10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2016

OR

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

For the transition period from to

Commission file number 1-35144

Sagent Pharmaceuticals, Inc.

(Exact name of registrant as specified in its charter)

Delaware	98-0536317
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1901 N. Roselle Road, Suite 700 Schaumburg, Illinois	60195
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (847) 908-1600

(Former name, former address and former fiscal year, if changed since last report)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  x    No  o

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

Large accelerated filer	o		Accelerated filer	x
Non-accelerated filer	o	(Do not check if a smaller reporting company)	Smaller reporting company	o

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

At July 29, 2016, there were 32,910,475 shares of the registrant’s common stock outstanding.

Sagent Pharmaceuticals, Inc.

Table of Contents

		Page No.
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets at June 30, 2016 and December 31, 2015	3
	Condensed Consolidated Statement of Operations for the Three and Six Months Ended June 30, 2016 and 2015	4
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2016 and 2015	5
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2016 and 2015	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	28
Item 4.	Controls and Procedures	29
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Mine Safety Disclosures	30
Item 5.	Other Information	30
Item 6.	Exhibits	31
	Signature	32

In this report, “Sagent,” “we,” “us,” “our” and the “Company” refers to Sagent Pharmaceuticals, Inc. and subsidiaries, and “Common Stock” refers to Sagent’s common stock, $0.01 par value per share.

2

Sagent Pharmaceuticals, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share amounts)

	June 30, 2016			December 31, 2015
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	15,524		$	28,962
Short-term investments		20,164			20,060
Accounts receivable, net of chargebacks and other deductions		50,110			51,425
Inventories, net		86,532			76,453
Due from related party		2,754			2,678
Prepaid expenses and other current assets		9,934			7,388
Assets held for sale		—			4,626
Total current assets		185,018			191,592
Property, plant, and equipment, net		28,310			19,761
Investment in joint ventures		7,850			7,108
Goodwill		26,556			25,184
Intangible assets, net		57,752			53,166
Non-current deferred tax assets		52,116			50,808
Other assets		1,411			2,113
Total assets	$	359,013		$	349,732
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	48,670		$	43,703
Due to related party		15,992			13,754
Accrued profit sharing		6,209			7,582
Accrued liabilities		14,951			15,706
Liabilities held for sale		—			2,910
Total current liabilities		85,822			83,655
Long term liabilities:
Long-term debt		5,978			1,623
Deferred income taxes		12,058			12,021
Other long-term liabilities		1,319			1,340
Total liabilities		105,177			98,639
Stockholders’ equity:
Common stock—$0.01 par value, 100,000,000 authorized, and 32,851,263 and    32,801,896 outstanding at June 30, 2016 and December 31, 2015, respectively		329			328
Additional paid-in capital		369,227			367,235
Accumulated other comprehensive income (loss)		(11,227	)		(17,482	)
Accumulated deficit		(104,493	)		(98,988	)
Total stockholders’ equity		253,836		$	251,093
Total liabilities and stockholders’ equity	$	359,013		$	349,732

See accompanying notes to condensed consolidated financial statements.

3

Sagent Pharmaceuticals, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(Unaudited)

	Three months ended June 30,						Six months ended June 30,
	2016			2015			2016			2015
Net revenue	$	71,721		$	77,345		$	139,516		$	159,990
Cost of sales		54,368			58,904			105,316			119,624
Gross profit		17,353			18,441			34,200			40,366
Operating expenses:
Product development		6,630			5,419			13,387			10,734
Selling, general and administrative		11,726			11,410			23,851			24,535
Acquisition-related costs		1,452			70			2,850			1,321
Management transition costs		—			644			—			3,952
Equity in net (income) of joint ventures		(186	)		(293	)		(742	)		(1,178	)
Total operating expenses		19,622			17,250			39,346			39,364
Loss on sale of SCP		—			—			6,341			—
Gain on sale of product rights		(1,800	)		—			(3,800	)		—
Income (loss) from operations		(469	)		1,191			(7,687	)		1,002
Interest income and other income (expense), net		3			516			1,096			(540	)
Interest expense		(101	)		(132	)		(233	)		(462	)
Income (loss) before income taxes		(567	)		1,575			(6,824	)		—
Provision (benefit) for income taxes		(52	)		1,831			(1,319	)		2,150
Net loss	$	(515	)	$	(256	)	$	(5,505	)	$	(2,150	)
Net loss per common share:
Basic	$	(0.02	)	$	(0.01	)	$	(0.17	)	$	(0.07	)
Diluted	$	(0.02	)	$	(0.01	)	$	(0.17	)	$	(0.07	)
Weighted-average of shares used to compute net income per    common share:
Basic		32,856			32,161			32,843			32,102
Diluted		32,856			32,161			32,843			32,102

See accompanying notes to condensed consolidated financial statements.

4

Sagent Pharmaceuticals, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(in thousands, except per share amounts)

(Unaudited)

	Three months ended June 30,						Six months ended June 30,
	2016			2015			2016			2015
Net income (loss)	$	(515	)	$	(256	)	$	(5,505	)	$	(2,150	)
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments		(62	)		2,266			4,752			(4,772	)
Reclassification of cumulative currency translation gain		—			—			1,426			—
Unrealized gains (losses) on available for sale securities		2			(5	)		77			25
Total other comprehensive income (loss), net of tax		(60	)		2,261			6,255			(4,747	)
Comprehensive income (loss)	$	(575	)	$	2,005		$	750		$	(6,897	)

See accompanying notes to condensed consolidated financial statements

5

Sagent Pharmaceuticals, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

	Six months ended June 30,
	2016			2015
Cash flows from operating activities
Net income (loss)	$	(5,505	)	$	(2,150	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating    activities:
Depreciation and amortization		4,415			6,127
Stock-based compensation		1,899			1,925
Equity in net (income) loss of joint ventures		(742	)		(1,178	)
Deferred income taxes, net		(2,117	)		800
Sale of SCP		6,184			—
Other		77			(88	)
Changes in operating assets and liabilities:
Accounts receivable, net		(3,186	)		(1,634	)
Inventories, net		(9,353	)		(10,649	)
Prepaid expenses and other current assets		(2,159	)		(1,446	)
Due from related party		(76	)		1,068
Accounts payable and other accrued liabilities		(4,234	)		5,530
Net cash used in operating activities		(14,797	)		(1,695	)
Cash flows from investing activities
Capital expenditures		(6,052	)		(3,193	)
Purchases of investments		(7,216	)		(5,221	)
Sale of investments		7,100			3,450
Net reduction in cash due to sale of SCP		(1,694	)		—
Sale of product rights		3,800			—
Purchase of product rights		—			(768	)
Net cash used in investing activities		(4,062	)		(5,732	)
Cash flows from financing activities
Increase (reduction) in short-term borrowings		—			(5,189	)
Issuance of long-term debt		7,966			—
Repayment of long-term debt		(3,158	)		(340	)
Payment of deferred financing costs		(202	)		(106	)
Proceeds from issuance of common stock, net of issuance costs		93			8,416
Net cash provided by financing activities		4,699			2,781
Effect of exchange rate movements in cash		722			(42	)
Net decrease in cash and cash equivalents		(13,438	)		(4,688	)
Cash and cash equivalents, at beginning of period		28,962			55,633
Cash and cash equivalents, at end of period	$	15,524		$	50,945
Supplemental disclosure of cash flow information
Acquisition of property, plant and equipment in accounts payable		2,242			(317	)
Acquisition of intangibles in accounts payable		2,400			—

See accompanying notes to condensed consolidated financial statements

6

Sagent Pharmaceuticals, Inc.

Notes to Condensed Consolidated Financial Statements

(in thousands, except for share and per share information)

(Unaudited)

Note 1. Basis of presentation:

Our interim condensed consolidated financial statements are unaudited. We prepared the condensed consolidated financial statements following rules for interim reporting as prescribed by the U.S. Securities and Exchange Commission (“SEC”). As permitted under those rules, we have condensed or omitted a number of footnotes or other financial information that are normally required by accounting principles generally accepted in the United States of America (“U.S. GAAP”). It is management’s opinion that these financial statements include all adjustments, consisting of normal and recurring adjustments, necessary for a fair presentation of our financial position, operating results and cash flows. Operating results for any interim period are not necessarily indicative of future or annual results.

The condensed consolidated financial statements include Sagent as well as our wholly owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. We account for our investment in Sagent Agila LLC using the equity method of accounting, as our interest in the entity provides for joint financial and operational control.  

Management uses segment information to evaluate segment performance and allocate resources. Since the acquisition of Omega in the fourth quarter of 2014, we have operated in two reportable segments comprised of operations organized geographically in the United States (Sagent US segment) and Canada (Omega segment). Effective March 2016, we completed the disposal of the Sagent China Pharmaceuticals Co., Ltd. (“SCP”) manufacturing facility, which was a component of the Sagent US segment, reorganized our internal reporting responsibilities with our new EVP-Global Operations, and continued to align our strategic focus to integrate our Canadian business to support the manufacturing and sale of products.  Following these events, our Chief Executive Officer now focuses his review of financial performance and allocation of resources on the operations of the consolidated Company.  As a result, we began operating in a single reportable segment, which develops, sources, manufactures and markets affordable generic pharmaceutical products to the hospital market.  We continue to operate with two reporting units, which comprise the single reportable segment.

You should read these statements in conjunction with our consolidated financial statements and related notes for the year ended December 31, 2015, included in our most recent Annual Report on Form 10-K filed with the SEC on March 7, 2016.

Note 2: Recent Accounting Pronouncements

In May 2014, the FASB issued amended revenue recognition guidance to clarify the principles for recognizing revenue from contracts with customers. The guidance requires an entity to recognize revenue in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The guidance also requires expanded disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required about customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. In July 2015, the FASB approved a one year deferral to the new revenue guidance, and we are therefore required to adopt the new guidance on January 1, 2018 using one of the two prescribed retroactive methods. We are evaluating the impact of the amended revenue recognition guidance on our financial statements and related disclosures.

In February 2015, the FASB issued amended guidance on the model used to evaluate whether certain legal entities should be consolidated. This guidance is effective for the Company in the first quarter of 2017. Early adoption is permitted. Adoption of this guidance is not expected to have a material impact on our financial statements.

In April 2015, the FASB issued amended guidance which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This guidance is effective for annual and interim periods beginning after December 15, 2015. We have adopted this guidance in the current period.  There was no material impact of adoption.

In February 2016, the FASB issued lease guidance, which is intended to increase the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. In order to meet that objective, the new standard requires recognition of the assets and liabilities that arise from leases. A lessee will be required to recognize on the balance sheet the assets and liabilities for leases with lease terms of more than 12 months. Accounting by lessors will remain largely unchanged from current U.S. GAAP. The new standard is effective for public companies for fiscal years beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. We are evaluating the impact of the lease guidance on our financial statements and related disclosures.

7

In March 2016, the FASB issued amended guidance on employee share-based payment accounting. This update involves several aspects of the accounting for share-based payment transactions, including income tax effects, forfeitures and classifications on the statement of cash flows. The guidance is effective for fiscal years beginning after December 15, 2016. Early adoption is permitted in an interim or annual period; however, all amendments must be adopted at the same time. We are evaluating the impact of this guidance on our financial statements.

Note 3. Sale of SCP:

On March 22, 2016, we completed the sale of all of the issued and outstanding shares of the capital stock of SCP to Hong Kong King-Friend Pharmaceutical Co., Ltd., a subsidiary of Nanjing King-Friend Pharmaceutical Co., Ltd., (“NKF”), in exchange for $500.  In connection with the closing of the transaction, we incurred additional charges related to employee severance, cumulative currency translation adjustments and transferred working capital, resulting in a loss of $6,341, net of the cash consideration we received.  

Note 4. Sale of Product Rights:

During March 2016, we completed the sale of two product rights to NKF for cash consideration of $2,000.  We recognized a gain on sale of $2,000 related to the transaction, as we have no further continuing involvement in the sale, marketing, or manufacturing process of the products.

During June 2016, we completed the sale of one product right for cash consideration of $1,800.  We recognized a gain on sale of $1,800 related to the transaction, as we have no further continuing involvement in the sale, marketing, or manufacturing process of the product.

Note 5. Investments:

Our investments at June 30, 2016 were comprised of the following:

	Cost basis		Unrealized gains		Unrealized losses			Carrying value		Cash and cash equivalents		Short term investments
Assets
Cash	$	12,834	$	—	$	—		$	12,834	$	12,834	$	—
Money market funds		2,690		—		—			2,690		2,690		—
Commercial paper		1,000		—		—			1,000		—		1,000
Corporate/Government bonds and notes		19,154		16		(6	)		19,164		—		19,164
	$	35,678	$	16	$	(6	)	$	35,688	$	15,524	$	20,164

Investments with continuous unrealized losses for less than twelve months and their related fair values at June 30, 2016 were as follows:

	Fair value		Unrealized losses
Corporate/Government bonds and notes	$	10,429	$	(6	)

Unrealized losses from fixed-income securities are primarily attributable to changes in interest rates. Because we do not currently intend to sell these investments, and it is not more likely than not that we will be required to sell our investments before recovery of their amortized cost basis, which may be maturity, we do not consider these investments to be other-than-temporarily impaired at June 30, 2016.

The original cost and estimated current fair value of our fixed-income securities at June 30, 2016 are set forth below.

	Cost basis		Estimatedfair value
Due in one year or less	$	10,429	$	10,428
Due between one and five years		9,725		9,736
	$	20,154	$	20,164

8

Note 6. Inventories:

Inventories at June 30, 2016 and December 31, 2015 were as follows:

	June 30, 2016									December 31, 2015
	Approved			Pending regulatory approval			Inventory			Approved			Pending regulatory approval		Inventory
Raw materials	$	6,458		$	6,028		$	12,486		$	4,855		$	2,800	$	7,655
Work in process		853			—		$	853			433			—		433
Finished goods		83,170			—		$	83,170			73,365			—		73,365
Inventory reserve		(7,214	)		(2,763	)	$	(9,977	)		(5,000	)		—		(5,000	)
	$	83,267		$	3,265		$	86,532		$	73,653		$	2,800	$	76,453

In the first quarter of 2016, we acquired $3,248 of pre-launch API related to one of the products in our development pipeline.  This amount is included in Raw materials pending regulatory approval as we believe the approval and launch of the related product is probable.  

Note 7. Property, plant and equipment

Property, plant and equipment at June 30, 2016 and December 31, 2015 were as follows:

	June 30, 2016			December 31, 2015
Land and land improvements	$	1,181		$	1,102
Buildings and improvements		7,572			6,713
Machinery, equipment, furniture and fixtures		6,114			5,457
Computer Software		3,840			3,776
Construction in process		14,596			6,535
		33,303			23,583
Less accumulated depreciation		(4,993	)		(3,822	)
	$	28,310		$	19,761

Depreciation expense was $504 and $1,067 for the three and six months ended June 30, 2016, respectively.  

Note 8. Goodwill and Intangible assets, net:

Goodwill at June 30, 2016 and December 31, 2015 was $26,556 and $25,184, respectively.  There were no goodwill impairment losses for the three or six months ended June 30, 2016 and 2015, respectively.

Movements in goodwill were due to the following:

December 31, 2015	$	25,184
Foreign currency movements		1,372
June 30, 2016	$	26,556

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Intangible assets at June 30, 2016 and December 31, 2015 were as follows:

	June 30, 2016							December 31, 2015
	Gross carrying amount		Accumulated amortization			Intangible assets, net		Gross carrying amount		Accumulated amortization			Intangible assets, net
Product licensing rights	$	4,583	$	(3,192	)	$	1,391	$	4,533	$	(2,998	)	$	1,535
Product development rights		6,722		—			6,722		2,890		—			2,890
Purchased product rights and  other		49,128		(7,461	)		41,667		46,238		(5,087	)		41,151
Total definite-lived intangible assets	$	60,433	$	(10,653	)	$	49,780	$	53,661	$	(8,085	)	$	45,576
In-process research and development (IPR&D)	$	7,972	$	—		$	7,972	$	7,590	$	—		$	7,590
Total intangible assets	$	68,405	$	(10,653	)	$	57,752	$	61,251	$	(8,085	)	$	53,166

Movements in intangible assets were due to the following:

	Product licensing rights			Product development rights			Purchased product rights and other			IPR&D
December 31, 2015	$	1,535		$	2,890		$	41,151		$	7,590
Purchase of product rights		50			4,800			—			—
Amortization of product rights		(194	)		(968	)		(2,015	)		—
Foreign currency movements and other		—			—			2,531			382
June 30, 2016	$	1,391		$	6,722		$	41,667		$	7,972

The weighted-average period prior to the next extension or renewal for the 20 products comprising our product licensing rights intangible asset was 46 months at June 30, 2016.

Note 9. Investment in Sagent Agila:

Changes in our investment in Sagent Agila during the six months ended June 30, 2016 were as follows:

Investment in Sagent Agila at December 31, 2015	$	7,108
Equity in net income of Sagent Agila	$	742
Investment in Sagent Agila at June 30, 2016	$	7,850

Condensed statement of operations information of Sagent Agila is as follows:.

	Three months ended June 30,				Six months ended June 30,
Condensed statement of operations information	2016		2015		2016		2015
Net revenues	$	1,788	$	847	$	3,396	$	3,921
Gross profit		372		585		1,484		2,355
Net income		372		585		1,484		2,355

Note 10. Debt:

JPMorgan Chase Revolving Credit Loan Facility

On October 31, 2014, we entered into a credit agreement with JPMorgan Chase Bank, N.A., (the “Chase Agreement”). The Chase Agreement provides for an $80,000 asset based revolving credit loan facility, with availability subject to a borrowing base consisting of eligible cash, short-term investments, accounts receivable and inventory and the satisfaction of conditions precedent specified in the Chase Agreement. The Chase Agreement provides for an accordion feature, whereby we may increase the revolving commitment up to an additional $25,000, subject to certain customary terms and conditions, including pro-forma compliance with a fixed charge coverage ratio (as defined in the Chase Agreement) of 1.00 to 1.00. The Chase Agreement matures on October 31, 2019, at which time all amounts outstanding will be due and payable. Borrowings under the Chase Agreement may be used for general corporate purposes, including funding working capital. Amounts drawn bear an interest rate equal to, at our option, either a Eurodollar rate plus 2.00% per annum or an alternative base rate plus 1.00% per annum. We also incur a commitment fee on undrawn amounts equal to 0.25% per annum.

10

The Chase Agreement includes customary covenants and also imposes a financial covenant requiring compliance with a minimum fixed charge coverage ratio of 1.00 to 1.00 during certain covenant testing times triggered if availability under the Chase Agreement is below the greater of 10% of the revolving commitment and $8,000.

On January 7, 2016, we amended and restated our Chase Agreement (the “Amended Chase Agreement”) by adding a Canadian tranche and joining Omega as a borrower. The Amended Chase Agreement adds a C$30,000 term loan (including a delayed draw term loan) to fund, among other things, Omega’s construction of a facility in Quebec. The Amended Chase Agreement also adds a C$10,000 revolving facility sublimit to the existing revolving facility, with the total revolving commitment amount remaining at $80,000. The applicable margins for the Canadian prime rate and Canadian Dollar Offered Rate (“CDOR”) revolving loans are the same as the base rate and Eurodollar rates for the U.S. revolving loans at 1.00% and 2.00%, respectively. The margins for the Canadian term loans are 1.25% and 2.25% for Canadian prime rate and CDOR, respectively. The commitment fee rate remains 0.25%. The fixed charge coverage ratio remains at 1.00 to 1.00. The Canadian term loans are to be repaid in certain increments pursuant to the Amended Chase Agreement as the facility in Quebec is completed.

As of June 30, 2016, there was $6,571 in term loan borrowings outstanding under our Amended Chase Agreement, no outstanding borrowingson the revolver, and we were in compliance with all covenants under the Amended Chase Agreement. Total availability under our Chase term loan facility was $16,584 (C$21,487) at June 30, 2016. Total availability under our Chase revolving loan facility was $79,900 at June 30, 2016, which is subject to adjustment on a monthly basis under our borrowing base calculation.

Credit facilities acquired under the Omega acquisition

In connection with the acquisition of Omega, we assumed a series of credit facilities and mortgages with the National Bank of Canada (“NBC”) and the Business Development Bank of Canada (“BDC”).

In January 2015, we paid off all amounts outstanding under the Omega operating credit facility, the Omega demand loan and the Omega decreasing revolving credit facility with available cash on hand.

Omega also had five mortgage loans with the BDC (collectively the “Omega mortgages”) which we assumed in connection with the acquisition. The Omega mortgages, which required monthly installments and which were secured by specific Omega buildings and equipment, ranged in amount from C$70 to C$1,250 ($62 to $1,114 as of the acquisition date) and bore interest at the lender’s prime rate (5% as of the acquisition date) plus a premium ranging from 0%—1.5%. The Omega mortgages had maturity dates at various times from August 2019 through November 2036. In January 2016, in connection with entering the Amended Chase Agreement, we repaid the Omega mortgages in full, and refinanced them under the Chase term loan.

Note 11. Accrued liabilities:

Accrued liabilities at June 30, 2016 and December 31, 2015 were as follows:

	June 30, 2016		December 31, 2015
Payroll and employee benefits	$	4,120	$	6,512
Sales and marketing		7,748		7,308
Taxes payable		580		131
Other accrued liabilities		2,503		1,755
	$	14,951	$	15,706

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Note 12. Fair value measurements:

Assets measured at fair value on a recurring basis as of June 30, 2016 consisted of the following:

	Total fair value		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets
Money market funds	$	2,690	$	2,690	$	—	$	—
Corporate/Government bonds and notes		19,164		—		19,164		—
Commercial paper		1,000		—		1,000		—
Short-term investments	$	20,164	$	—	$	20,164	$	—
Total assets	$	22,854	$	2,690	$	20,164	$	—

The fair value of our Level 2 investments is based on a combination of quoted market prices of similar securities and matrix pricing provided by third-party pricing services utilizing securities of similar quality and maturity.   The fair value of our Level 3 contingent consideration is based upon a probability weighting approach that considered the possible outcomes based on assumptions related to the timing and probability of the product approval date.

Assets and liabilities measured at fair value on a recurring basis as of December 31, 2015 consisted of the following:

	Total fair value		Quotedprices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets
Money market funds	$	13,838	$	13,838	$	—	$	—
Corporate bonds and notes		20,060		—		20,060		—
Short-term investments	$	20,060	$	—	$	20,060	$	—
Total assets	$	33,898	$	13,838	$	20,060	$	—
Liabilities
Contingent purchase consideration	$	50	$	—	$	—	$	50

There were no transfers of assets between Level 1, Level 2 or Level 3 during the periods presented.

The contingent consideration is fixed at $50 as product approval was not achieved by June 30, 2016.  As the consideration is now fixed, the fair value is equal to the carrying value, and valuation consideration is no longer required as of June 30, 2016.  The fair value of our Level 3 contingent consideration is based upon a probability weighting approach that considered the possible outcomes based on assumptions related to the timing and probability of the product approval date.

Note 13. Accumulated other comprehensive income (loss):

Accumulated other comprehensive income (loss) at June 30, 2016 and December 31, 2015 is comprised of the following:

	June 30, 2016			December 31, 2015
Currency translation adjustment, net of tax	$	(11,236	)	$	(17,414	)
Unrealized gains (losses) on available for sale securities,    net of tax		9			(68	)
Total accumulated other comprehensive income (loss)	$	(11,227	)	$	(17,482	)

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The table below presents the significant amounts reclassified out of each component of accumulated other comprehensive loss for the period ended June 30, 2016.

Type of reclassification	Amount reclassified from accumulated other comprehensive income		Affected line item in the condensed consolidated statement of operations
Currency translation    adjustment – reclassification of cumulative    currency translation gain	$	1,426	Loss on sale of SCP
Total reclassification for the six months    ended June 30, 2016, net of tax	$	1,426

Note 14. Earnings per share:

Basic earnings per share is calculated by dividing net income available to common stockholders by the weighted average number of common shares outstanding for the period. Because of their anti-dilutive effect, the following common share equivalents, comprised of restricted stock and unexercised stock options, have been excluded from the calculation of diluted earnings per share for the three and six month periods ended June 30, 2016 and 2015, respectively:

	Three months ended June 30,				Six months ended June 30,
	2016		2015		2016		2015
Anti-dilutive shares (in thousands)		2,125		1,849		2,125		1,849

The table below presents the computation of basic and diluted earnings per share for the three and six months ended June 30, 2016 and 2015:

	Three months ended June 30,						Six months ended June 30,
	2016			2015			2016			2015
Basic and dilutive numerator:
Net income (loss), as reported	$	(515	)	$	(256	)	$	(5,505	)	$	(2,150	)
Denominator:
Weighted-average common shares outstanding - basic    (in thousands)		32,856			32,161			32,843			32,102
Net effect of dilutive securities:
Stock options and restricted stock		—			—			—			—
Weighted-average common shares outstanding - diluted    (in thousands)		32,856			32,161			32,843			32,102
Net income (loss) per common share (basic)	$	(0.02	)	$	(0.01	)	$	(0.17	)	$	(0.07	)
Net income (loss) per common share (diluted)	$	(0.02	)	$	(0.01	)	$	(0.17	)	$	(0.07	)

Note 15. Stock-based compensation:

The following tables set forth stock option and restricted stock activity for the six months ended June 30, 2016:

	Number of Shares
	Stock options			Restricted stock
Outstanding at December 31, 2015		1,679,039			180,208
Granted		569,579			196,312
Exercised		(61,705	)		(48,082	)
Forfeited		(320,434	)		(69,816	)
Outstanding at June 30, 2016		1,866,479			258,622

The aggregate intrinsic value of stock options exercised during the three months ended June 30, 2016 and 2015, was $376 and $5,964, respectively. The aggregate intrinsic value of stock options exercised during the six months ended June 30, 2016 and 2015, was $376 and $7,514, respectively.

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Note 16. Net revenue by product:

Net revenue by therapeutic class is as follows:

	Three months ended June 30,				Six months ended June 30,
Therapeutic class:	2016		2015		2016		2015
Anti-infective	$	27,350	$	33,004	$	55,382	$	64,562
Critical care		30,896		26,783		59,344		56,692
Oncology		13,475		17,558		24,790		38,736
	$	71,721	$	77,345	$	139,516	$	159,990

Note 17. Related party transactions:

As of June 30, 2016 and December 31, 2015, respectively, we had a receivable of $2,754 and $2,678 from Sagent Agila LLC, which is expected to offset future profit-sharing payments.As of June 30, 2016 and December 31, 2015, respectively, we had a payable of $15,992 and $13,754 to Sagent Agila LLC, principally for the acquisition of inventory and amounts due under profit-sharing arrangements.

Note 18. Income Taxes:

Our benefit for income taxes for the three and six months ended June 30, 2016 was $52 and $1,319, respectively.  Our provision for income taxes for the three and six months ended June 30, 2015 was $1,831 and $2,150, respectively.  Included within the six months ended June 30, 2016 tax benefit are $1,064 of discrete tax benefits related to the completion of the sale of SCP.  

Note 19. Commitments and contingencies:

From time to time, we are subject to claims and litigation arising in the ordinary course of business. These claims may include assertions that our products infringe existing patents and claims that the use of our products has caused personal injuries. We intend to vigorously defend any such litigation that may arise under all defenses that would be available to us. At this time, there are no proceedings of which we are aware that are considered likely to have a material adverse effect on our consolidated financial position or results of operations.

Note 20. Management transition costs:

In 2015, we incurred costs related to the transition of our senior management team, following the retirement of our founder and Chief Executive Officer and resignation of our President in March 2015, and the elimination of certain positions in the US as part of the ongoing review of our business. Costs associated with these matters for the three and six months ended June 30, 2015, primarily severance related charges, totaled $644 and $3,952, respectively.

Of the charges incurred in 2015, $723 were paid during the quarter ended June 30, 2016 related to ongoing severance obligations. There are no costs accrued within the Accounts Payable and Accrued liabilities captions of the balance sheet at June 30, 2016. No costs were incurred in the six months ended June 30, 2016.

Note 21. Subsequent Events:

On June 15, 2016, we entered into an asset purchase agreement with Teva Pharmaceutical Industries Ltd. (Teva) and Actavis LLC to acquire a portfolio of five generic injectable pharmaceutical products., including Propofol Injectable Emulsion, 1%, for total consideration of $40 million.  The transaction closed on August 3, 2016.  Sagent has fully funded the transaction through borrowings on our revolver under the Amended Chase Agreement.  We intend to account for this transaction as a business combination.  Based on our preliminary estimates anticipate the purchase price will be primarily allocated to definite and indefinite lived intangible assets.

On July 10, 2016, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Nichi-Iko Pharmaceutical Co., Ltd., (“Parent”), and Shepard Vision, Inc., a wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which Merger Sub will, on the terms and subject to the conditions set forth therein, conduct a tender offer (the “Offer”) for all of the Company’s common

14

stock at a purchase price of $21.75 per share (the “Offer Price”), net to the seller in cash, without interest, less any required withholding taxes and, following acceptance of the tendered shares, merge with and into the Company.

The Offer is subject to customary conditions, including, among other things, (i) that the number of shares of Company common stock validly tendered in accordance with the terms of the Offer and not validly withdrawn, together with the shares of Company common stock owned by Merger Sub, must equal one share more than 50% of the outstanding shares of Company common stock, including all shares of Company common stock that the Company may be required to issue prior to the end date (as defined in the Merger Agreement) upon the vesting (including vesting solely as a result of the consummation of the Offer), conversion, settlement or exercise of all then outstanding warrants, options, obligations or securities convertible or exchangeable into shares of Company common stock or other rights to acquire or be issued shares of Company common stock, (ii) that any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 shall have expired or otherwise been terminated and (iii) the absence of any legal restraint.

The transaction is expected to be consummated in the third quarter of 2016.

Additional information about our pending acquisition by Parent is available in the Solicitation/Recommendation Statement on Schedule 14D-9 filed by us with the SEC on August 1, 2016 (as amended, the “Schedule 14D-9”). The foregoing description of the Merger Agreement and the terms and conditions of the tender offer and merger do not purport to be complete and are qualified in their entirety by reference to our Schedule 14D-9, and to the Merger Agreement and Parent’s offer to purchase and other related documents, copies of which are filed as Exhibits (e)(1) and (a)(1)(A), respectively, of our Schedule 14D-9, all of which are incorporated herein by reference.

Important Information:

Nothing in this Quarterly Report on Form 10-Q shall constitute an offer to purchase or a solicitation of an offer to sell any securities. The Offer is being made pursuant to a Tender Offer Statement on Schedule TO filed by Parent with the SEC on August 1, 2016.  Sagent filed a Solicitation/Recommendation Statement on Schedule 14D-9 with the SEC with respect to the Offer on August 1, 2016.  STOCKHOLDERS OF THE COMPANY ARE ADVISED TO READ THE SCHEDULE TO (INCLUDING AN OFFER TO PURCHASE, A RELATED LETTER OF TRANSMITTAL AND OTHER OFFER DOCUMENTS) AND THE SCHEDULE 14D-9, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE, BEFORE MAKING ANY DECISION WITH RESPECT TO THE TENDER OFFER BECAUSE THESE DOCUMENTS CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND THE PARTIES THERETO.  The Offer, the related Letter of Transmittal and certain other tender offer documents, as well as the Solicitation/Recommendation Statement on Schedule 14D-9, are being made available to all holders of shares of Sagent common stock at no expense to them.  Investors and stockholders may obtain free copies of the Schedule TO and Schedule 14D-9, as each may be amended or supplemented from time to time, and other documents filed by the parties at the SEC’s web site at www.sec.gov or by contacting Michael Ward, Sagent’s Chief Legal Officer and Corporate Secretary either by telephone at (847) 908-1600 or by e-mail at legal@sagentpharma.com.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with our condensed consolidated financial statements included elsewhere in this report and with our audited financial statements and the notes found in our most recent Annual Report on Form 10-K filed with the SEC on March 7, 2016. Unless otherwise noted, all dollar amounts are in thousands.

Disclosure Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q, including this Management’s Discussion and Analysis of Financial Condition and Results of Operations,contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact included in this report are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “will,” “should,” “could have,” “likely” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. For example, all statements we make relating to our estimated and projected costs, expenditures, cash flows, growth rates and financial results, our plans and objectives for future operations, growth or initiatives, strategies, our product pipeline and anticipated product approvals or the expected outcome or impact of pending or threatened litigation are forward-looking statements. In addition, this report contains forward-looking statements regarding the adequacy of our current cash balances to fund our ongoing operations; our utilization of our net operating loss carryforwards; and our ability to realize the expected benefits from our acquisition of Omega.

The forward-looking statements contained in this Quarterly Report on Form 10-Q are subject to a number of risks and uncertainties, and the cautionary statements set forth below, as well as elsewhere in this Quarterly Report on Form 10-Q, and those contained in Item 1A under the heading “Risk Factors” in our most recent Annual Report on Form 10-K filed with the SEC on March 7, 2016, identify important factors that could cause actual results to differ materially from those indicated by our forward-looking statements. Such factors, include, but are not limited to:

· we rely on our business partners for the manufacture of a significant portion of our products, and if our business partners fail to supply us with high-quality active pharmaceutical ingredient (“API”) or finished products in the quantities we require on a timely basis, sales of our products could be delayed or prevented, and our revenues and margins could decline, which could have a material adverse effect on our business, financial condition and results of operations;

· if we or any of our business partners are unable to comply with the quality and regulatory standards applicable to pharmaceutical drug manufacturers, or if approvals of pending applications are not granted or are delayed, we may be unable to meet the demand for our products, may lose potential revenues, may incur penalties, and our business, financial position and results of operations could be materially adversely effected;

· changes in the regulations, enforcement procedures or regulatory policies established by the Food and Drug Administration (“FDA”) and other regulatory agencies could increase the costs or time of development of our products and could delay or prevent sales of our products and our revenues could decline and, as a result, our business, financial condition and results of operations could be materially adversely affected;

· one of our products, heparin, represents a significant portion of our net revenues. Heparin is manufactured by and supplied to us by a single vendor, and, if the volume or pricing of this product declines, or we are unable to satisfy market demand, such event could have a material adverse effect on our business, financial position and results of operations;

· we participate in highly competitive markets, dominated by a few large competitors, and if we are unable to compete successfully, our revenues could decline and our business, financial condition and results of operations could be materially adversely affected;

· if we are unable to continue to develop and commercialize new products in a timely and cost-effective manner, we may not achieve our expected revenue growth and profitability, or our business, results of operations and financial position could be adversely affected;

· if we are unable to maintain our group purchasing organization (“GPO”) and distributor relationships, our revenues could decline and our results of operations could be adversely affected;

· we rely on a limited number of pharmaceutical wholesalers to distribute our products;

· we depend to a significant degree upon our key personnel, the loss of whom could adversely affect our operations;

· if we fail to attract and retain the talent required for our business, our business could be materially harmed;

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· our inability to manage our planned growth or successfully integrate newly acquired businesses or product rights could harm our business;  

· we may be exposed to product liability claims that could cause us to incur significant costs or cease selling some of our products;

· our products may infringe the intellectual property rights of third parties, and in such cases we may incur substantial liabilities and may be unable to commercialize products in a profitable manner or at all;

· healthcare reform legislation or other regulatory changes may adversely affect our business;

· our business could suffer if reimbursement by government-sponsored or private sector insurance programs for our current or future products is reduced or modified;

· we may need to raise additional capital in the event we change our business plan or encounter unexpected developments, which may cause dilution to our existing stockholders or restrict or limit our operations;

· we are subject to risks associated with managing our international network of business relationships, which include business partners and other suppliers of components, API and finished products located throughout the world;  

· we may never realize the expected benefits from our acquisition of Omega and it will require substantial capital resources to maintain its manufacturing capabilities and overall profitability;

· we rely on a single vendor to manage our order to cash cycle and our distribution activities in the U.S. and the loss or disruption of service from this vendor could adversely affect our operations and financial condition;

· we are likely to incur substantial costs associated with both implementation and maintenance of our new enterprise resource planning software and other related applications, and unforeseen problems may arise with the implementation. If the new systems do not perform as originally planned, our business, financial position and results of operations could be adversely affected;

· currency fluctuations may have an adverse effect on our business;

· we may seek to engage in strategic transactions, including the acquisition of products or businesses, that could have a variety of negative consequences, and we may not realize the intended benefits of such transactions;

· we are likely to incur substantial costs associated with the expansion of the Omega facility, and unforeseen problems may arise in the construction of the facility or equipment. If the new facility and equipment are delayed or do not operate as planned, we may never realize the expected benefits from our expansion and it will require substantial capital resources to improve;

· Our competitors and customers are consolidating which may affect our ability to compete effectively.

In addition, forward-looking statements may be affected by risks and uncertainties associated with our pending transaction with Nichi-Iko Pharmaceutical Co., Ltd., including but not limited to the satisfaction of the conditions to the consummation of the proposed transaction, the timing of the completion of the proposed transaction and the potential impact of the announcement or consummation of the proposed transaction on our important relationships, including with employees, suppliers and customers.  See Note 21.  Subsequent Events.

We derive many of our forward-looking statements from our work in preparing, reviewing and evaluating our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and, it is impossible for us to anticipate or accurately calculate the impact of all factors that could affect our actual results. You should evaluate all forward-looking statements made in this report in the context of these risks and uncertainties.

We cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our operations in the way we expect. The forward-looking statements included in this report are made only as of the date hereof. We undertake no obligation and do not intend to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

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Introduction

We are a leading provider of affordable pharmaceuticals to the hospital market, which we sell primarily throughout North America. Initially founded in 2006 as Sagent Holding Co., a Cayman Islands company, we reincorporated as Sagent Pharmaceuticals, Inc., a Delaware corporation, in connection with our initial public offering, on April 26, 2011.

With a primary focus on generic injectable pharmaceuticals, which provide customers a lower-cost alternative to branded products when applicable patents have expired or been declared invalid, or when the products are determined not to infringe the patents of others, we offer our customers a broad range of products across anti-infective, oncology and critical care indications in a variety of presentations, including single- and multi-dose vials and ready-to-use pre-filled syringes and premix bags. We generally seek to develop injectable products where the form or packaging of the product can be enhanced to improve delivery, product safety or end-user convenience. Our management team includes industry veterans who have served critical functions at other pharmaceutical companies or key customer groups and have long-standing relationships with customers, regulatory agencies, and suppliers. We have rapidly established a growing and diverse product portfolio and product pipeline as a result of our innovative business model. Our model combines an extensive network of international development, sourcing and manufacturing collaborations with our proven and experienced regulatory, quality assurance, business development, project management, and sales and marketing teams.

On June 4, 2013, we acquired the remaining 50% equity interest in Kanghong Sagent (Chengdu) Pharmaceutical Co. Ltd. from our former joint venture partner. In August 2013, we formally changed the name of this entity to Sagent (China) Pharmaceuticals Co., Ltd. (“SCP”). On December 29, 2015, our Board of Directors authorized the Company to proceed with a sale of all of the Company’s interests in SCP. On March 22, 2016, the Company completed the sale of all of the issued and outstanding shares of the capital stock of SCP to Hong Kong King-Friend Pharmaceutical Co., Ltd., a subsidiary of Nanjing King-Friend Pharmaceutical Co., Ltd., (“NKF”), at which time SCP ceased to be a subsidiary of the Company.

On October 1, 2014, we, through our wholly-owned subsidiary, Sagent Acquisition Corp., a Canadian company, acquired all of the issued and outstanding shares of the capital stock of 7685947 Canada Inc., and its subsidiary, Omega Laboratories Limited (collectively, “Omega”), a privately held Canadian pharmaceutical and specialty healthcare products company. Omega represents our first international market expansion, and the facility currently provides us with the ability to manufacture products for the Canadian and other international markets. In conjunction with the acquisition, we committed to a capital expansion project which would significantly increase Omega’s manufacturing capacity and enhance its quality systems to enable Omega to pursue FDA approval to manufacture injectable products for the US market.

Management uses segment information to evaluate segment performance and allocate resources. Since the acquisition of Omega in the fourth quarter of 2014, we have operated in two reportable segments comprised of operations organized geographically in the United States (Sagent US segment) and Canada (Omega segment). Effective March 2016, we completed the disposal of the SCP manufacturing facility, which was a component of the Sagent US segment, reorganized our internal reporting responsibilities with our new EVP-Global Operations, and continued to align our strategic focus to integrate our Canadian business to support the manufacturing and sale of products.  Following these events, our Chief Executive Officer now focuses his review of financial performance and allocation of resources on the operations of the consolidated Company.  As a result, we began operating in a single reportable segment, which develops, sources, manufactures and markets affordable generic pharmaceutical products to the hospital market.   We continue to operate with two reporting units, which comprise the single reportable segment.

On July 10, 2016, Sagent entered into a definitive merger agreement with Nichi-Iko Pharmaceutical Co., Ltd., and Shepard Vision, Inc., a wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which Merger Sub will, on the terms and subject to the conditions set forth therein, conduct a tender offer for all of the Company’s common stock and, following acceptance of the tendered shares, merge with and into the Company.See Note 21. Subsequent Events.

Non-GAAP Financial Measures

We report our financial results in accordance with accounting principles generally accepted in the United States (“GAAP”).

Adjusted Gross Profit

We use the non-GAAP financial measure “Adjusted Gross Profit” and corresponding ratios. We define Adjusted Gross Profit as gross profit plus our share of the gross profit earned through our Sagent Agila joint venture which is included in the Equity in net (income) loss of joint ventures line on the consolidated statements of operations and the impact of product-related non-cash charges arising from business combinations. We believe that Adjusted Gross Profit is relevant and useful supplemental information for our investors. Our management believes that the presentation of this non-GAAP financial measure, when considered together with our GAAP financial measures and the reconciliation to the most directly comparable GAAP financial measure, provides a more complete

18

understanding of the factors and trends affecting Sagent than could be obtained absent these disclosures. Management uses Adjusted Gross Profit and corresponding ratios to make operating and strategic decisions and evaluate our performance. We have disclosed this non-GAAP financial measure so that our investors have the same financial data that management uses with the intention of assisting you in making comparisons to our historical operating results and analyzing our underlying performance. Our management believes that Adjusted Gross Profit provides a useful supplemental tool to consistently evaluate the profitability of our products that have profit sharing arrangements. The limitation of this measure is that it includes an item that does not have an impact on our GAAP reported gross profit. The best way that this limitation can be addressed is by using Adjusted Gross Profit in combination with our GAAP reported gross profit. Because Adjusted Gross Profit calculations may vary among other companies, the Adjusted Gross Profit figures presented below may not be comparable to similarly titled measures used by other companies. Our use of Adjusted Gross Profit is not meant to and should not be considered in isolation or as a substitute for, or superior to, any GAAP financial measure. You should carefully evaluate the following tables reconciling Adjusted Gross Profit to our GAAP reported gross profit for the periods presented (dollars in thousands).

	Three months ended June 30,										% of net revenue, three months ended June 30,
	2016		2015		$ Change			% Change			2016			2015			% Change
Adjusted Gross Profit	$	17,539	$	18,734	$	(1,195	)		-6	%		24.5	%		24.2	%		0.3	%
Sagent portion of gross profit earned by    Sagent Agila joint venture		186		293		(107	)		-37	%		0.3	%		0.4	%		-0.1	%
Product-related non-cash charges arising    from business combinations		—		—		—		n/m				0.0	%		0.0	%		0.0	%
Gross Profit	$	17,353	$	18,441	$	(1,088	)		-6	%		24.2	%		23.8	%		0.4	%

	Six months ended June 30,										% of net revenue, six months ended June 30,
	2016		2015		$ Change			% Change			2016			2015			% Change
Adjusted Gross Profit	$	34,942	$	42,184	$	(7,242	)		-17	%		25.0	%		26.4	%		-1.4	%
Sagent portion of gross profit earned by    Sagent Agila joint venture		742		1,178		(436	)		-37	%		0.5	%		0.7	%		-0.2	%
Product-related non-cash charges arising    from business combinations		—		640		(640	)	n/m				0.0	%		0.4	%		-0.4	%
Gross Profit	$	34,200	$	40,366	$	(6,166	)		-15	%		24.5	%		25.2	%		-0.7	%

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EBITDA and Adjusted EBITDA

We use the non-GAAP financial measures “EBITDA” and “Adjusted EBITDA” and corresponding growth ratios. We define EBITDA as net income (loss) less interest expense, net of interest income, provision for income taxes, depreciation and amortization. We define Adjusted EBITDA as net income (loss) less interest expense, net of interest income, provision for income taxes, depreciation and amortization, stock-based compensation expense, management transition related costs, acquisition-related costs, the impact of unrealized foreign currency gains or losses, the impact of product-related non-cash charges arising from business combinations, the impact of SCP operations while classified as held for sale, the loss on the sale of SCP, and the gain on the sale of product rights.  We believe that EBITDA and Adjusted EBITDA are relevant and useful supplemental information for our investors. Our management believes that the presentation of these non-GAAP financial measures, when considered together with our GAAP financial measures and the reconciliation to the most directly comparable GAAP financial measures, provides a more complete understanding of the factors and trends affecting Sagent than could be obtained absent these disclosures. Management uses EBITDA, Adjusted EBITDA and corresponding ratios to make operating and strategic decisions and evaluate our performance. We have disclosed these non-GAAP financial measures so that our investors have the same financial data that management uses with the intention of assisting you in making comparisons to our historical operating results and analyzing our underlying performance. Our management believes that EBITDA and Adjusted EBITDA are useful supplemental tools to evaluate the underlying operating performance of the company on an ongoing basis. The limitation of these measures is that they exclude items that have an impact on our GAAP reported net income (loss). The best way that these limitations can be addressed is by using EBITDA and Adjusted EBITDA in combination with our GAAP reported net income (loss). Because EBITDA and Adjusted EBITDA calculations may vary among other companies, the EBITDA and Adjusted EBITDA figures presented below may not be comparable to similarly titled measures used by other companies. Our use of EBITDA and Adjusted EBITDA is not meant to and should not be considered in isolation or as a substitute for, or superior to, any GAAP financial measure. You should carefully evaluate the following tables reconciling EBITDA and Adjusted EBITDA to our GAAP reported net income (loss) for the periods presented (dollars in thousands).

	Three months ended June 30,
	2016			2015			$ Change			% Change
Adjusted EBITDA	$	2,702		$	6,222		$	(3,520	)		(57	)%
Stock-based compensation expense		862			835			27			3	%
Management transition costs		—			644			(644	)	n/m
Acquisition-related costs		1,452			70			1,382		n/m
Unrealized foreign exchange losses2		9			(27	)		36		n/m
Product-related non-cash charges arising from business    combinations		—			—			—		n/m
Operations of SCP while held for sale3		—			—			—		n/m
Loss on the sale of SCP4		—			—			—		n/m
Gain on the sale of product rights5		(1,800	)		—			(1,800	)	n/m
EBITDA	$	2,179		$	4,700		$	(2,521	)		(54	)%
Depreciation and amortization expense1		2,689			3,018			(329	)		(11	)%
Interest expense, net		57			107			(50	)		(47	)%
Provision (benefit) for income taxes		(52	)		1,831			(1,883	)	n/m
Net income (loss)	$	(515	)	$	(256	)	$	(259	)	n/m

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	Six months ended June 30,
	2016			2015			$ Change			% Change
Adjusted EBITDA	$	4,405		$	15,229		$	(10,824	)		(71	)%
Stock-based compensation expense		1,899			1,925			(26	)		(1	)%
Management transition costs		—			3,952			(3,952	)	n/m
Acquisition-related costs		2,850			1,321			1,529		n/m
Unrealized foreign exchange losses2		(964	)		888			(1,852	)	n/m
Product-related non-cash charges arising from business    combinations		—			640			(640	)	n/m
Operations of SCP while held for sale3		346			—			346		n/m
Loss on the sale of SCP4		6,341			—			6,341		n/m
Gain on the sale of product rights5		(3,800	)		—			(3,800	)	n/m
EBITDA	$	(2,267	)	$	6,503		$	(8,770	)	n/m
Depreciation and amortization expense1		4,415			6,091			(1,676	)		(28	)%
Interest expense, net		142			412			(270	)		(66	)%
Provision (benefit) for income taxes		(1,319	)		2,150			(3,469	)	n/m
Net income (loss)	$	(5,505	)	$	(2,150	)	$	(3,355	)	n/m

¹ Amortization expense excludes $42 and $17 of amortization in the three months ended June 30, 2016 and 2015, respectively, and $76 and $33 of amortization in the six months ended June 30, 2016 and 2015, respectively, related to deferred financing fees, which is included within interest expense and other in our Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2016 and 2015.

² Unrealized foreign exchange (gains) losses reflect the impact of foreign currency movements on intercompany loans, primarily related to the devaluation of the US dollar relative to the Canadian dollar in the current period and the inverse in the prior year period, and are included in Interest income and other income (expense), net, in our Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2016 and 2015.

³ Operations of SCP while classified as held for sale reflects the operational activity of SCP during the period.  Our Board approved a plan of sale related to SCP on December 29, 2015.

⁴ Loss on the sale of SCP reflects the completion of the SCP sale transaction and the elimination the operations assets and liabilities from our financial statements as of March 22, 2016.

⁵ Gain on the sale of product rights reflects the completion of the SCP sale transaction and the benefit received from selling certain product rights.

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Discussion and Analysis

Consolidated results of operations

The following compares our consolidated results of operations for the three months ended June 30, 2016 with those of the three months ended June 30, 2015:

	Three months ended June 30,
	2016			2015			$ change			% change
Net revenue	$	71,721		$	77,345		$	(5,624	)		-7	%
Cost of sales		54,368			58,904			(4,536	)		-8	%
Gross profit		17,353			18,441			(1,088	)		-6	%
Gross profit as % of net revenue		24.2	%		23.8	%
Operating expenses:
Product development		6,630			5,419			1,211			22	%
Selling, general and administrative		11,726			11,410			316			3	%
Acquisition-related costs		1,452			70			1,382		n/m
Management transition costs		—			644			(644	)	n/m
Equity in net income of joint ventures		(186	)		(293	)		107			37	%
Total operating expenses		19,622			17,250			2,372			14	%
Gain on the sale of product rights		(1,800	)		—			(1,800	)	n/m
Income (loss) from operations		(469	)		1,191			(1,660	)	n/m
Interest income and other income (expense), net		3			516			(513	)		-99	%
Interest expense		(101	)		(132	)		31			23	%
Income (loss) before income taxes		(567	)		1,575			(2,142	)	n/m
Provision (benefit) for income taxes		(52	)		1,831			(1,883	)	n/m
Net loss	$	(515	)	$	(256	)	$	(259	)	n/m
Net loss per common share:
Basic	$	(0.02	)	$	(0.01	)	$	(0.01	)	n/m
Diluted	$	(0.02	)	$	(0.01	)	$	(0.01	)	n/m

Net revenue: Net revenue for the three months ended June 30, 2016 totaled $71.7 million, a decrease of $5.6 million, or 7%, as compared to $77.3 million for the three months ended June 30, 2015.  The launch of one new code since June 30, 2015 contributed $1.1 million of net revenue in the second quarter of 2016. Net revenue for products launched prior to June 30, 2015 decreased $6.7 million, or 10%, to $62.0 million in the second quarter of 2016, due primarily to the annualization of price declines on the base business.    

Cost of sales: Cost of goods sold for the three months ended June 30, 2016 totaled $54.4 million, a decrease of $4.5 million, or 8%, as compared to $58.9 million for the three months ended June 30, 2015.  Gross profit as a percentage of net revenues was 24.2% for the three months ended June 30, 2016 compared to 23.8% for the three months ended June 30, 2015.   Adjusted Gross Profit as a percentage of net revenue was 24.5% for the three months ended June 30, 2016 compared to 24.2% for the three months ended June 30, 2015.    The increase in gross profit as a percentage of net revenue is primarily due to lower expenses incurred in the current quarter as a result of the sale of SCP in the previous quarter offset by annualization of price declines on the base business.

Product development: Product development expense for the three months ended June 30, 2016 totaled $6.6 million, an increase of $1.2 million, or 22%, as compared to $5.4 million for the three months ended June 30, 2015. The increase in product development expense was primarily due to higher milestone expenses for products in our development pipeline.

As of June 30, 2016, our new product pipeline included 63 ANDAs which we had filed, or licensed rights to, that were under review by the FDA and nine ANDAs that have been recently approved and were pending commercial launch.  We also had an additional 31 products under initial development at June 30, 2016.

Selling, general and administrative: Selling, general and administrative expenses for the three months ended June 30, 2016, totaled $11.7 million, an increase of $0.3 million, or 3%, as compared to $11.4 million for the three months ended June 30, 2015.  Selling, general and administrative expense as a percentage of net revenue was 16% and 15% for the three months ended June 30, 2016 and 2015, respectively.

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Acquisition-related costs: Acquisition-related costs for the three months ended June 30, 2016 totaled $1.5 million, an increase of $1.4 million, as compared to $0.1 million for the three months ended June 30, 2015. Acquisition related costs increased primarily for legal costs associated with the evaluation of the acquisition of the Company by Nichi-Iko Pharmaceuticals Co., Ltd.

Management transition costs: No management transition costs were incurred in the three months ended June 30, 2016.  Management transition costs for the three months ended June 30, 2015 totaled $0.6 million.

Equity in net income of joint ventures: Equity in net income of joint ventures for the three months ended June 30, 2016 totaled $0.2 million, a decrease of $0.1 million as compared to $0.3 million for the three months ended June 30, 2015, related to an increase in costs of sales, specifically an increase in inventory reserve, of Sagent Agila products during the three months ended June 30, 2016.

Gain on the sale of product rights: We sold one product right during the three months ended June 30, 2016 for cash consideration of $1.8 million.  We recognized a gain on sale of $1.8 million related to the transaction.

Interest income and other income (expense), net:  Interest income and other income (expense), net for the three months ended June 30, 2016 totaled $0.0 million of income, as compared to $0.5 million of income in the three months ended June 30, 2015.  The decrease was predominately related to realized and unrealized foreign currency gains.  

Interest expense: Interest expense for the three months ended June 30, 2016 and June 30, 2015 totaled $0.1 million, respectively.

Provision for income taxes: Our provision for income taxes for the three months ended June 30, 2016 was a benefit of $0.1 million, an increase of $1.9 million as compared to expense of $1.8 million in the three months ended June 30, 2015.  

Net income (loss) and diluted net earnings (loss) per common share: The net loss for the three months ended June 30, 2016 was $0.5 million, as compared to net income of $0.3 million for the three months ended June 30, 2015. Diluted net earnings (loss) per common share decreased by $0.01. The decrease in diluted net earnings (loss) per common share is due to the following factors:

Diluted EPS for the three months ended June 30, 2015	$	(0.01	)
Decrease in operations		(0.01	)
Decrease in common shares outstanding		—
Diluted EPS for the three months ended June 30, 2016	$	(0.02	)

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The following compares our consolidated results of operations for the six months ended June 30, 2016 with those of the six months ended June 30, 2015:

	Six months ended June 30,
	2016			2015			$ change			% change
Net revenue	$	139,516		$	159,990		$	(20,474	)		-13	%
Cost of sales		105,316			119,624			(14,308	)		-12	%
Gross profit		34,200			40,366			(6,166	)		-15	%
Gross profit as % of net revenue		24.5	%		25.2	%
Operating expenses:
Product development		13,387			10,734			2,653			25	%
Selling, general and administrative		23,851			24,535			(684	)		-3	%
Acquisition-related costs		2,850			1,321			1,529		n/m
Management transition costs		—			3,952			(3,952	)	n/m
Equity in net income of joint ventures		(742	)		(1,178	)		436			37	%
Total operating expenses		39,346			39,364			(18	)		0	%
Loss on the sale of SCP		6,341			—			6,341		n/m
Gain on the sale of product rights		(3,800	)		—			(3,800	)	n/m
Income (loss) from operations		(7,687	)		1,002			(8,689	)	n/m
Interest income and other income (expense), net		1,096			(540	)		1,636		n/m
Interest expense		(233	)		(462	)		229			50	%
Income (loss) before income taxes		(6,824	)		—			(6,824	)	n/m
Provision (benefit) for income taxes		(1,319	)		2,150			(3,469	)	n/m
Net loss	$	(5,505	)	$	(2,150	)	$	(3,355	)	n/m
Net loss per common share:
Basic	$	(0.17	)	$	(0.07	)	$	(0.10	)	n/m
Diluted	$	(0.17	)	$	(0.07	)	$	(0.10	)	n/m

Net revenue: Net revenue for the six months ended June 30, 2016 totaled $139.5 million, a decrease of $20.5 million, or 13%, as compared to $160.0 million for the six months ended June 30, 2015.  The launch of one new code since June 30, 2015 contributed $1.9 million of the net revenue increase in the first half of 2016. Net revenue for products launched prior to June 30, 2015 decreased $22.3 million, or 16%, to $121.4 million in the first half of 2016, due primarily to the annualization of price declines on the base business and reductions in demand for our anti-infective portfolio, given the weakness in the cold and flu related illness during the six month period.  

Cost of sales: Cost of goods sold for the six months ended June 30, 2016 totaled $105.3 million, a decrease of $14.3 million, or 12%, as compared to $119.6 million for the six months ended June 30, 2015.  Gross profit as a percentage of net revenue was 24.5% for the six months ended June 30, 2016 compared to 25.2% for the three months ended June 30, 2015.   Adjusted Gross Profit as a percentage of net revenue was 25.0% for the six months ended June 30, 2016, and 26.4% for the six months ended June 30, 2015.  The decrease in gross profit as a percentage of net revenue is primarily due to the impact of the annualization of price declines on the base business offset by lower expenses incurred in the second quarter as a result of the sale of SCP in the first quarter.

Product development: Product development expense for the six months ended June 30, 2016 totaled $13.4 million, an increase of $2.7 million, or 25%, as compared to $10.7 million for the six months ended June 30, 2015. The increase in product development expense was primarily due to higher milestone expenses for products in our development pipeline and a $2.7 million write-off of API inventory based upon an in-depth evaluation of our ANDA pipeline and termination of our current Iron Sucrose development initiative.

Selling, general and administrative: Selling, general and administrative expenses for the six months ended June 30, 2016, totaled $23.9 million, a decrease of $0.7 million, or 3%, as compared to $24.5 million for the six months ended June 30, 2015.  The decrease in selling, general and administrative expense was primarily due to lower employee related costs.  Selling, general and administrative expense as a percentage of net revenue was 17% and 15% for the six months ended June 30, 2016 and 2015, respectively.

Acquisition-related costs: Acquisition-related costs for the six months ended June 30, 2016 totaled $2.9 million, an increase of $1.5 million, as compared to $1.3 million for the six months ended June 30, 2015. Acquisition related costs in both periods were primarily for legal and financial advisory costs associated with the evaluation of potential transactions, as well as legal costs associated with the evaluation of the acquisition of the Company by Nichi-Iko Pharmaceutical Co., Ltd. for the six months ended June 30, 2016.

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Management transition costs: No management transition costs were incurred in the six months ended June 30, 2016.  Management transition costs for the six months ended June 30, 2015 totaled $4.0 million.

Equity in net income of joint ventures: Equity in net income of joint ventures for the six months ended June 30, 2016 totaled $0.7 million, a decrease of $0.4 million as compared to $1.2 million for the six months ended June 30, 2015, related to an increase in costs of sales, specifically an increase in inventory reserve, during the six months ended June 30, 2016.

Loss on the sale of SCP: We completed the sale of SCP to NKF in the first quarter of 2016, which resulted in a loss on sale of $6.3 million incurred in the six months ended June 30, 2016.

Gain on the sale of product rights: We sold the rights to three products during the first six months 2016 for total cash consideration of $3.8 million.  We recognized a gain on sale of $3.8 million related to the transactions.

Interest income and other income (expense), net:  Interest income and other income (expense), net for the six months ended June 30, 2016 totaled $1.1 million of income, as compared to $0.5 million of income in the three months ended June 30, 2015.  The increase in income primarily relates to unrealized foreign exchange gains on intercompany financing, primarily related to the valuation of the Canadian dollar versus the US dollar.

Interest expense: Interest expense for the six months ended June 30, 2016 totaled $0.2 million, a decrease of more than $0.2 million, or 50%, as compared to $0.5 million for the six months ended June 30, 2015.

Provision for income taxes: Our provision for income taxes for the six months ended June 30, 2016 was a benefit of $1.3 million, an increase of $3.5 million as compared to expense of $2.2 million in the six months ended June 30, 2015.    

Net income (loss) and diluted net earnings (loss) per common share: The net loss for the six months ended June 30, 2016 was $5.5 million, as compared to net income of $2.2 million for the six months ended June 30, 2015. Diluted net earnings (loss) per common share decreased by $0.10. The decrease in diluted net earnings (loss) per common share is due to the following factors:

Diluted EPS for the six months ended June 30, 2015	$	(0.07	)
Decrease in operations		(0.10	)
Decrease in common shares outstanding		—
Diluted EPS for the six months ended June 30, 2016	$	(0.17	)

Liquidity and Capital Resources

Our future capital requirements will depend on a number of factors, including the continued commercial success of our existing products, launching the products that have been recently approved and are pending commercial launch or are pending approval as of June 30, 2016, successfully identifying and sourcing other new product opportunities, capital expansion at our Omega facility and further business development activity.

Based on our existing business plan, we expect that cash, cash equivalents and short-term investments, together with operating cash flows and borrowings available under our existing Chase loan facilities, will be sufficient to fund our planned operations, the continued development of our product pipeline, investments in working capital, and capital expansion at our Omega facility, for at least the next 12 months. However, we may require additional funds in the event that we change our business plan, pursue additional strategic transactions, including the acquisition of businesses or products, or encounter unexpected developments, including unforeseen competitive conditions within our product markets, changes in the general economic climate, changes in the regulatory environment, the loss of or negative developments affecting key relationships with suppliers, group purchasing organizations or end-user customers or other unexpected developments that may have a material effect on the cash flows or results of operations of our business.

To the extent our capital resources are insufficient to meet our future capital requirements, we will need to finance our future cash needs through public or private equity offerings or debt financings, which may not be available to us on terms we consider acceptable or at all. Our ability to raise additional funding, if necessary, is subject to a variety of factors that we cannot predict with certainty, including our future results of operations, our relative levels of debt and equity, the volatility and overall condition of the capital markets and the market pricesof our securities. Debt financing, if available, may only be available to us on less favorable terms than our existing Chase loan facilities, including higher interest rates or greater exposure to interest rate risk. In addition, the terms of any financing may adversely affect the holdings or the rights of our stockholders.

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If additional funding is not available, we may be required to terminate, significantly modify or delay the development or commercialization of new products and may not be able to achieve the expansion of our Omega facility. We may elect to raise additional funds even before we need them if we believe that the conditions for raising capital are favorable.

On July 10, 2016, Sagent entered into a definitive merger agreement with Nichi-Iko Pharmaceutical Co., Ltd., and Shepard Vision, Inc., a wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which Merger Sub will, on the terms and subject to the conditions set forth therein, conduct a tender offer for all of the Company’s common stock and, following acceptance of the tendered shares, merge with and into the Company.See Note 21. Subsequent Events.

Cash Flows

Overview

On June 30, 2016, cash, cash equivalents and short term investments totaled $35.7 million.  Working capital totaled $99.2 million and our current ratio (current assets to current liabilities) was approximately 2.2 to 1.0.

Sources and Uses of Cash

Operating activities: Net cash used in operating activities was $14.8 million for the six months ended June 30, 2016, compared with net cash used in operating activities of $1.7 million during the six months ended June 30, 2015. The decrease in cash used in operations was primarily due to incremental working capital investment during the second quarter of 2016.  

Investing activities: Net cash used in investing activities was $4.1 million for the six months ended June 30, 2016, primarily related to capital expenditures and net cash settlement in the sale of SCP, partially offset by the cash received for the sale of product rights.  Net cash used in investing activities of $5.7 million during the six months ended June 30, 2015 primarily related to capital expenditures and the net change in our short-term investments.  

Financing activities: Net cash provided by financing activities was $4.7 million for the six months ended June 30, 2016, primarily related to borrowings on our Amended Chase Agreement facilities, partially offset by the repayment of the revolver and the repayment of the then outstanding balance of the Omega mortgages.  Net cash provided by financing activities for the six months ended June 30, 2015 was $2.8 million, primarily related to the proceeds from stock option exercises, partially offset by the repayment of the then outstanding balance of our NBC Loans.

Asset based revolving credit loan facility

On October 31, 2014, we entered into a credit agreement with Chase, (the “Chase Agreement”). The Chase Agreement provides for an $80.0 million asset based revolving credit loan facility, with availability subject to a borrowing base consisting of eligible cash, short-term investments, accounts receivable and inventory and the satisfaction of conditions precedent specified in the Chase Agreement. The Chase Agreement provides for an accordion feature, whereby we may increase the revolving commitment up to an additional $25.0 million subject to certain customary terms and conditions including pro forma compliance with a fixed charge coverage ratio (as defined in the Chase Agreement) of 1.00 to 1.00. The Chase Agreement matures on October 31, 2019, at which time all amounts outstanding will be due and payable. Borrowings under the Chase Agreement may be used for general corporate purposes, including funding working capital. Amounts drawn bear an interest rate equal to, at our option, either a Eurodollar rate plus 2.00% per annum or an alternative base rate plus 1.00% per annum. We also incur a commitment fee on undrawn amounts equal to 0.25% per annum.

The Chase Agreement is guaranteed by us and is secured by a lien on substantially all of our and our principal domestic subsidiary’s assets and any future domestic subsidiary guarantors’ assets. The Chase Agreement includes customary covenants and also imposes a financial covenant requiring compliance with a minimum fixed charge coverage ratio of 1.00 to 1.00 during certain covenant testing times triggered if availability under the Chase Agreement is below the greater of 10% of the revolving commitment and $8.0 million.

Loans under the Chase Agreement are secured by a lien on substantially all of our and our principal domestic operating subsidiary’s assets.

On January 7, 2016, we amended and restated the Chase Agreement with Chase (the “Amended Chase Agreement”) by adding a Canadian tranche and joining Omega as a borrower. The Amended Chase Agreement adds a C$30.0 million term loan (including a delayed draw term loan) to fund, among other things, Omega’s construction of a facility in Quebec. The Amended Chase Agreement also adds a C$10.0 million revolving facility sublimit to the existing revolving facility, with the total revolving commitment amount remaining at $80.0 million. The applicable margins for the Canadian prime rate and Canadian Dollar Offered Rate (“CDOR”) revolving loans are the same as the base rate and Eurodollar rates for the U.S. revolving loans at 1.00% and 2.00%, respectively. The

26

margins for the Canadian term loans are 1.25% and 2.25% for Canadian prime rate and CDOR, respectively. The commitment fee rate remains 0.25%. The fixed charge coverage ratio remains at 1.00 to 1.00. The Canadian term loans are to be repaid in certain increments pursuant to the Amended Chase Agreement as the facility in Quebec is completed.

As of June 30, 2016, there was $6,571 in term loan borrowings outstanding under our Amended Chase Agreement, no outstanding borrowings on the revolver, and we were in compliance with all covenants under the Amended Chase Agreement. Total availability under our Chase term loan facility was $16,584 (C$21,487) at June 30, 2016. Total availability under our Chase revolving loan facility was $79,900 at June 30, 2016, which is subject to adjustment on a monthly basis under our borrowing base calculation.

Omega credit facilities

In connection with the acquisition of Omega on October 1, 2014, we assumed a series of credit facilities and mortgages with the National Bank of Canada (“NBC”) and the Business Development Bank of Canada (“BDC”).

In January 2015, we paid off all amounts outstanding under the Omega operating credit facility, the Omega demand loan and the Omega decreasing revolving credit facility with available cash on hand.

Omega also had five mortgage loans with the BDC (collectively the “Omega mortgages”) which we assumed in connection with the acquisition. The Omega mortgages, which required monthly installments and which were secured by specific Omega buildings and equipment, ranged in amount from C$0.1 million to C$1.3 million ($0.1 million to $1.1 million as of the acquisition date) and bore interest at the lender’s prime rate (5% as of the acquisition date) plus a premium ranging from 0% - 1.5%. The Omega mortgages had maturity dates at various times from August 2019 through November 2036.  In January 2016, in connection with entering the Amended Chase Agreement, we repaid the Omega mortgages in full, and refinanced them under the Chase term loan.

Aggregate Contractual Obligations

As of June 30, 2016, there were no material changes to the contractual obligations information provided in Item 7 entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K, filed with the SEC on March 7, 2016.  

Off-Balance Sheet Arrangements

As of June 30, 2016, we were not party to any off-balance sheet arrangements, nor have we created any special-purpose or off-balance sheet entities for the purpose of raising capital, incurring debt or operating our business.  With the exception of operating leases, we do not have any off-balance sheet arrangements or relationships with entities that are not consolidated into or disclosed on our financial statements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues, expenses, results of operations, liquidity, capital expenditures or capital resources.  In addition, we do not engage in trading activities involving non-exchange traded contracts.

Critical Accounting Policies

We prepare our condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the periods presented. Actual results could differ from those estimates and assumptions. We have identified the following critical accounting policies:

· Revenue recognition;

· Inventories;

· Income taxes;

· Stock-based compensation;

· Valuation and impairment of marketable securities;

· Product development;

· Intangible assets;

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· Consolidations; and 

· Goodwill.

For a discussion of critical accounting policies affecting us, see the discussion under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” and under Note 1 to our consolidated financial statements for the year ended December 31, 2015 included in our Annual Report on Form 10-K filed with the SEC on March 7, 2016.

There have been no other material changes to the Company’s critical accounting policies and estimates since December 31, 2015.

New Accounting Guidance

In May 2014, the FASB issued amended revenue recognition guidance to clarify the principles for recognizing revenue from contracts with customers. The guidance requires an entity to recognize revenue in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The guidance also requires expanded disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required about customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. In July 2015, the FASB approved a one year deferral to the new revenue guidance, and we are therefore required to adopt the new guidance on January 1, 2018 using one of the two prescribed retroactive methods. We are evaluating the impact of the amended revenue recognition guidance on our financial statements.

In February 2015, the FASB issued amended guidance on the model used to evaluate whether certain legal entities should be consolidated. This guidance is effective for the Company in the first quarter of 2017. Early adoption is permitted. Adoption of this guidance is not expected to have a material impact on our financial statements.

In April 2015, the FASB issued amended guidance, which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This guidance is effective for annual and interim periods beginning after December 15, 2015. We have adopted this guidance in the current period.  There was no material impact of adoption.

In February 2016, the FASB issued lease guidance, which is intended to increase the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. In order to meet that objective, the new standard requires recognition of the assets and liabilities that arise from leases. A lessee will be required to recognize on the balance sheet the assets and liabilities for leases with lease terms of more than 12 months. Accounting by lessors will remain largely unchanged from current U.S. GAAP. The new standard is effective for public companies for fiscal years beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. We are currently evaluating the effect that adopting this standard will have on our financial statements and related disclosures.

In March 2016, the FASB issued amended guidance on employee share-based payment accounting. This update involves several aspects of the accounting for share-based payment transactions, including income tax effects, forfeitures and classifications on the statement of cash flows. The guidance is effective for fiscal years beginning after December 15, 2016. Early adoption is permitted in an interim or annual period; however, all amendments must be adopted at the same time. We are currently evaluating the impact of this guidance on our financial statements.

Contingencies

See Note 19. Commitments and Contingencies, and Part II, Item 1. Legal Proceedings for a discussion of contingencies.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Our market risks relate primarily to changes in interest rates and currency fluctuations between the Canadian dollar and US dollar, as the assets, liabilities and transactions of our international operations are generally recorded in the local currency of each of our legal entities.  As a result of the sale of SCP in the first quarter 2016, the Company is no longer exposed to the fluctuations between the Chinese Renminbi and the US dollar.

The revolving loan facility under our Amended Chase Agreement and substantially all of Omega’s debt facilities bear floating interest rates that are tied to LIBOR or an alternate rate, and therefore, our statements of operationsand our cash flows are exposed to changes in interest rates. Based on the amounts outstanding at June 30, 2016, a one percentage point increase in LIBOR would increase our

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ongoing interest expense by less than $0.1 million per year, and a 10% strengthening of the Canadian dollar relative to the US dollar, would increase our ongoing interest expense by less than $0.1 million per year. We historically have not engaged in hedging activities related to our interest rate or foreign exchange risks.

At June 30, 2016, we had cash and cash equivalents and short-term investments of $15.5 million and $20.2 million, respectively. Our cash and cash equivalents are held primarily in cash and money market funds, and our short-term investments are held primarily in corporate debt securities and commercial paper. We do not enter into investments for trading or speculative purposes. Due to the short-term nature of these investments, we believe that we do not have any material exposure to changes in the fair value of our investment portfolio as a result of changes in interest rates.

We generally record sales and pay our expenses in the local currency of the legal entity that incurs the expense. Substantially all of our business partners that supply us with API, product development services and finished product manufacturing are located in a number of foreign jurisdictions, and we believe those business partners generally incur their respective operating expenses in local currencies. As a result, both we and our business partners may be exposed to currency rate fluctuations and experience an effective increase in operating expenses in the event local currencies appreciate against the U.S. dollar. In this event, such business partners may elect to stop providing us with these services or attempt to pass these increased costs back to us through increased prices for product development services, API sourcing or finished products that they supply to us. Historically we have not used derivatives to protect against adverse movements in currency rates.

We do not have any foreign currency or any other material derivative financial instruments.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management including our Chief Executive Officer and our Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act of 1934, as amended, as of the end of the period covered by this Quarterly Report on Form 10-Q.  Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures (a) were effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and (b) include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Internal Control over Financial Reporting.

Management, together with our Chief Executive Officer and our Chief Financial Officer, evaluated the changes in our internal control over financial reporting during the quarter ended June 30, 2016. We determined that there were no changes in our internal control over financial reporting during the quarter ended June 30, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we are subject to claims and litigation arising in the ordinary course of business. These claims may include assertions that our products infringe existing patents and claims that the use of our products has caused personal injuries. We intend to vigorously defend any such litigation that may arise under all defenses that would be available to us. At this time, there are no proceedings of which we are aware that are considered likely to have a material adverse effect on our consolidated financial position or results of operations.

Item 1A. Risk Factors.

There were no material changes during the three months ended June 30, 2016 to the risk factors previously disclosed under Item 1A entitled “Risk Factors” in our most recent Annual Report on Form 10-K filed with the SEC on March 7, 2016.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities during the Quarter ended June 30, 2016

There are currently no share repurchase programs authorized by our Board of Directors. We did not repurchase any shares of our common stock during the quarter ended June 30, 2016.

Recent Sales of Unregistered Securities

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

On August 3, 2016, Sagent Pharmaceuticals, Inc., a Wyoming corporation (“Sagent WY”), and a wholly-owned subsidiary of Sagent Pharmaceuticals, Inc., a Delaware corporation (the “Company”) completed the transactions contemplated by  the Asset Purchase Agreement, dated as of June 15, 2016 , (the “APA”), among Sagent WY, the Company, Teva Pharmaceutical Industries Ltd., an Israeli corporation, acting directly or through its affiliates (“Teva”) and Actavis LLC, a Delaware limited liability company (“Allergan” and together with Teva, the “Sellers”). Pursuant to and subject to the terms and conditions in the APA, Sagent WY acquired all right, title and interest in and to five generic injectable pharmaceutical products, including Propofol Injectable Emulsion, 1%, and certain assets that relate solely and exclusively to the products, from the Sellers in exchange for total consideration of $40.0 million.

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Item 6. Exhibits.

Exhibit Number	Description
3.1	Certificate of Incorporation of Sagent Pharmaceuticals, Inc. (incorporated by reference to Exhibit 3.3 in the Company’s Registration Statement on Form S-1, as amended (File Nos. 333-170979 and 333-173597)).
3.2	Bylaws of Sagent Pharmaceuticals, Inc. (incorporated by reference to Exhibit 3.4 in the Company’s Registration Statement on Form S-1, as amended (File Nos. 333-170979 and 333-173597)).
3.3	Certificate of Amendment to the Certificate of Incorporation (incorporated by reference to Exhibit 3.3 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 5, 2014).
10.1*+	Employment Agreement dated March 14, 2016, by and among Sagent Pharmaceuticals, Inc., and Donald Bullock.
10.2*	Asset Purchase Agreement between Teva Pharmaceutical Industries Ltd. and Sagent Pharmaceuticals, Inc. dated as of June 15, 2016
10.3*	Asset Purchase Agreement among Actavis Group PTC EHF, Actavis LLC and Sagent Pharmaceuticals, Inc. dated as of June 15, 2016
31.1*	Certification of principal executive officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended
31.2*	Certification of principal financial officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended
32.1*	Certifications pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.1	The following materials from Sagent’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 are formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets as of June 30, 2016 and December 31, 2015, (ii) the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2016 and 2015, (iii) the Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2016 and 2015, (iv) the Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2016 and 2015, (v) Notes to the Condensed Consolidated Financial Statements, tagged as blocks of text and (vi) document and entity information.

* Filed herewith

+ Indicates a management contract or compensatory plan or arrangement

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Signature

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, thereunto duly authorized.

SAGENT PHARMACEUTICALS INC.

/s/ Jonathon M. Singer

Jonathon M. Singer

Executive Vice President and Chief Financial Officer

August 5, 2016

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EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (“Agreement”) is entered into as of the 27th day of June, 2016 (the “Effective Date”), by and between Sagent Pharmaceuticals, Inc., a Delaware corporation (the “Employer” or the “Company”), and Donald Bullock, an individual (the “Executive”).

WHEREAS, Company desires to employ Executive and to set forth certain terms and conditions of Executive’s employment, and Executive desires to be employed by Company on the terms and conditions set forth in this Agreement; and

WHEREAS, during the course of employment, Executive will learn confidential information regarding Company’s customers and/or Strategic Partners, and/or will establish, maintain, and improve knowledge of or relationships or goodwill with Company’s customers, Strategic Partners, and/or will learn Company’s Trade Secrets or Confidential Information (as such terms are defined below); and

WHEREAS, Company’s Confidential Information, Trade Secrets, customer relationships, and strategic partnerships have been developed by Company at considerable expense over a number of years; and

WHEREAS, but for Executive’s employment at Company, Executive would not know the Trade Secrets and Confidential Information, and Executive would not be able to create, improve, and maintain relationships with Company’s customers, Strategic Partners; and

WHEREAS, Company’s customer relationships, strategic partnerships, Trade Secrets, and Confidential Information are of considerable economic value to Company; and

WHEREAS, Company would not employ Executive if Executive did not accept the terms outlined herein; and

WHEREAS, EXECUTIVE HAS REVIEWED THE MATTERS RECITED IN THE PARAGRAPHS ABOVE AND CONFIRMS THAT S/HE AGREES WITH THOSE RECITALS.

NOW, THEREFORE, in consideration of the foregoing recitals and of the  promises and covenants set forth herein, and in exchange for a one-time payment of one thousand dollars ($1,000.00), which shall be paid upon execution of this Agreement; Executive’s access to Company’s customer relationships, strategic partnerships, good will, Confidential Information, or Trade Secrets; Executive’s employment with Company; Executive’s training; Executive’s receipt of valuable information as a result of Executive’s employment with Company; and for other good and valuable consideration, the sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. Employment Agreement.  On the terms and conditions set forth in this Agreement, the Employer agrees to employ the Executive and the Executive agrees to be employed by the Employer for the Employment Period set forth in Section 2 and in the positions and with the duties set forth in Section 3.  

2. Term.  The initial term of employment under this Agreement shall be for a three (3) year period commencing on the Effective Date (the “Initial Term”).  The term of employment shall be automatically extended for an additional consecutive 12-month period (the “Extended Term”) on the third anniversary of the Effective Date and each subsequent anniversary thereof, unless and until the Employer or Executive provides written notice to the other party in accordance with the Notice provisions provided for below, not less than sixty (60) days before such anniversary date that such party is electing not to extend the term of employment under this Agreement (“Non-Renewal”), in which case the term of employment shall end as of the end of such Initial Term or Extended Term, unless terminated earlier in accordance with the terms below.  Such Initial Term and all such Extended Terms are collectively referred to herein as the “Employment Period.” Anything herein to the contrary notwithstanding, if on the date of a Change in Control the remaining term of the Employment Period is less than 24 months, the Employment Period shall be automatically extended to the end of the 24-month period following such Change in Control, as that term is defined in Section 10 of this Agreement.

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3. Position and Duties.  During the Employment Period, the Executive shall serve as Executive Vice President, Sales.  In such capacity, the Executive shall report to the Chief Executive Officer and shall have the duties, responsibilities and authorities customarily associated with such position(s) in a company the size and nature of the Employer.  The Executive shall devote the Executive’s reasonable best efforts and full business time to the performance of the Executive’s duties hereunder and the advancement of the business and affairs of the Employer.

4. Other Employment.  Executive may not be an employee, consultant, director or other agent of any other person, firm or corporation without the prior written approval of the Chief Executive Officer of the Company.  

5. Place of Performance.  During the Employment Period, the Executive shall be based primarily at the Employer’s headquarters in Schaumburg, Illinois, except for reasonable travel on the Employer’s business consistent with the Executive’s position.

6. Compensation and Benefits; Options.

(a) Base Salary.  During the Employment Period, the Employer shall pay to the Executive a base salary (the “Base Salary”) at the rate of $275,000 per calendar year, less applicable deductions, and prorated for any partial year.  The Base Salary shall be reviewed by the Employer annually and shall be modified in the discretion of the Employer and any such adjusted Base Salary shall constitute the “Base Salary” for purposes of this Agreement.  The Base Salary shall be paid in substantially equal installments in accordance with the Employer’s regular payroll procedures.  

(b) Annual Bonus.  For each calendar year ending during the Employment Period, the Executive shall be eligible to be considered for an annual cash performance bonus (an “Annual Bonus”).  The performance criteria for any particular calendar year shall be determined in good faith by the Company, after consultation with the Employer’s Chief Executive Officer. The Executive is eligible for an annual bonus of up to 40% of the Executive’s Base Salary (the “Target Bonus”).  The Executive’s Annual Bonus shall be determined by the Company in accordance with this Section 6(b).  To the extent earned, Executive’s Annual Bonus shall be paid to the Executive when annual bonuses for that year are paid to other senior executives of the Employer generally, but in no event later than March 15 of the year following the year to which such Annual Bonus relates. In carrying out its functions under this Section 6(b), the Company shall at all times act uniformly, reasonably and in good faith.

(c) Initial Equity Grant; Annual Equity Grant.  The Executive shall receive a sign-on equity award  (the “Initial Grant”) with a grant date fair value of $150,000, 50% of which will be granted in the form of stock options (such options, the “Options”) and 50% in the form of restricted stock units; provided that such award will be subject to forfeiture in the event the Executive does not commence employment with the Employer on the Effective Date for any reason whatsoever.  The Options will have a per share exercise price equal to the fair market value of a share of common stock on the date of grant.  Following the Initial Grant, the Executive will be eligible to receive annual grants of equity-based awards on the same basis and terms and conditions as other senior executives.  It is anticipated that any such awards will be comprised of 50% options and 50% restricted stock units.  The Executive’s entitlement to any equity grants remains subject to approval by the Compensation Committee of the Board, in its sole discretion.  All equity grants will vest ratably over the four year period commencing with the date of grant.

(d) Vacation; Benefits.  During the Employment Period, the Executive shall be entitled to vacation in accordance with the Employer’s policies then in effect.   In addition, the Employer shall provide to the Executive employee benefits and perquisites on a basis that is comparable in all material respects to that provided to other executives of the Employer.   Subject to the terms of this Agreement, the Employer shall have the right to change insurance carriers and to adopt, amend, terminate or modify employee benefit plans and arrangements at any time and without the consent of the Executive.

(e) Relocation. The Executive will relocate to Chicago, Illinois (or the surrounding suburbs) ("Chicago") prior to August 31, 2016. Accordingly, on Pay Date September 2, 2016, the Company shall pay the Executive the amount of $85,000 to be used at the Executive's discretion towards all relocation expenses.  

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(f)Car Allowance. The Executive will receive $1,100 monthly paid on the second pay period of each month.

7. Expenses.  The Executive is authorized to incur reasonable, ordinary and necessary expenses in the performance of Executive’s duties hereunder.  The Employer will promptly reimburse the Executive for all expenses reasonably, necessarily and actually incurred, as determined by the Company, in accordance with policies which may be adopted from time to time by the Company.  To receive reimbursement, the Executive shall present to the Company an itemized account, including reasonable substantiation, of such expenses.

8. Confidentiality, Non-Disclosure, Non-Competition Agreement and Duty of Loyalty.  

(a) When used in this Agreement the following terms have the definition set forth below:

(i) “Competing Product”  means any product, creative solution, or service which is sold or provided in competition with a product, creative solution, or service:  that Executive sold or provided on behalf of Company at some time during the twelve (12) months immediately preceding the point when Executive is no longer employed by Company, or by any parent, subsidiary, or related entity of Company (such point being the “Termination of Executive’s Employment”); that one or more Company employees or business units managed, supervised, or directed by Executive sold or provided on behalf of Company at some time during the twelve (12) months immediately preceding the Termination of Executive’s Employment; that was designed, developed, tested, distributed, marketed, provided, or produced by Executive (individually or in collaboration with other Company employees) or one or more Company employees or business units managed, supervised, or directed by Executive at some time during the twelve (12) months immediately preceding the Termination of Executive’s Employment; or that was designed, tested, developed, distributed, marketed, produced, sold, or provided by Company with management or executive support from Executive at some time during the twelve (12) months immediately preceding the Termination of Executive’s Employment.

(ii) “Confidential Information” means information (to the extent it is not a Trade Secret), whether oral, written, recorded magnetically or electronically, or otherwise stored, and whether originated by Executive or otherwise coming into the possession or knowledge of Executive, which is possessed by or developed for Company, and which relates to Company’s existing or potential business, which information is not reasonably ascertainable by Company’s competitors or by the general public through lawful means, and which information Company treats as confidential, including but not limited to information regarding Company’s business affairs, plans, strategies, products, creative solutions, designs, finances, computer programs, research, customers, purchasing, marketing, and other information.

(iii) “Restricted Customer” means a customer of Company to which Executive, or one or more individuals or Company business units supervised, managed, or directed by Executive, sold or provided products, creative solutions, or services on behalf of Company during the twelve (12) month period immediately preceding the Termination of Executive’s Employment.  However, the term Restricted Customer shall not apply to any persons or entities listed on Attachment A hereto, which are those persons or entities with which Executive represents that Executive has a professional relationship pre-existing Executive’s employment with Company.

(iv) “Strategic Partner” means any entity or person that supplies to the Company goods or services related to the Company’s products, or manufactures for the Company goods related to the Company’s products, or manufactures the Company’s products, or Group Purchasing Organizations (GPOs), with which Executive, or one or more individuals or Company business units supervised, managed, or directed by Executive, did business on behalf of Company during the twelve (12) month period immediately preceding the Termination of Executive’s Employment.  However, the term Strategic Partner shall not apply to any persons or entities listed on Attachment A hereto, which are those persons or entities with which Executive represents that Executive has a professional relationship pre-existing Executive’s employment with Company.

(v) “Services” means sales, financial, supervisory, management, engineering, scientific, and other services of the type performed for Company by Executive or one or more Company employees managed, supervised, or directed by Executive during the final twelve (12) months preceding the Termination of Executive’s Employment, but shall not include clerical, menial, or manual labor.

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(vi)“Strategic Customer” means a customer of Company that purchased a product, creative solution, or service from Company during the twelve (12) month period immediately preceding the Termination of Executive’s Employment, but is limited to individuals and entities concerning which Executive learned, created, or reviewed Confidential Information or Trade Secrets on behalf of Company during the twelve (12) month period immediately preceding the Termination of Executive’s Employment.  However, the term Strategic Customer shall not apply to any persons or entities listed on Attachment A hereto, which are those persons or entities with which Executive represents that s/he has a professional relationship pre-existing Executive’s employment with Company.

(vii) “Third Party Confidential Information” means information received by Company from others that Company has an obligation to treat as confidential.

(viii) “Trade Secret” means a Trade Secret as that term is defined under the Uniform Trade Secrets Act, as amended or judicially construed from time to time.

(ix) “Territory” means a county within the United States of America, the District of Columbia, a territory of the United States of America, and/or a foreign nation.

(x) “Key Employee” means any person who at the Termination of Executive’s Employment is employed or engaged by Company and with whom Executive has had material contact in the course of employment during the twelve (12) months immediately preceding the Termination of Executive’s Employment, and (i) is a manager, officer, or director of Company and/or (ii) is in possession of Confidential Information and/or Trade Secrets of Company and/or (iii) is directly managed by or reports to Executive as of the end of Executive’s employment with Company.

(xi) “Restricted Territory” means: Territories (as the term “Territory” is defined below) in which Executive or one or more Company employees or business units managed, assisted or directed by Executive provided products, creative solutions, or services on behalf of Company during the twelve (12) month period immediately preceding the Termination of Executive’s Employment; Territories in which one or more Company employees or business units managed or directed by Executive sold or solicited the sale of products, creative solutions, or services on behalf of Company during the twelve (12) month period immediately preceding the Termination of Executive’s Employment; Territories in which Executive or one or more Company employees or business units managed or directed by Executive or receiving management or executive support from Executive provided, sold, or solicited the sale of products, creative solutions, or services on behalf of Company during the twelve (12) month period immediately preceding the Termination of Executive’s Employment; and Territories in which Company sold or provided products, creative solutions, or services designed, developed, tested, or produced by Executive (either individually or in collaboration with other Company employees) or by Company employees or business units working under Executive’s direction, management, or control during the twelve (12) month period immediately preceding the Termination of Executive’s Employment.  Notwithstanding the foregoing, the term Restricted Territory is limited to Territories in which Company sold or provided in excess of one hundred thousand dollars (US$100,000) in the aggregate worth of products, creative solutions, or services in the twelve (12) month period immediately preceding the Termination of Executive’s Employment.

(b) Nondisclosure of Third Party Confidential Information.  During Executive’s employment with Company and after Termination of Executive’s Employment, Executive shall not use or disclose Third Party Confidential Information for as long as the relevant third party has required Company to maintain its confidentiality, or for so long as required by applicable law, whichever period is longer.  This prohibition does not prohibit Executive’s use of general skills and know-how acquired during and prior to employment by Company, as long as such use does not involve the use or disclosure of Third Party Confidential Information.  This prohibition also does not prohibit the description by Executive of Executive’s employment history and duties, for work search or other purposes, as long as such use does not involve the use or disclosure of Third Party Confidential Information.  

(c) Non-disclosure of Trade Secrets.  During employment and after Termination of Executive’s Employment, Executive shall not use or disclose Company’s Trade Secrets so long as they remain Trade Secrets.  Nothing in this Agreement shall limit either Executive’s statutory and other duties not to use or disclose Company’s Trade Secrets, or Company’s remedies in the event Executive uses or discloses Company’s Trade Secrets.

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(d)Obligations Not to Disclose or Use Confidential Information.  Except as set forth herein or as expressly authorized in writing on behalf of Company, Executive agrees that while Executive is employed by Company and during the two (2) year period commencing at the Termination of Executive’s Employment, Executive will not use or disclose (except in discharging Executive’s job duties with Company) any Confidential Information, whether such Confidential Information is in Executive’s memory or it is set forth electronically, in writing or other form.  This prohibition does not prohibit Executive’s disclosure of information after it ceases to meet the definition of “Confidential Information,” or Executive’s use of general skills and know-how acquired during and prior to employment by Company, so long as such use does not involve the use or disclosure of Confidential Information; nor does this prohibition restrict Executive from providing prospective employers with an employment history or description of Executive’s duties with Company, so long as Executive does not use or disclose Confidential Information.  Notwithstanding the foregoing, if Executive learns information in the course of employment with Company which is subject to a law governing confidentiality or non-disclosure, Executive shall keep such information confidential for so long as required by law, or for two (2) years, whichever period is longer.  However, this Paragraph shall not preclude employees within the meaning of the National Labor Relations Act from exercising Section 7 rights they might have to communicate about working conditions.

(e) Return of Property; No Copying or Transfer of Documents.  All equipment, books, records, papers, notes, catalogs, compilations of information, data bases, correspondence, recordings, stored data (including data or files that exist on any personal computer or other electronic storage device), software, and any physical items, including copies and duplicates, that Executive generates or develops or which come into Executive’s possession or control, which relate directly or indirectly to, or are a part of Company’s (or its customers’) business matters, whether of a public nature or not, shall be and remain the property of Company, and Executive shall deliver all such materials and items, and any and all copies of them, to Company upon termination of employment.  During employment or after Termination of Executive’s Employment, Executive will not copy, duplicate, or otherwise reproduce, or permit copying, duplicating, or reproduction of Company documents or writings, whether stored on paper, magnetic tape, CD, electronically, or otherwise, including but not limited to notes, notebooks, letters, blueprints, manuals, drawings, sketches, specifications, formulas, financial documents, business plans, and the like, or any other documentation owned or originated by Company and relating to Company’s business which, from time to time, may have come into Executive’s possession, custody, or control as a result of, or in the course of, Executive’s employment with Company, without the express written consent of Company, or, as a part of Executive’s duties performed hereunder for the benefit of Company.  Executive expressly covenants and warrants, upon termination of employment for any reason (or no reason), that Executive shall promptly deliver to Company any and all originals and copies in Executive’s possession, custody, or control of any and all said property, documents, or writings, and that Executive shall not make, retain, or transfer to any third party any copies thereof.  In the event any Confidential Information or Trade Secrets are stored or otherwise kept in or on a computer hard drive or other storage device owned by or otherwise in the possession or control of Executive (each individually an "Executive Storage Device"), upon termination of employment Executive will present every such Executive Storage Device to Company, and certify that all Executive Storage Device(s) have been provided, for inspection and removal of all information regarding Company (including but not limited to Confidential Information or Trade Secrets) that is stored on Executive Storage Device.

(f) Duty of Loyalty.  During Executive’s employment with Company, Executive shall owe such Company an undivided duty of loyalty, and shall take no action adverse to that duty of loyalty.  Executive’s duty of loyalty to Company includes but is not limited to a duty to promptly disclose to Company any information that might cause Company to take or refrain from taking any action, or which otherwise might cause Company to alter its behavior.  Without limiting the generality of the foregoing, Executive shall promptly notify Company at any time that Executive decides to terminate employment with Company or enter into competition with Company, as Company may decide at such time to limit, suspend, or terminate Executive’s employment or access to one or more of Company’s Confidential Information, Trade Secrets, or customer relationships.

(g) Limited Restriction on Misuse of Goodwill Related To a Restricted Customer.  For one (1) year following the Termination of Executive’s Employment, for whatever reason, Executive shall not sell or solicit the sale of a Competing Product to a Restricted Customer.

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(h)Limited Restriction on Assisting Misuse of Goodwill Related To a Restricted Customer.  For one (1) year following the Termination of Executive’s Employment, for whatever reason, Executive shall not perform Services as part of or in support of providing, selling, or soliciting the sale of a Competing Product to a Restricted Customer.

(i) Limited Restriction on Misuse of Information Related To a Strategic Customer.  For one (1) year following Termination of Executive’s Employment, for whatever reason, Executive shall not sell or solicit the sale of a Competing Product to a Strategic Customer.

(j) Limited Restriction on Assisting Misuse of Information Related To a Strategic Customer.  For one (1) year following Termination of Executive’s Employment, for whatever reason, Executive shall not perform Services as part of or in support of providing, selling or soliciting the sale of a Competing Product to a Strategic Customer.

(k) Limited Restriction on Misuse of Goodwill Related To a Strategic Partner.  For one (1) year following the Termination of Executive’s Employment, for whatever reason, Executive shall not solicit the supply of goods or services to manufacture a Competing Product or the manufacturing of a Competing Product from a Strategic Partner.

(l) Limited Restriction on Assisting Misuse of Goodwill Related To a Strategic Partner.  For one (1) year following the Termination of Executive’s Employment, for whatever reason, Executive shall not perform Services as part of or in support of soliciting the supply of goods or services to manufacture a Competing Product or the manufacturing of a Competing Product from a Strategic Partner.

(m) Limited Territorial Restriction.  For one (1) year following Termination of Executive’s Employment, for whatever reason, Executive shall not perform Services as part of or in support of the business of selling, soliciting the sale of, or providing Competing Products in the Restricted Territory.

(n) Non-solicitation of Key Employees.  For one (1) year following the Termination of Executive’s Employment, for whatever reason, Executive shall not, without the prior written consent of Company, solicit a Key Employee to engage in competition with Company, unless such Key Employee has already ceased employment with Company.  This shall not bar any employee of Company from applying for or accepting employment with any person or entity.

(o) Ownership of Creations. All records, documents, papers, inventions and notebooks, drawings, designs, technical information, source code, object code, processes, methods or other copyrightable or otherwise protected works (“IP Assets”), in whatever media, that Executive has conceived, created, made, invented, or discovered relating to any work Executive performs or has performed or on behalf of Company or that arise from the use of, or assistance of, any of its or their premises, facilities, materials, employees, officers, directors, agents, advisors, or representatives, or any of their Confidential Information (whether or not during usual working hours), whether conceived, created, discovered, made, or invented individually or jointly with others, will, together with all the worldwide patent, copyright, trade secret, or other intellectual property rights in all such works, be and remain the absolute property of Company.  Executive irrevocably and unconditionally waives all rights that may otherwise vest in his authorship (or after the date of this Agreement) in connection with his authorship of any such copyrightable works, wherever in the world enforceable.  Without limitation, Executive waives the right to be identified as the author of any such works and the right not to have any such works subjected to derogatory treatment.  Executive recognizes any such works are “works for hire” of which Companyis the author.

(p) Disclosure of Creations. Executive will promptly disclose, grant and assign ownership to Company as directed by Company, for its sole use and benefit, any and all ideas, processes, inventions, discoveries, improvements, technical information, and copyrightable works (whether patentable or not) that Executive has developed, acquired, conceived or reduced to practice (whether or not during usual working hours) while employed by Company to which Company has any right or interest.  In connection therewith:  (i) Executive will, without charge but at Company’s expense, promptly execute and deliver such applications, assignments, descriptions and other instruments as Company may reasonably consider necessary or proper to vest title to any such inventions, discoveries, improvements, technical information, patent applications, patents, copyrightable work or reissues

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thereof in Company and to enable it to obtain and maintain the entire worldwide right and title thereto; and (ii) Executive will provide to Company at Company’s expense all such assistance as Company may reasonably require in the prosecution of applications for such patents, copyrights or reissues thereof, in the prosecution or defense of interferences that may be declared involving any such applications, patents or copyrights and in any litigation in which Company may be involved relating to any such patents, inventions, discoveries, improvements, technical information or copyrightable works or reissues thereof.  

(q) Personal Creations. Notwithstanding the foregoing, Sections 8(m) and 8(n) shall not apply to any IP Asset for which no equipment, supplies, premises, facility, Confidential Information, employee, officer, director, agent, advisor or representative of Company (including any of its predecessors or successors) was used and that was developed entirely on Executive’s own time, unless (a) the IP Asset relates (i) directly to the business of Company, to which Company has a right or interest, or (ii) to any actual or anticipated research or development of Company, to which Company has a right or interest, or (b) the IP Asset results from any work Executive performed as an employee of Company.

(r) Publicity.  During Executive’s employment with Company, Executive hereby grants to Company the right to use, in a reasonable and appropriate manner, Executive’s name and likeness, without additional consideration, on, in and in connection with technical, marketing or disclosure materials, or any combination thereof, published by or for Company.

(s) Enforcement.  Executive acknowledges that in the event of any breach of this Section 8, the business interests of Company will be irreparably injured, the full extent of the damages to Company will be impossible to ascertain, monetary damages will not be an adequate remedy for Company, and Company will be entitled to enforce this Agreement by a temporary, preliminary and/or permanent injunction or other equitable relief, without the necessity of posting bond or security, which Executive expressly waives.  Executive understands that Company may waive some of the requirements expressed in this Agreement, but that such a waiver to be effective must be made in writing and should not in any way be deemed a waiver of Company’s right to enforce any other requirements or provisions of this Agreement.  Executive agrees that each of Executive’s obligations specified in this Agreement is a separate and independent covenant and that the unenforceability of any of them shall not preclude the enforcement of any other covenants in this Agreement.  Executive further agrees that any breach of this Agreement by Company prior to the Date of Termination shall not release Executive from compliance with Executive’s obligations under this Section 8.    Notwithstanding the foregoing sentence, neither party shall be precluded from pursuing judicial remedies as a result of any such breaches

9. Termination of Employment.  This Agreement may be terminated upon occurrence of any one of the following events:

(a) Voluntary.  The Executive may terminate this Agreement at any time during the term of this Agreement by giving sixty (60) days written notice of termination to the Employer.  In the event of the termination of this Agreement by the Executive, the Executive shall not receive any severance pay.  In the event of termination of this Agreement by the Executive, the Employer shall have the right to immediately remove Executive from Executive’s position.  In either case, the Executive shall receive his compensation through the sixty (60) day notice period.  By agreement of the Executive and the Company, the Company may continue to employ the Executive for a period longer than sixty (60) days after the Executive gives notice of Executive’s voluntary resignation.  Such an agreement much be in writing and executed by both parties.  

(b) Involuntary With Cause.  The Company may, upon written notice effective immediately, terminate this Agreement With Cause at any time during the term of this  Agreement if any one of the following conditions outlined below exist.  For purposes of this Agreement, the conditions outlined below constitute “Cause”

(i) If the Executive becomes Disabled. For purposes of this Agreement, “Disabled” shall mean the inability to perform essential job functions with or without a reasonable accommodation for a period of 90 days or more;

(ii) If the Executive (for reasons other than illness or injury) is absent from Executives duties without the consent of the Company for more than three (3) consecutive days;

7

(iii)If the Executive dies (effective on the date of death);

(iv) If the Executive should be convicted of a crime punishable by imprisonment;

(v) If the Executive should willfully breach or habitually neglect the duties required to perform under this Agreement;

(vi) If the Executive has committed, undertaken or otherwise been involved in dishonest conduct in relation to the Company (and "dishonest conduct" is deemed to include, but is not limited to, the theft, embezzlement or other misappropriation of all or any material or significant part of the funds, assets or property (tangible or intangible) of the Company);

(vii) If the Executive violates any Company policy or fails to meet the legitimate expectations of the Company and Executive has been given thirty (30) days written notice of the violation and has failed to cure;

(viii) If the Executive has violated or breached  the terms and conditions of this Agreement;

(ix) If the Executive has plead guilty or "no contest" to, or is convicted by a court of a crime involving theft, fraud or embezzlement or a crime that constitutes a felony or is proceeded with as an indictable offence;

(x) If the Executive has knowingly caused the Company to commit a material violation of any applicable law that has (or is likely to have) a material adverse effect on the Company and Executive has been given thirty (30) days written notice of the violation and has failed to cure;

(xi) If the Executive engages in anything that reflects poorly on the Company, as determined by the Company and Executive has been given thirty (30) days written notice of the violation and has failed to cure;

(xii) If the Executive has disregarded a reasonable directive from the Company.  Whether the Executive has disregarded a reasonable directive will be determined by the Company.

In the event Executive is terminated pursuant to this paragraph, Executive will not be offered any severance payments and Executive’s compensation will cease immediately.

(c) Involuntary Without Cause.  The Company, in its sole discretion, may terminate this Agreement without “Cause,” as that term is defined above, at any time during the term of this Agreement upon written notice, at which time Executive’s compensation shall cease immediately.  In the event Company terminates this Agreement Without Cause, Company will offer Executive 12 months’ severance, to be paid at regular on pay dates and contingent on Executive abiding by the terms of this Agreement.  To receive severance, Executive must execute a general separation and release agreement that would include a release by Executive of any claims against the Company and all “Release Parties” as defined in the release. In the event Company terminates this Agreement Without Cause, Executive shall be entitled to a pro-rata share of Executive’s Annual Bonus.

(d) Change in Control.  This Section shall apply if, in the two-year period following a Change in Control, as that term is defined below, the Executive’s employment with the Company is terminated either: (i) by the Company, “Without Cause,” as that term is defined above; or by the Executive for “Good Reason,” as that term is defined below.

For the purposes of this Agreement, “Good Reason” means Executive’s resignation within thirty (30) days following the expiration of any Company cure period (discussed below) following the occurrence of one (1) or more of the following, without Executive’s express written consent: (i) a material adverse change of Executive’s title, authority, duties, position or responsibilities, or the removal of Executive from such position and responsibilities, either of which results in a material diminution of Executive’s authority, duties or responsibilities (other than temporarily while Executive is physically or mentally incapacitated or as required by applicable law); (ii) a material reduction in Executive’s Base Salary; or (iii) a material reduction in Executive’s Target Bonus percentage or (iv) a

8

material change in the geographic location of Executive’s primary work facility or location; provided, however, that a relocation of less than fifty (50) miles from Executive’s then-present location will not be considered a material change in geographic location. Executive will not resign for Good Reason without first providing the Company with written notice of the acts or omissions constituting the grounds for “Good Reason” within sixty (60) days of the initial existence of the grounds for “Good Reason” and a reasonable cure period of not less than thirty (30) days following the date the Company receives such notice during which such condition must not have been cured.  If any such termination occurs, (A) the Executive shall receive benefits set forth in Section 9(c) in addition to, (B) all outstanding equity-related awards held by the Executive shall immediately vest and all options, stock appreciation rights or similar awards shall remain exercisable for the full original term of the award.  

For purposes of this Agreement “Change in Control” means the occurrence of one or more of the following events:  (i) any “person” (as such terms is used in Sections 3(a)(9) and 13(d) of the Securities Exchange Act of 1934 as amended (the “Act”)) or “group” (as such term is used in Section 14(d)(d) of the Act) is or becomes a “beneficial owner” (as such term is used in Rule 13d-3 promulgated under the Act) of more than 30% of the Voting Stock of the Employer (excluding acquisitions pursuant to a Business Combination (as defined below) that is not considered to be a Change in Control under clause (v) below; (ii) the majority of the Board consists of individuals other than Incumbent Directors, which term means the members of the Board on the Effective Date; provided that any person becoming a director subsequent to such date whose election or nomination for election was supported by two-thirds of the directors who then comprised the Incumbent Directors shall be considered to be an Incumbent Director (excluding any person who received such support in connection with the settlement of a proxy contest); (iii) the Employer adopts any plan of liquidation providing for the distribution of all or substantially all of its assets; (iv) the Employer transfers all or substantially all of its assets or business (unless the shareholders of the Employer immediately prior to such transaction beneficially own, directly or indirectly, in substantially the same proportion as they owned the Voting Stock of the Employer, all of the Voting Stock or other ownership interests of the entity or entities, if any, that succeed to the business of the Employer); or (v) any merger, reorganization, consolidation or similar transaction (a “Business Combination”) unless, immediately after consummation of such Business Combination, (A) the shareholders of the Employer immediately prior to the Business Combination hold, directly or indirectly, more than 50% of the Voting Stock of the Employer or the Employer’s ultimate parent company if the Employer is a subsidiary of another corporation, and (B) no person or group beneficially owns more than 50% of the Voting Stock of the Employer or the ultimate parent company of the Employer if the Employer is a subsidiary of partner corporation.  For purposes of this Change in Control definition, the “Employer” shall include any entity that succeeds to all or substantially all of the business of the Employer and “Voting Stock” shall mean securities of any class or classes having general voting power under ordinary circumstances, in the absence of contingencies, to elect the directors of a corporation.

10. Indemnification.  During the Employment Period and thereafter, the Employer agrees to indemnify and hold the Executive and the Executive’s heirs and representatives harmless, to the maximum extent permitted by law, against any and all damages, costs, liabilities, losses and expenses (including reasonable attorneys’ fees) as a result of any claim or proceeding (whether civil, criminal, administrative or investigative), or any threatened claim or proceeding (whether civil, criminal, administrative or investigative), against the Executive that arises out of or relates to the Executive’s service as an officer, director or employee, as the case may be, of the Employer, or the Executive’s service in any such capacity or similar capacity with an affiliate of the Employer or other entity at the request of the Employer, both prior to and after the Effective Date, and to promptly advance to the Executive or the Executive’s heirs or representatives such expenses upon written request with appropriate documentation of such expense upon receipt of an undertaking by the Executive or on the Executive’s behalf to repay such amount if it shall ultimately be determined that the Executive is not entitled to be indemnified by the Employer.  During the Employment Period and thereafter, the Employer also shall provide the Executive with coverage under its current directors’ and officers’ liability policy to the same extent that it provides such coverage to its other executive officers.  If the Executive has any knowledge of any actual or threatened action, suit or proceeding, whether civil, criminal, administrative or investigative, as to which the Executive may request indemnity under this provision, the Executive will give the Employer prompt written notice thereof; provided that the failure to give such notice shall not affect the Executive’s right to indemnification.  The Employer shall be entitled to assume the defense of any such proceeding and the Executive will use reasonable efforts to cooperate with such defense.  To the extent that the Executive in good faith determines that there is an actual or potential conflict of interest between the Employer and the Executive in connection with the defense of a proceeding, the Executive shall so notify the Employer and shall be entitled to separate representation at the Employer’s expense by counsel selected by the Executive (provided that

9

the Employer may reasonably object to the selection of counsel within ten (10) business days after notification thereof) which counsel shall cooperate, and coordinate the defense, with the Employer’s counsel and minimize the expense of such separate representation to the extent consistent with the Executive’s separate defense.  This Section shall continue in effect after the termination of the Executive’s employment or the termination of this Agreement.

11. Notices.  All notices, demands, requests, or other communications which may be or are required to be given or made by any party to any other party pursuant to this Agreement shall be in writing and shall be hand delivered, mailed by first-class registered or certified mail, return receipt requested, postage prepaid, delivered by overnight air courier, or transmitted by facsimile transmission addressed as follows:

(i) If to the Employer:

Sagent Pharmaceuticals, Inc.

1901 N. Roselle Road

Suite 700

Schaumburg, IL 60195

Attn: Chief Executive Officer

(ii) If to the Executive:

Each party may designate by notice in writing a new address to which any notice, demand, request or communication may thereafter be so given, served or sent.  Each notice, demand, request, or communication that shall be given or made in the manner described above shall be deemed sufficiently given or made for all purposes at such time as it is delivered to the addressee (with the return receipt, the delivery receipt, confirmation of facsimile transmission or the affidavit of messenger being deemed conclusive but not exclusive evidence of such delivery) or at such time as delivery is refused by the addressee upon presentation.

12. Severability.  In case any one or more of the provisions contained in this Agreement is, for any reason, held invalid in any respect, such invalidity shall not affect the validity of any other provision of this Agreement. If the final judgment of a court of competent jurisdiction declares that any term or provision of this Agreement is invalid or unenforceable, the parties agree that the court making the determination of invalidity or unenforceability shall have the power to reduce the scope, duration or area of the term or provision, to delete specified words or phrases or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified.

13. Effect on Other Agreements.  The provisions of this Agreement shall supersede the terms of any plan, policy, agreement, award or other arrangement of the Employer (whether entered into before or after the Effective Date) to the extent application of the terms of this Agreement is more favorable to the Executive.

14. Assignment.  The Company may assign this Agreement to any parent, subsidiary, affiliate or successor of the Company, or to any entity that acquires all or substantially of the Company’s assets of the division in which Executive is employed.  This Agreement is not assignable by Executive and is binding upon him and his executors and other legal representatives.

15. Entire Agreement.  This Agreement constitutes the entire agreement between the parties respecting the employment of the Executive, there being no representations, warranties or commitments except as set forth herein.

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16.Amendments. This Agreement may not be changed except by a writing signed by the Company and Executive.  Executive represents to the Company that he or she is not presently bound by any agreement with any other person that conflicts with this Agreement.  Executive is not relying on any representations, statements, promises or agreements that are not set forth in writing in this Agreement.

17. Waiver.  The waiver of a breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other provision or subsequent breach of this Agreement.

18. Headings.  Section and subsection headings contained in this Agreement are inserted for convenience of reference only, shall not be deemed to be a part of this Agreement for any purpose, and shall not in any way define or affect the meaning, construction or scope of any of the provisions hereof.

19. Governing Law.  This Agreement, the rights and obligations of the parties hereto, and any claims or disputes relating thereto, shall be governed by and construed in accordance with the laws of the State of Illinois (but not including any choice of law rule thereof that would cause the laws of another jurisdiction to apply).

20. Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall construe one and the same Agreement.  Signature pages may be transmitted by facsimile or via PDF.  Upon delivery of the facsimile or PDF, a signature shall be deemed an original and shall be admissible into evidence.

21. Withholding.  The Employer may withhold from any benefit payment under this Agreement all federal, state, city or other taxes as shall be required pursuant to any law or governmental regulation or ruling; provided that any withholding obligation arising in connection with the exercise of a stock option or the transfer of stock or other property shall be satisfied through withholding an appropriate number of shares of stock or appropriate amount of such other property.

22. Executive Acknowledgement.  Executive acknowledges that Executive has fully read this Agreement, understands the contents of this Agreement, and agrees to its terms and conditions of Executive’s own free will, knowingly and voluntarily, and without any duress or coercion.

23. Representations and Warranties.  Executive hereby represents and warrants that: (a) other than those agreements disclosed to the Company by Executive in writing on or prior to the date of this Agreement (the “Prior Agreements”), listed in Attachment B, Executive is not subject to any restrictive covenant in any agreement and no contractual or other commitment or covenant (including, but not limited to, obligations of confidentiality and/or covenants not to compete with prior employers) exists which would prevent or impair Executive’s full performance of Executive’s duties and responsibilities under this Agreement and as an Executive for the Company; (b) Executive’s full performance of Executive’s duties for the Company and as an employee for the Company does not and will not breach any Prior Agreement, if any; (c) Executive has not, and will not, disclose or use during Executive’s employment with the Company, any confidential information or trade secrets which Executive acquired as a result of any previous engagement, any employment or under a contractual obligation of confidentiality or secrecy before Executive became engaged by of the Company; (d) all prior obligations (written and oral), such as confidentiality agreements or covenants restricting future engagements, consulting or employment, that Executive has entered into which restrict Executive’s ability to perform any services as an employee for the Company are listed below under the heading List of Prior Agreements; (e) Executive does not have any obligation to grant rights in any Work Product to a third party that might conflict with Executive’s obligations or the Company’s rights hereunder; and (f) all of Executive’s contributions to Work Product shall be Executive’s original work, and will not infringe, misappropriate or violate any intellectual property or other right of any third party.

24. Section 409A.  The intent of the parties is that payments and benefits under this Agreement comply with Section 409A of the Code, or an exemption thereunder, and the regulations and guidance promulgated thereunder (collectively “Code Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith.  If the Executive notifies the Employer (with specificity as to the reason therefor) that the Executive believes that any provision of this Agreement (or of any award of compensation, including equity compensation or benefits) would cause the Executive to incur any additional tax or interest under Code Section 409A and the Employer concurs with such belief or the Employer (without any obligation whatsoever

11

to do so) independently makes such determination, the Employer shall, after consulting with the Executive, reform such provision to attempt to comply with Code Section 409A through good faith modifications to the minimum extent reasonably appropriate to conform with Code Section 409A.  To the extent that any provision hereof is modified in order to comply with Code Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to the Executive and the Employer of the applicable provision without violating the provisions of Code Section 409A.  Notwithstanding the foregoing, Employer makes no representation that the payments and benefits provided under this Agreement comply with Code Section 409A and, in no event whatsoever shall the Employer be liable for any additional tax, interest or penalty that may be imposed on the Executive by Code Section 409A or damages for failing to comply with Code Section 409A.  With respect to any payment or benefit considered to be nonqualified deferred compensation under Section 409A, a termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”  Notwithstanding anything to the contrary in this Agreement, if the Executive is deemed on the date of termination to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B), then with regard to any payment or the provision of any benefit that is considered nonqualified deferred compensation under Code Section 409A payable on account of a “separation from service,” such payment or benefit shall not be made or provided until the date which is the earlier of (A) the expiration of the six (6)-month period measured from the date of such “separation from service” of the Executive, and (B) the date of the Executive’s death, to the extent required under Code Section 409A.  Upon the expiration of the foregoing delay period, all payments and benefits delayed pursuant to this Section 25 (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to the Executive in a lump sum, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein. To the extent that reimbursements or other in-kind benefits under this Agreement constitute “nonqualified deferred compensation” for purposes of Code Section 409A, (A) all expenses or other reimbursements hereunder shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by the Executive, (B) any right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (C) no such reimbursement, expenses eligible for reimbursement, or in-kind benefits provided in any taxable year shall in any way affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year.  For purposes of Code Section 409A, the Executive’s right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments.  Whenever a payment under this Agreement specifies a payment period with reference to a number of days, the actual date of payment within the specified period shall be within the sole discretion of the Employer.  Notwithstanding any other provision of this Agreement to the contrary, in no event shall any payment under this Agreement that constitutes “nonqualified deferred compensation” for purposes of Code Section 409A be subject to offset by any other amount unless otherwise permitted by Code Section 409A.

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IN WITNESS WHEREOF, the undersigned have duly executed and delivered this Agreement, or have caused this Agreement to be duly executed and delivered on their behalf.

SAGENT PHARMACEUTICALS, INC.
By:		Date:
Name:	Allan Oberman
Title:	Chief Executive Officer
EXECUTIVE
By:		Date:
Name:	Donald Bullock

13

EX-10.2

Exhibit 10.2

ASSET PURCHASE AGREEMENT

BETWEEN

TEVA PHARMACEUTICAL INDUSTRIES LTD.

AND

SAGENT PHARMACEUTICALS, INC.

DATED AS OF

JUNE 15, 2016

TABLE OF CONTENTS

			Page
ARTICLE I. DEFINITIONS			1
	SECTION 1.1.	Definitions	1
	SECTION 1.2.	Interpretation	6
	SECTION 1.3.	Currency	6
	SECTION 1.4.	Incorporation by Reference and Supremacy of FTC Order	7
ARTICLE II. SALE AND PURCHASE OF TRANSFERRED ASSETS			7
	SECTION 2.1.	Purchase and Sale	7
	SECTION 2.2.	Transferred Assets	7
	SECTION 2.3.	Assumption of Certain Liabilities and Obligations	8
	SECTION 2.4.	License to Certain Product Technology	8
	SECTION 2.5.	Covenant Not to Sue.	9
	SECTION 2.6.	Nonassignable Assets.	9
ARTICLE III. PURCHASE PRICE			9
	SECTION 3.1.	Purchase Price	9
	SECTION 3.2.	Allocation of Purchase Price	9
	SECTION 3.3.	Transfer Taxes	9
ARTICLE IV. THE CLOSING			10
	SECTION 4.1.	Closing Date	10
	SECTION 4.2.	Transactions to Be Effected at the Closing	10
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF SELLER			10
	SECTION 5.1.	Seller Organization; Good Standing	10
	SECTION 5.2.	Authority; Execution and Delivery	10
	SECTION 5.3.	Consents; No Violation, Etc.	11
	SECTION 5.4.	Title to Transferred Assets	11
	SECTION 5.5.	Litigation	11
	SECTION 5.6.	Regulatory Issues	12
	SECTION 5.7.	No Brokers	12
	SECTION 5.8.	Exclusive Representations and Warranties	12
	SECTION 5.9.	Regulatory Commitments	12
	SECTION 5.10.	Contracts to be Assumed; Customers	12
	SECTION 5.11.	Inventory.	13
	SECTION 5.12.	Assets.	13
	SECTION 5.13.	Absence of Certain Changes.	13
ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF BUYER			13
	SECTION 6.1.	Buyer's Organization; Good Standing	13
	SECTION 6.2.	Authority; Execution and Delivery	13
	SECTION 6.3.	Consents; No Violations, Etc.	13
	SECTION 6.4.	Litigation	14
	SECTION 6.5.	Development	14
	SECTION 6.6.	No Brokers	14
	SECTION 6.7.	Availability of Funds	14
	SECTION 6.8.	Solvency	14
	SECTION 6.9.	Independent Investigation; No Seller Warranty	15

ARTICLE VII. CERTAIN COVENANTS AND AGREEMENTS OF SELLER			15
	SECTION 7.1.	Conduct of Business Until Closing	15
	SECTION 7.2.	Post-Closing Orders and Payments	16
	SECTION 7.3.	Technology Transfer; Assistance with Buyer Regulatory Filings	16
	SECTION 7.4.	Seller's NDC Numbers	16
	SECTION 7.5.	Competition	16
	SECTION 7.6.	Sales Data; Customer	17
ARTICLE VIII. CERTAIN COVENANTS AND AGREEMENTS			17
	SECTION 8.1.	Insurance	17
	SECTION 8.2.	Books and Records	17
	SECTION 8.3.	Confidentiality	17
	SECTION 8.4.	Assumption of Regulatory Commitments	18
	SECTION 8.5.	Bulk Transfer Laws	18
	SECTION 8.6.	Buyer NDC Numbers; Buyer Trademarks and Buyer Trade Dress Changes	18
	SECTION 8.7.	Response to Medical Inquiries and Products Complaints	18
	SECTION 8.8.	Transition of Manufacturing Services.	18
	SECTION 8.9.	Use of Transferred Assets	19
ARTICLE IX. OTHER COVENANTS AND AGREEMENTS			19
	SECTION 9.1.	Trade Returns, Medicaid Rebates, Chargebacks	19
	SECTION 9.2.	Adverse Experience Reports	20
	SECTION 9.3.	Transfer of Product ANDAs, Etc.	20
	SECTION 9.4.	Further Action; Consents; Filings	20
	SECTION 9.5.	Compliance with the Federal Trade Commission Decision	21
	SECTION 9.6.	Representations to Customers.	21
	SECTION 9.7.	Preservation of Data Room.	21
ARTICLE X. CONDITIONS PRECEDENT			21
	SECTION 10.1.	Conditions to Each Party's Obligations	21
	SECTION 10.2.	Conditions to Obligations of Buyer	21
	SECTION 10.3.	Conditions to the Obligations of Seller	22
ARTICLE XI. TERMINATION, AMENDMENT AND WAIVER			22
	SECTION 11.1.	Termination	22
	SECTION 11.2.	Amendments and Waivers	23
	SECTION 11.3.	Rescission	23
	SECTION 11.4.	Modification	23
ARTICLE XII. INDEMNIFICATION			24
	SECTION 12.1.	Survival	24
	SECTION 12.2.	Indemnification by Seller	24
	SECTION 12.3.	Indemnification by Buyer	24
	SECTION 12.4.	Limitations.	24
	SECTION 12.5.	Procedure	25
	SECTION 12.6.	Adjustment to Purchase Price	26

- ii -

ARTICLE XIII. GENERAL PROVISIONS			26
	SECTION 13.1.	Expenses	26
	SECTION 13.2.	Further Assurances and Actions	27
	SECTION 13.3.	Notices	27
	SECTION 13.4.	Headings	28
	SECTION 13.5.	Severability	28
	SECTION 13.6.	Counterparts	28
	SECTION 13.7.	Entire Agreement; No Third-Party Beneficiaries	28
	SECTION 13.8.	Governing Law	29
	SECTION 13.9.	Jurisdiction, Venue, Service of Process, WAIVER OF JURY TRIAL	29
	SECTION 13.10.	Specific Performance	29
	SECTION 13.11.	Allergan	29
	SECTION 13.12.	Publicity	29
	SECTION 13.13.	Assignment	30

Exhibit A	Assignment and Assumption Agreement
Exhibit B	Bill of Sale
Exhibit C	Products
Exhibit D	Supply Agreement
Exhibit E	Purchase Price Allocation
Exhibit F	Form of Customer Notice
Appendix I	Proposed Order/Final Order
Appendix II	Provisions from Order
Appendix III	Seller NDC Number Transition Services

- iii -

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this “Agreement”), dated as of JUNE 15, 2016 (the “Effective Date”), is made by and between SAGENT PHARMACEUTICALS, INC., a Wyoming corporation (“Buyer”), and TEVA PHARMACEUTICAL INDUSTRIES LTD., an Israeli corporation, acting directly or through its Affiliates (“Seller”).

WHEREAS, the FTC staff has raised the concern that the proposed acquisition (the “Proposed Allergan Transaction”) of certain businesses and assets of Allergan plc (“Allergan”) by Seller, pursuant to the Allergan Agreement, is likely to produce anticompetitive effects in the alleged relevant product market(s) in the United States for the generic pharmaceutical products listed on Exhibit C (as such products are more specifically identified in this Agreement), which would not be in the public interest, including, but not limited to, by eliminating competition between Seller and Allergan;

WHEREAS, in order to resolve the concerns raised by the FTC staff in these alleged product markets in the United States, Seller has agreed to enter into this Agreement with Buyer to divest certain assets related to these products to Buyer, and to permit Buyer to replace the lost competition by manufacturing, marketing and selling the generic products referred to above into the respective alleged product markets;

WHEREAS, the FTC has or is about to issue an Order governing the scope, nature, extent and requirements of this Agreement;

WHEREAS, Seller sells the Products (as defined herein) commercially and/or has a Product ANDA (as defined herein) filed with the FDA with respect to the Products;

WHEREAS, upon and subject to the Allergan Closing, Seller desires to sell to Buyer, and Buyer desires to purchase from Seller, certain Transferred Assets (as defined herein) related to the Products within the Territory (as defined herein), all upon the terms and subject to the conditions hereinafter set forth; and

WHEREAS, concurrently with the execution of this Agreement, certain Affiliates of Seller entered into an asset purchase agreement with Buyer related to the Order (the “Other Acquisition Agreement”), pursuant to which such Seller Affiliates have agreed to sell to Buyer, and Buyer has agreed to purchase from such Seller Affiliates, certain Transferred Assets (as defined in the Other Acquisition Agreement) related to the Products (as defined in the Other Acquisition Agreement) within the Territory (as defined in the Other Acquisition Agreement), all upon the terms and conditions set forth therein.

NOW, THEREFORE, in consideration of the mutual covenants herein contained and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE I.

DEFINITIONS

SECTION 1.1. Definitions

As used in this Agreement, the following terms have the meanings set forth below:

“Affiliate” means any Person that controls, is controlled by, or is under common control with the applicable Person.  For purposes of this definition, “control” shall mean: (a) in the case of corporate entities, direct or indirect ownership of more than fifty percent (50%) of the stock or shares entitled to vote for the election of directors, or otherwise having the power to control or direct the affairs of such Person; and (b) in the case of non-corporate entities, direct or indirect ownership of more than fifty percent (50%) of the equity interest or the power to direct the management and policies of such noncorporate entities.

CONFIDENTIAL DRAFT – FOR DISCUSSION PURPOSES ONLY

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

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

“Allergan Agreement” means the Master Purchase Agreement dated as of July 26, 2015 by and between Allergan and Seller, as it may be amended from time to time.

“Allergan Closing” means the closing of the Proposed Allergan Transaction pursuant to the Allergan Agreement.

“Ancillary Agreements” means, collectively, the Supply Agreement, the Bill of Sale, and the Assignment and Assumption Agreement.

“Assigned Contracts” means the Contracts set forth on Schedule 2.2(a)(vi) hereto, but solely with respect to the applicable Product, or Contracts or arrangements conferring substantially equivalent rights with respect to the applicable Products.

“Assignment and Assumption Agreement” means an assignment and assumption agreement to be executed and delivered by Buyer and Seller at Closing, substantially in the form of Exhibit A.

“Assumed Liabilities” has the meaning set forth in Section 2.3(a).

“Bill of Sale” means a bill of sale to be executed and delivered by Seller to Buyer at Closing, substantially in the form of Exhibit B.

“Business Day” means any day other than a Friday, Saturday, Sunday or other day on which banks in the U.S. or Israel are permitted or required to close by Law.

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

“Buyer Indemnified Parties” has the meaning set forth in Section 12.2.

“Buyer NDC Numbers” has the meaning set forth in Section 8.6.

“Buyer Officer’s Certificate” means a certificate, dated the Closing Date, duly executed by an authorized officer of Buyer, reasonably satisfactory in form to Seller, as to the satisfaction of the conditions set forth in Sections 10.3(a) and (b).

“Buyer Returns” has the meaning set forth in Section 9.1(a).

“Closing” and “Closing Date” have the respective meanings set forth in Section 4.1.

“Confidentiality Agreement” means the Confidentiality Agreement between Seller and Buyer, dated September 24, 2015.

“Contracts” means contracts, leases, licenses, indentures, agreements, purchase orders and all other legally binding arrangements, whether in existence on the date hereof or subsequently entered into, including all amendments thereto.

“Customer List” has the meaning set forth in Section 5.10(c) hereof.

“Customer Notice” means the written notice to be sent to Customers in accordance with Section 7.6, in substantially the form attached hereto as Exhibit F.

“Customers” has the meaning set forth in Section 7.6(c).

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“Deductible” has the meaning set forth in Section 12.4(b).

“Direct Cost” means the cost of (i) direct labor and direct material used and (ii) all other reasonable out of pocket expenses, in each case, to provide the relevant assistance or service.

“Disclosing Party” has the meaning set forth in Section 8.3.

“Effective Date” has the meaning set forth in the preamble.

“Encumbrance” means, with respect to any asset, any imperfection of title, mortgage, charge, lien, security interest, easement, right of way, pledge or encumbrance of any nature whatsoever.

“Excluded Assets” has the meaning set forth in Section 2.2(b).

“Excluded Liabilities” has the meaning set forth in Section 2.3(b).

“Exhibits” means, collectively, the Exhibits referred to throughout this Agreement.

“Expiration Date” has the meaning set forth in Section 12.1.

“FDA” means the U.S. Food and Drug Administration or any successor United States governmental agency performing similar functions with respect to pharmaceutical products.

“Finished Goods” means each of the Products, respectively, packaged, labeled and ready for distribution and sale in finished form.

“FTC” means the U.S. Federal Trade Commission.

“GAAP” means United States generally accepted accounting principles, consistently applied.

“Governmental Entity” means any nation or government or any court, administrative agency or commission or other governmental authority, body or instrumentality, whether U.S. (federal, state, country, municipal or other) or non-U.S.

“Governmental Rule” means any Law, judgment, order, decree, statute, ordinance, rule or regulation enacted, issued or promulgated by any Governmental Entity.

“Indemnified Party” has the meaning set forth in Section 12.3.

“Indemnifying Party” has the meaning set forth in Section 12.5(a).

“Knowledge” of (i) Seller means all such facts, circumstances or other information, of which the following individuals are actually aware: Jamie Berlanska - VP of Finance & Controller – Americas, Maureen Cavanaugh – SVP General Manager US Generics, Vivian McCain - VP, Americas TPO Regional Head, Carol Devine - Senior PM TPO-PMO, Lauren Rabinovic - VP General Counsel NA Generic IP, Kirsten Bauer - SVP General Counsel TGO & Quality, and Dror Bashan - SVP BD and Strategic Initiatives and (ii) Buyer means all such facts, circumstances or other information, of which Michael Ward – Chief Legal Officer and Corporate Secretary and Jonathon Singer – Chief Financial Officer and Executive Vice President are actually aware.

“Law” means each federal, state, provincial, municipal, local, or foreign law, statute, ordinance, order, determination, judgment, common law, code, rule, official standard, or regulation, enacted, enforced, entered, promulgated, or issued by any Governmental Entity.

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“Liabilities” means any and all debts, liabilities and obligations of any kind, nature, character or description, whether accrued or fixed, absolute or contingent, matured or unmatured, or known or unknown, including those arising under any Governmental Rule or action and those arising under any Contract, arrangement, commitment or undertaking, or otherwise.

“License” has the meaning set forth in Section 2.4(a).

“Losses” means any and all damages, losses, Liabilities, claims, judgments, penalties, payments, interest, costs and expenses (including reasonable and documented legal fees, accountants’ fees and expert witnesses’ fees and expenses incurred in investigating and/or prosecuting any claim for indemnification).

“Material Adverse Effect” means an effect which has had or would reasonably be expected to have, a materially adverse effect on the Transferred Assets or Product Technology taken as a whole, but will not include (a) any adverse change or effect due to changes in conditions generally affecting (i) the healthcare industry or (ii) the United States economy as a whole, or (b) any change or adverse effect caused by, or relating to (i) the commencement, occurrence, continuation, or intensification of any national or international political conditions, including the engagement by the United States or any other country or group in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack upon the United States or any other country, or any of its territories, possessions, or diplomatic or consular offices or upon any military installation, equipment, or personnel of the United States or any other country or group, (ii) financial, banking, or securities markets (including any disruption thereof and any decline in the price of any security or any market index), (iii) any changes in Law or accounting rules (including GAAP) or the enforcement, implementation or interpretation thereof, (iv) the occurrence, continuation or intensification of any earthquakes, hurricanes, pandemics, or other natural disasters, or any other force majeure event, whether or not caused by any Person, or any national or international calamity or crisis, (v) compliance with the terms of, or the taking of any action required by, this Agreement or the transactions contemplated hereby (including any action reasonably required by, or condition or other term reasonably imposed by, the FTC in connection with the Order) or (vi) the execution, announcement or pendency of this Agreement and the transactions contemplated by this Agreement; provided, however, that the changes set forth in the foregoing clauses (a)(i), (b)(iii) and (b)(iv) shall be taken into account in determining whether a “Material Adverse Effect” has occurred to the extent (and only to the extent) such changes have a disproportionate impact on the Transferred Assets or the Products, in each case, when compared to similar companies or products in the pharmaceutical industry.

“Medicaid Reimbursements and Rebates” means all discounts, rebates, reimbursements or other payments required by Governmental Rule to be made under Medicaid, Medicare or other governmental special medical assistance programs.

“NDA” means a New Drug Application as defined in the United States Food, Drug, and Cosmetic Act.

“NDC” means a national drug code as issued by the FDA.

“NDC Numbers” means the NDC Number for each of the Products, respectively.

“Order” means the Decision and Order relating to the Products issued by the FTC in the proceeding captioned In the Matter of Teva Pharmaceutical Industries Ltd., a corporation.

“Other Acquisition Agreement” has the meaning set forth in the recitals.

“Permitted Encumbrances” means (a) any minor imperfections of title or similar Encumbrance that do not, and would not reasonably be expected to, individually or in the aggregate, materially impair the value or materially interfere with the use of, the Transferred Assets or the Product Technology, (b) Encumbrances for Taxes that are not yet due and payable, (c) Encumbrances that will be released at Closing, (d) statutory Encumbrances arising out of operation of Law with respect to a Liability incurred in the ordinary course of business and which is not delinquent, (e) Encumbrances incurred as a result of any facts or circumstances related to Buyer or its Affiliates and (f) Encumbrances set forth on Schedule 1.1(a).

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“Person” means any individual, corporation, partnership, limited liability company, joint venture, trust, business association, organization, Governmental Entity or other entity.

“Product ANDA” means, for each of the Products, respectively, the Abbreviated New Drug Application (as defined in the United States Food, Drug, and Cosmetic Act) identified on Exhibit C, and all amendments and supplements thereto, that have been filed with the FDA seeking authorization and approval to manufacture, package, ship and sell such Products, as more fully defined in 21 C.F.R. Part 314.

“Products” means the Products listed on Exhibit C hereto to be purchased pursuant to this Agreement.

“Product Scientific and Regulatory Material” means all technological, scientific, development, chemical, biological, pharmacological, toxicological, regulatory, clinical trial materials, product safety related information (including periodic safety update reports and adverse event database information), written correspondence with any Governmental Entity (including warning letters) and other data, files, records and other information (in any form or medium, wherever located) similar to the foregoing, in each case to the extent solely related to the Products that are owned by Seller and in Seller’s possession or control

“Product Technology” means the following information owned by or to the extent licensed to Seller, as in existence and in the possession of Seller as of the Closing Date:  the manufacturing technology, proprietary or confidential information, processes, techniques, protocols, methods, improvements and know-how that are necessary to manufacture the Products in accordance with the current applicable Product ANDA, as the case may be, including, but not limited to, the manufacturing process approved in the applicable Product ANDAs, specifications and test methods, raw material, packaging, stability and other applicable specifications, manufacturing and packaging instructions, master formula, validation reports to the extent available, stability data, analytical methods, records of complaints, annual product reviews to the extent available, and other master documents necessary for the manufacture, control and release of the Products as conducted by, or on behalf of, Seller or any of its Affiliates before the Effective Date.  The Product Technology includes without limitation the rights owned or to the extent controlled by Seller under any patent issued in or subject to a pending application in the Territory as of the Closing Date, and any rights under any patent or patent application outside of the Territory solely to the extent necessary to manufacture the Products outside the Territory for importation to and sale in the Territory.  For purposes of this definition, Allergan and its Affiliates will not be deemed to be Affiliates of Seller.

“Proposed Allergan Transaction” has the meaning set forth in the recitals.

“Purchase Price” has the meaning set forth in Section 3.1.

“Quality Agreement” means the Quality Agreement to be executed by Buyer and Seller pursuant to the Supply Agreement.

“Receiving Party” has the meaning set forth in Section 8.3.

“Required Third Party Consents” means the consents and approvals set forth on Schedule 1.1(b).

“Schedules” means, collectively, the Schedules referred to throughout this Agreement.

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

“Seller Indemnified Parties” has the meaning set forth in Section 12.3(a).

“Seller Officer’s Certificate” means a certificate, dated the Closing Date, duly executed by an authorized officer of Seller, reasonably satisfactory in form to Buyer, as to the satisfaction of the conditions set forth in Sections 10.2(a), (b) and (c).

“Seller Payments” has the meaning set forth in Section 9.1(c).

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“Seller’s Taxes” means all (i) Taxes arising out of, relating to or otherwise in respect of the Transferred Assets that are attributable to taxable periods, or portions thereof, ending on or prior to the Closing Date; and (ii) Taxes imposed on, or incurred by, Seller or any Affiliate of Seller for which Seller or any Affiliate of Seller is liable that do not arise out of, relate to or otherwise are not in respect of the Transferred Assets.

“Specifications” has the meaning set forth in the Supply Agreement.

“Supply Agreement” means the Supply Agreement to be executed by Seller and Buyer, in substantially the form attached hereto as Exhibit D.

“Tax” or “Tax(es)” means all taxes, levies or other governmental assessments, including income, excise, property, sales or use, value added, profits, license, withholding (with respect to compensation or otherwise), payroll, employment, net worth, capital gains, transfer, stamp, social security, environmental, occupation and franchise taxes, imposed by any taxing authority, and including any interest, penalties and additions attributable thereto.

“Tax Return” means any report, return, election, notice, estimate, declaration, information statement and other forms and documents (including all schedules, exhibits and other attachments thereto) relating to and filed or required to be filed with a taxing authority in connection with any Taxes (including estimated Taxes).

“Territory” means the United States of America and its territories, protectorates and possessions, including Puerto Rico.

“Third Party Claim” has the meaning set forth in Section 12.5(b).

“Transferred Assets” has the meaning set forth in Section 2.2(a).

“Transition Products” has the meaning set forth in Appendix III.

“U.S.” or “U.S.A.” means the United States of America.

SECTION 1.2. Interpretation

(a) When used in this Agreement, the words “include”, “includes” and “including” will be deemed to be followed by the words “without limitation.” Any terms defined in the singular will have a comparable meaning when used in the plural, and vice-versa.

(b) Reference to any Person includes such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by this Agreement, and reference to a Person in a particular capacity excludes such Person in any other capacity.

(c) Reference to any agreement (including this Agreement), document or instrument means such agreement, document or instrument as amended, modified or supplemented and in effect from time to time in accordance with the terms thereof and, if applicable, the terms hereof.

(d) When a reference is made in this Agreement to an Article, a Section, an Exhibit or a Schedule, such reference shall be to an Article of, a Section of, an Exhibit to or a Schedule to, this Agreement unless otherwise indicated.

SECTION 1.3. Currency

All currency amounts referred to in this Agreement are in U.S. Dollars, unless otherwise specified.

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SECTION 1.4.Incorporation by Reference and Supremacy of FTC Order

(a) Incorporation of FTC Order. The parties hereby agree and acknowledge that the terms and provisions of the Order of the FTC shall govern this Agreement. A copy of the Order proposed as of the date hereof is attached as Appendix I, and upon issuance by the FTC, the final Order shall replace the currently proposed Order as Appendix I attached hereto without any other action by the parties hereto. The terms and provisions of the Order that pertain to this Agreement are hereby deemed incorporated by reference into this Agreement.

(b) Supremacy of FTC Order. To the extent that any term or provision of this Agreement conflicts with any corresponding term or provision of the Order, the parties hereby agree that the terms or provisions of the Order shall control the rights and obligations of the parties.

(c) Publicity of Order.  Buyer acknowledges that the Order will be publicly available and will include information regarding the Products, the Buyer and certain information regarding this Agreement and the Ancillary Agreements.

ARTICLE II.

SALE AND PURCHASE OF TRANSFERRED ASSETS

SECTION 2.1. Purchase and Sale

Upon the terms and subject to the conditions of this Agreement, on the Closing Date, Seller will sell, assign, transfer, convey and deliver to Buyer, and Buyer will purchase, acquire and accept, all right, title and interest, within the Territory, of Seller in, to and under the Transferred Assets free and clear of all Encumbrances other than Permitted Encumbrances.

SECTION 2.2. Transferred Assets

(a) The term “Transferred Assets” means the following assets of Seller, as the same exist on the Closing Date that relate solely and exclusively to the Products (and for the avoidance of doubt, excluding the Excluded Assets):

(i) the Product ANDAs;

(ii) any correspondence with the FDA in Seller’s possession or control with respect to the Product ANDAs;

(iii) annual and periodic reports relating to the Product ANDAs which have been filed by or on behalf of Seller with the FDA, and adverse event reports pertaining to the Products, in each case as are in Seller’s possession or control;

(iv) the quantities and delivery terms in all outstanding customer purchase orders for the Products;

(v) the Product Scientific and Regulatory Material;

(vi) the Assigned Contracts;

(vii) the trademarks and tradenames owned by Seller set forth on Schedule 2.2(a)(vii); and

(viii) any other assets belonging to Seller that are required to be transferred pursuant to the Order.

(b) Seller and Buyer expressly agree and acknowledge that the Transferred Assets will not include any assets of any kind, nature, character or description (whether real personal or mixed, whether tangible or intangible, whether absolute, accrued, contingent, fixed or otherwise, and wherever situated) that are not expressly included within the definition of Transferred Assets (the “Excluded Assets”).  Excluded Assets include, without limitation, any refund

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of Seller’s Taxes, and all trademarks, and trade names not specifically included in the Transferred Assets and all, brand names, logotypes, symbols, service marks, and trade dress, and any registrations or applications for registrations of any of the foregoing.

(c) Buyer acknowledges and agrees that Seller may retain for archival purposes and for purposes of complying with the Supply Agreement, applicable Law and for legal and regulatory purposes as a seller of pharmaceutical products, one copy of all or any part of the documentation that Seller delivers to Buyer pursuant to Section 2.2(a).  The copies will be retained by Seller’s legal counsel and Seller agrees to treat such copies as confidential information (in accordance with Section 8.3 hereof).

SECTION 2.3. Assumption of Certain Liabilities and Obligations

(a) Buyer will assume, be responsible for and pay, perform and/or otherwise discharge when due those Liabilities (including any Liabilities arising in respect of Taxes) directly arising out of or in connection with or directly related to (x) the Transferred Assets, the use thereof, or the use of the Product Technology by or on behalf of Buyer or its Affiliates or their respective agents or assignees on or after the Closing Date and (y) the marketing, sale or use of the Products by or on behalf of Buyer or its Affiliates or their respective agents or assignees on or after the Closing Date; provided that, for the avoidance of doubt, such Assumed Liabilities shall include:  (i) Liabilities arising from any patent infringement claim or lawsuit brought by any third party, the FDA or any other Governmental Entity, in all cases only to the extent that they relate to Product sold on or after the Closing Date; (ii) Liabilities arising from any FDA or any other Governmental Entity action or notification only to the extent that such Liabilities relate to Product sold by or on behalf of Buyer or its Affiliates; (iii) Liabilities arising from any product liability claims relating to Product sold by Buyer or its agents or assignees, except to the extent the Manufacturer (as defined in the Supply Agreement) is liable for such Liabilities pursuant to the Supply Agreement on or after the Closing Date; (iv) Liabilities arising on or after the Closing Date from any plan of Risk Evaluation and Mitigation Strategies to the extent relating to any of the Products; and (v) subject to the terms set forth in Appendix III solely with respect to the Transition Products, state and federal Medicaid/Medicare rebates and payments, and all credits, chargebacks, rebates, discounts, allowances, incentives and similar payments in connection with the sale of Products on or after the Closing Date by or on behalf of Buyer or its Affiliates (collectively, the “Assumed Liabilities”).

(b) Except to the extent expressly included in the Assumed Liabilities, Buyer will not assume or be responsible or liable for any Liabilities of Seller or its Affiliates, and shall in no event assume or be responsible or liable for any Liabilities arising out of or in connection with or related to (x) the Transferred Assets, the use thereof or the use of the Product Technology by or on behalf of Seller or its Affiliates or their respective agents or assignees prior to the Closing Date, (y) the marketing, sale or use of the Products by or on behalf of Seller or its Affiliates or their respective agents or assignees prior to the Closing Date or liabilities that were incurred before Closing with respect to the Products and (z) Seller’s Taxes (collectively, the “Excluded Liabilities”).

SECTION 2.4. License to Certain Product Technology

(a) Seller hereby irrevocably grants to Buyer as of the Closing Date (i) a royalty-free exclusive, perpetual license to use the Product Technology that is owned or licensed (to the extent capable of sublicense, provided that Seller does not incur any additional fees payable to third parties with respect to any such sublicense and that Buyer agrees to be bound by the terms required for such sublicense by the third party licensor and to be liable for any breach thereof) by Seller and presently used or held for use solely and specifically for the manufacture of the Products for sale in the Territory and not for other products of Seller or for sale in other territories, to market and sell Products in the Territory, and to manufacture Products for marketing and sale in the Territory, and (ii) a royalty-free, non-exclusive, perpetual license to use the Product Technology that is owned or licensed (to the extent capable of sublicense, provided that Seller does not incur any additional fees payable to third parties with respect to any such sublicense and that Buyer agrees to be bound by the terms required for such sublicense by the third party licensor and to be liable for any breach thereof) by Seller and used or held for use not solely and specifically for the manufacture of the Products, to market and sell Products in the Territory and to manufacture Products for marketing and sale in the Territory (the “Licenses”).  Each of the Licenses includes the right to grant sublicenses.

(b) Each party may modify or improve the Product Technology.  The party making such modifications or improvements shall own all right, title and interest therein.

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SECTION 2.5.Covenant Not to Sue.

Each of the Seller and the Buyer hereby covenants that such party and its Affiliates will not bring any suits or claims, or cause or support any licensee or other third party to bring any suits or claims, against the other party or its Affiliates, their manufacturers and importers, or their distributors and customers or their consumers, alleging that the manufacture, use, sale, offer for sale or importation in or for the Territory of the Products, or the equivalent competing products sold by or on behalf of the Seller in or for the Territory, infringes any patent rights or misappropriates any trade secrets owned or controlled by such party or any of its Affiliates.

SECTION 2.6.Nonassignable Assets.

(a) Notwithstanding anything in this Agreement to the contrary, to the extent that the transfer or assignment to Buyer of any Transferred Asset is prohibited by any Governmental Rules or would require any authorizations, approvals, consents or waivers, and such authorizations, approvals, consents or waivers shall not have been obtained, neither this Agreement nor any document delivered pursuant hereto shall constitute a sale, assignment or transfer or an attempted assignment or transfer of such Transferred Asset if the applicable authorization, approval, consent or waiver has not been obtained by (or does not remain in full force and effect at) the Closing, unless and until such third party authorization, approval, consent or waiver is obtained, at which time such Transferred Asset shall be assumed and transferred to Buyer in accordance with the terms and conditions hereof.

(b) With respect to any such authorizations, approvals, consents, or waivers that are required for Transferred Assets, the parties shall use their respective commercially reasonable efforts, and reasonably cooperate with each other, to obtain promptly such authorizations, approvals, consents or waivers.  In the event that any such authorizations, approvals, consents or waivers are not obtained by the Closing Date, the parties shall cooperate with each other in any mutually agreeable, reasonable and lawful arrangements designed to provide to Buyer the benefits of use of such Transferred Assets and to impose upon Buyer the liabilities and obligations of such Transferred Assets as if such Transferred Assets had been conveyed to Buyer at the Closing.

ARTICLE III.

PURCHASE PRICE

SECTION 3.1.Purchase Price

Upon the terms and subject to the conditions set forth herein, in consideration of the sale and transfer of the Transferred Assets, the Purchaser shall on the Closing Date (i) assume the Assumed Liabilities and (ii) pay an amount in cash equal to Thirty-Six Million Dollars ($36,000,000) (the “Purchase Price”).

SECTION 3.2.Allocation of Purchase Price

The Purchase Price will be allocated among the Transferred Assets as of the Closing Date in accordance with applicable Law and as set forth in Exhibit E.  Each of the parties hereto agrees to report (and to cause its Affiliates to report) the transactions contemplated by this Agreement in a manner consistent with applicable Law and with the terms of this Agreement, including the allocation provided in Exhibit E, and agrees not to take any position inconsistent therewith in any Tax Return, in any Tax refund claim, in any litigation or otherwise.

SECTION 3.3.Transfer Taxes

All transfer, sales, value added, stamp duty and similar Taxes payable in connection with the transactions contemplated hereby will be borne by Buyer.

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ARTICLE IV.

THE CLOSING

SECTION 4.1.Closing Date

The closing of the (i) sale and transfer of the Transferred Assets and (ii) license of the Product Technology pursuant to Section 2.4 (the “Closing”) will take place at the offices of Seller at 1090 Horsham Road, North Wales, PA 19454, or at another place designated by Seller, remotely via the exchange of documents by electronic mail and overnight carrier service on the first Business Day following the date on which all of the conditions to each party’s obligations under Article X have been satisfied or (if permitted) waived, or at such other time, date and/or place as mutually agreed to by the parties hereto (such date of the Closing being hereinafter referred to as the “Closing Date”).  The parties will use their reasonable best efforts to cause the Closing Date to occur on the same date as the date of the Allergan Closing.

SECTION 4.2.Transactions to Be Effected at the Closing

At the Closing:

(a) Seller will deliver or cause to be delivered to Buyer each of the items referred to in Section 10.2(d), in each case appropriately executed; and

(b) Buyer will deliver or cause to be delivered to Seller (i) each of the items referred to in Section 10.3(d), in each case appropriately executed, and (ii) payment of the Purchase Price by wire transfer in immediately available funds, to the account or accounts designated in writing by Seller to Buyer.

ARTICLE V.

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller hereby represents and warrants to Buyer as follows:

SECTION 5.1.Seller Organization; Good Standing

Seller is a corporation duly organized, validly existing and in good standing under the Laws of Israel. Seller has the requisite power and authority to own and transfer all rights to the Transferred Assets, to license the Product Technology pursuant to Section 2.4 and to carry on its business as currently conducted.  Seller is duly qualified to conduct business as a foreign corporation and is in good standing in each jurisdiction where the nature of the business conducted by it makes such qualification necessary, except where the failure to so qualify or be in good standing would not have a Material Adverse Effect.  Teva Pharmaceutical Industries Ltd. is the Respondent to the Order.

SECTION 5.2.Authority; Execution and Delivery

Seller has the requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby and thereby.  The execution and delivery of this Agreement by Seller and the consummation of the transactions contemplated hereby have been duly and validly authorized and no other corporate proceeding is necessary on the part of Seller.  This Agreement has been duly executed and delivered by Seller and, assuming the due authorization, execution and delivery of this Agreement by Buyer, will constitute the legal, valid and binding obligation of Seller, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other similar Laws affecting creditors’ rights generally from time to time in effect and to general principles of equity (including concepts of materiality, reasonableness, good faith and fair dealing), regardless of whether considered in a proceeding in equity or at Law.

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SECTION 5.3.Consents; No Violation, Etc.

The execution and delivery of this Agreement do not, and the consummation of the transactions contemplated hereby and the compliance with the terms hereof will not:

(a) violate any Governmental Rule applicable to Seller,

(b) conflict with any provision of the certificate of incorporation or by-laws (or similar organizational document) of Seller,

(c) except as set forth on Schedule 5.3, conflict with any contract to which Seller is a party or by which it is otherwise bound, including any Contract related to any of the Products, or result in the creation of any Encumbrance upon any of the Transferred Assets (other than a Permitted Encumbrance),

(d) subject to the foregoing clause (c), to the Knowledge of Seller, violate any rights of any third party; or

(e) except as set forth on Schedule 5.3, require any approval, authorization, consent, license, exemption, filing or registration with any court, arbitrator or Governmental Entity other than approval of the FTC,

except, with respect to the foregoing clauses (a) and (c), for such violations or conflicts which would not have a Material Adverse Effect or materially interfere with Seller’s performance of its obligations hereunder and, with respect to the foregoing clause (e), (i) for receipt of FDA approval of any Product ANDA related to a Product that has not been approved by the FDA as of the Effective Date and (ii) otherwise, for such approvals, authorizations, consents, licenses, exemptions, filings or registrations that, if not obtained or made, would not have a Material Adverse Effect or interfere with Seller’s performance of its obligations hereunder.

SECTION 5.4.Title to Transferred Assets

Seller has good and valid title to all of the Transferred Assets, the right to license the Product Technology pursuant to Section 2.4 free and clear of all Encumbrances, other than Permitted Encumbrances. Except as expressly set forth in this Agreement, all of the Transferred Assets are being sold, assigned, conveyed or delivered (as applicable) to Buyer on an “As is” “Where is” basis without representations or warranties of any kind, express or implied, including but not limited to any warranty of merchantability or fitness for a particular purpose or infringement of third party rights, and all such warranties are disclaimed.

SECTION 5.5.Litigation

(a) There is no material suit, claim, action, investigation or proceeding pending or, to the Knowledge of Seller, threatened against Seller, that relates to the Transferred Assets, the Assumed Liabilities or the Product Technology that (i) challenges or seeks to prevent or enjoin the transactions contemplated by this Agreement, or (ii) has not been disclosed to Buyer in writing on Schedule 5.5(a) prior to the execution of this Agreement.

(b) Except as set forth on Schedule 5.5(b) hereto, during the twelve-month period ending on the Effective Date (i) Seller has not received any written notice from any other Person challenging its ownership or rights to use any intellectual property relating to the Products, (ii) there has not been any, and there are no, material suits, claims, actions, investigations or proceedings pending or, to the Knowledge of Seller, threatened against Seller, relating to its ownership or rights to use any intellectual property relating to the Products and (iii) there has not been any, and there are no, product liability suits, claims, actions, investigations or proceedings of any kind, including product liability, tort or breach of contract, pending or, to the Knowledge of Seller, threatened against Seller, relating to the Products or the Product Technology.

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SECTION 5.6.Regulatory Issues

(a) Except as may be disclosed on Schedule 5.6(a) hereto, during the twelve-month period ending on the Effective Date, (i) with respect to the Products only, Seller has not received:  (A) any FDA Form 483s or warning letters directly relating to the Products or the facilities in which the Products are manufactured; or (B) any FDA Notices of Adverse Findings with respect to the Products; and (ii) there has not been a recall or market withdrawal of any Product by Seller, whether voluntary or involuntary.

(b) Schedule 5.6(b) hereto sets forth a true and complete list of all documents that have been made available to Buyer that sets forth (i) adverse drug experience information, (ii) material events and matters concerning or affecting safety and (iii) medical inquiries and complaints brought to the attention of the Seller in respect of the Products.

SECTION5.7. No Brokers

Except as may be disclosed on Schedule 5.7 hereto, Seller has not entered into any agreement, arrangement or understanding with any Person or firm which will result in the obligation to pay any finder’s fee, brokerage commission or similar payment in connection with the transactions contemplated hereby.

SECTION 5.8. Exclusive Representations and Warranties

Other than the representations and warranties set forth in this Article V, Seller is not making any other representations or warranties, express or implied, with respect to the Products or the Transferred Assets or the Product Technology or any other matter, including but not limited to any warranty of merchantability or fitness for a particular purpose or infringement of third party rights, and all such warranties are disclaimed.

SECTION 5.9. Regulatory Commitments

Seller has complied in all material respects with all obligations arising from or related to any commitments to any Governmental Entity involving any Products. Seller and its Affiliates have been since January 1, 2014 in compliance in all material respects with all Laws applicable to the Transferred Assets and the Product Technology.

SECTION 5.10. Contracts to be Assumed; Customers

(a) Other than (i) the Assigned Contracts, (ii) any purchase orders or (iii) other Contracts with Customers there are no other material Contracts related to the Products.

(b) Each Contract that is a Transferred Asset is a legal, valid and binding obligation of Seller and is in full force and effect and, to the Knowledge of Seller, each other party thereto, enforceable against Seller and each other party in accordance with its terms (except as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws now or hereafter in effect relating to or affecting creditors’ rights generally, and subject to the limitations imposed by general equitable principles, regardless of whether such enforceability is considered in a proceeding at Law or in equity).  Seller has performed all material obligations under any such Contract, has not received notice from any party claiming or alleging that Seller has breached or is in default thereunder and Seller is not (with or without lapse of time or notice, or both) in material breach or material default thereunder.  To the Knowledge of Seller, each other party to each such Contract is not in material breach or default thereunder.

(c) Schedule 5.10(c) hereto sets forth (i) a true and complete list of Customers as of the Effective Date (the “Customer List”), and (ii) a list of active pharmaceutical ingredients in respect of the Products, the supplier thereof and the cost of such ingredients on a per kilogram basis.

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SECTION 5.11.Inventory.

Schedule 5.11 provides a true and accurate description of  the inventory levels in respect of Seller’s three largest wholesalers of all Products,  by Stock Keeping Unit (SKU) as of May 23, 2016 (or subsequent month end, if available) as communicated to Seller by such wholesalers.

SECTION 5.12. Assets.

Except for those assets used pursuant to, and materials, goods and services provided under, the Supply Agreement, the Transferred Assets, Product Technology and the rights to be acquired under this Agreement and the Supply Agreement constitute all of the material assets used or held for use by Seller with respect to the Transferred Assets.

SECTION 5.13. Absence of Certain Changes.

Since June 3, 2016, through the Effective Date, except as required by this Agreement or the Ancillary Agreements or in connection with the consummation of the transaction contemplated hereby, (i) Seller has conducted its business with respect to the Products and the Transferred Assets in all material respects in the ordinary course, and (ii) Seller has not taken any action (or made any omission) that, if taken (or omitted) after the Effective Date without the consent of Buyer would constitute a material violation of  Section 7.1.

ARTICLE VI.

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer hereby represents and warrants to Seller as follows:

SECTION 6.1. Buyer’s Organization; Good Standing

Buyer is a corporation duly organized, validly existing and in good standing under the Laws of the State of Wyoming.  Buyer has all requisite corporate power and authority to carry on its business as it is currently being conducted.  Buyer is duly qualified to conduct business as a foreign corporation and is in good standing in every jurisdiction where the nature of the business conducted by it makes such qualification necessary, except where the failure to so qualify or be in good standing would not prevent or materially delay the consummation of the transactions contemplated hereby.

SECTION 6.2. Authority; Execution and Delivery

Buyer has the requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby.  The execution and delivery of this Agreement by Buyer and the consummation of the transactions contemplated hereby have been duly and validly authorized.  This Agreement has been duly executed and delivered by Buyer and, assuming the due authorization, execution and delivery of this Agreement by Seller, constitutes the legal, valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other similar Laws affecting creditors’ rights generally from time to time in effect and to general principles of equity (including concepts of materiality, reasonableness, good faith and fair dealing), regardless of whether considered in a proceeding in equity or at Law.

SECTION 6.3. Consents; No Violations, Etc.

The execution and delivery of this Agreement do not, and the consummation of the transactions contemplated hereby and the compliance with the terms hereof will not (i) violate any Governmental Rule applicable to Buyer, (ii) conflict with any provision of the certificate of incorporation or by-laws of Buyer, (iii) conflict with any material contract to which Buyer is a party or by which it is otherwise bound or (iv) require any approval, authorization, consent, license, exemption, filing or registration with any court, arbitrator or Governmental Entity, other than

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approval of the FTC, except with respect to the foregoing clauses (i) and (iii), for such violations or conflicts which would not materially interfere with Buyer’s performance of its obligations hereunder or, with respect to the foregoing clause (iv), for the Order and such approvals, authorizations, consents, licenses, exemptions, filings or registrations which have been obtained or made or which, if not obtained or made, would not materially interfere with Buyer’s performance of its obligations hereunder.

SECTION 6.4. Litigation

There is no suit, claim, action, investigation or proceeding pending or, to the Knowledge of Buyer, threatened against Buyer or any of its Affiliates which, if adversely determined, would materially interfere with the ability of Buyer to perform its obligations hereunder or the consummation of the transactions contemplated hereby.

SECTION 6.5. Development

As of the date hereof, Buyer has not begun developing a generic version of any Product, has not filed a Product ANDA for a generic version of any Product.

SECTION 6.6. No Brokers

Buyer has not entered into any agreement, arrangement or understanding with any Person or firm which will result in the obligation to pay any finder’s fee, brokerage commission or similar payment in connection with the transactions contemplated hereby for which Seller could be liable.

SECTION 6.7. Availability of Funds

As of the Closing Date, Buyer will have cash available that is sufficient to enable it to make payment of the Purchase Price, to satisfy all of the Assumed Liabilities and to make all other necessary payments in connection with transactions contemplated by this Agreement as and when required.

SECTION 6.8. Solvency

(a) Immediately following the Closing, and after giving effect to all of the transactions contemplated by this Agreement, Buyer will be Solvent.  In connection with the transactions contemplated by this Agreement, Buyer is not making any transfer of property and is not incurring any Liability with the intent to hinder, delay, or defraud, either present or future creditors of Buyer.

(b) For purposes of this Agreement, “Solvent” when used with respect to Buyer or the Transferred Assets acquired by Buyer hereunder means, as applicable, that immediately following the Closing Date, (i) the amount of the Present Fair Saleable Value of its assets will, as of such date, exceed all of its known Liabilities as of such date, (ii) such Person will not have, as of such date, an unreasonably small amount of capital for the business in which it is engaged or will be engaged, and (iii) such Person will be able to pay its Debts as they become absolute and mature, taking into account the timing of and amounts of cash to be received by it and the timing of and amounts of cash to be payable on or in respect of its Debts.

(c) For purposes of the definition of “Solvent”:  (i) “Debt” means Liability on a Payment Right and “Payment Right” means (A) any right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured or (B) the right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured; and (ii) “Present Fair Saleable Value” means, with respect to Buyer or the Transferred Assets being acquired by Buyer hereunder, the amount that may be realized if its aggregate assets (including its goodwill) are sold as an entirety with reasonable promptness in an arm’s-length transaction under present conditions for the sale of comparable business enterprises.

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SECTION 6.9.Independent Investigation; No Seller Warranty

(a) Buyer has conducted its own independent investigation, review, and analysis of the Transferred Assets, the Products, the Product Technology and the Assumed Liabilities, has formed an independent judgment concerning the Transferred Assets, the Products, the Product Technology and the Assumed Liabilities and acknowledges that it has been provided adequate access to the personnel, properties, assets, premises, books and records, and other documents and data of Seller, for such purpose.

(b) Buyer acknowledges and represents that: (i)  in making its decision to enter into this Agreement and to consummate the transactions contemplated hereby, Buyer has relied solely upon its own investigation and the express representations and warranties of Seller set forth in this Agreement (including the related portions of the Schedules) and any certificates delivered hereunder; and (ii) neither Seller nor any other Person has made, and the Buyer is not relying on, any representation or warranty, express or implied, as to the accuracy or completeness of any information regarding Seller, its Affiliates, the Transferred Assets, the Products, the Product Technology or the Assumed Liabilities not expressly set forth in this Agreement (including any information, documents and materials made available to Buyer in any electronic data room or any repository of information, management presentations, or in any other form in expectation of the transactions contemplated hereby), and neither Seller nor any other Person will have or be subject to any Liability to Buyer or any other Person resulting from the distribution to Buyer or its representatives or Buyer’s use of any such information.

ARTICLE VII.

CERTAIN COVENANTS AND AGREEMENTS OF SELLER

SECTION 7.1. Conduct of Business Until Closing

During the period from the date of this Agreement and continuing until the Closing, Seller agrees that:

(a) Ordinary Course. Seller will conduct its business with respect to the Products and the Transferred Assets in all material respects in the ordinary course and in substantially the same manner as presently conducted and in accordance with the Order of the FTC, including, without limitation, by using commercially reasonable efforts to, in each case in accordance with past practices hereof and reasonable industry standards, (i) maintain sales of Products and customer inventory levels in respect thereof in accordance with past practices, historical sales data provided by Seller to Buyer pursuant to Section 7.6 hereof and reasonable industry standards, (ii) not engage in any special promotional activities including special discounts, (iii) not waive any material claims or rights related to the Products or the Transferred Assets, (iv) not terminate, modify or waive any material provision of any Assigned Contract, (v) with respect to the Products and the Transferred Assets, as applicable,  not materially alter the activities and practices with respect to inventory levels of the Products maintained at the wholesale, chain, institutional or retail levels in any material respect, (vi) seek FDA approval for the Product ANDA for any pipeline Product that has not already been approved by the FDA as of the Effective Date, (vii) maintain any Product ANDAs that have been approved by the FDA as of the Effective Date, (viii) comply with any Laws and FDA requests or requirements in respect of the Product ANDAs or the manufacture, distribution and sale of any of the Products pursuant to the Product ANDAs, in each case, in any material respect, (ix) maintain any Assigned Patents, (x) maintain, in all material respects, the assets reasonably necessary to the manufacture of the Products, (xi) maintain sales efforts and sales levels consistent in all material respects with past practice, or (xii) not agree, in writing or otherwise, to take or authorize the taking of any actions that conflict with the foregoing; provided, however, that nothing contained herein will be deemed to require the expenditures of any funds outside of the ordinary course of business. Seller will not, without the prior written consent of Buyer (which consent shall not be unreasonably withheld, conditioned or delayed), amend or modify any Assigned Contract in a manner adverse to Buyer in any material respect, including any change in any price therein.

(b) No Dispositions. Seller will not sell, lease, license, encumber, pledge or transfer, or agree to sell, lease, license encumber, pledge or transfer, any of the Transferred Assets or the Product Technology.

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(c)No Settlements.  Seller will not, without the prior written consent of Buyer (such consent not to be unreasonably withheld), (i) settle or agree to settle any claim, suit, action or other proceeding relating to the Products or the Transferred Assets brought against it by any Governmental Entity; provided, however, this Section 7.1(c) shall not apply with respect to the Order or (ii) initiate or agree to initiate any claim, suit, action or other proceeding relating to the Products or the Transferred Assets except to protect the Products or the Transferred Assets.

SECTION 7.2. Post-Closing Orders and Payments

From and after 12:01 A.M. (New York, New York, USA time) on the Closing Date, (i) Seller will promptly deliver to Buyer any payments received by Seller from third parties for Finished Goods purchased by the third parties from Buyer on or after the Closing Date, and refer all inquiries it will receive with respect to the Products (other than with respect to Excluded Assets or Excluded Liabilities), to Buyer or its designee; and (ii) Buyer will promptly deliver to Seller any payments received by Buyer from third parties for Finished Goods purchased by third parties from Seller or its Affiliates prior to the Closing.

SECTION 7.3. Technology Transfer; Assistance with Buyer Regulatory Filings

(a) Seller and Buyer will use commercially reasonable efforts to effect an orderly transfer of the Product Technology from Seller to Buyer pursuant to the terms of this Agreement as soon as practicable following the Closing Date.  Seller will provide reasonable cooperation and assistance to Buyer, including making available Seller personnel, in connection with such transfer of the Product Technology and Buyer’s preparation of all filings required to be filed with the FDA by Buyer with respect to such transfer of the Product Technology.  Each party will bear the Direct Costs incurred by it and its Affiliates in connection with its activities undertaken under this Section 7.3(a).

(b) Except with respect to Seller’s assistance in connection with the transfer of the Product Technology as set forth above in Section 7.3(a), Buyer shall have sole responsibility for obtaining, and shall use commercially reasonable efforts to obtain, all regulatory approvals necessary for the offer, sale, importation, manufacture, distribution, marketing, promotion, import, export, pricing and reimbursement of the Products, including, without limitation, supplementing the Product ANDA to include facilities designated by Buyer and to delete Seller’s facilities, and assuming all responsibility for maintenance of the Product ANDAs.  All decisions regarding the validation of Products and the conduct of regulatory activities with respect to the Products after the Closing Date shall be made by Buyer in its sole and absolute discretion, and all such regulatory activities shall be at its sole cost.

SECTION 7.4. Seller’s NDC Numbers

Buyer and its Affiliates will (i) sell Products only under Buyer NDC Numbers and (ii) not sell any Product under Seller’s or its Affiliates names, in each case save to the extent contemplated or permitted hereunder and under the Supply Agreement.

SECTION 7.5. Competition

(a) The parties hereto agree and acknowledge that the provisions of this Agreement will not be construed to limit or restrict in any manner the right of Seller or any of its Affiliates to develop, manufacture, use, sell or commercialize in any manner any pharmaceutical product, including any product competitive with the Products if sold under a Product ANDA or other filing that is not being purchased by Buyer as part of the Transferred Assets hereunder, either in the Territory or outside of the Territory.

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(b)Nothing contained in this Agreement will be construed as prohibiting Seller or any of its Affiliates from: (i) acquiring (whether by merger, asset or stock acquisition or otherwise) another company, business or line of products (including by license thereof or through investment therein), which makes, has made, sells, has sold, markets, has marketed, distributes or has distributed or otherwise represents a product which is substantially similar to or equivalent to a Product and continuing to operate such company, business or line of products following such acquisition; or (ii) entering into a joint venture, alliance or other similar collaborative arrangement between Seller or any of its Affiliates thereof and any third party which joint venture makes, has made, sells, has sold, markets, has marketed, distributes or has distributed a product which is substantially similar to or equivalent to a Product and continuing to participate in such collaboration.

SECTION 7.6. Sales Data; Customer

(a) On the Effective Date, Seller shall deliver to Buyer monthly net sales data for the Products (as calculated by Seller in accordance with its standard practice) for the previous six (6) month period, including details on units.

(b) Within two (2) Business Days after the Closing Date, Seller shall update the Customer List and the information required to be provided pursuant to Section 7.6(a) as necessary, to ensure that such information remains materially accurate and complete up to and including the Closing Date.

(c) On or after the date that is five (5) Business Days prior to the anticipated Closing Date, but in no event earlier than such date, and subject to Section 8.3 hereof, Buyer may contact the Customers to promote the Products and the distribution thereof. The parties hereto agree that as of the Closing Date, Buyer shall be permitted to distribute the Customer Notices to customers that have purchased the Products during the previous six (6) month period (the “Customers”).

ARTICLE VIII.

CERTAIN COVENANTS AND AGREEMENTS

SECTION 8.1. Insurance

At all times from the Closing Date through that date which is three (3) years after the termination or expiration of this Agreement, Buyer will maintain product liability and other insurance for itself (either in its own name or in the name of its Affiliates) in amounts, respectively, which are reasonable and customary in the USA pharmaceutical industry for companies of comparable size, provided that in no event shall the product liability insurance amounts be less than $15,000,000 per occurrence and $25,000,000 in the aggregate limit of liability per year.  Buyer shall provide the Seller with written proof of such insurance upon Seller’s request.

SECTION 8.2. Books and Records

Buyer will preserve all books and records included within the Transferred Assets for applicable periods of time as required by the FDA or FTC and, subject to Section 8.3 hereof, make such books and records available for inspection and copying by Seller or its agents upon reasonable request and upon reasonable notice.

SECTION 8.3. Confidentiality

Each party hereto or its Affiliates or contractors (a “Disclosing Party”) may, from time to time, prior to or after the Effective Date, disclose to the other party (the “Receiving Party”) information of a technical or non-technical nature that is not generally known to the trade or public.  The Receiving Party agrees that it will not use for any purpose other than as necessary to perform its obligations under this Agreement and the Supply Agreement, and will not disclose to anyone in any manner whatsoever, any such information, including, without limitation, information relating in any way to the products, processes, and services of the Disclosing Party, which becomes known to the Receiving Party on or prior to the latter of the date of the (a) termination of this Agreement or (b) termination or expiration of the Supply Agreement.  The obligations of this Section 8.3 will not apply to information that (i) is known to the Receiving Party as shown by written records prior to its disclosure by the Disclosing Party or

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its Affiliates or its contractors; (ii) becomes public information or is generally available to the public other than by an unauthorized act or omission of the Receiving Party; or (iii) is received by the Receiving Party from third parties who are in rightful possession of such information and who are lawfully entitled to disclose such information to the Receiving Party and did not receive such information from Disclosing Party.  From and after the Closing Date, the Transferred Assets and all confidential information related solely and exclusively to the Transferred Assets or the manufacture thereof shall be considered the confidential information of Buyer under this Section 8.3 and the obligations of this Section 8.3 in respect thereof will apply to Seller and not the Buyer.  It being understood for the avoidance of doubt, that, without limitation, to the extent any confidential information related to the Transferred Assets or the manufacture thereof is used by the Seller in the retained business thereof, such confidential information shall constitute the confidential information of both Parties.  Upon the latter of (x) the date of termination of this Agreement or (y) the termination or expiration of the Supply Agreement, the Receiving Party will return to the Disclosing Party all documents that include confidential information of the Disclosing Party or its contractors (other than the Transferred Assets), including all copies of such documents or extracts therefrom, if any, and will make no further use of such information.  To the extent that the confidential information relates to the Products, each Disclosing Party or Receiving Party, as the case may be, shall create an internal firewall and use reasonable best efforts to protect against the disclosure of such information to such Disclosing Party’s or Receiving Party’s, as the case may be, marketing and sales personnel.  Effective as of the Closing, the Confidentiality Agreement will terminate without further action by the parties thereto.

SECTION 8.4. Assumption of Regulatory Commitments

From and after the Closing Date, except as set forth in the terms set forth in Appendix III or the pharmacovigilance agreement to be entered into by the parties pursuant to the Supply Agreement, Buyer will assume control of, and responsibility for all costs and Liabilities arising from or related to any commitments or obligations to any Governmental Entity involving the Products, only to the extent arising from or relating to Product sold by Buyer after the Closing Date.

SECTION 8.5. Bulk Transfer Laws

Buyer hereby waives compliance by Seller with the provisions of any so-called “bulk transfer law” of any jurisdiction in connection with the sale of the Transferred Assets to Buyer.

SECTION 8.6. Buyer NDC Numbers; Buyer Trademarks and Buyer Trade Dress Changes

Buyer covenants and agrees that, if not already applied for, immediately following the Effective Date (if permitted by Governmental Rule), or otherwise within five (5) days of the Closing Date, Buyer will apply for and initiate applicable processes to obtain and establish new NDC Numbers (the “Buyer NDC Numbers”) and notify Seller thereof.

SECTION 8.7. Response to Medical Inquiries and Products Complaints

After the Closing Date, except as set forth in the terms set forth in Appendix III or the pharmacovigilance agreement to be entered into by the parties pursuant to the Supply Agreement, Buyer will assume all responsibility for responding to any medical inquiries or complaints about the Products in the Territory.

SECTION 8.8. Transition of Manufacturing Services.

Buyer and Seller will use commercially reasonable efforts to coordinate with each other to facilitate an orderly transition to Buyer of the supply of Products presently manufactured by third-party manufacturers for Seller pursuant to the Assigned Contracts.  In furtherance thereof, promptly after the Effective Date, Buyer and Seller shall mutually agree on the manner in which they shall jointly contact such third-party manufacturers and the content of such communications regarding the transition of the supply of Products from Seller to Buyer, including the assignment of any applicable Assigned Contracts to Buyer.

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SECTION 8.9.Use of Transferred Assets

Nothing contained in this Agreement will be construed as prohibiting Buyer or any of its Affiliates from: (a) acquiring (whether by merger, asset or stock acquisition or otherwise) another company, business or line of products (including by license thereof or through investment therein), which makes, has made, sells, has sold, markets, has marketed, distributes or has distributed or otherwise represents a product which is substantially similar to or equivalent to a Product and continuing to operate such company, business or line of products following such acquisition; or (b) entering into a joint venture, alliance or other similar collaborative arrangement between Buyer or any of its Affiliates thereof and any third party which joint venture makes, has made, sells, has sold, markets, has marketed, distributes or has distributed a product which is substantially similar to or equivalent to a Product, and continuing to participate in such arrangement.

ARTICLE IX.

OTHER COVENANTS AND AGREEMENTS

SECTION 9.1. Trade Returns, Medicaid Rebates, Chargebacks

(a) (i) Buyer will, at its expense, process and bear the cost of returns of any Products bearing Buyer’s NDC Number sold by Buyer or its Affiliates and returned in accordance with Buyer’s returned goods policy (“Buyer Returns”) and (ii) Seller will, at its expense, process and bear the cost of returns on or after the Closing Date of all Products other than Buyer Returns.

(b) Seller and Buyer will be responsible for processing and payment of all Medicaid Reimbursements and Rebates for the Products sold bearing their respective NDC Numbers.

(c) Seller will be responsible for any and all payments, rebates, administrative fees or chargebacks due to customers under Seller’s contracts for Products bearing the Seller NDC Number which were sold by Seller or its Affiliates (“Seller Payments”).  Buyer agrees that Seller shall have no responsibility for, and “Seller Payments” shall not include, credits for shelf stock adjustments or similar adjustments resulting from price decreases on or after the Closing Date.  Buyer will be responsible for all payments, rebates, administrative fees or chargebacks due in connection with any and all sales of Products by or on behalf of Buyer, other than Seller Payments.

(d) Notwithstanding any term or provision of this Section 9.1 to the contrary, the parties agree that the terms set forth in Appendix III shall control the obligations of each party with respect to Medicaid Reimbursements and Rebates, returns, rebates, adverse event reporting, audits, administrative fees, chargebacks and shelf stock adjustments as more specifically set forth therein relating to sales of the Transition Products initially supplied to Buyer bearing the Seller NDC Numbers.

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SECTION 9.2.Adverse Experience Reports

Seller shall continue to be responsible for adverse experience reporting to the FDA until the Closing Date.  On and after the Closing Date, Buyer and Seller shall negotiate in good faith and agree on a process and procedure for sharing adverse event information for the Products in which Seller will manufacture and supply Buyer from a retained ANDA, which shall be documented in a pharmacovigilance agreement to be entered into by the parties pursuant to the Supply Agreement.  For all other Products, Seller shall at all times provide to Buyer all adverse drug experience information brought to the attention of Seller in respect of the Products manufactured by Seller or its Affiliates, as well as any material events and matters concerning or affecting safety of the Products manufactured by Seller or its Affiliates.  At and after the Closing, Seller shall cooperate with Buyer’s requests regarding adverse experience information in respect of the Products to ensure that all adverse experience data is transferred to Buyer.  After the Closing Date, subject to this Agreement, the Supply Agreement, the Quality Agreement and any other agreement executed between the parties and/or their Affiliates with respect to any Product, Seller will submit to Buyer all adverse drug experience information brought to the attention of Seller in respect of the Products, as well as any material events and matters concerning or affecting safety of the Products.  After the Closing Date, any new adverse experience reports or any follow-up adverse experience reports received by Seller will be forwarded to Buyer, together with any source documents.

SECTION 9.3. Transfer of Product ANDAs, Etc.

(a) Seller will cooperate with Buyer in disclosing any relevant records and reports which are required to be made, maintained and reported pursuant to Governmental Rules in the Territory with respect to the Product ANDAs that are part of the Transferred Assets.

(b) The parties hereto agree to use their reasonable efforts to take any other actions required by the FDA to effect the transactions contemplated hereby.  On the Closing Date, each of the parties hereto will take any actions necessary to effect the transfer of the Product ANDAs from Seller to Buyer, including notices to the FDA regarding such transfer from Seller to Buyer of the Product ANDAs.  Each party shall bear its own costs related thereto. Seller shall use its commercially reasonably efforts and take all necessary actions to seek to cause the transfer of hard copies (to the extent reasonably in Seller’s possession) of the Product ANDAs to Buyer as soon as reasonably practicable after the Closing.

SECTION 9.4. Further Action; Consents; Filings

(a) Upon the terms and subject to the conditions hereof, each of Buyer and Seller will use commercially reasonable efforts to (i) take, or cause to be taken, all actions necessary, proper or advisable under applicable Governmental Rules or otherwise to satisfy the conditions to Closing set forth in Article X and consummate and make effective the transactions contemplated by this Agreement, (ii) obtain from the requisite Governmental Entities any consents, licenses, permits, waivers, approvals, authorizations or orders required to be obtained or made in connection with the authorization, execution and delivery of this Agreement and the consummation of the transactions contemplated by this Agreement and (iii) make all necessary filings, and thereafter make any other advisable submissions, with respect to this Agreement and the transactions contemplated by this Agreement required under any applicable Governmental Rules, including without limitation all filings with the FDA, or any other Governmental Entity, needed to permit Buyer to manufacture the Products in a timely and reasonable manner.  Each of Seller and Buyer will provide copies of all non-confidential documents to the other party and its advisors prior to filing and, if requested, will accept all reasonable additions, deletions or changes suggested in connection therewith.  Each of Seller and Buyer will furnish all information required for any application or other filing to be made pursuant to the rules and regulations of any applicable Governmental Rules in connection with the transactions contemplated by this Agreement.

(b) Each of Buyer and Seller shall use reasonable best efforts to obtain from the FTC preliminary approval for Buyer as the purchaser of the Transferred Assets.  Each of Buyer and Seller agrees to cooperate and use its reasonable best efforts vigorously to contest and resist any action, including legislative, administrative or judicial action, and to have vacated, lifted, reversed or overturned any decree, judgment, injunction or other order (whether temporary, preliminary or permanent) that is in effect and that restricts, prevents or prohibits the consummation of

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the transactions contemplated by this Agreement, including by vigorously pursuing all available avenues of administrative and judicial appeal and all available legislative action.

SECTION 9.5. Compliance with the Federal Trade Commission Decision

Reference is made to the Order.  The parties hereto agree that the provisions set forth in Appendix II, which provisions are called for by the Order, are incorporated into this Agreement as if set forth in their entirety in this Agreement.  To the extent the provisions of Appendix II conflict with the provisions of this Agreement or the provisions of the Supply Agreement, the provisions of Appendix II shall govern.

SECTION 9.6. Representations to Customers.

During the two (2) year period following the Closing, Buyer and Seller each agrees not to make any false and/or disparaging statements about any Product.

SECTION 9.7. Preservation of Data Room.

Seller shall deliver to Buyer one copy of a compact disc or DVD-ROM containing a true, correct and complete copy of the materials in the Intralinks electronic data room sponsored by Seller no more than ten (10) days after the Closing Date.  

ARTICLE X.

CONDITIONS PRECEDENT

SECTION 10.1. Conditions to Each Party’s Obligations

The obligation of Buyer to purchase the Transferred Assets from Seller and assume the Assumed Liabilities and the obligations of Seller to sell, assign, convey and deliver the Transferred Assets to Buyer will be subject to the satisfaction prior to the Closing of the following conditions:

(a) No Litigation, Injunctions, or Restraints.  No temporary restraining order, preliminary or permanent injunction or other legal restraint or prohibition preventing the consummation of the transactions contemplated by this Agreement will be threatened or in effect.

(b) FTC Preliminary Approval.  The FTC shall have preliminarily approved the Buyer as the purchaser of the Transferred Assets hereunder.

(c) Allergan Closing.  The Allergan Closing shall have occurred.

(a) Related Transactions.  Prior to or concurrently with the Closing the transactions contemplated by the Other Acquisition Agreement shall have been consummated.

SECTION 10.2. Conditions to Obligations of Buyer

The obligation of Buyer to purchase the Transferred Assets from Seller and to assume the Assumed Liabilities is subject to the satisfaction on and as of the Closing of each of the following additional conditions (any or all of which may be waived in whole or in part by Buyer):

(a) Representations and Warranties.  The representations and warranties of Seller set forth in this Agreement will be true and correct (without giving effect to any materiality or Material Adverse Effect qualifications set forth therein) in all respects as of the Closing as though made on and as of the Closing, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties will be true and correct as of such earlier date), and except in each case for breaches of such representations and warranties that would not, individually or in the aggregate, have a Material Adverse Effect.

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CONFIDENTIAL DRAFT – FOR DISCUSSION PURPOSES ONLY

(b)Performance of Obligations of Seller. Seller will have performed or complied in all material respects with the obligations, conditions and covenants required to be performed by it under this Agreement at or prior to the Closing.

(c) No Material Adverse Effect.  There shall not have been a Material Adverse Effect.

(d) Deliveries.  Seller will have duly executed and delivered to Buyer, dated as of the Closing Date, the (i) Ancillary Agreements, (ii) Seller Officer’s Certificate and (iii) Required Third Party Consents.

SECTION 10.3. Conditions to the Obligations of Seller

The obligations of Seller to sell, assign, convey, and deliver the Transferred Assets, or to cause the Transferred Assets to be sold, assigned, conveyed or delivered, as applicable, to Buyer are subject to the satisfaction on and as of the Closing of each of the following additional conditions (any or all of which may be waived in whole or in part by Seller):

(a) Representations and Warranties.  The representations and warranties of Buyer set forth in this Agreement will be true and correct (without giving effect to any materiality or similar qualifications set forth therein) in all respects as of the Closing as though made on and as of the Closing, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties will be true and correct as of such earlier date), and except in each case for breaches of such representations and warranties that would not, individually or in the aggregate, have a Material Adverse Effect.

(b) Performance of Obligations of Buyer.  Buyer will have performed in all material respects the obligations required to be performed by it under this Agreement at or prior to the Closing.

(c) Purchase Price.  Buyer will have paid the Purchase Price.

(d) Deliveries.  Buyer will have duly executed and delivered to Seller, dated as of the Closing Date, the (i) Ancillary Agreements, (ii) the Buyer Officer’s Certificate and (iii) Required Third Party Consents

ARTICLE XI.

TERMINATION, AMENDMENT AND WAIVER

SECTION 11.1. Termination

(a) Notwithstanding anything to the contrary in this Agreement, this Agreement may be terminated and the transactions contemplated hereby abandoned at any time prior to the Closing:

(i) by mutual written consent of Seller and Buyer;

(ii) by Seller if any of the conditions set forth in Section 10.1 or 10.3 will have become incapable of fulfillment and will not have been waived by Seller;

(iii) by Buyer if any of the conditions set forth in Section 10.1 or 10.2 will have become incapable of fulfillment and will not have been waived by Buyer;

(iv) by Seller or Buyer if the Closing does not occur on or prior to one year from the Effective Date; provided, however, that the right to terminate this Agreement pursuant to this clause (iv) shall not be available to any party hereto whose action or failure to fulfill any obligation under this Agreement has been the primary cause of the failure of the Closing to have occurred on or prior to one year from the Effective Date;

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CONFIDENTIAL DRAFT – FOR DISCUSSION PURPOSES ONLY

(v) by Seller, if Buyer is not preliminarily approved by the FTC or other necessary Governmental Entity as a purchaser of the Transferred Assets hereunder; 

(vi) by Seller, if the staff of the FTC informs Seller in writing that the staff will not recommend approval of Buyer as purchaser of the Transferred Assets hereunder; or

(vii) by Seller or Buyer if the Allergan Agreement is terminated prior to the consummation of the transactions contemplated by the Allergan Agreement.

provided, however, that the party seeking termination pursuant to clause (ii), (iii) or (iv) is not in breach of any of its representations, warranties, covenants or agreements contained in this Agreement.

(b) In the event of termination of this Agreement pursuant to this Section 11.1, written notice thereof will forthwith be given to the other party and the transactions contemplated by this Agreement will be terminated, without further action by any party.  If the transactions contemplated by this Agreement are terminated as provided herein:

(i) Buyer will return all documents and other material received from Seller relating to the Products, the Transferred Assets, the Product Technology or the transactions contemplated hereby, whether so obtained before or after the execution hereof, to Seller and, if applicable, Seller shall return any delivered portions of the Purchase Price to Buyer;

(ii) all confidential information received by Buyer with respect to Seller, the Products, the Transferred Assets or the Product Technology will be treated in accordance with Section 8.3, which will remain in full force and effect notwithstanding the termination of this Agreement; and

(iii) the Supply Agreement shall be terminated.

(c) If this Agreement is terminated, no party hereto and none of their respective directors, officers, stockholders, Affiliates or controlling Persons shall have any further liability or obligation under this Agreement, except as set forth in paragraphs (a) and (b) of this Section, except that (i) nothing in this Section 11.1 will be deemed to release any party from any liability for any willful and material breach by such party of the terms and provisions of this Agreement, and (ii) the provisions of Section 8.3 shall survive termination of this Agreement.

SECTION 11.2. Amendments and Waivers

This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.  By an instrument in writing, Buyer, on the one hand, or Seller, on the other hand, may waive compliance by the other party with any term or provision of this Agreement that such other party was or is obligated to comply with or perform.

SECTION 11.3. Rescission

If at the time the FTC determines to make final and effective its Order concerning the Proposed Allergan Transaction, the FTC notifies Seller that Buyer is not an acceptable purchaser of the Transferred Assets, then each of Seller and Buyer shall have the right immediately to rescind this Agreement, and the provisions of Sections 11.1(b) and 11.1(c) shall be applicable as if a termination of this Agreement had occurred.

SECTION 11.4. Modification

If at the time the FTC determines to make final and effective its Order concerning the Proposed Allergan Transaction, the FTC notifies Seller that this Agreement is not an acceptable manner of divestiture, Seller and Buyer shall reasonably seek to modify this Agreement as may be necessary to satisfy the FTC.

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CONFIDENTIAL DRAFT – FOR DISCUSSION PURPOSES ONLY

ARTICLE XII.

INDEMNIFICATION

SECTION 12.1. Survival

All representations and warranties of Seller and Buyer contained herein or made pursuant hereto shall survive the Closing Date and shall remain operative and in full force and effect for a period of twelve (12) months following the Closing Date (the “Expiration Date”).  Notwithstanding anything herein to the contrary, any breach of a representation or warranty that is the subject of a claim that is asserted in writing prior to the Expiration Date shall survive with respect to such claim or any dispute with respect thereto until the final resolution thereof.

SECTION 12.2. Indemnification by Seller

(a) Subject to Section 12.4, Seller hereby agrees that from and after the Closing Date, Seller shall indemnify Buyer and its Affiliates and their respective officers, directors and employees (the “Buyer Indemnified Parties”) against, and hold them harmless from, and pay and reimburse such Buyer Indemnified Parties for, any Losses to the extent such Losses arise from the following:

(i) any breach by Seller of any representation or warranty made by it contained in this Agreement;

(ii) any breach by Seller of any of its covenants, agreements or obligations contained in this Agreement; and

(iii) any and all Excluded Assets and/or Excluded Liabilities.

SECTION 12.3. Indemnification by Buyer

(a) Subject to Section 12.4 hereof, Buyer hereby agrees that from and after the Closing Date, Buyer shall indemnify Seller and its Affiliates and their respective officers, directors and employees (the “Seller Indemnified Parties”) against, and hold them harmless from, and pay and reimburse such Seller Indemnified Parties for, any Losses to the extent such Losses arise from the following:

(i) any breach by Buyer of any representation or warranty made by it contained in this Agreement;

(ii) any breach by Buyer of any of its covenants, agreements or obligations contained in this Agreement; and

(iii) any and all Assumed Liabilities.

Buyer Indemnified Parties and Seller Indemnified Parties are sometimes referred to herein as “Indemnified Parties”.

SECTION 12.4. Limitations.

(a) The amount of any Losses for which either Seller or Buyer, as the case may be, is liable shall be reduced by (i) the amount of any insurance proceeds actually paid to the Buyer Indemnified Party and the Seller Indemnified Party, as applicable, and (ii) the aggregate amount actually recovered under any Assigned Contract (if applicable) or any other indemnity agreement, contribution agreement, or other Contract between any of the Indemnified Parties, on the one hand, and any third Person, on the other hand, with respect to such Losses.

(b) Notwithstanding the other provisions of this Article XII, Seller shall not have any indemnification obligations for any individual Losses arising from or in connection with Section 12.2(a)(i) unless and until the aggregate amount of all such Losses together with the amount of all such Losses under the Other Acquisition Agreement exceed One Hundred Eighty Thousand Dollars ($180,000) (the “Deductible”), in which event Seller

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CONFIDENTIAL DRAFT – FOR DISCUSSION PURPOSES ONLY

shall be required to pay the full amount of such Losses to the extent exceeding the Deductible, but only up to a maximum aggregate amount with respect to this Agreement together with the Other Acquisition Agreement of Three Million Six Hundred Thousand Dollars ($3,600,000).

(c) In no event shall either party or any of its Affiliates be liable by reason of any breach of any representation, warranty, condition or other term of this Agreement or any duty of common law, for any punitive loss or damage and each party hereto agrees that it shall not make any such claim; provided that the foregoing does not limit any of the obligations or liability of either party or its Affiliates under Sections 12.2 and 12.3 with respect to claims of unrelated third parties.

(d) Neither Seller nor Buyer shall have any Liability under this Agreement in respect of any Loss if such Loss would not have arisen but for (i) a change in GAAP or (ii) a change in any Law after the Closing or a change in the interpretation of any Law after the Closing as determined by a Governmental Entity.

(e) For purposes of determining whether a breach of a representation or warranty has occurred for which indemnification is provided under this Article XII (but, for the sake of clarity, not for calculating the amount of Losses indemnifiable hereunder), any materiality, Material Adverse Effect or similar qualifications in such representation or warranty shall be disregarded.

(f) Except for claims based on fraud, the right of the Buyer Indemnified Parties and the Seller Indemnified Parties under this Article XII shall be the sole and exclusive monetary remedy of the Buyer Indemnified Parties and the Seller Indemnified Parties, as the case may be, with respect to matters covered hereunder, including but not limited to claims relating to the Products, the Transferred Assets or Product Technology, Assumed Liabilities or Excluded Liabilities and no Indemnified Party shall have any other cause of action or remedy at Law in equity for breach of contract, rescission, tort, or otherwise against the other party arising under or in connection with this Agreement and the matters and transactions contemplated hereby. Without limiting the generality of the preceding sentence, except in the case of specific performance and for claims based on fraud, no legal action sounding in contribution, tort, or strict liability (in each case, other than claims made or contemplated by this Article XII) may be maintained by an Indemnified Party, or any of its officers, directors, other governing bodies, employees, equityholders, owners, Affiliates, representatives, agents, successors, or assigns, against the Seller or Buyer or any of their Affiliates with respect to any matter that is the subject of Article XII, and Buyer and Seller, for themselves and the other Indemnified Parties and each of their respective officers, directors, other governing bodies, employees, equityholders, owners, Affiliates, representatives, agents, successors, and assigns, hereby waive any and all statutory rights of contribution or indemnification (other than rights of indemnification hereunder) that any of them might otherwise be entitled to under any Law with respect to any matter that is the subject of this Article XII.

SECTION 12.5. Procedure

(a) In order for an Indemnified Party to be entitled to any indemnification provided for under this Agreement, such Indemnified Party will, within a reasonable period of time following the discovery of the matters giving rise to any Losses, notify the indemnifying party under this Article XII (the “Indemnifying Party”) in writing of its claim for indemnification for such Losses, specifying in reasonable detail the nature of such Losses and the amount of the liability estimated to accrue therefrom; provided, however, that failure to give such notification will not affect the indemnification provided hereunder, except to the extent the Indemnifying Party will have been prejudiced as a result of such failure. Thereafter, the Indemnified Party will deliver to the Indemnifying Party, within a reasonable period of time after the Indemnified Party’s receipt of such request, all information and documentation reasonably requested by the Indemnifying Party with respect to such Losses.

(b) If the indemnification sought pursuant hereto involves a claim made by a third party against the Indemnified Party (a “Third Party Claim”), the Indemnifying Party will be entitled to assume the defense of such Third Party Claim at its own expense with counsel selected by the Indemnifying Party.  Should the Indemnifying Party so elect to assume the defense of a Third Party Claim, the Indemnifying Party will not be liable to the Indemnified Party for any legal expenses subsequently incurred by the Indemnified Party in connection with the defense thereof.  If the Indemnifying Party assumes such defense, the Indemnified Party will have the right to participate in the defense thereof and to employ counsel, at its own expense (which expense shall not constitute a Loss), separate from the counsel employed by the Indemnifying Party, it being understood that the Indemnifying

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CONFIDENTIAL DRAFT – FOR DISCUSSION PURPOSES ONLY

Party will control such defense.  The Indemnifying Party will be liable for the reasonable and documented fees and expenses of counsel employed by the Indemnified Party for any period during which the Indemnifying Party has not assumed the defense thereof (other than during any period in which the Indemnified Party will have failed to give notice of the Third Party Claim as provided above).  If the Indemnifying Party chooses to defend or prosecute a Third Party Claim, all of the parties hereto will cooperate in the defense or prosecution thereof.  Such cooperation will include the retention and (upon the Indemnifying Party’s request) the provision to the Indemnifying Party of records and information which are reasonably relevant to such Third Party Claim, and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. If the Indemnifying Party chooses to defend or prosecute any Third Party Claim, it will defend or prosecute it diligently and the Indemnifying Party will obtain the prior written consent of the Indemnified Party (not to be unreasonably withheld) before entering into any settlement, compromise or discharge of such Third Party Claim if (i) such settlement, compromise or discharge does not relate solely to monetary damages, (ii) such settlement, compromise or discharge does not expressly unconditionally and completely release the Indemnified Party from all Losses and liabilities with respect to such Third Party Claim, (iii) the Indemnifying Party is not directly paying the full amount of the Losses in connection with such Third Party Claim and (iv)  such settlement, compromise or discharge does not contain any admission of liability by the Indemnified Party or its Affiliates.  Whether or not the Indemnifying Party will have assumed the defense of a Third Party Claim, the Indemnified Party will not admit any liability with respect to, or settle, compromise or discharge, such Third Party Claim without the Indemnifying Party’s prior written consent (not to be unreasonably withheld).

(c) If an indemnification payment is received by Buyer Indemnified Party or Seller Indemnified Party, as applicable, and such Indemnified Party later receives insurance proceeds in respect of the related Losses or other recoveries under section 12.4(a)(ii) above that were not previously credited against such indemnification payment when made, such Indemnified Party shall promptly pay to the Indemnifying Party, an amount equal to the lesser of (A) such insurance proceeds or other recoveries, with respect to such Losses and (B) the net indemnification payment previously paid by such Indemnifying Party with respect to such Losses.  Each Indemnified Party shall use reasonable and good faith efforts to collect amounts available under available insurance coverage and promptly and diligently pursue such claims relating to any Losses for which it is seeking indemnification.

(d) Each Indemnified Party shall take, and shall cause its Affiliates to take, all reasonable steps to mitigate any Loss upon becoming aware of any event or circumstance that would reasonably be expected to, or such Indemnified Party believes does, give rise thereto, including incurring costs only to the minimum extent necessary to remedy the breach that gives rise to such Loss; provided, that such failure to use such efforts in accordance with the foregoing shall not relieve the Indemnifying Party of its indemnification obligations under this Article XII except and only to the extent that the Indemnifying Party is prejudiced thereby.

SECTION 12.6. Adjustment to Purchase Price.

Seller and Buyer agree to treat all payments made either to or for the benefit of the other party under this Agreement as adjustments to the Purchase Price for Tax purposes to the extent permitted under applicable Tax Law.

ARTICLE XIII.

GENERAL PROVISIONS

SECTION 13.1. Expenses

Except as otherwise specified in this Agreement and the Supply Agreement, all costs and expenses, including fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated hereby will be paid by the party incurring such costs and expenses, whether or not the Closing will have occurred. For the avoidance of doubt, Buyer will not have any obligation to make any payment in respect of the initial Firm Order (as defined in the Supply Agreement) if this Agreement is terminated prior to the Closing Date.

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CONFIDENTIAL DRAFT – FOR DISCUSSION PURPOSES ONLY

SECTION 13.2.Further Assurances and Actions

Each of the parties hereto, upon the request of the other party hereto, whether before or after the Closing and without further consideration, will do, execute, acknowledge and deliver or cause to be done, executed, acknowledged or delivered all such further acts, deeds, documents, assignments, transfers, conveyances, powers of attorney and assurances as may be reasonably necessary to effect complete consummation of the transactions contemplated by this Agreement.  Seller and Buyer agree to execute and deliver such other documents, certificates, agreements and other writings and to take such other actions as may be reasonably necessary in order to consummate or implement expeditiously the transactions contemplated by this Agreement. From and after the Closing, each of the parties shall cooperate and use their respective commercially reasonable efforts to take, or cause to be taken, all appropriate action, and do, or cause to be done, and assist and cooperate with the other parties in doing, all things reasonably requested by the other party hereto with respect to the transactions contemplated hereby.

SECTION 13.3. Notices

All notices and other communications required or permitted to be given or made pursuant to this Agreement shall be in writing signed by the sender and shall be deemed duly given (a) on the date delivered, if personally delivered, (b) on the date sent by telecopier with automatic confirmation by the transmitting machine showing the proper number of pages were transmitted without error, (c) on the Business Day after being sent by Federal Express or another recognized overnight mail service which utilizes a written form of receipt for next day or next business day delivery or (d) two (2) Business Days after mailing, if mailed by U.S. postage-prepaid certified or registered mail, return receipt requested, in each case addressed to the applicable party at the address set forth below; provided that a party may change its address for receiving notice by the proper giving of notice hereunder:

if to Seller, to:

Teva Pharmaceutical Industries Ltd.

5 Basel Street

P.O.B. 3190

Petach Tikvah, Israel

Attention: Dror Bashan

Email: Dror.Bashan@teva.co.il

and

Teva Pharmaceuticals USA, Inc.

425 Privet Road

PO Box 1005

Horsham, PA 19044 U.S.A.

Attention: General Counsel

Fax: (215) 293-6499

With a copy (which shall not constitute notice) to:

Kirkland & Ellis LLP

601 Lexington Avenue

New York, NY 10022

Attention: Daniel E. Wolf

Facsimile: (212) 446-6460

and

Kirkland & Ellis LLP

655 Fifteenth Street, N.W.

Washington, D.C. 20005

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CONFIDENTIAL DRAFT – FOR DISCUSSION PURPOSES ONLY

Attention:Mark Kovner

Facsimile: (202) 879-5200

if to Buyer, to:

Sagent Pharmaceuticals, Inc.

1901 N. Roselle Road, Suite 700

Schaumburg, IL 60195

Attention:  Michael V. Ward
Facsimile: (847) 908-1601

With a copy (which shall not constitute notice) to:

Katten Muchin Rosenman LLP

525 W. Monroe

Chicago, IL 60661

Attention:  Brian J. Sodikoff
Facsimile:(312) 902-1061

SECTION 13.4. Headings

The table of contents and headings contained in this Agreement are for reference purposes only and will not affect in any way the meaning or interpretation of this Agreement.

SECTION 13.5. Severability

If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced under any 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 contemplated hereby 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 hereto will negotiate in good faith to modify this Agreement so as to effect the original intent of the parties hereto as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.

SECTION 13.6. Counterparts

This Agreement may be executed in one or more counterparts, all of which will be considered one and the same agreement and will become effective when one or more counterparts have been signed by each of the parties hereto and delivered to the other parties hereto, it being understood that all parties hereto need not sign the same counterpart.

SECTION 13.7. Entire Agreement; No Third-Party Beneficiaries

This Agreement and the Exhibits and Schedules hereto, together with the Ancillary Agreements, constitute the entire agreement and supersede all prior agreements and understandings, both written and oral (including any letter of intent, memorandum of understanding or term sheet), between or among the parties hereto with respect to the subject matter hereof.  Except as specifically provided herein, this Agreement is not intended to confer upon any Person other than the parties hereto any rights or remedies hereunder.  Effective as of the Closing Date, the parties hereto acknowledge and agree that the supply agreement between Buyer and Seller, dated as of October 31, 2013, and amended as of September 10, 2014 and all other agreements related thereto, shall be terminated as to the Products being purchased through this Agreement and have no further force or effect as to those Products, except that, to the extent any provision therein survives termination of such agreement, such provision will survive in accordance with the terms therewith.  Notwithstanding any terms of this Agreement including this section, all agreements between Buyer and Seller relating to Topotecan HCl shall remain unchanged by this Agreement.

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CONFIDENTIAL DRAFT – FOR DISCUSSION PURPOSES ONLY

SECTION 13.8.Governing Law

This Agreement and any and all matters arising directly or indirectly herefrom shall be governed by and construed and enforced in accordance with the Laws of the State of New York, U.S.A. applicable to agreements made and to be performed entirely in such State.

SECTION 13.9. Jurisdiction, Venue, Service of Process, WAIVER OF JURY TRIAL

(a) Buyer and Seller agree to irrevocably submit to the exclusive jurisdiction of (i) the Supreme Court of the State of New York, New York County, or (ii) the United States District Court for the Southern District of New York, U.S.A., for the purposes of any suit, action or other proceeding arising out of this Agreement or any transaction contemplated hereby.  Each party agrees to commence any such action, suit or proceeding either in the United States District Court for the Southern District of New York, U.S.A. or, if such suit, action or other proceeding may not be brought in such court for jurisdictional reasons, in the Supreme Court of the State of New York, New York County.  Each party further agrees that service of any process, summons, notice or document by U.S. registered mail or recognized international courier service to such party’s respective address set forth in Section 13.3 of this Agreement shall be effective service of process for any action, suit or proceeding in New York with respect to any matters to which it has submitted to jurisdiction in this Agreement.  Each party irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in (i) the Supreme Court of the State of New York, New York County, or (ii) the United States District Court for the Southern District of New York, U.S.A.

(b) THE BUYER AND THE SELLER HEREBY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION (I) ARISING UNDER THIS AGREEMENT OR (II) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY, OR OTHERWISE.  THE PARTIES TO THIS AGREEMENT EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

SECTION 13.10. Specific Performance

The parties hereto agree that irreparable damage may occur in the event any provision of this Agreement were not performed in accordance with its terms and that the parties hereto will be entitled to seek specific performance of such terms, in addition to any other remedy at Law or in equity, without the necessity of demonstrating the inadequacy of monetary damages and without the posting of a bond.

SECTION 13.11. Allergan

Notwithstanding anything to the contrary contained herein, Buyer, on behalf of itself and its Affiliates acknowledges that neither Allergan nor any of its Affiliates shall have any Liability under this Agreement or for any claim based on, in respect of, or by reason of, the transactions contemplated hereby, including, but not limited to, any dispute related to, or arising from, the Transferred Assets.

SECTION 13.12. Publicity

Neither party will make any public announcement concerning, or otherwise publicly disclose, any information with respect to the transactions contemplated by this Agreement or any of the terms and conditions hereof without the prior written consent of the other parties hereto, which consent will not be unreasonably withheld.  Notwithstanding the foregoing, either party may make any public disclosure concerning the transactions contemplated hereby that in the view of such party’s counsel may be required by Law or the rules of any stock

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CONFIDENTIAL DRAFT – FOR DISCUSSION PURPOSES ONLY

exchange on which such party’s or its Affiliates’ securities trade; provided, however, the party making such disclosure will provide the non-disclosing party with a copy of the intended disclosure reasonably, and to the extent practicable, prior to public dissemination, and the parties hereto will coordinate with one another regarding the timing, form and content of such disclosure.

SECTION 13.13. Assignment

Neither party may assign its rights or obligations under this Agreement without the prior written consent of the other party; provided, however, that after the Closing Date either party may assign its rights and obligations under this Agreement (including without limitation the Licenses and the covenant not to sue contained in Section 2.5), without the prior written consent of the other party, to an Affiliate or to a successor of the assigning party by reason of merger, sale of all or substantially all of its assets or portion of its business which relates to a Product or any number of the Products, or any similar transaction.  Any permitted assignee or successor-in-interest will assume all obligations of its assignor under this Agreement.  No assignment will relieve either party of its responsibility for the performance of any obligation.  This Agreement will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

[signature page follows]

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IN WITNESS WHEREOF, the parties hereto have caused this Asset Purchase Agreement to be signed by their respective representatives thereunto duly authorized, all as of the date first written above.

TEVA PHARMACEUTICAL

INDUSTRIES LTD.

By:

Name:

Title:

By:

Name:

Title:

SAGENT PHARMACEUTICALS, INC.

By:

Name:

Title:

EXHIBIT A

Assignment and Assumption Agreement

(see attached)

EXHIBIT B

Bill of Sale

(see attached)

EXHIBIT C

Products

(see attached)

EXHIBIT D

Supply Agreement

(see attached)

EXHIBIT E

Purchase Price Allocation

(see attached)

EXHIBIT F

Form of Customer Notice

(see attached)

Appendix III

Seller NDC Number Transition Services

(see attached)

Disclosure Schedules

(see attached)

EX-10.3

Exhibit 10.3

ASSET PURCHASE AGREEMENT

AMONG

ACTAVIS GROUP PTC EHF

ACTAVIS LLC

AND

SAGENT PHARMACEUTICALS, INC.

DATED AS OF

JUNE 15, 2016

TABLE OF CONTENTS

		Page
ARTICLE I. DEFINITIONS		1
SECTION 1.1.	Definitions	1
SECTION 1.2.	Interpretation	6
SECTION 1.3.	Currency	6
SECTION 1.4.	Incorporation by Reference and Supremacy of FTC Order	8
ARTICLE II. SALE AND PURCHASE OF TRANSFERRED ASSETS		7
SECTION 2.1.	Purchase and Sale	7
SECTION 2.2.	Transferred Assets	7
SECTION 2.3.	Assumption of Certain Liabilities and Obligations	8
SECTION 2.4.	License to Certain Product Technology	8
SECTION 2.5.	Covenant Not to Sue.	9
SECTION 2.6.	Nonassignable Assets.	9
ARTICLE III. PURCHASE PRICE		9
SECTION 3.1.	Purchase Price	9
SECTION 3.2.	Allocation of Purchase Price	9
SECTION 3.3.	Transfer Taxes	9
ARTICLE IV. THE CLOSING		10
SECTION 4.1.	Closing Date	10
SECTION 4.2.	Transactions to Be Effected at the Closing	10
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF SELLER		10
SECTION 5.1.	Seller Organization; Good Standing	10
SECTION 5.2.	Authority; Execution and Delivery	10
SECTION 5.3.	Consents; No Violation, Etc.	11
SECTION 5.4.	Title to Transferred Assets	11
SECTION 5.5.	Litigation	11
SECTION 5.6.	Regulatory Issues	12
SECTION 5.7.	No Brokers	12
SECTION 5.8.	Exclusive Representations and Warranties	12
SECTION 5.9.	Regulatory Commitments	12
SECTION 5.10.	Contracts to be Assumed; Customers	12
SECTION 5.11.	Inventory.	13
SECTION 5.12.	Assets.	13
SECTION 5.13.	Absence of Certain Changes.	13
ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF BUYER		13
SECTION 6.1.	Buyer’s Organization; Good Standing	13
SECTION 6.2.	Authority; Execution and Delivery	13
SECTION 6.3.	Consents; No Violations, Etc.	13
SECTION 6.4.	Litigation	14
SECTION 6.5.	Development	14
SECTION 6.6.	No Brokers	14
SECTION 6.7.	Availability of Funds	14
SECTION 6.8.	Solvency	14
SECTION 6.9.	Independent Investigation; No Seller Warranty	15

ARTICLE VII. CERTAIN COVENANTS AND AGREEMENTS OF SELLER		15
SECTION 7.1.	Conduct of Business Until Closing	15
SECTION 7.2.	Post-Closing Orders and Payments	16
SECTION 7.3.	Technology Transfer; Assistance with Buyer Regulatory Filings	16
SECTION 7.4.	Seller’s NDC Numbers	16
SECTION 7.5.	Competition	16
SECTION 7.6.	Sales Data; Customer	17
ARTICLE VIII. CERTAIN COVENANTS AND AGREEMENTS		17
SECTION 8.1.	Insurance	17
SECTION 8.2.	Books and Records	17
SECTION 8.3.	Confidentiality	17
SECTION 8.4.	Assumption of Regulatory Commitments	18
SECTION 8.5.	Bulk Transfer Laws	18
SECTION 8.6.	Buyer NDC Numbers; Buyer Trademarks and Buyer Trade Dress Changes	18
SECTION 8.7.	Response to Medical Inquiries and Products Complaints	18
SECTION 8.8.	Transition of Manufacturing Services.	18
SECTION 8.9.	Use of Transferred Assets	18
ARTICLE IX. OTHER COVENANTS AND AGREEMENTS		19
SECTION 9.1.	Trade Returns, Medicaid Rebates, Chargebacks	19
SECTION 9.2.	Adverse Experience Reports	19
SECTION 9.3.	Transfer of Product ANDAs, Etc.	19
SECTION 9.4.	Further Action; Consents; Filings	20
SECTION 9.5.	Compliance with the Federal Trade Commission Decision	20
SECTION 9.6.	Representations to Customers.	20
SECTION 9.7.	Preservation of Data Room.	20
ARTICLE X. CONDITIONS PRECEDENT		21
SECTION 10.1.	Conditions to Each Party’s Obligations	21
SECTION 10.2.	Conditions to Obligations of Buyer	21
SECTION 10.3.	Conditions to the Obligations of Seller	21
ARTICLE XI. TERMINATION, AMENDMENT AND WAIVER		22
SECTION 11.1.	Termination	22
SECTION 11.2.	Amendments and Waivers	23
SECTION 11.3.	Rescission	23
SECTION 11.4.	Modification	23
ARTICLE XII. INDEMNIFICATION		23
SECTION 12.1.	Survival	23
SECTION 12.2.	Indemnification by Seller	24
SECTION 12.3.	Indemnification by Buyer	24
SECTION 12.4.	Limitations.	24
SECTION 12.5.	Procedure	25
SECTION 12.6.	Adjustment to Purchase Price.	26
ARTICLE XIII. GENERAL PROVISIONS		26
SECTION 13.1.	Expenses	26
SECTION 13.2.	Further Assurances and Actions	26
SECTION 13.3.	Notices	27
SECTION 13.4.	Headings	29
SECTION 13.5.	Severability	29
SECTION 13.6.	Counterparts	29

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SECTION 13.7.	Entire Agreement; No Third-Party Beneficiaries	29
SECTION 13.8.	Governing Law	29
SECTION 13.9.	Jurisdiction, Venue, Service of Process, WAIVER OF JURY TRIAL	29
SECTION 13.10.	Specific Performance	30
SECTION 13.11.	Allergan	30
SECTION 13.12.	Publicity	30
SECTION 13.13.	Assignment	30

Exhibit A	Assignment and Assumption Agreement
Exhibit B	Bill of Sale
Exhibit C	Products
Exhibit D	Supply Agreement
Exhibit E	Purchase Price Allocation
Appendix I	Proposed Order/Final Order
Appendix II	Provisions from Order

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ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this “Agreement”), dated as of June 15, 2016 (the “Effective Date”), is made by and among Sagent Pharmaceuticals, Inc., a Wyoming corporation (“Buyer”), Actavis Group PTC Ehf., an Iceland einkahlutafelag (“Actavis PTC”) and Actavis LLC, a Delaware limited liability company (“Actavis LLC” and, together with Actavis PTC, each a “Seller” and, collectively, the “Sellers”).

WHEREAS, the FTC staff has raised the concern that the proposed acquisition (the “Proposed Allergan Transaction”) of certain businesses and assets of Allergan plc (“Allergan”) by Teva Pharmaceutical Industries Ltd. (“Teva”), pursuant to the Allergan Agreement, is likely to produce anticompetitive effects in the alleged relevant product market(s) in the United States for the generic pharmaceutical products listed on Exhibit C (other than Argatroban and as such products are more specifically identified in this Agreement), which would not be in the public interest, including, but not limited to, by eliminating competition between Teva and Allergan;

WHEREAS, in order to resolve the concerns raised by the FTC staff in these alleged product markets in the United States, Sellers have agreed to enter into this Agreement with Buyer to divest certain assets related to these products to Buyer, and to permit Buyer to replace the lost competition by manufacturing, marketing and selling the generic products referred to above into the respective alleged product markets;

WHEREAS, the FTC has or is about to issue an Order governing the scope, nature, extent and requirements of this Agreement;

WHEREAS, Sellers sell the Products (as defined herein) commercially and/or have a Product ANDA (as defined herein) filed with the FDA with respect to the Products;

WHEREAS, upon and subject to the Allergan Closing, Sellers desire to sell to Buyer, and Buyer desires to purchase from Sellers, certain Transferred Assets (as defined herein) related to the Products within the Territory (as defined herein), all upon the terms and subject to the conditions hereinafter set forth; and

WHEREAS, concurrently with the execution of this Agreement, an Affiliate of the Sellers entered into an asset purchase agreement with Buyer related to the Order (the “Other Acquisition Agreement”), pursuant to which such Affiliate of Sellers have agreed to sell to Buyer, and Buyer has agreed to purchase from such Affiliate of Sellers, certain Transferred Assets (as defined in the Other Acquisition Agreement) related to the Products (as defined in the Other Acquisition Agreement) within the Territory (as defined in the Other Acquisition Agreement), all upon the terms and conditions set forth therein.

NOW, THEREFORE, in consideration of the mutual covenants herein contained and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE I.

DEFINITIONS

SECTION 1.1. Definitions

As used in this Agreement, the following terms have the meanings set forth below:

“Affiliate” means any Person that controls, is controlled by, or is under common control with the applicable Person.  For purposes of this definition, “control” shall mean: (a) in the case of corporate entities, direct or indirect ownership of more than fifty percent (50%) of the stock or shares entitled to vote for the election of directors, or otherwise having the power to control or direct the affairs of such Person; and (b) in the case of non-corporate entities, direct or indirect ownership of more than fifty percent (50%) of the equity interest or the power to direct the management and policies of such noncorporate entities.

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

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

“Allergan Agreement” means the Master Purchase Agreement dated as of July 26, 2015 by and between Allergan and Teva, as it may be amended from time to time.

“Allergan Closing” means the closing of the Proposed Allergan Transaction pursuant to the Allergan Agreement.

“Ancillary Agreements” means, collectively, the Supply Agreement, the Bill of Sale, and the Assignment and Assumption Agreement.

“Argatroban” means generic Argabtroban Injection, 100mg / mL, 2.5 mL vial with the Product ANDA number 206587.

“Assigned Contracts” means the Contracts set forth on Schedule 2.2(a)(vi) hereto, but solely with respect to the applicable Product, or Contracts or arrangements conferring substantially equivalent rights with respect to the applicable Products.

“Assignment and Assumption Agreement” means an assignment and assumption agreement to be executed and delivered by Buyer and the applicable Seller(s) at Closing, substantially in the form of Exhibit A.

“Assumed Liabilities” has the meaning set forth in Section 2.3(a).

“Bill of Sale” means a bill of sale to be executed and delivered by the applicable Seller(s) to Buyer at Closing, substantially in the form of Exhibit B.

“Business Day” means any day other than a Friday, Saturday, Sunday or other day on which banks in the U.S. or Israel are permitted or required to close by Law.

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

“Buyer Indemnified Parties” has the meaning set forth in Section 12.2.

“Buyer NDC Numbers” has the meaning set forth in Section 8.6.

“Buyer Officer’s Certificate” means a certificate, dated the Closing Date, duly executed by an authorized officer of Buyer, reasonably satisfactory in form to the Sellers, as to the satisfaction of the conditions set forth in Sections 10.3(a) and (b).

“Buyer Returns” has the meaning set forth in Section 9.1(a).

“Closing” and “Closing Date” have the respective meanings set forth in Section 4.1.

“Confidentiality Agreement” means the Confidentiality Agreement between Seller and Buyer, dated September 24, 2015.

“Contracts” means contracts, leases, licenses, indentures, agreements, purchase orders and all other legally binding arrangements, whether in existence on the date hereof or subsequently entered into, including all amendments thereto.

“Customer List” has the meaning set forth in Section 5.10(c) hereof.

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“Customers” means customers that have purchased the Products during the six (6) month period prior to the date hereof.

“Deductible” has the meaning set forth in Section 12.4(b).

“Direct Cost” means the cost of (i) direct labor and direct material used and (ii) all other reasonable out of pocket expenses, in each case, to provide the relevant assistance or service.

“Disclosing Party” has the meaning set forth in Section 8.3.

“Effective Date” has the meaning set forth in the preamble.

“Encumbrance” means, with respect to any asset, any imperfection of title, mortgage, charge, lien, security interest, easement, right of way, pledge or encumbrance of any nature whatsoever.

“Excluded Assets” has the meaning set forth in Section 2.2(b).

“Excluded Liabilities” has the meaning set forth in Section 2.3(b).

“Exhibits” means, collectively, the Exhibits referred to throughout this Agreement.

“Expiration Date” has the meaning set forth in Section 12.1.

“FDA” means the U.S. Food and Drug Administration or any successor United States governmental agency performing similar functions with respect to pharmaceutical products.

“Finished Goods” means each of the Products, respectively, packaged, labeled and ready for distribution and sale in finished form.

“FTC” means the U.S. Federal Trade Commission.

“GAAP” means United States generally accepted accounting principles, consistently applied.

“Governmental Entity” means any nation or government or any court, administrative agency or commission or other governmental authority, body or instrumentality, whether U.S. (federal, state, country, municipal or other) or non-U.S.

“Governmental Rule” means any Law, judgment, order, decree, statute, ordinance, rule or regulation enacted, issued or promulgated by any Governmental Entity.

“Indemnified Party” has the meaning set forth in Section 12.3.

“Indemnifying Party” has the meaning set forth in Section 12.5(a).

“Knowledge” of (i) Seller means all such facts, circumstances or other information, of which Daniel Motto, Sr. (SVP, Business Development & Portfolio Management) and Eric Schumacher (VP Business Development) are actually aware and (ii) Buyer means all such facts, circumstances or other information, of which Michael Ward (Chief Legal Officer and Corporate Secretary) and Jonathon Singer (Chief Financial Officer and Executive Vice President) are actually aware.

“Law” means each federal, state, provincial, municipal, local, or foreign law, statute, ordinance, order, determination, judgment, common law, code, rule, official standard, or regulation, enacted, enforced, entered, promulgated, or issued by any Governmental Entity.

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“Liabilities” means any and all debts, liabilities and obligations of any kind, nature, character or description, whether accrued or fixed, absolute or contingent, matured or unmatured, or known or unknown, including those arising under any Governmental Rule or action and those arising under any Contract, arrangement, commitment or undertaking, or otherwise.

“License” has the meaning set forth in Section 2.4(a).

“Losses” means any and all damages, losses, Liabilities, claims, judgments, penalties, payments, interest, costs and expenses (including reasonable and documented legal fees, accountants’ fees and expert witnesses’ fees and expenses incurred in investigating and/or prosecuting any claim for indemnification).

“Material Adverse Effect” means an effect which has had or would reasonably be expected to have, a materially adverse effect on the Transferred Assets or Product Technology taken as a whole, but will not include (a) any adverse change or effect due to changes in conditions generally affecting (i) the healthcare industry or (ii) the United States economy as a whole, or (b) any change or adverse effect caused by, or relating to (i) the commencement, occurrence, continuation, or intensification of any national or international political conditions, including the engagement by the United States or any other country or group in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack upon the United States or any other country, or any of its territories, possessions, or diplomatic or consular offices or upon any military installation, equipment, or personnel of the United States or any other country or group, (ii) financial, banking, or securities markets (including any disruption thereof and any decline in the price of any security or any market index), (iii) any changes in Law or accounting rules (including GAAP) or the enforcement, implementation or interpretation thereof, (iv) the occurrence, continuation or intensification of any earthquakes, hurricanes, pandemics, or other natural disasters, or any other force majeure event, whether or not caused by any Person, or any national or international calamity or crisis, (v) compliance with the terms of, or the taking of any action required by, this Agreement or the transactions contemplated hereby (other than with respect to Argatroban, including any action reasonably required by, or condition or other term reasonably imposed by, the FTC in connection with the Order) or (vi) the execution, announcement or pendency of this Agreement and the transactions contemplated by this Agreement; provided, however, that the changes set forth in the foregoing clauses (a)(i), (b)(iii) and (b)(iv) shall be taken into account in determining whether a “Material Adverse Effect” has occurred to the extent (and only to the extent) such changes have a disproportionate impact on the Transferred Assets or the Products, in each case, when compared to similar companies or products in the pharmaceutical industry.

“Medicaid Reimbursements and Rebates” means all discounts, rebates, reimbursements or other payments required by Governmental Rule to be made under Medicaid, Medicare or other governmental special medical assistance programs.

“NDA” means a New Drug Application as defined in the United States Food, Drug, and Cosmetic Act.

“NDC” means a national drug code as issued by the FDA.

“NDC Numbers” means the NDC Number for each of the Products, respectively.

“Order” means the Decision and Order relating to the Products issued by the FTC in the proceeding captioned In the Matter of Teva Pharmaceutical Industries Ltd., a corporation.

“Other Acquisition Agreement” has the meaning set forth in the recitals.

“Permitted Encumbrances” means (a) any minor imperfections of title or similar Encumbrance that do not, and would not reasonably be expected to, individually or in the aggregate, materially impair the value or materially interfere with the use of, the Transferred Assets or the Product Technology, (b) Encumbrances for Taxes that are not yet due and payable, (c) Encumbrances that will be released at Closing, (d) statutory Encumbrances arising out of operation of Law with respect to a Liability incurred in the ordinary course of business and which is not delinquent, (e) Encumbrances incurred as a result of any facts or circumstances related to Buyer or its Affiliates and (f) Encumbrances set forth on Schedule 1.1(a).

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“Person” means any individual, corporation, partnership, limited liability company, joint venture, trust, business association, organization, Governmental Entity or other entity.

“Product ANDA” means, for each of the Products, respectively, the Abbreviated New Drug Application (as defined in the United States Food, Drug, and Cosmetic Act) identified on Exhibit C, and all amendments and supplements thereto, that have been filed with the FDA seeking authorization and approval to manufacture, package, ship and sell such Products, as more fully defined in 21 C.F.R. Part 314.

“Products” means the Products listed on Exhibit C hereto to be purchased pursuant to this Agreement.

“Product Scientific and Regulatory Material” means, with respect to each Seller, all technological, scientific, development, chemical, biological, pharmacological, toxicological, regulatory, clinical trial materials, product safety related information (including periodic safety update reports and adverse event database information), written correspondence with any Governmental Entity (including warning letters) and other data, files, records and other information (in any form or medium, wherever located) similar to the foregoing, in each case to the extent solely related to the Products that are owned by such Seller in its possession or control.

“Product Technology” means, with respect to each Seller, the following information owned by or to the extent licensed to such Seller, as in existence and in the possession of such Seller as of the Closing Date:  the manufacturing technology, proprietary or confidential information, processes, techniques, protocols, methods, improvements and know-how that are necessary to manufacture the Products in accordance with the current applicable Product ANDA, as the case may be, including, but not limited to, the manufacturing process approved in the applicable Product ANDAs, specifications and test methods, raw material, packaging, stability and other applicable specifications, manufacturing and packaging instructions, master formula, validation reports to the extent available, stability data, analytical methods, records of complaints, annual product reviews to the extent available, and other master documents necessary for the manufacture, control and release of the Products as conducted by, or on behalf of, such Seller or any of its Affiliates before the Effective Date.  The Product Technology includes without limitation the rights owned or to the extent controlled by such Seller under any patent issued in or subject to a pending application in the Territory as of the Closing Date, and any rights under any patent or patent application outside of the Territory solely to the extent necessary to manufacture the Products outside the Territory for importation to and sale in the Territory.  For purposes of this definition, Allergan and its Affiliates will not be deemed to be Affiliates of such Seller.

“Proposed Allergan Transaction” has the meaning set forth in the recitals.

“Purchase Price” has the meaning set forth in Section 3.1.

“Quality Agreement” means the Quality Agreement to be executed by Buyer and Sellers pursuant to the Supply Agreement.

“Receiving Party” has the meaning set forth in Section 8.3.

“Required Third Party Consents” means the consents and approvals set forth on Schedule 1.1(b).

“Schedules” means, collectively, the Schedules referred to throughout this Agreement.

“Seller” or “Sellers” has the meaning set forth in the preamble.

“Seller Indemnified Parties” has the meaning set forth in Section 12.3(a).

“Seller Officer’s Certificate” means a certificate, dated the Closing Date, duly executed by an authorized officer of Sellers, reasonably satisfactory in form to Buyer, as to the satisfaction of the conditions set forth in Sections 10.2(a), (b) and (c).

“Seller Payments” has the meaning set forth in Section 9.1(c).

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“Seller Taxes” means all (i) Taxes arising out of, relating to or otherwise in respect of the Transferred Assets that are attributable to taxable periods, or portions thereof, ending on or prior to the Closing Date; and (ii) Taxes imposed on, or incurred by, Sellers or any of their Affiliates for which Sellers or their Affiliates are liable that do not arise out of, relate to or otherwise are not in respect of the Transferred Assets.

“Specifications” has the meaning set forth in the Supply Agreement.

“Supply Agreement” means the Supply Agreement to be executed by Sellers and Buyer, in substantially the form attached hereto as Exhibit D.

“Tax” or “Tax(es)” means all taxes, levies or other governmental assessments, including income, excise, property, sales or use, value added, profits, license, withholding (with respect to compensation or otherwise), payroll, employment, net worth, capital gains, transfer, stamp, social security, environmental, occupation and franchise taxes, imposed by any taxing authority, and including any interest, penalties and additions attributable thereto.

“Tax Return” means any report, return, election, notice, estimate, declaration, information statement and other forms and documents (including all schedules, exhibits and other attachments thereto) relating to and filed or required to be filed with a taxing authority in connection with any Taxes (including estimated Taxes).

“Territory” means the United States of America and its territories, protectorates and possessions, including Puerto Rico.

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

“Third Party Claim” has the meaning set forth in Section 12.5(b).

“Transferred Assets” has the meaning set forth in Section 2.2(a).

“U.S.” or “U.S.A.” means the United States of America.

SECTION 1.2. Interpretation

(a) When used in this Agreement, the words “include”, “includes” and “including” will be deemed to be followed by the words “without limitation.” Any terms defined in the singular will have a comparable meaning when used in the plural, and vice-versa.

(b) Reference to any Person includes such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by this Agreement, and reference to a Person in a particular capacity excludes such Person in any other capacity.

(c) Reference to any agreement (including this Agreement), document or instrument means such agreement, document or instrument as amended, modified or supplemented and in effect from time to time in accordance with the terms thereof and, if applicable, the terms hereof.

(d) When a reference is made in this Agreement to an Article, a Section, an Exhibit or a Schedule, such reference shall be to an Article of, a Section of, an Exhibit to or a Schedule to, this Agreement unless otherwise indicated.

SECTION 1.3. Currency

All currency amounts referred to in this Agreement are in U.S. Dollars, unless otherwise specified.

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SECTION 1.4. Incorporation by Reference and Supremacy of FTC Order

(a) Incorporation of FTC Order. The parties hereby agree and acknowledge that the terms and provisions of the Order of the FTC shall govern this Agreement, except with respect to Argatroban. A copy of the Order proposed as of the date hereof is attached as Appendix I, and upon issuance by the FTC, the final Order shall replace the currently proposed Order as Appendix I attached hereto without any other action by the parties hereto. The terms and provisions of the Order that pertain to this Agreement are hereby deemed incorporated by reference into this Agreement, except with respect to Argatroban.

(b) Supremacy of FTC Order. Except with respect to Argatroban, to the extent that any term or provision of this Agreement conflicts with any corresponding term or provision of the Order, the parties hereby agree that the terms or provisions of the Order shall control the rights and obligations of the parties.

(c) Publicity of Order.  Buyer acknowledges that the Order will be publicly available and will include information regarding the Products, the Buyer and certain information regarding this Agreement and the Ancillary Agreements.

ARTICLE II.

SALE AND PURCHASE OF TRANSFERRED ASSETS

SECTION 2.1. Purchase and Sale

Upon the terms and subject to the conditions of this Agreement, on the Closing Date, each Seller will sell, assign, transfer, convey and deliver to Buyer, and Buyer will purchase, acquire and accept, all right, title and interest, within the Territory, of such Seller in, to and under the Transferred Assets free and clear of all Encumbrances other than Permitted Encumbrances.

SECTION 2.2. Transferred Assets

(a) The term “Transferred Assets” means, with respect to each Seller, the following assets of such Seller, as the same exist on the Closing Date that relate solely and exclusively to the Products (and for the avoidance of doubt, excluding the Excluded Assets):

(i) the Product ANDAs;

(ii) any correspondence with the FDA in such Seller’s possession or control with respect to the Product ANDAs;

(iii) annual and periodic reports relating to the Product ANDAs which have been filed by or on behalf of such Seller with the FDA, and adverse event reports pertaining to the Products, in each case as are in such Seller’s possession or control;

(iv) the quantities and delivery terms in all outstanding customer purchase orders for the Products;

(v) the Product Scientific and Regulatory Material;

(vi) the Assigned Contracts;

(vii) the trademarks and tradenames owned by such Seller set forth on Schedule 2.2(a)(vii); and

(viii) any other assets belonging to such Seller that are required to be transferred pursuant to the Order.

(b) Sellers and Buyer expressly agree and acknowledge that the Transferred Assets will not include any assets of any kind, nature, character or description (whether real personal or mixed, whether tangible or intangible, whether

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absolute, accrued, contingent, fixed or otherwise, and wherever situated) that are not expressly included within the definition of Transferred Assets (the “Excluded Assets”).  Excluded Assets include, without limitation, any refund of Seller Taxes, and all trademarks, and trade names not specifically included in the Transferred Assets and all, brand names, logotypes, symbols, service marks, and trade dress, and any registrations or applications for registrations of any of the foregoing.

(c) Buyer acknowledges and agrees that Sellers may retain for archival purposes and for purposes of complying with the Supply Agreement, applicable Law and for legal and regulatory purposes as sellers of pharmaceutical products, one copy of all or any part of the documentation that Sellers deliver to Buyer pursuant to Section 2.2(a).  The copies will be retained by Sellers’ respective legal counsel and Sellers agree to treat such copies as confidential information (in accordance with Section 8.3 hereof).

SECTION 2.3. Assumption of Certain Liabilities and Obligations

(a) Buyer will assume, be responsible for and pay, perform and/or otherwise discharge when due those Liabilities (including any Liabilities arising in respect of Taxes) directly arising out of or in connection with or directly related to (x) the Transferred Assets, the use thereof, or the use of the Product Technology by or on behalf of Buyer or its Affiliates or their respective agents or assignees on or after the Closing Date and (y) the marketing, sale or use of the Products by or on behalf of Buyer or its Affiliates or their respective agents or assignees on or after the Closing Date; provided that, for the avoidance of doubt, such Assumed Liabilities shall include:  (i) Liabilities arising from any patent infringement claim or lawsuit brought by any third party, the FDA or any other Governmental Entity, in all cases only to the extent that they relate to Product sold on or after the Closing Date; (ii) Liabilities arising from any FDA or any other Governmental Entity action or notification only to the extent that such Liabilities relate to Product sold by or on behalf of Buyer or its Affiliates; (iii) Liabilities arising from any product liability claims relating to Product sold by Buyer or its agents or assignees, except to the extent the Manufacturer (as defined in the Supply Agreement) is liable for such Liabilities pursuant to the Supply Agreement on or after the Closing Date; (iv) Liabilities arising on or after the Closing Date from any plan of Risk Evaluation and Mitigation Strategies to the extent relating to any of the Products; and (v) state and federal Medicaid/Medicare rebates and payments, and all credits, chargebacks, rebates, discounts, allowances, incentives and similar payments in connection with the sale of Products on or after the Closing Date by or on behalf of Buyer or its Affiliates (collectively, the “Assumed Liabilities”).

(b) Except to the extent expressly included in the Assumed Liabilities, Buyer will not assume or be responsible or liable for any Liabilities of Sellers or their Affiliates, and shall in no event assume or be responsible or liable for any Liabilities arising out of or in connection with or related to (x) the Transferred Assets, the use thereof or the use of the Product Technology by or on behalf of Sellers or their Affiliates or their respective agents or assignees prior to the Closing Date, (y) the marketing, sale or use of the Products by or on behalf of Sellers or their Affiliates or their respective agents or assignees prior to the Closing Date or liabilities that were incurred before Closing with respect to the Products and (z) Seller Taxes (collectively, the “Excluded Liabilities”).

SECTION 2.4. License to Certain Product Technology

(a) Each Seller hereby irrevocably grants to Buyer as of the Closing Date (i) a royalty-free exclusive, perpetual license to use the Product Technology that is owned or licensed (to the extent capable of sublicense, provided that each such Seller does not incur any additional fees payable to third parties with respect to any such sublicense and that Buyer agrees to be bound by the terms required for such sublicense by the third party licensor and to be liable for any breach thereof) by each such Seller and presently used or held for use solely and specifically for the manufacture of the Products for sale in the Territory and not for other products of each such Seller or for sale in other territories, to market and sell Products in the Territory, and to manufacture Products for marketing and sale in the Territory, and (ii) a royalty-free, non-exclusive, perpetual license to use the Product Technology that is owned or licensed (to the extent capable of sublicense, provided that each such Seller does not incur any additional fees payable to third parties with respect to any such sublicense and that Buyer agrees to be bound by the terms required for such sublicense by the third party licensor and to be liable for any breach thereof) by each such Seller and used or held for use not solely and specifically for the manufacture of the Products, to market and sell Products in the Territory and to manufacture Products for marketing and sale in the Territory (the “Licenses”).  Each of the Licenses includes the right to grant sublicenses.

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(b) Each party may modify or improve the Product Technology.  The party making such modifications or improvements shall own all right, title and interest therein.

SECTION 2.5. Covenant Not to Sue.

Each of the Sellers and the Buyer hereby covenants that such party and its Affiliates will not bring any suits or claims, or cause or support any licensee or other third party to bring any suits or claims, against the other party or its Affiliates, their manufacturers and importers, or their distributors and customers or their consumers, alleging that the manufacture, use, sale, offer for sale or importation in or for the Territory of the Products, or the equivalent competing products sold by or on behalf of each such Seller in or for the Territory, infringes any patent rights or misappropriates any trade secrets owned or controlled by such party or any of its Affiliates.

SECTION 2.6. Nonassignable Assets.

(a) Notwithstanding anything in this Agreement to the contrary, to the extent that the transfer or assignment to Buyer of any Transferred Asset is prohibited by any Governmental Rules or would require any authorizations, approvals, consents or waivers, and such authorizations, approvals, consents or waivers shall not have been obtained, neither this Agreement nor any document delivered pursuant hereto shall constitute a sale, assignment or transfer or an attempted assignment or transfer of such Transferred Asset if the applicable authorization, approval, consent or waiver has not been obtained by (or does not remain in full force and effect at) the Closing, unless and until such third party authorization, approval, consent or waiver is obtained, at which time such Transferred Asset shall be assumed and transferred to Buyer in accordance with the terms and conditions hereof.

(b) With respect to any such authorizations, approvals, consents, or waivers that are required for Transferred Assets, the parties shall use their respective commercially reasonable efforts, and reasonably cooperate with each other, to obtain promptly such authorizations, approvals, consents or waivers.  In the event that any such authorizations, approvals, consents or waivers are not obtained by the Closing Date, the parties shall cooperate with each other in any mutually agreeable, reasonable and lawful arrangements designed to provide to Buyer the benefits of use of such Transferred Assets and to impose upon Buyer the liabilities and obligations of such Transferred Assets as if such Transferred Assets had been conveyed to Buyer at the Closing.

ARTICLE III.

PURCHASE PRICE

SECTION 3.1. Purchase Price

Upon the terms and subject to the conditions set forth herein, in consideration of the sale and transfer of the Transferred Assets, the Purchaser shall on the Closing Date (i) assume the Assumed Liabilities and (ii) pay an amount in cash equal to Four Million Dollars ($4,000,000) (the “Purchase Price”).

SECTION 3.2. Allocation of Purchase Price

The Purchase Price will be allocated among the Transferred Assets as of the Closing Date in accordance with applicable Law and as set forth in Exhibit E.  Each of the parties hereto agrees to report (and to cause its Affiliates to report) the transactions contemplated by this Agreement in a manner consistent with applicable Law and with the terms of this Agreement, including the allocation provided in Exhibit E, and agrees not to take any position inconsistent therewith in any Tax Return, in any Tax refund claim, in any litigation or otherwise.

SECTION 3.3. Transfer Taxes

All transfer, sales, value added, stamp duty and similar Taxes payable in connection with the transactions contemplated hereby will be borne by Buyer.

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ARTICLE IV.

THE CLOSING

SECTION 4.1. Closing Date

The closing of the (i) sale and transfer of the Transferred Assets and (ii) license of the Product Technology pursuant to Section 2.4 (the “Closing”) will take place at the offices of Sellers at 1090 Horsham Road, North Wales, PA 19454, or at another place designated by Sellers, remotely via the exchange of documents by electronic mail and overnight carrier service on the first Business Day following the date on which all of the conditions to each party’s obligations under Article X have been satisfied or (if permitted) waived, or at such other time, date and/or place as mutually agreed to by the parties hereto (such date of the Closing being hereinafter referred to as the “Closing Date”).  The parties will use their reasonable best efforts to cause the Closing Date to occur on the same date as the date of the Allergan Closing.

SECTION 4.2. Transactions to Be Effected at the Closing

At the Closing:

(a) Sellers will deliver or cause to be delivered to Buyer each of the items referred to in Section 10.2(d), in each case appropriately executed; and

(b) Buyer will deliver or cause to be delivered to Sellers (i) each of the items referred to in Section 10.3(d), in each case appropriately executed, and (ii) payment of the Purchase Price by wire transfer in immediately available funds, to the account or accounts designated in writing by Sellers to Buyer.

ARTICLE V.

REPRESENTATIONS AND WARRANTIES OF SELLERS

Each Seller hereby represents and warrants to Buyer as follows:

SECTION 5.1. Organization; Good Standing

Such Seller is a corporation or entity duly organized, validly existing and in good standing under the Laws the state of its incorporation or organization. Such Seller has the requisite power and authority to own and transfer all rights to the Transferred Assets of such Seller, to license the Product Technology pursuant to Section 2.4 and to carry on its business as currently conducted.  Such Seller is duly qualified to conduct business as a foreign corporation or entity and is in good standing in each jurisdiction where the nature of the business conducted by it makes such qualification necessary, except where the failure to so qualify or be in good standing would not have a Material Adverse Effect.  Such Seller is a Respondent to the Order.

SECTION 5.2. Authority; Execution and Delivery

Such Seller has the requisite corporate or similar power and authority to enter into this Agreement and to consummate the transactions contemplated hereby and thereby.  The execution and delivery of this Agreement by such Seller and the consummation of the transactions contemplated hereby have been duly and validly authorized and no other corporate proceeding is necessary on the part of such Seller.  This Agreement has been duly executed and delivered by such Seller and, assuming the due authorization, execution and delivery of this Agreement by Buyer, will constitute the legal, valid and binding obligation of such Seller, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other similar Laws affecting creditors’ rights generally from time to time in effect and to general principles of equity (including concepts of materiality, reasonableness, good faith and fair dealing), regardless of whether considered in a proceeding in equity or at Law.

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SECTION 5.3. Consents; No Violation, Etc.

The execution and delivery of this Agreement do not, and the consummation of the transactions contemplated hereby and the compliance with the terms hereof will not:

(a) violate any Governmental Rule applicable to such Seller,

(b) conflict with any provision of the certificate of incorporation or by-laws (or similar organizational document) of such Seller,

(c) except as set forth on Schedule 5.3, conflict with any contract to which such Seller is a party or by which it is otherwise bound, including any Contract related to any of the Products, or result in the creation of any Encumbrance upon any of the Transferred Assets of such Seller (other than a Permitted Encumbrance),

(d) subject to the foregoing clause (c), to the Knowledge of such Seller, violate any rights of any third party; or

(e) except as set forth on Schedule 5.3, require any approval, authorization, consent, license, exemption, filing or registration with any court, arbitrator or Governmental Entity other than approval of the FTC, with respect to the Product other than Argatroban,

except, with respect to the foregoing clauses (a) and (c), for such violations or conflicts which would not have a Material Adverse Effect or materially interfere with such Seller’s performance of its obligations hereunder and, with respect to the foregoing clause (e), (i) for receipt of FDA approval of any Product ANDA related to a Product that has not been approved by the FDA as of the Effective Date and (ii) otherwise, for such approvals, authorizations, consents, licenses, exemptions, filings or registrations that, if not obtained or made, would not have a Material Adverse Effect or interfere with such Seller’s performance of its obligations hereunder.

SECTION 5.4. Title to Transferred Assets

Such Seller has good and valid title to all of the Transferred Assets of such Seller, the right to license the Product Technology pursuant to Section 2.4 free and clear of all Encumbrances, other than Permitted Encumbrances. Except as expressly set forth in this Agreement, all of the Transferred Assets are being sold, assigned, conveyed or delivered (as applicable) to Buyer on an “As is” “Where is” basis without representations or warranties of any kind, express or implied, including but not limited to any warranty of merchantability or fitness for a particular purpose or infringement of third party rights, and all such warranties are disclaimed.

SECTION 5.5. Litigation

(a) There is no material suit, claim, action, investigation or proceeding pending or, to the Knowledge of such Seller, threatened against such Seller, that relates to the Transferred Assets of such Seller, the Assumed Liabilities or the Product Technology that (i) challenges or seeks to prevent or enjoin the transactions contemplated by this Agreement, or (ii) has not been disclosed to Buyer in writing on Schedule 5.5(a) prior to the execution of this Agreement.

(b) Except as set forth on Schedule 5.5(b) hereto, during the twelve-month period ending on the Effective Date (i) such Seller has not received any written notice from any other Person challenging its ownership or rights to use any intellectual property relating to the Products, (ii) there has not been any, and there are no, material suits, claims, actions, investigations or proceedings pending or, to the Knowledge of such Seller, threatened against such Seller, relating to its ownership or rights to use any intellectual property relating to the Products and (iii) there has not been any, and there are no, product liability suits, claims, actions, investigations or proceedings of any kind, including product liability, tort or breach of contract, pending or, to the Knowledge of such Seller, threatened against such Seller, relating to the Products or the Product Technology.

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SECTION 5.6. Regulatory Issues

(a) Except as may be disclosed on Schedule 5.6(a) hereto, during the twelve-month period ending on the Effective Date, (i) with respect to the Products only, such Seller has not received:  (A) any FDA Form 483s or warning letters directly relating to the Products or the facilities in which the Products are manufactured; or (B) any FDA Notices of Adverse Findings with respect to the Products; and (ii) there has not been a recall or market withdrawal of any Product by such Seller, whether voluntary or involuntary.

(b) Schedule 5.6(b) hereto sets forth a true and complete list of all documents that have been made available to Buyer that sets forth (i) adverse drug experience information, (ii) material events and matters concerning or affecting safety and (iii) medical inquiries and complaints brought to the attention of such Seller in respect of the Products.

SECTION 5.7. No Brokers

Except as may be disclosed on Schedule 5.7 hereto, such Seller has not entered into any agreement, arrangement or understanding with any Person or firm which will result in the obligation to pay any finder’s fee, brokerage commission or similar payment in connection with the transactions contemplated hereby.

SECTION 5.8. Exclusive Representations and Warranties

Other than the representations and warranties set forth in this Article V, such Seller is not making any other representations or warranties, express or implied, with respect to the Products or the Transferred Assets or the Product Technology or any other matter, including but not limited to any warranty of merchantability or fitness for a particular purpose or infringement of third party rights, and all such warranties are disclaimed.

SECTION 5.9. Regulatory Commitments

Such Seller has complied in all material respects with all obligations arising from or related to any commitments to any Governmental Entity involving any Products. Such Seller and its Affiliates have been since January 1, 2014 in compliance in all material respects with all Laws applicable to the Transferred Assets of such Seller and the Product Technology.

SECTION 5.10. Contracts to be Assumed; Customers

(a) Other than (i) the Assigned Contracts, (ii) any purchase orders or (iii) other Contracts with Customers there are no other material Contracts related to the Products.

(b) Each Contract that is a Transferred Asset of such Seller is a legal, valid and binding obligation of such Seller and is in full force and effect and, to the Knowledge of such Seller, each other party thereto, enforceable against such Seller and each other party in accordance with its terms (except as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws now or hereafter in effect relating to or affecting creditors’ rights generally, and subject to the limitations imposed by general equitable principles, regardless of whether such enforceability is considered in a proceeding at Law or in equity).  Such Seller has performed all material obligations under any such Contract, has not received notice from any party claiming or alleging that such Seller has breached or is in default thereunder and such Seller is not (with or without lapse of time or notice, or both) in material breach or material default thereunder.  To the Knowledge of such Seller, each other party to each such Contract is not in material breach or default thereunder.

(c) Schedule 5.10(c) hereto sets forth (i) a true and complete list of Customers as of the Effective Date (the “Customer List”), and (ii) a list of active pharmaceutical ingredients in respect of the Products, the supplier thereof and the cost of such ingredients on a per kilogram basis.

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SECTION 5.11. Inventory.

Schedule 5.11 provides a true and accurate description of  the inventory levels in respect of such Seller and the other Sellers’ three largest wholesalers of all Products, by Stock Keeping Unit (SKU) as of May 23, 2016 (or subsequent month end, if available) as communicated to such Seller and the other Sellers by such wholesalers.

SECTION 5.12. Assets.

Except for those assets used pursuant to, and materials, goods and services provided under, the Supply Agreement, the Transferred Assets of such Seller, Product Technology and the rights to be acquired under this Agreement and the Supply Agreement constitute all of the material assets used or held for use by such Seller with respect to the Transferred Assets of such Seller.

SECTION 5.13. Absence of Certain Changes.

Since June 3, 2016, through the Effective Date, except as required by this Agreement or the Ancillary Agreements or in connection with the consummation of the transaction contemplated hereby, (i) such Seller has conducted its business with respect to the Products and the Transferred Assets of such Seller in all material respects in the ordinary course, and (ii) such Seller has not taken any action (or made any omission) that, if taken (or omitted) after the Effective Date without the consent of Buyer would constitute a material violation of  Section 7.1.

ARTICLE VI.

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer hereby represents and warrants to each Seller as follows:

SECTION 6.1. Buyer’s Organization; Good Standing

Buyer is a corporation duly organized, validly existing and in good standing under the Laws of the State of Wyoming.  Buyer has all requisite corporate power and authority to carry on its business as it is currently being conducted.  Buyer is duly qualified to conduct business as a foreign corporation and is in good standing in every jurisdiction where the nature of the business conducted by it makes such qualification necessary, except where the failure to so qualify or be in good standing would not prevent or materially delay the consummation of the transactions contemplated hereby.

SECTION 6.2. Authority; Execution and Delivery

Buyer has the requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby.  The execution and delivery of this Agreement by Buyer and the consummation of the transactions contemplated hereby have been duly and validly authorized.  This Agreement has been duly executed and delivered by Buyer and, assuming the due authorization, execution and delivery of this Agreement by such Seller, constitutes the legal, valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other similar Laws affecting creditors’ rights generally from time to time in effect and to general principles of equity (including concepts of materiality, reasonableness, good faith and fair dealing), regardless of whether considered in a proceeding in equity or at Law.

SECTION 6.3. Consents; No Violations, Etc.

The execution and delivery of this Agreement do not, and the consummation of the transactions contemplated hereby and the compliance with the terms hereof will not (i) violate any Governmental Rule applicable to Buyer, (ii) conflict with any provision of the certificate of incorporation or by-laws of Buyer, (iii) conflict with any material contract to which Buyer is a party or by which it is otherwise bound or (iv) require any approval, authorization, consent, license, exemption, filing or registration with any court, arbitrator or Governmental Entity, other than

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approval of the FTC with respect to the Product other than Argatroban, except with respect to the foregoing clauses (i) and (iii), for such violations or conflicts which would not materially interfere with Buyer’s performance of its obligations hereunder or, with respect to the foregoing clause (iv), for the Order (other than with respect to Argatroban) and such approvals, authorizations, consents, licenses, exemptions, filings or registrations which have been obtained or made or which, if not obtained or made, would not materially interfere with Buyer’s performance of its obligations hereunder.

SECTION 6.4. Litigation

There is no suit, claim, action, investigation or proceeding pending or, to the Knowledge of Buyer, threatened against Buyer or any of its Affiliates which, if adversely determined, would materially interfere with the ability of Buyer to perform its obligations hereunder or the consummation of the transactions contemplated hereby.

SECTION 6.5. Development

As of the date hereof, Buyer has not begun developing a generic version of any Product, has not filed a Product ANDA for a generic version of any Product.

SECTION 6.6. No Brokers

Buyer has not entered into any agreement, arrangement or understanding with any Person or firm which will result in the obligation to pay any finder’s fee, brokerage commission or similar payment in connection with the transactions contemplated hereby for which such Seller could be liable.

SECTION 6.7. Availability of Funds

As of the Closing Date, Buyer will have cash available that is sufficient to enable it to make payment of the Purchase Price, to satisfy all of the Assumed Liabilities and to make all other necessary payments in connection with transactions contemplated by this Agreement as and when required.

SECTION 6.8. Solvency

(a) Immediately following the Closing, and after giving effect to all of the transactions contemplated by this Agreement, Buyer will be Solvent.  In connection with the transactions contemplated by this Agreement, Buyer is not making any transfer of property and is not incurring any Liability with the intent to hinder, delay, or defraud, either present or future creditors of Buyer.

(b) For purposes of this Agreement, “Solvent” when used with respect to Buyer or the Transferred Assets acquired by Buyer hereunder means, as applicable, that immediately following the Closing Date, (i) the amount of the Present Fair Saleable Value of its assets will, as of such date, exceed all of its known Liabilities as of such date, (ii) such Person will not have, as of such date, an unreasonably small amount of capital for the business in which it is engaged or will be engaged, and (iii) such Person will be able to pay its Debts as they become absolute and mature, taking into account the timing of and amounts of cash to be received by it and the timing of and amounts of cash to be payable on or in respect of its Debts.

(c) For purposes of the definition of “Solvent”:  (i) “Debt” means Liability on a Payment Right and “Payment Right” means (A) any right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured or (B) the right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured; and (ii) “Present Fair Saleable Value” means, with respect to Buyer or the Transferred Assets being acquired by Buyer hereunder, the amount that may be realized if its aggregate assets (including its goodwill) are sold as an entirety with reasonable promptness in an arm’s-length transaction under present conditions for the sale of comparable business enterprises.

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SECTION 6.9. Independent Investigation; No Warranty

(a) Buyer has conducted its own independent investigation, review, and analysis of the Transferred Assets, the Products, the Product Technology and the Assumed Liabilities, has formed an independent judgment concerning the Transferred Assets, the Products, the Product Technology and the Assumed Liabilities and acknowledges that it has been provided adequate access to the personnel, properties, assets, premises, books and records, and other documents and data of such Seller, for such purpose.

(b) Buyer acknowledges and represents that: (i)  in making its decision to enter into this Agreement and to consummate the transactions contemplated hereby, Buyer has relied solely upon its own investigation and the express representations and warranties of such Seller set forth in this Agreement (including the related portions of the Schedules) and any certificates delivered hereunder; and (ii) neither such Seller nor any other Person has made, and the Buyer is not relying on, any representation or warranty, express or implied, as to the accuracy or completeness of any information regarding such Seller, its Affiliates, the Transferred Assets, the Products, the Product Technology or the Assumed Liabilities not expressly set forth in this Agreement (including any information, documents and materials made available to Buyer in any electronic data room or any repository of information, management presentations, or in any other form in expectation of the transactions contemplated hereby), and neither such Seller nor any other Person will have or be subject to any Liability to Buyer or any other Person resulting from the distribution to Buyer or its representatives or Buyer’s use of any such information.

ARTICLE VII.

CERTAIN COVENANTS AND AGREEMENTS OF SELLERS

SECTION 7.1. Conduct of Business Until Closing

During the period from the date of this Agreement and continuing until the Closing, each Seller agrees that:

(a) Ordinary Course. Such Seller will conduct its business with respect to the Products and the Transferred Assets in all material respects in the ordinary course and in substantially the same manner as presently conducted and, with respect to the Product other than Argatroban, in accordance with the Order of the FTC, including, without limitation, by using commercially reasonable efforts to, in each case in accordance with past practices hereof and reasonable industry standards, (i) maintain sales of Products and customer inventory levels in respect thereof in accordance with past practices, historical sales data provided by such Seller to Buyer pursuant to Section 7.6 hereof and reasonable industry standards, (ii) not engage in any special promotional activities including special discounts, (iii) not waive any material claims or rights related to the Products or the Transferred Assets, (iv) not terminate, modify or waive any material provision of any Assigned Contract, (v) with respect to the Products and the Transferred Assets, as applicable,  not materially alter the activities and practices with respect to inventory levels of the Products maintained at the wholesale, chain, institutional or retail levels in any material respect, (vi) seek FDA approval for the Product ANDA for any pipeline Product that has not already been approved by the FDA as of the Effective Date, (vii) maintain any Product ANDAs that have been approved by the FDA as of the Effective Date, (viii) comply with any Laws and FDA requests or requirements in respect of the Product ANDAs or the manufacture, distribution and sale of any of the Products pursuant to the Product ANDAs, in each case, in any material respect, (ix) maintain any Assigned Patents, (x) maintain, in all material respects, the assets reasonably necessary to the manufacture of the Products, (xi) maintain sales efforts and sales levels consistent in all material respects with past practice, or (xii) not agree, in writing or otherwise, to take or authorize the taking of any actions that conflict with the foregoing; provided, however, that nothing contained herein will be deemed to require the expenditures of any funds outside of the ordinary course of business. Such Seller will not, without the prior written consent of Buyer (which consent shall not be unreasonably withheld, conditioned or delayed), amend or modify any Assigned Contract in a manner adverse to Buyer in any material respect, including any change in any price therein.

(b) No Dispositions. Such Seller will not sell, lease, license, encumber, pledge or transfer, or agree to sell, lease, license encumber, pledge or transfer, any of the Transferred Assets or the Product Technology.

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(c) No Settlements.  Such Seller will not, without the prior written consent of Buyer (such consent not to be unreasonably withheld), (i) settle or agree to settle any claim, suit, action or other proceeding relating to the Products or the Transferred Assets brought against it by any Governmental Entity; provided, however, this Section 7.1(c) shall not apply with respect to the Order or (ii) initiate or agree to initiate any claim, suit, action or other proceeding relating to the Products or the Transferred Assets except to protect the Products or the Transferred Assets.

SECTION 7.2. Post-Closing Orders and Payments

From and after 12:01 A.M. (New York, New York, USA time) on the Closing Date, (i) each Seller will promptly deliver to Buyer any payments received by each such Seller from third parties for Finished Goods purchased by the third parties from Buyer on or after the Closing Date, and refer all inquiries it will receive with respect to the Products (other than with respect to Excluded Assets or Excluded Liabilities), to Buyer or its designee; and (ii) Buyer will promptly deliver to each such Seller any payments received by Buyer from third parties for Finished Goods purchased by third parties from each such Seller or its Affiliates prior to the Closing.

SECTION 7.3. Technology Transfer; Assistance with Buyer Regulatory Filings

(a) Sellers and Buyer will use commercially reasonable efforts to effect an orderly transfer of the Product Technology from Sellers to Buyer pursuant to the terms of this Agreement as soon as practicable following the Closing Date.  Sellers will provide reasonable cooperation and assistance to Buyer, including making available Sellers’ personnel, in connection with such transfer of the Product Technology and Buyer’s preparation of all filings required to be filed with the FDA by Buyer with respect to such transfer of the Product Technology.  Each party will bear the Direct Costs incurred by it and its Affiliates in connection with its activities undertaken under this Section 7.3(a).

(b) Except with respect to Sellers’ assistance in connection with the transfer of the Product Technology as set forth above in Section 7.3(a), Buyer shall have sole responsibility for obtaining, and shall use commercially reasonable efforts to obtain, all regulatory approvals necessary for the offer, sale, importation, manufacture, distribution, marketing, promotion, import, export, pricing and reimbursement of the Products, including, without limitation, supplementing the Product ANDA to include facilities designated by Buyer and to delete Sellers’ facilities, and assuming all responsibility for maintenance of the Product ANDAs.  All decisions regarding the validation of Products and the conduct of regulatory activities with respect to the Products after the Closing Date shall be made by Buyer in its sole and absolute discretion, and all such regulatory activities shall be at its sole cost.  Sellers shall use commercially reasonable efforts in providing reasonable cooperation and pre-launch regulatory assistance to Buyer for unlaunched Products, including making available Seller personnel.  In addition, solely with respect to the Supply Products, Seller shall use commercially reasonable efforts to provide validation support services for Supply Products from Sellers’ facilities as may be reasonably requested by Buyer.  For the avoidance of doubt, Buyer shall bear the reasonable costs (including Direct Costs) incurred by Sellers in connection with any such pre-launch regulatory assistance and validation support services provided pursuant to this Section 7.3(b).  

SECTION 7.4. Sellers’ NDC Numbers

Buyer and its Affiliates will (i) sell Products only under Buyer NDC Numbers and (ii) not sell any Product under Sellers’ or their Affiliates names, in each case save to the extent contemplated or permitted hereunder and under the Supply Agreement.

SECTION 7.5. Competition

(a) The parties hereto agree and acknowledge that the provisions of this Agreement will not be construed to limit or restrict in any manner the right of Sellers or any of their Affiliates to develop, manufacture, use, sell or commercialize in any manner any pharmaceutical product, including any product competitive with the Products if sold under a Product ANDA or other filing that is not being purchased by Buyer as part of the Transferred Assets hereunder, either in the Territory or outside of the Territory.

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(b) Nothing contained in this Agreement will be construed as prohibiting Sellers or any of their Affiliates from: (i) acquiring (whether by merger, asset or stock acquisition or otherwise) another company, business or line of products (including by license thereof or through investment therein), which makes, has made, sells, has sold, markets, has marketed, distributes or has distributed or otherwise represents a product which is substantially similar to or equivalent to a Product and continuing to operate such company, business or line of products following such acquisition; or (ii) entering into a joint venture, alliance or other similar collaborative arrangement between Sellers or any of their Affiliates thereof and any third party which joint venture makes, has made, sells, has sold, markets, has marketed, distributes or has distributed a product which is substantially similar to or equivalent to a Product and continuing to participate in such collaboration.

SECTION 7.6. Sales Data; Customer

(a) On the Effective Date, Seller shall deliver to Buyer monthly net sales data for the Products (as calculated by Seller in accordance with its standard practice) for the previous six (6) month period, including details on units.

(b) Within two (2) Business Days after the Closing Date, Sellers shall update the Customer List and the information required to be provided pursuant to Section 7.6(a) as necessary, to ensure that such information remains materially accurate and complete up to and including the Closing Date.

(c) On or after the date that is five (5) Business Days prior to the anticipated Closing Date, but in no event earlier than such date, and subject to Section 8.3 hereof, Buyer may contact the Customers to promote the Products and the distribution thereof.

ARTICLE VIII.

CERTAIN COVENANTS AND AGREEMENTS

SECTION 8.1. Insurance

At all times from the Closing Date through that date which is three (3) years after the termination or expiration of this Agreement, Buyer will maintain product liability and other insurance for itself (either in its own name or in the name of its Affiliates) in amounts, respectively, which are reasonable and customary in the U.S.A. pharmaceutical industry for companies of comparable size, provided that in no event shall the product liability insurance amounts be less than $15,000,000 per occurrence and $25,000,000 in the aggregate limit of liability per year.  Buyer shall provide the Sellers with written proof of such insurance upon Sellers’ request.

SECTION 8.2. Books and Records

Buyer will preserve all books and records included within the Transferred Assets for applicable periods of time as required by the FDA or FTC and, subject to Section 8.3 hereof, make such books and records available for inspection and copying by Sellers or their agents upon reasonable request and upon reasonable notice.

SECTION 8.3. Confidentiality

Each party hereto or its Affiliates or contractors (a “Disclosing Party”) may, from time to time, prior to or after the Effective Date, disclose to the other party (the “Receiving Party”) information of a technical or non-technical nature that is not generally known to the trade or public.  The Receiving Party agrees that it will not use for any purpose other than as necessary to perform its obligations under this Agreement and the Supply Agreement, and will not disclose to anyone in any manner whatsoever, any such information, including, without limitation, information relating in any way to the products, processes, and services of the Disclosing Party, which becomes known to the Receiving Party on or prior to the latter of the date of the (a) termination of this Agreement or (b) termination or expiration of the Supply Agreement.  The obligations of this Section 8.3 will not apply to information that (i) is known to the Receiving Party as shown by written records prior to its disclosure by the Disclosing Party or its Affiliates or its contractors; (ii) becomes public information or is generally available to the public other than by an unauthorized act or omission of the Receiving Party; or (iii) is received by the Receiving Party from third parties

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who are in rightful possession of such information and who are lawfully entitled to disclose such information to the Receiving Party and did not receive such information from Disclosing Party.  From and after the Closing Date, the Transferred Assets and all confidential information related solely and exclusively to the Transferred Assets or the manufacture thereof shall be considered the confidential information of Buyer under this Section 8.3 and the obligations of this Section 8.3 in respect thereof will apply to Sellers and not the Buyer.  It being understood for the avoidance of doubt, that, without limitation, to the extent any confidential information related to the Transferred Assets or the manufacture thereof is used by the Sellers in the retained business thereof, such confidential information shall constitute the confidential information of the parties.  Upon the latter of (x) the date of termination of this Agreement or (y) the termination or expiration of the Supply Agreement, the Receiving Party will return to the Disclosing Party all documents that include confidential information of the Disclosing Party or its contractors (other than the Transferred Assets), including all copies of such documents or extracts therefrom, if any, and will make no further use of such information.  To the extent that the confidential information relates to the Products, each Disclosing Party or Receiving Party, as the case may be, shall create an internal firewall and use reasonable best efforts to protect against the disclosure of such information to such Disclosing Party’s or Receiving Party’s, as the case may be, marketing and sales personnel.  Effective as of the Closing, the Confidentiality Agreement will terminate without further action by the parties thereto.

SECTION 8.4. Assumption of Regulatory Commitments

From and after the Closing Date, except as set forth in the pharmacovigilance agreement to be entered into by the parties pursuant to the Supply Agreement, Buyer will assume control of, and responsibility for all costs and Liabilities arising from or related to any commitments or obligations to any Governmental Entity involving the Products, only to the extent arising from or relating to Product sold by Buyer after the Closing Date.

SECTION 8.5. Bulk Transfer Laws

Buyer hereby waives compliance by Sellers with the provisions of any so-called “bulk transfer law” of any jurisdiction in connection with the sale of the Transferred Assets to Buyer.

SECTION 8.6. Buyer NDC Numbers; Buyer Trademarks and Buyer Trade Dress Changes

Buyer covenants and agrees that, if not already applied for, immediately following the Effective Date (if permitted by Governmental Rule), or otherwise within five (5) days of the Closing Date, Buyer will apply for and initiate applicable processes to obtain and establish new NDC Numbers (the “Buyer NDC Numbers”) and notify Sellers thereof.

SECTION 8.7. Response to Medical Inquiries and Products Complaints

After the Closing Date, except as set forth in the pharmacovigilance agreement to be entered into by the parties pursuant to the Supply Agreement, Buyer will assume all responsibility for responding to any medical inquiries or complaints about the Products in the Territory.

SECTION 8.8. Transition of Manufacturing Services.

Buyer and Sellers will use commercially reasonable efforts to coordinate with each other to facilitate an orderly transition to Buyer of the supply of Products presently manufactured by third-party manufacturers for Seller pursuant to the Assigned Contracts.  In furtherance thereof, promptly after the Effective Date, Buyer and Sellers shall mutually agree on the manner in which they shall jointly contact such third-party manufacturers and the content of such communications regarding the transition of the supply of Products from Sellers to Buyer, including the assignment of any applicable Assigned Contracts to Buyer.

SECTION 8.9. Use of Transferred Assets

Nothing contained in this Agreement will be construed as prohibiting Buyer or any of its Affiliates from: (a) acquiring (whether by merger, asset or stock acquisition or otherwise) another company, business or line of products

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(including by license thereof or through investment therein), which makes, has made, sells, has sold, markets, has marketed, distributes or has distributed or otherwise represents a product which is substantially similar to or equivalent to a Product and continuing to operate such company, business or line of products following such acquisition; or (b) entering into a joint venture, alliance or other similar collaborative arrangement between Buyer or any of its Affiliates thereof and any third party which joint venture makes, has made, sells, has sold, markets, has marketed, distributes or has distributed a product which is substantially similar to or equivalent to a Product, and continuing to participate in such arrangement.

ARTICLE IX.

OTHER COVENANTS AND AGREEMENTS

SECTION 9.1. Trade Returns, Medicaid Rebates, Chargebacks

(a) (i) Buyer will, at its expense, process and bear the cost of returns of any Products bearing Buyer’s NDC Number sold by Buyer or its Affiliates and returned in accordance with Buyer’s returned goods policy (“Buyer Returns”) and (ii) Sellers will, at their expense, process and bear the cost of returns on or after the Closing Date of all Products other than Buyer Returns.

(b) Sellers and Buyer will be responsible for processing and payment of all Medicaid Reimbursements and Rebates for the Products sold bearing their respective NDC Numbers.

(c) Sellers will be responsible for any and all payments, rebates, administrative fees or chargebacks due to customers under Sellers’ contracts for Products bearing the Seller NDC Number which were sold by any Seller or its Affiliates (“Seller Payments”).  Buyer agrees that Sellers shall have no responsibility for, and “Seller Payments” shall not include, credits for shelf stock adjustments or similar adjustments resulting from price decreases on or after the Closing Date.  Buyer will be responsible for all payments, rebates, administrative fees or chargebacks due in connection with any and all sales of Products by or on behalf of Buyer, other than Seller Payments.

SECTION 9.2. Adverse Experience Reports

Sellers shall continue to be responsible for adverse experience reporting to the FDA until the Closing Date.  On and after the Closing Date, Buyer and Sellers shall negotiate in good faith and agree on a process and procedure for sharing adverse event information for the Products in which Sellers will manufacture and supply Buyer from a retained ANDA, which shall be documented in a pharmacovigilance agreement to be entered into by the parties pursuant to the Supply Agreement.  For all other Products, Sellers shall at all times provide to Buyer all adverse drug experience information brought to the attention of Sellers in respect of the Products manufactured by Sellers or their Affiliates, as well as any material events and matters concerning or affecting safety of the Products manufactured by Sellers or their Affiliates.  At and after the Closing, Sellers shall cooperate with Buyer’s requests regarding adverse experience information in respect of the Products to ensure that all adverse experience data is transferred to Buyer.  After the Closing Date, subject to this Agreement, the Supply Agreement, the Quality Agreement and any other agreement executed between the parties and/or their Affiliates with respect to any Product, Sellers will submit to Buyer all adverse drug experience information brought to the attention of Sellers in respect of the Products, as well as any material events and matters concerning or affecting safety of the Products.  After the Closing Date, any new adverse experience reports or any follow-up adverse experience reports received by Sellers will be forwarded to Buyer, together with any source documents.

SECTION 9.3. Transfer of Product ANDAs, Etc.

(a) Sellers will cooperate with Buyer in disclosing any relevant records and reports which are required to be made, maintained and reported pursuant to Governmental Rules in the Territory with respect to the Product ANDAs that are part of the Transferred Assets.

(b) The parties hereto agree to use their reasonable efforts to take any other actions required by the FDA to effect the transactions contemplated hereby.  On the Closing Date, each of the parties hereto will take any actions

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necessary to effect the transfer of the Product ANDAs from Sellers to Buyer, including notices to the FDA regarding such transfer from Sellers to Buyer of the Product ANDAs.  Each party shall bear its own costs related thereto. Sellers shall use their commercially reasonably efforts and take all necessary actions to seek to cause the transfer of hard copies (to the extent reasonably in each such Seller’s possession) of the Product ANDAs to Buyer as soon as reasonably practicable after the Closing.

SECTION 9.4. Further Action; Consents; Filings

(a) Upon the terms and subject to the conditions hereof, each of Buyer and Sellers will use commercially reasonable efforts to (i) take, or cause to be taken, all actions necessary, proper or advisable under applicable Governmental Rules or otherwise to satisfy the conditions to Closing set forth in Article X and consummate and make effective the transactions contemplated by this Agreement, (ii) obtain from the requisite Governmental Entities any consents, licenses, permits, waivers, approvals, authorizations or orders required to be obtained or made in connection with the authorization, execution and delivery of this Agreement and the consummation of the transactions contemplated by this Agreement and (iii) make all necessary filings, and thereafter make any other advisable submissions, with respect to this Agreement and the transactions contemplated by this Agreement required under any applicable Governmental Rules, including without limitation all filings with the FDA, or any other Governmental Entity, needed to permit Buyer to manufacture the Products in a timely and reasonable manner.  Each of Sellers and Buyer will provide copies of all non-confidential documents to each other party and its advisors prior to filing and, if requested, will accept all reasonable additions, deletions or changes suggested in connection therewith.  Each of Sellers and Buyer will furnish all information required for any application or other filing to be made pursuant to the rules and regulations of any applicable Governmental Rules in connection with the transactions contemplated by this Agreement.

(b) Each of Buyer and Sellers shall use reasonable best efforts to obtain from the FTC preliminary approval for Buyer as the purchaser of the Transferred Assets.  Each of Buyer and Sellers agree to cooperate and use its reasonable best efforts vigorously to contest and resist any action, including legislative, administrative or judicial action, and to have vacated, lifted, reversed or overturned any decree, judgment, injunction or other order (whether temporary, preliminary or permanent) that is in effect and that restricts, prevents or prohibits the consummation of the transactions contemplated by this Agreement, including by vigorously pursuing all available avenues of administrative and judicial appeal and all available legislative action.

SECTION 9.5. Compliance with the Federal Trade Commission Decision

Reference is made to the Order.  The parties hereto agree that the provisions set forth in Appendix II, which provisions are called for by the Order, are incorporated into this Agreement as if set forth in their entirety in this Agreement, except with respect to Argatroban.  To the extent the provisions of Appendix II conflict with the provisions of this Agreement or the provisions of the Supply Agreement, the provisions of Appendix II shall govern, except with respect to Argatroban.

SECTION 9.6. Representations to Customers.

During the two (2) year period following the Closing, Buyer and Sellers each agrees not to make any false and/or disparaging statements about any Product.

SECTION 9.7. Preservation of Data Room.

Sellers shall deliver to Buyer one copy of a compact disc or DVD-ROM containing a true, correct and complete copy of the materials in the Intralinks electronic data room sponsored by Sellers no more than ten (10) days after the Closing Date.  

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ARTICLE X.

CONDITIONS PRECEDENT

SECTION 10.1. Conditions to Each Party’s Obligations

The obligation of Buyer to purchase the Transferred Assets from Sellers and assume the Assumed Liabilities and the obligations of Sellers to sell, assign, convey and deliver the Transferred Assets to Buyer will be subject to the satisfaction prior to the Closing of the following conditions:

(a) No Litigation, Injunctions, or Restraints.  No temporary restraining order, preliminary or permanent injunction or other legal restraint or prohibition preventing the consummation of the transactions contemplated by this Agreement will be threatened or in effect.

(b) FTC Preliminary Approval.  The FTC shall have preliminarily approved the Buyer as the purchaser of the Transferred Assets hereunder (other than Argatroban and the Transferred Assets that solely and exclusively relate to Argatroban).

(c) Allergan Closing.  The Allergan Closing shall have occurred.

(a) Related Transactions.  Prior to or concurrently with the Closing the transactions contemplated by the Other Acquisition Agreement shall have been consummated.

SECTION 10.2. Conditions to Obligations of Buyer

The obligation of Buyer to purchase the Transferred Assets from Sellers and to assume the Assumed Liabilities is subject to the satisfaction on and as of the Closing of each of the following additional conditions (any or all of which may be waived in whole or in part by Buyer):

(a) Representations and Warranties.  The representations and warranties of Sellers set forth in this Agreement will be true and correct (without giving effect to any materiality or Material Adverse Effect qualifications set forth therein) in all respects as of the Closing as though made on and as of the Closing, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties will be true and correct as of such earlier date), and except in each case for breaches of such representations and warranties that would not, individually or in the aggregate, have a Material Adverse Effect.

(b) Performance of Obligations of Sellers. Sellers will have performed or complied in all material respects with the obligations, conditions and covenants required to be performed by it under this Agreement at or prior to the Closing.

(c) No Material Adverse Effect.  There shall not have been a Material Adverse Effect.

(d) Deliveries.  Sellers will have duly executed and delivered to Buyer, dated as of the Closing Date, the (i) Ancillary Agreements, (ii) Seller Officer’s Certificate and (iii) Required Third Party Consents.

SECTION 10.3. Conditions to the Obligations of Seller

The obligations of Sellers to sell, assign, convey, and deliver the Transferred Assets, or to cause the Transferred Assets to be sold, assigned, conveyed or delivered, as applicable, to Buyer are subject to the satisfaction on and as of the Closing of each of the following additional conditions (any or all of which may be waived in whole or in part by Sellers):

(a) Representations and Warranties.  The representations and warranties of Buyer set forth in this Agreement will be true and correct (without giving effect to any materiality or similar qualifications set forth therein) in all respects as of the Closing as though made on and as of the Closing, except to the extent such representations and

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warranties expressly relate to an earlier date (in which case such representations and warranties will be true and correct as of such earlier date), and except in each case for breaches of such representations and warranties that would not, individually or in the aggregate, have a Material Adverse Effect.

(b) Performance of Obligations of Buyer.  Buyer will have performed in all material respects the obligations required to be performed by it under this Agreement at or prior to the Closing.

(c) Purchase Price.  Buyer will have paid the Purchase Price.

(d) Deliveries.  Buyer will have duly executed and delivered to Seller, dated as of the Closing Date, the (i) Ancillary Agreements, (ii) the Buyer Officer’s Certificate and (iii) Required Third Party Consents

ARTICLE XI.

TERMINATION, AMENDMENT AND WAIVER

SECTION 11.1. Termination

(a) Notwithstanding anything to the contrary in this Agreement, this Agreement may be terminated and the transactions contemplated hereby abandoned at any time prior to the Closing:

(i) by mutual written consent of Sellers and Buyer;

(ii) by Sellers if any of the conditions set forth in Section 10.1 or 10.3 will have become incapable of fulfillment and will not have been waived by Sellers;

(iii) by Buyer if any of the conditions set forth in Section 10.1 or 10.2 will have become incapable of fulfillment and will not have been waived by Buyer;

(iv) by Sellers or Buyer if the Closing does not occur on or prior to one year from the Effective Date; provided, however, that the right to terminate this Agreement pursuant to this clause (iv) shall not be available to any party hereto whose action or failure to fulfill any obligation under this Agreement has been the primary cause of the failure of the Closing to have occurred on or prior to one year from the Effective Date;

(v) by Sellers, if Buyer is not preliminarily approved by the FTC or other necessary Governmental Entity as a purchaser of the Transferred Assets other than Argatroban and the Transferred Assets that solely and exclusively relate to Argatroban;

(vi) by Sellers, if the staff of the FTC informs Seller in writing that the staff will not recommend approval of Buyer as purchaser of the Transferred Assets other than Argatroban and the Transferred Assets that solely and exclusively relate to Argatroban; or

(vii) by Sellers or Buyer if the Allergan Agreement is terminated prior to the consummation of the transactions contemplated by the Allergan Agreement.

provided, however, that the party seeking termination pursuant to clause (ii), (iii) or (iv) is not in breach of any of its representations, warranties, covenants or agreements contained in this Agreement.

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(b) In the event of termination of this Agreement pursuant to this Section 11.1, written notice thereof will forthwith be given to the other party and the transactions contemplated by this Agreement will be terminated, without further action by any party.  If the transactions contemplated by this Agreement are terminated as provided herein:

(i) Buyer will return all documents and other material received from Sellers relating to the Products, the Transferred Assets, the Product Technology or the transactions contemplated hereby, whether so obtained before or after the execution hereof, to Sellers and, if applicable, Sellers shall return any delivered portions of the Purchase Price to Buyer;

(ii) all confidential information received by Buyer with respect to Sellers, the Products, the Transferred Assets or the Product Technology will be treated in accordance with Section 8.3, which will remain in full force and effect notwithstanding the termination of this Agreement; and

(iii) the Supply Agreement shall be terminated.

(c) If this Agreement is terminated, no party hereto and none of their respective directors, officers, stockholders, Affiliates or controlling Persons shall have any further liability or obligation under this Agreement, except as set forth in paragraphs (a) and (b) of this Section, except that (i) nothing in this Section 11.1 will be deemed to release any party from any liability for any willful and material breach by such party of the terms and provisions of this Agreement, and (ii) the provisions of Section 8.3 shall survive termination of this Agreement.

SECTION 11.2. Amendments and Waivers

This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.  By an instrument in writing, Buyer, on the one hand, or Sellers, on the other hand, may waive compliance by the other party with any term or provision of this Agreement that such other party was or is obligated to comply with or perform.

SECTION 11.3. Rescission

If at the time the FTC determines to make final and effective its Order concerning the Proposed Allergan Transaction, the FTC notifies Sellers or their Affiliates that Buyer is not an acceptable purchaser of the Transferred Assets (other than Argatroban and the Transferred Assets that solely and exclusively relate to Argatroban), then each of Sellers and Buyer shall have the right immediately to rescind this Agreement, and the provisions of Sections 11.1(b) and 11.1(c) shall be applicable as if a termination of this Agreement had occurred.

SECTION 11.4. Modification

If at the time the FTC determines to make final and effective its Order concerning the Proposed Allergan Transaction, the FTC notifies Seller or their Affiliates that this Agreement is not an acceptable manner of divestiture, Sellers and Buyer shall reasonably seek to modify this Agreement as may be necessary to satisfy the FTC, except with respect to Argatroban.

ARTICLE XII.

INDEMNIFICATION

SECTION 12.1. Survival

All representations and warranties of Sellers and Buyer contained herein or made pursuant hereto shall survive the Closing Date and shall remain operative and in full force and effect for a period of twelve (12) months following the Closing Date (the “Expiration Date”).  Notwithstanding anything herein to the contrary, any breach of a representation or warranty that is the subject of a claim that is asserted in writing prior to the Expiration Date shall survive with respect to such claim or any dispute with respect thereto until the final resolution thereof.

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SECTION 12.2. Indemnification by Sellers

(a) Subject to Section 12.4, Sellers hereby agree that from and after the Closing Date, Sellers shall indemnify Buyer and its Affiliates and their respective officers, directors and employees (the “Buyer Indemnified Parties”) against, and hold them harmless from, and pay and reimburse such Buyer Indemnified Parties for, any Losses to the extent such Losses arise from the following:

(i) any breach by Sellers of any representation or warranty made by them contained in this Agreement;

(ii) any breach by Sellers of any of their covenants, agreements or obligations contained in this Agreement; and

(iii) any and all Excluded Assets and/or Excluded Liabilities.

SECTION 12.3. Indemnification by Buyer

(a) Subject to Section 12.4 hereof, Buyer hereby agrees that from and after the Closing Date, Buyer shall indemnify each Seller and its Affiliates and their respective officers, directors and employees (the “Seller Indemnified Parties”) against, and hold them harmless from, and pay and reimburse such Seller Indemnified Parties for, any Losses to the extent such Losses arise from the following:

(i) any breach by Buyer of any representation or warranty made by it contained in this Agreement;

(ii) any breach by Buyer of any of its covenants, agreements or obligations contained in this Agreement; and

(iii) any and all Assumed Liabilities.

Buyer Indemnified Parties and Seller Indemnified Parties are sometimes referred to herein as “Indemnified Parties”.

SECTION 12.4. Limitations.

(a) The amount of any Losses for which either any Seller or Buyer, as the case may be, is liable shall be reduced by (i) the amount of any insurance proceeds actually paid to the Buyer Indemnified Party and the Seller Indemnified Party, as applicable, and (ii) the aggregate amount actually recovered under any Assigned Contract (if applicable) or any other indemnity agreement, contribution agreement, or other Contract between any of the Indemnified Parties, on the one hand, and any third Person, on the other hand, with respect to such Losses.

(b) Notwithstanding the other provisions of this Article XII, Sellers shall not have any indemnification obligations for any individual Losses arising from or in connection with Section 12.2(a)(i) unless and until the aggregate amount of all such Losses together with the amount of all such Losses under the Other Acquisition Agreement exceed Twenty Thousand ($20,000) (the “Deductible”), in which event Sellers shall be required to pay the full amount of such Losses to the extent exceeding the Deductible, but only up to a maximum aggregate amount with respect to this Agreement together with the Other Acquisition Agreement of Four Hundred Thousand Dollars ($400,000).

(c) In no event shall any party or any of its Affiliates be liable by reason of any breach of any representation, warranty, condition or other term of this Agreement or any duty of common law, for any punitive loss or damage and each party hereto agrees that it shall not make any such claim; provided that the foregoing does not limit any of the obligations or liability of any party or its Affiliates under Sections 12.2 and 12.3 with respect to claims of unrelated third parties.

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(d) Neither Sellers nor Buyer shall have any Liability under this Agreement in respect of any Loss if such Loss would not have arisen but for (i) a change in GAAP or (ii) a change in any Law after the Closing or a change in the interpretation of any Law after the Closing as determined by a Governmental Entity.

(e) For purposes of determining whether a breach of a representation or warranty has occurred for which indemnification is provided under this Article XII (but, for the sake of clarity, not for calculating the amount of Losses indemnifiable hereunder), any materiality, Material Adverse Effect or similar qualifications in such representation or warranty shall be disregarded.

(f) Except for claims based on fraud, the right of the Buyer Indemnified Parties and the Seller Indemnified Parties under this Article XII shall be the sole and exclusive monetary remedy of the Buyer Indemnified Parties and the Seller Indemnified Parties, as the case may be, with respect to matters covered hereunder, including but not limited to claims relating to the Products, the Transferred Assets or Product Technology, Assumed Liabilities or Excluded Liabilities and no Indemnified Party shall have any other cause of action or remedy at Law in equity for breach of contract, rescission, tort, or otherwise against the other party arising under or in connection with this Agreement and the matters and transactions contemplated hereby. Without limiting the generality of the preceding sentence, except in the case of specific performance and for claims based on fraud, no legal action sounding in contribution, tort, or strict liability (in each case, other than claims made or contemplated by this Article XII) may be maintained by an Indemnified Party, or any of its officers, directors, other governing bodies, employees, equityholders, owners, Affiliates, representatives, agents, successors, or assigns, against Sellers or Buyer or any of their Affiliates with respect to any matter that is the subject of Article XII, and Buyer and Sellers, for themselves and the other Indemnified Parties and each of their respective officers, directors, other governing bodies, employees, equityholders, owners, Affiliates, representatives, agents, successors, and assigns, hereby waive any and all statutory rights of contribution or indemnification (other than rights of indemnification hereunder) that any of them might otherwise be entitled to under any Law with respect to any matter that is the subject of this Article XII.

SECTION 12.5. Procedure

(a) In order for an Indemnified Party to be entitled to any indemnification provided for under this Agreement, such Indemnified Party will, within a reasonable period of time following the discovery of the matters giving rise to any Losses, notify the indemnifying party under this Article XII (the “Indemnifying Party”) in writing of its claim for indemnification for such Losses, specifying in reasonable detail the nature of such Losses and the amount of the liability estimated to accrue therefrom; provided, however, that failure to give such notification will not affect the indemnification provided hereunder, except to the extent the Indemnifying Party will have been prejudiced as a result of such failure. Thereafter, the Indemnified Party will deliver to the Indemnifying Party, within a reasonable period of time after the Indemnified Party’s receipt of such request, all information and documentation reasonably requested by the Indemnifying Party with respect to such Losses.

(b) If the indemnification sought pursuant hereto involves a claim made by a third party against the Indemnified Party (a “Third Party Claim”), the Indemnifying Party will be entitled to assume the defense of such Third Party Claim at its own expense with counsel selected by the Indemnifying Party.  Should the Indemnifying Party so elect to assume the defense of a Third Party Claim, the Indemnifying Party will not be liable to the Indemnified Party for any legal expenses subsequently incurred by the Indemnified Party in connection with the defense thereof.  If the Indemnifying Party assumes such defense, the Indemnified Party will have the right to participate in the defense thereof and to employ counsel, at its own expense (which expense shall not constitute a Loss), separate from the counsel employed by the Indemnifying Party, it being understood that the Indemnifying Party will control such defense.  The Indemnifying Party will be liable for the reasonable and documented fees and expenses of counsel employed by the Indemnified Party for any period during which the Indemnifying Party has not assumed the defense thereof (other than during any period in which the Indemnified Party will have failed to give notice of the Third Party Claim as provided above).  If the Indemnifying Party chooses to defend or prosecute a Third Party Claim, all of the parties hereto will cooperate in the defense or prosecution thereof.  Such cooperation will include the retention and (upon the Indemnifying Party’s request) the provision to the Indemnifying Party of records and information which are reasonably relevant to such Third Party Claim, and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. If the Indemnifying Party chooses to defend or prosecute any Third Party Claim, it will defend or prosecute it diligently and the Indemnifying Party will obtain the prior written consent of theIndemnified Party (not

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to be unreasonably withheld) before entering into any settlement, compromise or discharge of such Third Party Claim if (i) such settlement, compromise or discharge does not relate solely to monetary damages, (ii) such settlement, compromise or discharge does not expressly unconditionally and completely release the Indemnified Party from all Losses and liabilities with respect to such Third Party Claim, (iii) the Indemnifying Party is not directly paying the full amount of the Losses in connection with such Third Party Claim and (iv)  such settlement, compromise or discharge does not contain any admission of liability by the Indemnified Party or its Affiliates.  Whether or not the Indemnifying Party will have assumed the defense of a Third Party Claim, the Indemnified Party will not admit any liability with respect to, or settle, compromise or discharge, such Third Party Claim without the Indemnifying Party’s prior written consent (not to be unreasonably withheld).

(c) If an indemnification payment is received by Buyer Indemnified Party or Seller Indemnified Party, as applicable, and such Indemnified Party later receives insurance proceeds in respect of the related Losses or other recoveries under section 12.4(a)(ii) above that were not previously credited against such indemnification payment when made, such Indemnified Party shall promptly pay to the Indemnifying Party, an amount equal to the lesser of (A) such insurance proceeds or other recoveries, with respect to such Losses and (B) the net indemnification payment previously paid by such Indemnifying Party with respect to such Losses.  Each Indemnified Party shall use reasonable and good faith efforts to collect amounts available under available insurance coverage and promptly and diligently pursue such claims relating to any Losses for which it is seeking indemnification.

(d) Each Indemnified Party shall take, and shall cause its Affiliates to take, all reasonable steps to mitigate any Loss upon becoming aware of any event or circumstance that would reasonably be expected to, or such Indemnified Party believes does, give rise thereto, including incurring costs only to the minimum extent necessary to remedy the breach that gives rise to such Loss; provided, that such failure to use such efforts in accordance with the foregoing shall not relieve the Indemnifying Party of its indemnification obligations under this Article XII except and only to the extent that the Indemnifying Party is prejudiced thereby.

SECTION 12.6. Adjustment to Purchase Price.

Sellers and Buyer agree to treat all payments made either to or for the benefit of the other party under this Agreement as adjustments to the Purchase Price for Tax purposes to the extent permitted under applicable Tax Law.

ARTICLE XIII.

GENERAL PROVISIONS

SECTION 13.1. Expenses

Except as otherwise specified in this Agreement and the Supply Agreement, all costs and expenses, including fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated hereby will be paid by the party incurring such costs and expenses, whether or not the Closing will have occurred. For the avoidance of doubt, Buyer will not have any obligation to make any payment in respect of the initial Firm Order (as defined in the Supply Agreement) if this Agreement is terminated prior to the Closing Date.

SECTION 13.2. Further Assurances and Actions

Each of the parties hereto, upon the request of the other party hereto, whether before or after the Closing and without further consideration, will do, execute, acknowledge and deliver or cause to be done, executed, acknowledged or delivered all such further acts, deeds, documents, assignments, transfers, conveyances, powers of attorney and assurances as may be reasonably necessary to effect complete consummation of the transactions contemplated by this Agreement.  Sellers and Buyer agree to execute and deliver such other documents, certificates, agreements and other writings and to take such other actions as may be reasonably necessary in order to consummate or implement expeditiously the transactions contemplated by this Agreement. From and after the Closing, each of the parties shall cooperate and use their respective commercially reasonable efforts to take, or cause

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to be taken, all appropriate action, and do, or cause to be done, and assist and cooperate with the other parties in doing, all things reasonably requested by the other party hereto with respect to the transactions contemplated hereby.

SECTION 13.3. Notices

All notices and other communications required or permitted to be given or made pursuant to this Agreement shall be in writing signed by the sender and shall be deemed duly given (a) on the date delivered, if personally delivered, (b) on the date sent by telecopier with automatic confirmation by the transmitting machine showing the proper number of pages were transmitted without error, (c) on the Business Day after being sent by Federal Express or another recognized overnight mail service which utilizes a written form of receipt for next day or next business day delivery or (d) two (2) Business Days after mailing, if mailed by U.S. postage-prepaid certified or registered mail, return receipt requested, in each case addressed to the applicable party at the address set forth below; provided that a party may change its address for receiving notice by the proper giving of notice hereunder:

if to Seller prior to Closing, to:

Allergan plc

Morris Corporate Center III

400 Interpace Parkway

Parsippany, New Jersey 07054

Attention: Chief Legal Officer and Secretary

Facsimile: +1 (862) 261-8043

and

Latham & Watkins LLP

885 Third Avenue

New York, NY 10022-4834

Attn: Charles K. Ruck

R. Scott Shean

Facsimile: +1 (212) 751-4864

With a copy (which shall not constitute notice) to:

Teva Pharmaceutical Industries Ltd.

5 Basel Street

P.O.B. 3190

Petach Tikvah, Israel

Attention: Dror Bashan
Email: Dror.Bashan@teva.co.il

and

Teva Pharmaceuticals USA, Inc.

425 Privet Road

PO Box 1005

Horsham, PA 19044 U.S.A.

Attention: General Counsel

Fax: (215) 293-6499

and

Kirkland & Ellis LLP

601 Lexington Avenue

New York, NY 10022

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Attention:Daniel E. Wolf

Facsimile: (212) 446-6460

and

Kirkland & Ellis LLP

655 Fifteenth Street, N.W.

Washington, D.C. 20005

Attention: Mark Kovner

Facsimile: (202) 654-9402

if to Seller following Closing, to:

Teva Pharmaceutical Industries Ltd.

5 Basel Street

P.O.B. 3190

Petach Tikvah, Israel

Attention: Dror Bashan

Email: Dror.Bashan@teva.co.il

and

Teva Pharmaceuticals USA, Inc.

425 Privet Road

PO Box 1005

Horsham, PA 19044 U.S.A.

Attention: General Counsel

Fax: (215) 293-6499

With a copy (which shall not constitute notice) to:

Kirkland & Ellis LLP

601 Lexington Avenue

New York, NY 10022

Attention: Daniel E. Wolf

Facsimile: (212) 446-6460

and

Kirkland & Ellis LLP

655 Fifteenth Street, N.W.

Washington, D.C. 20005

Attention: Mark Kovner

Facsimile: (202) 654-9402

if to Buyer, to:

Sagent Pharmaceuticals, Inc.

1901 N. Roselle Road, Suite 700

Schaumburg, IL 60195

Attention:  Michael V. Ward
Facsimile: (847) 908-1601

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With a copy (which shall not constitute notice) to:

Katten Muchin Rosenman LLP

525 W. Monroe

Chicago, IL 60661

Attention:  Brian J. Sodikoff

Facsimile:(312) 902-1061

SECTION 13.4. Headings

The table of contents and headings contained in this Agreement are for reference purposes only and will not affect in any way the meaning or interpretation of this Agreement.

SECTION 13.5. Severability

If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced under any 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 contemplated hereby 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 hereto will negotiate in good faith to modify this Agreement so as to effect the original intent of the parties hereto as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.

SECTION 13.6. Counterparts

This Agreement may be executed in one or more counterparts, all of which will be considered one and the same agreement and will become effective when one or more counterparts have been signed by each of the parties hereto and delivered to the other parties hereto, it being understood that all parties hereto need not sign the same counterpart.

SECTION 13.7. Entire Agreement; No Third-Party Beneficiaries

This Agreement and the Exhibits and Schedules hereto, together with the Ancillary Agreements, constitute the entire agreement and supersede all prior agreements and understandings, both written and oral (including any letter of intent, memorandum of understanding or term sheet), between or among the parties hereto with respect to the subject matter hereof.  Except as specifically provided herein, this Agreement is not intended to confer upon any Person other than the parties hereto any rights or remedies hereunder.  Effective as of the Closing Date, the parties hereto acknowledge and agree that the supply agreement between Buyer and Seller, dated as of October 31, 2013, and amended as of September 10, 2014 and all other agreements related thereto, shall be terminated as to the Products being purchased through this Agreement and have no further force or effect as to those Products, except that, to the extent any provision therein survives termination of such agreement, such provision will survive in accordance with the terms therewith.  Notwithstanding any terms of this Agreement including this section, all agreements between Buyer and Seller relating to Topotecan HCl shall remain unchanged by this Agreement.

SECTION 13.8. Governing Law

This Agreement and any and all matters arising directly or indirectly herefrom shall be governed by and construed and enforced in accordance with the Laws of the State of New York, U.S.A. applicable to agreements made and to be performed entirely in such State.

SECTION 13.9. Jurisdiction, Venue, Service of Process, WAIVER OF JURY TRIAL

(a) Buyer and Sellers agree to irrevocably submit to the exclusive jurisdiction of (i) the Supreme Court of the State of New York, New York County, or (ii) the United States District Court for the Southern District of New York, U.S.A., for the purposes of any suit, action or other proceeding arising out of this Agreement or any

- 29 -

transaction contemplated hereby.  Each party agrees to commence any such action, suit or proceeding either in the United States District Court for the Southern District of New York, U.S.A. or, if such suit, action or other proceeding may not be brought in such court for jurisdictional reasons, in the Supreme Court of the State of New York, New York County.  Each party further agrees that service of any process, summons, notice or document by U.S. registered mail or recognized international courier service to such party’s respective address set forth in Section 13.3 of this Agreement shall be effective service of process for any action, suit or proceeding in New York with respect to any matters to which it has submitted to jurisdiction in this Agreement.  Each party irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in (i) the Supreme Court of the State of New York, New York County, or (ii) the United States District Court for the Southern District of New York, U.S.A.

(b) THE BUYER AND THE SELLERS HEREBY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION (I) ARISING UNDER THIS AGREEMENT OR (II) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY, OR OTHERWISE.  THE PARTIES TO THIS AGREEMENT EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

SECTION 13.10. Specific Performance

The parties hereto agree that irreparable damage may occur in the event any provision of this Agreement were not performed in accordance with its terms and that the parties hereto will be entitled to seek specific performance of such terms, in addition to any other remedy at Law or in equity, without the necessity of demonstrating the inadequacy of monetary damages and without the posting of a bond.

SECTION 13.11. Allergan

Notwithstanding anything to the contrary contained herein, Buyer, on behalf of itself and its Affiliates acknowledges that neither Allergan nor any of its Affiliates (other than the Sellers) shall have any Liability under this Agreement or for any claim based on, in respect of, or by reason of, the transactions contemplated hereby, including, but not limited to, any dispute related to, or arising from, the Transferred Assets.

SECTION 13.12. Publicity

No party will make any public announcement concerning, or otherwise publicly disclose, any information with respect to the transactions contemplated by this Agreement or any of the terms and conditions hereof without the prior written consent of the other parties hereto, which consent will not be unreasonably withheld.  Notwithstanding the foregoing, any party may make any public disclosure concerning the transactions contemplated hereby that in the view of such party’s counsel may be required by Law or the rules of any stock exchange on which such party’s or its Affiliates’ securities trade; provided, however, the party making such disclosure will provide the non-disclosing party with a copy of the intended disclosure reasonably, and to the extent practicable, prior to public dissemination, and the parties hereto will coordinate with one another regarding the timing, form and content of such disclosure.

SECTION 13.13. Assignment

None of the parties may assign its rights or obligations under this Agreement without (i) in the case of Sellers, the prior written consent of Buyer, or (ii) in the case of Buyer, the prior written consent of Sellers; provided, however, that after the Closing Date any party may assign its rights and obligations under this Agreement (including without limitation the Licenses and the covenant not to sue contained in Section 2.5), without the prior written

- 30 -

consent of the applicable party, to an Affiliate or to a successor of the assigning party by reason of merger, sale of all or substantially all of its assets or portion of its business which relates to a Product or any number of the Products, or any similar transaction.  Any permitted assignee or successor-in-interest will assume all obligations of its assignor under this Agreement.  No assignment will relieve any party of its responsibility for the performance of any obligation.  This Agreement will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

[signature page follows]

- 31 -

IN WITNESS WHEREOF, the parties hereto have caused this Asset Purchase Agreement to be signed by their respective representatives thereunto duly authorized, all as of the date first written above.

[SELLERS]

By:

Name:

Title:

By:

Name:

Title:

SAGENT PHARMACEUTICALS, INC.

By:

Name:

Title:

- 32 -

EXHIBIT A

Assignment and Assumption Agreement

(see attached)

EXHIBIT B

Bill of Sale

(see attached)

EXHIBIT C

Products

(see attached)

EXHIBIT D

Supply Agreement

(see attached)

EXHIBIT E

Purchase Price Allocation

(see attached)

Disclosure Schedules

(see attached)

Appendix I

Appendix II

EX-31.1

Exhibit 31.1

Certifications

I, Allan Oberman, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Sagent Pharmaceuticals, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 5, 2016

/s/ Allan Oberman

Allan Oberman

Chief Executive Officer

EX-31.2

Exhibit 31.2

Certifications

I, Jonathon M. Singer, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Sagent Pharmaceuticals, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 5, 2016

/s/ Jonathon M. Singer

Jonathon M. Singer

Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATIONS

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Allan Oberman, President of Sagent Pharmaceuticals, Inc. (“Sagent”), certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that Sagent’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in Sagent’s Quarterly Report on Form 10-Q fairly presents in all material respects Sagent’s financial condition and results of operations.

/s/ Allan Oberman

Allan Oberman

Chief Executive Officer

August 5, 2016

I, Jonathon M. Singer, Chief Financial Officer of Sagent Pharmaceuticals, Inc. (“Sagent”), certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that Sagent’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in Sagent’s Quarterly Report on Form 10-Q fairly presents in all material respects Sagent’s financial condition and results of operations.

/s/ Jonathon M. Singer

Jonathon M. Singer

Executive Vice President and Chief Financial Officer

August 5, 2016

A signed original of these written statements required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Sagent Pharmaceuticals, Inc. and will be retained by Sagent Pharmaceuticals, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Jul. 29, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Trading Symbol	SGNT
Entity Registrant Name	SAGENT PHARMACEUTICALS, INC.
Entity Central Index Key	0001369786
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		32,910,475

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 15,524	$ 28,962
Short-term investments	20,164	20,060
Accounts receivable, net of chargebacks and other deductions	50,110	51,425
Inventories, net	86,532	76,453
Due from related party	2,754	2,678
Prepaid expenses and other current assets	9,934	7,388
Assets held for sale		4,626
Total current assets	185,018	191,592
Property, plant, and equipment, net	28,310	19,761
Investment in joint ventures	7,850	7,108
Goodwill	26,556	25,184
Intangible assets, net	57,752	53,166
Non-current deferred tax assets	52,116	50,808
Other assets	1,411	2,113
Total assets	359,013	349,732
Current liabilities:
Accounts payable	48,670	43,703
Due to related party	15,992	13,754
Accrued profit sharing	6,209	7,582
Accrued liabilities	14,951	15,706
Liabilities held for sale		2,910
Total current liabilities	85,822	83,655
Long term liabilities:
Long-term debt	5,978	1,623
Deferred income taxes	12,058	12,021
Other long-term liabilities	1,319	1,340
Total liabilities	105,177	98,639
Stockholders’ equity:
Common stock—$0.01 par value, 100,000,000 authorized, and 32,851,263 and 32,801,896 outstanding at June 30, 2016 and December 31, 2015, respectively	329	328
Additional paid-in capital	369,227	367,235
Accumulated other comprehensive income (loss)	(11,227)	(17,482)
Accumulated deficit	(104,493)	(98,988)
Total stockholders’ equity	253,836	251,093
Total liabilities and stockholders’ equity	$ 359,013	$ 349,732

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2016	Dec. 31, 2015
Statement Of Financial Position [Abstract]
Common stock, par value	$ 0.01	$ 0.01
Common stock, authorized shares	100,000,000	100,000,000
Common stock, outstanding shares	32,851,263	32,801,896

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Income Statement [Abstract]
Net revenue	$ 71,721,000	$ 77,345,000	$ 139,516,000	$ 159,990,000
Cost of sales	54,368,000	58,904,000	105,316,000	119,624,000
Gross profit	17,353,000	18,441,000	34,200,000	40,366,000
Operating expenses:
Product development	6,630,000	5,419,000	13,387,000	10,734,000
Selling, general and administrative	11,726,000	11,410,000	23,851,000	24,535,000
Acquisition-related costs	1,452,000	70,000	2,850,000	1,321,000
Management transition costs	0	644,000	0	3,952,000
Equity in net (income) of joint ventures	(186,000)	(293,000)	(742,000)	(1,178,000)
Total operating expenses	19,622,000	17,250,000	39,346,000	39,364,000
Loss on sale of SCP			6,341,000
Gain on sale of product rights	(1,800,000)		(3,800,000)
Income (loss) from operations	(469,000)	1,191,000	(7,687,000)	1,002,000
Interest income and other income (expense), net	3,000	516,000	1,096,000	(540,000)
Interest expense	(101,000)	(132,000)	(233,000)	(462,000)
Income (loss) before income taxes	(567,000)	1,575,000	(6,824,000)
Provision (benefit) for income taxes	(52,000)	1,831,000	(1,319,000)	2,150,000
Net loss	$ (515,000)	$ (256,000)	$ (5,505,000)	$ (2,150,000)
Net loss per common share:
Basic	$ (0.02)	$ (0.01)	$ (0.17)	$ (0.07)
Diluted	$ (0.02)	$ (0.01)	$ (0.17)	$ (0.07)
Weighted-average of shares used to compute net income per common share:
Basic	32,856	32,161	32,843	32,102
Diluted	32,856	32,161	32,843	32,102

XML

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Statement Of Income And Comprehensive Income [Abstract]
Net income (loss)	$ (515)	$ (256)	$ (5,505)	$ (2,150)
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments	(62)	2,266	4,752	(4,772)
Reclassification of cumulative currency translation gain			1,426
Unrealized gains (losses) on available for sale securities	2	(5)	77	25
Total other comprehensive income (loss), net of tax	(60)	2,261	6,255	(4,747)
Comprehensive income (loss)	$ (575)	$ 2,005	$ 750	$ (6,897)

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash flows from operating activities
Net income (loss)	$ (5,505)	$ (2,150)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	4,415	6,127
Stock-based compensation	1,899	1,925
Equity in net (income) loss of joint ventures	(742)	(1,178)
Deferred income taxes, net	(2,117)	800
Sale of SCP	6,184
Other	77	(88)
Changes in operating assets and liabilities:
Accounts receivable, net	(3,186)	(1,634)
Inventories, net	(9,353)	(10,649)
Prepaid expenses and other current assets	(2,159)	(1,446)
Due from related party	(76)	1,068
Accounts payable and other accrued liabilities	(4,234)	5,530
Net cash used in operating activities	(14,797)	(1,695)
Cash flows from investing activities
Capital expenditures	(6,052)	(3,193)
Purchases of investments	(7,216)	(5,221)
Sale of investments	7,100	3,450
Net reduction in cash due to sale of SCP	(1,694)
Sale of product rights	3,800
Purchase of product rights		(768)
Net cash used in investing activities	(4,062)	(5,732)
Cash flows from financing activities
Increase (reduction) in short-term borrowings		(5,189)
Issuance of long-term debt	7,966
Repayment of long-term debt	(3,158)	(340)
Payment of deferred financing costs	(202)	(106)
Proceeds from issuance of common stock, net of issuance costs	93	8,416
Net cash provided by financing activities	4,699	2,781
Effect of exchange rate movements in cash	722	(42)
Net decrease in cash and cash equivalents	(13,438)	(4,688)
Cash and cash equivalents, at beginning of period	28,962	55,633
Cash and cash equivalents, at end of period	15,524	50,945
Supplemental disclosure of cash flow information
Acquisition of property, plant and equipment in accounts payable	2,242	$ (317)
Acquisition of intangibles in accounts payable	$ 2,400

XML

Basis of presentation

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Basis of presentation

Note 1. Basis of presentation:

Our interim condensed consolidated financial statements are unaudited. We prepared the condensed consolidated financial statements following rules for interim reporting as prescribed by the U.S. Securities and Exchange Commission (“SEC”). As permitted under those rules, we have condensed or omitted a number of footnotes or other financial information that are normally required by accounting principles generally accepted in the United States of America (“U.S. GAAP”). It is management’s opinion that these financial statements include all adjustments, consisting of normal and recurring adjustments, necessary for a fair presentation of our financial position, operating results and cash flows. Operating results for any interim period are not necessarily indicative of future or annual results.

The condensed consolidated financial statements include Sagent as well as our wholly owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. We account for our investment in Sagent Agila LLC using the equity method of accounting, as our interest in the entity provides for joint financial and operational control.  

Management uses segment information to evaluate segment performance and allocate resources. Since the acquisition of Omega in the fourth quarter of 2014, we have operated in two reportable segments comprised of operations organized geographically in the United States (Sagent US segment) and Canada (Omega segment). Effective March 2016, we completed the disposal of the Sagent China Pharmaceuticals Co., Ltd. (“SCP”) manufacturing facility, which was a component of the Sagent US segment, reorganized our internal reporting responsibilities with our new EVP-Global Operations, and continued to align our strategic focus to integrate our Canadian business to support the manufacturing and sale of products.  Following these events, our Chief Executive Officer now focuses his review of financial performance and allocation of resources on the operations of the consolidated Company.  As a result, we began operating in a single reportable segment, which develops, sources, manufactures and markets affordable generic pharmaceutical products to the hospital market.  We continue to operate with two reporting units, which comprise the single reportable segment.

You should read these statements in conjunction with our consolidated financial statements and related notes for the year ended December 31, 2015, included in our most recent Annual Report on Form 10-K filed with the SEC on March 7, 2016.

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Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2016

Accounting Changes And Error Corrections [Abstract]

Recent Accounting Pronouncements

Note 2: Recent Accounting Pronouncements

In May 2014, the FASB issued amended revenue recognition guidance to clarify the principles for recognizing revenue from contracts with customers. The guidance requires an entity to recognize revenue in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The guidance also requires expanded disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required about customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. In July 2015, the FASB approved a one year deferral to the new revenue guidance, and we are therefore required to adopt the new guidance on January 1, 2018 using one of the two prescribed retroactive methods. We are evaluating the impact of the amended revenue recognition guidance on our financial statements and related disclosures.

In February 2015, the FASB issued amended guidance on the model used to evaluate whether certain legal entities should be consolidated. This guidance is effective for the Company in the first quarter of 2017. Early adoption is permitted. Adoption of this guidance is not expected to have a material impact on our financial statements.

In April 2015, the FASB issued amended guidance which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This guidance is effective for annual and interim periods beginning after December 15, 2015. We have adopted this guidance in the current period.  There was no material impact of adoption.

In February 2016, the FASB issued lease guidance, which is intended to increase the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. In order to meet that objective, the new standard requires recognition of the assets and liabilities that arise from leases. A lessee will be required to recognize on the balance sheet the assets and liabilities for leases with lease terms of more than 12 months. Accounting by lessors will remain largely unchanged from current U.S. GAAP. The new standard is effective for public companies for fiscal years beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. We are evaluating the impact of the lease guidance on our financial statements and related disclosures.

In March 2016, the FASB issued amended guidance on employee share-based payment accounting. This update involves several aspects of the accounting for share-based payment transactions, including income tax effects, forfeitures and classifications on the statement of cash flows. The guidance is effective for fiscal years beginning after December 15, 2016. Early adoption is permitted in an interim or annual period; however, all amendments must be adopted at the same time. We are evaluating the impact of this guidance on our financial statements.

XML

Sale of SCP

6 Months Ended

Jun. 30, 2016

Discontinued Operations And Disposal Groups [Abstract]

Sale of SCP

Note 3. Sale of SCP:

On March 22, 2016, we completed the sale of all of the issued and outstanding shares of the capital stock of SCP to Hong Kong King-Friend Pharmaceutical Co., Ltd., a subsidiary of Nanjing King-Friend Pharmaceutical Co., Ltd., (“NKF”), in exchange for $500.  In connection with the closing of the transaction, we incurred additional charges related to employee severance, cumulative currency translation adjustments and transferred working capital, resulting in a loss of $6,341, net of the cash consideration we received.  

XML

Sale of Product Rights

6 Months Ended

Jun. 30, 2016

Text Block [Abstract]

Sale of Product Rights

Note 4. Sale of Product Rights:

During March 2016, we completed the sale of two product rights to NKF for cash consideration of $2,000.  We recognized a gain on sale of $2,000 related to the transaction, as we have no further continuing involvement in the sale, marketing, or manufacturing process of the products.

During June 2016, we completed the sale of one product right for cash consideration of $1,800.  We recognized a gain on sale of $1,800 related to the transaction, as we have no further continuing involvement in the sale, marketing, or manufacturing process of the product.

XML

Investments

6 Months Ended

Jun. 30, 2016

Investments Debt And Equity Securities [Abstract]

Investments

Note 5. Investments:

Our investments at June 30, 2016 were comprised of the following:

	Cost basis		Unrealized gains		Unrealized losses			Carrying value		Cash and cash equivalents		Short term investments
Assets
Cash	$	12,834	$	—	$	—		$	12,834	$	12,834	$	—
Money market funds		2,690		—		—			2,690		2,690		—
Commercial paper		1,000		—		—			1,000		—		1,000
Corporate/Government bonds and notes		19,154		16		(6	)		19,164		—		19,164
	$	35,678	$	16	$	(6	)	$	35,688	$	15,524	$	20,164

Investments with continuous unrealized losses for less than twelve months and their related fair values at June 30, 2016 were as follows:

	Fair value		Unrealized losses
Corporate/Government bonds and notes	$	10,429	$	(6	)

Unrealized losses from fixed-income securities are primarily attributable to changes in interest rates. Because we do not currently intend to sell these investments, and it is not more likely than not that we will be required to sell our investments before recovery of their amortized cost basis, which may be maturity, we do not consider these investments to be other-than-temporarily impaired at June 30, 2016.

The original cost and estimated current fair value of our fixed-income securities at June 30, 2016 are set forth below.

	Cost basis		Estimatedfair value
Due in one year or less	$	10,429	$	10,428
Due between one and five years		9,725		9,736
	$	20,154	$	20,164

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Inventories

6 Months Ended

Jun. 30, 2016

Inventory Disclosure [Abstract]

Inventories

Note 6. Inventories:

Inventories at June 30, 2016 and December 31, 2015 were as follows:

	June 30, 2016									December 31, 2015
	Approved			Pending regulatory approval			Inventory			Approved			Pending regulatory approval		Inventory
Raw materials	$	6,458		$	6,028		$	12,486		$	4,855		$	2,800	$	7,655
Work in process		853			—		$	853			433			—		433
Finished goods		83,170			—		$	83,170			73,365			—		73,365
Inventory reserve		(7,214	)		(2,763	)	$	(9,977	)		(5,000	)		—		(5,000	)
	$	83,267		$	3,265		$	86,532		$	73,653		$	2,800	$	76,453

In the first quarter of 2016, we acquired $3,248 of pre-launch API related to one of the products in our development pipeline.  This amount is included in Raw materials pending regulatory approval as we believe the approval and launch of the related product is probable.  

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Property, plant and equipment

6 Months Ended

Jun. 30, 2016

Property Plant And Equipment [Abstract]

Property, plant and equipment

Note 7. Property, plant and equipment

Property, plant and equipment at June 30, 2016 and December 31, 2015 were as follows:

	June 30, 2016			December 31, 2015
Land and land improvements	$	1,181		$	1,102
Buildings and improvements		7,572			6,713
Machinery, equipment, furniture and fixtures		6,114			5,457
Computer Software		3,840			3,776
Construction in process		14,596			6,535
		33,303			23,583
Less accumulated depreciation		(4,993	)		(3,822	)
	$	28,310		$	19,761

Depreciation expense was $504 and $1,067 for the three and six months ended June 30, 2016, respectively.  

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Goodwill and Intangible assets, net

6 Months Ended

Jun. 30, 2016

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Intangible assets, net

Note 8. Goodwill and Intangible assets, net:

Goodwill at June 30, 2016 and December 31, 2015 was $26,556 and $25,184, respectively.  There were no goodwill impairment losses for the three or six months ended June 30, 2016 and 2015, respectively.

Movements in goodwill were due to the following:

December 31, 2015	$	25,184
Foreign currency movements		1,372
June 30, 2016	$	26,556

Intangible assets at June 30, 2016 and December 31, 2015 were as follows:

	June 30, 2016							December 31, 2015
	Gross carrying amount		Accumulated amortization			Intangible assets, net		Gross carrying amount		Accumulated amortization			Intangible assets, net
Product licensing rights	$	4,583	$	(3,192	)	$	1,391	$	4,533	$	(2,998	)	$	1,535
Product development rights		6,722		—			6,722		2,890		—			2,890
Purchased product rights and  other		49,128		(7,461	)		41,667		46,238		(5,087	)		41,151
Total definite-lived intangible assets	$	60,433	$	(10,653	)	$	49,780	$	53,661	$	(8,085	)	$	45,576
In-process research and development (IPR&D)	$	7,972	$	—		$	7,972	$	7,590	$	—		$	7,590
Total intangible assets	$	68,405	$	(10,653	)	$	57,752	$	61,251	$	(8,085	)	$	53,166

Movements in intangible assets were due to the following:

	Product licensing rights			Product development rights			Purchased product rights and other			IPR&D
December 31, 2015	$	1,535		$	2,890		$	41,151		$	7,590
Purchase of product rights		50			4,800			—			—
Amortization of product rights		(194	)		(968	)		(2,015	)		—
Foreign currency movements and other		—			—			2,531			382
June 30, 2016	$	1,391		$	6,722		$	41,667		$	7,972

The weighted-average period prior to the next extension or renewal for the 20 products comprising our product licensing rights intangible asset was 46 months at June 30, 2016.

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Investment in Sagent Agila

6 Months Ended

Jun. 30, 2016

Sagent Agila LLC

Investment in Sagent Agila

Note 9. Investment in Sagent Agila:

Changes in our investment in Sagent Agila during the six months ended June 30, 2016 were as follows:

Investment in Sagent Agila at December 31, 2015	$	7,108
Equity in net income of Sagent Agila	$	742
Investment in Sagent Agila at June 30, 2016	$	7,850

Condensed statement of operations information of Sagent Agila is as follows:.

	Three months ended June 30,				Six months ended June 30,
Condensed statement of operations information	2016		2015		2016		2015
Net revenues	$	1,788	$	847	$	3,396	$	3,921
Gross profit		372		585		1,484		2,355
Net income		372		585		1,484		2,355

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Debt

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Debt

Note 10. Debt:

JPMorgan Chase Revolving Credit Loan Facility

On October 31, 2014, we entered into a credit agreement with JPMorgan Chase Bank, N.A., (the “Chase Agreement”). The Chase Agreement provides for an $80,000 asset based revolving credit loan facility, with availability subject to a borrowing base consisting of eligible cash, short-term investments, accounts receivable and inventory and the satisfaction of conditions precedent specified in the Chase Agreement. The Chase Agreement provides for an accordion feature, whereby we may increase the revolving commitment up to an additional $25,000, subject to certain customary terms and conditions, including pro-forma compliance with a fixed charge coverage ratio (as defined in the Chase Agreement) of 1.00 to 1.00. The Chase Agreement matures on October 31, 2019, at which time all amounts outstanding will be due and payable. Borrowings under the Chase Agreement may be used for general corporate purposes, including funding working capital. Amounts drawn bear an interest rate equal to, at our option, either a Eurodollar rate plus 2.00% per annum or an alternative base rate plus 1.00% per annum. We also incur a commitment fee on undrawn amounts equal to 0.25% per annum.

The Chase Agreement includes customary covenants and also imposes a financial covenant requiring compliance with a minimum fixed charge coverage ratio of 1.00 to 1.00 during certain covenant testing times triggered if availability under the Chase Agreement is below the greater of 10% of the revolving commitment and $8,000.

On January 7, 2016, we amended and restated our Chase Agreement (the “Amended Chase Agreement”) by adding a Canadian tranche and joining Omega as a borrower. The Amended Chase Agreement adds a C$30,000 term loan (including a delayed draw term loan) to fund, among other things, Omega’s construction of a facility in Quebec. The Amended Chase Agreement also adds a C$10,000 revolving facility sublimit to the existing revolving facility, with the total revolving commitment amount remaining at $80,000. The applicable margins for the Canadian prime rate and Canadian Dollar Offered Rate (“CDOR”) revolving loans are the same as the base rate and Eurodollar rates for the U.S. revolving loans at 1.00% and 2.00%, respectively. The margins for the Canadian term loans are 1.25% and 2.25% for Canadian prime rate and CDOR, respectively. The commitment fee rate remains 0.25%. The fixed charge coverage ratio remains at 1.00 to 1.00. The Canadian term loans are to be repaid in certain increments pursuant to the Amended Chase Agreement as the facility in Quebec is completed.

As of June 30, 2016, there was $6,571 in term loan borrowings outstanding under our Amended Chase Agreement, no outstanding borrowingson the revolver, and we were in compliance with all covenants under the Amended Chase Agreement. Total availability under our Chase term loan facility was $16,584 (C$21,487) at June 30, 2016. Total availability under our Chase revolving loan facility was $79,900 at June 30, 2016, which is subject to adjustment on a monthly basis under our borrowing base calculation.

Credit facilities acquired under the Omega acquisition

In connection with the acquisition of Omega, we assumed a series of credit facilities and mortgages with the National Bank of Canada (“NBC”) and the Business Development Bank of Canada (“BDC”).

In January 2015, we paid off all amounts outstanding under the Omega operating credit facility, the Omega demand loan and the Omega decreasing revolving credit facility with available cash on hand.

Omega also had five mortgage loans with the BDC (collectively the “Omega mortgages”) which we assumed in connection with the acquisition. The Omega mortgages, which required monthly installments and which were secured by specific Omega buildings and equipment, ranged in amount from C$70 to C$1,250 ($62 to $1,114 as of the acquisition date) and bore interest at the lender’s prime rate (5% as of the acquisition date) plus a premium ranging from 0%—1.5%. The Omega mortgages had maturity dates at various times from August 2019 through November 2036. In January 2016, in connection with entering the Amended Chase Agreement, we repaid the Omega mortgages in full, and refinanced them under the Chase term loan.

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Accrued liabilities

6 Months Ended

Jun. 30, 2016

Payables And Accruals [Abstract]

Accrued liabilities

Note 11. Accrued liabilities:

Accrued liabilities at June 30, 2016 and December 31, 2015 were as follows:

	June 30, 2016		December 31, 2015
Payroll and employee benefits	$	4,120	$	6,512
Sales and marketing		7,748		7,308
Taxes payable		580		131
Other accrued liabilities		2,503		1,755
	$	14,951	$	15,706

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Fair value measurements

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Fair value measurements

Note 12. Fair value measurements:

Assets measured at fair value on a recurring basis as of June 30, 2016 consisted of the following:

	Total fair value		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets
Money market funds	$	2,690	$	2,690	$	—	$	—
Corporate/Government bonds and notes		19,164		—		19,164		—
Commercial paper		1,000		—		1,000		—
Short-term investments	$	20,164	$	—	$	20,164	$	—
Total assets	$	22,854	$	2,690	$	20,164	$	—

The fair value of our Level 2 investments is based on a combination of quoted market prices of similar securities and matrix pricing provided by third-party pricing services utilizing securities of similar quality and maturity.   The fair value of our Level 3 contingent consideration is based upon a probability weighting approach that considered the possible outcomes based on assumptions related to the timing and probability of the product approval date.

Assets and liabilities measured at fair value on a recurring basis as of December 31, 2015 consisted of the following:

	Total fair value		Quotedprices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets
Money market funds	$	13,838	$	13,838	$	—	$	—
Corporate bonds and notes		20,060		—		20,060		—
Short-term investments	$	20,060	$	—	$	20,060	$	—
Total assets	$	33,898	$	13,838	$	20,060	$	—
Liabilities
Contingent purchase consideration	$	50	$	—	$	—	$	50

There were no transfers of assets between Level 1, Level 2 or Level 3 during the periods presented.

The contingent consideration is fixed at $50 as product approval was not achieved by June 30, 2016.  As the consideration is now fixed, the fair value is equal to the carrying value, and valuation consideration is no longer required as of June 30, 2016.  The fair value of our Level 3 contingent consideration is based upon a probability weighting approach that considered the possible outcomes based on assumptions related to the timing and probability of the product approval date.

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Accumulated other comprehensive income (loss)

6 Months Ended

Jun. 30, 2016

Equity [Abstract]

Accumulated other comprehensive income (loss)

Note 13. Accumulated other comprehensive income (loss):

Accumulated other comprehensive income (loss) at June 30, 2016 and December 31, 2015 is comprised of the following:

	June 30, 2016			December 31, 2015
Currency translation adjustment, net of tax	$	(11,236	)	$	(17,414	)
Unrealized gains (losses) on available for sale securities,    net of tax		9			(68	)
Total accumulated other comprehensive income (loss)	$	(11,227	)	$	(17,482	)

The table below presents the significant amounts reclassified out of each component of accumulated other comprehensive loss for the period ended June 30, 2016.

Type of reclassification	Amount reclassified from accumulated other comprehensive income		Affected line item in the condensed consolidated statement of operations
Currency translation    adjustment – reclassification of cumulative    currency translation gain	$	1,426	Loss on sale of SCP
Total reclassification for the six months    ended June 30, 2016, net of tax	$	1,426

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Earnings per share

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Earnings per share

Note 14. Earnings per share:

Basic earnings per share is calculated by dividing net income available to common stockholders by the weighted average number of common shares outstanding for the period. Because of their anti-dilutive effect, the following common share equivalents, comprised of restricted stock and unexercised stock options, have been excluded from the calculation of diluted earnings per share for the three and six month periods ended June 30, 2016 and 2015, respectively:

	Three months ended June 30,				Six months ended June 30,
	2016		2015		2016		2015
Anti-dilutive shares (in thousands)		2,125		1,849		2,125		1,849

The table below presents the computation of basic and diluted earnings per share for the three and six months ended June 30, 2016 and 2015:

	Three months ended June 30,						Six months ended June 30,
	2016			2015			2016			2015
Basic and dilutive numerator:
Net income (loss), as reported	$	(515	)	$	(256	)	$	(5,505	)	$	(2,150	)
Denominator:
Weighted-average common shares outstanding - basic    (in thousands)		32,856			32,161			32,843			32,102
Net effect of dilutive securities:
Stock options and restricted stock		—			—			—			—
Weighted-average common shares outstanding - diluted    (in thousands)		32,856			32,161			32,843			32,102
Net income (loss) per common share (basic)	$	(0.02	)	$	(0.01	)	$	(0.17	)	$	(0.07	)
Net income (loss) per common share (diluted)	$	(0.02	)	$	(0.01	)	$	(0.17	)	$	(0.07	)

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Stock-based compensation

6 Months Ended

Jun. 30, 2016

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-based compensation

Note 15. Stock-based compensation:

The following tables set forth stock option and restricted stock activity for the six months ended June 30, 2016:

	Number of Shares
	Stock options			Restricted stock
Outstanding at December 31, 2015		1,679,039			180,208
Granted		569,579			196,312
Exercised		(61,705	)		(48,082	)
Forfeited		(320,434	)		(69,816	)
Outstanding at June 30, 2016		1,866,479			258,622

The aggregate intrinsic value of stock options exercised during the three months ended June 30, 2016 and 2015, was $376 and $5,964, respectively. The aggregate intrinsic value of stock options exercised during the six months ended June 30, 2016 and 2015, was $376 and $7,514, respectively.

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Net revenue by product

6 Months Ended

Jun. 30, 2016

Text Block [Abstract]

Net revenue by product

Note 16. Net revenue by product:

Net revenue by therapeutic class is as follows:

	Three months ended June 30,				Six months ended June 30,
Therapeutic class:	2016		2015		2016		2015
Anti-infective	$	27,350	$	33,004	$	55,382	$	64,562
Critical care		30,896		26,783		59,344		56,692
Oncology		13,475		17,558		24,790		38,736
	$	71,721	$	77,345	$	139,516	$	159,990

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Related party transactions

6 Months Ended

Jun. 30, 2016

Related Party Transactions [Abstract]

Related party transactions

Note 17. Related party transactions:

As of June 30, 2016 and December 31, 2015, respectively, we had a receivable of $2,754 and $2,678 from Sagent Agila LLC, which is expected to offset future profit-sharing payments.As of June 30, 2016 and December 31, 2015, respectively, we had a payable of $15,992 and $13,754 to Sagent Agila LLC, principally for the acquisition of inventory and amounts due under profit-sharing arrangements.

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Income Taxes

6 Months Ended

Jun. 30, 2016

Income Tax Disclosure [Abstract]

Income Taxes

Note 18. Income Taxes:

Our benefit for income taxes for the three and six months ended June 30, 2016 was $52 and $1,319, respectively.  Our provision for income taxes for the three and six months ended June 30, 2015 was $1,831 and $2,150, respectively.  Included within the six months ended June 30, 2016 tax benefit are $1,064 of discrete tax benefits related to the completion of the sale of SCP.  

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Commitments and contingencies

6 Months Ended

Jun. 30, 2016

Commitments And Contingencies Disclosure [Abstract]

Commitments and contingencies

Note 19. Commitments and contingencies:

From time to time, we are subject to claims and litigation arising in the ordinary course of business. These claims may include assertions that our products infringe existing patents and claims that the use of our products has caused personal injuries. We intend to vigorously defend any such litigation that may arise under all defenses that would be available to us. At this time, there are no proceedings of which we are aware that are considered likely to have a material adverse effect on our consolidated financial position or results of operations.

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Management transition costs

6 Months Ended

Jun. 30, 2016

Restructuring And Related Activities Abstract

Management transition costs

Note 20. Management transition costs:

In 2015, we incurred costs related to the transition of our senior management team, following the retirement of our founder and Chief Executive Officer and resignation of our President in March 2015, and the elimination of certain positions in the US as part of the ongoing review of our business. Costs associated with these matters for the three and six months ended June 30, 2015, primarily severance related charges, totaled $644 and $3,952, respectively.

Of the charges incurred in 2015, $723 were paid during the quarter ended June 30, 2016 related to ongoing severance obligations. There are no costs accrued within the Accounts Payable and Accrued liabilities captions of the balance sheet at June 30, 2016. No costs were incurred in the six months ended June 30, 2016.

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Subsequent Events

6 Months Ended

Jun. 30, 2016

Subsequent Events [Abstract]

Subsequent Events

Note 21. Subsequent Events:

On June 15, 2016, we entered into an asset purchase agreement with Teva Pharmaceutical Industries Ltd. (Teva) and Actavis LLC to acquire a portfolio of five generic injectable pharmaceutical products., including Propofol Injectable Emulsion, 1%, for total consideration of $40 million.  The transaction closed on August 3, 2016.  Sagent has fully funded the transaction through borrowings on our revolver under the Amended Chase Agreement.  We intend to account for this transaction as a business combination.  Based on our preliminary estimates anticipate the purchase price will be primarily allocated to definite and indefinite lived intangible assets.

On July 10, 2016, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Nichi-Iko Pharmaceutical Co., Ltd., (“Parent”), and Shepard Vision, Inc., a wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which Merger Sub will, on the terms and subject to the conditions set forth therein, conduct a tender offer (the “Offer”) for all of the Company’s common stock at a purchase price of $21.75 per share (the “Offer Price”), net to the seller in cash, without interest, less any required withholding taxes and, following acceptance of the tendered shares, merge with and into the Company.  

The Offer is subject to customary conditions, including, among other things, (i) that the number of shares of Company common stock validly tendered in accordance with the terms of the Offer and not validly withdrawn, together with the shares of Company common stock owned by Merger Sub, must equal one share more than 50% of the outstanding shares of Company common stock, including all shares of Company common stock that the Company may be required to issue prior to the end date (as defined in the Merger Agreement) upon the vesting (including vesting solely as a result of the consummation of the Offer), conversion, settlement or exercise of all then outstanding warrants, options, obligations or securities convertible or exchangeable into shares of Company common stock or other rights to acquire or be issued shares of Company common stock, (ii) that any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 shall have expired or otherwise been terminated and (iii) the absence of any legal restraint.

The transaction is expected to be consummated in the third quarter of 2016.

Additional information about our pending acquisition by Parent is available in the Solicitation/Recommendation Statement on Schedule 14D-9 filed by us with the SEC on August 1, 2016 (as amended, the “Schedule 14D-9”). The foregoing description of the Merger Agreement and the terms and conditions of the tender offer and merger do not purport to be complete and are qualified in their entirety by reference to our Schedule 14D-9, and to the Merger Agreement and Parent’s offer to purchase and other related documents, copies of which are filed as Exhibits (e)(1) and (a)(1)(A), respectively, of our Schedule 14D-9, all of which are incorporated herein by reference.

Important Information:

Nothing in this Quarterly Report on Form 10-Q shall constitute an offer to purchase or a solicitation of an offer to sell any securities. The Offer is being made pursuant to a Tender Offer Statement on Schedule TO filed by Parent with the SEC on August 1, 2016.  Sagent filed a Solicitation/Recommendation Statement on Schedule 14D-9 with the SEC with respect to the Offer on August 1, 2016.  STOCKHOLDERS OF THE COMPANY ARE ADVISED TO READ THE SCHEDULE TO (INCLUDING AN OFFER TO PURCHASE, A RELATED LETTER OF TRANSMITTAL AND OTHER OFFER DOCUMENTS) AND THE SCHEDULE 14D-9, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE, BEFORE MAKING ANY DECISION WITH RESPECT TO THE TENDER OFFER BECAUSE THESE DOCUMENTS CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND THE PARTIES THERETO.  The Offer, the related Letter of Transmittal and certain other tender offer documents, as well as the Solicitation/Recommendation Statement on Schedule 14D-9, are being made available to all holders of shares of Sagent common stock at no expense to them.  Investors and stockholders may obtain free copies of the Schedule TO and Schedule 14D-9, as each may be amended or supplemented from time to time, and other documents filed by the parties at the SEC’s web site at www.sec.gov or by contacting Michael Ward, Sagent’s Chief Legal Officer and Corporate Secretary either by telephone at (847) 908-1600 or by e-mail at legal@sagentpharma.com.

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Recent Accounting Pronouncements (Policies)

6 Months Ended

Jun. 30, 2016

Accounting Changes And Error Corrections [Abstract]

Recent Accounting Pronouncements

In May 2014, the FASB issued amended revenue recognition guidance to clarify the principles for recognizing revenue from contracts with customers. The guidance requires an entity to recognize revenue in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The guidance also requires expanded disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required about customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. In July 2015, the FASB approved a one year deferral to the new revenue guidance, and we are therefore required to adopt the new guidance on January 1, 2018 using one of the two prescribed retroactive methods. We are evaluating the impact of the amended revenue recognition guidance on our financial statements and related disclosures.

In February 2015, the FASB issued amended guidance on the model used to evaluate whether certain legal entities should be consolidated. This guidance is effective for the Company in the first quarter of 2017. Early adoption is permitted. Adoption of this guidance is not expected to have a material impact on our financial statements.

In April 2015, the FASB issued amended guidance which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This guidance is effective for annual and interim periods beginning after December 15, 2015. We have adopted this guidance in the current period.  There was no material impact of adoption.

In February 2016, the FASB issued lease guidance, which is intended to increase the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. In order to meet that objective, the new standard requires recognition of the assets and liabilities that arise from leases. A lessee will be required to recognize on the balance sheet the assets and liabilities for leases with lease terms of more than 12 months. Accounting by lessors will remain largely unchanged from current U.S. GAAP. The new standard is effective for public companies for fiscal years beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. We are evaluating the impact of the lease guidance on our financial statements and related disclosures.

In March 2016, the FASB issued amended guidance on employee share-based payment accounting. This update involves several aspects of the accounting for share-based payment transactions, including income tax effects, forfeitures and classifications on the statement of cash flows. The guidance is effective for fiscal years beginning after December 15, 2016. Early adoption is permitted in an interim or annual period; however, all amendments must be adopted at the same time. We are evaluating the impact of this guidance on our financial statements.

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Investments (Tables)

6 Months Ended

Jun. 30, 2016

Investments Debt And Equity Securities [Abstract]

Investments

Our investments at June 30, 2016 were comprised of the following:

	Cost basis		Unrealized gains		Unrealized losses			Carrying value		Cash and cash equivalents		Short term investments
Assets
Cash	$	12,834	$	—	$	—		$	12,834	$	12,834	$	—
Money market funds		2,690		—		—			2,690		2,690		—
Commercial paper		1,000		—		—			1,000		—		1,000
Corporate/Government bonds and notes		19,154		16		(6	)		19,164		—		19,164
	$	35,678	$	16	$	(6	)	$	35,688	$	15,524	$	20,164

Investments with Continuous Unrealized Losses for Less Than Twelve Months and Related Fair Values

Investments with continuous unrealized losses for less than twelve months and their related fair values at June 30, 2016 were as follows:

	Fair value		Unrealized losses
Corporate/Government bonds and notes	$	10,429	$	(6	)

Cost and Estimated Current Fair Value of Fixed-Income Securities

The original cost and estimated current fair value of our fixed-income securities at June 30, 2016 are set forth below.

	Cost basis		Estimatedfair value
Due in one year or less	$	10,429	$	10,428
Due between one and five years		9,725		9,736
	$	20,154	$	20,164

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Inventories (Tables)

6 Months Ended

Jun. 30, 2016

Inventory Disclosure [Abstract]

Inventory Valuation

Inventories at June 30, 2016 and December 31, 2015 were as follows:

	June 30, 2016									December 31, 2015
	Approved			Pending regulatory approval			Inventory			Approved			Pending regulatory approval		Inventory
Raw materials	$	6,458		$	6,028		$	12,486		$	4,855		$	2,800	$	7,655
Work in process		853			—		$	853			433			—		433
Finished goods		83,170			—		$	83,170			73,365			—		73,365
Inventory reserve		(7,214	)		(2,763	)	$	(9,977	)		(5,000	)		—		(5,000	)
	$	83,267		$	3,265		$	86,532		$	73,653		$	2,800	$	76,453

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Property, plant and equipment (Tables)

6 Months Ended

Jun. 30, 2016

Property Plant And Equipment [Abstract]

Property, Plant and Equipment

Property, plant and equipment at June 30, 2016 and December 31, 2015 were as follows:

	June 30, 2016			December 31, 2015
Land and land improvements	$	1,181		$	1,102
Buildings and improvements		7,572			6,713
Machinery, equipment, furniture and fixtures		6,114			5,457
Computer Software		3,840			3,776
Construction in process		14,596			6,535
		33,303			23,583
Less accumulated depreciation		(4,993	)		(3,822	)
	$	28,310		$	19,761

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Goodwill and Intangible assets, net (Tables)

6 Months Ended

Jun. 30, 2016

Goodwill And Intangible Assets Disclosure [Abstract]

Summary of Movements in Goodwill

Movements in goodwill were due to the following:

December 31, 2015	$	25,184
Foreign currency movements		1,372
June 30, 2016	$	26,556

Schedule of Intangible Assets - Finite lived

Intangible assets at June 30, 2016 and December 31, 2015 were as follows:

	June 30, 2016							December 31, 2015
	Gross carrying amount		Accumulated amortization			Intangible assets, net		Gross carrying amount		Accumulated amortization			Intangible assets, net
Product licensing rights	$	4,583	$	(3,192	)	$	1,391	$	4,533	$	(2,998	)	$	1,535
Product development rights		6,722		—			6,722		2,890		—			2,890
Purchased product rights and  other		49,128		(7,461	)		41,667		46,238		(5,087	)		41,151
Total definite-lived intangible assets	$	60,433	$	(10,653	)	$	49,780	$	53,661	$	(8,085	)	$	45,576
In-process research and development (IPR&D)	$	7,972	$	—		$	7,972	$	7,590	$	—		$	7,590
Total intangible assets	$	68,405	$	(10,653	)	$	57,752	$	61,251	$	(8,085	)	$	53,166

Movements in Intangible Assets

Movements in intangible assets were due to the following:

	Product licensing rights			Product development rights			Purchased product rights and other			IPR&D
December 31, 2015	$	1,535		$	2,890		$	41,151		$	7,590
Purchase of product rights		50			4,800			—			—
Amortization of product rights		(194	)		(968	)		(2,015	)		—
Foreign currency movements and other		—			—			2,531			382
June 30, 2016	$	1,391		$	6,722		$	41,667		$	7,972

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Investment in Sagent Agila (Tables) - Sagent Agila LLC

6 Months Ended

Jun. 30, 2016

Changes in Investment

Changes in our investment in Sagent Agila during the six months ended June 30, 2016 were as follows:

Investment in Sagent Agila at December 31, 2015	$	7,108
Equity in net income of Sagent Agila	$	742
Investment in Sagent Agila at June 30, 2016	$	7,850

Condensed Statement of Operations Information

Condensed statement of operations information of Sagent Agila is as follows:.

	Three months ended June 30,				Six months ended June 30,
Condensed statement of operations information	2016		2015		2016		2015
Net revenues	$	1,788	$	847	$	3,396	$	3,921
Gross profit		372		585		1,484		2,355
Net income		372		585		1,484		2,355

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Accrued liabilities (Tables)

6 Months Ended

Jun. 30, 2016

Payables And Accruals [Abstract]

Accrued Liabilities

Accrued liabilities at June 30, 2016 and December 31, 2015 were as follows:

	June 30, 2016		December 31, 2015
Payroll and employee benefits	$	4,120	$	6,512
Sales and marketing		7,748		7,308
Taxes payable		580		131
Other accrued liabilities		2,503		1,755
	$	14,951	$	15,706

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Fair value measurements (Tables)

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Summary of Assets and Liabilities Measured at Fair Value on Recurring Basis

Assets measured at fair value on a recurring basis as of June 30, 2016 consisted of the following:

	Total fair value		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets
Money market funds	$	2,690	$	2,690	$	—	$	—
Corporate/Government bonds and notes		19,164		—		19,164		—
Commercial paper		1,000		—		1,000		—
Short-term investments	$	20,164	$	—	$	20,164	$	—
Total assets	$	22,854	$	2,690	$	20,164	$	—

Assets and liabilities measured at fair value on a recurring basis as of December 31, 2015 consisted of the following:

	Total fair value		Quotedprices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets
Money market funds	$	13,838	$	13,838	$	—	$	—
Corporate bonds and notes		20,060		—		20,060		—
Short-term investments	$	20,060	$	—	$	20,060	$	—
Total assets	$	33,898	$	13,838	$	20,060	$	—
Liabilities
Contingent purchase consideration	$	50	$	—	$	—	$	50

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Accumulated other comprehensive income (loss) (Tables)

6 Months Ended

Jun. 30, 2016

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) at June 30, 2016 and December 31, 2015 is comprised of the following:

	June 30, 2016			December 31, 2015
Currency translation adjustment, net of tax	$	(11,236	)	$	(17,414	)
Unrealized gains (losses) on available for sale securities,    net of tax		9			(68	)
Total accumulated other comprehensive income (loss)	$	(11,227	)	$	(17,482	)

The table below presents the significant amounts reclassified out of each component of accumulated other comprehensive loss for the period ended June 30, 2016.

Type of reclassification	Amount reclassified from accumulated other comprehensive income		Affected line item in the condensed consolidated statement of operations
Currency translation    adjustment – reclassification of cumulative    currency translation gain	$	1,426	Loss on sale of SCP
Total reclassification for the six months    ended June 30, 2016, net of tax	$	1,426

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Earnings per share (Tables)

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Summary Anti-Dilutive Share Excluded from Calculation of Diluted Earnings Per Share

Basic earnings per share is calculated by dividing net income available to common stockholders by the weighted average number of common shares outstanding for the period. Because of their anti-dilutive effect, the following common share equivalents, comprised of restricted stock and unexercised stock options, have been excluded from the calculation of diluted earnings per share for the three and six month periods ended June 30, 2016 and 2015, respectively:

	Three months ended June 30,				Six months ended June 30,
	2016		2015		2016		2015
Anti-dilutive shares (in thousands)		2,125		1,849		2,125		1,849

Schedule of Computation of Basic and Diluted Earnings Per Share

The table below presents the computation of basic and diluted earnings per share for the three and six months ended June 30, 2016 and 2015:

	Three months ended June 30,						Six months ended June 30,
	2016			2015			2016			2015
Basic and dilutive numerator:
Net income (loss), as reported	$	(515	)	$	(256	)	$	(5,505	)	$	(2,150	)
Denominator:
Weighted-average common shares outstanding - basic    (in thousands)		32,856			32,161			32,843			32,102
Net effect of dilutive securities:
Stock options and restricted stock		—			—			—			—
Weighted-average common shares outstanding - diluted    (in thousands)		32,856			32,161			32,843			32,102
Net income (loss) per common share (basic)	$	(0.02	)	$	(0.01	)	$	(0.17	)	$	(0.07	)
Net income (loss) per common share (diluted)	$	(0.02	)	$	(0.01	)	$	(0.17	)	$	(0.07	)

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Stock-based compensation (Tables)

6 Months Ended

Jun. 30, 2016

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock Option and Restricted Stock Activity

The following tables set forth stock option and restricted stock activity for the six months ended June 30, 2016:

	Number of Shares
	Stock options			Restricted stock
Outstanding at December 31, 2015		1,679,039			180,208
Granted		569,579			196,312
Exercised		(61,705	)		(48,082	)
Forfeited		(320,434	)		(69,816	)
Outstanding at June 30, 2016		1,866,479			258,622

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Net revenue by product (Tables)

6 Months Ended

Jun. 30, 2016

Text Block [Abstract]

Schedule of Net Revenue by Product Category

Net revenue by therapeutic class is as follows:

	Three months ended June 30,				Six months ended June 30,
Therapeutic class:	2016		2015		2016		2015
Anti-infective	$	27,350	$	33,004	$	55,382	$	64,562
Critical care		30,896		26,783		59,344		56,692
Oncology		13,475		17,558		24,790		38,736
	$	71,721	$	77,345	$	139,516	$	159,990

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Sale of SCP - Additional Information (Detail) - USD ($) $ in Thousands		6 Months Ended
	Mar. 22, 2016	Jun. 30, 2016
Discontinued Operations And Disposal Groups [Abstract]
Sale of SCP	$ 500
Loss on sale of SCP		$ (6,341)

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Sale of Product Rights - Additional Information (Detail) $ in Thousands	1 Months Ended		3 Months Ended	6 Months Ended
	Jun. 30, 2016 USD ($) Right	Mar. 31, 2016 USD ($) Right	Jun. 30, 2016 USD ($)	Jun. 30, 2016 USD ($)
Goodwill And Intangible Assets Disclosure [Abstract]
Sale of product rights	$ 1,800	$ 2,000		$ 3,800
Gain on sale of product rights	$ 1,800	$ 2,000	$ 1,800	$ 3,800
Number of product rights | Right	1	2

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Investments (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Cost basis	$ 35,678
Unrealized gains	16
Unrealized losses	(6)
Carrying value	35,688
Cash and cash equivalents	15,524	$ 28,962	$ 50,945	$ 55,633
Short term investments	20,164	$ 20,060
Cash
Schedule of Available-for-sale Securities [Line Items]
Cost basis	12,834
Carrying value	12,834
Cash and cash equivalents	12,834
Money market funds
Schedule of Available-for-sale Securities [Line Items]
Cost basis	2,690
Carrying value	2,690
Cash and cash equivalents	2,690
Commercial paper
Schedule of Available-for-sale Securities [Line Items]
Cost basis	1,000
Carrying value	1,000
Short term investments	1,000
Corporate/Government bonds and notes
Schedule of Available-for-sale Securities [Line Items]
Cost basis	19,154
Unrealized gains	16
Unrealized losses	(6)
Carrying value	19,164
Short term investments	$ 19,164

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Investments with Continuous Unrealized Losses for Less Than Twelve Months and Related Fair Values (Detail) - Corporate/Government bonds and notes $ in Thousands	Jun. 30, 2016 USD ($)
Schedule of Available-for-sale Securities [Line Items]
Fair value	$ 10,429
Unrealized losses	$ (6)

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Cost and Estimated Current Fair Value of Fixed-Income Securities (Detail) $ in Thousands	Jun. 30, 2016 USD ($)
Investments Debt And Equity Securities [Abstract]
Due in one year or less, Cost basis	$ 10,429
Due between one and five years, Cost basis	9,725
Total fixed income securities, Cost basis	20,154
Due in one year or less, Estimated fair value	10,428
Due between one and five years, Estimated fair value	9,736
Total fixed income securities, Estimated fair value	$ 20,164

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Inventories (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Inventory [Line Items]
Raw materials	$ 12,486	$ 7,655
Work in process	853	433
Finished goods	83,170	73,365
Inventory reserve	(9,977)	(5,000)
Inventory, Net, Total	86,532	76,453
Approved
Inventory [Line Items]
Raw materials	6,458	4,855
Work in process	853	433
Finished goods	83,170	73,365
Inventory reserve	(7,214)	(5,000)
Inventory, Net, Total	83,267	73,653
Pending Regulatory Approval
Inventory [Line Items]
Raw materials	6,028	2,800
Inventory reserve	(2,763)
Inventory, Net, Total	$ 3,265	$ 2,800

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Inventories - Additional Information (Detail) $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($)
Pending Regulatory Approval
Inventory [Line Items]
Raw materials acquired	$ 3,248

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Property, Plant and Equipment (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Property, plant and equipment before depreciation	$ 33,303	$ 23,583
Less accumulated depreciation	(4,993)	(3,822)
Property, plant and equipment after depreciation	28,310	19,761
Land and land improvements
Property, Plant and Equipment [Line Items]
Property, plant and equipment before depreciation	1,181	1,102
Buildings and improvements
Property, Plant and Equipment [Line Items]
Property, plant and equipment before depreciation	7,572	6,713
Machinery, equipment, furniture and fixtures
Property, Plant and Equipment [Line Items]
Property, plant and equipment before depreciation	6,114	5,457
Computer Software
Property, Plant and Equipment [Line Items]
Property, plant and equipment before depreciation	3,840	3,776
Construction in process
Property, Plant and Equipment [Line Items]
Property, plant and equipment before depreciation	$ 14,596	$ 6,535

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Property, Plant and Equipment - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2016
Property Plant And Equipment [Abstract]
Depreciation expense	$ 504	$ 1,067

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Goodwill and Intangible Assets, net - Additional Information (Detail)	3 Months Ended		6 Months Ended
	Jun. 30, 2016 USD ($)	Jun. 30, 2015 USD ($)	Jun. 30, 2016 USD ($) Product_Right	Jun. 30, 2015 USD ($)	Dec. 31, 2015 USD ($)
Goodwill And Intangible Assets [Line Items]
Goodwill	$ 26,556,000		$ 26,556,000		$ 25,184,000
Goodwill impairment	$ 0	$ 0	$ 0	$ 0
Number of products comprising product licensing rights intangible asset | Product_Right			20
Product Licensing Rights
Goodwill And Intangible Assets [Line Items]
Weighted-average period prior to next extension or renewal of intangible asset			46 months

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Summary of Movements in Goodwill (Detail) $ in Thousands	6 Months Ended
	Jun. 30, 2016 USD ($)
Goodwill And Intangible Assets Disclosure [Abstract]
Balance at December 31, 2015	$ 25,184
Foreign currency movements	1,372
Balance at June 30, 2016	$ 26,556

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Schedule of Intangible Assets (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items]
Definite-lived intangible assets, Gross carrying amount	$ 60,433	$ 53,661
Intangible assets, Gross carrying amount	68,405	61,251
Definite-lived intangible assets, Accumulated amortization	(10,653)	(8,085)
Definite-lived intangible assets, net	49,780	45,576
Intangible assets, net	57,752	53,166
Product Licensing Rights
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items]
Definite-lived intangible assets, Gross carrying amount	4,583	4,533
Definite-lived intangible assets, Accumulated amortization	(3,192)	(2,998)
Definite-lived intangible assets, net	1,391	1,535
Product Development Rights
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items]
Definite-lived intangible assets, Gross carrying amount	6,722	2,890
Definite-lived intangible assets, net	6,722	2,890
Purchased Product Rights And Other
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items]
Definite-lived intangible assets, Gross carrying amount	49,128	46,238
Definite-lived intangible assets, Accumulated amortization	(7,461)	(5,087)
Definite-lived intangible assets, net	41,667	41,151
In-Process Research and Development (IPR&D)
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items]
Indefinite-lived IPR&D, Intangible assets, net	$ 7,972	$ 7,590

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Movements in Intangible Assets (Detail) $ in Thousands	6 Months Ended
	Jun. 30, 2016 USD ($)
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items]
Beginning Balance	$ 45,576
Ending Balance	49,780
Product Licensing Rights
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items]
Beginning Balance	1,535
Purchase of product rights	50
Amortization of product rights	(194)
Ending Balance	1,391
Product Development Rights
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items]
Beginning Balance	2,890
Purchase of product rights	4,800
Amortization of product rights	(968)
Ending Balance	6,722
Purchased Product Rights And Other
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items]
Beginning Balance	41,151
Amortization of product rights	(2,015)
Foreign currency movements and other	2,531
Ending Balance	41,667
IPR&D
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items]
Beginning Balance	7,590
Foreign currency movements and other	382
Ending Balance	$ 7,972

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Changes in Investment of Sagent Agila (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Schedule of Equity Method Investments [Line Items]
Investment at beginning of the period			$ 7,108
Equity in net income of joint ventures	$ 186	$ 293	742	$ 1,178
Investment at end of the period	7,850		7,850
Sagent Agila LLC
Schedule of Equity Method Investments [Line Items]
Investment at beginning of the period			7,108
Equity in net income of joint ventures			742
Investment at end of the period	$ 7,850		$ 7,850

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Condensed Statement of Operations Information (Detail) - Sagent Agila LLC - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Schedule of Equity Method Investments [Line Items]
Net revenues	$ 1,788	$ 847	$ 3,396	$ 3,921
Gross profit	372	585	1,484	2,355
Net income	$ 372	$ 585	$ 1,484	$ 2,355

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Debt - Additional Information (Detail)			6 Months Ended
	Jan. 07, 2016 USD ($)	Oct. 31, 2014 USD ($)	Jun. 30, 2016 USD ($) MortgageLoan	Jun. 30, 2016 CAD	Jun. 30, 2016 CAD MortgageLoan	Jan. 07, 2016 CAD
Canadian Term Loans
Line of Credit Facility [Line Items]
Commitment fee rate	0.25%
Fixed charge coverage ratio	100.00%					100.00%
Omega
Line of Credit Facility [Line Items]
Number of mortgage loans | MortgageLoan			5		5
Omega | Term Loan
Line of Credit Facility [Line Items]
Amount available under credit facility | CAD						CAD 30,000,000
Minimum | Omega | Mortgage Loans
Line of Credit Facility [Line Items]
Monthly mortgages installments			$ 62,000	CAD 70,000
Maximum | Omega | Mortgage Loans
Line of Credit Facility [Line Items]
Monthly mortgages installments			$ 1,114,000	CAD 1,250,000
Prime Rate | Canadian Term Loans
Line of Credit Facility [Line Items]
Basis spread on variable rate	1.25%
Prime Rate | Omega | Mortgage Loans
Line of Credit Facility [Line Items]
Interest rate			5.00%		5.00%
Prime Rate | Minimum | Omega | Mortgage Loans
Line of Credit Facility [Line Items]
Basis spread on variable rate			0.00%	0.00%
Prime Rate | Maximum | Omega | Mortgage Loans
Line of Credit Facility [Line Items]
Basis spread on variable rate			1.50%	1.50%
CDOR | Canadian Term Loans
Line of Credit Facility [Line Items]
Basis spread on variable rate	2.25%
JP Morgan Chase Revolving Credit Loan Facility Amended | Term Loan
Line of Credit Facility [Line Items]
Outstanding borrowings			$ 6,571,000
Line of credit facility, remaining borrowing capacity			$ 16,584,000		CAD 21,487,000
Revolving Credit Facility
Line of Credit Facility [Line Items]
Amount available under credit facility	$ 80,000,000					CAD 10,000,000
Revolving Credit Facility | Eurodollar
Line of Credit Facility [Line Items]
Basis spread on variable rate	2.00%
Revolving Credit Facility | Base Rate
Line of Credit Facility [Line Items]
Basis spread on variable rate	1.00%
Revolving Credit Facility | JPMorgan Chase Revolving Credit Loan Facility
Line of Credit Facility [Line Items]
Amount available under credit facility		$ 80,000,000
Amount available under additional revolving credit facility		$ 25,000,000
Debt coverage ratio		100.00%
Agreement maturity date			Oct. 31, 2019	Oct. 31, 2019
Commitment fee on undrawn amounts		0.25%
Credit facility, interest rate			10.00%	10.00%
Revolving Credit Facility | JPMorgan Chase Revolving Credit Loan Facility | Minimum
Line of Credit Facility [Line Items]
Debt coverage ratio			100.00%		100.00%
Revolving Credit Facility | JPMorgan Chase Revolving Credit Loan Facility | Maximum
Line of Credit Facility [Line Items]
Line of credit availability to trigger debt covenants			$ 8,000,000
Revolving Credit Facility | JPMorgan Chase Revolving Credit Loan Facility | Eurodollar
Line of Credit Facility [Line Items]
Basis spread on variable rate		2.00%
Revolving Credit Facility | JPMorgan Chase Revolving Credit Loan Facility | Base Rate
Line of Credit Facility [Line Items]
Basis spread on variable rate		1.00%
Revolving Credit Facility | JP Morgan Chase Revolving Credit Loan Facility Amended
Line of Credit Facility [Line Items]
Outstanding borrowings			0
Line of credit facility, remaining borrowing capacity			$ 79,900,000

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Accrued Liabilities (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Accrued Liabilities Current [Abstract]
Payroll and employee benefits	$ 4,120	$ 6,512
Sales and marketing	7,748	7,308
Taxes payable	580	131
Other accrued liabilities	2,503	1,755
Accrued Liabilities, Total	$ 14,951	$ 15,706

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Summary of Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - Assets and liabilities measured at fair value on a recurring basis - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	$ 22,854	$ 33,898
Contingent purchase consideration		50
Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	2,690	13,838
Corporate/Government bonds and notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	19,164
Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	1,000
Short-term investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	20,164	20,060
Corporate bonds and notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets		20,060
Quoted prices in active markets for identical assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	2,690	13,838
Quoted prices in active markets for identical assets (Level 1) | Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	2,690	13,838
Significant other observable inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	20,164	20,060
Significant other observable inputs (Level 2) | Corporate/Government bonds and notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	19,164
Significant other observable inputs (Level 2) | Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	1,000
Significant other observable inputs (Level 2) | Short-term investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	$ 20,164	20,060
Significant other observable inputs (Level 2) | Corporate bonds and notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets		20,060
Significant unobservable inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent purchase consideration		$ 50

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Fair Value Measurements - Additional Information (Detail) - USD ($)	3 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Transfer of assets between Level 1 to Level 2	$ 0	$ 0
Transfer of assets between Level 2 to Level 1	0	0
Transfer of assets into (out of) Level 3	0	$ 0
Contingent Consideration Liability
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent purchase consideration	$ 50,000

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Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract]
Currency translation adjustment, net of tax	$ (11,236)	$ (17,414)
Unrealized gains (losses) on available for sale securities, net of tax	9	(68)
Total accumulated other comprehensive income (loss)	$ (11,227)	$ (17,482)

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Amounts Reclassified Out of Each Component of Accumulated Other Comprehensive Loss (Detail) $ in Thousands	6 Months Ended
	Jun. 30, 2016 USD ($)
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Loss on sale of SCP	$ (6,341)
Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Loss on sale of SCP	1,426
Reclassification out of Accumulated Other Comprehensive Income | Currency translation adjustment
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Loss on sale of SCP	$ 1,426

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Schedule of Anti-Dilutive Share Excluded from Calculation of Diluted Earnings per Share (Detail) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Earnings Per Share [Abstract]
Anti-dilutive shares (in thousands)	2,125	1,849	2,125	1,849

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Schedule of Calculation of Numerator and Denominator in Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Basic and dilutive numerator:
Net income (loss), as reported	$ (515)	$ (256)	$ (5,505)	$ (2,150)
Denominator:
Weighted-average common shares outstanding - basic (in thousands)	32,856	32,161	32,843	32,102
Weighted-average common shares outstanding - diluted (in thousands)	32,856	32,161	32,843	32,102
Net income (loss) per common share (basic)	$ (0.02)	$ (0.01)	$ (0.17)	$ (0.07)
Net income (loss) per common share (diluted)	$ (0.02)	$ (0.01)	$ (0.17)	$ (0.07)

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Stock Option and Restricted Stock Activity (Detail)	6 Months Ended
	Jun. 30, 2016 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Beginning Balance, Options Outstanding	1,679,039
Granted	569,579
Exercised	(61,705)
Forfeited	(320,434)
Ending Balance, Options Outstanding	1,866,479
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Beginning Balance, Outstanding	180,208
Granted	196,312
Exercised	(48,082)
Forfeited	(69,816)
Ending Balance, Outstanding	258,622

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Stock-Based Compensation - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Intrinsic value of stock options exercised	$ 376	$ 5,964	$ 376	$ 7,514

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Schedule of Net Revenue by Product Category (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Product Information [Line Items]
Net revenue by product Line	$ 71,721	$ 77,345	$ 139,516	$ 159,990
Anti-infective
Product Information [Line Items]
Net revenue by product Line	27,350	33,004	55,382	64,562
Critical care
Product Information [Line Items]
Net revenue by product Line	30,896	26,783	59,344	56,692
Oncology
Product Information [Line Items]
Net revenue by product Line	$ 13,475	$ 17,558	$ 24,790	$ 38,736

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Related Party Transactions - Additional Information (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Related Party Transaction [Line Items]
Due from related party	$ 2,754	$ 2,678
Due to related party	15,992	13,754
Sagent Agila LLC
Related Party Transaction [Line Items]
Due from related party	2,754	2,678
Due to related party	$ 15,992	$ 13,754

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Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Income Tax Disclosure [Line Items]
Provision (benefit) for income taxes	$ (52)	$ 1,831	$ (1,319)	$ 2,150
SCP
Income Tax Disclosure [Line Items]
Tax benefit			$ 1,064

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Management Transition Costs - Additional Information (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Restructuring Cost and Reserve [Line Items]
Management transition costs	$ 0	$ 644,000	$ 0	$ 3,952,000
Payment of management transition cost	723,000
Accounts Payable and Accrued Liabilities
Restructuring Cost and Reserve [Line Items]
Management transition cost accrued	$ 0		$ 0

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Subsequent Events - Additional Information (Detail) - Subsequent Event $ / shares in Units, $ in Millions	Aug. 05, 2016 USD ($) Product	Jul. 10, 2016 $ / shares
Teva and Actavis LLC
Subsequent Event [Line Items]
Number of generic injectable pharmaceutical product | Product	5
Consideration percentage	1.00%
Total consideration | $	$ 40
Parent and Shepard Vision, Inc.
Subsequent Event [Line Items]
Common stock purchase price per share | $ / shares		$ 21.75
Parent and Shepard Vision, Inc. | Minimum
Subsequent Event [Line Items]
Percentage of outstanding shares to be sold		50.00%