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IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

In re: NeuroproteXeon, Inc., et al. Debtors.1

Chapter 11 Case No. 19-12676 (___) (Joint Administration Requested)

DEBTORS’ APPLICATION FOR AN ORDER AUTHORIZING AND APPROVING THE EMPLOYMENT AND RETENTION OF EMERALD CAPITAL ADVISORS AS FINANCIAL ADVISOR TO THE DEBTORS NUNC PRO TUNC TO THE PETITION

DATE AND MODIFYING CERTAIN REQUIREMENTS UNDER LOCAL RULE 2016-2

NeuroproteXeon, Inc. and its affiliated debtors and debtors-in-possession (collectively

the “Debtors”) in the above-captioned chapter 11 cases hereby submit this application (the

“Application”) for entry of an order: (a) authorizing the employment and retention of Emerald

Capital Advisors Corp. (“Emerald”) to serve as the Debtors’ financial advisor effective nunc pro

tunc to the Petition Date (as defined herein) pursuant to sections 327(a) and 328 of Title 11 of the

United States Code, 11 U.S.C. §§ 101 et seq. (the “Bankruptcy Code”), Rules 2014 and 2016 of

the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”) and Rules 2014-1 and

2016-2 of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy

Court for the District of Delaware (the “Local Rules”). In support of the Application, the

Debtors submit the Declaration of John P. Madden (the “Madden Declaration”), attached hereto

as Exhibit A and incorporated herein by reference. In further support of this Application, the

Debtors respectfully represents as follows:

1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, as applicable, are: NeuroproteXeon, Inc. (3425); NeuroproteXeon Limited (4379); NeuroproteXeon GmbH (5397); and NPXe PLC (9811). The location of the Debtors’ corporate headquarters is 50 Cobham Drive, Orchard Park, New York 14127.

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JURISDICTION AND VENUE

1. This Court has jurisdiction to consider this Application pursuant to 28 U.S.C.

§§ 157 and 1334 and the Amended Standing Order of Reference from the United States District

Court for the District of Delaware, dated as of February 29, 2012.

2. This matter is a core proceeding pursuant to 28 U.S.C. § 157(b). Venue is proper

in this Court pursuant to 28 U.S.C. §§ 1408 and 1409.

3. The statutory predicates for the relief sought herein are sections 327(a) and 328 of

the Bankruptcy Code, Bankruptcy Rules 2014 and 2016 and Local Rules 2014-1 and 2016-2.

4. Pursuant to Local Rule 9013-1(f), the Debtors hereby consent to the entry of a final

order or judgment by the Court if it is determined that the Court, absent consent of the parties,

cannot enter a final order or judgment consistent with Article III of the United States Constitution.

BACKGROUND

5. On the date hereof (the “Petition Date”), each of the Debtors filed with the Court

a voluntary petition for relief under Chapter 11 of the Bankruptcy Code commencing the above-

captioned chapter 11 cases. The Debtors continue to operate their business and manage their

properties as debtors-in-possession pursuant to sections 1107(a) and 1108 of the Bankruptcy

Code.

6. No creditors’ committee has been appointed in these cases. No trustee or

examiner has been appointed.

7. A detailed description of the Debtors’ business operations, corporate structure,

capital structure and reasons for commencing these cases is set forth in full in the Declaration of

William Burns in Support of First Day Motions (the “Burns Declaration”), which was filed

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contemporaneously herewith and is incorporated herein by reference. Additional facts in support

of the specific relief sought herein are set forth below.1

EMERALD’S QUALIFICATIONS

8. Emerald is a financial advisory and investment banking firm founded in 2012

with approximately 25 professionals based in their two U.S. offices. Emerald provides a broad

range of financial advisory and investment banking services to its clients, including general

corporate finance, mergers, acquisitions and divestitures, corporate restructurings, interim

management assignments, special committee assignments and capital raising. Emerald and its

senior professionals have extensive experience in the reorganization, restructuring and

divestiture of distressed companies, both out-of-court and in chapter 11 cases.

Emerald’s business reorganization professionals have served as financial advisors in numerous

cases in this District, including: In re SportCo Holdings, Inc., No 19-11299 (LSS) (Bankr. D.

Del. June 10, 2019); In re Hobbico, Inc., No. 18-10055 (KG) (Bankr. D. Del. Jan. 10, 2018); In

re Maurice Sporting Goods of Delaware, Inc., No. 17-12481 (CSS) (Bankr. D. Del. Nov. 20,

2017); In re Suniva, Inc., No. 17-10837 (KG) (Bankr. D. Del. Apr. 17, 2017); In re DB Holdings

Liquidation, Inc., No. 16-12435 (CSS) (Bankr. D. Del. Nov. 1, 2016); In re Old EPP, Inc., No.

16-10221 (CSS) (Bankr. D. Del. Jan. 31, 2016); In re American Apparel Inc., No 15-12055

(BLS) (Bankr. D. Del. Oct. 5, 2015); In re Karmaloop, Inc., No. 15-10635 (MFW) (Bankr. D.

Del. Mar. 23, 2015); In re FAH Liquidating Corp., Case No. 13-13087 (KG) (Bankr. D. Del.

Nov. 22, 2013); In re Coda Automotive, Inc., No. 13-11154 (CSS) (Bankr. D. Del. May 1, 2013).

9. The Debtors have determined, in the exercise of their business judgment, that the

size and complexity of these chapter 11 cases require them to employ a financial advisor with

1 Capitalized terms used but not otherwise defined herein have the meaning given them in the Burns Declaration.

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knowledge of the Debtors’ business and experience with the chapter 11 process. The Debtors

selected Emerald as their financial advisor based upon, among other things: (a) the Debtors’ need

to retain a skilled financial advisor to provide advice with respect to the Debtors’ restructuring

activities, including the Debtors’ sale process, (b) Emerald’s experience and reputation in

providing financial advisory services in complex chapter 11 cases, (c) Emerald’s expertise in

mergers and acquisitions, specifically in distressed M&A transactions effectuated through

section 363 of the Bankruptcy Code, and (d) Emerald’s extensive knowledge of the Debtors, as

described below.

10. Emerald began advising the Debtors on strategic and restructuring initiatives prior

to the commencement of these cases. Since its engagement on October 17, 2019, Emerald has

provided extensive prepetition services in connection with the Debtors’ restructuring efforts,

including: (a) assisting management in analyzing potential restructuring transactions, (b)

assisting management in negotiations with the Debtors’ pre-petition lender, as well as other

potential third-party lenders, regarding the terms of a debtor-in-possession financing facility, (c)

building and managing the Debtors’ cash flow forecast, and (d) providing additional financial

advisory services in preparation of the Debtors’ chapter 11 filing.

11. As a result of its pre-petition work with the Debtors, Emerald has developed

valuable institutional knowledge regarding the Debtors’ businesses, operations, capital structure

and other material information and has become well-acquainted with the Debtors’ business

operations and capital structure. Accordingly, the Debtors believe Emerald is well-qualified to

represent them in a cost-effective, efficient and timely manner, and the Debtors submit that the

employment and retention of Emerald is in the best interests of the Debtors, their creditors and

all parties in interest.

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SCOPE OF SERVICES TO BE PROVIDED BY EMERALD

12. Subject to Court approval, and as set forth more fully in the Engagement Letter, in

consideration for the compensation contemplated therein, Emerald has and will perform the

following services, as requested, for the Debtors:1

(a) Review and analyze the Company’s operations, financial condition, strategy and operating forecasts. Recommend and implement changes as needed;

(b) Along with the Company’s management and other professionals, manage the Company’s cash and, if necessary, prepare for chapter 11 filing, including assisting with the preparation of first-day filings, schedules and statements, 13-week budget and cash flow analysis;

(c) Provide testimony needed in connection with the Company’s chapter 11 filing;

(d) Market the Company to potential lenders with the goal of securing bridge financing needed to reach a chapter 11 filing;

(e) Engage in bridge financing negotiations with interested parties;

(f) If requested, in connection with the Company’s potential chapter 11 case, seek and negotiate debtor-in-possession financing with potential lenders and acquirors;

(g) Review the Company’s infrastructure including its technology, systems and procedures with the goal of eliminating any unnecessary costs that may exist;

(h) Provide strategic advice regarding various restructuring alternatives;

(i) Analyze the Company’s workforce, assist in potential terminations and advise on WARN Act implications, if any;

(j) Analyze the business and financial impact of various restructuring initiatives;

(k) Assist the Company in the development and distribution of selected information, documents and other materials;

(l) Provide such other financial advisory as may be agreed upon by Emerald and the Company; and

(m) Provide the Company with other appropriate general restructuring advice.

13. It is necessary for the Debtors’ restructuring efforts that the Debtors employ

Emerald to render the foregoing professional services. The Debtors believe that the services will

1 The summary of the Engagement Letter in this Application is qualified in its entirety by reference to the provisions of the Engagement Letter. To the extent there is any discrepancy between the summary contained herein and the terms set forth in the Engagement Letter, the terms of the Engagement Letter (as modified by any order entered in connection therewith) shall control.

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not duplicate the services that other professionals will be providing the Debtors in these cases.

Specifically, Emerald will carry out unique functions and will use reasonable efforts to coordinate

with the Debtors and other professionals retained in these cases to avoid the duplication of

services.

PROFESSIONAL COMPENSATION

14. Emerald’s hourly billing rates vary on a case-by-case basis and depend on a

number of factors such as scope of services, liquidity considerations and case size and direction,

among others. In consideration of the services to be performed by Emerald, and as more fully

described in the Engagement Letter, subject to Court approval, the Debtors and Emerald have

agreed on the proposed compensation set forth in the Engagement Letter which may be

summarized as follow:1

Advisory Fees: The Company agrees that Emerald will be compensated at the applicable hourly rates for professional time set forth below plus reasonable expenses incurred during this engagement. Emerald’s fees are based on the hours actually expended by Emerald personnel, multiplied by their applicable hourly billing rate for this engagement. Emerald shall submit weekly invoices to the Company, which shall be payable one week in arrears. If the Company is unable to fund the Retainer and/or remain current with the payment of Emerald’s Advisory Fees, Emerald is entitled to 2x its normal hourly rates for all work performed but not yet compensated for, which will remain in effect for all go-forward work until the balance is made current. Once Emerald is paid current on its Advisory Fees, the hourly rates shall revert back to the original hourly rates.

Professional Hourly Rate

Managing Partners $700.00 - $750.00

Managing Directors $600.00 - $650.00

1 Summaries and other descriptions of the term of the Engagement Letter set forth herein are not intended to replace the terms of the Engagement Letter, which shall govern to the extent of any inconsistency between this Application and the Engagement Letter; provided however that any order entered in connection with this Application shall control in the event of any inconsistencies between this Application, the Engagement Letter and the order.

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Vice Presidents $500.00 - $550.00

Associates $400.00 - $450.00

Analysts $300.00 - $350.00

Financing Fee: In connection with Emerald’s mandate to provide advisory services in connection with the Company’s pursuit of financing, Emerald shall be entitled to a financing fee (the “Financing Fee”) payable at the closing of a financing, equal to the greater of: (i) the applicable percentages set forth below of the aggregate principal amount of any financing committed to the Company, and (ii) $50,000.00.

o 3.0% of any senior secured debt raised; o 5.0% of any debt, other than senior-secured, raised; and/or o 7.0% of any equity facility raised.

Expense Reimbursement: Emerald shall be entitled to monthly reimbursement of reasonable out-of-pocket expenses incurred in connection with the services to be provided under this Agreement. Out-of-pocket expenses shall include, but not be limited to, all reasonable expenses pertaining to travel, work-related meals, report preparation, delivery services, photocopying and other costs included in providing the services.

15. Following the execution of the Engagement Letter on October 17, 2019, Emerald

began providing pre-petition services to the Debtors. Pursuant to the terms of the Engagement

Letter, Emerald was to receive a retainer in the amount of $100,000.00. However, due to the

Debtors’ lack of liquidity, Emerald never received the retainer and continued working unpaid,

accruing fees in accordance with the Engagement Letter. After the Debtors received the pre-

petition loan on November 26, 2019, Emerald submitted an invoice to the Debtors in the amount

of $268,500 on account of pre-petition services provided to the Debtors. Given the Debtors’

liquidity position, and in an effort to help the Debtors continue with their chapter 11 preparation

and retention of additional professions, Emerald agreed to waive $193,500 of its pre-petition fees.

On November 27, 2019, Emerald received payment in the amount of $75,000, which was applied

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to pre-petition services rendered to the Debtors. As of the Petition Date, Emerald holds no

retainer. Emerald is owed approximately $263,500 for pre-petition work and has agreed to waive

this amount.

16. Emerald shall file fee applications with the Court in accordance with the applicable

provisions of the Bankruptcy Code, Bankruptcy Rules, Local Rules and any orders of the Court.

In light of the services to be provided by Emerald, Emerald requests that it be excused from the

requirement to maintain or provide detailed time records in accordance with Bankruptcy Rule

2016(a) and Local Rule 2016-2. Instead, Emerald will maintain reasonably detailed time records

in 0.5 hour increments containing descriptions of those services rendered to the Debtors and the

individuals who provided those services and will present such records together with its fee

applications filed with the Court.

17. No promises have been received by Emerald nor any employee thereof as to

payment or compensation in connection with these chapter 11 cases other than in accordance with

the provisions of the Bankruptcy Code.

INDEMNIFICATION

18. The Engagement Letter provides that the Debtors shall indemnify and hold

harmless Emerald and certain affiliated persons (collectively, “Indemnified Persons”) from all

claims to which Emerald may become subject in connection with services provided pursuant to

the Engagement Letter, provided however that in no event shall any Indemnified Person be

indemnified in the case of bad faith, self-dealing, breach of fiduciary duty, gross negligence or

willful misconduct on the part of that or any other Indemnified Persons. The Debtors shall pay

Emerald’s fees and expenses, including counsel fees, as they are incurred in defending any such

claim; provided however that where it has been determined in a final judgment by a court of

competent jurisdiction that the claim resulted from the bad faith, self-dealing, breach of fiduciary

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duty, gross negligence or willful misconduct of Emerald, Emerald shall repay the Debtors for any

fees and expenses advanced by the Debtors pursuant to the preceding sentence. Notwithstanding

a final judgment determining that a claim did not result from Emerald’s bad faith, self-dealing,

breach of fiduciary duty, gross negligence or willful misconduct, the Debtors shall not pay any

indemnification claim without further notice and a hearing before the Court for approval of such

payment.

19. The terms and conditions of the Engagement Letter, including the indemnification

provisions contained therein, were negotiated by the Debtors and Emerald at arm’s length and in

good faith. Such terms and conditions of the Engagement Letter, as modified by the proposed

form of order authorizing Emerald’s retention, reflect the qualifications and limitations on such

terms and conditions that are customary for restructuring advisory engagements, both out of court

and in comparable chapter 11 cases in this jurisdiction, and are in substantially the same form as

terms that were approved by this Court in other cases. Accordingly, the Debtors and Emerald

respectfully submit that the terms and conditions of retention set forth in the Engagement Letter,

as modified by the Proposed Order, are customary and reasonable for engagements of this type

and should be approved in this case.

DISINTERESTEDNESS OF EMERALD

20. To the best of the Debtors’ knowledge, information and belief and based upon and

subject to the disclosures in the Madden Declaration, Emerald is “disinterested” under section

101(14) of the Bankruptcy Code and does not currently hold or represent an interest adverse to

the Debtors, their estates or creditors with respect to the matters in which Emerald is to be

employed.

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21. To the best of the Debtors’ knowledge, Emerald has no connection with the

creditors or any other adverse party or its attorneys in these cases except as otherwise stated in the

attached Madden Declaration.

22. To the extent Emerald discovers any connection with any interested party or enters

into any new relationship with any interested party, Emerald will promptly supplement the

Madden Declaration.

RELIEF REQUESTED AND BASIS THEREFORE

23. By this Application, the Debtors hereby seek entry of an order (the “Proposed

Order”), substantially in the form attached hereto as Exhibit B: (a) authorizing the Debtors to

employ and retain Emerald as their financial advisor nunc pro tunc to the Petition Date in

accordance with the terms and conditions set forth in the engagement letter between Emerald and

the Debtors, dated October 17, 2019 (the “Engagement Letter”), a copy of which is attached

hereto as Exhibit C; (b) approving the provisions of the Engagement Letter, including the

proposed compensation arrangements and the indemnification, contribution and reimbursement

provisions set forth in the Engagement Letter; (c) modifying the timekeeping requirements of

Local Rule 2016-2; and (d) granting such other relief as may be just and proper.

24. The Debtors submit that the retention of Emerald under the terms described herein

is appropriate pursuant to sections 327(a) and 328 of the Bankruptcy Code. The Debtors

respectfully submit that the terms and conditions of Emerald’s retention as described herein,

including the proposed compensation and indemnification terms, are reasonable and in keeping

with the terms and conditions typical for engagements of this size and character. Since the

Debtors will require substantial assistance with the reorganization and sale process, it is

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reasonable for the Debtors to seek to employ and retain Emerald to serve as their financial

advisor on the terms and conditions set forth herein.

NOTICE

25. The Debtors will provide notice of this Application to: (a) the Office of the United

States Trustee for the District of Delaware; (b) the holders of the 20 largest unsecured claims

against the Debtors; (c) counsel to any official committee; (d) counsel to JMB Capital Partners

Lending, LLC; and (e) any party that has requested notice pursuant to Bankruptcy Rule 2002. In

light of the nature of the relief requested and the circumstances surrounding these chapter 11

cases, no other or further notice is required or necessary.

NO PRIOR REQUEST

26. No prior request for the relief sought herein has been made to this or any other

court.

WHEREFORE, for the reasons set forth herein, the Debtors respectfully request that the

Court (a) enter the Proposed Order substantially in the form annexed as Exhibit B, authorizing

the Debtors to retain and employ Emerald as their financial advisor nunc pro tunc to the Petition

Date, and (b) grant such other and further relief as may be just and appropriate.

Dated: December 16, 2019 NeuroproteXeon, Inc. and its Affiliated Debtors and Debtors-in-Possession

/s/ James McAuliffe ________________________________

James McAuliffe Chief Financial Officer

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EXHIBIT A

(Madden Declaration)

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Chapter 11 Case No. 19-12676 (___) (Joint Administration Requested)

DECLARATION OF JOHN P. MADDEN IN SUPPORT OF DEBTORS’ APPLICATION

FOR AN ORDER AUTHORIZING AND APPROVING THE EMPLOYMENT AND RETENTION OF EMERALD CAPITAL ADVISORS AS FINANCIAL ADVISOR TO THE DEBTORS NUNC PRO TUNC TO THE PETITION DATE AND MODIFYING

CERTAIN REQUIREMENTS UNDER LOCAL RULE 2016-2

John P. Madden hereby declares, pursuant to 28 U.S.C. § 1746, as follows:

1. I am the Founder and Managing Partner of Emerald Capital Advisors (“Emerald”),

a financial advisory firm having expertise in turnaround and bankruptcy issues. Emerald

maintains an office located at 70 East 55th Street, 17th Floor, New York, NY 10022. I am a

Certified Insolvency and Restructuring Advisor (CIRA).

2. I submit this declaration (the “Declaration”) in support of the application (the

“Application”) of NeuroproteXeon, Inc. and its affiliated debtors and debtors-in-possession

(collectively the “Debtors”) in the above-captioned chapter 11 cases seeking entry of an order

authorizing the Debtors to retain and employ Emerald, nunc pro tunc to the Petition Date, as

financial advisor to the Debtors pursuant to sections 327(a) and 328 of Title 11 of the United

States Code, 11 U.S.C. §§ 101 et seq. (the “Bankruptcy Code”), Rules 2014 and 2016 of the

Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”) and Rules 2014-1 and 2016-2


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of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court

for the District of Delaware (the “Local Rules”).

3. Unless otherwise stated in this Declaration, I have personal knowledge of the facts

hereinafter set forth.

4. Emerald has agreed to be retained and employed to provide financial advisory

services and assistance to the Debtors as set forth in the terms of an engagement letter dated

October 17, 2019 (the “Engagement Letter”) attached to the Application as Exhibit C. Since its

engagement on October 17, 2019, Emerald has provided extensive prepetition services in

connection with the Debtors’ restructuring efforts, including: (a) assisting management in

analyzing potential restructuring transactions, (b) assisting management in negotiations with the

Debtors’ pre-petition lender, as well as other potential third-party lenders, regarding the terms of a

debtor-in-possession financing facility, (c) building and managing the Debtors’ cash flow

forecast, and (d) providing additional financial advisory services in preparation of the Debtors’

chapter 11 filing.

5. Emerald’s professionals have extensive experience working with financially

troubled companies in complex financial restructurings both in and out of chapter 11. Emerald’s

professionals have advised debtor, creditors’ committees, creditors and equity holders in

numerous chapter 11 cases.

6. In connection with the preparation of this Declaration, Emerald has researched its

client database to determine whether it has any past or current relationship with the parties listed

on Exhibit 1 hereto. Emerald’s review of these relationships was completed under my

supervision and consisted of a query of its internal computer database containing the names of

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individuals and entities that are present and recent former clients of Emerald. A summary of such

relationships that Emerald identified during this process is set forth on Exhibit 2 hereto.

7. Insofar as I have been able to ascertain through diligent inquiry, except as set forth

on Exhibit 2, neither I, Emerald nor any partner or professional employee of Emerald have any

connection with the Debtors, their creditors, any other party-in-interest, the Debtors’ current

attorneys or professionals, the United States Trustee, any person employed in the Office of the

United States Trustee or any Bankruptcy Judge currently serving on the United States Bankruptcy

Court for the District of Delaware, nor do we hold or represent any entity having an adverse

interest in connection with the Debtors’ chapter 11 cases.

8. Neither I, Emerald nor any professional employee of Emerald is related

professionally to the Debtors, their creditors or any other party in interest herein or the Debtors’

attorneys or professionals in the matters for which Emerald is proposed to be retained.

9. Emerald has in the past worked with, continues to work with and has mutual

clients with certain law firms who may represent parties-in-interest in the cases. None of these

engagements or relationships relate to the Debtors or this case.

10. Emerald has had, may currently have and may in the future have commercial or

professional relationships directly or indirectly with customers, competitors and creditors of the

Debtors. As described above, however, Emerald has undertaken a detailed search to determine,

and to disclose, whether it is performing or has performed services for these parties in matters

related to this case.

11. Despite the efforts described above to identify and disclose Emerald’s connections

with parties-in-interest in this case, because the Debtors have numerous creditors and other

relationships, Emerald is unable to state with certainty that every client representation or other

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connection has been disclosed. If Emerald discovers additional information that requires

disclosure, Emerald will file supplemental disclosures with the Court as promptly as possible.

12. Emerald has not been retained to assist any entity or person other than the Debtors

on matters relating to, or in connection with, this case. If this Court approves the proposed

employment of Emerald as financial advisor to the Debtors, Emerald will not accept any

engagement or perform any services in these cases for any entity or person other than the Debtors.

Emerald may, however, continue to provide professional services to, and engage in commercial or

professional relationships with, entities or persons that may be creditors of the Debtors or parties-

in-interest in this case; provided however that such services do not and will not relate to, or have

any direct connection with, this case.

13. To the best of my knowledge, information and belief, Emerald does not have or

represent any interest materially adverse to the interest of the Debtors, or of any class of creditors

or equity security holders of the Debtors, by reason of any direct or indirect relationship to,

connection with, or interest in the Debtors.

14. To the extent that any information disclosed herein requires amendment or

modification upon Emerald’s completion of further analysis, or as additional information

becomes available to it, a supplemental declaration will be submitted to the Court.

15. Subject to Court approval, and as set forth more fully in the Engagement Letter, in

consideration for the compensation contemplated therein, Emerald has and will perform the

following services, as requested, for the Debtors:2

2 The summary of the Engagement Letter in this Application is qualified in its entirety by reference to the provisions of the Engagement Letter. To the extent there is any discrepancy between the summary contained herein and the terms set forth in the Engagement Letter, the terms of the Engagement Letter shall control.

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(a) Review and analyze the Company’s operations, financial condition, strategy and operating forecasts. Recommend and implement changes as needed;

(b) Along with the Company’s management and other professionals, manage the Company’s cash and, if necessary, prepare for chapter 11 filing, including assisting with the preparation of first-day filings, schedules and statements, 13-week budget and cash flow analysis;

(c) Provide testimony needed in connection with the Company’s chapter 11 filing;

(d) Market the Company to potential lenders with the goal of securing bridge financing needed to reach a chapter 11 filing;

(e) Engage in bridge financing negotiations with interested parties;

(f) If requested, in connection with the Company’s potential chapter 11 case, seek and negotiate debtor-in-possession financing with potential lenders and acquirors;

(g) Review the Company’s infrastructure including its technology, systems and procedures with the goal of eliminating any unnecessary costs that may exist;

(h) Provide strategic advice regarding various restructuring alternatives;

(i) Analyze the Company’s workforce, assist in potential terminations and advise on WARN Act implications, if any;

(j) Analyze the business and financial impact of various restructuring initiatives;

(k) Assist the Company in the development and distribution of selected information, documents and other materials;

(l) Provide such other financial advisory as may be agreed upon by Emerald and the Company; and

(m) Provide the Company with other appropriate general restructuring advice.

16. Emerald’s hourly billing rates vary on a case-by-case basis and depend on a

number of factors such as scope of services, liquidity considerations, and case size and direction,

among others. In consideration of the services to be performed by Emerald, and as more fully

described in the Engagement Letter, subject to the Court’s approval, the Debtors and Emerald

have agreed on the proposed compensation set forth in the Engagement Letter which may be

summarized as follow:3

3 Summaries and other descriptions of the term of the Engagement Letter set forth herein are not intended to replace the terms of the Engagement Letter, which shall govern to the extent of any inconsistency between this Application and the Engagement Letter; provided however that any order entered in

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Advisory Fees: The Company agrees that Emerald will be compensated at the applicable hourly rates for professional time set forth below plus reasonable expenses incurred during this engagement. Emerald’s fees are based on the hours actually expended by Emerald personnel, multiplied by their applicable hourly billing rate for this engagement. Emerald shall submit weekly invoices to the Company, which shall be payable one week in arrears. If the Company is unable to fund the Retainer and/or remain current with the payment of Emerald’s Advisory Fees, Emerald is entitled to 2x its normal hourly rates for all work performed but not yet compensated for, which will remain in effect for all go-forward work until the balance is made current. Once Emerald is paid current on its Advisory Fees, the hourly rates shall revert back to the original hourly rates.

Professional Hourly Rate

Managing Partners $700.00 - $750.00

Managing Directors $600.00 - $650.00

Vice Presidents $500.00 - $550.00

Associates $400.00 - $450.00

Analysts $300.00 - $350.00

Financing Fee: In connection with Emerald’s mandate to provide advisory services in connection with the Company’s pursuit of financing, Emerald shall be entitled to a financing fee (the “Financing Fee”) payable at the closing of a financing, equal to the greater of: (i) the applicable percentages set forth below of the aggregate principal amount of any financing committed to the Company, and (ii) $50,000.00.

o 3.0% of any senior secured debt raised; o 5.0% of any debt, other than senior-secured, raised; and/or o 7.0% of any equity facility raised.

Expense Reimbursement: Emerald shall be entitled to monthly reimbursement of reasonable out-of-pocket expenses incurred in connection with the services to be

connection with this Application shall control in the event of any inconsistencies between this Application, the Engagement Letter and the order.

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provided under this Agreement. Out-of-pocket expenses shall include, but not be limited to, all reasonable expenses pertaining to travel, work-related meals, report preparation, delivery services, photocopying and other costs included in providing the services.

17. The Debtors and Emerald understand that any compensation or reimbursement of

expenses paid to Emerald must be submitted for approval in accordance with the relevant

provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules and any other

applicable rules and orders of this Court.

18. Emerald has not shared or agreed to share any of the payments to be received by

Emerald with any other person, other than a principal, professional or employee of Emerald, as

permitted by section 504 of the Bankruptcy Code. The proposed engagement is not prohibited by

Bankruptcy Rule 5002.

19. Following the execution of the Engagement Letter, Emerald began providing pre-

petition services to the Debtors. Pursuant to the terms of the Engagement Letter, Emerald was to

receive a retainer in the amount of $100,000.00. However, due to the Debtors’ lack of liquidity,

Emerald never received the retainer and continued working unpaid, accruing fees in accordance

with the Engagement Letter. After the Debtors received the pre-petition loan on November 26,

2019, Emerald submitted an invoice to the Debtors in the amount of $268,500 on account of pre-

petition services provided to the Debtors. Given the Debtors’ liquidity position, and in an effort

to help the Debtors continue with their chapter 11 preparation and retention of additional

professions, Emerald agreed to waive $193,500 of its pre-petition fees. On November 27, 2019,

Emerald received payment in the amount of $75,000, which was applied to pre-petition services

rendered to the Debtors. As of the Petition Date, Emerald holds no retainer. Emerald is owed

approximately $263,500 for pre-petition work and has agreed to waive this amount.

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20. The Engagement Letter provides that the Debtors shall indemnify and hold

harmless Emerald and certain affiliated persons (collectively, “Indemnified Persons”) from all

claims to which Emerald may become subject in connection with services provided pursuant to

the Engagement Letter, provided however that in no event shall any Indemnified Person be

indemnified in the case of bad faith, self-dealing, breach of fiduciary duty, gross negligence or

willful misconduct on the part of that or any other Indemnified Persons. The Debtors shall pay

Emerald’s fees and expenses, including counsel fees, as they are incurred in defending any such

claim; provided however that where it has been determined in a final judgment by a court of

competent jurisdiction that the claim resulted from the bad faith, self-dealing, breach of fiduciary

duty, gross negligence or willful misconduct of Emerald, Emerald shall repay the Debtors for any

fees and expenses advanced by the Debtors pursuant to the preceding sentence. Notwithstanding

a final judgment determining that a claim did not result from Emerald’s bad faith, self-dealing,

breach of fiduciary duty, gross negligence or willful misconduct, the Debtors shall not pay any

indemnification claim without further notice and a hearing before the Court for approval of such

payment.

21. By reason of the foregoing, I believe Emerald is eligible for employment and

retention by the Debtors pursuant to sections 327(a) and 328 of the Bankruptcy Code and the

applicable Bankruptcy Rules and Local Rules.

I declare under penalty of perjury that the foregoing statements are true and correct to the

best of my knowledge, information and belief.

Dated: December 16, 2019 /s/ John P. Madden John P. Madden Founder and Managing Partner Emerald Capital Advisors

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EXHIBIT 1

Schedule of Parties-in-Interest

Debtors NeuroproteXeon, Inc. NeuroproteXeon Limited NeuroproteXeon GmbH NPXe PLC

Significant Vendors BSI Group America Inc. Caltronix CATO Research JW Danforth Datalink Electronic Data Resolution Durham Staffing, Inc. Dymax Corporation Edinburgh Innovations Hodgson Russ IMP Pharmaceutical Services J.F. Machining Co. Inc. John Joseph The Kane Firm KPMG LLP Nelson Labs LLC OhioMedical Orkin Penlon Limited Praxair Healthcare Services Premier Research International LLC Ranstad Life Sciences Software Solution Group Inc. TransPerfect Tronconi Segarra & Associates LLP UFP Technologies Uline Black & Callow Brown Rudnick LLP Consilium Strategic Communications Link Asset Services LI Partnership London Stock Exchange Potter Clarkson RSM Tax and Advisory Services LLP Solebury Trout UDL Intellectual Property WG Partners Have & Mailander

Bankruptcy Professionals Ashby & Geddes, P.A. Brown Rudnick LLP Lincoln Partners Advisors LLC Emerald Capital Advisors Omni Agent Solutions Arent Fox Rosner Law Group Secured Creditors JMB Capital Partners Lending, LLC Top 20 Creditors Holding Largest Unsecured Claims CATO Research Praxair Healthcare Services Brown Rudnick LLP The Krog Corp Hodgson Russ WG Partners Potter Clarkson Ranstad Life Sciences J.F. Machining Co., Inc. IMP Pharmaceutical Services KPMG LLP Black & Callow Imperial Innovations Consilium Strategic Communications Penlon Limited Tronconi Segarra & Associates LLP The Kane Firm Haver & Mailander AFCO RSM Tax and Advisory Services LLP

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Landlords The Krog Corp Penlon Limited 50 Cobham Drive, LLC

Landesoberkasse Baden-Württemberg Saville Notaries LLP EBC Payroll Solutions John W. Danforth Company Uline UFP Technologies Saville Notaries Microsoft Durham Staffing, Inc. Schlecht und Partner Bill Burns Maria Campanico CNA Insurance Companies House Imperial Innovations LJ Partnership Jim McAuliffe Matt Napoletano Praxair Healthcare Services Delaware Bankruptcy Judges Chief Judge Christopher S. Sontchi Judge Brendan L. Shannon Judge Kevin Gross Judge Laurie Selber Silverstein Judge Mary F. Walrath Judge Karen B. Owens Judge John T. Dorsey United States Trustee’s Office Benjamin Hackman Christine Green David Buchbinder Diane Giordano Dion Wynn Edith A. Serrano Hannah M. McCollum Holly Dice James R. O'Malley Jane Leamy Jeffrey Heck Juliet Sarkessian Karen Starr Lauren Attix Linda Casey Linda Richenderfer

Contract Counterparties Mallinckrodt Pharma IP Trading DAC Linde AG CATO Research Ltd. Imperial Innovations Limited Utilities Verizon Vaspian LLC NYSEG FSC Systems, LLC Energy Mark, LLC Republic Services Erie County Water Authority Current Board of Directors, and Former Board of Directors within Last 3 Years Paul Harder William Burns James McAuliffe Matthew Napoletano Ali Arpacioglu Current Management, and Former Management within Last 3 Years William Burns James McAuliffe Maria Campanico Richard Robel, Jr. Neal Rudewicz Michelle Cullen Han Zang Michael Cuzydlo Carol Burns Equity Holders (Five percent and greater) Mervyn Maze, MB ChB Nicholas Franks, FPS Touchstone Innovations Inspiration Healthcare

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Insurers, Brokers, Carriers CNA Countrywide Continental Casualty Company USI Insurance Services LLC Chubb Group of Insurance Companies Chubb European Group Limited Great Northern Insurance Company AIG AIG Property Casualty American International Group UK Limited American International Group, Inc. National Union Fire Insurance Company of Pittsburgh, Pa. Amwins Brokerage of New York Inc. AFCO Blue Cross Blue Shield Standard Security Life Insurance Company Banks, Secured Lenders, Equipment Financiers Silicon Valley Bank HSBC

Michael Panacio Michael West Ramona Vinson Richard Schepacarter Shakima L. Dortch T. Patrick Tinker Timothy J. Fox, Jr. Taxing Authorities New York State Department of Taxation and Finance Orchard Park Central School District Internal Revenue Service – Department of the Treasury Finanzamt/Bundeszentralamt fűr Steuern

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EXHIBIT 2

Relationships with Potential Parties in Interest

Emerald has been recently engaged or is currently engaged in matters wholly unrelated to these cases in which the following Potential Parties in Interest (or one or more of their affiliates, as the case may be) were involved: Top 20 Creditors CATO Research (has been a creditor in other cases in which Emerald has been involved) Brown Rudnick LLP (has been a professional in other cases in which Emerald has been involved) KPMG LLP (has been a creditor and professional in other cases in which Emerald has been involved) AFCO (has been a creditor in other cases in which Emerald has been involved) Banks Silicon Valley Bank (has been a lender to other debtors in other cases in which Emerald has been involved) HSBC (has been counterparty to a lease or executory contract to other debtors in other cases in which Emerald has been involved) Significant Vendors Uline (has been a creditor in other cases in which Emerald has been involved) Utilities Verizon (has been a utility provider and party to a lease or executory contract in other cases in which Emerald has been involved) NYSEG (has been a utility provider in other cases in which Emerald has been involved) Republic Services (has been a party that filed a proof of claim in other cases in which Emerald has been involved) Insurers Continental Casualty Company (has been a first lien lender in other cases in which Emerald has been involved) Chubb Group of Insurance Companies (has been an insurer in other cases in which Emerald has been involved) AFCO (has been a creditor in other cases in which Emerald has been involved)

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Blue Cross Blue Shield (has been a creditor in other cases in which Emerald has been involved) Professionals Ashby & Geddes, P.A. (Professional in Terravia Holdings Inc., where Emerald is currently serving as Plan Administrator) Brown Rudnick LLP (Professional in Fisker Automotive Inc., where Emerald served as Financial Advisor to the Official Committee of Unsecured Creditors and is currently serving as Liquidating Trustee) Omni Management Group (Claims and Noticing Agent in Fisker Automotive Inc., Glansaol LLC, and numerous cases where Emerald was involved) Arent Fox (Professional in Glansaol LLC., where Emerald is currently serving as Financial Advisor and Investment Banker to the Company) Lincoln Partners Advisors LLC (Professional in Katy Industries, Inc., where Emerald is currently serving as Financial Advisor and Investment Banker to the Company) Rosner Law Group (Professional in Adoc Holdings, Inc., et al. (f/k/a Coda Holdings, Inc.) where Emerald served as Restructuring Advisor to the Debtors and is currently serving as Liquidating Trustee) United States Bankruptcy Court, District of Delaware Judges & U.S. Trustee Office In connection therewith, Emerald is currently involved in numerous cases in the District of Delaware – Fleetwood Acquisition Corp.; SportCo Holdings, Inc.; Sienna Biopharmaceuticals; Fisker Automotive Holdings, Inc.; Katy Industries, Inc.; and TerraVia Holdings, Inc., where Emerald is currently involved with several Delaware Bankruptcy Judges and The Office of the U.S. Trustee.

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EXHIBIT B

(Proposed Order)

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Chapter 11 Case No. 19-12676 (___) (Joint Administration Requested) Related Docket No. __

ORDER AUTHORIZING AND APPROVING

THE EMPLOYMENT AND RETENTION OF EMERALD CAPITAL ADVISORS AS FINANCIAL ADVISOR TO THE DEBTORS NUNC PRO TUNC TO THE PETITION

DATE AND MODIFYING CERTAIN REQUIREMENTS UNDER LOCAL RULE 2016-2

Upon consideration of the application (the “Application”) of the NeuroproteXeon, Inc.

and its affiliated debtors and debtors-in-possession (collectively, the “Debtors”) in the above-

captioned chapter 11 cases for authorization to employ and retain Emerald Capital Advisors

(“Emerald”) as financial advisors to the Debtors nunc pro tunc to the Petition Date; and upon

consideration of the Declaration of John P. Madden in support thereof (the “Madden

Declaration”); and the Court being satisfied that Emerald consists of professionals who are

qualified to serve as financial advisor to the Debtors in these chapter 11 cases, and that Emerald

does not hold or represent any interest adverse to the estates of the Debtors in the matters for

which it is to be employed; and notice of the Application being sufficient; and good cause

appearing therefor; it is hereby

IT IS ORDERED AS FOLLOWS:

1. The Application is GRANTED as set forth herein.


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2. Pursuant to sections 327(a) and 328 of Title 11 of the United States Code, 11

U.S.C. §§ 101 et seq. (the “Bankruptcy Code”), Rules 2014 and 2016 of the Federal Rules of

Bankruptcy Procedure (the “Bankruptcy Rules”) and Rules 2014-1 and 2016-2 of the Local

Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the

District of Delaware (the “Local Rules”), the Debtors are authorized to employ and retain

Emerald to serve as their financial advisor upon the terms and conditions set forth in the

Engagement Letter, as modified by the terms of this Order, nunc pro tunc to the Petition Date.

3. Emerald shall file monthly, interim and final fee applications for the allowance of

compensation and reimbursement of expenses pursuant to the procedures set forth in sections

330 and 331 of the Bankruptcy Code, Bankruptcy Rules, Local Rules and any other applicable

procedures and orders of the Court; provided however that Emerald shall be compensated and

reimbursed pursuant to section 328(a) of the Bankruptcy Code and that Emerald’s fees and

expenses shall not be evaluated under the standard set forth in section 330 of the Bankruptcy

Code.

4. Notwithstanding any provision in this Order, the United States Trustee shall have

the right to object to Emerald’s requests for monthly, interim and final compensation and

reimbursement based on the reasonableness standard set forth in section 330 of the Bankruptcy

Code, and not section 328(a) of the Bankruptcy Code.

5. The Debtors are authorized to compensate and reimburse Emerald pursuant to the

terms of the Engagement Letter, as modified by this Order.

6. Notwithstanding anything to the contrary in the Application or the Engagement

Letter, Emerald shall not seek reimbursement of any fees or costs arising from the prosecution

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(as opposed to preparation of) or defense of any monthly fee statements or fee applications in

these cases.

7. In light of the services to be provided by Emerald, Emerald and its professionals

shall be excused from: (i) the requirement to maintain or provide detailed time records in

accordance with Bankruptcy Rule 2016(a) and Local Rule 2016-2 and (ii) conforming to a

schedule of hourly rates for its professionals. Instead, Emerald will maintain reasonably detailed

time records in 0.5 hour increments containing descriptions of those services rendered to the

Debtors and the individuals who provided those services and will present such records together

with its fee applications filed with the Court.

8. The indemnification provisions set forth in the Engagement Letter are approved,

subject to the following:

(a) No indemnified Person (as defined in the Engagement Letter) shall be entitled to indemnification, contribution or reimbursement for services, unless such services and the indemnification, contribution or reimbursement therefore are approved by the Court; and

(b) notwithstanding any provisions of the Engagement Letter to the contrary, the Debtors shall have no obligation to indemnify an Indemnified Person or provide contribution or reimbursement to an Indemnified Person (i) for any claim or expense that is judicially determined (the determination having become final) to have arisen from such Indemnified Person’s bad faith, self-dealing, breach of fiduciary duty, gross negligence or willful misconduct, (ii) for a contractual dispute in which the Debtors allege the breach of an Indemnified Person’s contractual obligations if the Court determines that indemnification, contribution or reimbursement would not be permissible pursuant to In re United Artists Theatre Company, 315 F.3d 217 (3d Cir. 2003), or (iii) for any claim or expense that is settled prior to a judicial determination as to the exclusions set forth in clauses (i) and (ii) above, but determined by this Court, after notice and a hearing, to be a claim or expense for which such Indemnified Person should not receive indemnity, contribution or reimbursement under the terms of the Engagement Letter, as modified by this Order.

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(c) if, before the earlier of (i) the entry of an order confirming a Chapter 11 plan in the chapter 11 cases (that order having become a final order no longer subject to appeal) and (ii) the entry of an order closing the chapter 11 cases, an Indemnified Person believes that it is entitled to the payment of any amounts by the Debtors on account of the Debtors’ indemnification, contribution and/or reimbursement obligations under the Engagement Letter, as modified by this Order, including without limitation the advancement of defense costs, the Indemnified Person must file an application therefore in this Court, and the Debtors may not pay any such amounts to the Indemnified Person before the entry of an order by this Court approving such payment. This subparagraph (c) is intended only to specify the period during which the Court shall have jurisdiction over any request by an Indemnified Person for indemnification, contribution or reimbursement and is not a provision limiting the duration of the Debtors’ obligation to indemnify an Indemnified Person. All parties in interest shall retain the right to object to any demand by an Indemnified Person for indemnification, contribution or reimbursement.

9. Any limitation of liability pursuant to the terms and conditions of the Engagement

Letter or otherwise is hereby eliminated.

10. Notwithstanding anything contained in the Engagement Letter, paragraph 3(a) of

the Engagement Letter shall not apply.

11. Notwithstanding anything contained in the Engagement Letter, the third, fourth

and fifth sentences of paragraph 3(b) of the Engagement Letter shall not apply.

12. To the extent that there may be any inconsistency between the terms of the

Application, the Engagement Letter, the Madden Declaration and this Order, the terms of this

Order shall govern.

13. The Debtors and Emerald are authorized and empowered to take all actions

necessary to implement the relief granted in this Order.

14. The terms and conditions of this Order shall be immediately effective and

enforceable upon its entry.

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15. The Court retains jurisdiction with respect to all matters arising from or related to

the implementation of this Order.

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EXHIBIT C

(Engagement Letter)

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