			(4.0	)			0.5				(3.5	)			(892.7	)			(646.5	)			(1,539.2	)
(Loss) income from continuing operations before income taxes		$	(46.2	)		$	3.3			$	(42.9	)		$	(1,909.1	)		$	(578.3	)		$	(2,487.4	)
Income tax benefit			(8.0	)			(0.5	)			(8.5	)			(277.8	)			(129.6	)			(407.4	)
(Loss) income from continuing operations		$	(38.2	)		$	3.8			$	(34.4	)		$	(1,631.3	)		$	(448.7	)		$	(2,080.0	)
Basic loss per share:
Loss from continuing operations		$	(1.94	)						$	(1.75	)		$	(122.75	)						$	(156.39	)
Basic weighted-average shares outstanding			19.7								19.7				13.3								13.3
Diluted loss per share (Note 6):
Loss from continuing operations		$	(1.94	)						$	(1.75	)		$	(122.75	)						$	(156.39	)
Diluted weighted-average shares outstanding			19.7								19.7				13.3								13.3

 

The accompanying notes are an integral part of this unaudited pro forma condensed combined financial information.

 

 

MALLINCKRODT PLC
PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
(unaudited; in millions, except per share data)
		Predecessor Period from June 17, 2022 through December 30, 2022												Predecessor Period from January 1, 2022 through June 16, 2022
		Historical				Discontinued Operations				Pro Forma				Historical				Discontinued Operations				Pro Forma
		Mallinckrodt plc				Specialty Generics (Note 4(a))				Mallinckrodt plc				Mallinckrodt plc				Specialty Generics (Note 4(a))				Mallinckrodt plc
Net Sales		$	1,039.7			$	(357.3	)		$	682.4			$	874.6			$	(287.5	)		$	587.1
Cost of Sales			991.0				(327.0	)			664.0				582.0				(205.0	)			377.0
Gross Profit			48.7				(30.3	)			18.4				292.6				(82.5	)			210.1
Selling, general and administrative expenses			268.9				(47.8	)			221.1				266.3				(59.7	)			206.6
Research and development expenses			64.2				(12.6	)			51.6				65.5				(12.1	)			53.4
Restructuring charges, net			11.1				-				11.1				9.6				-				9.6
Liabilities management and separation costs			21.2				-				21.2				9.0				-				9.0
Operating income (loss)		$	(316.7	)		$	30.1			$	(286.6	)		$	(57.8	)		$	(10.7	)		$	(68.5	)
Interest expense			(324.3	)			75.6				(248.7	)			(108.6	)			-				(108.6	)
Interest income			3.9				(1.4	)			2.5				0.6				(0.6	)			-
Other income (expense), net			10.0				(2.1	)			7.9				(14.6	)			0.1				(14.5	)
Reorganization items, net			(23.2	)			6.2				(17.0	)			(630.9	)			(721.1	)			(1,352.0	)
(Loss) income from continuing operations before income taxes		$	(650.3	)		$	108.4			$	(541.9	)		$	(811.3	)		$	(732.3	)		$	(1,543.6	)
Income tax (benefit) expense			(52.0	)			17.3				(34.7	)			(497.3	)			(98.8	)			(596.1	)
(Loss) income from continuing operations		$	(598.3	)		$	91.1			$	(507.2	)		$	(314.0	)		$	(633.5	)		$	(947.5	)
Basic loss per share:
Loss from continuing operations		$	(45.43	)						$	(38.42	)		$	(3.70	)						$	(11.17	)
Basic weighted-average shares outstanding			13.2								13.2				84.8								84.8
Diluted loss per share (Note 6):
Loss from continuing operations		$	(45.43	)						$	(38.42	)		$	(3.70	)						$	(11.17	)
Diluted weighted-average shares outstanding			13.2								13.2				84.8								84.8

 

The accompanying notes are an integral part of this unaudited pro forma condensed combined financial information.

 

 

MALLINCKRODT PLC

NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

(unaudited; dollars in millions)

 

1.	Description of Transactions

 

The unaudited Pro Forma Financial Information primarily reflects the pro forma effects of the following:

 

•

Spin-off of Par Health – On November 10, 2025, Mallinckrodt completed the previously announced separation of its Specialty Generics business and Endo’s Generic Pharmaceuticals and Sterile Injectables businesses as an independent entity named Par Health. In October 2025, prior to the Spin-off, Mallinckrodt issued 45,564 preferred shares for each outstanding Mallinckrodt ordinary share to shareholders of record as of October 8, 2025. The preferred shares carried no voting rights, dividend entitlement, or enforceable redemption rights.

 

Mallinckrodt preferred shares held by certain qualified shareholders (including qualified institutional buyers) were redeemed in exchange for 0.0000219471513 shares of Par Health common stock per Mallinckrodt preferred share, and Mallinckrodt preferred shares held by non-qualified shareholders were redeemed for $0.000424786467775745 in cash per Mallinckrodt preferred share (or $19.35497062 per Mallinckrodt ordinary share). Therefore, none of the Mallinckrodt preferred shares remain issued and outstanding.

 

The Company concluded that the Spin-off was a pro rata distribution of economic value among shareholders, whereby the value of the shares received by qualified shareholders was commensurate with the cash amount received by non-qualified shareholders. As a result, the Company accounted for the Spin-off at the carrying amount of the net assets distributed. The Company reduced its equity by the carrying amount of Par Health’s assets and liabilities after taking into account any potential impairment, with no gain or loss recognized (the “Redemption”).

 

•

Other Spin-off Related Transactions – The impact of a Tax Matters Agreement, Employee Matters Agreement, Transition Services Agreement, and Amended and Restated Multi-Tenant Agreement that the Company entered into with Par Health and its subsidiaries (“SpinCo Group”) in connection with the Spin-off (“Other Spin-off Related Transactions”).

 

•

Other Transactions – The Mallinckrodt and Endo Business Combination, the Financing and Prepayment of Historical Mallinckrodt Indebtedness and makewhole premium, Mallinckrodt’s Therakos Divestiture, Endo’s International Pharmaceuticals Business Divestiture, and Endo’s Reorganization and Fresh-Start Accounting, as further described in Note 3 (collectively referred to as the “Other Transactions”). Refer to Note 3 for the pro forma effect of the Other Transactions.

 

2.	Basis of Presentation

 

The unaudited Pro Forma Financial Information is presented in accordance with Article 11 of Regulation S-X and has been compiled from historical consolidated financial statements of Mallinckrodt, Endo, and Endo’s Predecessor, each prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

 

Mallinckrodt reports its results based on a “52-53 week” year ending on the last Friday of December. For 2024, the fiscal year represented the period from December 30, 2023 to December 27, 2024 (Successor). For 2023, the fiscal year comprised the period from November 15, 2023 through December 29, 2023 (Successor) and the period from December 31, 2022 through November 14, 2023 (Predecessor). For 2022, the fiscal year comprised the period from June 17, 2022 through December 30, 2022 (Predecessor) and the period from January 1, 2022 through June 16, 2022 (Predecessor). The six months ended June 27, 2025 refers to the twenty-six week period ended from December 28, 2024 to June 27, 2025. Endo reported its results on a calendar year basis, with the most recent year ending on December 31, 2024, and the most recent quarter ending on June 30, 2025. The interim statement of operations information for the six months ended June 27, 2025 and the annual statement of operations information for the fiscal year ended December 27, 2024 is combined within the Pro Forma Financial Information, given the difference in the fiscal year end of Mallinckrodt and Endo is less than one quarter.

 

 

The unaudited Pro Forma Financial Information is provided for illustrative purposes only and may not provide an indication of results in the future. The unaudited Pro Forma Financial Information should be read in conjunction with the accompanying notes to the unaudited Pro Forma Financial Information. In addition, the unaudited Pro Forma Financial Information is compiled from and should be read in conjunction with the following historical consolidated financial statements and accompanying notes of Mallinckrodt, Endo, and Endo’s Predecessor for the applicable periods:

 

•

Unaudited condensed consolidated financial statements of Mallinckrodt as of June 27, 2025 and December 27, 2024 and for the six months ended June 27, 2025 and June 28, 2024, and the related notes thereto included in Mallinckrodt’s Quarterly Report on Form 10-Q (“Mallinckrodt’s Q2 2025 Quarterly Report on Form 10-Q”).

 

•

Audited consolidated financial statements of Mallinckrodt as of and for the fiscal year ended December 27, 2024 (Successor), for the period from November 15, 2023 through December 29, 2023 (Successor), for the period from December 31, 2022 through November 14, 2023 (Predecessor), for the period from June 17, 2022 through December 30, 2022 (Predecessor), and for the period from January 1, 2022 through June 16, 2022 (Predecessor), and the related notes thereto included in Mallinckrodt’s Annual Report on Form 10-K (“Mallinckrodt’s 2024 Annual Report on Form 10-K”).

 

•

Unaudited condensed consolidated financial statements of Endo Inc. as of June 30, 2025 (Successor) and December 31, 2024 (Successor) and for the six months ended June 30, 2025 (Successor) and 2024 (Successor), the period from April 1, 2024 to April 23, 2024 (Predecessor) and the period from January 1, 2024 to April 23, 2024 (Predecessor), and the related notes thereto included in Exhibit 99.2 to Mallinckrodt’s Current Report on Form 8-K filed on August 6, 2025 (“Endo’s Q2 2025 historical financial statements”).

 

•

Audited consolidated financial statements of Endo, Inc. (Successor) as of December 31, 2024 and for the year ended December 31, 2024, and of Endo International Plc (Predecessor) as of December 31, 2023, for the period from January 1, 2024 to April 23, 2024, and for the years ended December 31, 2023 and 2022, and the related notes thereto (incorporated by reference to Part II, Item 8 of Endo, Inc’s Annual Report on Form 10-K, filed on March 13, 2025) (“Endo’s 2024 Annual Report on Form 10-K”).

 

The unaudited Pro Forma Financial Information has been derived from Mallinckrodt’s and Endo’s historical consolidated financial statements as noted above and give effect to the Spin-off, Other Spin-off Related Transactions, and Other Transactions as follows:

 

•

The unaudited Pro Forma Financial Information reflects the presentation of Mallinckrodt’s Specialty Generics business and Endo’s Generic Pharmaceuticals and Sterile Injectables businesses as discontinued operations in accordance with ASC 205-20 for all periods presented.

 

•

The unaudited pro forma condensed combined balance sheet as of June 27, 2025 gives effect to the Spin-off, Other Spin-off Related Transactions, the Business Combination, the Financing, and the Mallinckrodt Prepayment as if they had occurred on June 27, 2025.

 

•

The unaudited pro forma condensed combined statement of operations for the six months ended June 27, 2025 gives effect to the Spin-off, Other Spin-off Related Transactions, the Business Combination, the Financing, and the Mallinckrodt Prepayment, as if they had been consummated on December 30, 2023, the beginning of Mallinckrodt’s most recently completed fiscal year end, and gives effect to the divestiture of Endo’s International Pharmaceuticals business, as if it had been completed as of January 1, 2024, which is the beginning of Endo’s most recently completed fiscal year.

 

•

The unaudited pro forma condensed combined statement of operations for the year ended December 27, 2024 gives effect to the Spin-off, Other Spin-off Related Transactions, the Business Combination, the Financing, the Mallinckrodt Prepayment, and Mallinckrodt’s Therakos divestiture, as if they had been consummated on December 30, 2023, the beginning of Mallinckrodt’s most recently completed fiscal year, and gives effect to Endo’s Predecessor’s Plan and the divestiture of Endo’s International Pharmaceuticals business, as if it had been completed as of January 1, 2024, the beginning of Endo’s most recently completed fiscal year.

 

•

The unaudited pro forma condensed combined statement of operations for the period from November 15, 2023 through December 29, 2023 (Successor), for the period from December 31, 2022 through November 14, 2023 (Predecessor), for the period from June 17, 2022 through December 30, 2022 (Predecessor), and for the period from January 1, 2022 through June 16, 2022 (Predecessor) gives effect to the Spin-off, which reflects the presentation of Mallinckrodt’s Specialty Generics business as discontinued operations in accordance with ASC 205-20.

 

 

The financial information of Mallinckrodt’s Specialty Generics business and Endo’s Generic Pharmaceuticals and Sterile Injectables businesses reflected in the unaudited Pro Forma Financial Information in the “Discontinued Operations” columns was derived from:

 

•

Mallinckrodt’s consolidated financial information and related accounting books and records as of and for the six months ended June 27, 2025 (Successor), for the year ended December 27, 2024 (Successor), for the period from November 15, 2023 through December 29, 2023 (Successor), for the period from December 31, 2022 through November 14, 2023 (Predecessor), for the period from June 17, 2022 through December 30, 2022 (Predecessor), and for the period from January 1, 2022 through June 16, 2022 (Predecessor), and

 

•

Endo’s consolidated financial information and related accounting books and records as of and for the six months ended June 27, 2025 (Successor), for the year ended December 31, 2024 (Successor), and for the period from January 1, 2024 through April 23, 2024 (Predecessor).

 

The information in the “Discontinued Operations” columns in the unaudited Pro Forma Financial Information does not include any allocation of general corporate overhead expense or interest expense of Mallinckrodt and was adjusted to include certain assets and liabilities that will be transferred to Par Health pursuant to the Separation Agreement, and exclude certain liabilities related to Par Health that will be retained by Mallinckrodt in connection with the Spin-off. Discontinued Operations does not reflect what Par Health’s results of operations would have been on a stand-alone basis and are not necessarily indicative of future results of operations. Beginning with the consolidated financial statements for the fiscal year ending in December 2025, Mallinckrodt’s Specialty Generics business and Endo’s Generic Pharmaceuticals and Sterile Injectables businesses’ historical financial results for periods prior to the Spin-off will be reflected in Mallinckrodt’s consolidated financial statements as discontinued operations, with prior periods retrospectively revised, in accordance with ASC 205-20.

 

The Business Combination is reflected in the unaudited Pro Forma Financial Information using the acquisition method of accounting in accordance with ASC 805. U.S. GAAP requires that one of the two companies in the Business Combination be designated as the acquirer for accounting purposes based on the evidence available. Mallinckrodt is the acquiring entity for accounting purposes. In identifying the Company as the acquiring entity for accounting purposes, management considered the voting rights of all equity instruments, the composition of the corporate governing body and senior management, the size of each of the companies, and the terms of the exchange of equity interests.

 

The acquisition method of accounting uses the fair value concepts defined in ASC 820, Fair Value Measurements and Disclosures (“ASC 820”). Fair value is defined in ASC 820 as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” Fair value measurements can be highly subjective and it is possible the application of reasonable judgment could develop different assumptions resulting in a range of alternative estimates using the same facts and circumstances. The allocation of the merger consideration is preliminary, pending finalization of various estimates and analyses. Since the unaudited Pro Forma Financial Information has been prepared based on preliminary fair values, the final amounts recorded for the acquisition date fair values, including goodwill, may differ materially from the information presented.

 

The initial allocation of the preliminary consideration in the unaudited Pro Forma Financial Information is based upon an estimated preliminary consideration of approximately $1.9 billion. This amount is based on approximately 19.7 million ordinary shares that Mallinckrodt issued to holders of Endo common stock in connection with the Business Combination, based on the number of shares of Endo common stock outstanding as of July 31, 2025, the number of Endo equity awards subject to acceleration upon change in control, the number of Endo equity awards settled in cash, and the Endo exchange ratio that resulted in 49.9% of the outstanding ordinary shares of Mallinckrodt as of immediately following the Business Combination being owned by former Endo shareholders.

 

Mallinckrodt is not listed on a national securities exchange or quoted on the automated quotation system of a national securities association, and as such, used a fair value per ordinary share equal to $90.50 per share as of July 31, 2025 in accordance with U.S. Internal Revenue Service Section 409A (“Section 409A”) to determine preliminary fair value of consideration transferred. The preliminary consideration also includes the $100.0 million cash payment to former Endo shareholders and estimated fair value of replaced Endo equity awards relating to pre-acquisition vesting of the equity holders’ requisite service periods. A 10% change in fair value per ordinary share would change the purchase price by approximately $177.8 million.

 

 

On August 28, 2023, the Company voluntarily initiated Chapter 11 proceedings ("2023 Chapter 11 Cases") under chapter 11 of title 11 ("Chapter 11") of the United States Code ("Bankruptcy Code") in the U.S. Bankruptcy Court for the District of Delaware ("Bankruptcy Court"). On September 20, 2023, the directors of the Company initiated examinership proceedings with respect to Mallinckrodt plc by presenting a petition to the High Court of Ireland pursuant to Section 510(1)(b) of the Companies Act 2014 seeking the appointment of an examiner to Mallinckrodt plc. On November 14, 2023 (“2023 Effective Date”), the Company emerged from the 2023 Chapter 11 Cases and the Irish examinership proceedings (together, the "2023 Bankruptcy Proceedings").

 

On October 12, 2020, the Company voluntarily initiated Chapter 11 proceedings ("2020 Chapter 11 Cases"). On March 2, 2022, the Bankruptcy Court entered an order confirming a plan of reorganization ("2020 Plan"). On June 16, 2022 (“2020 Effective Date”), the Company emerged from the 2020 Chapter 11 Cases and the Irish examinership proceedings (together, the "2020 Bankruptcy Proceedings").

 

Upon emergence from both the 2020 Bankruptcy Proceedings on June 16, 2022 and the 2023 Bankruptcy Proceedings on November 14, 2023, the Company adopted fresh-start accounting in accordance with the provisions of Financial Accounting Standards Board Accounting Standards Codification ("ASC") Topic 852, Reorganizations ("ASC 852"), and became a new entity for financial reporting purposes as of each of the 2020 Effective Date and the 2023 Effective Date. References to "Successor" in the pro forma condensed combined statements of operations for the period from November 15, 2023 through December 29, 2023 relate to the results of operations of the reorganized Company subsequent to November 14, 2023, while references to "Predecessor" relate to the results of operations of the Company for the period from December 31, 2022 through November 14, 2023, the period from June 17, 2022 through December 30, 2022, and for the period from January 1, 2022 through June 16, 2022.

 

The pro forma adjustments reflected in the unaudited Pro Forma Financial Information were based on available information and assumptions that Mallinckrodt believes are reasonable and supportable that reflect the effects of the transactions described in Note 1 and Note 3. The pro forma adjustments do not reflect future events that may occur after the Spin-off, including potential selling, general and administrative dis-synergies and the expected charges, the expected realization of any cost savings and other synergies, or the usage of the expected cash distribution to be received from Par Health in connection with the Spin-off. Further, the unaudited Pro Forma Financial Information does not reflect restructuring or integration activities that have yet to be determined or other costs following the Business Combination that may be incurred to achieve cost or growth synergies of the combined company, including severance and retention bonus costs. As no assurance can be made that the costs will be incurred or the cost or growth synergies will be achieved, no adjustments have been made.

 

The unaudited Pro Forma Financial Information and underlying pro forma adjustments are based upon currently available information and include certain estimates and assumptions made by management; accordingly, actual results could differ materially from the unaudited Pro Forma Financial Information.

 

3.	Unaudited Pro Forma Financial Information of Mallinckrodt Reflecting the Other Transactions

 

The unaudited Pro Forma Financial Information of Mallinckrodt also give effect to the following Other Transactions:

 

•

Mallinckrodt and Endo Business Combination - On July 31, 2025, the Company completed the Business Combination, whereby the Company acquired all of the issued and outstanding shares of common stock of Endo in exchange for a combination of cash and the Company’s ordinary shares in accordance with the merger agreement entered into to effectuate a combination of the respective companies (the “Merger Agreement”). Outstanding shares of common stock of Endo were cancelled and converted into the right to receive 0.2575 of a Mallinckrodt ordinary share and approximately $1.31 in cash, without interest and subject to applicable withholding.

 

The Company acquired Endo by means of the merger of Salvare Merger Sub LLC, a wholly owned subsidiary of Mallinckrodt, with and into Endo, with Endo continuing as the surviving entity in the merger and a wholly-owned subsidiary of Mallinckrodt. On July 31, 2025, prior to the completion of the Business Combination, the memorandum and articles of association of the Company were amended by means of a scheme of arrangement (the “Scheme”) under the Companies Act 2014 of Ireland (as amended) and certain other amendments that had been previously approved by the Company’s shareholders (the “constitution amendment”).

 

 

Mallinckrodt is the acquiring entity for accounting purposes. The Company accounted for the Business Combination under the acquisition method of accounting in accordance with ASC 805. This method requires the recording of acquired assets, including separately identifiable intangible assets at their fair value on the acquisition date. Any excess of the purchase price over the estimated fair value of the identifiable net assets acquired is recorded as goodwill.

 

The determination of the estimated fair value of assets acquired requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates, asset lives and market multiples, among other items. Fair values were determined by management, using a variety of methodologies and resources, including external independent valuation experts. The valuation methods consisted of physical appraisals, discounted cash flow analyses, excess earnings, relief from royalty, and other appropriate valuation techniques to determine the fair value of assets acquired and liabilities assumed. As of the date of this filing, the valuation of the identifiable assets acquired and liabilities assumed remains ongoing and material adjustments may be made. The allocation of the merger consideration is preliminary, pending finalization of various estimates and analyses. Since the unaudited Pro Forma Financial Information has been prepared based on preliminary fair values, the final amounts recorded for the acquisition date fair values, including goodwill, may differ materially from the information presented.

 

•

Financing and Prepayment of Historical Mallinckrodt Indebtedness and Makewhole Premium - On July 31, 2025, in connection with the consummation of the Business Combination, ST 2020, Inc. (“ST 2020”), a wholly owned subsidiary of Mallinckrodt, and MEH, Inc. (the “Borrower”), a wholly owned subsidiary of ST 2020, entered into a credit agreement (the “Credit Agreement”) with the lenders named therein, Wilmington Savings Fund Society, FSB, as administrative agent and collateral agent, and OPY Credit Corp., as trading agent, providing for $1,350.0 million in aggregate principal amount of senior secured credit facilities, comprising (i) a $1,200.0 million senior secured term loan facility (“Term Facility”) and (ii) a $150.0 million senior secured revolving credit facility (“Revolving Facility” and together with the Term Facility, the “Facilities” or the “Financing”). MEH, Inc. borrowed $1,200.0 million under the Term Facility on August 1, 2025. No amounts were drawn on the Revolving Facility. The Facilities mature on July 31, 2030, unless extended pursuant to the terms of the Credit Agreement.

 

The Term Facility will amortize in quarterly installments as follows: (i) commencing with the fiscal quarter ending December 31, 2025 through (and including) the fiscal quarter ending September 30, 2026, 0.625% of the initial aggregate principal amount of the Term Facility, (ii) from the last day of the fiscal quarter ending December 31, 2026 through (and including) the last day of the fiscal quarter ending September 30, 2027, 1.25% of the initial aggregate principal amount of the Term Facility, (iii) from the last day of the fiscal quarter ending December 31, 2027 through (and including) the last day of the fiscal quarter ending September 30, 2028, 1.875% of the initial aggregate principal amount of the Term Facility and (iv) from the last day of the fiscal quarter ending December 31, 2028 through the maturity date of the Term Facility, 2.50% of the initial aggregate principal amount of the Term Facility, with the balance payable on the maturity date of the Term Facility.

 

The Company capitalized $28.3 million of certain third-party debt issuance costs in connection with executing the Credit Agreement. Approximately $26.8 million of the capitalized costs was attributed to the Term Facility and was recorded as a direct reduction of long-term debt on the Company’s Consolidated Balance Sheet. Approximately $1.5 million was attributed to the Revolving Facility and recorded within other assets on the Company’s Consolidated Balance Sheet. These capitalized costs will be amortized into interest expense over the five-year term of the Credit Agreement.

 

ST 2020, the Borrower and certain of their subsidiaries, all of which shall be members of the SpinCo Group, will remain liable for the indebtedness under the Credit Agreement upon the separation of Par Health from Mallinckrodt. Following separation of Par Health from Mallinckrodt, none of Mallinckrodt and its subsidiaries shall be liable for the indebtedness under the Credit Agreement. Such indebtedness is given effect to in Note 3 and Note 4 of the unaudited pro forma condensed combined balance sheet as of June 27, 2025 and the unaudited pro forma condensed combined statements of operations for the six months ended June 27, 2025 and the year ended December 27, 2024 to reflect the financing impact and subsequent impact of the separation for this financing to the Company.

 

 

 

On August 1, 2025, in connection with the consummation of the Business Combination, Mallinckrodt and its subsidiaries prepaid in full approximately $385.5 million in outstanding aggregate principal amount of the senior secured first lien “second-out” term loans (the “Second-Out Takeback Term Loans”), constituting all of the remaining indebtedness outstanding under the existing Mallinckrodt credit agreement, together with accrued and unpaid interest thereon, as well as a payment of approximately $10.6 million in required makewhole premium and all amounts outstanding under Mallinckrodt’s receivables financing facility due December 2027 (the “Existing ABL Facility”) were repaid.

 

Also in connection with the consummation of the Business Combination, on August 1, 2025, Mallinckrodt and its subsidiaries redeemed in full approximately $477.2 million in outstanding principal amount of “second-out” 14.75% senior secured first lien notes due 2028 (the “Takeback Notes”), constituting all of the Takeback Notes outstanding under the existing Mallinckrodt indenture, for a redemption price equal to such outstanding principal amount, accrued and unpaid interest thereon and approximately $13.7 million in required makewhole premium. The prepayment of Mallinckrodt’s historical debt instruments (the “Mallinckrodt Prepayment”) is reflected in the unaudited Pro Forma Financial Information. The unaudited Pro Forma Financial Information reflects a makewhole premium of $24.3 million as further discussed in Note 3(c).

 

As a result of such prepayment, redemption and repayment, the existing Mallinckrodt credit agreement and the existing ABL facility were terminated, the existing Mallinckrodt indenture was discharged and all guarantees of, and liens securing, the obligations thereunder were released.

 

•

Therakos Divestiture - On November 29, 2024, Mallinckrodt completed the divestiture of its Therakos business for total cash consideration of $887.6 million, net of preliminary purchase price adjustments (“Initial Net Proceeds”). During the fiscal year ended December 27, 2024, Mallinckrodt recorded a gain on sale of $754.4 million, comprised of the $887.6 million of Initial Net Proceeds less the elimination of $125.5 million of net assets divested and $7.7 million in success-based professional fees. Mallinckrodt recorded a loss on the divestiture and paid $6.2 million for the final working capital settlement during the six months ended June 27, 2025. As a result, the total cash consideration was $881.4 million, net of the final working capital settlement. Mallinckrodt was required to use the proceeds to make a $775.5 million mandatory prepayment on certain portions of its debt and $63.7 million in required makewhole premium. Refer to Note 3(d) for further information regarding Mallinckrodt’s Therakos divestiture.

 

•

International Pharmaceuticals Business Divestiture - Prior to the Business Combination, on March 10, 2025, Endo entered into a definitive agreement to divest its International Pharmaceuticals business to Knight Therapeutics Inc. The sale closed on June 17, 2025 and Endo received net cash consideration of approximately $78.6 million, consisting of $89.9 million upfront, less approximately $11.3 million related to certain permitted hold backs. As of September 26, 2025, Endo remains eligible to receive up to an additional $9.4 million related to certain permitted hold backs and up to $15.0 million in potential future payments contingent upon the achievement of certain milestones.

 

•

Reorganization and Fresh-Start Accounting - On April 23, 2024, Endo’s Predecessor’s Plan of Reorganization (the “Plan”) became effective (the “Effective Date”). In accordance with the Plan on the Effective Date, Endo acquired substantially all of the assets, as well as certain equity interests of and assumed certain liabilities of Endo’s Predecessor. In accordance with ASC 852, the provisions of fresh-start accounting were applied on the Effective Date and Endo became the Successor entity for financial reporting purposes.

 

 

The following unaudited pro forma condensed combined balance sheet as of June 27, 2025 and unaudited pro forma condensed combined statements of operations for the six months ended June 27, 2025 and for the year ended December 27, 2024 present reclassification adjustments to conform the financial statement presentation of historical balances of Mallinckrodt and Endo and the pro forma effects of the Business Combination, the Financing, and the Mallinckrodt Prepayment:

 

MALLINCKRODT PLC

PRO FORMA CONDENSED COMBINED BALANCE SHEET

As of June 27, 2025

(unaudited; in millions, except share and per share data)

 

		Historical				Historical				Transaction Adjustments											Pro Forma
		Mallinckrodt plc				Endo, Inc.				Reclassifications and Eliminations (Note 3(a))					Pro Forma Adjustments (Note 3(c))						Mallinckrodt plc
Assets
Current assets:
Cash and cash equivalents		$	497.8			$	439.0			$	—				$	34.4			3(c1)		$	971.2
Restricted cash and cash equivalents			—				93.1				19.5		3(a1)			—						112.6
Accounts receivable, net			410.7				453.1				(44.4	)	3(a2)			—						819.4
Inventories			594.0				439.7				(59.1	)	3(a3)			446.4			3(c2)			1,421.0
Prepaid expenses and other current assets			112.7				50.0				31.2		3(a4)			—						193.9
Income taxes receivables			—				8.8				(8.8	)	3(a5)			—						—
Total current assets		$	1,615.2			$	1,483.7			$	(61.6	)			$	480.8					$	3,518.1
Property, plant and equipment, net			414.3				539.8				5.5		3(a6)			(134.0	)		3(c3)			825.6
Inventories, long-term			—				—				187.2		3(a3)			373.8			3(c2)			561.0
Operating lease assets			—				37.2				52.8		3(a7)			—						90.0
Intangible assets, net			393.1				1,646.7				—					568.3			3(c4)			2,608.1
Goodwill			—				—				—					10.2			3(c5)			10.2
Deferred income taxes (asset)			658.3				267.4				—					(116.4	)		3(c6)			809.3
Other assets			205.4				150.6				(186.4	)	3(a8)			(2.9	)		3(c7)			166.7
Total Assets		$	3,286.3			$	4,125.4			$	(2.5	)	3(a2)		$	1,179.8					$	8,589.0
Liabilities and Shareholders’ Equity
Current liabilities:
Current maturities of long-term debt		$	3.9			$	15.0			$	—				$	18.6			3(c8)		$	37.5
Accounts payable			78.4				—				62.2		3(a9)			—						140.6
Accounts payable and accrued expenses			—				451.4				(451.4	)	3(a9)			—						—
Accrued payroll and payroll-related costs			76.3				—				63.2		3(a9)			117.7			3(c9)			257.2
Accrued interest			13.7				—				18.2		3(a9)			(13.7	)		3(c10)			18.2
Acthar Gel-Related Settlement			33.7				—				—					—						33.7
Current portion of legal settlement			—				1.8				(1.8	)	3(a10)			—						—
Current portion of operating lease liabilities			—				4.1				10.5		3(a11)			—						14.6
Income taxes payable			—				11.7				(11.7	)	3(a12)			—						—
Accrued and other current liabilities			250.6				—				308.3		3(a13)			3.8			3(c11)			562.7
Total current liabilities		$	456.6			$	484.0			$	(2.5	)	3(a2)		$	126.4					$	1,064.5
Long-term debt			901.4				2,418.8				—					375.5			3(c8)			3,695.7
Acthar Gel-Related Settlement			102.7				—				—					—						102.7
Long-term legal settlement accrual			—				6.6				(6.6	)	3(a14)			—						—
Operating lease liabilities			—				33.7				42.1		3(a15)			—						75.8
Pension and postretirement benefits			27.1				—				—					—						27.1
Environmental liabilities			34.0				—				—					—						34.0
Other income tax liabilities			24.8				38.6				—					106.9			3(c12)			170.3
Other liabilities			97.8				72.6				(35.5	)	3(a16)			19.9			3(c13)			154.8
Total Liabilities		$	1,644.4			$	3,054.3			$	(2.5	)			$	628.7					$	5,324.9
Shareholders’ Equity:
Ordinary A shares, €1.00 par value, 25,000 authorized; none issued and outstanding			—				—				—					—						—
Ordinary shares, $0.01 par value, 500,000,000 authorized; 19,762,306 issued; 19,736,759 outstanding			0.2				—				—					0.2			3(c14)			0.4
Ordinary shares held in treasury at cost, 25,547			(1.9	)			—				—					—						(1.9	)
Endo, Inc. common stock, $0.001 par value; 1,000,000,000 shares authorized; 76,313,462 shares issued and outstanding			—				0.1				—					(0.1	)		3(c14)			—
Additional paid-in capital			1,214.4				1,990.3				—					(207.5	)		3(c14)			2,997.2
Accumulated other comprehensive income			13.9				(0.2	)			—					0.2			3(c14)			13.9
Retained earnings (deficit)			415.3				(919.1	)			—					758.3			3(c14)			254.5
Total Shareholders' Equity (Deficit)		$	1,641.9			$	1,071.1			$	—				$	551.1					$	3,264.1
Total Liabilities and Shareholders' Equity (Deficit)		$	3,286.3			$	4,125.4			$	(2.5	)			$	1,179.8					$	8,589.0

 

 

 

MALLINCKRODT PLC
PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
Six Months Ended June 27, 2025
(unaudited; in millions, except per share data)
		Historical				Pro Forma (Note 3(e))				Transaction Adjustments										Pro Forma Combined
		Mallinckrodt plc				Endo, Inc.				Reclassifications and Eliminations (Note 3(a))					Pro Forma Adjustments (Note 3(c))					Mallinckrodt plc
Net Sales		$	905.0			$	814.2			$	(2.9	)	3(a17)		$	—				$	1,716.3
Cost of Sales			470.3				563.9				(2.9	)	3(a17)			(88.9	)	3(c15)			942.4
Gross Profit		$	434.7			$	250.3			$	—				$	88.9				$	773.9
Selling, general and administrative expenses			298.1				295.2				(53.3	)	3(a18)			1.3		3(c16)			541.3
Combination, integration, and other related expenses			43.1				—				55.7		3(a19)			—					98.8
Research and development expenses			44.1				57.6				1.6		3(a20)			—					103.3
Restructuring charges, net			(2.2	)			—				—					—					(2.2	)
Non-restructuring impairment charges			—				—				1.0		3(a21)			—					1.0
Liabilities management and separation costs			3.6				—				—					—					3.6
Acquired in-process research and development			—				1.6				(1.6	)	3(a20)			—					—
Litigation-related and other contingencies, net			—				1.0				(1.0	)	3(a18)			—					—
Asset impairment charges			—				1.0				(1.0	)	3(a21)			—					—
Acquisition-related and integration items, net			—				1.4				(1.4	)	3(a19)			—					—
Operating income (loss)		$	48.0			$	(107.5	)		$	—				$	87.6				$	28.1
Interest expense			(65.4	)			(106.2	)			(5.1	)	3(a22)			(13.1	)	3(c17)			(189.8	)
Interest income			11.7				—				5.1		3(a22)			—					16.8
Loss on divestiture			(6.7	)			—				—					—					(6.7	)
Other income (expense), net			1.4				(4.0	)			—					—					(2.6	)
(Loss) income from continuing operations before income taxes		$	(11.0	)		$	(217.7	)		$	—				$	74.5				$	(154.2	)
Income tax expense (benefit)			14.6				(22.9	)			—					10.2		3(c18)			1.9
(Loss) income from continuing operations		$	(25.6	)		$	(194.8	)		$	—				$	64.3				$	(156.1	)
Basic loss per share:
Loss from continuing operations		$	(1.30	)																$	(3.96	)
Basic weighted-average shares outstanding			19.7													19.7		3(c19)			39.4
Diluted loss per share:
Loss from continuing operations		$	(1.30	)																$	(3.96	)
Diluted weighted-average shares outstanding			19.7													19.7		3(c19)			39.4

 

The accompanying notes are an integral part of this unaudited pro forma condensed combined financial information.

 

MALLINCKRODT PLC
PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
Year Ended December 27, 2024
(unaudited; in millions, except per share data)
		Pro Forma (Note 3(d))				Pro Forma (Note 3(e))				Transaction Adjustments										Pro Forma Combined
		Mallinckrodt plc				Endo, Inc.				Reclassifications and Eliminations (Note 3(a))					Pro Forma Adjustments (Note 3(c))					Mallinckrodt plc
Net Sales		$	1,738.1			$	1,686.5			$	(2.9	)	3(a23)		$	—				$	3,421.7
Cost of Sales			1,029.6				1,565.5				(2.9	)	3(a23)			(158.0	)	3(c20)			2,434.2
Gross Profit		$	708.5			$	121.0			$	—				$	158.0				$	987.5
Selling, general and administrative expenses			528.4				512.6				10.6		3(a24)			143.9		3(c21)			1,195.5
Research and development expenses			93.4				102.2				2.6		3(a25)			—					198.2
Restructuring charges, net			10.5				—				—					—					10.5
Non-restructuring impairment charges			—				—				245.7		3(a26)			—					245.7
Combination, integration and other related expenses			—				—				—					113.4		3(c22)			113.4
Liabilities management and separation costs			43.9				—				—					—					43.9
Acquired in-process research and development			—				2.6				(2.6	)				—					—
Litigation-related and other contingencies, net			—				0.4				(0.4	)	3(a24)			—					—
Asset impairment charges			—				245.7				(245.7	)	3(a26)			—					—
Acquisition-related and integration items, net			—				0.8				(0.8	)	3(a24)			—					—
Operating income (loss)		$	32.3			$	(743.3	)		$	(9.4	)			$	(99.3	)			$	(819.7	)
Interest expense			(137.3	)			(225.5	)			(2.7	)	3(a27)			58.9		3(c23)			(306.6	)
Interest income			27.0				—				2.7		3(a27)			—					29.7
Gain on divestiture			754.4				—				27.6		3(a28)			—					782.0
(Loss) gain on debt extinguishment, net			(19.7	)			—				—					14.4		3(c24)			(5.3	)
Other income (expense), net			0.3				24.6				(27.6	)	3(a28)			—					(2.7	)
Income (loss) from continuing operations before income taxes		$	657.0			$	(944.2	)		$	(9.4	)			$	(26.0	)			$	(322.6	)
Income tax expense (benefit)			131.2				(125.2	)			(2.2	)	3(a29)			(1.6	)	3(c25)			2.2
Income (loss) from continuing operations		$	525.8			$	(819.0	)		$	(7.2	)			$	(24.4	)			$	(324.8	)
Basic income (loss) per share:
Income (loss) from continuing operations		$	26.69																	$	(8.24	)
Basic weighted-average shares outstanding			19.7													19.7		3(c26)			39.4
Diluted income (loss) per share:
Income (loss) from continuing operations		$	26.56																	$	(8.24	)
Diluted weighted-average shares outstanding			19.8													19.7		3(c26)			39.4

 

 

The accompanying notes are an integral part of this unaudited pro forma condensed combined financial information.

 

 

3(a) Reclassification Adjustments

 

Certain reclassification adjustments and eliminations of intercompany transactions between the two companies have been made to Mallinckrodt and Endo’s standalone historical financial statements presented within the unaudited pro forma financial information to conform the presentation of historical balances.

 

Unaudited Pro Forma Condensed Combined Balance Sheet as of June 27, 2025

 

The following reclassification adjustments and eliminations of intercompany transactions were made to the unaudited pro forma condensed combined balance sheet:

 

3(a1) On its historical unaudited condensed consolidated balance sheet, Mallinckrodt presented $19.5 million of restricted cash within prepaid and other current assets. Restricted cash is presented within a separate line item on the unaudited pro forma condensed combined balance sheet.

 

3(a2) Accounts Receivable, net on the unaudited pro forma condensed combined balance sheet decreased by $44.4 million. On its historical unaudited condensed consolidated balance sheet, Endo presented $41.9 million of certain non-trade accounts receivable within accounts receivable, net. This balance is presented within prepaid and other current assets on the unaudited pro forma condensed combined balance sheet. Additionally, Mallinckrodt had $2.5 million in accounts receivable related to sales and purchases of Amitiza (lubiprostone) that were generated by transactions with Endo. These transactions are considered intercompany and eliminated for purposes of the unaudited Pro Forma Financial Information.

 

3(a3) Inventories on the unaudited pro forma condensed combined balance sheet decreased $59.1 million. On its historical unaudited condensed consolidated balance sheet, Mallinckrodt presented all inventory related to Acthar Gel as short-term. Additionally, on its historical unaudited condensed consolidated balance sheet, Endo presented $128.1 million of inventories, long-term within other assets. These balances are presented within its own financial statement caption on the unaudited pro forma condensed combined balance sheet. As a result, inventories, long-term increased by $187.2 million.

 

3(a4) Prepaid expenses and other current assets on the unaudited pro forma condensed combined balance sheet increased by $31.2 million, of which $41.9 million relates to certain non-trade accounts receivable described in Note 3(a2) and $8.8 million of income tax receivables described further in Note 3(a5), offset by reclassifications of $19.5 million of restricted cash described further in Note 3(a1).

 

3(a5) On its historical unaudited condensed consolidated balance sheet, Endo presented $8.8 million of income tax receivables as its own line item. This balance is presented within prepaid expenses and other current assets on the unaudited pro forma condensed combined balance sheet and offsets the previously noted reductions.

 

3(a6) On its historical unaudited condensed consolidated balance sheet, Mallinckrodt presented $5.5 million of finance lease assets within other assets. This balance is presented within plant, property, and equipment, net on the unaudited pro forma condensed combined balance sheet.

 

3(a7) On its historical unaudited condensed consolidated balance sheet, Mallinckrodt presented $52.8 million of operating lease assets within other assets. This balance is presented within a separate line item on the unaudited pro forma condensed combined balance sheet.

 

3(a8) Other assets on the unaudited pro forma condensed combined balance sheet decreased by $186.4 million, of which $128.1 million relates to the inventories, long-term described further in Note 3(a3), $52.8 million relates to operating lease assets further described in Note 3(a7), and $5.5 million relates to finance lease assets further described in Note 3(a6).

 

 

3(a9) On its historical unaudited condensed consolidated balance sheet, Endo presented the below items within a single line item “Accounts payable and accrued expenses”. These balances are presented in the respective captions on the unaudited pro forma condensed combined balance sheet noted below (dollars in millions).

 

Endo Historical Financial Statement Caption						Pro Forma Condensed Combined Balance Sheet Caption
Trade accounts payable		$	64.7			Accounts payable
Returns and allowances			89.9			Accrued and other current liabilities
Rebates			104.3			Accrued and other current liabilities
Other sales deductions			3.3			Accrued and other current liabilities
Accrued interest			18.2			Accrued interest
Accrued payroll and related benefits			63.2			Accrued payroll and payroll-related costs
Accrued royalties and other distribution partner payables			19.1			Accrued and other current liabilities
Acquisition-related contingent consideration - current			2.1			Accrued and other current liabilities
Other			86.6			Accrued and other current liabilities
Accounts payable and accrued expenses		$	451.4

 

In addition to the reclassifications shown above, Endo had $2.5 million in accounts payable related to sales and purchases of Amitiza that were generated by transactions with Mallinckrodt further discussed in Note 3(a2). These transactions are considered intercompany and eliminated for purposes of the unaudited Pro Forma Financial Information.

 

3(a10) On its historical unaudited condensed consolidated balance sheet, Endo presented $1.8 million of current portion of legal settlement as its own financial statement caption. This balance is presented within accrued and other current liabilities on the unaudited pro forma condensed combined balance sheet.

 

3(a11) On its historical unaudited condensed consolidated balance sheet, Mallinckrodt presented $10.5 million of current operating lease liabilities within accrued and other current liabilities. This balance is presented within its own financial statement caption on the unaudited pro forma condensed combined balance sheet.

 

3(a12) On its historical unaudited condensed consolidated balance sheet, Endo presented $11.7 million of income taxes payable as its own financial statement caption. This balance is presented within accrued and other current liabilities on the unaudited pro forma condensed combined balance sheet.

 

3(a13) Accrued and other current liabilities on the unaudited pro forma condensed combined balance sheet increased to $308.3 million. This is a result of the reclassifications of accrued and other current liabilities of $305.3 million further described in Note 3(a9), $1.8 million of current portion of legal settlement further described in Note 3(a10), and $11.7 million of income taxes payable further described in Note 3(a12), offset by $10.5 million of current operating lease liabilities further described in Note 3(a11).

 

3(a14) On its historical unaudited condensed consolidated balance sheet, Endo presented $6.6 million of long-term legal settlement accrual, less current portion as its own financial statement caption. This balance is presented within other liabilities on the unaudited pro forma condensed combined balance sheet.

 

3(a15) On its historical unaudited condensed consolidated balance sheet, Mallinckrodt presented $42.1 million of non-current operating lease liabilities within other liabilities. This balance is presented within its own financial statement caption on the unaudited pro forma condensed combined balance sheet.

 

3(a16) Other liabilities on the unaudited pro forma condensed combined balance sheet decreased $35.5 million. This is a result of the net impact of the reclassifications of $42.1 million of non-current operating lease liabilities further described in Note 3(a15) and $6.6 million of long-term legal settlement accrual further described in Note 3(a14).

 

 

Unaudited Pro Forma Condensed Combined Statements of Operations for the six months ended June 27, 2025

 

The following conforming reclassification adjustments were made to the unaudited pro forma condensed combined statements of operations for analogous historical financial statement captions:

 

•

On its historical unaudited condensed consolidated statement of operations, Endo and Endo’s Predecessor presented its net sales within a financial statement caption, “revenue, net”. This activity is conformed as “net sales” on the unaudited pro forma condensed combined statements of operations.

 

•

On its historical unaudited condensed consolidated statement of operations, Endo and Endo’s Predecessor presented its cost of sales within a financial statement caption “cost of revenues”. This activity is conformed as “cost of sales” on the unaudited pro forma condensed combined statements of operations.

 

The following reclassification adjustments were made to the unaudited pro forma condensed combined statement of operations:

 

3(a17) On their historical unaudited condensed consolidated statement of operations, Mallinckrodt and Endo reported activity that for purposes of the unaudited Pro Forma Financial Information are considered intercompany transactions. The elimination of these transactions related to sales and purchases of Amitiza resulted in a $2.9 million reduction to Mallinckrodt net sales and Endo’s cost of sales.

 

3(a18) Selling, general and administrative expenses (“SG&A”) decreased by $53.3 million. On its historical unaudited condensed consolidated statement of operations, Endo presented $54.3 million of combination, integration and other related expense within SG&A. This activity is presented within combination, integration, and other related expenses on the unaudited pro forma condensed combined statement of operations. On its historical unaudited condensed consolidated statement of operations, Endo presented a combined $1.0 million of litigation-related and other contingencies, net, as separate financial statement captions. This activity is presented within SG&A on the unaudited pro forma condensed combined statement of operations.

 

3(a19) Combination, integration and other related expenses increased by $55.7 million. On its historical unaudited condensed consolidated statement of operations, Endo presented $1.4 million in acquisition-related and integration items, net, as separate financial statement captions. On its historical unaudited condensed consolidated statement of operations, Endo presented $54.3 million of combination, integration and other related expense within SG&A. This activity is presented within combination, integration, and other related expenses on the unaudited pro forma condensed combined statement of operations.

 

3(a20) On its historical unaudited condensed consolidated statement of operations, Endo presented $1.6 million in acquired in-process research and development, as separate financial statement captions. This activity is presented within research and development expenses on the unaudited pro forma condensed combined statement of operations.

 

3(a21) On its historical unaudited condensed consolidated statement of operations, Endo presented $1.0 million in Asset impairment charges, as separate financial statement captions. This activity is presented within Non-restructuring impairment charges on the unaudited pro forma condensed combined statement of operations.

 

3(a22) On its historical unaudited condensed consolidated statement of operations, Endo presented $5.1 million of interest income within interest expense, net. This activity is presented within Interest income on the unaudited pro forma condensed combined statement of operations.

 

Unaudited Pro Forma Condensed Combined Statements of Operations for the year ended December 27, 2024

 

The following conforming reclassification adjustments were made to the unaudited pro forma condensed combined statement of operations for analogous historical financial statement captions:

 

•

On its historical consolidated statement of operations, Endo and Endo’s Predecessor presented its net sales within a line item “revenue, net”. This activity is conformed as net sales on the unaudited pro forma condensed combined statement of operations.

 

•

On its historical consolidated statement of operations, Endo and Endo’s Predecessor presented its cost of sales within a line item “cost of revenues”. This activity is conformed as cost of sales on the unaudited pro forma condensed combined statement of operations.

 

 

The following reclassification adjustments were made to the unaudited pro forma condensed combined statement of operations:

 

3(a23) On their historical consolidated statement of operations, Mallinckrodt and Endo reported activity that for purposes of the unaudited Pro Forma Financial Information are considered intercompany transactions. The elimination of these transactions related to sales and purchases of Amitiza resulted in a $2.9 million reduction to Mallinckrodt net sales and Endo’s cost of sales.

 

3(a24) SG&A on the unaudited pro forma condensed combined statement of operations increased by $10.6 million. On their historical consolidated statement of operations, Mallinckrodt and Endo reported activity that for purposes of the unaudited Pro Forma Financial Information are considered intercompany transactions. The elimination of these transactions resulted in a reduction of $9.4 million of Mallinckrodt SG&A. The reduction in SG&A represents a $6.4 million reversal of previously recognized customer bad debt expense. Mallinckrodt reversed the bad debt expense in the year ended December 27, 2024 as a result of the effectiveness of Endo’s Predecessor’s Plan. The remaining $3.0 million reduction to SG&A for Mallinckrodt relates to the sale of fixed assets to Endo, which are appropriately recorded within property, plant and equipment, net on Endo’s historical consolidated balance sheet.

 

Additionally, on its historical consolidated statement of operations, Endo and Endo’s Predecessor presented a combined $0.4 million and $0.8 million of litigation-related and other contingencies, net, and acquisition-related and integration items, net, respectively, as separate financial statement captions. This activity is presented within SG&A on the unaudited pro forma condensed combined statement of operations.

 

3(a25) On its historical unaudited condensed consolidated statement of operations, Endo presented $2.6 million in acquired in-process research and development, as separate financial statement captions. This activity is presented within research and development expenses on the unaudited pro forma condensed combined statement of operations.

 

3(a26) On its historical consolidated statement of operations, Endo and Endo’s Predecessor presented a combined $245.7 million of asset impairment charges as its own financial statement caption. This activity is presented within non-restructuring impairment charges on the unaudited pro forma condensed combined statement of operations.

 

3(a27) On its historical unaudited condensed consolidated statement of operations, Endo presented $2.7 million of interest income within interest expense, net. This activity is presented within interest income on the unaudited pro forma condensed combined statement of operations.

 

3(a28) On its historical unaudited condensed consolidated statement of operations, Endo presented $27.6 million of a gain on sale of divestitures within other income, net. This activity is presented within gain on divestiture on the unaudited pro forma condensed combined statement of operations.

 

3(a29) This adjustment represents the estimated income tax effects of $9.4 million of the intercompany eliminations described in Note 3(a24), calculated using a blended statutory rate. The blended statutory rate was calculated based on the statutory rates by jurisdiction in which the pro forma adjustment is expected to be recognized.

 

3(b) Business Combination Preliminary Consideration

 

The preliminary consideration is calculated as follows (amounts in millions except exchange ratio and share price):

 

Endo common stock outstanding as of July 31, 2025			76,313,462
Endo common stock exchange ratio			0.2575
Mallinckrodt ordinary shares issued in exchange			19,650,663
Mallinckrodt closing stock price (1)		$	90.50
Preliminary estimated fair value of Mallinckrodt ordinary shares issued		$	1,778.4
Other cash consideration (2)			0.0
Payment to Endo shareholders			100.0
Other merger consideration attributable to Endo stock-based awards			1.9
Obligation to cash settle shares underlying certain Endo stock-based awards			4.2
Total estimated preliminary consideration (in millions)		$	1,884.5

 

(1) Mallinckrodt is not listed on a national securities exchange or quoted on the automated quotation system of a national securities association, and as such, used a preliminary fair value per ordinary share as of July 31, 2025 in accordance with Section 409A to determine preliminary fair value of consideration transferred.

 

(2) Other cash consideration represents less than $0.1 million of aggregate cash payments to Endo stockholders in lieu of any fractional shares.

 

 

In accordance with U.S. GAAP, the fair value of the equity securities comprising the consideration were measured on July 31, 2025 upon completion of the Business Combination in accordance with Section 409A. An increase or decrease of 10% in the estimated fair value of Mallinckrodt ordinary shares assumed in the unaudited Pro Forma Financial Information would change the value of the preliminary consideration by approximately $177.8 million, which would be reflected as a corresponding increase or decrease to goodwill, respectively.

 

The table below reflects the Company’s preliminary estimates of fair value of Endo’s tangible and intangible assets acquired and liabilities assumed as of June 27, 2025 (amounts in millions).

 

		Preliminary estimated fair value
Total estimated preliminary consideration		$	1,884.5
Cash and cash equivalents		$	363.2
Restricted cash and cash equivalents			93.1
Accounts receivable, net			411.2
Inventories			886.1
Prepaid expenses and other current assets			100.7
Property, plant and equipment, net			405.8
Inventories, long-term			501.9
Operating lease assets			37.2
Intangible assets, net			2,215.0
Deferred income taxes			151.0
Other assets			18.1
Total Assets		$	5,183.3
Current maturities of long-term debt			15.0
Accounts payable			64.7
Accrued payroll and payroll-related costs			72.0
Current portion of operating lease liabilities			4.1
Accrued interest			18.2
Accrued and other current liabilities			311.6
Long-term debt			2,545.0
Operating lease liabilities			33.7
Other income tax liabilities			145.5
Other liabilities			99.2
Net Assets		$	1,874.3
Goodwill		$	10.2

 

The Company’s preliminary estimates of fair value are based on information currently available to the Company and remain subject to change. Since these pro forma financial statements have been prepared based on preliminary fair values, the final amounts recorded for the acquisition date fair values, including goodwill, may differ materially from the information presented.

 

 

3(c) Business Combination, Financing, and Mallinckrodt Prepayment Pro Forma Adjustments

 

Unaudited Pro Forma Condensed Combined Balance Sheet as of June 27, 2025

 

The unaudited pro forma condensed combined balance sheet as of June 27, 2025 reflects the following adjustments:

 

3(c1) The pro forma adjustments to the cash balance are summarized as follows:

 

Sources of Cash
Proceeds from the Financing (Note 3(c8))		$	1,200.0
Total sources of cash		$	1,200.0
Uses of Cash
Prepayment of historical Mallinckrodt long-term debt (Note 3(c8))		$	863.6
Makewhole premium due on paydown of historical Mallinckrodt long-term debt (Note 3(c8))			24.3
Payment of debt issuance costs for the Financing (Note 3(c16))			39.6
Payment of historical Mallinckrodt accrued interest			15.2
Payment to Endo shareholders (Note 3(b))			100.0
Other cash consideration (Note 3(b))			0.0
Payment of success fee for Mallinckrodt upon consummation of the Business Combination (Note 3(c22))			29.9
Payment of success fee for Endo upon consummation of the Business Combination (Note 3(c22))			25.3
Payment of other professional fees (Note 3(c22))			67.7
Total uses of cash		$	1,165.6
Total pro forma adjustments to cash		$	34.4

 

The cash balance does not include working capital activity between June 27, 2025 and July 31, 2025.

 

3(c2) This adjustment represents the preliminary fair value adjustments of $446.4 million and $373.8 million to current and non-current inventory, respectively, which considers replacement cost for materials and net realizable value for work-in-process and finished goods. Mallinckrodt will recognize the increased value of inventory in cost of sales as the inventory is sold. For purposes of the unaudited Pro Forma Financial Information, it is assumed that the increased value of current inventory will be recognized in cost of sales the first year after the Business Combination, while the long-term inventory will be recognized in cost of sales within four years after the Business Combination.

 

3(c3) This adjustment represents the adjustment to property, plant and equipment, net to reflect the preliminary fair value and the corresponding depreciation expense. The amounts assigned to property, plant and equipment, the estimated useful lives, and the estimated depreciation expense related to the property, plant and equipment acquired are as follows (in millions):

 

 

		Preliminary Fair Value				Estimated Weighted Average Life (Years)				Depreciation Expense for the year ended December 27, 2024				Depreciation Expense for the six months ended June 27, 2025
Land		$	16.3				—			$	—			$	—
Land Improvements			12.1				10.0				1.2				0.6
Buildings and improvements			93.7				15.0				6.2				3.2
Machinery and equipment			90.5				5.0				18.1				9.0
Computer equipment and software			9.8				3.0				3.3				1.8
Leasehold improvements			18.1				10.0				1.8				1.0
Furniture and Fixtures			9.8				5.0				2.0				1.0
Construction in process			152.1				—				—				—
Total Property, plant and equipment and depreciation expense at pro forma fair value		$	402.3							$	32.6			$	16.6
Less: Endo historical Property, plant and equipment, net and pro forma depreciation expense (excluding finance lease right-of-use assets of $3.5 million)		$	(536.3	)						$	(63.2	)		$	(27.2	)
Total pro forma adjustments to property, plant and equipment, net		$	(134.0	)						$	(30.6	)		$	(10.6	)

 

The depreciation expense was calculated using a weighted average useful life by category that represents the midpoint of the life range per the Company’s policy. If the weighted average useful life were to change by one year, this would impact annual depreciation expense by approximately $4.7 million.

 

3(c4) This adjustment represents the preliminary fair value and resulting adjustment to intangible assets. The preliminary amounts assigned to the identifiable intangible assets, the estimated weighted average useful lives, and the estimated amortization expense related to these identifiable intangible assets are as follows (in millions):

 

		Preliminary Fair Value				Estimated Weighted Average Life (Years)				Amortization Method		Amortization Expense for the year ended December 27, 2024				Amortization Expense for the six months ended June 27, 2025
Developed technology - Branded		$	2,113.0				12.0			Straight Line		$	176.1			$	88.0
Developed Technology - Generics			51.0				3.2			Straight Line			15.9				7.9
Licenses – Generics			34.0				3.0			Straight Line			11.3				5.6
In-process research and development - Generics			17.0
Total pro forma intangible assets and amortization expense		$	2,215.0									$	203.3			$	101.5
Less: Endo historical Intangible assets, net and pro forma amortization expense		$	(1,646.7	)								$	(247.0	)		$	(124.4	)
Total pro forma adjustments to intangible assets, net and amortization expense		$	568.3									$	(43.7	)		$	(22.9	)

 

The pro forma financial statements reflect the use of the straight-line method for amortizing acquired intangible assets; however, actual results may differ if management determines that an alternative method better reflects the pattern of economic benefit, which could materially affect amortization expense and net income. If the estimated weighted average useful lives changed by one year, this would impact annual amortization expense by approximately $20.2 million.

 

3(c5) The adjustment represents the preliminary goodwill as a result of the Business Combination. The preliminary pro forma adjustment to goodwill is calculated as follows (in millions):

 

Preliminary purchase price (Note 3(b))		$	1,884.5
Less: Fair value of net assets to be acquired (Note 3(b))			1,874.3
Total pro forma adjustment to goodwill		$	10.2

 

 

Goodwill represents the excess of the consideration transferred over the preliminary fair value of the assets acquired and liabilities assumed as described in Note 3(b). The goodwill will not be amortized and will be tested for impairment at least annually or whenever events or circumstances have occurred that may indicate a possible impairment exists. In the event Management determines that the value of goodwill has become impaired, Mallinckrodt will incur a non-cash impairment charge during the period in which the determination is made. The goodwill is attributable to the expected synergies of the combined business operations. The goodwill is not expected to be deductible for tax purposes.

 

3(c6) These adjustments represent estimated impacts to deferred income tax balances as shown below:

 

Estimated impact of purchase price adjustments to deferred tax assets (1)

$

(116.4

)

 

(1) This adjustment is included within deferred income tax asset on the unaudited pro forma balance sheet.

 

An evaluation of additional income tax adjustments will continue through the completion of acquisition accounting, which may result in material income tax adjustments.

 

3(c7) As described in Note 3(c8), the unaudited Pro Forma Financial Information reflects certain adjustments to the fair value of Endo’s existing debt instruments, which results in the elimination of Endo’s existing debt issuance costs and debt discounts. This adjustment reflects the elimination of approximately $4.4 million of Endo’s historical debt issuance costs that were recorded to other assets, offset by newly capitalized deferred financing fees of approximately $1.5 million attributed to the Revolving Facility.

 

3(c8) On July 31, 2025, in connection with the consummation of the Business Combination, ST 2020, a wholly owned subsidiary of Mallinckrodt, and MEH, Inc., a wholly owned subsidiary of ST 2020, entered into the Credit Agreement, providing for $1,350.0 million in aggregate principal amount of senior secured credit facilities, comprising (i) a $1,200.0 million Term Facility and (ii) a $150.0 million Revolving Facility. MEH, Inc borrowed $1,200.0 million under the Term Facility on August 1, 2025. No amounts were drawn on the Revolving Facility. The Facilities mature on July 31, 2030, unless extended pursuant to the terms of the Credit Agreement.

 

On August 1, 2025, in connection with the consummation of the Business Combination, Mallinckrodt and its subsidiaries prepaid in full approximately $385.5 million in outstanding aggregate principal amount of the Second-Out Takeback Term Loans, constituting all of the remaining indebtedness outstanding under the existing Mallinckrodt credit agreement, together with accrued and unpaid interest thereon, as well as a payment of approximately $10.6 million in required makewhole premium and all amounts outstanding under the Existing ABL Facility were repaid.

 

Also in connection with the consummation of the Business Combination, on August 1, 2025, Mallinckrodt and its subsidiaries redeemed in full approximately $477.2 million in outstanding principal amount of Takeback Notes, constituting all of the existing Mallinckrodt notes outstanding under the existing Mallinckrodt indenture, for a redemption price equal to such outstanding principal amount, accrued and unpaid interest thereon and approximately $13.7 million in required makewhole premium.

 

As a result of such prepayment, redemption and repayment, the existing Mallinckrodt credit agreement and the existing ABL facility were terminated, the existing Mallinckrodt indenture was discharged and all guarantees of, and liens securing, the obligations thereunder were released.

 

 

The prepayment amounts shown in the table below illustrate the prepayment of the balances as shown on Mallinckrodt’s unaudited condensed consolidated balance sheet as of June 27, 2025. As a result of the prepayment of Mallinckrodt’s historical debt, the unaudited Pro Forma Financial Information also eliminates all of Mallinckrodt existing debt premiums. The unaudited Pro Forma Financial Information also reflects the adjustments to fair value of Endo’s existing debt instruments, which results in the elimination of Endo’s existing debt issuance costs and debt discounts.

 

The pro forma adjustments to debt are summarized as follows:

 

Current maturities of long-term debt
New debt financing		$	22.5
Prepayment of historical Mallinckrodt term loan			(3.9	)
Net pro forma adjustment to current maturities of long-term debt		$	18.6
Long-term debt
New debt financing		$	1,177.5
Prepayment of historical Mallinckrodt term loan			(382.5	)
Prepayment of historical Mallinckrodt notes			(477.2	)
Write off of historical Mallinckrodt term loan unamortized debt premium			(19.0	)
Write off of historical Mallinckrodt notes unamortized debt premium			(24.5	)
Write off of historical Mallinckrodt receivables securitization facility deferred financing fee			1.8
New debt issuance costs classified as reduction to liability			(26.8	)
Fair value adjustment of Endo historical debt from purchase price allocation			126.2
Net adjustment to long-term debt		$	375.5
Total pro forma adjustments to debt		$	394.1

 

3(c9) Accrued payroll and payroll-related costs increased $117.7 million. This adjustment also includes an $8.8 million increase to Endo’s retention program that became payable upon consummation of the transaction. Additionally, this adjustment represents $108.9 million of compensation expenses related to Mallinckrodt’s Transaction Incentive Plan (“TrIP”), which became payable upon consummation of the Business Combination and the acceleration of the service period component of the TrIP earned from Mallinckrodt’s sale of its Therakos business. Since the consummation of the Business Combination is a significant qualifying event as defined by the TrIP, the deferred component of the TrIP earned for the Therakos transaction became payable upon consummation of the Business Combination. Mallinckrodt accrued $6.1 million within accrued payroll and payroll-related costs in the unaudited condensed consolidated balance sheet as of June 27, 2025.

 

3(c10) This adjustment represents a $13.7 million net impact on the historical accrued interest expense related to the Financing as described in Note 3(c8).

 

3(c11) Accrued and other current liabilities on the unaudited pro forma condensed combined balance sheet increased $3.8 million. This adjustment also includes $24.0 million of accrued professional fees due after close of the transaction. This adjustment also includes $4.2 million of cash due to Endo non-employee directors in accordance with the Merger Agreement and $9.1 million related to a Medicare Part D inflation rebate liability, offset by $16.3 million of previously accrued professional fees for Endo and $17.2 million of previously accrued professional fees for Mallinckrodt that were settled in cash upon consummation of the transaction.

 

3(c12) These adjustments represent estimated impacts to deferred income tax balances as shown below:

 

Estimated impact of purchase price adjustments to deferred tax liabilities (1)

$106.9

 

(1) This adjustment is included within other income tax liabilities on the unaudited pro forma balance sheet.

 

An evaluation of additional income tax adjustments will continue through the completion of acquisition accounting, which may result in material income tax adjustments.

 

 

3(c13) This adjustment represents a $19.9 million increase in value of acquired contingent consideration liabilities and legal liabilities. In 2015, Endo acquired Auxilium, which was a party to an agreement pursuant to which it was obligated to make certain contingent cash consideration payments, related primarily to sales-based royalties on Edex. The agreement calls for sales-based royalty payments to continue indefinitely until pre-determined market conditions are met. As a result of the Business Combination, the Company assumed the obligation. The acquisition date fair value was estimated based on a discounted cash flow model (income approach) and resulted in a $17.1 million increase in value. The remaining adjustment of $1.8 million relates to a fair value adjustment to an assumed legal liability.

 

3(c14) This adjustment represents the elimination of Endo’s historical equity-related balances, the issuance of approximately 19.7 million of Mallinckrodt ordinary shares, $7.3 million of incremental share-based compensation expense, net of tax, related to the accelerated vesting of share-based awards of three departing non-employee directors of Mallinckrodt upon consummation of the Business Combination, and a $100.0 million cash payment (premium) to Endo’s shareholders. Refer to Note 3(b) for additional information.

 

The unaudited pro forma adjustment to Mallinckrodt’s ordinary shares is calculated as follows (in millions):

 

Ordinary shares issued in the Business Combination (Note 3(b))		$	0.2
Less: Endo’s historical common stock			(0.1	)
Total pro forma adjustment to ordinary shares		$	0.1

 

The unaudited pro forma adjustment to Additional Paid-in-Capital is calculated as follows (in millions):

 

Additional paid in capital from the Business Combination		$	1,782.8
Less: Endo’s historical additional paid in capital			(1,990.3	)
Total pro forma adjustment to additional paid in capital		$	(207.5	)

 

The unaudited pro forma adjustment to retained earnings represents the remaining impact of the adjustments described in Notes 3(c1) through 3(c14).

 

Unaudited Pro Forma Condensed Combined Statements of Operations for the six months ended June 27, 2025

 

3(c15) Cost of sales decreased $88.9 million. This is the result of decreases in inventory step up amortization expense of $55.4 million further described in Note 3(c2), intangible asset amortization expense of $22.9 million further described in Note 3(c4), and depreciation expense of $10.6 million further described in Note 3(c3). With respect to intangible asset amortization and depreciation expense, the decreases are driven by lower fair value estimates of the corresponding assets compared to previously recorded book values.

 

3(c16) This adjustment represents $1.3 million of incremental non-cash share-based compensation expense, net of tax, related to Endo share-based awards that were replaced by the Company’s awards in connection with the Business Combination.

 

3(c17) This adjustment represents the net increase in interest expense of $13.1 million. This adjustment is comprised of $66.8 million in estimated coupon interest expense together with approximately $2.8 million related to the amortization of deferred financing fees related to the Financing and $4.8 million of amortization of the fair value premium on the legacy Endo notes and term loans, partially offset by a reduction of $56.9 million in Mallinckrodt’s historical interest expense and a $4.4 million reduction in Endo’s historical interest expense related to amortization of deferred financing fees. The interest expense calculated for the Financing was calculated assuming $1,200.0 million of principal balance as described in Note 3(c8).

 

•

For the $1,200.0 million of new term loans under the Term Facility, the interest rate is SOFR + 7.00%, which was approximately 11.47% for purposes of the unaudited Pro Forma Financial Information. For every 0.125% difference in interest rate, this would impact interest expense for the six months ended June 27, 2025 by approximately $0.8 million for purposes of the unaudited Pro Forma Financial Information.

 

•

For the undrawn Revolving Credit Facility, a commitment fee was calculated at a rate of approximately 0.25% as required per the Credit Agreement.

 

•

Financing fees related to the Financing were estimated to be approximately $39.6 million, of which $26.8 million are treated as a reduction to the outstanding debt principal balance. The prepayment of Mallinckrodt’s historical debt and incurrence of the Financing is being accounted for as an extinguishment based on information known at the time of this filing. The interest expense in the pro forma statement of operations reflects the deferred fees being amortized over the respective instrument maturities of five years, utilizing the effective interest rate method. The remaining $12.8 million of financing fees were recorded within gain on debt extinguishment in the unaudited pro forma statement of operations for the year ended December 27, 2024.

 

 

3(c18) This adjustment represents the estimated income tax effects of the Business Combination, the Financing and the Mallinckrodt Prepayment, and purchase price allocation impacts as described in Notes 3(c15) through 3(c17), calculated using a blended statutory rate. The blended statutory rate was calculated based on the statutory rates by jurisdiction in which the respective pro forma adjustment is expected to be recognized and was impacted by valuation allowances and statutory limitations on tax deductibility for certain adjustments.

 

3(c19) The following tables summarize pro forma ordinary shares outstanding for basic and diluted income (loss) per share:

 

Mallinckrodt ordinary shares outstanding – basic			19,736,759
Endo pro forma converted common shares outstanding – basic			19,650,663
Mallinckrodt pro forma ordinary shares outstanding – basic			39,387,422

 

A net loss cannot be diluted. When a company is in a net loss position, basic and diluted loss per share are the same. The computation of pro forma diluted weighted-average shares outstanding excluded approximately 1.7 million shares of contingent value rights held by the Opioid Master Disbursement Trust II (“Opioid CVRs”) and outstanding equity awards because the effect would have been anti-dilutive. If Mallinckrodt records net income in the future, the denominator of a diluted earnings per share calculation will include both the weighted average number of shares outstanding and the number of common stock equivalents, if the inclusion of such common stock equivalents would be dilutive.

 

Unaudited Pro Forma Condensed Combined Statements of Operations for the year ended December 27, 2024

 

3(c20) Cost of sales decreased $158.0 million. This is the result decreases in intangible asset amortization expense of $43.7 million further described in Note 3(c4), inventory step up amortization expense of $83.7 million further described in Note 3(c2), and fixed asset depreciation expense of $30.6 million further described in Note 3(c3). With respect to intangible asset amortization and depreciation expense, the decreases are driven by lower fair value estimates of the corresponding assets compared to previously recorded book values.

 

3(c21) This adjustment represents $143.9 million of compensation expenses related to the Business Combination. $108.9 million is related to Mallinckrodt’s TrIP, which became payable upon consummation of the Business Combination and the acceleration of the service period component of the TrIP earned from Mallinckrodt’s sale of its Therakos business. Since the consummation of the Business Combination is a significant qualifying event as defined by the TrIP, the deferred component of the TrIP earned for the Therakos transaction accelerated as it became payable upon consummation of the Business Combination.

 

Additionally, this represents $32.4 million of expense, net of tax, related to estimated cash payments to Endo employees for retention and incremental non-cash share-based compensation expense related to Endo share-based awards that were replaced by the Company’s awards in connection with the Business Combination. This also includes $2.6 million of expense, net of tax, related to the accelerated vesting of share-based awards of departing non-employee directors of Mallinckrodt upon consummation of the Business Combination. The compensation expenses related to Mallinckrodt’s TrIP, and retention are non-recurring and not expected to have a continuing impact on Mallinckrodt’s operating results in future periods.

 

 

3(c22) This adjustment represents $113.4 million of professional fees related to the Business Combination. $55.2 million are success-based professional fees that were incremental direct costs payable by Mallinckrodt and Endo upon completion of the Business Combination. The success-based professional fees are shown as a use of cash in the pro forma balance sheet and reflected as a non-recurring expense in the pro forma statement of operations. This adjustment also includes $58.2 million of incremental professional fees that were incurred separately by Mallinckrodt and Endo prior to or upon consummation of the Business Combination. The unpaid portion of these costs are accrued in the pro forma balance sheet and reflected within combination and other related expenses on the pro forma statement of operations, further described in Note 3(c11). These professional fees are non-recurring and not expected to have a continuing impact on Mallinckrodt’s operating results in future periods.

 

3(c23) This adjustment represents the net decrease in interest expense of $58.9 million, related to the prepayment of historical Mallinckrodt indebtedness and incurrence of the Financing as illustrated in Note 3(c1), as if the prepayment occurred on December 30, 2023. The net adjustment is comprised of a reduction of $210.2 million in Mallinckrodt’s historical interest expense and $10.2 million in Endo’s historical interest expense related to deferred financing fee amortization, partially offset by $146.6 million in estimated coupon interest expense under the Financing, $5.1 million related to amortization of deferred financing fees related to the Financing and $9.8 million of amortization of the premium on legacy Endo’s term loans and notes. The interest expense calculated for the Financing was calculated assuming $1,200.0 million as described in Note 3(c8).

 

•

For the $1,200.0 million of new term loans under the Term Facility, the interest rate is SOFR + 7.00%, which was approximately 12.34% for purposes of the unaudited Pro Forma Financial Information. For every 0.125% difference in interest rate, this would impact annual interest expense by approximately $1.5 million. for purposes of the unaudited Pro Forma Financial Information.

 

•

For the undrawn Revolving Facility, a commitment fee was calculated at a rate of approximately 0.25% as required per the Credit Agreement.

 

•

Financing fees related to the Financing were estimated to be approximately $39.6 million, of which $26.8 million are treated as a reduction to the outstanding debt principal balance. The prepayment of Mallinckrodt’s historical debt and incurrence of the Financing accounted for as an extinguishment based on information known at the time of this filing. The interest expense in the pro forma statement of operations reflects the deferred fees being amortized over the respective instrument maturities of five years, utilizing the effective interest rate method. The remaining $12.8 million of financing fees were recorded to gain on debt extinguishment in the unaudited pro forma statement of operations.

 

3(c24) This adjustment represents a $14.4 million gain on extinguishment of debt, comprised of an approximately $50.0 million gain to write-off certain unamortized premiums related to Mallinckrodt’s historical indebtedness, partially offset by an approximately $24.3 million payment of the makewhole premium and $12.8 million of financing fees that did not qualify as debt issuance costs. The gain on extinguishment of debt is non-recurring and not expected to have a continuing impact on Mallinckrodt’s operating results in future periods.

 

3(c25) This adjustment represents the estimated income tax effects of the Business Combination, the Financing and the Mallinckrodt Prepayment, and purchase price allocation impacts as described in Notes 3(c20) through 3(c24), calculated using a blended statutory rate. The blended statutory rate was calculated based on the statutory rates by jurisdiction in which the respective pro forma adjustment is expected to be recognized and was impacted by valuation allowances and statutory limitations on tax deductibility for certain adjustments.

 

3(c26) The following tables summarize pro forma ordinary shares outstanding for basic and diluted income (loss) per share:

 

Mallinckrodt ordinary shares outstanding - basic			19,736,759
Endo pro forma converted common shares outstanding - basic			19,650,663
Mallinckrodt pro forma ordinary shares outstanding - basic			39,387,422

 

 

A net loss cannot be diluted. When a company is in a net loss position, basic and diluted loss per share are the same. The computation of pro forma diluted weighted-average shares outstanding for the year ended December 27, 2024 excluded approximately 1.7 million shares of Opioid CVRs and equity awards because the effect would have been anti-dilutive. If Mallinckrodt records net income in the future, the denominator of a diluted earnings per share calculation will include both the weighted average number of shares outstanding and the number of common stock equivalents, if the inclusion of such common stock equivalents would be dilutive.

 

3(d) Therakos Divestiture

 

On August 3, 2024, Mallinckrodt entered into a Purchase and Sale Agreement for Mallinckrodt’s Therakos business for a base purchase price of $925.0 million. On November 29, 2024, Mallinckrodt completed the divestiture of its Therakos business for total cash consideration of $887.6 million, net of preliminary purchase price adjustments. During the year ended December 27, 2024, Mallinckrodt recorded a non-recurring gain on sale of $754.4 million, comprised of the $887.6 million of Initial Net Proceeds less the elimination of $125.5 million of net assets divested and $7.7 million in non-recurring success-based professional fees. Mallinckrodt recorded a loss on the divestiture and paid $6.2 million for the final working capital settlement during the six months ended June 27, 2025. As a result, the total cash consideration was $881.4 million, net of the final working capital settlement. Mallinckrodt was required to use the proceeds to make a mandatory prepayment on certain portions of its debt.

 

On December 6, 2024, Mallinckrodt (i) mandatorily prepaid a portion of its historical term loans in an aggregate principal amount of approximately $474.1 million (of which approximately $227.1 million consisted of its senior secured first lien “first-out” term loans (“First-Out Takeback Term Loans”) and approximately $247.0 million consisted of its Second-Out Takeback Term Loans) together with a payment of approximately $36.4 million in required makewhole premium (of which approximately $15.2 million was in respect of its First-Out Takeback Term Loans and approximately $21.2 million was in respect of its Second-Out Takeback Term Loans) and (ii) mandatorily redeemed $301.4 million in aggregate principal amount of its Takeback Notes together with a payment of approximately $27.3 million in required makewhole premium.

 

As a result of the mandatory prepayment, Mallinckrodt recorded $19.7 million as a net loss on extinguishment of debt, comprised of the $63.7 million payment of the makewhole premium, offset by a $44.0 million gain to write-off certain unamortized premiums.

 

The Therakos divestiture is reflected in the historical financial information of Mallinckrodt, but adjustments are required to eliminate the results of the Therakos business from the historical Mallinckrodt amounts, as shown in the following table:

 

		Historical				Transaction Adjustments					Pro Forma
		Mallinckrodt plc				Therakos Divestiture					Mallinckrodt plc
Net Sales		$	1,979.7			$	(241.6	)	3(d1)		$	1,738.1
Cost of Sales			1,152.6				(123.0	)	3(d1)			1,029.6
Gross Profit		$	827.1			$	(118.6	)	3(d1)		$	708.5
Selling, general and administrative expenses			566.8				(38.4	)	3(d1)			528.4
Research and development expenses			115.7				(22.3	)	3(d1)			93.4
Restructuring charges, net			10.5				—					10.5
Liabilities management and separation costs			43.9				—					43.9
Operating income		$	90.2			$	(57.9	)	3(d1)		$	32.3
Interest expense			(228.3	)			91.0		3(d2)			(137.3	)
Interest income			27.0				—					27.0
Gain on divestiture			754.4				—					754.4
Loss on debt extinguishment, net			(19.7	)			—					(19.7	)
Other income (expense), net			(9.1	)			9.4		3(d3)			0.3
Income from continuing operations before income taxes		$	614.5			$	42.5				$	657.0
Income tax expense (benefit)			137.9				(6.7	)	3(d4)			131.2
Income from continuing operations		$	476.6			$	49.2				$	525.8

 

 

Mallinckrodt plc Unaudited Pro Forma Condensed Statement of Operations for the year ended December 27, 2024

 

The unaudited pro forma condensed statement of operations for the year ended December 27, 2024 reflect the following adjustments:

 

3(d1) This adjustment represents the elimination of the revenues, and direct operating expenses, including depreciation and amortization expense, associated with the Therakos divestiture.

 

3(d2) This adjustment represents the removal of interest expense of $91.0 million, as if the pay down of debt occurred on December 30, 2023.

 

3(d3) This adjustment primarily represents $8.2 million of income related to Mallinckrodt’s transition services agreement (“TSA”), as if the TSA commenced on December 30, 2023. The TSA was effective upon closing of the Therakos divestiture to provide certain business support services for up to 18 months after the closing date. These services include, but are not limited to, information technology, procurement, distribution, logistics and order to delivery, compliance, accounting, finance, and administrative activities. The remaining activity reflects the elimination of non-operating expenses associated with the Therakos divestiture.

 

3(d4) This adjustment represents the estimated income tax effects of the Therakos divestiture described in Note 3(d1), calculated using a blended statutory rate. The blended statutory rate was calculated based on the statutory rates by jurisdiction in which the respective pro forma adjustment is expected to be recognized and was impacted by valuation allowances and statutory limitations on tax deductibility for certain adjustments.

 

3(e) Unaudited Pro Forma Combined Financial Statements of Endo and Endo’s Predecessor

 

The unaudited Pro Forma Combined Financial Statements of Endo and Endo’s Predecessor give effect to the following transactions:

 

International Pharmaceuticals Divestiture

 

On March 11, 2025, Endo announced it had entered into a definitive agreement to divest its International Pharmaceuticals business, primarily operated through Canada-based specialty pharmaceutical company Paladin Pharma Inc., to Knight Therapeutics Inc. The sale closed on June 17, 2025 and Endo received net cash consideration of approximately $78.6 million, consisting of $89.9 million upfront, less approximately $11.3 million related to certain permitted hold backs. As of September 26, 2025, Endo remains eligible to receive up to an additional $9.4 million related to certain permitted hold backs and up to $15.0 million in potential future payments contingent upon the achievement of certain milestones.

 

The results of the International Pharmaceuticals business are reflected in the historical financial information of Endo and Endo’s Predecessor, but as it was not acquired by Mallinckrodt as part of the Business Combination, an adjustment is required to eliminate the results of the International Pharmaceutical business from the historical Endo amounts.

 

Endo Chapter 11 Restructuring

 

Prior to the Effective Date, Endo’s business was operated by Endo’s Predecessor. On August 16, 2022 (the “Petition Date”), Endo International plc, together with certain of its direct and indirect subsidiaries (the “Debtors”), filed voluntary petitions for relief under chapter 11 of title 11 of the United States (“U.S.”) Code (the “Bankruptcy Code”). The Debtors received approval from the U.S. Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) to jointly administer their chapter 11 cases (the “Chapter 11 Cases”) for administrative purposes only pursuant to Rule 1015(b) of the Federal Rules of Bankruptcy Procedure under the caption In re: Endo International plc, et al.

 

On December 19, 2023, the Debtors filed the Plan and related disclosure statement with the Bankruptcy Court. The Bankruptcy Court confirmed the Plan on March 19, 2024, and the Debtors satisfied all conditions required for the Plan effectiveness on the Effective Date.

 

 

Adoption of Fresh-Start Accounting

 

Pursuant to the Plan, on the Effective Date, Endo, Inc. purchased substantially all of the assets, as well as certain equity interests of the Debtors and non-debtor affiliates and assumed certain liabilities of Endo’s Predecessor. In accordance with ASC 852, fresh-start accounting was applied on the Effective Date because (i) the holders of existing Endo International plc voting shares received less than 50% of the voting shares of Endo, Inc., and (ii) the reorganization value of assets, which approximated $5.0 billion, immediately prior to the confirmation of the Plan was less than the corresponding total of all post-petition liabilities and allowed claims, which approximated $11.8 billion. Applying fresh-start accounting resulted in a new reporting entity with no beginning retained earnings or accumulated deficit. Accordingly, Endo’s financial statements are not comparable to the financial statements of Endo’s Predecessor prior to the Effective Date.

 

Fresh-start accounting required that the reorganization value be assigned to Endo, Inc.’s identified tangible and intangible assets based on their respective fair values, as determined in conformity with ASC 805, with any excess recorded as goodwill, if applicable; post-petition liabilities have generally been assumed by Endo, Inc. at their historical carrying values; Exit Financing Debt liabilities are measured and recorded by Endo, Inc. at their fair values; The amount of deferred taxes was determined in accordance with ASC Topic 740, Income Taxes (“ASC 740”) and ASC 852, and historical accumulated deficit and accumulated other comprehensive loss of Endo International plc was reset to zero by Endo, Inc. As applicable, Endo International plc’s liabilities subject to compromise and certain other liabilities were satisfied in accordance with the Plan’s terms. The Effective Date fair values of Endo’s assets and liabilities differed materially from their recorded values as reflected on the historic balance sheets of Endo’s Predecessor.

 

ENDO, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
Six Months Ended June 30, 2025
(unaudited; in millions, except per share data)
		Successor				Transaction Adjustments					Pro Forma
		Endo, Inc.				International Business Divestiture					Endo, Inc.
Net Sales		$	840.6			$	(26.4	)	3(e1)		$	814.2
Cost of Sales			584.9				(21.0	)	3(e1)			563.9
Gross Profit		$	255.7			$	(5.4	)			$	250.3
Selling, general and administrative expenses			307.8				(12.6	)	3(e1)			295.2
Research and development expenses			57.6				—					57.6
Acquired in-process research and development			2.6				(1.0	)	3(e1)			1.6
Litigation-related and other contingencies, net			1.0				—					1.0
Asset impairment charges			1.0				—					1.0
Acquisition-related and integration items, net			1.4				—					1.4
Operating loss		$	(115.7	)		$	8.2				$	(107.5	)
Interest expense, net			106.2				—					106.2
Other expense (income), net			(14.9	)			18.9		3(e1)			4.0
Income (loss) from continuing operations before income taxes		$	(207.0	)		$	(10.7	)			$	(217.7	)
Income tax (benefit) expense			(18.9	)			(4.0	)				(22.9	)
Income (loss) from continuing operations		$	(188.1	)		$	(6.7	)			$	(194.8	)

 

Endo, Inc. Unaudited Pro Forma Condensed Combined Statement of Operations for the six months ended June 30, 2025

 

3(e1) This adjustment represents the elimination of the revenues, direct operating expenses, including depreciation and amortization expense, and other non-operating income, including the elimination of the pre-tax gain of approximately $20.4 million associated with the International Pharmaceuticals business divestiture. The pre-tax gain has been reflected in the pro forma adjustments for the year ended December 27, 2024, further discussed in Note 3(e2).

 

 

ENDO, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
Year Ended December 31, 2024
(unaudited; in millions, except per share data)
						Transaction Adjustments					Pro Forma
		Successor and Predecessor Pro Forma Combined(1)				International Business Divestiture					Endo, Inc.
Net Sales		$	1,760.2			$	(73.7	)	3(e2)		$	1,686.5
Cost of Sales			1,604.7				(39.2	)	3(e2)			1,565.5
Gross Profit		$	155.5			$	(34.5	)	3(e2)		$	121.0
Selling, general and administrative expenses			541.9				(29.3	)	3(e2)			512.6
Research and development expenses			102.7				(0.5	)	3(e2)			102.2
Acquired in-process research and development			2.6				—					2.6
Litigation-related and other contingencies, net			0.4				—					0.4
Asset impairment charges			245.7				—					245.7
Acquisition-related and integration items, net			2.2				(1.4	)	3(e2)			0.8
Operating loss		$	(740.0	)		$	(3.3	)	3(e2)		$	(743.3	)
Interest expense, net			225.5				—					225.5
Other income, net			(4.5	)			(20.1	)	3(e2)			(24.6	)
Income (loss) from continuing operations before income taxes		$	(961.0	)		$	16.8				$	(944.2	)
Income tax (benefit) expense			(136.6	)			11.4		3(e3)			(125.2	)
Income (loss) from continuing operations		$	(824.4	)		$	5.4				$	(819.0	)

 

(1) Refer to the Endo, Inc. unaudited successor and predecessor pro forma combined statement of operations for the year ended December 31, 2024 below.

 

Endo, Inc. Unaudited Pro Forma Condensed Combined Statement of Operations for the year ended December 31, 2024

 

The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2024 reflect the following adjustments:

 

3(e2) This adjustment represents the elimination of the revenues, direct operating expenses, including depreciation and amortization expense, and other non-operating income, associated with the International Pharmaceuticals business divestiture, offset by the inclusion of the pre-tax gain of approximately $20.4 million further described in Note 3(e1), as if the divestiture occurred at the beginning of 2024.

 

3(e3) This adjustment represents the income tax effects of the International Pharmaceuticals business divestiture, described in Note 3(e), including a $7.7 million tax benefit reversal associated with Endo’s Canadian affiliate and a $3.6 million adjustment associated with Endo’s Irish affiliate’s pre-tax income. The blended statutory rate was calculated based on the statutory rates by jurisdiction in which the pro forma adjustment is expected to be recognized.

 

 

ENDO, INC.
UNAUDITED SUCCESSOR AND PREDECESSOR PRO FORMA COMBINED STATEMENT OF OPERATIONS
Year Ended December 31, 2024
(unaudited; in millions, except per share data)
		Predecessor				Successor				Pro Forma Adjustments
		Period from January 1, 2024 through April 23, 2024				Year Ended December 31, 2024				Reorganization and Fresh-Start Accounting					Successor and Predecessor Pro Forma Combined
Net Sales		$	582.0			$	1,178.2			$	—				$	1,760.2
Cost of Sales			259.6				1,184.5				160.6		3(e4)			1,604.7
Gross Profit		$	322.4			$	(6.3	)		$	(160.0	)			$	155.5
Selling, general and administrative expenses			158.4				382.6				0.9		3(e4)			541.9
Research and development expenses			32.0				70.7				—					102.7
Acquired in-process research and development			0.8				1.8				—					2.6
Litigation-related and other contingencies, net			0.2				0.2				—					0.4
Asset impairment charges			2.1				243.6				—					245.7
Acquisition-related and integration items, net			(0.2	)			2.4				—					2.2
Operating income (loss)		$	129.1			$	(707.6	)		$	(161.5	)	3(e4)		$	(740.0	)
Interest expense, net			—				164.1				61.4		3(e5)			225.5
Reorganization items, net			(6,125.1	)			—				6,125.1		3(e6)			—
Other expense (income), net			5.3				(9.8	)			—					(4.5	)
Income (loss) from continuing operations before income taxes		$	6,248.9			$	(861.9	)		$	(6,348.0	)			$	(961.0	)
Income tax (benefit) expense			58.5				(131.0	)			(64.1	)	3(e7)			(136.6	)
Income (loss) from continuing operations		$	6,190.4			$	(730.9	)		$	(6,283.9	)			$	(824.4	)

 

Endo, Inc. Unaudited Successor and Predecessor Pro Forma Combined Statement of Operations for the year ended December 31, 2024

 

The unaudited Successor and Predecessor pro forma combined statement of operations for the year ended December 31, 2024 reflect the following adjustments:

 

3(e4) The adjustment to cost of sales reflects the change in inventory step-up amortization, fixed asset depreciation, and intangible amortization expense based on new asset values as a result of adopting fresh-start accounting, as if the fresh-start accounting was applied on January 1, 2024. The adjustment to SG&A is specific to incremental fixed asset depreciation based on new asset value as a result of adopting fresh-start accounting, as if fresh-start accounting was applied as of January 1, 2024.

 

3(e5) This adjustment reflects the interest expense for Endo’s Exit Financing as if the financing transactions occurred on January 1, 2024.

 

 

3(e6) This adjustment represents the elimination of reorganization items that were directly attributable to Endo’s Predecessor’s bankruptcy, which is assumed to have applied fresh-start accounting as of January 1, 2024. Endo’s Successor entity did not adopt ASC 852, and therefore is assumed to have not recognized reorganization items in 2024. Endo’s Predecessor’s reorganization items, net were comprised of the following:

 

		Predecessor
		Period From January 1, 2024 through April 23, 2024
Professional Fees		$	68.1
Debt valuation adjustments(1)			192.3
Reorganization Adjustments			(5,996.0	)
Fresh-Start Adjustments			(389.5	)
Total reorganization items, net		$	(6,125.1	)

 

(1) For the period January 1, 2024 through April 23, 2024, adequate protection payments were $192.3 million and recognized as a reduction to the carrying amount of the respective Predecessor First Lien Debt Instruments. Concurrently, as a result of adjusting to the estimated allowed claim amount for the corresponding debt instruments, a charge was recognized within Reorganization items, net. For the year ended December 31, 2023, adequate protection payments were $592.8 million. In December 2023, the Plan and related disclosure statement were filed with the Bankruptcy Court, which included for the first time, among other things, the estimated allowed claims with respect to outstanding debt obligations. As a result, the unsecured and potentially undersecured debt obligations as of December 31, 2023 were adjusted to equal the expected amount of the allowed claim as detailed in the Plan, resulting in an adjustment of approximately $905.9 million to Liabilities subject to compromise and a corresponding expense recognized within Reorganization items, net in the Consolidated Statement of Operations.

 

3(e7) This adjustment represents the tax effect of the items described in Notes 3(e4) and 3(e5) using the statutory tax rate applicable to these separate items, as well as the elimination of the tax-effects of the reorganization and fresh-start accounting. Additionally, the U.S. Internal Revenue Service’s (“IRS”) claims and uncertain tax positions related to the historical federal income tax positions not specifically challenged by the IRS, as well as certain federal income tax related claims that arose during the Endo’s Predecessor’s Chapter 11 Cases and as a result of the consummation of the Plan, were resolved in accordance with the global resolution reached by the Debtors with the Department of Justice with respect to claims filed in the Chapter 11 Cases by the United States of America (the “U.S. Government Economic Settlement”) which became effective on the Effective Date of the Plan. The US Government Economic Settlement Agreement is reflected in the adjustment described in Note 3(e6) and the related impact on the predecessor tax provision is reflected in this adjustment as if settlement occurred on January 1, 2024.

 

4. Discontinued Operations Pro Forma Adjustments

 

4(a) Reflects the discontinued operations, including associated assets, liabilities, and equity and results of operations, attributable to Mallinckrodt’s Specialty Generics segment which were included in Mallinckrodt’s historical consolidated financial statements. These adjustments were derived from the accounting books and records of Mallinckrodt and reflect the estimated income tax effect of the pro-forma adjustments. The tax effect of the pro-forma adjustments was determined by applying the intraperiod allocation rules in ASC 740 for each period presented.

 

4(b) Reflects the discontinued operations, including associated assets, liabilities, and equity and results of operations, attributable to Endo’s “Generic Pharmaceuticals” and “Sterile Injectables” segments which were included in Endo’s historical consolidated financial statements. These adjustments were derived from the accounting books and records of Endo. These amounts reflect the estimated income tax effect of the pro-forma adjustments. The tax effect of the pro-forma adjustments was determined by applying the intraperiod allocation rules in ASC 740 for each period presented.

 

5.  Spin-off and Other Spin-off Related Transactions Pro Forma Adjustments

 

Unaudited Pro Forma Condensed Combined Balance Sheet as of June 27, 2025

 

5(a) This adjustment reflects the estimated cash payment to be made in exchange for the redemption of Mallinckrodt preferred shares held by non-qualified shareholders in accordance with the terms outlined in the Separation Agreement as described in Note 1, assuming qualified shareholder certification was at approximately 98.5%. A 1.0% change in qualified shareholder certification would impact the cash payment by approximately $7.8 million for purposes of the Pro Forma Financial Information.

 

 

5(b) This adjustment reflects the impact of the amendment to an existing lease agreement between Mallinckrodt and Par Health in connection with the Spin-off. Under the amended terms, Mallinckrodt will continue as the lessee of the leased property. As a result, Mallinckrodt will recognize a right-of-use (ROU) asset and a corresponding lease liability on its balance sheet in accordance with ASC 842. The lease is scheduled to expire on October 31, 2027, unless renewed pursuant to the terms outlined in the Lease Agreement. The discount rate used to calculate the lease balances was 6.33%.

 

Unaudited Pro Forma Condensed Combined Statements of Operations for the six months ended June 27, 2025

 

5(c) This $3.0 million adjustment to selling, general and administrative expenses is comprised of a $1.2 million impact related to the amended lease between Mallinckrodt and Par Health further described in Note 5(b) and $1.8 million of incremental costs that the Company expects to recognize pursuant to the TSA with Par Health. Costs incurred under the TSA are primarily related to certain core business services and operational support to be provided by Par Health, including supply chain and manufacturing support, quality assurance, and commercial, research and development (“R&D”), human resources (“HR”), finance, and information technology (“IT”) services and are reflected within selling, general and administrative expenses for purposes of the Pro Forma Financial Information. However, actual costs incurred may also be reflected within cost of sales or research and development expenses based on the nature of services provided. Par Health will receive transitional support from the Company under the TSA for up to 24 months. The Company will provide Par Health with a broad range of transitional services (Reverse Transition Services), including supply chain, manufacturing, quality, commercial, R&D, HR, procurement, compliance, environmental health and safety, facilities and security, finance, IT, and suspicious order monitoring and controlled substance compliance, to ensure business continuity and operational support post transaction. A committee with representatives from both parties to the TSA will oversee service delivery and dispute resolution. Charges will be billed quarterly.

 

5(d) This adjustment reflects incremental income of approximately $0.2 million related to the Reverse Transition Services Agreement (the “RTSA”) with Par Health further described in Note 5(c).

 

5(e) This adjustment reflects the income tax impact of the pro forma transaction adjustments related to the Other Spin-off Transactions described in Note 5(c) and Note 5(d). For the six months ended June 27, 2025, the tax impact was calculated using a blended statutory rate. The blended statutory rate was calculated based on the statutory rates by jurisdiction in which the respective pro forma adjustment is expected to be recognized.

 

Unaudited Pro Forma Condensed Combined Statements of Operations for the year ended December 27, 2024

 

5(f) This $14.1 million adjustment to selling, general and administrative expenses is comprised of a $2.4 million impact related to the amended lease between Mallinckrodt and Par Health further described in Note 5(b) and $11.7 million of incremental costs that the Company expects to recognize pursuant to the TSA with Par Health further described in Note 5(c). Costs related to the TSA are reflected within selling, general and administrative expenses for purposes of the unaudited Pro Forma Financial Information. However, actual costs incurred may also be reflected within cost of sales or research and development expenses based on the nature of services provided.

 

5(g) This adjustment reflects incremental income of approximately $9.7 million related to the RTSA with Par Health further described in Note 5(c).

 

5(h) This adjustment reflects the income tax impact of the pro forma transaction adjustments related to the Spin-off described in Note 5(f) and Note 5(g). For the fiscal year ended December 27, 2024, the tax impact was calculated using a blended statutory rate. The blended statutory rate was calculated based on the statutory rates by jurisdiction in which the respective pro forma adjustment is expected to be recognized and was impacted by valuation allowances and statutory limitations on tax deductibility for certain adjustments.

 

6. Loss per Share

 

The computation of pro forma diluted weighted-average shares outstanding for the six months ended June 27, 2025, the year ended December 27, 2024 (Successor), the period November 15, 2023 through December 29, 2023 (Successor), the period December 31, 2022 through November 14, 2023 (Predecessor), the period June 17, 2022 through December 30, 2022 (Predecessor), and the period January 1, 2022 through June 16, 2022 (Predecessor) excluded approximately 1.7 million, 1.7 million, 1.0 million, zero, zero, and 0.5 million shares of Opioid CVRs for the Successor periods only and equity awards for all periods presented, respectively, because the effect would have been anti-dilutive.