SERVICES AGREEMENT dated as of July 27, 2018 between NALPROPION PHARMACEUTICALS, INC. and PERNIX THERAPEUTICS, LLC

“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person, at the time during the period for which the determination of affiliation is being made.  For purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlling” and “controlled” have correlative meanings.  For the purposes of this Agreement, in no event shall (i) the Company or any of its Subsidiaries be deemed to be an Affiliate of Pernix, the Pernix Parent or any of their respective Subsidiaries or (ii) Pernix, the Pernix Parent or any of their respective Subsidiaries be deemed to be an Affiliate of the Company or any of its Subsidiaries.  Notwithstanding anything herein to the contrary, for the purposes of this Agreement and solely as between the Parties hereto, any Company Officer, including ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇, shall be deemed to be an Affiliate of Pernix and a Pernix Employee and not an Affiliate of  

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the Company or a Company Employee, regardless of whether such Person is also an officer, director, employee or consultant of the Company or any of its Subsidiaries.

“Allocated Compensation” means, with respect to any Corporate Service, the portion of the aggregate compensation (including base salary, wages, commissions, incentive compensation, retirement benefits and employee or welfare benefits) attributable to a Pernix Employee involved in providing such Corporate Service in accordance with the internal budgeting practices of Pernix or its Subsidiaries to the extent consistent with GAAP (other than, in all cases, equity or equity-based compensation), to the extent related to the provision of such Corporate Service to the Company, allocated based on the actual time spent by such Pernix Employee in performing such Corporate Services as evidenced by the contemporaneous written time sheets completed in good faith by such Pernix Employees and maintained by Pernix (subject to Section 2.01(a) and (b) in the case of Company Officers to which the Parties have agreed on a deemed allocation of time dedicated to Corporate Services). 

“Allocated Costs” means, with respect to any Corporate Service, without duplication, the (i) Allocated Compensation and (ii) Allocated Overhead. 

“Allocated Overhead” means, with respect to any Corporate Service, the portion of the aggregate overhead expenses (including costs associated with office space, connectivity, licenses, setup, utilities and maintenance) attributable to any Pernix Employee involved in providing such Corporate Service in accordance with the internal budgeting practices of Pernix or its Subsidiaries, to the extent related to the provision of such Corporate Service to the Company, allocated based on the actual time spent by such Pernix Employee in performing such Corporate Services as evidenced by the contemporaneous written time sheets completed in good faith by such Pernix Employees and maintained by Pernix (subject to Section 2.01(a) and (b) in the case of Company Officers to which the Parties have agreed on a deemed allocation of time dedicated to Corporate Services), but in all cases shall exclude any overhead expenses related to under-utilized capacity.  

“Applicable Law” means, with respect to any Person, any transnational, domestic or foreign federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a Governmental Authority that is binding upon or applicable to such Person. 

“Business Day” means a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by Applicable Law to close.

“Capital Stock” has the meaning set forth in the Stockholders Agreement.

“Change in Control” has the meaning set forth in the Stockholders Agreement.

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“Company Board” means the board of directors of the Company.

“Company Employee” means any employee of the Company or one of its Subsidiaries.

“Company Intellectual Property” means any and all Intellectual Property Rights owned or controlled by the Company or any of its Subsidiaries, including, if any, the Pernix Product IP.

“Company Patents” means all Patents included in the Company Intellectual Property.

“Company Trademarks” means the Trademarks included in the Company Intellectual Property and set forth on Schedule I.

“Credit Agreement” has the meaning set forth in the Stockholders Agreement.

“FDA” means the U.S. Food and Drug Administration or its successor.

“GAAP” means U.S. generally acceptable accounting practices, applied on a consistent basis by the applicable Party.

“Governmental Authority” means any transnational, domestic or foreign federal, state or local governmental, regulatory or administrative authority, department, court, agency or official, including any political subdivision thereof.

“Intellectual Property Rights” means (i) inventions, whether or not patentable, reduced to practice or made the subject of one or more pending patent applications, (ii) national and multinational statutory invention registrations, patents and patent applications (including all reissues, divisions, continuations, continuations-in-part, extensions and reexaminations thereof) registered or applied for in the Territory and all other nations throughout the world, all improvements to the inventions disclosed in each such registration, patent or patent application (“Patents”), (iii) trademarks, service marks, trade dress, logos, domain names, trade names and corporate names (whether or not registered) in the Territory and all other nations throughout the world, including all variations, derivations, combinations, registrations and applications for registration of the foregoing and all goodwill associated therewith (“Trademarks”), (iv) copyrights (whether or not registered) and registrations and applications for registration thereof in the Territory and all other nations throughout the world, including all derivative works, moral rights, renewals, extensions, reversions or restorations associated with such copyrights, now or hereafter provided by law, regardless of the medium of fixation or means of expression, (v) computer software (including source code, object code, firmware, operating systems and specifications), (vi) trade secrets and, whether or not confidential, business information (including pricing and cost information, business and marketing plans and customer and supplier lists) and know-how (including manufacturing and production processes and techniques and research and development information), (vii) industrial designs (whether or

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not registered), (viii) databases and data collections, (ix) copies and tangible embodiments of any of the foregoing, in whatever form or medium, (x) all rights to obtain and rights to apply for patents, and to register trademarks and copyrights, (xi) all rights in all of the foregoing provided by treaties, conventions and common law and (xii) all rights to ▇▇▇ or recover and retain damages and costs and attorneys’ fees for past, present and future infringement or misappropriation of any of the foregoing.

“Logistics Provider” means the third party logistics provider engaged by Pernix from time to time to provide distribution and cash-to-order services for the Product and other products.

“Net Sales” means, with respect to any period of time after the date hereof, the gross amounts invoiced for sales of the Product during such period, by, in the case of Net Sales in the Territory, Pernix, its Affiliates and/or its sublicensees to third parties not Affiliated to Pernix for use in the Territory and, in the case of Net Sales outside the Territory, the Company and its Affiliates to third parties not Affiliated to the Company for use outside of the Territory, minus any (i) trade, cash or quantity discounts or commercial rebates; (ii) redemption costs related to patient discount, loyalty and co-pay assistance programs; (iii) fees to wholesalers, retailers or distributors for inventory management programs or pursuant to distribution agreements; (iv) discounts, rebates, chargebacks and other price concessions, along with associated administrative fees, paid under managed care contracts; (v) deductions with respect to returns, recalls and rejections; (vi) price reductions or rebates imposed by Governmental Authorities; (vii) chargebacks granted to drug wholesalers or their customers in cases where there are not direct shipments to such customers; and (viii) sales, transfer, goods, services, value-added, gross receipt or similar taxes, duties, fees, charges or assessments (including any such taxes required to be withheld excluding in all cases taxes on income) (the “Taxes”) levied on, imposed or measured by the invoiced amount for the Product, as adjusted for rebates and refunds, to the extent not paid by a third party (the items in clauses (i) through (viii), the “Net Sales Deductions”).  For the avoidance of doubt, Net Sales Deductions shall be accrued in accordance with GAAP, as an estimate in the month in which the related Products are sold with reconciliations for actual deductions and credits performed on a quarterly basis until all such amounts have been finally reconciled, regardless of the number of quarters such final reconciliation requires.

“Net Sales Deductions” has the meaning set forth in the definition of Net Sales.

“Orange Book” means the FDA publication entitled “Approved Drug Products with Therapeutic Equivalence Evaluations” or any replacement thereof established or approved by the FDA.

“Patents” has the meaning set forth in the definition of Intellectual Property Rights.

“Pernix Employee” means any employee of Pernix or one of its Subsidiaries.

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“Stockholders Agreement” means the Amended and Restated Stockholders Agreement among the Company, Highbridge Capital Management, LLC, Pernix Ireland Pain Designated Activity Company and Whitebox Advisors, LLC, dated as of the date hereof, as hereafter amended from time to time.

“Subsidiary” means, with respect to any Person, any entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by such Person.  For the purposes of this Agreement, in no event shall the Company be deemed to be a Subsidiary of Pernix, Pernix Parent or any of their respective Subsidiaries.

“Taxes” has the meaning set forth in the definition of Net Sales.

“Territory” means the United States of America (including its territories and possessions).

“Trademarks” has the meaning set forth in the definition of Intellectual Property Rights.

“Trigger Event” has the meaning set forth in the Stockholders Agreement.

(c)Each of the following terms is defined in the Section set forth opposite such term: 

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Section 1.02.   Other Definitional and Interpretive Provisions.   The words “hereof,” “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.  The captions herein are included for convenience of reference only and shall be ignored in

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ARTICLE 2 

SERVICES 

(a)During the Term, and subject to the terms and conditions set forth herein, Pernix shall perform and be responsible for the provision of services (the “Corporate Services”) necessary for the management and operations of the Company as set forth in the Business Plan and Budget (as defined in Section 2.05 below), as well as all of the following:  

Section 2.05.  Business Plan and Budget.  During the first sixty (60) days of the term of this Agreement, the Company Officers shall oversee, as part of the Corporate

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Section 2.07. Reports.

(a)As part of the Corporate Services, a delegate of Pernix (which delegate shall be one or more of the following Pernix Employees unless otherwise approved by the Company Board: ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇) shall be available for (i) any duly called meeting of the Company Board (which may be held as often as deemed necessary by the Company Board) and (ii) non-meeting conference calls with the Company Board as and when requested by the Company Board (but no more than once per month for the first six (6) calendar months after the date hereof and then no more than once every three months thereafter) for the purpose of informing the Company Board of the performance of the Company and the Product against the Business Plan and Budget and any other matters relevant to the operation of the Company, including Pernix’s performance hereunder.  The Company Officers shall oversee the development, preparation and submission by the Company of written reports to the Company Board relative to financial or operational matters of a scope and detail as requested by the Board on a periodic basis (which may be as often as requested by the Company Board) as requested by the Company Board. 

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Section 2.08.   Force Majeure.  Neither Party shall be liable to the other Party for any delays or any failure to perform under this Agreement to the extent caused by matters or events occurring that are beyond the reasonable control of such first Party (each, a “Force Majeure Event”), including strikes, lockouts or other labor difficulties, fires, floods, acts of God, extremes of weather, earthquakes, tornadoes or similar occurrences, riot, insurrection or other hostilities, embargo or fuel or energy shortage, personnel resignations, third party supply chain and production delays, or unfavorable changes in managed care and other third party contractual relationships (subject to Section 2.02 with respect to Pernix Parties).  Any delays in performance or failures to perform caused by such occurrences shall not be deemed to be a breach or failure to perform under this Agreement.  Each Party shall promptly notify the other Party upon learning of the occurrence of a Force Majeure Event that may lead to a delay in performance or failure to perform by such Party under this Agreement and (i) such first Party shall use its commercially reasonable efforts to mitigate and eliminate such Force Majeure Event in order to resume performance; provided that such first Party will have no obligations to incur any additional costs or liabilities to do so, and (ii) the other Party shall have no obligation hereunder with respect to the obligations that such first Party is unable to perform due to the Force Majeure Event.

(a)Pernix represents that is currently has and shall use reasonable best efforts to maintain during the Term the resources and capabilities to perform the Services as currently contemplated and set forth in Schedule II in accordance with this Agreement.  Subject to the foregoing, in providing the Services, subject to Pernix’s obligations to comply with the terms of this Agreement (including meeting the general standard of service described under Section 2.03), no Pernix Party shall be obligated to: (i) hire any additional employees, (ii) maintain the employment of any specific employee or (iii) purchase, lease or license any additional equipment, hardware, Intellectual Property Rights or software.  Notwithstanding the foregoing, should Pernix and/or the Company Board determine that additional employees or equipment, hardware, Intellectual Property Rights or software are needed to perform the Corporate Services, the Company Board and Pernix shall hold good faith discussions as the necessity and most efficient manner to provide them and what, if any, alteration to the Fees and Expenses would be appropriate under such circumstances.  A Pernix Party shall not be obligated to provide any Service that such Pernix Party’s independent auditor concludes will result in material deficiencies with such Pernix Party’s internal financial controls in connection with the keeping of its financial books and records or the preparation of its financial statements, unless such deficiencies can be avoided by a commercially reasonable change in the manner in which such Service is provided, in which case such Pernix Party shall perform such Service in such a manner as to avoid such deficiencies with no liability hereunder. 

(b)All labor matters relating to Pernix Employees (including Pernix Employees in their capacities as Company Officers) shall be within the exclusive control of Pernix (or its applicable Affiliate), and the Company and its Subsidiaries shall not take any action  

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affecting such matters (except as permitted under Section 2.01(c) with respect to the removal of Pernix Employees in their capacities as Company Officers).  Nothing in this Agreement is intended to transfer the employment of any Pernix Employee to the Company or any of its Subsidiaries (including Pernix Employees in their capacities as Company Officers).  All Pernix Employees (including Pernix Employees in their capacities as Company Officers) will be deemed for all compensation, employee benefits, tax and social security contribution purposes to be employees of Pernix (or its applicable Affiliate) and not employees of the Company or any of its Subsidiaries.  All Company Employees will be deemed for all compensation, employee benefits, tax and social security contribution purposes to be employees of the Company (or its applicable Subsidiary) and not employees of Pernix or any of its Affiliates; provided that, as part of the Corporate Services, Pernix shall be responsible for day to day management and administration of Company Employees, including, authority through the Company Officers to hire, terminate and set the compensation of Company Employees.  In providing the Corporate Services, the Pernix Employees (including Pernix Employees in their capacities as Company Officers) will be under the direction, control and supervision of Pernix or its Affiliate and not of the Company or any of its Subsidiaries (subject to the right of the Company Board to remove Pernix Employees in their capacities as Company Officers as permitted by Section 2.01(c)).  For the avoidance of doubt, Company Officers shall not be entitled to receive compensation directly from the Company (excluding, for the avoidance of doubt, the Fees) in respect to the Services except to the extent expressly approved by the Company Board and Pernix.

Section 2.10.  Cooperation; Further Actions.

(b)Pernix acknowledges and agrees that as part of the Corporate Services the Company Officers will oversee all Company Third Party Providers and Company Employees who will be reporting directly or indirectly to Company Officers who are Pernix Employees.  Notwithstanding anything herein to the contrary, the Company shall not be responsible for any inability or delay in the performance of any obligation hereunder to the extent that such inability or delay is the result of the failure of the Company Officers to  

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timely and fully perform the foregoing Services in accordance with this Agreement necessary for the Company to perform such obligations hereunder.

Section 2.11.  Systems Access.  The Company Officers, as part of the Corporate Services, shall oversee the Company Employees and any contractors, subcontractors or vendors of, or third party providers of services to, the Company (each, a “Company Third Party Provider”) in): (i) not attempting to obtain access to, use or interfere with any information technology systems of Pernix or any of its Affiliates, or any data owned, used or processed by Pernix or any of its Affiliates, except to the extent granted by Pernix in connection with receipt by the Company of the Services, (ii) not permitting access to or the use of information technology systems of Pernix or any of its Affiliates by a third party other than as authorized by Pernix and (iii) not disabling, damaging or erasing or disrupting or impairing the normal operation of the information technology systems of Pernix or any of its Affiliates; provided that so long as the Company Officers meet their obligations in performing such Corporate Services in accordance with Section 2.03, nothing in this Section 2.11 shall eliminate the liability of the Company to Pernix to the extent set forth in Article 6 in the event that any of the Company Employees or any Company Third Party Providers take the actions set forth in the foregoing.  To the extent deemed necessary by Pernix, the Company shall use its commercially reasonable efforts to: (A) provide Pernix and each other Pernix Party with access to the Company’s information technology systems, as well as any data owned, used or processed by Pernix or any of its Affiliates, and (B) permit access to, or the use of, information technology systems of the Company by a third party as authorized by Pernix, except in either case to the extent so doing would violate Applicable Law or otherwise not comply with any obligation of the Company including its contractual obligations to third parties.

Section 2.12. Policies and Procedures.

(b)During any period in which Pernix is required to consolidate the results of the Company under U.S. generally accepted accounting practices or Applicable Law, the Company shall, and shall use its commercially reasonable efforts to cause the Company Employees and Company Third Party Providers to, comply, at Pernix’s expense, with and subject to any reasonable accommodations requested by the Company to protect its Confidential Information (including Intellectual Property Rights) the reasonable requests of Pernix Employees and Pernix Third Party Providers for information and  

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assistance and the policies and procedures of Pernix that Pernix, in Pernix’s good faith reasonable judgment, determines that the Company should comply with to ensure that Pernix can satisfy its obligations under Applicable Law.

Section 2.13. Outstanding Accounts Receivable.

 As part of the Corporate Services, Pernix shall have the sole right to, and shall have the responsibility to, collect all accounts receivable of the Company on its behalf that are accrued and outstanding as of the date hereof; provided that (i) Pernix shall pay over to the Company all amounts collected on such accounts receivable within five (5) Business Days of Pernix’s receipt of any such accounts receivable, minus, any (A) accruals or reserves for returns, chargebacks or wholesaler fees to the extent related to such accounts receivables as determined by Pernix in its reasonable discretion which shall be timely paid when due by Pernix on the Company’s behalf and (B) other deductions or expenses that Pernix will be responsible for paying under this Agreement  to the extent such deductions or expenses are expressly permitted to be offset against amounts collected on such accounts receivable as set forth in the Business Plan and Budget or as otherwise expressly approved by the Company Board (or its delegee pursuant to Section 2.06), and (ii) Pernix may delegate the collection of such accounts receivable to a Pernix Third Party Provider as set forth in Section 2.02.  Within thirty (30) days after the end of each calendar month, Pernix shall deliver to the Company a schedule setting forth Pernix’s collections for the prior month and itemizing in detail any deductions made from such collections pursuant to this Section 2.13.  The Company’s right of audit set forth in Section 4.02(f) shall apply to Pernix’s collection activities under this Section 2.13.

ARTICLE 3

DISTRIBUTION

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a manner consistent with Applicable Law (including the Product’s Regulatory Approval in the Territory) and this Agreement.

(b)The Company reserves the right to practice reasonable quality control with regard to the use of the Company Trademarks by Pernix and its sublicensees and Pernix shall, and shall cause its sublicensees to, adhere to such quality, appearance, distinctiveness and other standards with respect to the use of the Company Trademarks with respect to the Product as the Company may reasonably require from time to time.  Any use of the Company Trademarks by Pernix or its sublicensees inures to the benefit of the Company. 

(c)The Company shall not, and shall ensure that its Affiliates do not, during the term of this Agreement, offer for sale, sell, import or distribute the Product for use in the Territory without the prior written consent of Pernix. 

(e)Except as expressly provided in this Agreement, as agreed to in writing by the Parties or (iii) solely to the extent necessary for Pernix to perform the Corporate Services, no license or other right, title or interest in or to any Intellectual Property Rights is granted to either Party under this Agreement, whether by implication, estoppel or otherwise. 

.  The Company shall supply (or cause to be supplied) exclusively to Pernix for sale for use in the Territory in connection with the Distribution Services, and Pernix shall purchase exclusively from the Company, Pernix’s, its Affiliates’ and its sublicensees’ requirements of the Product for sale in the Territory in connection with the Distribution Services, in accordance with the following terms:

(g)Existing Product Inventory.  Notwithstanding the foregoing, any Product inventory owned by the Company existing as of the date hereof and in its possession shall be provided to Pernix for use in connection with the Distribution Services and no Transfer  

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Price (as defined in Section 3.02(d) below) shall be due on such Product; provided however that if the Company owes outstanding payment obligations to any Third Party Manufacturers in respect of such Product, Pernix shall pay such outstanding obligations; and provided further that Pernix shall pay to the Company any Monthly U.S. Net Sales Payment due on such Product.

(k)Delivery.  All Products ordered by Pernix pursuant to an accepted Purchase Order shall be shipped in accordance with the applicable Third Party Manufacturing Agreement and risk, and title to such Products shall pass to Pernix upon acceptance of delivery; provided, that Pernix shall only reject such Products on a basis and within a time period that would permit the Company to properly and timely reject such Products and return them to the Third Party Manufacturer in accordance with the terms of the applicable Third Party Manufacturing Agreement. 

(i)Notwithstanding anything to the contrary herein, Pernix acknowledges and agrees that:  

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(A)all Product to be supplied to Pernix hereunder shall be sourced by the Company from one or more Third Party Manufacturers;  and,  

(B) terms of supply of Product to Pernix from the Company shall be no more favorable to Pernix than the terms of supply of Product to the Company from the applicable Third Party Manufacturer; and,  

(C)the Company’s obligations hereunder to supply Product to Pernix shall be limited in all cases to using reasonable best efforts to perform the Company’s obligations and enforce the Company’s rights under applicable Third Party Manufacturing Agreements; it being understood that Pernix has no duty to perform the Distribution Service to the extent the Company does not perform pursuant to this Section 3.02(d)(i)(A); and  

(D)In the event the Company incurs obligations pursuant to Third Party Manufacturing Agreements approved by Pernix to purchase Product, Pernix shall have corresponding obligations to the Company to purchase such Product; and  

(E)any liability of the Company to Pernix or remedy of Pernix (whether arising under contract, tort or otherwise) for failure to supply Product hereunder shall in no event exceed the contractual remedy, if any, that the Company may have against any applicable Third Party Manufacturer for such failure under the applicable Third Party Manufacturing Agreement; it being understood that Pernix has no duty to perform the Distribution Service to the extent the Company does not perform pursuant to this Section 3.02(d)(i)(C).  

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(m)Recalls.  In the event that any Governmental Authority issues, requests or recommends a recall or market withdrawal or takes similar action in connection with the Product in the Territory, or in the event that the Company Board and/or Pernix determines that an event, incident or circumstance has occurred that may result in the need for a recall or market withdrawal of the Product in the Territory, Pernix and the Company shall consult with each other as to how best to proceed, it being understood and agreed that the final decision as to any recall or withdrawal of any Product shall be made by the Company Board; provided, however, that Pernix shall not be prohibited hereunder from taking any action (including initiating any recall or withdrawal) that it reasonably believes to be required or appropriate to take by Applicable Law after providing prior written notice of such action to the Company Board.  The Company shall bear all reasonable costs in connection with such recall or withdrawal; provided, however, nothing in this Section 3.02(h) is intended to affect the Parties’ respective rights and obligations under Article 6 with respect to indemnification.   

(i)An illustrative flow chart with respect to the distribution of Products in the Territory is attached hereto as Schedule IV. 

Section 3.03. Intellectual Property Matters.

(ii)Pernix shall further reasonably assist the Company, at the Company’s expense, to further evidence, record and perfect the foregoing assignments set forth in Section 3.03(a)(i) above, and to perfect, obtain and maintain, any Pernix Product IP. 

(iii)Pernix shall, and shall cause its Affiliates and Pernix Parties to, maintain reasonable written records (in such format as may be reasonably specified by the Company) of any conception, development or reduction to practice of Pernix Product IP, and all such written records shall be available and provided to the Company in the manner as requested by the Company.  To the extent such records solely relate to the Pernix Product IP, all such records shall be the sole and exclusive property of the Company. 

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(iv)If Pernix Product IP is based on, incorporates, or is an improvement or derivative of, or cannot be reasonably and fully practiced, made, used, reproduced, distributed and otherwise exploited without using or violating Intellectual Property Rights of Pernix, Pernix hereby grants the Company and its successors a perpetual, irrevocable, worldwide royalty-free, non-exclusive, freely sublicensable and assignable right and license to exploit and exercise all such Intellectual Property Rights in support of the Company’s exercise or exploitation of Pernix Product IP (including any modifications, improvements and derivatives of any of the same); provided that, in the event and to the extent any royalties or other fees become payable by Pernix to third parties as a result of such exercise or exploitation by the Company of the Intellectual Property Rights licensed under this Section 3.03(a)(iv), the Company shall reimburse Pernix for such royalties and fees. 

(v)Pernix shall cause each of the Pernix Affiliates and Pernix Employees to, and shall use reasonable best efforts to cause Pernix Third Party Providers and any other Pernix Parties to, execute and deliver to Pernix or the Company (upon request by the Company) an agreement assigning all of such party’s right, title and interest (if any) in and to the Pernix Product IP consistent with this Section 3.03(a) so that sole and exclusive ownership therein resides in the Company after giving effect to the assignment set forth under Section 3.03(a)(i) above and providing Pernix sufficient rights to grant the license to the Company set forth in Section 3.30(a)(iv).  

(b)Subject to the terms and conditions of this Agreement, during the Term, Pernix shall have the sole and exclusive right (including exercising such right as so directed by the Company Board) to prepare, file, prosecute, maintain and defend (including in connection with any interferences, reissue proceedings, reexaminations, requests for patent term extensions, inter partes reviews, post-grant reviews, derivation proceedings, oppositions or declaratory judgment actions) the Company Patents in the Company’s name, for its benefit and at the Company’s expense (such activities, the “Prosecution Activities”).  In connection with the foregoing, Pernix shall, as part of the Corporate Services, manage Prosecution Activities in accordance with the Business Plan and Budget, subject to any approval rights of the Company Board as set forth in Schedule III.  Notwithstanding the foregoing, any legal counsel engaged to perform Prosecution Activities shall be engaged on behalf of the Company by Pernix.  Each Party shall provide all reasonable cooperation and assistance requested by the other Party in connection with the Prosecution Activities, including by providing any necessary powers of attorney and executing any other required document or instrument for such Prosecution Activities.  Without limiting the generality  

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of the foregoing, each Party shall provide the other Party with all information necessary or desirable to enable such Party to comply with the duty of candor and duty of disclosure requirements of any patent authority.  Pernix agrees that at least one Pernix Employee (initially anticipated to be ▇▇▇▇▇ ▇▇▇▇▇▇) shall manage such Prosecution Activities as part of the Corporate Services subject to any approval rights of the Company Board.

(a)During the Term, Pernix shall make recommendations to the Company Board relative to decisions regarding which, if any, of the Company Patents to submit to the FDA for listing in the Orange Book for any Product that is not so listed as of the date hereof.  As part of the Corporate Services, Pernix shall maintain with the FDA correct and complete listings of all Company Patents applicable to the Product.  Notwithstanding anything herein to the contrary, Pernix shall act in accordance with Schedule III. 

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(b)With respect to the matters under this Section 3.03, the Company and Pernix shall discuss promptly after the date hereof entering into a Joint Defense and Common Interest Agreement in a form to be mutually agreed. 

(c)Nothing in this Section 3.03 shall limit Pernix’s obligations with respect to the Corporate Services as expressly set forth in this Agreement. 

Section 3.04.  Regulatory Matters.

(b)Pernix and its Affiliates shall have the responsibility in the Territory for complying with all Applicable Laws, regulatory filings and reporting requirements required to be undertaken by Pernix acting as a distributor of the Product in the Territory. Pernix shall promptly notify the appropriate, designated persons within the Company of any report of an adverse drug reaction/experience concerning the Product to the extent known by Pernix.  Pernix shall cooperate with the Company as necessary to report such adverse drug reaction/experience when so required as a distributor of the Product under Applicable Laws.  Pernix shall also promptly notify the appropriate, designated persons within the Company of any material complaints related to the Product of which the applicable personnel of Pernix becomes aware regarding problems with the Product other than those associated with adverse drug reactions/experiences.  Subject to the foregoing, the Company shall be responsible for the timely reporting of all relevant adverse drug reactions/experiences, Product quality, Product complaints and safety data relating to the  

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Product to the appropriate Governmental Authorities in and outside of the Territory, all in accordance with Applicable Law and requirements of Governmental Authorities in the Territory or the applicable jurisdiction outside of the Territory, as the case may be.  As such pertains to the Corporate Services provided by Pernix, the Company shall promptly share all such reports with Pernix, and in all cases shall use its commercially reasonably efforts to provide such reports to Pernix before or simultaneous to the issuance of such reports to Governmental Authorities.

(c)The Company shall use its commercially reasonable efforts to obtain and maintain all Regulatory Approvals in the Territory.  The Company shall be responsible for all Product-related communications with any Governmental Authority in or outside of the Territory regarding the Product, unless previously agreed between the Company and Pernix. 

(d)Each Party shall keep the other Party reasonably informed in writing in a timely manner of any information that such Party receives that (i) raises any material concerns regarding the safety or efficacy of the Product; (ii) indicates or suggests a potential material liability of either Party to third parties (including Governmental Authorities) in connection with the Product; (iii) is reasonably likely to lead to a recall or market withdrawal of the Product; or (iv) relates to the Product and is reasonably likely to have a material impact on a Regulatory Approval or the commercialization of the Product. 

(e)At the request of designated persons within the Company, Pernix will supply distribution information and other information reasonably requested by the Company, for the purposes of inclusion into the Company’s Annual Report to FDA. 

(f)Pernix shall ensure that the Distribution Service activities of Pernix, its Affiliates, Pernix Parties and sublicensees related to the Product shall be compliant with Applicable Laws.  Pernix shall ensure that Pernix, its Affiliates, Pernix Parties and sublicensees shall not use any Promotional Materials not expressly approved for Pernix’s use by the Company Board (or its delegee).  “Promotional Materials” means all sales representative training materials and all written, printed, graphic, electronic, audio or video matter, including, but not limited to, journal advertisements, sales aids, formulary binders, reprints, direct mail, direct-to-consumer advertising, Internet postings, broadcast advertisements and sales reminder aids (for example, scratch pads, pens and other such items), used or intended for use by in connection with any promotion, distribution, marketing, advertising, importation, use, offer for sale, or sale of the Product.  

(g)Pernix and the Company agree to promptly notify the other Party in the event they or any of their respective Affiliates receive any communication or notice from the FDA with respect to the Product or an inspection of the facility where the Product is manufactured, and each Party shall promptly provide a copy of such communications to the extent applicable to the Product to the other.  The Parties shall cooperate in good faith in responding to any such FDA inquiry or in making any report to the FDA with respect to the Product, but in all cases the Company shall have final authority for regulatory decisions concerning the Product and responsibility for all communications with the FDA.   

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(h)Nothing in this Section 3.04 shall limit Pernix’s obligations with respect to the Corporate Services as expressly set forth in this Agreement.   

Section 3.06.    No Conflict. To the fullest extent permitted by Applicable Law, each Party acknowledges and agrees, on behalf of itself and its Affiliates, that the enforcement by Pernix of its rights under Section 3.01, Section 3.02 and ‎Section 3.05, in and of itself, shall in no event be deemed to be (i) a breach of any fiduciary duty owed to the Company by any Pernix Employee (including any Company Officer or any designee of Pernix on the Company Board), whether pursuant to this Agreement, the Stockholders Agreement or otherwise, or (ii) a breach by Pernix under this Agreement of its obligations with respect to the Corporate Services; provided that this Section 3.06 shall not in and of itself limit Pernix’s obligations to perform the Corporate Services or the Company's rights to enforce Pernix's obligations hereunder.

ARTICLE 4 

FEES; PAYMENTS

Section 4.01.  Fees for Services.

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in the size of the Company and its business from the date hereof until the Corporate Services Fee Cap has been increased.  

Section 4.02.  Invoicing and Payments.

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Monthly ex-U.S. Net Sales Payment shall be payable by the Company to Pernix; provided that if the Company shall adjust its calculation of the Monthly ex-U.S. Net Sales for any calendar month subsequent to the Monthly Reconciliation for such calendar month, then, (A) if the adjusted Monthly ex-U.S. Net Sales is higher than the original Monthly ex-U.S. Net Sales, an amount equal to 5% of such excess shall be payable by the Company to Pernix and (B) if the original Monthly ex-U.S. Net Sales is higher than the adjusted Monthly ex-U.S. Net Sales, the Company shall deduct from the Monthly ex-U.S. Net Sales Payment for such calendar month an amount equal to 5% of such excess.  

(f)Pernix shall maintain complete and accurate records in all material respects of Fees and Expenses and Monthly U.S. Net Sales for a period of at least three (3) years  

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following the end of the calendar year in which such Fees and Expenses were incurred and such Monthly U.S. Net Sales were generated.  The Company shall maintain complete and accurate records in all material respects of Monthly ex-U.S. Net Sales for a period of at least three (3) years following the end of the calendar year in which such Monthly ex-U.S. Net Sales were generated.  Each Party shall have the right to have an independent public accounting firm (provided that such independent public accounting firm is not compensated on a contingency basis), reasonably acceptable to the other Party, audit such records solely to confirm the accuracy of the amounts of, with respect to the Company’s audit right, Fees and Expenses and Monthly U.S. Net Sales and, with respect to Pernix’s audit right, Monthly ex-U.S. Net Sales.  Such audit may be exercised during normal business hours no more than once in any calendar year upon at least thirty (30) days prior written notice to the Party being audited.  The records of the audited Party shall be considered Confidential Information of such Party under Section 5.01 below.  Such accounting firm shall enter into a reasonable and standard written non-disclosure agreement with the audited Party and shall disclose to the Party requesting the audit only information relating to the accuracy of, with respect to the Company, Fees and Expenses and Monthly U.S. Net Sales and with respect to Pernix, Monthly ex-U.S. Net Sales.  Such accountants shall deliver concurrently to the Parties a detailed final written audit report (setting forth, among other things, the miscalculations, if any, identified by the audit) within thirty (30) days of completion of the audit.  If the audit discloses an overpayment by a Party, the Party who received such overpayment shall promptly pay the other Party the amount of such overpayment, within thirty (30) days of the audit report.  The Party requesting the audit shall bear the full cost of such audit unless such review discloses a discrepancy in the amounts under review of more than five (5) percent (5%) from the amounts originally reported by the Party being audited, in which case, the Party under audit shall reimburse the other Party the documented fees and costs of such audit.

ARTICLE 5

OTHER AGREEMENTS

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disclose Confidential Information of the Company to the extent necessary to perform the Services in accordance with the terms of this Agreement.

Section 5.02. Noncompetition

(a)Pernix agrees that, during the Term and for one (1) year after the expiration or termination of this Agreement, neither it nor any of its Affiliates shall: 

(vii)employ or solicit for employment any current Company Employee; provided that nothing in this Section 5.03 shall prohibit Pernix or any of its Subsidiaries from (A) conducting any general solicitations for employment, such as any newspaper or Internet help wanted advertisement, directly or through any agent (including placement and recruiting agencies) that is not directed at current Company Employees, or (B) hiring any Company Employee whose employment with the Company or its Subsidiary has ceased. 

ARTICLE 6

INDEMNIFICATION; LIMITATION OF LIABILITY

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Section 6.02.  Warranties.

(i)Such Party is a business entity duly organized and validly existing under the laws of the jurisdiction in which it is formed. 

(ii)Such Party (A) has the power and authority to enter into this Agreement and to perform its obligations hereunder, and (B) has taken all necessary corporate action on its part to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder. 

(iii)This Agreement has been duly executed and delivered on behalf of such Party, and constitutes a legal, valid, binding obligation, enforceable against such Party in accordance with its terms. 

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(iv)All necessary consents, approvals and authorizations of all Governmental Authorities and other Persons required to be obtained by such Party in connection with its execution, delivery and performance of this Agreement have been obtained. 

(v)The execution and delivery of this Agreement and the performance of such Party’s obligations hereunder (A) do not violate any provisions of the organizational documents of such Party, (B) do not conflict with or violate any requirement of Applicable Laws, and (C) do not conflict with, or constitute a default under, any material contractual obligation of such Party. 

(viii)Neither Party nor its Subsidiaries (A) has been debarred by the FDA or other governmental agency or is the subject of any FDA or other governmental agency debarment investigation or proceeding, (B) has employed or engaged any Person debarred by the FDA or other governmental agency, or any Person which is the subject of any FDA or other governmental agency debarment investigation or proceeding, and (C) has employed or engaged any Person which has been excluded from participating in the Medicare program or any other similar program of a governmental agency or has been subject to sanction pursuant to 42 U.S.C. § 1320a 7a or § 1320a 8 or been convicted of a criminal offense under 42 U.S.C. § 1320a 7b, in the conduct of the activities described above.  

(b)  Except to the extent expressly set forth in this Agreement, neither Party makes, and no Party is relying on, any warranty, express or implied, with respect to the Services and each Party hereby specifically disclaims any implied warranty of reasonable care or workmanlike effort.

Section 6.03.  Procedures

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any Third Party Claim relating to any alleged infringement, misappropriation or other violation of any third-party Intellectual Property Right shall be solely controlled by Pernix, who will act under and at the direction of the Company Board so long as there is no conflict between the Company’s rights and interests and Pernix’s rights and interests; and in the case of any conflict, the Company shall assume control of such defense and Pernix shall be entitled to participate in the defense and employ separate counsel of its choice for such purpose, in which case the fees and expenses of such separate counsel shall be borne by Pernix.

(c)The Indemnifying Party shall not be entitled to assume or maintain control of the defense of any Third Party Claim and shall pay the reasonable fees and expenses of counsel retained by the Indemnified Party if (i) the Indemnifying Party does not deliver the acknowledgment referred to in Section 6.03(b) within thirty (30) days of receipt of notice of the Third Party Claim pursuant to Section 6.03(a), (ii) the Third Party Claim relates to or arises in connection with any criminal proceeding, action, indictment, allegation or investigation, (iii) the Indemnified Party reasonably believes an adverse determination with respect to the Third Party Claim would be materially detrimental to the reputation or future business prospects of the Indemnified Party or any of its Subsidiaries, or (iii) the Third Party Claim seeks an injunction or equitable relief against the Indemnified Party or any of its Affiliates. 

(d)If the Indemnifying Party shall assume the control of the defense of any Third Party Claim in accordance with the provisions of this Section 6.03, the Indemnifying Party shall obtain the prior written consent of the Indemnified Party (which shall not be unreasonably withheld, conditioned or delayed) before entering into any settlement of such Third Party Claim, if the settlement does not expressly unconditionally release the Indemnified Party and its Affiliates from all liabilities and obligations with respect to such Third Party Claim or the settlement imposes injunctive or other equitable relief against the Indemnified Party or any of its Affiliates. 

(e)In circumstances where the Indemnifying Party is controlling the defense of a Third Party Claim, the Indemnified Party shall be entitled to participate in the defense of any Third Party Claim and to employ separate counsel of its choice for such purpose, in which case the fees and expenses of such separate counsel shall be borne by the Indemnified Party; provided that the Indemnifying Party shall pay the reasonable fees and expenses of such separate counsel if representation of both the Indemnifying Party and the Indemnified Party by the same counsel would create a conflict of interest. 

(f)Each Party shall cooperate, and cause their respective Affiliates to cooperate, in the defense or prosecution of any Third Party Claim and shall furnish or cause to be furnished such records, information and testimony, and attend such conferences, discovery proceedings, hearings, trials or appeals, as may be reasonably requested in connection therewith. 

(g)In the event an Indemnified Party has a claim for indemnity under Section 6.01 against an Indemnifying Party that does not involve a Third Party Claim, the  

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Indemnified Party agrees to give prompt, written notice of such claim to the Indemnifying Party.  Such notice shall set forth in reasonable detail such claim and the basis for indemnification (taking into account the information then available to the Indemnified Party).  The failure to so notify the Indemnifying Party shall not relieve the Indemnifying Party of its obligations hereunder, except to the extent such failure shall have materially and adversely prejudiced the Indemnifying Party.  If the Indemnifying Party does not notify the Indemnified Party within thirty (30) days following the receipt of a written notice with respect to any such claim that the Indemnifying Party disputes its indemnity obligation to the Indemnified Party for any Damages with respect to such claim, such Damages shall be conclusively deemed a liability of the Indemnifying Party and the Indemnifying Party shall promptly pay to the Indemnified Party any and all Damages arising out of such claim.  If the Indemnifying Party has timely disputed its indemnity obligation for any Damages with respect to such claim, the Parties shall proceed in good faith to negotiate a resolution of such dispute and, if not resolved through negotiations, such dispute shall be resolved by binding arbitration pursuant to the terms set forth in ‎Section 8.07.

Section 6.04. Limitation of Liability: Exclusion of Damages.

(a)TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, NO PARTY WILL BE LIABLE FOR ANY (I) PUNITIVE, SPECIAL, CONSEQUENTIAL, EXEMPLARY OR TREBLED DAMAGES (IN EACH CASE, EXCEPT TO THE EXTENT PAYABLE TO A THIRD PARTY IN RESPECT OF A THIRD PARTY CLAIM BASED ON A FINAL JUDGMENT OF A COURT OF COMPETENT JURISDICTION) OR (II) LOST PROFITS, DIMINUTION IN VALUE, MULTIPLE-BASED OR OTHER DAMAGES CALCULATED BASED ON A MULTIPLE OF ANOTHER FINANCIAL MEASURE, IN EACH CASE, ARISING OUT OF OR RELATING TO THIS AGREEMENT EVEN IF THE OTHER PARTY HAD BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 

(b)NOTWITHSTANDING ANY OTHER PROVISION CONTAINED IN THIS AGREEMENT, BUT SUBJECT TO SECTION 8.13, IN NO EVENT WILL EITHER PARTY, THE PERNIX INDEMNITEES OR THE COMPANY INDEMNITEES BE LIABLE UNDER THIS AGREEMENT, INCLUDING FOR ANY AND ALL CLAIMS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, WHETHER SUCH LIABILITY ARISES FROM ANY CLAIM BASED UPON CONTRACT, WARRANTY, TORT, FAILURE OF ESSENTIAL PURPOSE, TRADE USAGE OR OTHERWISE, EXCEPT WITH RESPECT TO AMOUNTS PAYABLE BY SUCH PARTY UNDER SECTION 6.01. 

(c)NOTWITHSTANDING ANYTHING ELSE HEREIN TO THE CONTRARY, THE MAXIMUM AGGREGATE LIABILITY OF PERNIX TO THE COMPANY UNDER OR IN CONNECTION WITH THIS AGREEMENT, EXCLUDING ANY SUCH LIABILITY PURSUANT TO SECTION 6.01(B)(II), SHALL NOT EXCEED AND SHALL BE LIMITED TO THE FEES ACTUALLY RECEIVED BY PERNIX HEREUNDER OR $6 MILLION, WHICHEVER IS LOWER. 

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ARTICLE 7

TERM; TERMINATION OF SERVICES 

Section 7.02. Termination.

(a)This Agreement may be terminated by either Party (the “Terminating Party”) upon written notice to the other Party, if: 

(ii)the other Party fails to perform its obligations hereunder as a result of a Force Majeure Event for any period aggregating one hundred and twenty (120) days or more within any three hundred and sixty (360) day period; or 

(iii)the other Party makes a general assignment for the benefit of creditors or becomes insolvent, or a receiver is appointed for, or a court approves reorganization or arrangement proceedings on, such Party. 

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written notice of such fact to the Company suspend performance of such Service without any liability under this Agreement; provided that, following delivery of such notice, the Parties will cooperate in good faith to promptly amend this Agreement to the extent necessary either (i) to eliminate such violation of Applicable Law (ii) or to determine if such Service can be provided in a different manner that does not violate Applicable Law, in each case while as nearly as possible accomplishing the purpose of the intended Service in a mutually satisfactory manner.  If the Parties are unable to agree upon such an amendment to this Agreement within thirty (30) days of such notification, then Pernix may at its option (i) seek binding arbitration relative to such an amendment or (ii) terminate its obligation with respect to such Service upon written notice to the Company and, for the avoidance of doubt, such termination shall relieve each Party from any liability or payment obligation under this Agreement with respect to such Service that has not yet accrued prior to such termination.

(e)  This Agreement shall terminate automatically and without further notice upon the consummation of a Trigger Event or a Change in Control; and, in the event that the amount of the Pernix Promote is less than $5,000,000, the Company shall pay to Pernix by wire transfer of immediately available funds payable to the order of Pernix pursuant to wire transfer instructions specified by Pernix an amount equal to $5,000,000 less the amount of the Pernix Promote received or receivable by Pernix within thirty (30) Business Days after the effective date of the termination of this Agreement in accordance with this Section 7.02(e); provided, however, that if the amount of the Pernix Promote is equal to or greater than $5,000,000, the Company shall only be obligated to pay Pernix the Pernix Promote.

Section 7.03.  Effect of Termination.

(b)Upon the expiration of this Agreement pursuant to Section 7.01 or the termination of this Agreement pursuant to Section 7.02(a)(i), 7.02(a)(iii) or Section 7.02(b), upon request of the Company, Pernix will provide one or more of the Service(s) as the Company deems reasonably necessary or desirable for an orderly transition to the Company for a period of time mutually agreed between the Parties at Pernix’s reasonable and documented cost (including all Fees and Expenses (as applicable)) on the same terms as such Service was provided during the calendar month immediately prior to the expiration or termination of this Agreement; provided that in no event shall any such Service(s) be  

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provided for more than nine (9) months after the expiration or termination of this Agreement.

(d)Upon expiration or any termination of this Agreement, the Company shall have the right, upon written notice to Pernix, to (i) cancel any then outstanding Pernix purchase orders for Product without liability to the Company; (ii) fulfill any then outstanding Pernix purchase orders for Product; and/or (iii) purchase from Pernix all unopened Product in Pernix’s inventory that is in good and resellable condition for the cost Pernix paid for such Product or such lesser price as mutually agreed. 

(e)Upon expiration or termination of this Agreement, for no additional consideration, the Company shall be, at the Company’s election on a case by case basis, subrogated to all of the Pernix Product Arrangements to the extent permitted under such Pernix Product Arrangements.  Pernix shall take such actions and execute such instruments as reasonably requested by the Company to facilitate such subrogation.  To the extent that any such Pernix Product Arrangement is not assignable to the Company, Pernix shall take such steps as necessary to allow the Company to obtain and enjoy the benefits of such Pernix Product Arrangements in the form of a license or other right to the extent Pernix has the right and ability to do so at the Company’s sole cost.  During the Term, Pernix shall use its commercially reasonable efforts to ensure that all Pernix Product Arrangements are assignable to the Company at its election at the Company’s sole cost.  

ARTICLE 8

MISCELLANEOUS

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Section 8.03. Expenses. Except as otherwise expressly provided in this Agreement, each Party will bear its respective fees and expenses incurred in connection with the preparation, negotiation, execution and performance of this Agreement and the transactions contemplated herein, including all fees and expenses of its lawyers, consultants and other agents.  Further, in the event of a dispute, each Party will bear its respective fees and expenses incurred in connection with undertaking a binding arbitration proceeding and shall share equally the costs of such arbitration proceeding.

Section 8.04.  Independent Contractor Status. Nothing in this Agreement shall constitute or be deemed to constitute a partnership or joint venture between the Parties. Neither Party is now, nor shall it be made by this Agreement, an agent, employee or legal representative of the other Party or any of its Affiliates for any purpose pursuant to this Agreement.  Each Party is and shall be an independent contractor in the performance of Services hereunder and nothing herein shall be construed to be inconsistent with this status.

Section 8.05.   Successors and Assigns.  The provisions of this Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.  Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof nor any of the documents executed in connection herewith may be assigned by any Party without the consent of the other Party, which consent may be granted or withheld in the discretion of such other Party; provided that, Pernix may assign this Agreement to any of Pernix Parent’s current Subsidiaries existing as of the date hereof, without the prior written consent of the Company; provided, further that (i) Pernix shall remain liable and responsible to the Company for the performance and observance of all such duties and obligations by such Subsidiary and (ii) Section 7.02(b)(ii) shall remain in force and effect notwithstanding any such assignment.

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Section 8.07.  Mediation. Any and all claims, disputes or controversies arising out of, in connection with or relating to this Agreement (the “Dispute”) shall, at the written request of a Party (a “Mediation Request”), be submitted to a neutrally positioned Person to act as mediator as mutually agreed by the Parties.  The mediation shall be held in (a) New York, NY or (b) such other place as the Parties may mutually agree in writing. The Parties shall have thirty (30) days from receipt by a Party of a Mediation Request to agree on a mediator.  If no mediator has been agreed upon by the Parties within thirty (30) days of receipt by a Party of a Mediation Request, then Section 8.08 shall apply.  All mediation pursuant to this clause shall be confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence, and no oral or documentary representations made by the Parties during such mediation shall be admissible for any purpose in any subsequent proceedings.  Live witness testimony shall not be taken.  Except as required by Applicable Law, neither Party nor its representatives may disclose the existence, content or results of any mediation hereunder without the prior written consent of both Parties.  If any of the Dispute has not been resolved within sixty (60) days of the appointment of a mediator, or within ninety (90) days after receipt by a Party of a Mediation Request (whichever occurs sooner), or within such longer period as the Parties may agree to in writing, then the Dispute shall be submitted to litigation in accordance with Section 8.08.

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Section 8.15.  No Commingling.  In the event that the Company Board determines that it is not in the best interest of the Company to co-mingle any assets of the Company with assets of Pernix, it shall notify Pernix and the Company Officers and Pernix and the Company shall take reasonable steps to limit such commingling as soon as practicable and take reasonable steps to cause such commingling to cease within 90 days.

[Signature Page Follows]

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IN WITNESS WHEREOF the Parties have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

Schedule I

Company Trademarks

1.CONTRAVE 

2.OREXIGEN THERAPEUTICS 

3.All Trademarks (as such term is defined in the Asset Purchase Agreement dated as of April 23, 2018 between Orexigen Therapeutics, Inc. and the Company (the “APA”)) in the Territory set forth on Schedule 2.1(d) of the APA 

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Schedule II

List of Corporate Services

Pernix will provide senior management oversight for all of key functions of the Company.  Pernix will provide services to support most corporate functions, as requested specifically by the Company Board, as approved in the Company’s Business Plan and Budget; and as otherwise mutually agreed in writing.  The scope of oversight, services and support to be provided by Pernix shall include, but not be limited to, the following corporate functions:

oSales  

oMarketing 

oSales Operations 

oSales Training 

oTrade Relations 

oGovernment Affairs and Contracting 

oManaged Markets 

oPatient Access Programming 

oSupply Chain and Technical Operations 

oRegulatory Affairs  

oQuality Assurance  

oPharmacovigilance/Drug Safety 

oLegal Affairs  

oCorporate Secretarial and Governance Services 

oContract Management Support 

oRisk Management and Insurance 

oHuman Resources  

oCorporate Finance and Financial Reporting  

oMedical Affairs 

oResearch and Development 

oCompliance, Quality Control and Clinical Affairs 

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Schedule III

List of Actions Requiring Company Board Approval

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·The Board should receive prior notice of and the right to approve or disallow the following actions related to Intellectual Property Rights:  

oMaterial deviation from the prosecution plan and budget included in the then current Business Plan and Budget approved by the Company Board.  

oAbandoning or ceasing the prosecution or maintenance of any of the Company's material rights in any material Patents, Trademarks or other Intellectual Property Rights (including failure to file a continuing patent application after allowance of any patent application).  

oCommencing or settling any administrative proceeding, including threat of action, concerning the Company's rights in material Patents, Trademarks or other Intellectual Property Rights.  

oIssuance of any legal opinion concerning Company's rights in material Patents, Trademarks or other Intellectual Property Rights or the Company's business or products.  

oCommencing or settling any claim or action, including threat of claim or action, alleging infringement, misappropriation or similar claim of the Company's material Intellectual Property Rights.  

oSettling any material claim or action, including threat of claim or action, alleging infringement, misappropriation or similar claim of a third party's Intellectual Property Rights.  

·Developing, manufacturing or commercializing any product other than the brand product sold under the Trademark  Contrave or Mysimba and approved under NDA #200063, (including any generic product),or the granting of a license or authorization to do the foregoing to a third party.  

·Entering into, materially amending, terminating or not renewing any material agreements that: (i) grants any party the right to develop, manufacture, market or sell the Company's product(s), (ii) licenses or secures rights in any Intellectual Property Rights integral to such products (other than ordinary course non-exclusive licenses for commercially available, off-the-shelf software granted by third parties to the Company in the ordinary course of business), (iii) contains any non-competition or non-solicitation covenants that are not considered customary and within the scope of conduct deemed to be in the ordinary course of business, (iv) involve a governmental entity and are not considered within the scope of conduct deemed to be in the ordinary course of business, (iv) which cannot be terminated within 120 days without resulting in a cost or penalty of $50,000 or more, or (iv) which the Company will be committed to spend or is expected to receive, in the aggregate, more than $1 million annually.  

·The following actions related to the regulatory matters:  

oMaterial deviation from the regulatory plan and budget included in the then current Business Plan and Budget approved by the Company Board. 

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oSponsoring, commencing or authorizing any clinical studies for the Company’s products that are not included in the Company’s Business Plan and Budget. 

oThe filing of material regulatory submissions, material amendments and/or supplements, as well as termination and non-renewal notifications, with respect to the Company's products.  

·Review and approval of the Company’s annual risk management and insurance program and subsequent review and approval of any material modifications to any existing and previously Board approved insurance coverage (except for the planned renewal of existing policies on terms not materially different from those in effect).  

·Commencing or settling any material lawsuit, litigation or other legal proceeding with an actual or estimated monetary value in excess of $500,000 or that does not expressly and unconditionally release the Company or which restricts the Company's business in any material respect. 

·Hiring, terminating, or changing the compensation of any of the Company's employees with titles of Senior Vice President or above or creating any new benefits for employees not contemplated in the then current Business Plan and Budget approved by the Company Board.  

·Creating any non wholly-owned subsidiary of the Company or joint venture or similar arrangements, or acquiring any debt securities, equity securities, or any other ownership or similar interest (or any right or option to acquire any such interest) in any other person. 

·Subject to the Stockholders Agreement, issuing, selling or otherwise transferring any debt securities, equity securities, or any other ownership or similar interest (or any right or option to acquire any such interest) in the Company.  

·Engaging the Company's outside auditors. 

·Subject to Section 2.12(b), approving the Company’s consolidated financial statements. 

·Making any material change to any accounting or tax policies of the Company. 

·Filing a voluntary petition in bankruptcy or similar proceeding, or consenting to the appointment of a receiver for the Company.  

·Issuing any press release or public statement on behalf of the Company or with respect to its products relative to a material development, other than in the ordinary course. .   

References to the “Company” and to “Pernix” shall include the respective Affiliates of each.

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