Exhibit 10.116

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT MARKED WITH [***]
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

Confidential

Execution Copy

 

 

 

ASSET PURCHASE AGREEMENT

BY AND BETWEEN

BIOVAIL LABORATORIES INTERNATIONAL SRL, AS BUYER,

AND

CORTEX PHARMACEUTICALS, INC., AS SELLER

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

     Page

ARTICLE I DEFINITIONS; INTERPRETATION

   1    Section 1.1.    Definitions    1    Section 1.2.    Interpretation    14
ARTICLE II PURCHASE AND SALE    14    Section 2.1.    Purchase and Sale of
Assets; Purchase Price; Additional Consideration.    14    Section 2.2.   
Acquired Assets; Excluded Assets    15    Section 2.3.    Assumed Liabilities;
Buyer Not Successor to Seller; Excluded Liabilities    17    Section 2.4.   
Procedures for Certain Acquired Assets Not Freely Transferable    18    Section
2.5.    Licenses    19 ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER   
20    Section 3.1.    Organization, Standing and Power    20    Section 3.2.   
Authority; Binding Agreements    20    Section 3.3.    Conflicts; Consents    21
   Section 3.4.    Governmental Authorizations    21    Section 3.5.    Absence
of Changes    21    Section 3.6.    Good Title; Sufficiency of Assets    22   
Section 3.7.    Tangible Property    22    Section 3.8.    Intellectual
Property.    22    Section 3.9.    Contracts.    25    Section 3.10.   
Compliance with Applicable Law; Permits    26    Section 3.11.    Non-Clinical
and Clinical Material    26    Section 3.12.    Litigation    26    Section
3.13.    Adverse Information    27    Section 3.14.    Insurance    27   
Section 3.15.    Taxes    27    Section 3.16.    Brokers    28    Section 3.17.
   Regulatory Matters    28    Section 3.18.    Adequate Consideration; Solvency
   29    Section 3.19.    Environmental Matters    29    Section 3.20.   
Disclosure    29

--------------------------------------------------------------------------------

TABLE OF CONTENTS (Cont.)

 

     Page ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER    29   
Section 4.1.    Organization, Standing and Power    29    Section 4.2.   
Authority; Binding Agreements    30    Section 4.3.    Conflicts; Consents    30
   Section 4.4.    Litigation    30    Section 4.5.    Brokers    30 ARTICLE V
ADDITIONAL AGREEMENTS    30    Section 5.1.    Access to Information    30   
Section 5.2.    Confidentiality; Non Competition; Covenant Not to Sue    31   
Section 5.3.    Patent Family 11 Applications    33    Section 5.4.    Certain
Tax Matters.    33    Section 5.5.    Public Announcements    34    Section 5.6.
   Checks; Remittances and Refunds    34    Section 5.7.    Cooperation in
Litigation    34    Section 5.8.    Cooperation in Patent Transfer, Assignment,
Prosecution, Maintenance and Enforcement    35    Section 5.9.    Required
Approvals and Consents    35    Section 5.10.    Transfer Period    35   
Section 5.11.    Compliance with Laws    35    Section 5.12.    Variable
Interest Entities    35    Section 5.13.    Post-Closing Filings; Further
Assurances    36    Section 5.14.   

[***]

   37 ARTICLE VI CONDITIONS PRECEDENT    37    Section 6.1.    Conditions to
Obligations of Buyer and Seller    37    Section 6.2.    Conditions to
Obligations of Buyer    38    Section 6.3.    Conditions to Obligations of
Seller    40 ARTICLE VII REPURCHASE OF ASSETS    41    Section 7.1.   
Repurchase of Assets by Seller    41 ARTICLE VIII INDEMNIFICATION    42   
Section 8.1.    Survival; Expiration    42    Section 8.2.    Indemnification by
Seller    43    Section 8.3.    Indemnification by Buyer    43

[***]: CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION.

 

ii

--------------------------------------------------------------------------------

TABLE OF CONTENTS (Cont.)

 

               Page    Section 8.4.    Calculation of Losses; Mitigation of
Damages    44    Section 8.5.    Certain Procedures for Indemnification    44   
Section 8.6.    Certain Limitations on Indemnification    45    Section 8.7.   
Exclusive Remedy    46 ARTICLE IX MISCELLANEOUS    46    Section 9.1.   
Governing Law    46    Section 9.2.    Notices    46    Section 9.3.    Benefits
of Agreement    47    Section 9.4.    Amendments and Waivers    47    Section
9.5.    Cumulative Rights    47    Section 9.6.    Expenses    48    Section
9.7.    Arbitration    48    Section 9.8.    Assignment    49    Section 9.9.   
Enforceability; Severability    49    Section 9.10.    Entire Agreement    49   
Section 9.11.    Counterparts    49

 

iii

--------------------------------------------------------------------------------

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (this “Agreement”), dated as of March 25, 2010
(the “Effective Date”), is made by and between Cortex Pharmaceuticals, Inc., a
Delaware corporation (“Seller”) and Biovail Laboratories International SRL, an
international society with restricted liability organized under the laws of
Barbados (“Buyer”). Buyer and Seller may be referred to herein each individually
as a “Party” and collectively as the “Parties”.

RECITALS

WHEREAS, Seller owns or has license rights to certain pharmaceutical compounds,
including the Primary AMPAKINE® Compounds (as hereinafter defined) and the Other
AMPAKINE® Compounds (as hereinafter defined), which are being or may be
developed, among other things, for use in the prevention and/or treatment of RD
(as hereinafter defined) or vaso-occlusive crises associated with sickle cell
disease (the “Field”);

WHEREAS, Buyer is a pharmaceutical company with expertise and experience in
researching, developing, manufacturing and commercializing pharmaceutical
products;

WHEREAS, subject to the terms and conditions of this Agreement, Seller desires
to transfer to Buyer and Buyer desires to acquire Seller’s interest in certain
assets relating to the Compounds (as defined herein); and

WHEREAS, Buyer and Seller are simultaneously entering into the Seller License
Agreement (as hereinafter defined) for the license back to Seller of certain of
the Acquired Assets (as hereinafter defined) for use outside the Field.

NOW, THEREFORE, in consideration of the mutual benefits to be derived from this
Agreement and of the representations, warranties, conditions, agreements and
promises contained herein and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties hereto, intending
to be legally bound, hereby agree as follows:

ARTICLE I

DEFINITIONS; INTERPRETATION

Section 1.1. Definitions. The capitalized terms used in this Agreement have the
respective meanings ascribed to them as follows:

“508 Application” means the Patent application [***].

“254 Application” means the Patent application [***] and the US Patent
application [***], both of which claim priority to provisional Patent
application [***].

“Act” means the United States Federal Food, Drug, and Cosmetic Act, as amended,
and the rules, regulations, guidelines, guidances and requirements promulgated
thereunder, as may be in effect from time to time.

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

[***]: CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION.

--------------------------------------------------------------------------------

“Acquired Patent Families” means, collectively, Patent Family 5 and Patent
Family 6.

“Action” means any claim, action, suit, arbitration, inquiry, audit, proceeding
or investigation by or before or otherwise involving, any Governmental
Authority.

“Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, such first Person. For purposes of this definition, a Person shall
be deemed, in any event, to control another Person if it (a) owns or controls,
directly or indirectly, or has the ability to direct or cause the direction or
control of, more than 50% of the voting equity of the other Person, or (b) has
the ability to direct, cause the direction of, or control the actions of such
other Person, whether through direct or indirect ownership of voting equity, by
contract or otherwise.

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

“Ampakine Molecule” means any compound that positively modulates through an
allosteric mechanism AMPA receptor mediated responses.

“AMPAKINE® NDA Submission” has the meaning set forth in the definition of Second
Milestone Event.

“AMPAKINE® Pivotal Studies” has the meaning set forth in the definition of
Second Milestone Event.

“AMPAKINE® Trademark” means the Trademark having serial number 74439919, filed
on September 24, 1993 and registered on May 12, 1998 as registration number
2157044.

“Applicable Law” means any applicable supra-national, federal, state, regional,
local or foreign constitution, treaty, law, statute, ordinance, rule,
regulation, interpretation, directive, policy, administrative code, guidance,
order, writ, award, decree, injunction, judgment, stay or restraining order of
any Governmental Authority, the terms of any Permit, and any other ruling or
decision of, agreement with or by, or any other requirement of, any Governmental
Authority.

“Assumed Contracts” has the meaning set forth in Section 2.2(a)(ii).

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

“Basket” has the meaning set forth in Section 8.6(a).

“BfArM Approvals” means all Regulatory Approvals by the Bundesinstitut für
Arzneimittel und Medizinprodukte (German Federal Institute for Drugs and Medical
Devices) with respect to CX717.

“Books and Records” means all books, records, files (including data files) and
documents (including research and development and records), correspondence and,
to the extent not originals, true and complete copies of all files relating to
the acquired Compounds or the Acquired Assets or the filing, prosecution,
issuance, maintenance, enforcement or defense of any Patents, Trademarks,
Copyrights or other Intellectual Property, including file wrappers, written
third party correspondence,

 

2

--------------------------------------------------------------------------------

records and documents primarily related to the Seller Compound Activities,
including laboratory notebooks, procedures, tests, dosage information, criteria
for patient selection, safety and efficacy and study protocols, investigators
brochures and all pharmacovigilance and other safety records) in all forms,
including electronic, in which they are stored or maintained, and all data and
information included or referenced therein, in each case that are licensed,
owned or Controlled by or otherwise in the possession of Seller or any of its
Affiliates, as applicable; provided, however, the [***] Books and Records shall
be excluded from Books and Records for so long as Seller is bound by the
confidentiality restrictions pursuant to the [***] Agreement, and thereafter,
the [***] Books and Records shall be included in Books and Records.

“Business Day” means any day excluding Saturdays, Sundays and any day that is a
legal holiday under the laws of the United States or Barbados or that is a day
on which banking institutions located in New York, New York are authorized or
required by Applicable Law or other governmental action to close.

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

“Buyer 508 Application” has the meaning set forth in Section 6.2(m)(i).

“Buyer 254 Applications” has the meaning set forth in Section 6.2(m)(ii).

“Buyer Confidential Information” means (a) all financial, technical, commercial,
proprietary or other information disclosed by or on behalf of Buyer or an
Affiliate of Buyer to Seller, its Affiliates or any of its or their officers,
directors, employees or Representatives (each, for purposes of this definition,
a “Seller Recipient”) in connection with the transactions contemplated by this
Agreement, (b) each of the provisions contained in this Agreement and the
Related Documents, (c) all financial, technical, commercial, proprietary or
other information of Buyer or its Affiliates disclosed by or on behalf of Buyer
to any Governmental Authority in connection with any filings or review in
connection with the transactions contemplated by this Agreement, and (d) all
financial, technical, commercial, proprietary or other information of Seller or
its Affiliates relating to the Acquired Assets, including all Seller
Intellectual Property and Books and Records. Notwithstanding the preceding
sentence, the definition of Buyer Confidential Information does not include any
information that (i) is in the public domain at the time of disclosure to a
Seller Recipient or becomes part of the public domain after such disclosure
through no fault of a Seller Recipient, (ii) except with respect to information
set forth in subclause (d) above which shall constitute Buyer Confidential
Information, is already in the possession of a Seller Recipient at the time of
disclosure to such Seller Recipient and had not been previously provided by
Buyer or its Affiliates, (iii) is disclosed to a Seller Recipient by any Person
other than by or on behalf of a Buyer Recipient; provided that, no Seller
Recipient has actual knowledge that such Person is prohibited from disclosing
such information (either by reason of contract or legal or fiduciary obligation)
or (iv) is developed independently by a Seller Recipient without the use of any
Buyer Confidential Information.

“Buyer Patent Family 11 Applications” means, collectively, the Buyer 508
Application and the Buyer 254 Applications.

“Buyer Recipient” has the meaning set forth in the definition of Seller
Confidential Information.

 

[***]: CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION.

3

--------------------------------------------------------------------------------

“Cap” has the meaning set forth in Section 8.6(a).

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

“Compounds” means the Primary AMPAKINE® Compounds and the Other AMPAKINE®
Compounds.

“Competing Compound” means any compound or product that has as an active
ingredient an Ampakine Molecule or any metabolites, salts, free base forms,
prodrugs, isomers, enantiomers, derivatives or analogs thereof either in single
or combination form.

“Consent” means, with respect to a Contract or a Permit, any consent or approval
of any Person other than either Party to this Agreement that, in accordance with
the terms of such Contract or Permit, is required to be obtained for the
transfer or assignment thereof to Buyer.

“Contracts” has the meaning set forth in Section 3.9(b).

“Control” including its various tenses and derivatives (such as “Controlled” and
“Controlling”) means (a) when used with respect to any Person, the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such entity, whether through the ownership of voting
securities, by contract or otherwise, (b) when used with respect to any
security, the possession, directly or indirectly, of the power to vote, or to
direct the voting of, such security or the power to dispose of, or to direct the
disposition of, such security, and (c) when used with respect to any item of
Intellectual Property, possession of the right, whether directly or indirectly,
and whether by ownership, license or otherwise, to assign or grant a license,
sublicense or other right to or under such Intellectual Property.

“Copyrights” means (a) all copyrights (including copyrights in any package
inserts, marketing or promotional materials, labeling or other text provided to
prescribers or consumers), whether registered or unregistered throughout the
world; (b) any registrations and applications therefor; (c) works of authorship
(whether published or unpublished) and rights to databases of any kind under the
Applicable Laws of any jurisdiction; (d) all rights and priorities afforded
under any international treaty, convention or the like; (e) all extensions and
renewals thereof; (f) the right to sue for past, present and future
infringements of any of the foregoing, and all proceeds of the foregoing,
including licenses, royalties, income, payments, claims, damages (including
attorneys’ fees), and proceeds of suit; and (g) any rights similar to the
foregoing in any country, including moral rights.

“[***]” shall have the meaning set forth in Exhibit 1.

“CX717” shall have the meaning set forth in Exhibit 1.

“CX1739” shall have the meaning set forth in Exhibit 1.

“CX1763” shall have the meaning set forth in Exhibit 1.

“CX1942” shall have the meaning set forth in Exhibit 1.

 

[***]: CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION.

4

--------------------------------------------------------------------------------

“CX717 IND” means IND #[***] filed with the FDA on [***] for CX717.

“Distribute” or “Distribution” means any and all activities related to the
distribution, marketing, promoting, offering for sale and selling of any
product, including advertising, detailing, educating, planning, promoting,
conducting reporting, storing, handling, shipping and communicating with
Governmental Authorities and third parties in connection therewith.

“Dollars” or “$” means United States dollars.

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

“Employee” means an individual who has provided or is currently providing
services to Seller in respect of the Seller Compound Activities, or otherwise
has knowledge in respect of the Seller Intellectual Property, as an employee or
consultant of Seller.

“Environmental Law” means any Applicable Law relating to (a) pollution or
protection of the environment, including natural resources, disposal of
pollutants, toxic, hazardous, or other waste, and discharge and treatment of
stormwater or sanitary and industrial wastewater; (b) health and safety,
including exposure of employees or other persons, to toxic or hazardous
substances; (c) protection of the public health or welfare from the effects of
by-products, wastes, emissions, discharges or releases of any chemical or other
substances from industrial or commercial activities; or (d) regulation of the
manufacture, use or introduction into commerce of chemical or other substances,
including their manufacture, importation, exportation, formulation, labeling,
distribution, transportation, handling, storage, treatment, recycling, removal
and disposal, specifically including petroleum and petroleum derived products.

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

“Excluded Intellectual Property” means all right, title and interest of Seller
(or its Affiliates, as applicable) in and to Intellectual Property, whether now
existing or hereafter developed or acquired other than the Seller Intellectual
Property.

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

“Exploit” or “Exploitation” means to make, have made, import, use, sell, offer
for sale, or otherwise dispose of, including all discovery, research,
development, registration, modification, enhancement, improvement, manufacture,
storage, formulation, optimization, importation, exportation, transportation,
Distribution, commercialization, promotion and marketing activities related
thereto.

“FDA” means the United States Food and Drug Administration, or any successor
agency thereto.

“Field” has the meaning set forth in the recitals hereto.

“Filing Date” has the meaning set forth in Section 9.7(c).

 

[***]: CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION.

5

--------------------------------------------------------------------------------

“First Milestone Event” means the date on which Buyer generates data which in
Buyer’s sole discretion successfully demonstrates the utility of the Compound
referred to as CX717 in the intravenous dosage format for the prophylactic or
rescue treatment of RD.

“First Milestone Payment” has the meaning set forth in Section 2.1(c)(i).

“Good Manufacturing Practices” means standards and methods to be used in, and
the facilities or controls to be used for, the manufacture, processing,
packaging, testing or holding of a drug to assure that such drug meets the
requirements of Applicable Law and other requirements of any Governmental
Authority as to safety, identity and strength, and meets the quality and purity
characteristics that it purports or is represented to possess.

“Governmental Authority” means any supra-national, federal, state, local or
foreign government, legislature, governmental or administrative agency,
department, commission, bureau, board, instrumentality, self-regulatory
association or authority, court or other authority of tribunal of competent
jurisdiction (including any arbitration or other alternative dispute forum), or
any other governmental authority or instrumentality anywhere in the world.

“Hold-Back Amount” has the meaning set forth in Section 2.1(a)(i).

“Improvement” means any modification, variation or revision to a compound,
product or technology or any discovery, technology, device, process or
formulation related to such compound, product or technology, whether or not
patented or patentable, including any enhancement in the efficiency, operation,
manufacture, ingredients, preparation, presentation, formulation, means of
delivery, packaging or dosage of such compound, product or technology, any
discovery or development of any new or expanded indications for such compound,
product or technology, or any discovery or development that improves the
stability, safety or efficacy of such compound, product or technology or would,
if commercialized, replace or displace such compound, product or technology.

“IND” means (a) an Investigational New Drug Application, as defined in the Act,
which is required to be filed with the FDA before beginning clinical testing of
a product in human subjects, and its equivalent in other countries or regulatory
jurisdictions in the Territory or any successor application or procedure, and
(b) all supplements and amendments that may be filed with respect to the
foregoing.

“Indemnification Claim” has the meaning set forth in Section 8.5(b).

“Indemnified Party” has the meaning set forth in Section 8.5(a).

“Indemnifying Party” has the meaning set forth in Section 8.5(a).

“Information and Inventions” means all technical, scientific and other know-how
and information, trade secrets, knowledge, technology, means, methods,
processes, practices, formulas, instructions, skills, techniques, procedures,
experiences, ideas, technical assistance, designs, drawings, assembly
procedures, computer programs, apparatuses, specifications, data, results and
other material, including high-throughput screening and other drug discovery and
development technology, pre-clinical and clinical trial results, manufacturing
procedures, test procedures and purification and isolation techniques, (whether
or not confidential, proprietary, patented or

 

6

--------------------------------------------------------------------------------

patentable) in written, electronic or any other form and all Improvements,
whether to the foregoing or otherwise, and other discoveries, developments,
inventions, and other Intellectual Property (whether or not confidential,
proprietary, patented or patentable), but excluding the Regulatory
Documentation.

“Intellectual Property” means all intellectual property rights, whether
registered or unregistered, including (a) Patents, (b) Information and
Inventions, (c) Trademarks, (d) Copyrights, (e) other intellectual property
rights, including confidential information, trade secrets, and similar
proprietary rights in confidential inventions, discoveries, analytic models,
improvements, processes, techniques, devices, methods, patterns, formulations
and specifications, (f) all completed or pending registrations, renewals or
applications for registration or renewal of any of the foregoing, (g) copies and
tangible embodiments of any of the foregoing (in whatever form or media) and
(h) other tangible and intangible information or material.

“Licensed Patent Families” means, collectively, Patent Family 1 and Patent
Family 9.

“Lien” means any lien (statutory or otherwise), security interest, pledge,
hypothecation, mortgage, assessment, lease, claim, levy, license, defect in
title, charge, or any other third party right, license or property interest of
any kind, or any conditional sale or other title retention agreement, right of
first option, right of first refusal or similar restriction, any covenant not to
sue, or any restriction on use, transfer, receipt of income or exercise of any
other attribute of ownership or any agreement to give any of the foregoing in
the future or similar encumbrance of any kind or nature whatsoever.

“Losses” has the meaning set forth in Section 8.2.

“Marketing Authorization Application” or “MAA” means a New Drug Application as
defined in the Act, and any corresponding foreign application, registration or
certification, necessary or reasonably useful to market any product containing
any of the Compounds as an active pharmaceutical ingredient in the Territory,
but not including pricing and reimbursement approvals.

“Material Adverse Effect” means any effect that (a) is materially adverse to the
Seller Compound Activities or the Acquired Assets, in whole or in part,
(b) materially impacts, materially delays or prevents the consummation of the
transactions contemplated hereby, (c) creates a material limitation on the
ability of the Buyer to develop, use or otherwise Exploit the Compounds in the
Field in the Territory or (d) creates a material limitation on the ability of
Buyer to acquire valid and marketable title to the Acquired Assets free and
clear of all Liens (other than Permitted Liens).

“Material Consent” means any Consent under any Assumed Contract or Permit as
designated on Schedule 3.3.

“MHRA Approvals” means all Regulatory Approvals by the Medicines & Healthcare
products Regulatory Agency in the United Kingdom with respect to the Compound
referred to as CX717.

“Milestone Event” means any of the First Milestone Event, the Second Milestone
Event or the Third Milestone Event, as applicable.

“Milestone Payments” has the meaning set forth in Section 2.1(c).

 

7

--------------------------------------------------------------------------------

“NDA” means a New Drug Application for any product requesting permission to
place the product on the market in accordance with the Act, together with all
supplements or amendments filed with respect thereto pursuant to the
requirements of the Act, including all documents, data and other information
concerning the product that are reasonably necessary for the FDA approval to
market the product in the United States.

“Non-Assignable Right” has the meaning set forth in Section 2.4(a).

“Non-Clinical and Clinical Material” has the meaning set forth in
Section 2.2(a)(vi).

“Non-Compete Adjustment Trigger” means the acquisition of beneficial ownership
of Seller by a third party of all or a material portion of the assets of, or any
material equity interest in, Seller pursuant to a merger, consolidation or other
business combination, sale of shares of capital stock, sale of assets, licensing
transaction, tender or exchange offer or similar transaction involving Seller,
including any single or multi-step transaction or series of related transactions
that is structured to permit such party to acquire beneficial ownership of any
material portion of the assets of, or any material equity interest in, Seller.
For the purposes of this definition, a material portion of the assets of, or
material equity interest in, Seller means greater than [***]% of the assets of,
or equity interest in, Seller.

“Order” means any writ, judgment, decree, injunction or similar order, including
consent orders, of any Governmental Authority (in each such case whether
preliminary or final).

“[***] Agreement” means that certain [***] Agreement, dated [***], by and
between [***] and Buyer.

“[***] Books and Records” means books, records, files (including data files) and
documents (including research and development records) and correspondence
relating solely to information under Patent Family 5 and for which Seller is
subject to confidentiality restrictions pursuant to the [***] Agreement (as such
confidentiality restrictions are in effect as of the date hereof).

“[***] Sublicense” means the sublicense granted by Seller to Buyer in the Seller
License Agreement of Seller’s Intellectual Property rights in Patent Family 5
that are licensed to Seller pursuant to the [***] Agreement.

“Other AMPAKINE® Compounds” means the molecules disclosed in, claimed in or
otherwise covered by the Acquired Patent Families (other than the Primary
AMPAKINE® Compounds).

“Party” or “Parties” has the meaning set forth in the preamble hereto.

“Patent Family 1” means the Patents listed on Schedule 1.1(a) hereto.

“Patent Family 1 UofC License Agreement” means that certain Exclusive License
Agreement, dated as of June 25, 1993, by and between the Regents of the
University of California and Seller, as amended.

 

[***]: CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION.

8

--------------------------------------------------------------------------------

“Patent Family 5” means the Patents listed on Schedule 1.1(b) hereto, and
covering CX717 and [***].

“Patent Family 6” means the Patents listed on Schedule 1.1(c) hereto, and
covering CX1739, CX1942 and CX1763.

“Patent Family 9” means the Patents listed on Schedule 1.1(d) hereto.

“Patent Family 11 Applications” means, collectively, the 508 Application and the
254 Applications, as set forth on Schedule 1.1(e) hereto.

“Patents” means (a) all national, regional and international patents and patent
applications, including provisional patent applications; (b) all patent
applications filed either from such patents, patent applications or provisional
applications or from an application claiming priority from either of these,
including divisionals, continuations, continuations-in-part, substitutions,
provisionals, converted provisionals, continued prosecution applications and
requests for continued examination applications; (c) any and all patents that
have issued or in the future issue from the foregoing patent applications
described in clauses (a) and (b), including utility models, petty patents and
design patents and certificates of invention; (d) any and all extensions or
restorations by existing or future extension or restoration mechanisms,
including revalidations, reissues, re-examinations and extensions (including any
supplementary protection certificates and the like) of the foregoing patents or
patent applications described in clauses (a), (b) and (c); (e) any and all
causes of action, claims, demands or other rights occasioned from or because of
any and all past, present and future infringement of any of the foregoing,
including all rights to recover damages (including attorneys’ fees), profits and
injunctive or other relief for such infringement; and (f) any similar rights,
including so-called pipeline protection, or any importation, revalidation,
confirmation or introduction patent or registration patent or patent of
additions to any such foregoing patent applications and patents.

“Permits” means all licenses, permits, construction permits, approvals,
concessions, franchises, certificates, consents, qualifications, registrations,
privileges and other authorizations and rights, including the Regulatory
Approvals, from or issued by any Governmental Authority held by Seller (or its
Affiliates, as applicable) that primarily relate to any Compound or the Seller
Compound Activities in the Field, including those set forth on Schedule 3.10,
together with any renewals, extensions, or modifications thereof and any
additions thereto.

“Permitted Liens” means (a) Liens for Taxes or assessments that are not yet due
or which are being contested in good faith by appropriate Actions and
(b) statutory mechanics’, materialmen’s, contractors’, warehousemen’s,
repairmen’s and other similar statutory Liens arising in the ordinary course of
business and consistent with past practice and that are not delinquent or as set
forth on Schedule 1.1(f).

“Person” means a human being, labor organization, partnership, firm, enterprise,
association, joint venture, corporation, limited liability company, cooperative,
legal representative, foundation, society, political party, estate, trust,
trustee, trustee in bankruptcy, receiver or any other organization or entity
whatsoever, including any Governmental Authority.

 

[***]: CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION.

9

--------------------------------------------------------------------------------

“Phase III Clinical Study” means a human clinical trial of a compound or product
on a sufficient number of subjects that is designed to establish that the
compound or product is safe and efficacious for its intended use, and to
determine warnings, precautions and adverse reactions that are associated with
the compound or product in the dosage range to be prescribed, and to support
Regulatory Approval of the compound or product or label expansion of the
compound or product.

“Primary AMPAKINE® Compounds” means CX717, CX1739, CX1942 and CX1763, and their
respective metabolites, salts, free base forms, prodrug forms or enantiomers.

“Primary Contract” has the meaning set forth in Section 3.9(a).

“Purchase Price” has the meaning set forth in Section 2.1(a)(i).

“RD” or “respiratory depression” means a variety of conditions characterized by
reduced frequency and inspiratory drive to cranial and spinal motor neurons.
Specifically, respiratory depression refers to conditions where the medullary
neural network associated with respiratory rhythm generating activity does not
respond to accumulating levels of PCO2 (or decreasing levels of PO2) in the
blood and subsequently under stimulates motor neurons controlling lung
musculature.

“Regulatory Approval” means, with respect to a country in the Territory, any and
all approvals (including pricing and reimbursement approvals), licenses,
registrations or authorizations of any Governmental Authority necessary or
useful for the Exploitation of the Compound in such country, including, where
applicable, (a) approval of any Compound or any product containing any Compound,
including any INDs, MAAs and supplements and amendments thereto; (b) pre- and
post-approval marketing authorizations (including any prerequisite manufacturing
approval or authorization related thereto); (c) labeling approval; and
(d) technical, medical and scientific licenses.

“Regulatory Documentation” means any and all applications (including for “orphan
drug” status), registrations, licenses, authorizations and approvals (including
all Regulatory Approvals), and non-clinical and clinical study authorization
applications or notifications (including all supporting files, writings, data,
studies and reports) prepared for submission to a Governmental Authority or
research ethics committee with a view to the granting of any Regulatory
Approval, and any correspondence to or with the FDA or any other Governmental
Authority with respect to the Compounds, the Seller Compound Activities
(including minutes and official contact reports relating to any communications
with any Governmental Authority), and all data contained in any of the
foregoing, including all INDs, MAAs, regulatory drug lists, advertising and
promotion documents, adverse event files, complaint files and manufacturing
records.

“Related Contract” has the meaning set forth in Section 3.9(b).

“Related Documents” means, other than this Agreement, all agreements,
certificates and documents signed and delivered by either Party in connection
with this Agreement.

“Representatives” has the meaning set forth in Section 5.2(a).

 

10

--------------------------------------------------------------------------------

“Second Milestone Event” means the occurrence of both: (i) the successful
completion by Buyer of a Phase III program for a Primary AMPAKINE® Compound in
the intravenous dosage format for prophylactic or rescue treatment of RD, as
measured by [***]; and (ii) [***] (the “[***]”) [***] (the “[***]”).

“Second Milestone Payment” has the meaning set forth in Section 2.1(c)(ii).

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

“Seller 508 Application” has the meaning set forth in Section 6.2(m)(i).

“Seller 254 Applications” has the meaning set forth in Section 6.2(m)(ii).

“Seller Compound Activities” means those tests, studies (whether preclinical or
clinical) and other activities conducted by or on behalf of Seller or its
Affiliates in connection with the Compounds or the Exploitation thereof.

“Seller Confidential Information” means (a) all financial, technical,
commercial, proprietary or other information of Seller or an Affiliate of Seller
disclosed by Seller or an Affiliate of Seller to Buyer, its Affiliates or any of
its or their officers, directors, employees (or Representatives for purposes of
this definition, each a “Buyer Recipient”) in connection with the transactions
contemplated by this Agreement that does not primarily relate to the Seller
Compound Activities or the Acquired Assets, (b) each of the provisions contained
in this Agreement and the Related Documents, and (c) all financial, technical,
commercial, proprietary or other information of Seller or an Affiliate of Seller
disclosed by Seller or an Affiliate of Seller to any Governmental Authority in
connection with any filings or review in connection with the transactions
contemplated hereunder not primarily relating to the Seller Compound Activities
or the Acquired Assets. Notwithstanding the preceding sentence, the definition
of Seller Confidential Information does not include any information that (i) is
in the public domain at the time of disclosure to a Buyer Recipient or becomes
part of the public domain after such disclosure through no fault of such Buyer
Recipient, (ii) is already in the possession of a Buyer Recipient at the time of
disclosure to such Buyer Recipient and had not been previously provided by
Seller or its Affiliates, (iii) is disclosed to a Buyer Recipient by any Person
other than by or on behalf of a Seller Recipient; provided that, no Buyer
Recipient has actual knowledge that such Person is prohibited from disclosing
such information (either by reason of contract or legal or fiduciary obligation)
or (iv) is developed independently by a Buyer Recipient without the use of any
Seller Confidential Information.

“Seller Intellectual Property” means (a) the Seller Patent Rights, (b) the
Seller Know-How, (c) the AMPAKINE® Trademark, and (d) all other Intellectual
Property Controlled by Seller (or its Affiliates) primarily related to the
Seller Compound Activities and the Compounds and the Exploitation thereof,
together with all associated goodwill.

“Seller Know-How” means all Information and Inventions developed by or at the
request of, or in the possession or Control of, Seller or its Affiliates as of
the Effective Date primarily relating to the Seller Compound Activities or the
Compounds (or the Exploitation thereof) or any Improvements thereto as of the
Effective Date, to the extent that such Information and Inventions are not
generally known, but excluding any Information and Inventions to the extent
covered or claimed by the Seller

 

[***]: CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION.

11

--------------------------------------------------------------------------------

Patent Rights. Seller Know-How shall include all: (a) biological, chemical,
pharmacological, toxicological, pharmaceutical, physical and analytical,
clinical, safety, manufacturing and quality control data and information
primarily related to the Seller Compound Activities or any Compound, (b) assays
and biological methodology necessary or useful for the conduct of the Seller
Compound Activities or Exploitation of any Compound, and (c) any and all
Information and Inventions primarily related to any and all Compounds, or the
Exploitation thereof, discovered or developed by or on behalf of Seller or its
Affiliates as of the Effective Date, that are not covered or claimed by the
Seller Patent Rights.

“Seller’s Knowledge” (and similar phrases) means the actual knowledge of any
officer or director of Seller or Seller’s Affiliates.

“Seller License Agreement” means the license agreement entered into
simultaneously herewith between Buyer and Seller with respect to (a) the license
of certain of the Seller Intellectual Property by Buyer to Seller for use
outside the Field and (b) the [***].

“Seller Patent Rights” means the Acquired Patent Families, the Buyer Patent
Family 11 Applications and the Licensed Patent Families.

“Seller Recipient” has the meaning set forth in the definition of Buyer
Confidential Information.

“Seller Resource Employees” has the meaning set forth in Section 5.10.

“Sleep Apnea” or “SA” means a chronic disorder characterized by brief and
frequently repeated interruptions of breathing during sleep, including
obstructive sleep apnea and central sleep apnea.

“Subsidiary” means, with respect to any Person, any other Person of which at
least a majority of the securities or ownership interests having by their terms
ordinary voting power to elect a majority of the board of directors or other
persons performing similar functions is directly or indirectly owned or
Controlled by such Person and/or by one or more of its Subsidiaries.

“Tax” or “Taxes” means any and all taxes, assessments, levies, tariffs, duties
or other charges or impositions in the nature of a tax (together with any and
all interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any Governmental Authority, including income,
estimated income, gross receipts, profits, business, license, occupation,
franchise, capital stock, real or personal property, sales, use, transfer, value
added, employment or unemployment, social security, disability, alternative or
add-on minimum, customs, excise, stamp, environmental, commercial rent or
withholding taxes, and shall include any liability for Taxes of any other Person
under Applicable Law, as a transferee or successor, by contract or otherwise.

“Tax Return” means any return, declaration, report, claim for refund,
information return or statement relating to Taxes, including any schedule or
attachment thereto, filed or maintained, or required to be filed or maintained,
in connection with the calculation, determination, assessment or collection of
any Tax and shall include any amended returns required as a result of
examination adjustments made by the Internal Revenue Service or other Tax
authority.

 

[***]: CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION.

12

--------------------------------------------------------------------------------

“Territory” means worldwide.

“Third Milestone Event” means receipt by Buyer of Regulatory Approval from the
FDA for the NDA pursuant to the AMPAKINE® NDA Submission.

“Third Milestone Payment” has the meaning set forth in Section 2.1(c)(iii).

“Trademark” means (a) any word, name, symbol, color, designation or device or
any combination thereof, including any trademark, trade dress, brand mark, trade
name, brand name, logo, domain name or business symbol and (b) all registrations
and applications for any of the foregoing; and (c) all rights and priorities
connected with the foregoing afforded under Applicable Law.

“Transfer Date” means with respect to an Assumed Contract requiring the Consent,
the date such Consent is obtained and such Assumed Contract is duly assigned to
Buyer.

“Transfer Taxes” has the meaning set forth in Section 5.4(a).

“Transfer Period” has the meaning set forth in Section 5.10.

“Transfer Plan” has the meaning set forth in Section 5.10.

“UofA Consent and Amendment” means the written consent of the University of
Alberta, in form and substance reasonably satisfactory to Buyer, to the
assignment to Buyer of the UofA License Agreement, and the related amendment of
the UofA License Agreement.

“UofA License Agreement” means that certain Patent License Agreement, dated as
of May 9, 2007, by and between the University of Alberta, as licensor, and
Seller, as licensee, as amended as of June 8, 2007, relating to Patent Family 9.

“[***]” means the lesser of (a) [***] and (b) [***], at any time up to and
including the Effective Date for a period up to and including [***], to [***] on
account of, and in connection with, [***] in contemplation of the transactions
set forth herein, [***].

“UofA Research Agreement” means the Research Contract and Materials Transfer
Agreement, dated as of June 2007, by and between Seller and 1328254 Alberta Ltd.
(now known as Neurochemical Modulation Inc.), as amended on May 27, 2009.

“UofA Research Consent” means the written consent of 1328254 Alberta Ltd. (now
known as Neurochemical Modulation Inc.), in form and substance reasonably
satisfactory to Buyer, to the assignment to Buyer of the UofA Research
Agreement.

“UofC Field-Limited Agreement” means the Field-limited non-exclusive license to
be granted by the Regents of the University of California to Buyer relating to
Patent Family 1 in connection with the transactions contemplated hereunder.

“UofC Intellectual Property” means the Intellectual Property acquired by Buyer
from the Regents of the University of California relating to Patent Family 5.

 

[***]: CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION.

13

--------------------------------------------------------------------------------

“[***]” means the lesser of (a) [***] and (b) [***], as the case may be, at any
time up to and including the Effective Date for a period up to and including
[***] to [***] on account of, and in connection with, [***] in connection with
[***].

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

Section 1.2. Interpretation.

(a) Descriptive headings are for convenience only and shall not control or
affect the meaning or construction of any provision of this Agreement.

(b) Except as otherwise expressly provided in this Agreement or as the context
otherwise requires, the following rules of interpretation apply to this
Agreement: (i) the singular includes the plural and the plural includes the
singular; (ii) “or” and “any” are not exclusive and the words “include” and
“including,” and variations thereof, shall not be deemed to be terms of
limitation, but rather shall be deemed to be followed by the words “without
limitation;” (iii) a reference to any contract includes supplements and
amendments; (iv) a reference to an Applicable Law includes any amendment or
modification to such Applicable Law; (v) a reference to a Person includes its
successors, heirs and permitted assigns; (vi) a reference to one gender shall
include any other gender; (vii) a reference in this Agreement to an Article,
Section, Exhibit or Schedule is to the referenced Article, Section, Exhibit or
Schedule of this Agreement; (viii) “hereunder,” “hereof,” and words of similar
import shall be deemed references to this Agreement as a whole and not to any
particular Article, Section or other provision; and (ix) “commercially
reasonable efforts” of a Party shall be construed as the efforts that a prudent
Person in such Party’s industry, desirous of achieving a result, would use in
similar circumstances to achieve that result as expeditiously as possible.

(c) The Parties hereto agree that they have been represented by counsel during
the negotiation, drafting, preparation and execution of this Agreement and,
therefore, waive the application of any Applicable Law or rule of construction
providing that ambiguities in an agreement or other document will be construed
against the Party drafting such agreement or document.

ARTICLE II

PURCHASE AND SALE

Section 2.1. Purchase and Sale of Assets; Purchase Price; Additional
Consideration.

(a) Purchase and Sale of Assets; Purchase Price. Pursuant to the terms and
subject to the conditions of this Agreement, on the date hereof, Seller shall
(and, as applicable, shall cause its Affiliates to) sell, convey, deliver,
transfer and assign to Buyer, free and clear of all Liens (other than Permitted
Liens), and Buyer shall purchase, take delivery of and acquire from Seller (and
its Affiliates, as applicable), all of Seller’s (and, as applicable, its
Affiliates’) right, title and interest in, to and under all of the Acquired
Assets of Seller (and, as applicable, its Affiliates). In consideration of the
sale, conveyance, delivery, transfer, and assignment of the Acquired Assets to
Buyer and Seller’s other covenants and obligations hereunder, on the date hereof
and pursuant to the terms and subject to the conditions hereof, Buyer shall:

(i) pay Seller an amount equal to $10,000,000 (the “Purchase Price”), less an
amount equal to $1,000,000 (the “Hold Back Amount”) which shall be payable to
Seller upon completion of the Transfer Plan and the Transfer Period, and

 

[***]: CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION.

14

--------------------------------------------------------------------------------

(ii) assume the Assumed Liabilities.

(b) Payment of Purchase Price. Buyer shall deliver the Purchase Price, by wire
transfer of immediately available funds to the account set forth on
Schedule 6.3(d)(i).

(c) Additional Consideration; Milestone Events. As additional consideration of
the sale, conveyance, delivery, transfer, and assignment of the Acquired Assets
to Buyer and Seller’s other covenants and obligations hereunder, Buyer shall pay
Seller the following amounts (the “Milestone Payments”), subject to the
following conditions, which amounts shall be due and payable, if at all, as
specified below:

(i) Subject to Section 7.1(a), within ninety (90) days of satisfaction of the
First Milestone Event, Buyer shall pay Seller an amount equal to $[***] plus
(A) [***] plus (B) [***] (the “First Milestone Payment”).

(ii) Subject to Section 7.1(b), within ninety (90) days of satisfaction of the
Second Milestone Event, Buyer shall pay Seller an amount equal to $[***] (the
“Second Milestone Payment”).

(iii) Within ninety (90) days of satisfaction of the Third Milestone Event,
Buyer shall pay Seller an amount equal to $[***] (the “Third Milestone
Payment”).

For clarity, each Milestone Payment set forth in clauses (i) through (iii) above
shall only be payable once upon the first such Milestone Event to occur.

(d) Notwithstanding anything to the contrary herein, the maximum amount payable
by Buyer to Seller hereunder in respect of the Purchase Price and the Milestone
Payments, including reimbursement of Seller’s expenses pursuant to
Section 9.6(b), shall not exceed $[***] in the aggregate.

Section 2.2. Acquired Assets; Excluded Assets.

(a) Acquired Assets. The term “Acquired Assets” means all of Seller’s right,
title and interest in and to all properties and assets (tangible or intangible)
used, useful, held for use, or generated under or in connection with, or
otherwise primarily related to, the Compounds or the Seller Compound Activities,
including all properties and assets used or generated under or in connection
with the Compounds or the Seller Compound Activities, other than the Excluded
Assets (as set forth in Section 2.2(c)), including the following:

(i) the Compounds;

(ii) all of Seller’s rights in and to the contracts set forth in
Schedule 2.2(a)(ii) (collectively, the “Assumed Contracts”), including (A) all
rights to receive goods and services purchased pursuant to such contracts,
(B) contracts by which Seller or its Affiliates Control any Seller Intellectual
Property or the Compounds, and (C) rights to assert claims and take other
actions in respect of breaches or other violations of the foregoing;

 

[***]: CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION.

15

--------------------------------------------------------------------------------

(iii) Regulatory Documentation generated under or in connection with the
Compounds, including, for clarity, original and, if available, electronic copies
of (a) the CX717 IND, MHRA Approvals and BfArM Approvals, (b) all clinical
studies and tests and all data generated in connection with the Compounds
(including case report forms), (c) all correspondence and other documentation
related to communications to or from Governmental Authorities and (d) all other
supporting documentation and materials that would be necessary or useful to
obtain or maintain Regulatory Approvals in connection with the Compounds;

(iv) all Seller Intellectual Property, including the registrations and
applications listed on Schedule 2.2(a)(iv) (except the AMPAKINE® Trademark,
which is licensed to the Buyer pursuant to Section 2.5 hereof);

(v) all Books and Records and originals (or copies for the AMPAKINE® Trademark,
which is licensed to the Buyer pursuant to Section 2.5 hereof) of any tangible
embodiments of Seller Intellectual Property, including laboratory notebooks and
original files of any Patents that have issued in Seller’s (or any of its
Affiliate’s) name;

(vi) all right, title and interest in and to (a) 1 kg of CX1739, and (b) all
inventory of CX717 and CX1942 in Seller’s (or Seller’s Affiliates) possession or
control as of the Effective Date together with all work-in-progress, packaging
and all bulk active pharmaceutical ingredient related to CX717 and CX1942 owned
by Seller (or its Affiliates, as applicable) as of the Effective Date, including
that which is described on Schedule 2.2(a)(vi) (collectively, the “Non-Clinical
and Clinical Material”); provided that, Seller may retain up to 10 g of each of
CX717 and CX1942 for analytical reference material and internal comparative use
studies;

(vii) all Permits and applications for any Permits, together with any renewals,
extensions, or modifications thereof and additions thereto;

(viii) all claims, counterclaims, credits, causes of action, chooses in action,
rights of recovery, and rights of indemnification or setoff against third
parties and other claims arising out of or relating primarily to any Acquired
Assets or the Assumed Liabilities and all other intangible property rights that
primarily relate to any Acquired Assets or the Assumed Liabilities; and

(ix) all goodwill of or primarily relating to the Compounds.

(b) Notwithstanding anything in this Agreement to the contrary, if the existence
or condition of any asset (including an asset that, but for this sentence, would
be deemed to be an Acquired Asset) constitutes or arises out of a breach or
inaccuracy of any representation or warranty or the non-fulfillment or breach of
any covenant, agreement or obligation of Seller hereunder, then Buyer shall have
the right to elect at any time to deem such asset to be an Excluded Asset for
purposes hereof.

(c) Excluded Assets. Notwithstanding Section 2.2(a), Buyer shall not acquire
from Seller pursuant to this Agreement any of the following assets of Seller (or
its Affiliates, as applicable) (the “Excluded Assets”):

(i) any of the rights of Seller under this Agreement and the Related Documents;

 

16

--------------------------------------------------------------------------------

(ii) any contract that is not an Assumed Contract, including the Patent Family 1
UofC License Agreement, as amended for the UofC Field-Limited Agreement, and the
[***] Agreement;

(iii) any right, title or interest to the Excluded Intellectual Property; and

(iv) any employees or agreements related to employment or consulting
arrangements.

Section 2.3. Assumed Liabilities; Buyer Not Successor to Seller; Excluded
Liabilities.

(a) Assumed Liabilities. Pursuant to the terms and subject to the conditions of
this Agreement, on the date hereof, Seller shall sell, convey, transfer and
assign to Buyer, and Buyer shall assume from Seller, only the Assumed
Liabilities. “Assumed Liabilities” means only, and only to the extent not
excluded pursuant to Section 2.3(c)(iii):

(i) any and all liabilities with respect to obligations and commitments in
connection with the Regulatory Documentation (except as it relates to [***] or
CX1739 in the oral form) included in the Acquired Assets but excluding any
liability, obligation or commitment arising out of or resulting from any breach
or violation of such Regulatory Documentation or any related requirement of
Applicable Law by Seller prior to the Effective Date.

(ii) any and all liabilities with respect to obligations and commitments under
the Assumed Contracts accruing with respect to the period commencing after the
Effective Date or the Transfer Date (if Consent to assignment thereof is
required) but excluding any liability, obligation or commitment arising from or
relating to the performance or non-performance thereof on or prior to the
Effective Date or the Transfer Date (if Consent to assignment thereof is
required); and

(iii) any and all liabilities to prosecute and maintain the Seller Patent Rights
(other than Patent Family 1) arising after the Effective Date, including
liabilities to defend patents and applications and their foreign counterparts,
including in reexamination, reissue, litigation, interference, opposition or
nullity actions or the like. The foregoing shall be subject to the terms of the
Seller License Agreement.

(b) Buyer Not Successor to Seller. Notwithstanding anything herein to the
contrary, in no event shall Buyer be deemed to have assumed any liability or
obligation (including a liability or obligation that, but for this sentence,
would be deemed to be an Assumed Liability) where the existence or nature of
such liability or obligation constitutes or arises out of a breach or inaccuracy
of any representation or warranty or the non-fulfillment or breach of any
covenant, agreement or obligation of Seller hereunder.

(c) Excluded Liabilities. Buyer shall not be the successor to Seller, and Buyer
expressly does not assume and shall not become liable to pay, perform or
discharge, any liability, obligation or commitment whatsoever of Seller or
relating to the Seller Compound Activities or any

 

[***]: CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION.

17

--------------------------------------------------------------------------------

of the Acquired Assets other than the Assumed Liabilities. All liabilities,
obligations or commitments other than the Assumed Liabilities are referred to
herein as the “Excluded Liabilities.” Seller shall pay, perform and discharge
when due, all of the Excluded Liabilities. Without limitation of the foregoing,
the term “Excluded Liabilities” includes the following liabilities, obligations
and commitments, whether accrued or fixed, absolute or contingent, known or
unknown, determined or determinable, or otherwise (and whether due or to become
due) and, unless otherwise expressly provided herein, whenever arising:

(i) any liabilities, obligations or commitments relating to or arising out of
the Excluded Assets;

(ii) any liabilities, obligations or commitments of Seller or any of its
Affiliates under this Agreement, the Related Documents or in connection with the
transactions contemplated hereby and thereby;

(iii) any liabilities, obligations or commitments under the Assumed Contracts to
the extent such liabilities, obligations or commitments relate to the period
ending on or prior to the Effective Date or the Transfer Date (if Consent to
assignment thereof is required), as the case may be, and all liabilities,
obligations or commitments under any contract not listed on Schedule 3.9;

(iv) except as otherwise provided in Section 2.3(a), any liabilities,
obligations or commitments arising from the Seller Compound Activities or the
ownership of the Acquired Assets on or prior to the Effective Date;

(v) any liabilities, obligations or commitments of Seller or any of its
Affiliates to third parties for royalty, license fee and other payment
obligations under the Assumed Contracts not indicated on Schedule 3.8(f); and

(vi) any liabilities, obligations or commitments of Seller or any of its
Affiliates not related to the Acquired Assets.

Section 2.4. Procedures for Certain Acquired Assets Not Freely Transferable.

(a) If any Assumed Contract is not assignable or transferable to Buyer either by
virtue of the provisions thereof or under Applicable Law without the Consent of
one or more third Persons (each, a “Non-Assignable Right”), Seller shall
promptly notify Buyer and shall use its commercially reasonable efforts, at
Seller’s sole cost and expense, to obtain such Consents. If any such Consent
cannot be obtained prior to the Effective Date and Buyer agrees to allow such
Consent to be delivered after the date hereof, then, notwithstanding anything to
the contrary in this Agreement or any Related Document, (i) this Agreement and
the related instruments of transfer shall not constitute an assignment or
transfer of the Non-Assignable Right, and (A) Seller shall use its commercially
reasonable efforts to obtain such Consent as soon as possible after the
Effective Date and (B) Buyer shall cooperate, to the extent commercially
reasonable, with Seller in Seller’s efforts to obtain such Consent; and (ii) at
Buyer’s election, (A) the Non-Assignable Right shall be an Excluded Asset and
Buyer shall have no obligation or rights pursuant to Section 2.2(a) or
Section 2.3(a) or otherwise with respect to any such Non-Assignable Right or any
liability with respect thereto or (B) Seller shall use its commercially
reasonable efforts to obtain for Buyer substantially all of the practical
benefit and burden of such Non-Assignable Right, including by

 

18

--------------------------------------------------------------------------------

(1) entering into appropriate and reasonable alternative arrangements on terms
mutually agreeable to Buyer and Seller and (2) subject to the consent and
control of Buyer, enforcement, at the cost and for the account of Buyer, of any
and all rights of Seller against the other Party thereto arising out of the
breach or cancellation thereof by such other Party or otherwise.

(b) If any of the Permits included in the Acquired Assets are not assignable or
transferable without obtaining a replacement Permit, then, notwithstanding
anything to the contrary in this Agreement or any Related Document, this
Agreement and the related instruments of transfer shall not constitute an
assignment or transfer of any such Permit, and Seller shall cooperate, to the
extent commercially reasonable, with Buyer in its efforts to obtain a
replacement Permit issued in Buyer’s name. If any replacement Permit has not
been obtained prior to the Effective Date, Seller shall allow Buyer to operate
under Seller’s Permit, if permitted by Applicable Law or applicable Governmental
Authorities, for a period of up to ninety (90) days after the Effective Date (or
such longer period as may be reasonably necessary for Buyer, using its
commercially reasonable efforts, to obtain the replacement Permit).

Section 2.5. Licenses.

(a) Seller grants Buyer a non-exclusive, worldwide, royalty-free license with
the right to sublicense to use (i) all licenses, permits, construction permits,
approvals, concessions, franchises, certificates, consents, qualifications,
registrations, privileges and other authorizations and rights, including
Regulatory Approvals, from or issued by any Governmental Authority held by
Seller (or its Affiliates, as applicable) that relate, but not primarily, to any
Compound or the Seller Compound Activities in the Field, including those set
forth on Schedule 3.10 and the right to cross-reference Regulatory Documentation
relating to CX1739 filed with the Medicines & Healthcare products Regulatory
Agency in the United Kingdom, as listed in Schedule 3.4, together with any
renewals, extensions, or modifications thereof and any additions thereto; and
(ii) all other books, records, files, documents, correspondence and filings
which are related, but not primarily, to the Compounds or the Acquired Assets.

(b) Seller hereby grants to Buyer an exclusive, royalty-free, irrevocable,
perpetual, worldwide license, with the right to sublicense, to use the AMPAKINE®
Trademark in the Field. Buyer will have the right to direct Seller to file
Trademark applications from time to time in form and substance reasonably
satisfactory to Buyer in additional jurisdictions in the Territory for use by
Buyer in the Field, at Buyer’s cost and expense. To the extent Buyer directs
Seller to make such filings, Seller shall use counsel reasonably acceptable to
Buyer to comply with such obligation. Buyer shall not commence commercial use of
the AMPAKINE® Trademark in such jurisdiction until an appropriate Trademark
search has been conducted and an application has been filed. All uses of the
AMPAKINE® Trademark shall comply with all applicable laws and regulations
(including, without limitation, those laws and regulations particularly applying
to the proper use and designation of Trademarks in the applicable countries).
Buyer specifically undertakes to make any changes in the manner in which the
Trademark is used and in such materials bearing the Trademark that are
reasonably requested by the Seller for the purpose of preventing material harm
to the goodwill associated with the Trademark. Buyer recognizes Seller’s
ownership in and title to the AMPAKINE® Trademark throughout the world and it is
understood that so long as Seller is still the owner of the AMPAKINE® Trademark,
Buyer shall not contest the validity of the AMPAKINE® Trademark, claim adversely
to Seller any right, title or interest in and to the AMPAKINE® Trademark and
shall not register, apply to register or aid a third party in registering the
AMPAKINE® Trademark, or a confusingly similar trademark(s) anywhere in world
during and after

 

19

--------------------------------------------------------------------------------

the term of this Agreement. All rights to the AMPAKINE® Trademark, except as
specifically granted to Buyer herein, are expressly reserved to Seller for its
own use and benefit. Seller and Buyer agree that neither Party shall use the
AMPAKINE® Trademark in a commercial product name.

(c) Seller shall be notified in writing at least twenty (20) Business Days in
advance of the grant of any sublicense (including a description of the rights to
be granted, the identity of the sublicensee and the countries involved). Any
such sublicense shall (a) be subject and subordinate to the terms and conditions
of this Agreement, (b) contain terms and conditions which are consistent with
the terms and conditions of this Agreement, (c) not in any way diminish, reduce
or eliminate any of Buyer’s obligations under this Agreement and (d) impose on
the sublicensee all applicable obligations under the terms of this Agreement.
Buyer shall promptly provide Seller with a fully executed copy of each such
sublicense agreement. Buyer shall ensure that all sublicensees comply with the
terms and conditions of this Agreement, and Buyer shall remain responsible for,
and shall guarantee, the performance of its sublicensees hereunder.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller represents and warrants to Buyer, as of the date hereof, as follows, with
each such representation and warranty subject only to such exceptions, if any,
as are set forth in the particular disclosure Schedule numbered and captioned to
correspond to, and referenced in, such representation or warranty:

Section 3.1. Organization, Standing and Power. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite power and authority to own, lease and operate its
properties and to carry on its business as now being conducted. Seller is duly
qualified to do business and is in good standing in each jurisdiction in which
such qualification is necessary because of the property owned, leased or
operated by it or because of the nature of its business as now being conducted,
except where any failure, individually or in the aggregate, to be so qualified
or in good standing does not or could not reasonably be expected to have a
Material Adverse Effect. Except as set forth on Schedule 3.1, Seller has never
operated the Acquired Assets or conducted any of the Seller Compound Activities
under or otherwise used, for any purpose or in any jurisdiction, any fictitious
name, assumed name, trade name or other name. Except as set forth on Schedule
3.1, Seller has no, and since December 31, 2008 has not had, any Subsidiaries or
Affiliates. The only shares of capital stock of Seller issued and outstanding
are Seller’s common stock and Seller’s Series B Convertible Preferred Stock.

Section 3.2. Authority; Binding Agreements. The execution and delivery by Seller
of this Agreement and the Related Documents to which it is or will become a
party and the consummation of the transactions contemplated hereby and thereby
have been duly and validly authorized by all necessary action on the part of
Seller. Seller has all requisite power and authority to enter into this
Agreement and the Related Documents to which it is or will become a party and to
consummate the transactions contemplated hereby and thereby, and this Agreement
and such Related Documents have been, or upon execution and delivery thereof
will be, duly executed and delivered by Seller. No stockholder or other
equityholder approval is required on behalf of Seller for the execution,
delivery or performance of this Agreement and such Related Documents. This
Agreement and the Related Documents to which Seller is or will become a party
are, or upon execution and delivery by Seller thereof will be, the valid and
binding obligations of Seller, enforceable against Seller in accordance with
their respective terms, subject to laws of general application relating to the
rights of creditors generally.

 

20

--------------------------------------------------------------------------------

Section 3.3. Conflicts; Consents. Except as set forth on Schedule 3.3, the
execution and delivery by Seller of this Agreement and the Related Documents to
which it is or will become a party, the consummation of the transactions
contemplated hereby and thereby and compliance by Seller with any of the
provisions hereof and thereof do not and will not:

(a) conflict with or result in a breach of the certificate of incorporation,
bylaws or other constitutive or organizational documents of Seller;

(b) conflict with, result in a default or give rise to any right of termination,
cancellation, modification or acceleration under any note, bond, lease,
mortgage, indenture, Permit, contract or other instrument or obligation to which
Seller or any of its Affiliates is a party, or by which Seller, any of its
Affiliates, or any of the Acquired Assets may be bound or affected except as set
forth on Schedule 3.3;

(c) violate any Applicable Law with respect to Seller, the Seller Compound
Activities or any of the Acquired Assets; or

(d) result in the creation or imposition of any Lien upon any Acquired Asset.

Section 3.4. Governmental Authorizations. Except as set forth on Schedule 3.4,
no consent, approval or authorization of, or registration, declaration or other
similar action in respect of, or filing with, any Governmental Authority is
required to be obtained or made by or with respect to Seller or any of its
Affiliates in connection with the execution, delivery and performance of this
Agreement, the Related Documents or the consummation of the transactions
contemplated hereby and thereby.

Section 3.5. Absence of Changes. Since [***], Seller and its Affiliates have
maintained the Acquired Assets and conducted the Seller Compound Activities in
the ordinary course of business and consistent with past practice, and, except
as set forth on Schedule 3.5, there has not been in connection with or related
to the Seller Compound Activities or the Acquired Assets:

(a) any Material Adverse Effect or event, development or state of circumstances
that individually or in the aggregate could reasonably be expected to result in
a Material Adverse Effect;

(b) any incurrence, assumption or guarantee by Seller or any of its Affiliates
of any liability or obligation (whether accrued, fixed, absolute, contingent,
known, unknown, determined, determinable or otherwise, and whether due or to
become due) with respect to the Seller Compound Activities or any Acquired
Asset, other than current liabilities and obligations incurred in the ordinary
course of business and consistent with past practice that are not material to
the Seller Compound Activities or the Acquired Assets;

(c) any sale, assignment, license, transfer or other disposition of any Seller
Intellectual Property or any other intangible assets related to the Seller
Compound Activities or any Acquired Asset;

 

[***]: CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION.

21

--------------------------------------------------------------------------------

(d) except in the ordinary course of business and consistent with past practice,
any amendment, modification or termination of any Contract;

(e) any creation or other incurrence of any Lien (other than Permitted Liens) on
any Acquired Asset;

(f) any material damage, destruction or loss (whether or not covered by
insurance) affecting any Acquired Asset;

(g) any cancellation, delinquency or loss of any Permit;

(h) any institution of, settlement of or agreement to settle any Action related
to the Compounds or the Seller Compound Activities;

(i) any change in the customary maintenance of all Regulatory Documentation
contained in the Books and Records in the ordinary course of business;

(j) any agreement or action not otherwise referred to in items (a) through
(i) above entered into or taken that is material to the Acquired Assets; or

(k) any agreement or commitment, whether in writing or otherwise, to take any of
the actions specified in items (a) through (j) above.

Section 3.6. Good Title; Sufficiency of Assets.

(a) Except as set forth on Schedule 3.6(a), (i) Seller has good and marketable
title to, or valid contract rights to, as applicable, all of the Acquired Assets
free and clear of all Liens (other than Permitted Liens), and has the complete
and unrestricted power and unqualified right to sell, convey, deliver, transfer
and assign to Buyer, as applicable, the Acquired Assets; (ii) to Seller’s
Knowledge there are no adverse claims of ownership to the Acquired Assets and
(iii) neither Seller nor any of its Affiliates has received written notice that
any Person has asserted a claim of ownership or right of possession or use in or
to any of the Acquired Assets. Except as set forth on Schedule 3.6(a), Buyer
will acquire from Seller, good and marketable title to, or valid contract rights
to, as applicable, all of the Acquired Assets, free and clear of all Liens
(other than Permitted Liens).

(b) The Acquired Assets constitute all of the properties, interests, assets and
rights owned or Controlled by Seller or any of its Affiliates that are used,
useful or held for use primarily in connection with the Acquired Assets. The
Acquired Assets constitute all those properties, interests, assets and rights
necessary to continue to conduct the Seller Compound Activities consistent with
current and historical practice.

Section 3.7. Tangible Property. Seller owns no Tangible Personal Property
primarily related to the Acquired Assets.

Section 3.8. Intellectual Property.

(a) Seller owns all right, title and interest in and to, or has valid license
rights to, all of the Seller Intellectual Property. The Seller Intellectual
Property includes all of the Patents owned or Controlled by, or otherwise in the
possession of Seller or any of its Affiliates that claim or cover, or other
Intellectual Property owned or Controlled by, or otherwise in the possession of
Seller

 

22

--------------------------------------------------------------------------------

or any of its Affiliates that are necessary for or that otherwise primarily
relates to the Compounds, the Exploitation thereof to date, or any Improvements
thereto to date and the conduct of the Seller Compound Activities as they are
presently conducted. Except as set forth on Schedule 3.8(a), none of the rights
of Seller or its Affiliates under the Seller Patent Rights were developed with
federal funding from the U.S. government or any other Governmental Authority.

(b) Schedule 2.2(a)(iv) sets forth a true, accurate and complete list of all
registrations, applications for registration and similar filings with any
Governmental Authority relating to the Seller Intellectual Property owned by,
Controlled by, or otherwise in the possession of, Seller or any of its
Affiliates (which Schedule identifies the applicable serial or other identifying
number, country, filing, expiration date and title, if applicable). Seller has
provided true and complete copies of all such registrations, applications and
similar filings to Buyer, has taken all action necessary to prosecute all of
Seller’s existing applications and to maintain all such registrations in full
force and effect, and has not taken or failed to take any action that could
reasonably be expected to have the effect of waiving any rights to the Seller
Intellectual Property.

(c) Schedule 3.8(c) lists all license agreements in respect of any of the Seller
Intellectual Property either licensed by Seller or any of its Affiliates as
licensor to third parties or licensed by third parties to Seller or any of its
Affiliates as licensee.

(d) Except as set forth on Schedule 3.8(d), (i) the Seller Intellectual Property
is, to Seller’s Knowledge, enforceable and valid and (ii) none of the Seller
Intellectual Property has been or is the subject of (A) any pending Action
(including, with respect to Patents, inventorship challenges, interferences,
reissues, reexaminations and oppositions or similar Actions) or any Order or
other agreement restricting (x) the use of any Seller Intellectual Property in
connection with the Exploitation of any Compound within the Territory or (y) the
assignment or license thereof by Seller (or any of its Affiliates, as
applicable), or (B) to Seller’s Knowledge, any threatened Action or claim of
infringement threatened or made in writing or any pending Action to which Seller
(or any of its Affiliates, as applicable) is a party. Schedule 3.8(d) sets forth
any and all settlements or agreements reached with respect to any such Actions
related to the Seller Intellectual Property.

(e) Except as set forth on Schedule 3.8(e), Seller (or its Affiliates, as
applicable) possesses the ability, whether by ownership, license or otherwise,
to grant the right to access or use, grant a license or a sublicense under, or
otherwise exercise any indicia of control over, all Seller Intellectual Property
within the Territory. Except as set forth on Schedule 3.8(e), Seller (or its
Affiliates, as applicable) has the right to assign, transfer or grant to Buyer
all its rights in and to the Seller Intellectual Property that are being
assigned, transferred or granted to Buyer under this Agreement and the Related
Documents, in each case free of any rights or claims of any Person or any other
Liens (other than Permitted Liens), and without payment by either party of any
royalties, license fees or other amounts to any other Person.

(f) Schedule 3.8(f) sets forth a true, accurate and complete list of all
royalty, license fee and other payment obligations of Seller or its Affiliates
with respect to the Compounds. Other than as set forth on Schedule 3.8(f), no
royalties, license fees or other payment obligations are owed by Seller or its
Affiliates to any Person in connection with the Exploitation of any Compound.
There are no royalties, license fees or other payments outstanding to any Person
as of the date hereof in connection with the UofA License Agreement.

 

23

--------------------------------------------------------------------------------

(g) Except as set forth on Schedule 3.8(g), (i) neither Seller nor its
Affiliates, if applicable, has assigned, transferred, conveyed, or granted any
licenses to the Seller Intellectual Property to third parties within the
Territory, or otherwise caused or permitted any Lien to attach to any Seller
Intellectual Property or the Compounds; (ii) neither Seller nor its Affiliates,
if applicable, nor to Seller’s Knowledge, any other Person, is party to any
agreements with third parties that materially limit or restrict the use of the
Seller Intellectual Property within the Territory or require any payments for
their use; (iii) (A) to Seller’s Knowledge, no Person, other than Seller or its
Affiliates, has any proprietary, commercial, joint ownership, royalty or other
interest in the Seller Intellectual Property or the goodwill associated
therewith within the Territory, and (B) Seller has not created or permitted to
exist any such interest; and (iv) neither Seller nor its Affiliates, if
applicable, has entered into any contract (except for [***]) (A) granting any
Person the right to bring infringement actions with respect to, or otherwise to
enforce rights with respect to, any of the Seller Intellectual Property,
(B) expressly agreeing to indemnify any Person against any charge of
infringement of any of the Seller Intellectual Property, or (C) granting any
Person the right to control the prosecution of any of the Seller Intellectual
Property. Except for the Permitted Liens, there are no existing agreements,
options, commitments, or rights with, of or to any third party from Seller or
its Affiliates to acquire or obtain any rights to any of the Seller Intellectual
Property.

(h) To Seller’s Knowledge, there is no unauthorized use, infringement,
misappropriation or violation of any of the Seller Intellectual Property by any
Person within the Territory. To Seller’s Knowledge, the conduct of the Seller
Compound Activities in the Territory, as it has been and is now being conducted,
does not infringe or misappropriate or otherwise violate, as applicable, the
Intellectual Property of any Person and, except as set forth on Schedule 3.8(h),
Seller has not received any written notice from any Person regarding, and has no
Knowledge of, any claim or assertion to the contrary.

(i) All issuance, renewal, maintenance and other material payments that are or
have become due with respect to the Seller Intellectual Property have been
timely paid by or on behalf of Seller. All documents, certificates and other
material in connection with the Seller Intellectual Property have, for the
purposes of maintaining such Seller Intellectual Property, been filed in a
timely manner with the relevant Governmental Authorities in the United States,
Canada, the United Kingdom, Germany, France, Italy, Spain and Japan and in such
other countries where the failure to do so would not have a Material Adverse
Effect. Seller and its Affiliates, as applicable, have properly filed,
prosecuted and maintained all Patents included in the Seller Intellectual
Property, and have properly filed and maintained all other Seller Intellectual
Property, in each case in the United States, Canada, the United Kingdom,
Germany, France, Italy, Spain and Japan and in such other countries where the
failure to do so would not have a Material Adverse Effect.

(j) Seller has taken reasonable measures to protect and preserve the security,
confidentiality, value and ownership of the Information and Inventions and other
confidential information included in the Acquired Assets. Seller has obtained
from each of its Affiliates, sublicensees, employees and agents, and from the
employees and agents of its Affiliates, sublicensees and agents who performed
any of the Seller Compound Activities, rights to any and all Information and
Inventions arising out of or relating to such Seller Compound Activities.
Seller’s public disclosures of Information and Inventions with respect to the
Field or the Primary AMPAKINE® Compounds are as set forth on Schedule 3.8(j)
hereto. Except as disclosed under confidentiality agreements and listed on
Schedule 3.8(j) hereto, none of such Information and Inventions with respect to
the Field or the Primary AMPAKINE® Compounds has been used by, disclosed or
divulged to, or appropriated by or for the benefit of any Person other than
Seller.

 

[***]: CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION.

24

--------------------------------------------------------------------------------

Section 3.9. Contracts.

(a) Schedule 3.9(a) sets forth a true, accurate and complete list of all
contracts, commitments, arrangements, agreements, leases, subleases, licenses,
sublicenses, purchase orders for the sale or purchase of goods or services and
any other understandings primarily related to the Acquired Assets to which
Seller or any of its Affiliates is a party or by which any of them is bound, or
to which any of the Acquired Assets are subject, including the Assumed Contracts
set forth on Schedule 2.2(a)(ii) (the “Primary Contracts”), and including:

(i) Contracts that are material to the Compounds or the Exploitation thereof or
that are material to the conduct of the Seller Compound Activities;

(ii) Contracts pursuant to which the Seller Compound Activities are or were
conducted by third parties;

(iii) Contracts under which Seller or its Affiliates, as applicable, own, have
under license, have a right to acquire (by option or otherwise), have a right to
use or exercise (including any covenant not to sue or other similar right of
forbearance), or otherwise Control, or have any other right or interest in or to
any Seller Intellectual Property; and

(iv) Contracts limiting or restraining Seller in any material respect from
engaging or competing in any lines of business with any Person or from
purchasing any products, services or inventory from any third parties.

Seller has delivered to Buyer true and complete copies of all Primary Contracts,
including all amendments, modifications and waivers relating thereto. Neither
Seller nor any of its Affiliates are party to, or otherwise bound by, any oral
contracts or agreements primarily related to the Acquired Assets.

(b) Schedule 3.9(b) sets forth a true, accurate and complete list of all
contracts, commitments, arrangements, agreements, leases, subleases, licenses,
sublicenses, purchase orders for the sale or purchase of goods or services and
any other understandings related, but not primarily related, to the Acquired
Assets to which Seller or any of its Affiliates is a party or by which any of
them is bound, or to which any of the Acquired Assets are subject (the “Related
Contracts” and, collectively with the Primary Contracts, the “Contracts”). The
Primary Contracts are (i) in full force and effect, (ii) the valid and binding
obligations of Seller, and to Seller’s Knowledge, the other parties thereto and
(iii) enforceable in accordance with their respective terms, subject to the laws
of general application relating to the rights of creditors generally. Except as
would not have a Material Adverse Effect, the Related Contracts are (i) in full
force and effect, (ii) the valid and binding obligations of Seller and, to
Seller’s Knowledge, the other parties thereto and (iii) enforceable in
accordance with their respective terms, subject to the laws of general
application relating to the rights of creditors generally. There exists no
default, or any event which upon notice or the passage of time, or both, could
reasonably be expected to give rise to any default, in the performance by Seller
or, to Seller’s Knowledge, by any other party under any Contract that would
result in a Material Adverse Effect. Seller has not received any written notice,
nor does Seller have any Knowledge, that any party to any of the Primary
Contracts intends to cancel or terminate any Primary Contract or has or intends
to submit to Seller (or any of its Affiliates, as applicable) any claim of
material breach by any such party with respect to the performance of Seller’s
obligations under any such Primary Contract.

 

25

--------------------------------------------------------------------------------

Seller has delivered to Buyer true and complete copies of all Related Contracts,
including all amendments, modifications and waivers relating thereto. Neither
Seller nor any of its Affiliates are party to, or otherwise bound by, any oral
contracts or agreements related, but not primarily related, to the Acquired
Assets.

(c) Schedule 3.3 sets forth a true, accurate and complete list of those Assumed
Contracts for which Consents are required to assign such Assumed Contracts to
Buyer, including the UofA License Agreement. Subject to the receipt of the
Consents listed on Schedule 3.3, Buyer will succeed to all right, title and
interest of Seller (or its Affiliates, as applicable) under each Assumed
Contract without the necessity to obtain any Consent to the assignment of such
Assumed Contract.

(d) None of the Assumed Contracts have been entered into by Seller (or any of
its Affiliates, as applicable) other than in the ordinary course of its or their
business or other than on an arm’s length basis.

Section 3.10. Compliance with Applicable Law; Permits. The Seller Compound
Activities have been and are conducted in material compliance with Applicable
Law. Schedule 3.10 sets forth a true, accurate and complete list of all of the
Permits. The Permits set forth on Schedule 3.10 have been issued to Seller and
constitute all Permits that are required by Applicable Law or Governmental
Authorities for the lawful conduct of the Seller Compound Activities and the
lawful ownership of the Acquired Assets. Seller is in compliance in all material
respects with the terms of all of the Permits, each Permit is in full force and
effect, and no violations are or have been recorded in respect thereof. Except
as set forth on Schedule 3.10, Buyer will succeed to all right, title and
interest of Seller (or its Affiliate, as applicable) under each Permit without
the necessity to obtain any Consents. No Action is pending or, to Seller’s
Knowledge, threatened to cancel, suspend, revoke or limit any of the Permits
and, to Seller’s Knowledge, there is no basis for any such Action.

Section 3.11. Non-Clinical and Clinical Material.

(a) All of the Non-Clinical and Clinical Material met specifications therefor
when released and was produced in a good scientific manner and in accordance
with customary industry practices. To the extent used for clinical activities,
such material was at the time of use not adulterated or misbranded and was of
suitable quality. Since their respective release dates, all material not used
for clinical activities has been stored in accordance with good scientific
practices and all material used for clinical activities has been stored in
accordance with Good Manufacturing Practices.

(b) To the extent that the Non-Clinical and Clinical Material contains raw
materials and works-in-progress, such raw materials and works-in-progress met
specifications therefor when released and were produced in a good scientific
manner and in accordance with customary industry practices, and to the extent
used for clinical activities, were at the time of use not adulterated or
misbranded and were of suitable quality. Since their release dates, all raw
materials and works-in-process have been stored in accordance with good
scientific practices.

 

26

--------------------------------------------------------------------------------

Section 3.12. Litigation. Except as set forth on Schedule 3.12, there is no
Action pending, or to Seller’s Knowledge, threatened before any Governmental
Authority, and there is no claim, investigation or administrative action of any
Governmental Authority pending, or to Seller’s Knowledge, threatened, that
affects Seller or the Acquired Assets or that could reasonably be expected to
result in restraining, enjoining or otherwise preventing the completion by
Seller of the transactions contemplated by this Agreement or the Related
Documents, nor has Seller been notified in writing of any reasonable basis on
which any Action may be brought in the future that affects Seller, nor has
Seller been notified of any reasonable basis on which any Action may be brought
in the future that adversely affects the Acquired Assets. Seller has made
available to Buyer true and complete copies of all court papers and other
documents with respect to the matters referred to on Schedule 3.12. Except as
set forth on Schedule 3.12, there is no outstanding Order of any Governmental
Authority against Seller relating to the Acquired Assets or that adversely
affects the Seller Compound Activities or delays the ability of Seller to
perform its obligations hereunder or under any Related Document. No Action
listed on Schedule 3.12 has had or would have, individually or in the aggregate,
a Material Adverse Effect.

Section 3.13. Adverse Information. Reports of all material adverse information
with respect to the safety and efficacy of the Compounds known to Seller (or its
Affiliates) as of the Effective Date has been provided to Buyer and (i) with
respect to its conclusion, such report is true, complete and correct and
(ii) with respect to the balance of such report, such report is true, complete
and correct in all material respects. There are no scientific or technical facts
or circumstances that would have a Material Adverse Effect on the scientific,
therapeutic or commercial potential of the Compound other than the information
provided to Buyer pursuant to the first sentence of this Section 3.13.

Section 3.14. Insurance. Seller has maintained commercial general liability
insurance covering bodily injury and third party property damage with minimum
limits of $[***] per occurrence and $[***] general aggregate, and (b) products
liability/completed operations coverage (including clinical trial liability
coverage) with minimum limits of $[***] each occurrence and $[***] general
aggregate. Schedule 3.14 sets forth a true, accurate and complete list of all
policies of casualty and liability insurance related to the Acquired Assets held
by Seller or its Affiliates (specifying for each such insurance policy the
insurer, the policy number or cover note number with respect to binders, the
policy period, the policy limits, each pending claim thereunder, and setting
forth the aggregate amounts paid out under each such policy during the past
three years through the Effective Date). To Seller’s Knowledge, each such policy
is valid and binding, and is or has been in effect during the entire policy
period stated therefor. All insurance policies are in the name of Seller and all
premiums with respect to such policies are paid on an installment basis when
due. Seller has not received notice of cancellation or termination of any such
policy, nor has it been denied or had revoked or rescinded any policy of
insurance and Seller has not borrowed against any such policies. No claim under
any such policy is pending.

Section 3.15. Taxes. Seller (and each of its Affiliates, as applicable) has
timely paid all Taxes that will have been required to be paid by it, the
non-payment of which would result in a Lien on any Acquired Asset, would
otherwise adversely affect the Seller Compound Activities or would result in
Buyer becoming liable or responsible therefor.

[***]: CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION.

 

27

--------------------------------------------------------------------------------

Section 3.16. Brokers. Except as set forth on Schedule 3.16 hereto, no agent,
broker, firm or other Person acting on behalf, or under the authority, of Seller
is or will be entitled to any broker’s or finder’s fee or any other commission
or similar fee directly or indirectly in connection with any of the transactions
contemplated hereby.

Section 3.17. Regulatory Matters.

(a) Seller and its Affiliates, if applicable, have conducted all clinical
activities related to the Compounds in accordance with good clinical and good
laboratory practices and in material compliance with other Applicable Law. To
Seller’s Knowledge, Seller and its Affiliates have employed Persons with
appropriate education, knowledge and experience to conduct and to oversee the
conduct of the Seller Compound Activities.

(b) No Governmental Authority has notified Seller or its Affiliates, and Seller
is not otherwise aware, that the conduct of the Seller Compound Activities were
or are in violation of any Applicable Law or the subject of any investigation.
Except as set forth on Schedule 3.17(b) and other than with respect to the
pharmaceutical industry or the regulatory landscape in general, neither Seller
nor any of its Affiliates is aware of any circumstances currently existing,
which would reasonably be expected to lead to an adverse effect on the
acceptance, or the subsequent approval, by any Governmental Authority of any
filing, application or request for Regulatory Approval with respect to the
Compounds.

(c) Neither Seller nor any of the Employees that conducted any Seller Compound
Activities has been disqualified, debarred or voluntarily excluded by the FDA or
any other Governmental Authority for any purpose, or has been charged with or
convicted under United States federal law for conduct relating to the
development or approval, or otherwise relating to the regulation, of any drug
product under the Generic Drug Enforcement Act of 1992, the Act or any other
Applicable Law, or has made an untrue statement of a material fact to any
Governmental Authority with respect to the Acquired Assets (whether in any
submission to such Governmental Authority or otherwise), or failed to disclose a
material fact required to be disclosed to any Governmental Authority with
respect to the Acquired Assets. Neither Seller nor any Employee has received any
notice to such effect.

(d) Seller has made available, or has caused its Affiliates to make available,
to Buyer all Regulatory Documentation, Seller Know-How and any other data,
clinical studies, pre-clinical studies and other Information and Inventions in
Seller’s or Seller’s Affiliates’ possession or Control regarding or primarily
related to any Compound or any Improvement thereto, and all such Regulatory
Documentation, Seller Know-How and other Information and Inventions were and are
true, complete and correct in all material respects at such time and as of the
date hereof. Except as set forth on Schedule 3.17(d), Seller has prepared,
maintained and retained all Regulatory Documentation that is required to be
maintained or reported pursuant to and in material compliance with good
laboratory and clinical practices and other Applicable Law and all such
information is true, complete and correct in all material respects and what it
purports to be.

(e) Concurrently with the Effective Date, Seller and its Affiliates will assign
to Buyer all of Seller’s and its Affiliates’ right, title and interest in and to
all Regulatory Documentation, including, to the extent permitted by Applicable
Law, all Regulatory Approvals, Controlled by Seller or its Affiliates at any
time prior to the Effective Date.

 

28

--------------------------------------------------------------------------------

Section 3.18. Adequate Consideration; Solvency. The consideration to be received
by Seller under this Agreement constitutes fair consideration and reasonable
value for the Acquired Assets. Seller is not insolvent, and shall not be
rendered insolvent by any of the transactions contemplated by this Agreement or
the Related Documents. As used in this Section 3.18, “insolvent” means that the
sum of the debts and other liabilities and obligations of Seller exceeds the
present fair saleable value of Seller’s assets. Immediately after giving effect
to the consummation of the transactions contemplated by this Agreement and the
Related Documents, (a) Seller will be able to pay its liabilities and
obligations as they become due in the usual course of its business, (b) Seller
will not have unreasonably small capital with which to conduct its business,
(c) Seller will have assets (calculated at fair market value) that exceed its
liabilities and obligations and (d) taking into account all pending and
threatened litigation, final judgments against Seller in actions for money
damages are not reasonably anticipated to be rendered at a time when, or in
amounts such that, Seller shall be unable to satisfy any such judgment promptly
in accordance with its terms (taking into account an estimated probable amount
of such judgments in any such actions and the earliest reasonable time at which
such judgments might be rendered) as well as all other obligations of Seller.
The cash available to Seller is and shall be sufficient to pay all such
liabilities, obligations and judgments promptly in accordance with their terms.

Section 3.19. Environmental Matters.

(a) There are no writs, injunctions, decrees, orders or judgments outstanding
against Seller and no written notice, notification, demand, request for
information, citation, summons or order has been received by Seller, no written
complaint has been filed, no penalty has been assessed and no investigation,
action, claim, suit or proceeding is pending, or to Seller’s Knowledge,
threatened by any Governmental Authority or other Person involving any of
Seller, any current or former subsidiary of Seller or the current or past
activities, operations, real property or assets of Seller or any current or
former subsidiary of Seller and relating to or arising out of any Environmental
Law or Hazardous Substance against Seller, (i) which remains unresolved; and
(ii) alleges or is with respect to a violation of any applicable Environmental
Law that would have a Material Adverse Effect; and

(b) Seller has provided copies to Buyer of all material written environmental
investigation reports that relate to its current facilities or, to Seller’s
Knowledge, are otherwise in its possession.

Section 3.20. Disclosure. No representation or warranty of Seller contained in
this Agreement or the disclosure Schedules furnished in connection herewith
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statement contained herein or therein not misleading.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Seller, as of the date hereof, as follows, with
each such representation and warranty subject only to such exceptions, if any,
as are set forth in the particular disclosure Schedule numbered and captioned to
correspond to, and referenced in, such representation or warranty:

Section 4.1. Organization, Standing and Power. Buyer is an international society
with restricted liability duly organized, validly existing and in good standing
under the laws of Barbados and has all requisite power and authority to own,
lease and operate its properties and to carry on its business as now being
conducted.

 

29

--------------------------------------------------------------------------------

Section 4.2. Authority; Binding Agreements. The execution and delivery by Buyer
of this Agreement and the Related Documents to which it is or will become a
party and the consummation of the transactions contemplated hereby and thereby
have been duly and validly authorized by all necessary action on the part of
Buyer. Buyer has all requisite power and authority to enter into this Agreement
and the Related Documents to which it is or will become a party and to
consummate the transactions contemplated hereby and thereby, and this Agreement
and such Related Documents have been, or upon execution and delivery thereof
will be, duly executed and delivered by Buyer. This Agreement and the Related
Documents to which Buyer is or will become a party are, or upon execution and
delivery thereof will be, the valid and binding obligations of Buyer,
enforceable against Buyer in accordance with their respective terms, subject to
laws of general application relating to the rights of creditors generally.

Section 4.3. Conflicts; Consents. The execution and delivery by Buyer of this
Agreement and the Related Documents to which it is or will become a party, the
consummation of the transactions contemplated hereby and thereby and compliance
by Buyer with the provisions hereof and thereof do not and will not (a) conflict
with or result in a breach of the constitutive or organizational documents of
Buyer, (b) violate any Applicable Law with respect to Buyer or Buyer’s
properties or assets, (c) conflict with, result in a default or give rise to any
right of termination, cancellation, modification or acceleration under any note,
bond, lease, mortgage, indenture, permit, contract or other instrument or
obligation to which Buyer or any of its Affiliates is a party, or by which
Buyer, any of its Affiliates, may be bound or affected except as would not be
expected to have a material impact or delay or prevent the consummation of the
transactions contemplated by this Agreement and the Related Documents; or
(d) require the Consent of, or any notification to or filing with, any
Governmental Authority or other Person.

Section 4.4. Litigation. There is no Action pending, or to Buyer’s Knowledge,
threatened before any Governmental Authority, and there is no claim,
investigation or administrative action of any Governmental Authority pending, or
to Buyer’s Knowledge, threatened, that could reasonably be expected to result in
restraining, enjoining or otherwise preventing the completion by Buyer of the
transactions contemplated by this Agreement or the Related Documents.

Section 4.5. Brokers. No agent, broker, investment banker, firm or other Person
acting on behalf, or under the authority, of Buyer is or will be entitled to any
broker’s or finder’s fee or any other commission or similar fee in connection
with any of the transactions contemplated hereby.

ARTICLE V

ADDITIONAL AGREEMENTS

Section 5.1. Access to Information. Seller shall grant to Buyer such access to
information in its possession related to the Acquired Assets and the
transactions contemplated hereby and in the Related Documents with respect to
the period before the Effective Date and such cooperation and assistance as
shall be reasonably required to enable Buyer to complete its legal, regulatory,
stock exchange and financial reporting requirements and for any other reasonable
business purpose, including in respect of litigation and insurance matters;
provided, however, that such access is upon

 

30

--------------------------------------------------------------------------------

reasonable prior notice and does not unreasonably disrupt the normal operations
of Seller. Buyer shall promptly reimburse Seller for Seller’s reasonable
out-of-pocket expenses associated with requests made by Buyer under this
Section 5.1 but no other charges shall be payable by Buyer to Seller in
connection with such requests.

Section 5.2. Confidentiality; Non Competition; Covenant Not to Sue.

(a) Seller Confidentiality Agreement. Subject to Seller’s rights under (A) the
Seller License Agreement, (B) Article VII hereof, and (C) Section 5.5 below,
Seller shall, and shall cause its Affiliates and its and their respective
counsel, accountants, financial advisors, lenders and other agents and
representatives (collectively, “Representatives”) to: (i) protect Buyer
Confidential Information with at least the same degree of care, but no less than
reasonable care, with which it protects its own most sensitive confidential
information and not disclose or reveal any Buyer Confidential Information to any
Person other than to Seller’s or its Affiliates’ respective Representatives,
including financial advisors, current and prospective lenders and investors who
need to know Buyer Confidential Information in connection with any investigation
of Seller or the negotiation, preparation or performance of this Agreement or
any Related Document or for the purpose of evaluating the transactions
contemplated hereby, except to the extent that disclosure of Buyer Confidential
Information has been consented to in writing by Buyer; and (ii) not use Buyer
Confidential Information for any purpose other than (A) in connection with the
evaluation or consummation of the transactions contemplated by this Agreement;
(B) to the extent necessary in connection with any filing requirements under
Applicable Law or to obtain any Consents from any Governmental Authority or
other Person to the transactions contemplated by this Agreement; (C) to enforce
Seller’s rights and remedies under this Agreement; or (D) as required to be
disclosed under Applicable Law (provided, that, prompt notice of such disclosure
will be given as far in advance as reasonably possible to Buyer to give Buyer an
opportunity to determine whether disclosure is required and to assess the extent
of Buyer Confidential Information required to be disclosed). The obligations of
Seller under this Section 5.2(a) shall survive the Effective Date.

(b) Buyer Confidentiality Agreement. Buyer shall and shall cause its Affiliates
and its and their respective Representatives to: (i) protect the Seller
Confidential Information with at least the same degree of care, but no less than
reasonable care, with which it protects its own most sensitive confidential
information and not disclose or reveal any Seller Confidential Information to
any Person other than to Buyer’s or its Affiliates’ respective Representatives,
including financial advisors, current and prospective lenders and investors who
need to know Seller Confidential Information in connection with the performance
of this Agreement or any document to be delivered hereunder or for the purpose
of evaluating the transactions contemplated hereby, except to the extent that
disclosure of such Seller Confidential Information has been consented to in
writing by Seller; and (ii) not use Seller Confidential Information for any
purpose other than (A) in connection with the evaluation or consummation of the
transactions contemplated by this Agreement; (B) to the extent necessary in
connection with any filing requirements under Applicable Law or to obtain any
Consents from any Governmental Authority or other Person to the transactions
contemplated by this Agreement; (C) to enforce Buyer’s rights and remedies under
this Agreement; or (D) as required to be disclosed under Applicable Law
(provided, that prompt notice of such disclosure will be given as far in advance
as reasonably possible to Seller to give Seller an opportunity to determine
whether disclosure is required and to assess the extent of Seller Confidential
Information required to be disclosed). The obligations of Buyer under this
Section 5.2(b) shall survive the Effective Date.

 

31

--------------------------------------------------------------------------------

(c) Restrictions on Seller’s Activities. Until the later of (i) the expiration
of the last patent under the Seller Patent Rights or (ii) [***] from the date of
the first commercial sale by Buyer or its Affiliate of a product that
incorporates a Compound, neither Seller nor any of its Affiliates shall,
directly or indirectly, develop, use or otherwise Exploit any compound or
product in the Territory in the Field; provided that, in the event of a
Non-Compete Adjustment Trigger, the restrictions set forth herein shall not
apply to the acquiring entity’s activities that do not directly or indirectly
use a Competing Compound in the Field.

(d) Restrictions on Buyer’s Activities. Neither Buyer nor its Affiliates shall
directly or indirectly use or permit any third party to use any of its rights
under Patent Family 5, Patent Family 6 or the Seller Know-How for any purposes
outside of the Field. By way of example, without limiting the scope of the
foregoing, Buyer and its Affiliates shall not directly or indirectly use or
permit any third party to use any of its rights under Patent Family 5, Patent
Family 6 or the Seller Know-How in the fields of neurodegenerative diseases,
disorders and conditions, psychiatric diseases, disorders and conditions, sleep
disorders, including Sleep Apnea and overcoming sleep deprivation, and sexual
dysfunction. Additionally, neither Buyer nor its Affiliates shall directly or
indirectly develop, use or otherwise Exploit or permit a third party to Exploit
CX1739 other than in the Field in an injectable formulation. The Buyer hereby
agrees that neither it nor its Affiliates shall directly or indirectly use or
permit any third party to use any of its rights under Patent Family 9 for the
prevention or treatment of Sleep Apnea. To the extent that Buyer determines in
its sole discretion that CX1739 is not suitable for prevention or treatment in
the Field, Buyer agrees not to, directly or indirectly, use or otherwise Exploit
CX1739.

(e) Covenant Not to Sue. Buyer on behalf of itself, its Affiliates and any
successors and assigns of Buyer or its Affiliates hereby waives any right,
remedy or cause of action against Seller or its Affiliates or any of their
respective licensees, transferees, successors or assigns for infringement of any
Patents in Patent Family 9, with respect to products for use in the prevention
or treatment of Sleep Apnea.

(f) Interpretation. Each Party acknowledges and agrees that the provisions of
this Section 5.2 are necessary and reasonable to protect the other Party in the
Exploitation of its compounds and are a material inducement to such Party’s
execution and delivery of this Agreement. If the restrictions against engaging
in competition contained in this Section 5.2 are determined in accordance with
Section 9.1 to be unenforceable by reason of its extending for too great a
period of time or over too great a geographical area or by reason of its being
too extensive in any other respect, this Section 5.2 shall be interpreted to
extend only over the maximum period of time for which it may be enforceable and
over the maximum geographical areas as to which it may be enforceable and to the
maximum extent in all other respects as to which it may be enforceable all as
determined in accordance with Section 9.1. Each Party hereby waives any right to
assert that any provision of law renders the restrictions contained in this
Section 5.2 as invalid, illegal or unenforceable in any respect.

(g) Equitable Relief. Each Party acknowledges and agrees that a breach of this
Section 5.2 will cause irreparable damage and great loss to the other Party or
its Affiliates, the exact amount of which will be difficult to ascertain, and
that the remedies at law for any such breach will be inadequate. Accordingly,
each Party acknowledges and agrees that in the event of such a breach, the other
Party shall be entitled to equitable relief, including injunctive relief,
without posting bond or other security and without a showing of the inadequacy
of monetary damages as a remedy.

 

[***]: CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION.

32

--------------------------------------------------------------------------------

Section 5.3. Patent Family 11 Applications. Seller shall bear all costs and
expenses associated with the filing and prosecution of the Patent Family 11
Applications; provided that, within ten (10) days of receipt of documentation,
Buyer agrees to reimburse Seller up to a maximum of $[***] in the aggregate for
Seller’s documented out-of-pocket expenses incurred in connection with the
filing and prosecution of the Buyer 508 Application and the Buyer 254
Applications. If Buyer determines, in its sole discretion, to develop, use or
otherwise Exploit either of the Compounds referred to as [***] and [***], then
at such time Buyer shall have the right to negotiate a license with Seller on
customary terms to use the Patent Family 11 Applications in the Field in any
injectable dosage formulation for such compound(s) only. At the time such
license is granted, Seller shall assist Buyer in obtaining such quantities of
the Compounds referred to as [***] and [***] as Buyer may reasonably request, at
Buyer’s cost and expense.

Section 5.4. Certain Tax Matters.

(a) Transfer Taxes. All recordation, transfer, documentary, excise, sales, value
added, use, stamp, conveyance or other similar Taxes, duties or governmental
charges, and all recording or filing fees or similar costs, imposed or levied by
reason of, in connection with or attributable to this Agreement and the Related
Documents or the transactions contemplated hereby and thereby (collectively,
“Transfer Taxes”) shall be borne equally by Seller and Buyer; provided, however,
that Buyer and Seller shall reasonably cooperate with one another to lawfully
minimize such Taxes; provided further, however, that Buyer shall be solely
responsible for any non-U.S. tax liabilities. In the case of Transfer Taxes for
which Buyer is liable to the applicable taxing authority, on the Effective Date
Seller shall pay to Buyer 50% of the amount of such Transfer Taxes as reasonably
estimated by Buyer, with subsequent additional payments by Seller to Buyer or
refunds by Buyer to Seller of amounts previously paid by Seller in the event it
is subsequently determined that the amount of the subject Transfer Taxes was
more or less than the estimated amounts.

(b) Tax Withholding. Buyer and Seller agree that all payments under this
Agreement will be made without any deduction or withholding for or on account of
any Taxes or other amounts unless required by Applicable Law. In the event Buyer
determines that it is required under Applicable Law to withhold and pay any Tax
to any revenue authority in respect of any payments made to Seller, the amount
of such Tax shall be deducted by Buyer and paid to the relevant revenue
authority, and Buyer shall notify Seller thereof and shall promptly furnish to
Seller all copies of any Tax certificate or other documentation evidencing such
withholding. Buyer shall not be required to pay any additional amounts to Seller
in respect of any amounts paid to any revenue authority pursuant to the
immediately preceding sentence. In the event that any withholding Tax shall
subsequently be found to be due, payment of such Tax shall be the responsibility
of Seller. The Parties agree to reasonably cooperate with each other, including
by completing or filing documents required under the provisions of any
applicable income tax treaty or Applicable Law, to claim any applicable
exemption from, or reduction of, any such applicable Taxes. [***]

 

[***]: CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION.

33

--------------------------------------------------------------------------------

(c) Bulk Sales. Seller and Buyer hereby waive compliance with any Applicable
Laws with respect to “bulk sales” (including any requirement to withhold any
amount from payment of the Purchase Price or the Milestone Payments) applicable
to the sale to Buyer of the Acquired Assets by Seller.

(d) Cooperation and Exchange of Information. Each of Seller and Buyer shall
provide the other with such assistance as may reasonably be requested by the
other Party in connection with the preparation of any Tax Return.

Section 5.5. Public Announcements. Other than the press release(s) set forth on
Schedule 5.5 hereto (which shall be released promptly following the execution of
this Agreement by both Parties), and a Form 8-K (including copies of the
Agreement and the Related Documents as required) to be filed by Seller with the
Securities and Exchange Commission with respect to the transactions contemplated
hereby (and following reasonable prior review by Buyer), neither Party shall
issue or permit any of their respective Affiliates to issue any press release or
other public announcement with respect to this Agreement or the transactions
contemplated hereby or by the Related Documents without the prior consent of the
other Party, which consent shall not be unreasonably withheld, except as may be
required by Applicable Laws (in which case the Party required to make the
release or statement shall allow the other Party reasonable time to comment on
such release or statement in advance of such issuance to the extent permitted by
Applicable Laws). Each Party shall give the other Party a reasonable opportunity
to review all filings of this Agreement and all filings describing the terms of
this Agreement with any Governmental Authority, including without limitation the
United States Securities and Exchange Commission, prior to submission of such
filings, and shall give due consideration to any reasonable comments by the
non-filing Party relating to such filing, including the provisions of this
Agreement for which confidential treatment should be sought.

Section 5.6. Checks; Remittances and Refunds. If Seller or its Affiliates
receive any payment, refund or other amount that is attributable to or results
from an Acquired Asset and that is properly due and owing to Buyer in accordance
with the terms of this Agreement, Seller shall promptly remit, or cause to be
remitted, such amount to Buyer. Seller shall promptly endorse and deliver to
Buyer any notes, checks, negotiable instruments, letters of credit or other
documents received on account of or attributable to the Acquired Assets that are
properly due and owing to Buyer in accordance with the terms of this Agreement,
and Buyer shall have the right and authority to endorse, without recourse, the
name of Seller or any of its Affiliates on any such instrument or document.

Section 5.7. Cooperation in Litigation. Subject to the terms of the Seller
License Agreement, Buyer and Seller shall cooperate with each other in the
defense or prosecution of any Action instituted prior to the Effective Date or
that may be instituted thereafter against or by such Parties relating to or
arising out of the activities conducted pursuant to the Seller Compound
Activities or the Acquired Assets prior to or after the Effective Date (other
than litigation between Buyer and Seller or their respective Affiliates arising
out of the transactions contemplated hereby or by the Related Documents).
Subject to Article VIII, the Party requesting such cooperation shall pay the
reasonable and verifiable out-of-pocket costs and expenses of providing such
cooperation (including legal fees and disbursements) incurred by the Party
providing such cooperation and by its officers, directors, employees and agents,
and any applicable Taxes in connection therewith, but shall not be responsible
for reimbursing such Party or its officers, directors, managers, employees or
agents for their time spent in such cooperation, provided that, the amount of
such time is reasonable and consistent with such individual’s other obligations.

 

34

--------------------------------------------------------------------------------

Section 5.8. Cooperation in Patent Transfer, Assignment, Prosecution,
Maintenance and Enforcement. Upon the reasonable request of Buyer, and at
Buyer’s sole expense, Seller and its patent attorneys and agents will cooperate
with Buyer following the Effective Date to prepare any additional documentation
required to record and give effect to the assignment of the Seller Patent Rights
in accordance with this Agreement. Subject to the terms of the Seller License
Agreement, Seller shall, at Buyer’s expense for Seller’s reasonable and
verifiable out-of-pocket costs and expenses, cooperate and assist Buyer with the
filing, prosecution, defense and enforcement of any Patents that are included in
the Acquired Assets or that claim or cover any Information and Inventions
included therein, including by providing access to inventors and other persons
familiar with the conception and reduction to practice of any Information and
Inventions included within the Acquired Assets.

Section 5.9. Required Approvals and Consents. As soon as reasonably practicable,
but in any event, no later than ten (10) Business Days after the Effective Date,
Seller shall make all filings required to be made by Seller in order to
consummate the transactions contemplated herein. The Parties shall also
cooperate with each other with respect to all filings that Buyer elects to make.
Seller shall use its commercially reasonable efforts to obtain all Consents, in
accordance with its obligations under Section 2.4, required to effect the
assignment of the Assumed Contracts and Permits to Buyer.

Section 5.10. Transfer Period. Buyer and Seller shall use their commercially
reasonable efforts to transfer all tangible embodiments of the Seller
Intellectual Property and Books and Records included in the Acquired Assets as
soon as reasonably practicable but in any event within [***] months of the
Effective Date (the “Transfer Period”) in accordance with the transfer plan set
forth on Schedule 5.10 (the “Transfer Plan”). At Buyer’s reasonable request,
Seller shall provide technical assistance to the employees and contractors of
Buyer and its Affiliates as may be reasonably required to ensure an efficient
and orderly transfer of the Seller Intellectual Property and Books and Records
to Buyer, including making available to Buyer those of Seller’s Employees with
training and expertise relating to the Acquired Assets listed on Schedule 5.10
(the “Seller Resource Employees”) for a minimum of [***] hours per week during
the Transfer Period. To the extent that assistance is required after the
expiration of the Transfer Period or exceeds [***] hours in the aggregate for
all Seller Resource Employees, then Buyer shall reimburse Seller for its
reasonable, documented out-of-pocket expenses relating to such assistance at a
rate of $[***]/hour.

Section 5.11. Compliance with Laws. Each Party shall perform, and shall ensure
that its Affiliates, sublicensees and contractors perform, the activities for
which such Party is responsible under this Agreement and all other activities
required or permitted under this Agreement in compliance with the Foreign
Corrupt Practices Act, and, in all material respects, with all other Applicable
Laws and regulations.

Section 5.12. Variable Interest Entities. [***] Seller agrees that, in the event
that Buyer and its independent auditors (of nationally recognized standing in
the U.S.) determine in good faith that Buyer or any one of its Affiliates is
required (subsequent to the Effective Date) to consolidate Seller under US GAAP
as a result of (i) [***] or (ii) [***], Buyer shall notify Seller as soon as
reasonably practicable and Buyer shall (no less than thirty (30) Business Days
prior to the date upon which Buyer and its Affiliates, as a calendar year end
U.S. domestic issuer, would be required to

 

[***]: CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION.

35

--------------------------------------------------------------------------------

publicly release consolidated financial results) provide Seller with [***] and,
for so long as Buyer or its Affiliate is required to so consolidate, Seller
shall:

(a) provide to Buyer and its auditors all (i) financial information,
(ii) audited annual or unaudited quarterly financial statements, as applicable,
prepared in accordance with US GAAP and (iii) access to Seller’s books, records
and accounting personnel that is necessary in order for Buyer to prepare such
consolidated financial statements and reconcile Seller’s financial results to
US GAAP, in each case within a time period sufficient to permit Buyer and its
Affiliates (as a calendar year end U.S. domestic issuer) to consolidate the
financial results; and

(b)(i) collaborate in good faith with Buyer and its Affiliates to provide
information as reasonably necessary (including by permitting Buyer to use or
disclose to its lenders Seller’s financial information and financial statements)
to enable Buyer and its Affiliates to determine their compliance with any
covenants under their credit agreements with their lenders and (ii) comply with
any covenants under such credit agreements if such covenants become applicable
to Seller as of such consolidation requirement; provided that, in no event shall
any such accommodation restrict Seller’s ability to conduct its operations in
the normal course of business; and provided further that, Buyer shall engage in
good faith negotiations with its lenders to exempt and waive compliance with
such requirement.

[***] Buyer agrees that any and all information of Seller disclosed pursuant to
this Section 5.12 shall be considered Seller Confidential Information for all
purposes and limited to the uses described in this Section 5.12.

Section 5.13. Post-Closing Filings; Further Assurances.

(a) As promptly as practicable following Closing, Seller shall submit filings
with the following Governmental Authorities in order to assign ownership of the
Regulatory Documentation relating to CX717 to Buyer:

(i) FDA;

(ii) Medicines & Healthcare products Regulatory Agency in the United Kingdom;
and

(iii) Bundesinstitut für Arzneimittel und Medizinprodukte (German Federal
Institute for Drugs and Medical Devices).

(b) As promptly as practicable following Closing, Seller shall submit filings
with the Medicines & Healthcare products Regulatory Agency in the United Kingdom
to provide Buyer the right to cross-reference Regulatory Documentation relating
to CX1739.

(c) As promptly as practicable following Closing, Seller shall use its
commercially reasonable efforts, at Seller’s sole cost and expense, to obtain,
prior to the end of the Transfer Period, Consent for the assignment of any of
the Assumed Contracts to the extent not obtained prior to the Effective Date.
Seller shall provide Buyer the reasonable opportunity to review and comment on
each such Consent prior to the execution thereof and shall take into account any

 

[***]: CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION.

36

--------------------------------------------------------------------------------

comments received by Buyer and incorporate such comments to the extent
practicable. With respect to the following contracts: (i) [***]; (ii) [***];
(iii) [***]; (iv) [***]; and (v) [***], Seller shall use its commercially
reasonable efforts, at Seller’s sole cost and expense, to bifurcate, prior to
the end of the Transfer Period, such contract such that the portion of such
contract relating to CX717 may, with Buyer’s reasonable consent, become an
Assumed Contract.

(d) In the event that any contract (including, without limitation, the [***])
retained by Seller relates to one or more Compounds and includes obligations of
the other party to keep data or other information confidential, Seller shall
enforce its rights with respect to such obligations for the benefit of Buyer. In
the event that any contract (including, without limitation: (i) [***] and
(ii) [***]) retained by Seller relates to one or more Compounds and includes
provisions for publication of data or other information relating to such
Compound(s), Seller shall not publish such data or other information without the
prior written consent of Buyer and shall exercise its rights under such contract
to prevent or limit any such publication by any other party thereto. In the
event that any contract (including, without limitation, [***]) retained by
Seller relates to one or more Compounds and includes provisions for the
furnishing to Seller of any data or other information relating to such
Compound(s) after the Effective Date, Seller shall promptly upon receipt of such
data or other information provide a copy thereof (in all forms received under
such contract) to Buyer.

(e) At such time that the [***] Books and Records are no longer subject to
confidentiality restrictions under the [***] Agreement, Seller shall, and hereby
does, promptly transfer to Buyer all right, title and interest in and to such
[***] Books and Records (and all tangible embodiments thereof) free and clear of
all Liens other than contractual rights in favor of [***] under the [***]
Agreement or Seller under the Seller License Agreement, including their
respective successors and assigns.

(f) Each Party shall, and shall cause its Affiliates to, at any time and from
time to time, upon the request of the other Party, and at the requesting Party’s
expense, do, execute, acknowledge, deliver and file, or cause to be done,
executed, acknowledged, delivered and filed, all such further acts, deeds,
transfers, conveyances, assignments or assurances as may be reasonably required
for carrying out the purposes of this Agreement and the Related Documents and
the consummation of the transactions contemplated hereby and thereby.

Section 5.14. [***]

ARTICLE VI

CONDITIONS PRECEDENT

Section 6.1. Conditions to Obligations of Buyer and Seller. The obligations of
Buyer and Seller to complete the transactions contemplated by this Agreement are
subject to the satisfaction at or prior to the Effective Date of the following
conditions:

(a) No Adverse Law; No Injunction. No Applicable Law shall have been enacted,
entered, promulgated or enforced by any Governmental Authority that prohibits
the consummation of all or any part of the transactions contemplated by this
Agreement or the Related Documents, and no Action shall be pending or threatened
by any Governmental Authority or other Person seeking any such Order or decree
or seeking to recover any damages or obtain other relief as a result of the
consummation of such transactions;

 

[***]: CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION.

37

--------------------------------------------------------------------------------

(b) Governmental Approvals. All required notifications and filings with any
Governmental Authority shall have been made and any waiting periods applicable
to the transactions contemplated hereby pursuant to any Applicable Law shall
have expired or been terminated.

Section 6.2. Conditions to Obligations of Buyer. The obligation of Buyer to
complete the transactions contemplated by this Agreement is subject to the
satisfaction or waiver by Buyer at or prior to the Effective Date of the
following additional conditions:

(a) Representations and Warranties. The representations and warranties of Seller
contained herein that are qualified by materiality or subject to thresholds
shall be true and correct in all respects, and the representations and
warranties of Seller contained herein that are not so qualified shall be true
and correct in all material respects, as of the Effective Date.

(b) Covenants; Material Adverse Effect. Seller shall have performed and complied
in all material respects with all covenants, agreements and obligations required
to be performed or complied with on or prior to the Effective Date. As of the
Effective Date, there shall have been no Material Adverse Effect.

(c) Officer’s Certificate. Buyer shall have received a certificate, dated as of
the Effective Date, duly executed by an authorized executive officer of Seller,
certifying that:

(i) all of the conditions set forth in Section 6.2(a) and Section 6.2(b) have
been satisfied;

(ii) the resolutions adopted by the Board of Directors of Seller (or a duly
authorized committee thereof) authorizing the execution, delivery and
performance of this Agreement, as attached to the certificate, were duly adopted
at a duly convened meeting of such board or committee, at which a quorum was
present and acting throughout or by unanimous written consent, remain in full
force and effect, and have not been amended, rescinded or modified, except to
the extent attached thereto; and

(iii) Seller’s officer executing this Agreement, and each of the other documents
necessary for consummation of the transactions contemplated herein, is an
incumbent officer, and the specimen signature on such certificate is a genuine
signature.

(d) Material Consents. Subject to Section 2.4, Buyer shall have received duly
executed and delivered copies of all Material Consents and all such other
Consents or approvals required to vest in Buyer good and marketable title in the
Acquired Assets, free and clear of any and all Liens (other than Permitted Liens
and Liens set forth on Schedule 3.6(a)), shall have been obtained or made, as
the case may be.

(e) Certain Deliveries at Signing. Seller shall have delivered or caused to be
delivered to Buyer:

(i) subject to Section 2.4, a Bill of Sale and Assignment and Assumption
Agreement, substantially in the form of Exhibit 6.2(e)(i), as may be reasonably
necessary, among other things, to effect the assignment to Buyer of all rights
of Seller (and its Affiliates, as applicable) in and to the Assumed Contracts,
duly executed by Seller (or its Affiliate, as applicable);

 

38

--------------------------------------------------------------------------------

(ii)(A) an opinion of Seller’s corporate counsel, and (B) an opinion of Seller’s
Delaware counsel, each dated as of the Effective Date, in form and substance
reasonably satisfactory to Buyer;

(iii) assignments duly executed by Seller for the registrations and applications
included in the Seller Intellectual Property (except the AMPAKINE® Trademark,
which is licensed to the Buyer pursuant to Section 2.5(b) hereof) in
substantially the form attached hereto as Exhibit 6.2(e)(iii), which shall be
recordable in all jurisdictions in which such registrations have been made or
such applications have been filed;

(iv) an unredacted, fully executed copy of each Primary Contract, and physical
possession of all other Acquired Assets, subject to the Transfer Plan, together
with all such other deeds, endorsements or other instruments as shall be
reasonably requested by Buyer to vest in Buyer good and marketable title to all
of the Acquired Assets, free and clear of all Liens (other than Permitted Liens
and Liens set forth on Schedule 3.6(a) hereto);

(v) drafts of all filings referenced on Schedule 3.4 hereto to be made with
Governmental Authorities following the Effective Date;

(vi) a duly executed counterpart to the Seller License Agreement; and

(vii) evidence that the first $[***] milestone payable under the Patent Family 1
UofC License Agreement in connection with the compound referred to as [***] has
been paid to the University of California.

(f) Certificate of Good Standing. Buyer shall have received a certificate of
good standing in respect of Seller certified by the Secretary of State or other
appropriate official of the State of Delaware, dated as of a date not more than
ten (10) days prior to the Effective Date.

(g) Board Approval. This Agreement and the transactions contemplated hereby
shall have been duly approved and adopted by the Seller’s Board of Directors in
accordance with Seller’s charter documents and Applicable Law.

(h) Tax Form. Seller shall have delivered to Buyer a properly completed IRS form
W-9 duly executed by Seller.

(i) UofC Intellectual Property. The UofC Intellectual Property shall have been
conveyed to Buyer from the University of California.

(j) UofC Field-Limited Agreement. The University of California shall have duly
executed and delivered the UofC Field-Limited Agreement, in form and substance
reasonably acceptable to Buyer.

(k) UofA Consent and Amendment. The University of Alberta shall have duly
executed and delivered the UofA Consent and Amendment.

 

[***]: CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION.

39

--------------------------------------------------------------------------------

(l) UofA Research Consent. [***] (now known as [***]) shall have duly executed
and delivered the UofA Research Consent.

(m) AMPAKINE® Trademark Registration. Seller shall have filed Trademark
applications for Buyer’s use of the AMPAKINE® Trademark in the Field in the
United States.

(n) Nationalization/Filing of Patent Family 11 Applications.

(i) Seller shall have completed nationalization of the 508 Application in the
jurisdictions listed on Schedule 6.2(m)(i) hereto, and in any additional
jurisdictions as may be agreed by the Parties, as two separate Patent
applications on the same day, each in form and substance acceptable to Buyer.
The first Patent application shall include claims directed to the Other
AMPAKINE® Compounds and their method of use outside the Field (the “Seller 508
Application”) and the second Patent application shall include claims directed to
the method of use of the Other AMPAKINE® Compounds in the Field (the “Buyer 508
Application”).

(ii) Seller shall have filed two PCT Patent applications and two US utility
Patent applications for the 254 Application on the same day, each in form and
substance reasonably acceptable to Buyer. The first PCT Patent application and
the first US utility Patent application shall include claims directed to the
Other AMPAKINE® Compounds and their method of use outside the Field (the “Seller
254 Applications”) and the second PCT Patent application and the second US
utility Patent application shall include claims directed to the method of use of
the Other AMPAKINE® Compounds in the Field (the “Buyer 254 Applications”).

(iii) Seller shall have executed and delivered assignment documentation, in form
and substance reasonably satisfactory to Buyer, transferring ownership to Buyer
of the Buyer 508 Application and the Buyer 254 Applications.

(o) Other Documents. Buyer shall have received such other documents,
certificates and instruments as it may reasonably request, and all actions
hereunder and all documents and other papers required to be delivered by Seller
hereunder or in connection with the consummation of the transactions
contemplated hereby, and all other related matters, shall be reasonably
acceptable to Buyer in form and substance.

Section 6.3. Conditions to Obligations of Seller. The obligation of Seller to
consummate the transactions contemplated by this Agreement is subject to the
satisfaction or waiver by Seller at or prior to the Effective Date of the
following additional conditions:

(a) Representations and Warranties. The representations and warranties of Buyer
contained herein that are qualified by materiality or subject to thresholds
shall be true and correct in all respects, and the representations and
warranties of Buyer contained herein that are not so qualified shall be true and
correct in all material respects, as of the Effective Date.

(b) Covenants. Buyer shall have performed and complied in all material respects
with all covenants, agreements and obligations required to be performed or
complied with on or prior to the Effective Date.

 

[***]: CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION.

40

--------------------------------------------------------------------------------

(c) Officer’s Certificate. Seller shall have received a certificate, dated as of
the Effective Date, duly executed by an authorized representative of Buyer,
certifying that:

(i) all of the conditions set forth in Section 6.3(a) and Section 6.3(b) have
been satisfied;

(ii) all required approvals of Buyer authorizing the execution, delivery and
performance of this Agreement have been obtained and remain in full force and
effect; and

(iii) Buyer’s officer executing this Agreement, and each of the other documents
necessary for consummation of the transactions contemplated herein, is an
incumbent officer, and the specimen signature on such certificate is a genuine
signature.

(d) Certain Deliveries at Signing. Buyer shall have delivered or caused to be
delivered to Seller:

(i) payment of the Purchase Price less the Holdback Amount by wire transfer of
same day funds directly to the account set forth on Schedule 6.3(d)(i); and

(ii) a Bill of Sale and Assignment and Assumption Agreement, substantially in
the form of Exhibit 6.2(e)(i), duly executed by Buyer, as may be reasonably
necessary, among other things, to effect the consummation of the transactions
contemplated herein;

(iii) a duly executed counterpart to the Seller License Agreement; and

(iv) a duly executed counterpart to the UofC Field-Limited Agreement.

(e) Other Documents. Seller shall have received such other documents,
certificates and instruments as it may reasonably request, and all actions
hereunder and all documents and other papers required to be delivered by Buyer
hereunder or in connection with the consummation of the transactions
contemplated hereby, and all other related matters, shall be reasonably
acceptable to Seller in form and substance.

ARTICLE VII

REPURCHASE OF ASSETS

Section 7.1. Repurchase of Assets by Seller.

(a) In the event that Buyer determines, in its sole discretion, that (i) the
First Milestone has not been achieved or (ii) Buyer no longer intends to
develop, use or otherwise Exploit the Primary AMPAKINE® Compounds in the Field,
then Buyer shall promptly notify Seller and may elect, within ninety (90) days
of such determination, to (x) continue to conduct and fund additional studies
required for Regulatory Approval by the FDA of an NDA for a Primary AMPAKINE®
Compound for use in the Field, (y) require Seller to repurchase the Acquired
Assets from Buyer for consideration of $1, or (z) proceed with other
arrangements as may be agreed by the Parties. Notwithstanding the foregoing, in
the event that, within ninety (90) days of satisfaction of the First Milestone
Event, Buyer has not paid the First Milestone Payment, then the First Milestone
Payment shall not be payable, and Seller shall have the right, within thirty
(30) days thereafter, to require Buyer to sell the Acquired Assets to Seller for
consideration of $1 by giving written notice to Buyer.

 

41

--------------------------------------------------------------------------------

(b) In the event that Buyer determines, in its sole discretion, that (i) the
AMPAKINE® Pivotal Studies are inconclusive and additional studies are required
to support Regulatory Approval of the AMPAKINE® NDA Submission or (ii) Buyer no
longer intends to develop, use or otherwise Exploit the Primary AMPAKINE®
Compounds in the Field, then Buyer shall promptly notify Seller and may elect,
within ninety (90) days of such determination, to (x) continue to conduct and
fund additional studies required for Regulatory Approval by the FDA of an NDA
for the Compound referred to as CX717 or any other Primary AMPAKINE® Compound
for use in the Field, (y) require Seller to repurchase the Acquired Assets from
Buyer for consideration of $1, or (z) proceed with other arrangements as may be
agreed by the Parties. Notwithstanding the foregoing, in the event that, within
ninety (90) days of satisfaction of the Second Milestone Event, Buyer has not
paid the Second Milestone Payment, then the Second Milestone Payment shall not
be payable, and Seller shall have the right, within thirty (30) days thereafter,
to require Buyer to sell the Acquired Assets to Seller for consideration of $1
by giving written notice to Buyer.

(c) In the event that Seller is to repurchase the Acquired Assets from Buyer
pursuant to Sections 7.1(a) or 7.1(b) above, the Parties shall use commercially
reasonable efforts to prepare customary documentation and consummate such
transaction in an expeditious manner. For purposes of clarification, the
Acquired Assets subject to repurchase shall include, without limitation, all
Information and Inventions, Regulatory Documents and other assets set forth in
Section 2.2 through the repurchase date.

ARTICLE VIII

INDEMNIFICATION

Section 8.1. Survival; Expiration.

(a) Notwithstanding any investigation made by or on behalf of Seller or Buyer
prior to, on or after the Effective Date, the representations and warranties
contained in this Agreement (including the Schedules hereto) and in any Related
Document shall survive the Effective Date and shall terminate [***] the
Effective Date, except that the representations and warranties:

(i) set forth in Section 3.1 (Organization, Standing and Power); Section 3.2
(Authority; Binding Agreements); Section 3.3 (Conflicts; Consents); Section 3.4
(Governmental Authorizations); Section 3.6(a) (Good Title; Sufficiency of
Assets), Section 3.16 (Brokers), Section 4.1 (Organization, Standing and Power),
Section 4.2 (Authority; Binding Agreements), Section 4.3 (Conflicts; Consents)
and Section 4.4 (Brokers) shall survive indefinitely;

(ii) that constitute or are based upon fraud or intentional misrepresentation
shall survive indefinitely; and

(iii) set forth in Section 3.15 (Taxes) and Section 3.19 (Environmental Matters)
shall survive until the expiration of the applicable statute of limitation.

The covenants, agreements and obligations of the Parties shall survive until
fully performed and discharged, unless otherwise expressly provided herein. For
clarity, the covenant set forth in Section 5.12 shall survive indefinitely. Each
Party shall give prompt written notice to the other Party of

[***]: CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION.

 

42

--------------------------------------------------------------------------------

(x) any event, circumstance or condition that constitutes a breach of, or makes
inaccurate, any representation and warranty of such Party hereunder, or (y) the
non-fulfillment of any covenant, agreement or obligation of such Party
hereunder.

Section 8.2. Indemnification by Seller. Seller shall indemnify and hold harmless
Buyer and its Affiliates, and the directors, officers, managers, employees and
Representatives of Buyer and its Affiliates, from and against any and all
liabilities, judgments, claims, settlements, losses, damages, fees, Liens,
Taxes, penalties, obligations and expenses (including reasonable attorneys’ fees
and expenses and costs and expenses of investigation) (collectively, “Losses”)
incurred or suffered, directly or indirectly, by any such Person arising from,
by reason of or in connection with:

(a) any breach or inaccuracy of any representation or warranty of Seller in this
Agreement or any Related Document;

(b) any failure by Seller to duly and timely perform or fulfill any of its
covenants or agreements required to be performed by Seller under this Agreement,
any Related Document or under any other document or instrument delivered by
Seller pursuant hereto or thereto or the UofC Field-Limited Agreement;

(c) any Excluded Liability or Excluded Asset;

(d) except with respect to the laws of Barbados, the failure of Seller to comply
with any Applicable Laws relating to bulk sales or Tax applicable to the
transactions contemplated by this Agreement;

(e) any Transfer Taxes allocated to Seller pursuant to Section 5.4;

(f) any Permitted Lien relating to the Acquired Assets; and

(g) any fees payable by Seller to any entity set forth on Schedule 3.16 hereto.

Section 8.3. Indemnification by Buyer. Buyer shall indemnify and hold harmless
Seller and its Affiliates, and the directors, officers, employees and
Representatives of Seller and its Affiliates, from and against any and all
Losses incurred or suffered, directly or indirectly, by any such Person arising
from, by reason of or in connection with:

(a) any breach or inaccuracy of any representation or warranty of Buyer in this
Agreement or any Related Document;

(b) any failure by Buyer to duly and timely perform or fulfill any of its
covenants or agreements required to be performed by Buyer under this Agreement
or any Related Document or under any other document or instrument delivered by
Buyer pursuant hereto or thereto;

(c) the failure of Buyer to comply with any Applicable Laws relating to bulk
sales or Tax applicable to the transactions contemplated by this Agreement;

(d) any Transfer Taxes allocated to Buyer pursuant to Section 5.4; and

(e) any Assumed Liability.

 

43

--------------------------------------------------------------------------------

Section 8.4. Calculation of Losses; Mitigation of Damages.

(a) The amount of any Losses for which indemnification is provided under this
Article VIII shall be net of any amounts actually recovered by the Indemnified
Party under insurance policies or otherwise with respect to such Losses (net of
any Tax or expenses incurred in connection with such recovery). For purposes of
clarification, nothing set forth in this provision shall require the Buyer to
seek recovery under its insurance policies with respect to such Losses.

(b) Any indemnity payment hereunder shall be treated as an adjustment to the
Purchase Price to the extent permitted by Applicable Law. Where the receipt of
any such payment is treated for Tax purposes in a manner other than as an
adjustment to the Purchase Price, the amount of the payment shall be adjusted to
take account of any net Tax cost actually incurred, or benefit actually enjoyed,
by the Indemnified Party in respect thereof.

(c) Each Party shall take and shall cause its Affiliates to take all reasonable
steps to mitigate any Losses upon becoming aware of any event which would
reasonably be expected to, or does, give rise thereto.

(d) Notwithstanding anything to the contrary elsewhere in this Agreement, no
Party shall, in any event, be liable to any other Person for any consequential,
incidental, indirect, special or punitive damages of such other Person,
including loss of revenue, income or profits, loss of business reputation or
opportunity relating to the breach or alleged breach hereof.

Section 8.5. Certain Procedures for Indemnification.

(a) If any Person entitled to indemnification under this Agreement (an
“Indemnified Party”) asserts a claim for indemnification, or receives notice of
the assertion of any claim or of the commencement of any Action by any Person
not a party to this Agreement against such Indemnified Party, for which a Party
is required to provide indemnification under this Article VIII (an “Indemnifying
Party”), the Indemnified Party shall promptly notify the Indemnifying Party in
writing of the claim or the commencement of that Action; provided, however, that
the failure to so notify the Indemnifying Party shall not relieve the
Indemnifying Party from any liability that it may have to the Indemnified Party,
except to the extent that such failure prejudices the Indemnifying Party’s
ability to defend such Action.

(b) With respect to third party claims for which indemnification is claimed
hereunder (each, an “Indemnification Claim”), (i) the Indemnifying Party shall
be entitled to participate in the defense of any such Indemnification Claim, and
(ii) if, in the reasonable opinion of counsel to the Indemnified Party, such
Indemnification Claim can properly be resolved by money damages alone and the
Indemnifying Party has the financial resources to pay such damages and commits
to diligently and vigorously conduct such defense, then the Indemnifying Party
shall be entitled (A) to direct the defense of any Indemnification Claim at its
sole cost and expense, but such defense shall be conducted by legal counsel
reasonably satisfactory to the Indemnified Party, and (B) to settle and
compromise any such Indemnification Claim or Action for money damages alone;
provided, however, that if the Indemnified Party has elected to be represented
by separate counsel pursuant to the proviso below, or if such settlement or
compromise does not include an unconditional release of the Indemnified Party
for any liability arising out of such Indemnification Claim or Action, such
settlement or compromise shall be effected only with the written consent of the
Indemnified Party, which consent will not be unreasonably withheld.
Notwithstanding the foregoing, if a

 

44

--------------------------------------------------------------------------------

settlement or compromise offer solely for money damages is made by the
applicable third party claimant, and the Indemnifying Party notifies the
Indemnified Party in writing of the Indemnifying Party’s willingness to accept
the offer and, subject to the applicable limitations of Sections 8.6, pay the
amount called for by such offer, and the Indemnified Party declines to accept
such offer, the Indemnified Party may continue to contest such Indemnification
Claim, free of any participation by the Indemnifying Party, and the amount of
any ultimate liability with respect to such Indemnification Claim that the
Indemnifying Party has an obligation to pay hereunder shall be limited to the
lesser of (A) the amount of the settlement or compromise offer that the
Indemnified Party declined to accept plus the Losses of the Indemnified Party
relating to such Indemnification Claim through the date of its rejection of the
settlement offer or (B) the aggregate Losses of the Indemnified Party with
respect to such Indemnification Claim. After notice from the Indemnifying Party
to the Indemnified Party of its election to assume the defense of such claim or
Action, the Indemnifying Party shall not be liable to the Indemnified Party
under this Section 8.5 for any legal or other expenses subsequently incurred by
the Indemnified Party in connection with the defense thereof; provided, however,
that if, in the reasonable opinion of counsel to the Indemnified Party, an
actual or potential conflict of interest exists between the Indemnifying Party
and the Indemnified Party that would make such separate representation
advisable, then the Indemnified Party shall have the right to employ counsel to
represent it and in that event the reasonable fees and expenses of such separate
counsel shall be paid by the Indemnifying Party; provided further, that in no
event shall the Indemnifying Party be responsible for the fees of more than one
law firm for all Indemnified Parties in connection with any Indemnification
Claim. The Indemnified Party and the Indemnifying Party shall each render to
each other such assistance as may reasonably be requested in order to ensure the
proper and adequate defense of any such Action.

(c) In the event that Seller owes any amounts to Buyer with respect to Seller’s
indemnification obligations set forth in this Article VIII, then without
limiting any other rights or remedies of Buyer hereunder, and subject to the
Cap, the Buyer shall be entitled to offset any unpaid and indemnifiable Losses
against any Milestone Payments remaining due to the Seller hereunder.

Section 8.6. Certain Limitations on Indemnification.

(a) Notwithstanding the provisions of this Article VIII, no Party shall have any
indemnification obligations for Losses under Sections 8.2(a) or 8.3(a) unless
the aggregate amount of all such Losses exceeds $[***] (the “Basket”), in which
case Seller or Buyer, as applicable, shall be liable for all Losses arising from
such Indemnification Claim (subject to the Cap, as defined below). In no event
shall the aggregate indemnification to be paid by Seller, on the one hand, or
Buyer, on the other hand, for any indemnification obligations for Losses under
Sections 8.2(a) or 8.3(a) exceed $[***] (the “Cap”).

(b) If the Indemnifying Party makes any payment on any Indemnification Claim,
the Indemnifying Party shall be subrogated, to the extent of such payment, to
all rights and remedies of the Indemnified Party to any insurance benefits or
other claims of the Indemnified Party with respect to such Indemnification
Claim. For purposes of clarification, nothing set forth in this provision shall
require the Indemnifying Party to seek recovery under its insurance policies
with respect to such Indemnification Claim.

[***]: CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION.

 

45

--------------------------------------------------------------------------------

Section 8.7. Exclusive Remedy. The sole and exclusive remedy for any breach or
failure to be true and correct, or alleged breach or failure to be true and
correct, of any representation or warranty or any covenant or agreement in this
Agreement or the Related Documents, shall be indemnification in accordance with
this Article VIII. In furtherance of the foregoing, each of the Parties hereby
waives, to the fullest extent permitted by Applicable Law, any and all other
rights, claims and causes of action (including rights of contributions, if any)
known or unknown, foreseen or unforeseen, which exist or may arise in the
future, that it may have against the other Party, arising under or based upon
any Applicable Law (including any such law relating to environmental matters or
arising under or based upon common law or otherwise). Notwithstanding the
foregoing, this Section 8.7 shall not operate to limit the rights of the Parties
to seek equitable remedies (including specific performance or injunctive relief)
or limit the rights of the Parties to pursue claims based upon fraud.

ARTICLE IX

MISCELLANEOUS

Section 9.1. Governing Law. Construction and interpretation of this Agreement
shall be governed by the laws of the State of New York, excluding any conflicts
or choice of law rule or principle that might otherwise refer construction or
interpretation of this Agreement to the substantive Applicable Law of another
jurisdiction.

Section 9.2. Notices. All notices, requests, demands and other communications
that are required or may be given pursuant to the terms of this Agreement shall
be in written form, and shall be deemed delivered (a) on the date of delivery
when delivered by hand on a Business Day, (b) on the Business Day designated for
delivery if sent by reputable overnight courier maintaining records of receipt
and (c) on the date of transmission when sent by facsimile, electronic mail or
other electronic transmission during normal business hours on a Business Day,
with confirmation of transmission by the transmitting equipment; provided,
however, that any such communication delivered by facsimile or other electronic
transmission shall only be effective if within two Business Days of such
transmission such communication is also delivered by hand or deposited with a
reputable overnight courier maintaining records of receipt for delivery on the
Business Day immediately succeeding such day of deposit. All such communications
shall be addressed to the Parties at the address set forth as follows, or at
such other address as a Party may designate upon ten (10) days’ prior written
notice to the other Party.

If to Buyer, to:

Biovail Laboratories International SRL

Welches, Christ Church

Barbados, West Indies BB17154

Attention: Chief Operating Officer

Facsimile: (246) 420-1532

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

Biovail Corporation

7150 Mississauga Road

Mississauga, ON L5N 8M5

Attention: Vice President, Associate General Counsel

Facsimile: (905) 286-3370

 

46

--------------------------------------------------------------------------------

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

Morgan Lewis & Bockius LLP

502 Carnegie Center

Princeton, NJ 08540

Attention: Randall B. Sunberg, Esq.

Facsimile: (609) 919-6701

If to Seller to:

Cortex Pharmaceuticals, Inc.

15241 Barranca Parkway

Irvine, California 92618

Attention: Chief Executive Officer

Facsimile: (949) 727-3657

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

Stradling Yocca Carlson & Rauth, P.C.

660 Newport Center Drive, Suite 1600

Newport Beach, California 92660

Attention: Lawrence B. Cohn

Facsimile: (949) 725-4100

Section 9.3. Benefits of Agreement. All of the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of the Parties hereto
and their respective successors and permitted assigns. Except for the provisions
of Article VIII, this Agreement is for the sole benefit of the Parties hereto
and not for the benefit of any third party, including, for the avoidance of
doubt, any Employee.

Section 9.4. Amendments and Waivers. No modification, amendment or waiver of any
provision of, or consent or approval required by, this Agreement, nor any
consent to or approval of any departure herefrom, shall be effective unless it
is in writing and signed by the Party against whom enforcement of any such
modification, amendment, waiver, consent or approval is sought. Such
modification, amendment, waiver, consent or approval shall be effective only in
the specific instance and for the purpose for which given. Neither the failure
of either Party to enforce, nor the delay of either Party in enforcing, any
condition or part of this Agreement at any time shall be construed as a waiver
of that condition or part or forfeit any rights to future enforcement thereof.
No action taken pursuant to this Agreement, including any investigation by or on
behalf of either Party hereto, shall be deemed to constitute a waiver by the
Party taking action of compliance by the other Party with any representation,
warranty, covenant, agreement or obligation contained herein.

Section 9.5. Cumulative Rights. Except as expressly provided herein, the various
rights under this Agreement shall be construed as cumulative, and no one of them
is exclusive of any other or exclusive of any rights allowed by Applicable Law.

 

47

--------------------------------------------------------------------------------

Section 9.6. Expenses.

(a) Except as otherwise specified herein, each Party shall bear any costs and
expenses with respect to the transactions contemplated herein incurred by it.

(b) If the Effective Date occurs on or before March 25, 2010, then Buyer shall
reimburse Seller up to a maximum of $[***] of the reasonable and documented
out-of-pocket expenses incurred by Seller in connection with the transactions
contemplated by this Agreement and the Related Documents (including attorneys’
fees and disbursements); which reimbursement shall occur within ten (10) days of
receipt of a documented request.

Section 9.7. Arbitration.

(a) Except as otherwise expressly provided in this Agreement, any disputes,
claims or controversies arising between the Parties relating to, arising out of
or in any way connected with this Agreement or any term or condition hereof, or
the performance by either Party of its obligations hereunder, shall be promptly
presented to the Chief Executive Officers of Buyer and Seller (or alternative
officers designated by Buyer or Seller) for resolution and if such officers
cannot promptly resolve such disputes, claims or controversies then such
dispute, claim or controversey shall be finally resolved by binding arbitration.
Whenever a Party shall decide to institute arbitration proceedings, it shall
give written notice to that effect to the other Party. The Party giving such
notice shall refrain from instituting the arbitration proceedings for a period
of sixty (60) days following such notice.

(b) Any arbitration hereunder shall be conducted before the American Arbitration
Association, or its successor. The arbitration shall be conducted before a
single arbitrator and shall be conducted in accordance with the rules and
regulations promulgated by the American Arbitration Association unless
specifically modified herein. The arbitration shall be located in New York, New
York. The arbitrator shall have the authority to grant specific performance, and
to allocate between the Parties the costs of arbitration in such equitable
manner as he or she determines.

(c) The parties covenant and agree that the arbitration shall commence within
ninety (90) days of the date on which a written demand for arbitration is filed
by either Party (the “Filing Date”). In connection with the arbitration
proceeding, the arbitrator shall have the power to order the production of
documents by each Party and any third-party witnesses. In addition, each Party
may take up to three (3) depositions as of right, and the arbitrator may in his
or her discretion allow additional depositions upon good cause shown by the
moving party. However, the arbitrator shall not have the power to order the
answering of interrogatories or the response to requests for admission. In
connection with any arbitration, each Party shall provide to the other, no later
than seven (7) Business Days before the date of the arbitration, the identity of
all persons that may testify at the arbitration and a copy of all documents that
may be introduced at the arbitration or considered or used by a Party’s
witnesses or experts. The arbitrator’s decision and award shall be made and
delivered within thirty (30) days of the closing of the arbitration hearing. The
arbitrator’s decision shall set forth a reasoned basis for any award of damages
or finding of liability.

(d) The Parties covenant and agree that they will participate in the arbitration
in good faith. Any Party unsuccessfully refusing to comply with an order of the
arbitrator shall be

[***]: CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION.

 

48

--------------------------------------------------------------------------------

liable for costs and expenses, including attorneys’ fees, incurred by the other
Party in enforcing the award. Notwithstanding anything to the contrary contained
in this Agreement, this Section 9.7 shall not apply to any request by any Party
to this Agreement for temporary, preliminary or permanent injunctive relief or
other forms of equitable relief.

(e) Judgment upon the award so rendered may be entered in any court having
jurisdiction or application may be made to such court for judicial acceptance of
any award and an order of enforcement, as the case may be.

Section 9.8. Assignment. This Agreement and the rights and obligations hereunder
shall not be assignable or transferable by either Party hereto without the prior
written consent of the other Party hereto, which consent will not be
unreasonably withheld; provided, however, that, upon prior written notice to the
other Party, either Party may assign, sublicense, subcontract or delegate this
Agreement and any or all of its rights and obligations under this Agreement
(i) to any of its Affiliates, (ii) in connection with a merger, consolidation,
sale of substantially all of such Party’s assets or (iii) otherwise by operation
of Applicable Law without the prior written consent of the other Party. Any
attempted assignment, sublicense, subcontract or delegation in violation of this
Section 9.8 shall be null and void.

Section 9.9. Enforceability; Severability. Without limitation to Section 5.2(e),
(a) if any covenant or provision hereof is determined to be void or
unenforceable in whole or in part, it shall not be deemed to affect or impair
the validity of any other covenant or provision hereof if the rights and
obligations of a Party hereto will not be materially and adversely affected,
each of which is hereby declared to be separate and distinct, (b) if any
provision of this Agreement is so broad as to be unenforceable, such provision
shall be interpreted to be only so broad as is enforceable, and (c) if any
provision of this Agreement is declared invalid or unenforceable for any reason
other than overbreadth, the Parties hereto agree to modify the offending
provision so as to maintain the essential benefits of the bargain (including the
rights and obligations hereunder) between the Parties to the maximum extent
possible, consistent with Applicable Law and public policy.

Section 9.10. Entire Agreement. This Agreement, together with the Schedules and
Exhibits expressly contemplated hereby and attached hereto, the Related
Documents and the other agreements, certificates and documents delivered in
connection herewith or otherwise in connection with the transactions
contemplated hereby and thereby, contain the entire agreement among the Parties
with respect to the transactions contemplated by this Agreement and supersede
all prior agreements or understandings among the Parties with respect to the
subject matter hereof.

Section 9.11. Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart hereof shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement. Delivery of an executed counterpart of a signature page of this
Agreement by facsimile or other electronic transmission shall be effective as
delivery of a manually executed original counterpart of this Agreement.

[Remainder of page intentionally left blank]

 

49

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and
year first above written.

 

CORTEX PHARMACEUTICALS, INC. By:  

 

Name:   Title:   BIOVAIL LABORATORIES INTERNATIONAL SRL By:  

 

Name:   Title:  

[Signature Page to Asset Purchase Agreement]

--------------------------------------------------------------------------------

Exhibit 1 – Certain Compound Definitions

[***]

“CX717” means [***]

“CX1739” means [***]

“CX1763” means [***]

“CX1942” means [***]

[***]: CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION.