Exhibit 10.1

 

ASSET PURCHASE AND LICENSE AGREEMENT

 

This Asset Purchase and License Agreement (this “Agreement”), dated the 25th day
of March, 2005 (the “Effective Date”), is by and among Sunol Molecular
Corporation, a Delaware corporation having its principal offices at 2810 North
Commerce Parkway, Miramar, Florida 33025-3958 (“Seller”), Tanox, Inc., a
Delaware corporation having its principal offices at 10301 Stella Link, Houston,
Texas 77025 (“Purchaser”), and solely with respect to the Sections and Articles
hereof set forth in Section 15.14 below, Altor Bioscience Corporation, a
Delaware corporation having its principal offices at 2810 North Commerce
Parkway, Miramar, Florida 33025-3958 (“Altor”).

 

RECITALS:

 

WHEREAS, Seller is a drug discovery company with a research and development
program evaluating tissue factor antagonists and anti-infective antibodies for
the treatment or prevention of cardiovascular diseases, inflammation, cancer,
and serious infectious diseases; and

 

WHEREAS, Purchaser is a biopharmaceutical company specializing in the discovery
and development of biotherapeutics based on monoclonal antibody technology for
the treatment of asthma, allergy, oncology, inflammation and infectious
diseases; and

 

WHEREAS, Purchaser desires to obtain the assets and technology of Seller
comprising its Tissue Factor Antagonist program (hereinafter described), and
Seller desires to convey such assets and technology to Purchaser and distribute
the proceeds of such sale to its stockholders; and

 

WHEREAS, Seller contemplates transferring to Altor after the Closing, all or a
substantial portion of the remainder of Seller’s assets, business and
liabilities, including without limitation the Nonexclusively Licensed Patent
Rights and the Licensed Tissue Factor Antagonist Know-How (each as hereinafter
defined) (the “Altor Transfer”); and

 

WHEREAS, Purchaser desires to obtain and Seller desires to convey (and to have
Altor convey after the Altor Transfer) to Purchaser a non-exclusive license
under the Nonexclusively Licensed Patent Rights and the Licensed Tissue Factor
Antagonist Know-How;

 

NOW, THEREFORE, in consideration of the premises and the mutual promises,
covenants and conditions hereinafter set forth, the receipt and adequacy of
which are hereby acknowledged, the Parties hereto hereby agree as follows:

 

Article I

Definitions

 

When used in this Agreement and unless the context otherwise requires, each of
the following terms shall have the meanings set forth in this Article I:

 

Section 1.1 “Affiliate” means, with respect to a Party, any Person that
controls, is controlled by, or is under common control with such Party. For
purposes of this Section 1.1, “control” shall refer to direct or indirect
ownership of fifty percent (50%) or more of the stock or shares having the right
to vote for the election of directors of such Person or, if such Person is

 

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not a corporate entity, the possession, directly or indirectly, of the power to
direct, or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities by contract or otherwise.

 

Section 1.2 “Ancillary Agreements” means the Escrow Agreement and the
Stockholder and Registration Rights Agreement.

 

Section 1.3 “Assigned Patent Rights” means, collectively: (i) the patent
applications and patents set forth on Schedule 1.3, (ii) foreign counterparts of
the patent applications and patents set forth on Schedule 1.3, and (iii) all
Patent Rights claiming priority from the patent applications and patents set
forth on Schedule 1.3 and the foreign counterparts of such patent applications
and patents. Notwithstanding the foregoing, Assigned Patent Rights shall
specifically exclude Nonexclusively Licensed Patent Rights.

 

Section 1.4 “Assumed Contracts” means the Contracts listed on Schedule 1.4.

 

Section 1.5 “BioCryst Agreement” means that certain Master Agreement dated April
26, 1999, by and between Seller and BioCryst Pharmaceuticals, Inc., as it exists
on the date of this Agreement.

 

Section 1.6 “Active Clinical Trial Agreements” means those Contracts listed
under the caption, “Active Clinical Trial Agreements,” in Schedule 1.6.

 

Section 1.7 “Confidentiality Agreements” means those confidentiality and
nondisclosure contracts, agreements, or other arrangements to which Seller (or,
as a result of the Altor Transfer, Altor) is a party or may be bound or receive
benefits (excluding any Assumed Contracts) related to the Program.

 

Section 1.8 “Contracts” means all contracts, agreements or other arrangements
(excluding any Confidentiality Agreements) to which Seller (or, as a result of
the Altor Transfer, Altor) is a party or may be bound or receive benefits and
which relate to the Tissue Factor Antagonists or the Program, but not including
contracts, agreements, or other arrangements to which Seller is a party which
relate to the general operations of Seller’s business.

 

Section 1.9 “Control” or “Controlled” means, with respect to any Know-How or
Patent Rights, possession of the ability and right to transfer and grant rights
to Purchaser as provided herein without violating the terms of any agreement
with any Third Party existing as of the date of this Agreement.

 

Section 1.10 “Dow Agreement” means that certain Collaborative Research Agreement
dated September 11, 2003, by and between Seller and The Dow Chemical Company (as
amended on November 13, 2003 and June 9, 2004), as it exists on the date of this
Agreement and as amended from time to time by Seller with Purchaser’s written
consent (such consent not to be unreasonably withheld or delayed), provided that
such consent shall be deemed automatically given by Purchaser in the event that
Purchaser has not responded to Seller’s request for consent within thirty (30)
days of such notice.

 

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Section 1.11 “Encumbrances” means any lien, pledge, hypothecation, charge, or
other security interest, in each case, of any kind or nature whatsoever, or any
Third Party Contractual Restriction.

 

Section 1.12 “Escrow Agreement” means the Escrow Agreement to be entered into as
of the Closing Date, by and among Seller, Purchaser and Wells Fargo, National
Association, as Escrow Agent, in the form set forth on Exhibit A hereto.

 

Section 1.13 “Excluded Assets” means those assets of the Seller set forth on
Schedule 1.13.

 

Section 1.14 “FDA” means the United States Food and Drug Administration, or any
successor thereto.

 

Section 1.15 “Field Restrictions” means those restrictions described as Field
Restrictions in the Side Letter.

 

Section 1.16 “Good Practices” means compliance in all material respects with the
applicable requirements contained in current Good-Laboratory Practices, current
Good Clinical Practices and/or current Good Manufacturing Practices regulations
as promulgated by the FDA.

 

Section 1.17 “Governmental Authority” means any federal, state, local or foreign
governmental entity or municipality or subdivision thereof or any authority,
department, commission, board, bureau, agency, court or instrumentality.

 

Section 1.18 “Indications” means, with respect to a Product, the following
indications: acute lung injury (ALI), acute respiratory distress syndrome (ARDS)
and/or sepsis, including the sub-indications of community-acquired pneumonia
(CAP), severe avian respiratory syndrome (SARS) and avian flu, to the extent
such Product has received Regulatory Approval with respect to any of the
foregoing indications in the relevant jurisdiction.

 

Section 1.19 “Know-How” means any information, knowledge, data or materials,
including without limitation ideas, inventions, discoveries, developments, trade
secrets, concepts, formulas, methods, techniques, processes, procedures,
designs, specifications, operating manuals, supplier lists, computer programs,
technologies, compositions, formulations, plans, applications, scientific,
clinical or technical data or information conceived, memorialized, developed
and/or reduced to practice as may be embodied in samples, raw materials,
supplies, works-in-process, protocols, notebooks, algorithms, assays, chemical
compounds and biological materials (such as antibodies, cell lines, cell banks,
RNA, DNA, DNA fragments, organisms, proteins, polypeptides, plasmids,
constructs, vectors, in vitro or in vivo models), whether or not proprietary to
Seller, which are in the possession of, used by or licensed to Seller,
specifically excluding, for the avoidance of doubt, any Patent Rights. Until
such time as any patent application has been filed on such inventions, the term
“Know-How” shall be deemed to include all inventions disclosed in any draft
patent application, draft publication or other unpublished document.

 

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Section 1.20 “Legal Requirement” means any federal, state, local, municipal,
foreign, international or other constitution, law, ordinance, principle of
common law, code, rule, regulation, statute, treaty or order.

 

Section 1.21 “Liability” means any liability or obligation of any kind,
character or description, whether known or unknown, absolute or contingent,
accrued or unaccrued, disputed or undisputed, liquidated or unliquidated,
secured or unsecured, joint or several, due or to become due, vested or
unvested, executory, determined, determinable or otherwise, and whether or not
the same is required to be accrued on the financial statements.

 

Section 1.22 “Licensed Tissue Factor Antagonist Know-How” means all Tissue
Factor Antagonist Know-How owned by Seller as of the Effective Date or
thereafter (but prior to the Closing Date) which does not constitute Seller
Tissue Factor Antagonist Know-How.

 

Section 1.23 “Material Adverse Effect” means, with respect to Seller, any
material adverse effect on or change in (a) the condition (financial or
otherwise), properties, assets (including intellectual property rights),
liabilities, business, operations, results of operations or prospects of Seller
or the Program or (b) the ability of Seller to consummate the Transaction or
perform its obligations under this Agreement.

 

Section 1.24 “Material Assumed Contracts” means those Assumed Contracts listed
under the caption, “Material Assumed Contracts,” in Schedule 1.4.

 

Section 1.25 “Net Sales” means, with respect to a Product, the gross amounts
received by Purchaser, its Affiliates or its or their sublicensees in respect of
sales or dispositions of Products to Third Parties (or Affiliate end-users), in
each case less the following deductions:

 

(a) Trade, cash and/or quantity discounts actually allowed and taken directly
with respect to such sales;

 

(b) Tariffs, duties, excises, sales taxes or other taxes imposed upon and paid
directly with respect to the production, delivery, sale or use of the Product
and included and separately stated in the applicable invoice (excluding
national, state or local taxes based on income);

 

(c) Freight, insurance and other transportation charges incurred in shipping a
Product to Third Parties included and separately stated in the applicable
invoice;

 

(d) Any reasonable and customary chargebacks or rebates, including without
limitation, cash, governmental and managed care rebates and hospital or other
buying group chargebacks to the extent actually granted;

 

(e) Amounts repaid or credited to such Third Parties for returned, rejected,
recalled or damaged Product; and

 

(f) Retroactive price reductions imposed by Governmental Authorities or
Regulatory Authorities with respect to invoiced amounts.

 

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Such amounts shall be determined, in a manner consistent with generally accepted
accounting principles (GAAP) and the foregoing definition, from the books and
records of Purchaser, its Affiliates and/or its or its Affiliates’ sublicensees,
maintained in accordance with GAAP.

 

Any sales of a Product by Purchaser, its Affiliates or its or its Affiliates’
sublicensees to another Affiliate or sublicensee of Purchaser for resale by any
of the foregoing shall not result in any Net Sales, but Net Sales will occur
upon such other Affiliate’s or sublicensee’s sale of such Product to a
Distributor (as defined below) or an independent end-user.

 

“Distributor” means a Third Party which purchases any Product from Purchaser or
any of its Affiliates, or any of its or its Affiliates’ sublicensees, for
further resale, but which does not have a sublicense to manufacture, develop,
use or sell any Product.

 

Section 1.26 “Nonexclusively Licensed Patent Rights” means: (i) the patent
applications and patents set forth on Schedule 1.26, (ii) foreign counterparts
of the patent applications and patents set forth on Schedule 1.26, and (iii) all
Patent Rights claiming priority from the patent applications and patents set
forth on Schedule 1.26 and the foreign counterparts of such patent applications
and patents. Notwithstanding the foregoing, Nonexclusively Licensed Patent
Rights shall specifically exclude Assigned Patent Rights.

 

Section 1.27 “Party” means any of Purchaser, Seller or Altor; “Parties” means
Purchaser, Seller and Altor.

 

Section 1.28 “Patent Rights” means any United States or foreign patent, patent
application or provisional application, and all substitutions, divisionals,
continuations, continuation-in-part applications, continued prosecution
applications, reissues, reexaminations and extensions thereof.

 

Section 1.29 “Person” means any natural person or any corporation, company,
partnership, joint venture, firm, unincorporated association or other entity or
body.

 

Section 1.30 “Product” means a pharmaceutical product containing the monoclonal
antibody known by Seller as cH36 or a humanized version of cH36.

 

Section 1.31 “Proceeding” means any action, arbitration, audit, hearing,
investigation, litigation or suit (whether civil, criminal, administrative,
judicial or investigative, whether formal or informal, whether public or
private) commenced, brought, conducted or heard by or before, or otherwise
involving, any Governmental Authority or arbitrator.

 

Section 1.32 “Program” means Seller’s research and development of Tissue Factor
Antagonists.

 

Section 1.33 “Purchaser Claim” shall have the meaning set forth in the Escrow
Agreement.

 

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Section 1.34 “Regulatory Application” means any application or filing for a
Regulatory Approval, including without limitation any Investigational New Drug
(IND) application, Biologic License Application (BLA), or New Drug Application
(NDA).

 

Section 1.35 “Regulatory Approval” means any approval, consent, order,
registration, license or authorization from any Regulatory Authority required
for the manufacture, development, commercialization, storage or transport of a
Tissue Factor Antagonist in any regulatory jurisdiction.

 

Section 1.36 “Regulatory Authority” means a federal, national, multinational,
state, provincial or local regulatory agency, department, bureau or other
governmental entity with authority over the testing, manufacture, use, storage,
importation, promotion, marketing or sale of a product in a country or
territory.

 

Section 1.37 “Release Date” means the third anniversary of the Closing Date.

 

Section 1.38 “Securities Act” means the Securities Act of 1933, as amended.

 

Section 1.39 “Seller Tissue Factor Antagonists” means all Tissue Factor
Antagonists owned by Seller as of the Effective Date or thereafter (but prior to
or on the Closing Date), including but not limited to those molecules referred
to by Seller as H36 (mouse anti-tissue factor monoclonal antibody), cH36
(chimeric anti-tissue factor monoclonal antibody IgG4), hOAT (humanized
anti-tissue factor monoclonal antibody IgG1), and hFAT (humanized anti-tissue
factor monoclonal antibody IgG4) (including their derived fragments, encoding
nucleic acids, expression vectors and plasmids, and hybridomas and production
cell lines for producing same), and 57-5F, 57-6A, Sarco-C, Sarco-E, FAU-1 and
FAU-2.

 

Section 1.40 “Seller Tissue Factor Antagonist Know-How” means all Tissue Factor
Antagonist Know-How owned by Seller as of the Effective Date or thereafter (but
prior to or on the Closing Date) and that is used or has been used or is held
for use by Seller primarily in the design, research, development, manufacture,
operation, clinical testing, commercialization, sale and/or other use of a
Tissue Factor Antagonist.

 

Section 1.41 “Shareholders” means all of the shareholders of the Seller on the
Closing Date.

 

Section 1.42 “Side Letter” means that certain side letter between Seller and
Purchaser dated even date herewith, which is incorporated herein by this
reference.

 

Section 1.43 “Stockholder and Registration Rights Agreement” means the
Stockholder and Registration Rights Agreement to be entered into as of the
Closing Date, by and among Seller, Purchaser and the Shareholders, in the form
set forth on Exhibit B hereto.

 

Section 1.44 “Territory” means all countries and territories of the world.

 

Section 1.45 “Third Party” means any Person other than a Party or any of its
Affiliates.

 

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Section 1.46 “Third Party Contractual Restriction” means, with respect to any
Asset, any of the following that is in effect as of the Effective Date or
thereafter (but prior to the Closing Date): a license granted to a Third Party
with respect to such Asset; an option to purchase or license such Asset granted
to a Third Party; a covenant not to compete contained in an Assumed Contract
related to such Asset; a covenant not to sue contained in an Assumed Contract
related to such Asset; or a restriction on Seller’s right to exploit such Asset.
Notwithstanding the foregoing, Third Party Contractual Restrictions shall not
include any license granted under a Contract solely for the performance of such
Contract by or on behalf of a Third Party or, with respect to any Active
Clinical Trial Agreement or Clinical-Related and Other Research Agreement, any
publication rights granted therein.

 

Section 1.47 “Tissue Factor Antagonist” means the physical embodiment of any
molecule (including without limitation small molecules and antibodies, their
derived fragments, encoding nucleic acids, expression vectors and plasmids, and
hybridomas and production cell lines for producing same) that is capable of
binding to or otherwise suppressing or inhibiting the activity of a tissue
factor protein. Notwithstanding the foregoing, Tissue Factor Antagonists shall
specifically exclude “Factor VIIa” and “Factor Xa” protease active-site
inhibitors and any anti-Stx (anti-Shiga toxin) antibodies and anti-staph
antibodies.

 

Section 1.48 “Tissue Factor Antagonist Know-How” means all Know-How, whether
patentable or otherwise, that is used or has been used or is held for use in the
design, research, development, manufacture, operation, clinical testing,
commercialization, sale and/or other use of a Tissue Factor Antagonist or
relates to a Tissue Factor Antagonist. Notwithstanding the foregoing, Tissue
Factor Antagonist Know-How shall specifically exclude Know-How related primarily
to “Factor VIIa” or “Factor Xa” protease active-site inhibitors or any anti-Stx
(anti-Shiga toxin) antibodies or anti-staph antibodies.

 

Section 1.49 “Transaction” means the purchase and sale of the Assets and the
licenses of the Nonexclusively Licensed Patent Rights, the Licensed Tissue
Factor Antagonist Know-How, and the Seller Tissue Factor Antagonist Know-How, in
each case as contemplated by this Agreement.

 

Section 1.50 Additional Definitions. Each of the following definitions is set
forth in the section or Article, as applicable, of this Agreement indicated
below (in addition, additional terms are defined in the Schedules hereto):

 

Definitions

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Section

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Agreement      Introductory Paragraph ALI Study      11.5(a) Altor     
Introductory Paragraph Assets      2.1

Bill of Sale and Assignment

    and Assumption Agreement

     5.2(a) Cash Purchase Price      6.1 Closing      5.1

 

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Definitions

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Section

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Closing Date      5.1 Closing Shares      6.2 Common Stock      6.2 Competitive
Activity      11.4(a) Confidential Informaton      11.3 Distributor      1.25
Effective Date      Introductory Paragraph Escrow Agent      6.2 Field
Restrictions      Side Letter Holdback Shares      6.2 Indemnity Basket     
14.5(c) License      3.1 Losses      14.1 Nonassignable Contract      11.11
Purchaser      Introductory Paragraph Purchaser Consents      9.2 Purchaser
Indemnified Parties      14.2 Restricted Parties      11.4(a) SEC      9.4(a)
SEC Financial Statements      9.4(b) SEC Reports      9.4(a) Seller     
Introductory Paragraph Seller Consents      7.2 Seller Disclosure Schedule     
Article VII Seller Distribution      7.10 Seller Indemnified Parties      14.1
Shares      6.2 Termination Date      13.1(c) Transition Services Agreement     
4.1

 

Article II

Asset Purchase

 

Section 2.1 Purchase and Sale. Upon and subject to the terms and conditions
hereof, at the Closing, Seller shall sell, transfer and assign to Purchaser, and
Purchaser shall purchase and acquire from Seller, all right, title and interest
in and to the following assets and rights owned by Seller as of the date of this
Agreement or the Closing Date (such assets, collectively, the “Assets”),
including without limitation those items set forth in Schedule 2.1:

 

(a) All Seller Tissue Factor Antagonists;

 

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(b) All Seller Tissue Factor Antagonist Know-How;

 

(c) All Assigned Patent Rights and all patent files and all correspondence or
other documents related to the Assigned Patent Rights, including all
correspondence of patent attorneys (U.S. or foreign) working on behalf of Seller
regarding such Assigned Patent Rights (which files, correspondence and documents
may be redacted by Seller to remove information not related to the Assigned
Patent Rights or the Program);

 

(d) All consents, permits, licenses, approvals, orders or authorizations of, or
registration, declarations or filings, with any Governmental Authority,
including without limitation all Regulatory Applications and Regulatory
Approvals, that are primarily related to any Tissue Factor Antagonist, in each
event, to the extent that the foregoing are transferable by Seller to Purchaser;

 

(e) All pre-clinical and clinical and/or regulatory materials that are primarily
related to the Tissue Factor Antagonists, including toxicological,
pharmacological, statistical or clinical study designs, protocols, investigator
brochures, documentation, raw data, batch records, data tables, data files and
summaries, including without limitation all reports or summaries of all data,
records and documents resulting from pre-clinical studies or clinical trials,
with respect to any Tissue Factor Antagonist, which results from or arises out
of research studies, clinical or non-clinical studies conducted with respect to
any Tissue Factor Antagonist by or on behalf of or in conjunction with Seller;

 

(f) All of Seller’s rights in, to and under the Assumed Contracts and the
benefits of the Confidentiality Agreements (as set forth in Section 11.8,
below), it being acknowledged by Purchaser that (i) with respect to any Assumed
Contract which is not a Material Assumed Contract and for which any Seller
Consent is required for the assignment of such Assumed Contract to Purchaser,
then the inclusion of such Assumed Contract in the Assets shall be subject to
obtaining such Seller Consent, which Seller shall use commercially reasonable
efforts to obtain, and (ii) with respect to any Assumed Contract which
constitutes an Active Clinical Trial Agreement, Seller’s rights in, to and under
such Assumed Contract shall not be transferred to Purchaser until such time as
Purchaser has effectuated the transfer of the Investigational New Drug
application, or otherwise filed a new application, pursuant to Section 11.7,
below;

 

(g) All books, files, papers, correspondence, databases, information systems,
programs, software, documents, records and documentation thereof primarily
related to any of the Assets, or primarily used in the conduct of the Program,
on whatever medium, except generally and commercially available information
systems, programs and documents;

 

(h) All original laboratory notebooks and reports solely related to research,
development, manufacture or commercialization by or on behalf of Seller of any
Tissue Factor Antagonist, Seller Tissue Factor Antagonist Know-How or other
Asset, and copies of those pages of all other laboratory notebooks and reports
that primarily relate to the research, development, manufacture or
commercialization of any Tissue Factor Antagonist, Tissue Factor Antagonist
Know-How or other Asset, in each case, whether such research, development,
manufacture or commercialization, as applicable, was conducted in-house or by a
Third Party in collaboration with Seller; and

 

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(i) Subject to Section 11.9, all milestone, royalty, or other similar payments
due or payable to Seller as of the Closing Date or thereafter relating to the
licensing of any of the Assigned Patent Rights, Seller Tissue Factor Antagonist,
or any Tissue Factor Antagonist Know-How (to the extent that such payments are
due or payable in connection with the research, development, or
commercialization of Tissue Factor Antagonists).

 

Section 2.2 No Encumbrances. Seller shall deliver good and valid title to the
Assets to Purchaser, free and clear of any lien, pledge, hypothecation, charge
or other security interest at the time of transfer.

 

Section 2.3 Materials Under Assumed Contracts. Upon assignment of an Assumed
Contract to Purchaser hereunder, Seller shall provide to Purchaser copies of
those books, files, documents, records, laboratory notebooks, databases,
reports, and other documentation and materials (if any) that embody the Tissue
Factor Antagonists and/or Tissue Factor Antagonist Know-How (if any) in Seller’s
possession that were licensed to Seller under such Assumed Contract.

 

Section 2.4 Costs. All costs associated with the transfer of possession,
delivery, preparation and assignment of the Assets to Purchaser shall be borne
by Seller, excluding the following costs, which shall be borne by Purchaser: (a)
those costs described in Section 11.1, (b) those costs described in Schedule 2.4
or in the Side Letter, and (c) any other costs that the Parties, prior to the
Closing Date, mutually agree in writing shall be borne by Purchaser.

 

Section 2.5 No Assumed Liabilities. Purchaser shall not assume nor shall
Purchaser be deemed to have assumed or be liable or responsible for any
Liability of Seller or any Affiliate of Seller, except that Purchaser shall
assume all Liabilities accruing on or after the Closing Date under the Assumed
Contracts.

 

Section 2.6 Excluded Assets. Seller does not, and shall not, sell, transfer or
assign any assets to Purchaser other than the Assets. Without limiting the
foregoing, Seller does not, and shall not, sell, transfer or assign to Purchaser
any Excluded Assets.

 

Article III

Grant of Licenses

 

Section 3.1 Grant of License. Seller hereby grants to Purchaser, effective as of
the Closing Date, a royalty-free, perpetual and non-exclusive license (subject
to the Field Restrictions) under the Nonexclusively Licensed Patent Rights to
research, develop, manufacture, commercialize and/or otherwise use the Tissue
Factor Antagonists and other Assets transferred by Seller to Purchaser hereunder
and for no other purpose (the foregoing license, the “License”), and to assign
or sublicense such License to any Third Party. Such License shall remain in full
force and effect until the expiration of the last to expire of any issued and
valid patent comprising a Nonexclusively Licensed Patent Right.

 

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Section 3.2 Patent Filings. Seller will have exclusive responsibility for the
preparation, filing, prosecution and maintenance of the Nonexclusively Licensed
Patent Rights. Should Seller wish to abandon or otherwise abbreviate the term of
any Nonexclusively Licensed Patent Right, Seller shall provide Purchaser with
written notice of its intention at least sixty (60) days prior to said
abandonment or termination, so that Purchaser may, in its sole discretion,
assume the responsibility for the preparation, filing, prosecution and
maintenance, as applicable, of such particular Patent Right, in which event
Seller shall reasonably cooperate with Purchaser in such preparation, filing,
prosecution and maintenance at its own expense.

 

Section 3.3 Dow Agreement. In consideration for the grant of license to
Purchaser under Section 3.1, Purchaser hereby grants to Seller, effective as of
the date on which Seller obtains The Dow Chemical Company’s consent to provide
Purchaser with the reports described in Section 11.9 below, a royalty-free,
non-exclusive, assignable (to Altor), and sublicensable license to make, have
made or use the hOAT Antibody (as defined in the Dow Agreement) for the sole
purpose of exercising the rights and performing the obligations of Seller under
the Dow Agreement. Upon the earlier of the completion of the studies
contemplated by the Dow Agreement or the expiration or termination of the Dow
Agreement, the license under this Section 3.3 shall immediately terminate and be
of no further force and effect.

 

Section 3.4 Cross-Licenses to Certain Know-How.

 

(a) License to Purchaser Under Certain Tissue Factor Antagonist Know-How. Seller
hereby grants, and agrees to grant, to Purchaser, effective as of the Closing
Date, a perpetual, irrevocable, worldwide, non-exclusive, fully-paid up, royalty
free, non-transferable (except as set forth in Section 15.2) license, with the
right to sublicense in accordance with Section 3.4(c) below, to make and have
made, use, sell, offer to sell, or import, reproduce, distribute, display and
otherwise make available (subject to Section 3.4(c)), prepare derivatives based
upon and otherwise modify, and otherwise practice, commercialize and exploit (in
connection with research and development activities, products, services or
otherwise), Licensed Tissue Factor Antagonist Know-How, solely for purposes of
the design, research, development, manufacture, operation, clinical testing,
commercialization, sale and/or other use of Tissue Factor Antagonists. After the
Closing Date, in conjunction with the delivery of Assets to Purchaser hereunder,
Seller shall provide to Purchaser copies of books, files, documents, records,
laboratory notebooks, databases, reports, and other documentation and materials
embodying any Licensed Tissue Factor Antagonist Know-How.

 

(b) License to Seller Under Seller Tissue Factor Antagonist Know-How. Purchaser
hereby grants, and agrees to grant, to Seller, effective as of the Closing Date,
a perpetual, irrevocable, worldwide, non-exclusive, fully-paid up, royalty free,
non-transferable (except as set forth in Section 15.2) license, with the right
to sublicense in accordance with Section 3.4(c) below, to make and have made,
use, sell, offer to sell, or import, reproduce, distribute, display and
otherwise make available (subject to Section 3.4(c)), prepare derivatives based
upon and otherwise modify, and otherwise practice, commercialize and exploit (in
connection with research and development activities, products, services or
otherwise), the Seller Tissue Factor Antagonist Know-How (other than Seller
Tissue Factor Antagonist Know-How that is related solely to the Tissue Factor
Antagonists), solely outside of the field of Tissue Factor Antagonists. Seller
may retain copies of books, files, documents, records, laboratory notebooks,

 

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databases, reports, and other documentation and materials embodying any Seller
Tissue Factor Antagonist Know-How (other than Seller Tissue Factor Antagonist
Know-How that is related solely to the Tissue Factor Antagonists).

 

(c) Sublicense Rights. Each of Seller and Purchaser may sublicense the rights
granted to it in Sections 3.4(a) and 3.4(b), as applicable, to Affiliates and
Third Parties, provided that each such Third Party or Affiliate, as applicable,
is bound in writing by confidentiality obligations with respect to the other
Party’s Confidential Information that are no less restrictive than the
confidentiality obligations of this Agreement.

 

Article IV

Transition Services

 

Section 4.1 Transition Services. Following the Closing Date, Seller shall
perform certain transition services for Purchaser as generally described, and
for the consideration set forth, in the form of transition services agreement
attached hereto as Exhibit E hereof (the “Transition Services Agreement”).

 

Section 4.2 License-Back to Seller. Purchaser hereby grants to Seller, effective
as of the Closing Date, a royalty-free, non-exclusive, non-sublicensable license
to make, have made, use, import, research and develop the Assets solely for
purposes of performing its obligations under the Transition Services Agreement.

 

Article V

Closing and Closing Deliveries

 

Section 5.1 Closing; Time and Place. The closing of the Transaction (the
“Closing”) shall occur at the offices of Morrison & Foerster LLP, New York, New
York, at 10:00 A.M. local time on the day on which all of the conditions to
closing set forth in Article XII are satisfied or waived (other than conditions
that are intended to be satisfied at the Closing), which the Parties hereto
intend shall be March 31, 2005, or at such other date, time or place as the
Parties may agree (the “Closing Date”).

 

Section 5.2 Deliveries by Seller. At the Closing, Seller shall (i) take all
steps necessary to place Purchaser in actual possession and operating control of
the Program and the Assets, except to the extent Purchaser and Seller shall have
agreed to a transition plan for transferring such Assets, in which case, Seller
shall comply with such plan, and (ii) deliver the following items, duly executed
by Seller as applicable, all of which shall be in a form and substance
reasonably acceptable to Purchaser and Purchaser’s counsel:

 

(a) Bill of Sale and Assignment and Assumption Agreement. Bill of Sale and
Assignment and Assumption Agreement covering all of the applicable Assets,
substantially in the form attached hereto as Exhibit C (the “Bill of Sale and
Assignment and Assumption Agreement”);

 

(b) Patents. Patent assignment covering all Assigned Patent Rights, in the form
of Exhibit D hereto;

 

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(c) Documents of Title. Documents of title relating to the Assets, if any;

 

(d) Certificate of Representations and Warranties and Shareholder Approval. A
Certificate executed on behalf of Seller by its President, certifying (i) the
matters in Section 12.1(a) and (ii) that the shareholders of Seller have
approved or are not required to approve this Agreement and the Transaction in
accordance with Section 12.1(f);

 

(e) Consents. Subject to Section 2.1(f), above, and Section 11.11, below, all
Seller Consents;

 

(f) Other Agreements. Each of the Ancillary Agreements and the Transition
Services Agreement;

 

(g) Certified Organizational Documents and Resolutions. Certified copies of (1)
the certificate of incorporation and bylaws of Seller and (2) the resolutions of
the Board of Directors of Seller and, if required, the Shareholders of Seller
ratifying, approving and consenting to the execution of this Agreement and the
Ancillary Agreements by Seller and the consummation of the Transaction;

 

(h) Certificate of Good Standing. Seller’s certificate of good standing in the
State of Delaware; and

 

(i) Further Assurances. Such other certificates, instruments or documents
required pursuant to the provisions of this Agreement or otherwise necessary to
transfer the Assets (in each case in a form reasonably required and requested in
writing by Purchaser) duly executed by the appropriate Parties in accordance
with the terms hereof to consummate the Transaction, and to vest in Purchaser
and its successors and assigns full, complete, absolute, legal and equitable
title to the Assets and rights to the licenses described in Article III, free
and clear of any lien, pledge, hypothecation, charge, or other security
interest. Seller shall take (or cause to be taken) reasonable steps necessary to
deliver the Assets to Purchaser.

 

Section 5.3 Deliveries by Purchaser. At the Closing, Purchaser shall deliver to
Seller (except as otherwise provided below) the following items, duly executed
by Purchaser as applicable, all of which shall be in a form and substance
reasonably acceptable to Seller and Seller’s counsel:

 

(a) Cash Purchase Price. The Cash Purchase Price in immediately available funds
by wire transfer in accordance with Section 6.1.

 

(b) Share Certificates. One share certificate to Seller for the Closing Shares,
and one share certificate to the Escrow Agent (as defined below) for the
Holdback Shares;

 

(c) Certificate of Representations and Warranties. A Certificate executed on
behalf of Purchaser by its President, certifying the matters in Section 12.2(a);

 

(d) Other Agreements. Each of the Ancillary Agreements and the Transition
Services Agreement;

 

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(e) Certified Organizational Documents and Resolutions. Certified copies of (1)
the certificate of incorporation and bylaws of Purchaser and (2) the resolutions
of the Board of Directors of Purchaser and, if required, the shareholders
ratifying, approving and consenting to the execution of this Agreement and the
Ancillary Agreements by Purchaser and the consummation of the Transaction;

 

(f) Consents. All Purchaser Consents;

 

(g) Certificate of Good Standing. Purchaser’s certificate of good standing in
the State of Delaware; and

 

(h) Further Assurances. Such other certificates, instruments or documents
required pursuant to the provisions of this Agreement or otherwise necessary to
vest in Seller and its successors and assigns full, complete, absolute, legal
and equitable right to the licenses described in Article III, free and clear of
any lien, pledge, hypothecation, charge, or other security interest.

 

Article VI

Consideration for Transfer

 

Subject to the terms and conditions of this Agreement, as full consideration for
(i) the sale, assignment, transfer and delivery of the Assets by Seller to
Purchaser and (ii) the license granted by Seller to Purchaser under Section 3.1
and Section 3.4(a), Purchaser shall deliver to Seller the amounts and shares set
forth in this Article VI.

 

Section 6.1 Initial Payment. Subject to the terms and conditions of this
Agreement, Purchaser shall pay to Seller, on the Closing Date, Six Million
Dollars ($6,000,000) (“Cash Purchase Price”) in immediately available funds,
wired to an account designated by Seller in writing at least one business day
prior to the Closing

 

Section 6.2 Equity Issuance. Purchaser shall deliver to Seller at the Closing a
certificate representing Five Hundred Twenty-Five Thousand (525,000) shares (the
“Closing Shares” and, together with the Holdback Shares, the “Shares”) of the
Purchaser’s Common Stock, $.01 par value (“Common Stock”). As security for the
indemnification obligations of Seller set forth in this Agreement, at the
Closing, Purchaser shall place in escrow with Wells Fargo, National Association
(the “Escrow Agent”), a certificate representing Two Hundred Seventy Five
Thousand (275,000) shares of Common Stock (collectively, the “Holdback Shares”),
naming Seller as the holder of the Holdback Shares. The Holdback Shares shall be
delivered by the Purchaser to the Escrow Agent at the Closing, shall be held by
the Escrow Agent pursuant to the terms of the Escrow Agreement, and shall be
delivered by the Escrow Agent in accordance with the terms and provisions of the
Escrow Agreement.

 

Section 6.3 Royalties. Purchaser shall pay royalties to Seller on Net Sales of
Product sold for the treatment of any of the Indications, in the amount of 1% on
that portion of such Net Sales that exceeds One Hundred Million Dollars
($100,000,000) but is less than Five Hundred Million Dollars ($500,000,000) in
any calendar year, and 2% on that portion of such Net Sales that equals or
exceeds Five Hundred Million Dollars ($500,000,000) in any calendar year.
Purchaser shall use commercially reasonable efforts to accurately track the
indications for which Products are sold.

 

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(a) Reports; Payments. Purchaser shall deliver to Seller, within sixty (60) days
after the end of each calendar quarter, reasonably detailed written accountings
of Net Sales of Products for the Indications that are subject to royalty
obligations to Seller under this Section 6.3 for such calendar quarter. Such
quarterly reports shall indicate (x) Net Sales for treatment of the Indications
on a Product-by-Product basis and (y) the calculation of royalties owed to
Seller from such Net Sales. Such written accounting shall also be accompanied by
the related royalty payment. In addition to and without limiting the foregoing,
Purchaser shall deliver to Seller, within sixty (60) days after the end of each
calendar year during which any Products are sold, a reasonably detailed written
accounting of Net Sales of Products for the Indications during such calendar
year, irrespective of whether such Net Sales are subject to royalty obligations
to Seller under this Section 6.3 for such calendar year.

 

(b) Records and Audits. Purchaser shall keep, and shall require its Affiliates
and its and its Affiliates’ sublicensees to keep, complete and accurate records
for at least four (4) years from the date of the transactions underlying such
records relating to Net Sales of Products and other information relevant to
calculating payments owed to Seller hereunder. For the sole purpose of verifying
payments paid or payable to Seller, Seller shall have the right no more than
once each calendar year at Seller’s expense to retain an independent certified
public accountant selected by Seller and reasonably acceptable to Purchaser, to
review such records in the location(s) where such records are maintained by
Purchaser, its Affiliates or its sublicensees upon reasonable notice and during
regular business hours and under obligations of confidence. For purposes of this
Section 6.3 (b), Seller’s regular audit accountants are not deemed acceptable to
Purchaser. The accountant’s determination of whether the payments made to Seller
were accurate and/or whether additional amounts are payable to Seller shall be
made available to Seller. If the review reflects an underpayment to Seller, such
underpayment shall be promptly remitted to Seller. If the underpayment is equal
to or greater than ten percent (10%) of the royalties that were otherwise due
under this Section 6.3, Purchaser shall pay all of the reasonable costs of such
review, plus interest as described in clause (d) below. If the review reflects
an overpayment to Seller, the amount of such overpayment shall be promptly
refunded to Purchaser by Seller.

 

(c) Currency. All dollar ($) amounts specified in this Agreement are United
States dollar amounts

 

(d) Late Payments. If any payments due to Seller are not made on or before the
specified due date, Purchaser shall pay interest on the outstanding amounts
until paid in full, to the extent permitted by applicable law, in an amount
equal to the average of the prime rate, as reported by The Wall Street Journal
(Western Edition) over the period during which such payment is overdue, plus
three percent (3%)

 

(e) Currency and Method of Translation. All payments under this Agreement shall
be made in United States dollars by transfer to such bank account as Seller may
designate from time to time. Any royalties due hereunder with respect to amounts
in currencies other than United States dollars shall be payable in their United
States dollar equivalents. The United States

 

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dollar equivalent shall be calculated for each currency using the foreign
exchange rates that are used in the then Purchaser’s official currency
conversion system, which system is qualified under GAAP and used regularly by
Purchaser in similar agreements with third parties and explained in reasonable
detail to Seller.

 

(f) Tax Withholding. The Parties shall use all commercially reasonable and legal
efforts to reduce tax withholding on payments made to Seller under this
Agreement. Despite such efforts, if tax withholdings under the laws of any
country are required with respect to payments to Seller, Purchaser may withhold
the required amount and pay it to the appropriate Governmental Authority. In
such a case, Purchaser shall promptly provide Seller with receipts to allow
Seller to document such tax withholdings for purposes of claiming foreign tax
credits and similar benefits.

 

(g) Blocked Payments. In the event that, by reason of applicable laws or
regulations in any country, it becomes impossible or illegal for Purchaser or
its Affiliates or its or its Affiliates’ sublicensees to transfer, or have
transferred on its behalf, royalties or other payments to Seller, such royalties
or other payments shall be deposited in local currency in the relevant country
to the credit of Seller in a recognized banking institution designated by Seller
or, if none is designated by Seller within a period of thirty (30) days, in a
recognized banking institution selected by Purchaser or its Affiliates or
sublicensees, as the case may be, and identified in a notice in writing given to
Seller.

 

Article VII

Representations and Warranties of Seller

 

Except as specifically set forth on Schedule VII (the “Seller Disclosure
Schedule”) attached hereto (the parts of which are numbered to correspond to the
individual section numbers of this Article VII), Seller represents and warrants
to Purchaser as follows:

 

Section 7.1 Authority; Binding Obligation. Seller is a corporation duly
organized and validly existing under the laws of its jurisdiction of
incorporation and has full right, power and authority to execute and deliver
this Agreement, the Ancillary Agreements, the Side Letter, and the Transition
Services Agreement, and to perform its obligations hereunder and thereunder.
Except as set forth in Section 7.1 of the Seller Disclosure Schedule, the
execution, delivery and performance by Seller of this Agreement, the Side
Letter, and the Ancillary Agreements, and the consummation by Seller of the
Transaction, have been duly and validly authorized by all necessary corporate
action on the part of Seller, including any required vote of stockholders. Each
of this Agreement and the Side Letter has been executed and delivered by Seller
and constitutes a legal, valid and binding obligation of Seller enforceable
against Seller in accordance with its terms; and each of the Ancillary
Agreements, and the Transition Services Agreement, when executed and delivered
by Seller, shall constitute a legal, valid and binding obligation of Seller
enforceable against Seller in accordance with its terms.

 

Section 7.2 Consents. Except as set forth in Section 7.2 of the Seller
Disclosure Schedule, all necessary permits, consents, approvals and
authorizations of all Governmental Authorities and other Persons required to be
obtained by Seller in connection with its execution, delivery and performance of
this Agreement and the Ancillary Agreements, including for the sale, transfer
and assignment of the Assets to Purchaser (“Seller Consents”), have been
obtained.

 

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Section 7.3 Noncontravention. Neither the execution and delivery by Seller of
this Agreement or the Ancillary Agreements, nor the consummation by Seller of
the transactions contemplated hereby or thereby, will:

 

(a) conflict with or violate any Legal Requirement;

 

(b) conflict with any provision of the articles or certificate of incorporation
or by-laws of Seller; or

 

(c) except as set forth in Section 7.3(c) of the Seller Disclosure Schedule,
conflict with, result in a breach of, constitute (with or without due notice or
lapse of time or both) a default under, result in the acceleration of
obligations under, create in any Person the right to terminate, modify or
cancel, or require notice, consent or waiver under any Assumed Contract.

 

Section 7.4 Intellectual Property.

 

(a) Schedule 1.3 lists all Patent Rights that are owned by Seller and describe
or claim Tissue Factor Antagonists. There are no Patent Rights of which Seller
is aware that describe or claim Tissue Factor Antagonists, which Patent Rights
are not owned by Seller but are Controlled by Seller.

 

(b) Each item of Assigned Patent Rights and Nonexclusively Licensed Patent
Rights (i) has been duly filed and is in full force and effect and (ii) has not
been abandoned or passed into the public domain. Except as set forth in Section
7.4(b) of the Seller Disclosure Schedule, each item of Assigned Patent Rights is
free and clear of any Encumbrances.

 

(c) The Assigned Patent Rights and Nonexclusively Licensed Patent Rights
constitute all of the Patent Rights owned by Seller that are used in, intended
for use in or necessary to conduct the Program as it is currently conducted.

 

(d) [THIS SECTION INTENTIONALLY LEFT BLANK]

 

(e) Each item of Assigned Patent Rights was created solely by employees of
Seller acting within the scope of their employment, all of which employees have
validly and irrevocably assigned all of their rights to Seller, or was acquired
by way of transfer or assignment to Seller from a Third Party. Except as set
forth in Section 7.4(e) of the Seller Disclosure Schedule, no Third Party owns
or has any rights to any Assigned Patent Rights.

 

(f) In each case in which Seller has acquired by way of transfer or assignment
any Assigned Patent Rights from any Person, Seller has obtained an enforceable
assignment sufficient to irrevocably transfer all rights in such Assigned Patent
Rights (including the right to seek past and future damages with respect
thereto) to Seller. Except as set forth in Section 7.4(f) of the Seller
Disclosure Schedule, no Person has ownership rights or license rights to
improvements made by Seller in any Assigned Patent Rights. Except as described
in Section 7.4(f) of the Seller Disclosure Schedule, Seller has not transferred
ownership of, or granted any license of or right to use, or authorized the
retention of any rights to use or joint ownership of, any Assigned Patent Rights
to any Person.

 

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(g) Seller has, to its knowledge, taken all reasonably necessary action to
maintain (i) and, to its knowledge and in its reasonable judgment, taken all
reasonable necessary action to protect, the Assigned Patent Rights and
Nonexclusively Licensed Patent Rights, and (ii) and protect the secrecy and
confidential nature of Confidential Information related to the Seller Tissue
Factor Antagonists, the Seller Tissue Factor Antagonist Know-How and the
Licensed Tissue Factor Antagonist Know-How, which Confidential Information
belongs to Seller or belongs to Third Parties and with respect to which Seller
owes a duty of confidentiality; in each event, except where failure to take such
action, individually or in the aggregate with other items, would not be
reasonably expected to have a Material Adverse Effect. Seller has and enforces a
policy requiring all current and former employees, consultants and contractors
of Seller to execute appropriate confidentiality and assignment agreements, and
all current and former employees and consultants of Seller, and all other
individuals and entities that have had authorized access to any such
Confidential Information, have executed documents that expressly obligate
confidentiality and non-use. A copy of the forms of confidentiality, assignment
and non-competition agreement which Seller has entered into with its employees,
consultants and contractors is attached as Schedule 7.4(g). To the knowledge of
Seller, there has been no violation or unauthorized disclosure or use of any
such Confidential Information.

 

(h) Except as set forth in Section 7.4(h) of the Seller Disclosure Schedule,
Seller has the full right and power to grant the license set forth in Section
3.1 and Purchaser shall have no Liability to any Third Party specifically on
account of the license under the Nonexclusively Licensed Patent Rights.

 

(i) [THIS SECTION INTENTIONALLY LEFT BLANK]

 

(j) [THIS SECTION INTENTIONALLY LEFT BLANK]

 

(k) To the knowledge of Seller, no Asset is or has been subject to any
Proceeding or any outstanding decree, order, judgment, office action or
settlement agreement or stipulation that restricts in any manner the use,
transfer or licensing thereof by Seller or that may affect the validity, use or
enforceability of such Asset (except to the extent that a pending patent
application is subject to a review by the competent authorities in connection
therewith). There are no interference action Proceedings pending, or any written
communication that threatens an interference action, or other Proceeding (not
including any office action or responses thereto or any Proceedings involving
the FDA in the ordinary course), before any patent and trademark office or any
Government Authority in any jurisdiction in regard to any Assigned Patent Rights
or, to the knowledge of Seller, any Seller Tissue Factor Antagonist Know-How or
Licensed Tissue Factor Antagonist Know-How.

 

(l) [THIS SECTION INTENTIONALLY LEFT BLANK]

 

(m) Except as set forth in Section 7.4(m) of the Seller Disclosure Schedule,
neither this Agreement nor the Transaction, including any assignment to
Purchaser under this Agreement, by operation of law or otherwise, will result in
(i) Purchaser granting to any Third

 

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Party any right to, or with respect to, any Assets, which are owned by, or
licensed to, Purchaser; (ii) Purchaser being bound by, or subject to, any
non-compete or other restriction on the operation or scope of its businesses,
including the Program; or (iii) Purchaser being obligated to pay any royalties
or other amounts to any Third Party.

 

(n) Except as set forth in Section 7.4(n) of the Seller Disclosure Schedule,
Seller is the true and lawful owner, and has good title to, all of the Assets,
free and clear of all Encumbrances, and has the right to assign, transfer and
convey the Assets to Purchaser in accordance with the terms of this Agreement.

 

(o) Seller does not own any trademarks, trade dress, or copyrights, or any
applications for any of the foregoing, in each event that are related to the
Tissue Factor Antagonists.

 

(p) The Seller Tissue Factor Antagonists constitute all Tissue Factor
Antagonists which are used or are held for use by or for Seller as of the
Effective Date or thereafter (but prior to or on the Closing Date).

 

(q) The Seller Tissue Factor Antagonist Know-How, the Licensed Tissue Factor
Antagonist Know-How and Tissue Factor Antagonist Know-How licensed by Seller
pursuant to the Contracts, constitute, collectively, all Tissue Factor
Antagonist Know-How which is used or is held for use by or for Seller as of the
Effective Date or thereafter (but prior to or on the Closing Date) for the
design, research, development, manufacture, operation, clinical testing,
commercialization, sale and/or other use of any Tissue Factor Antagonist
(excluding any Tissue Factor Antagonist Know-How licensed to Seller in
connection with reagents purchased in the ordinary course of business by Seller
for use in connection with the Program or under any other generally-available
software contracts).

 

(r) To the knowledge of Seller, Seller has not received any notice under any
Contract which constitutes a research or other collaborative agreement that the
other party to such Contract has developed an invention under such Contract for
which Seller would have ownership or license rights under such Contract.

 

Section 7.5 Regulatory Authority Interactions.

 

(a) All Regulatory Applications or Regulatory Approvals or permits that are
owned, filed or applied for by Seller and which are necessary and material for
Seller’s activities to date relating to the research, development, manufacture,
commercialization and/or other use of Tissue Factor Antagonists are set forth on
Schedule 7.5. There are no audit reports, warning letters, or notices of adverse
findings, from Regulatory Authorities or other Third Parties relating to any
Regulatory Application or Regulatory Approval with respect to any Tissue Factor
Antagonist. Seller has made available to Purchaser true and correct copies of
all written communications by or on behalf of or at the request of Seller with
the FDA and all other Regulatory Authorities with respect to any Tissue Factor
Antagonist, as well as copies of any notes relative to oral discussions. To
Seller’s knowledge, no Third Party that conducted preclinical or clinical
studies on Seller’s behalf has made, without Seller’s permission or request, any
filings with the FDA or any other Regulatory Authority with respect to any
Tissue Factor Antagonist.

 

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(b) To Seller’s knowledge, neither Seller nor any Third Party manufacturer of
clinical supplies of Tissue Factor Antagonist has received notice of, or is
subject to, any adverse inspection, finding of deficiency or non-compliance,
compelled or voluntary recall, investigation, penalty for corrective or remedial
action or other compliance or enforcement action by a Regulatory Authority or
other Governmental Authority, in each case relating to any Tissue Factor
Antagonist.

 

(c) To Seller’s knowledge, no clinical investigator acting for Seller with
respect to the Program has been or is now, or is threatened to become, the
subject of any disbarment or disqualification proceedings by any Regulatory
Authority.

 

Section 7.6 Compliance with Laws. Seller is and at all times has been in
compliance in all material respects with all Legal Requirements related to the
research, development, and/or manufacture of any Tissue Factor Antagonists by or
for Seller. Without limiting the foregoing, all investigative trials and
manufacturing activities with respect to any Tissue Factor Antagonists have been
performed by or, to Seller’s knowledge, for, Seller in accordance with Good
Practices.

 

Section 7.7 Assumed Contracts.

 

(a) Schedule 7.7(a) sets forth an accurate and complete list of all Contracts.

 

(b) Seller has delivered to Purchaser true and correct copies of all Contracts,
including all amendments, supplements, modifications and waivers thereof (except
for those Contracts marked with an asterisk (*) in Schedule 7.7(a)).

 

(c) Each Assumed Contract is currently valid and in full force and effect, and
is enforceable by Seller in accordance with its terms, except as may be limited
by bankruptcy, insolvency, reorganization, moratorium and other similar laws and
equitable principles related to or limiting creditors’ rights generally and by
general principles of equity.

 

(d) Seller is not in default, and no Person has notified Seller that it is in
default, under any Assumed Contract. To the knowledge of Seller, no event has
occurred, and no circumstance or condition exists, that would reasonably be
expected (with or without notice or lapse of time) to (i) result in a violation
or breach of any of the provisions of any Assumed Contract, (ii) give any Person
the right to declare a default or exercise any remedy under any Assumed
Contract, or (iii) give any Person the right to accelerate the maturity or
performance of any Assumed Contract or to cancel, terminate or modify any
Assumed Contract, except as set forth in Section 7.7(d) of the Seller Disclosure
Schedule. Seller has not waived any of its rights under any Assumed Contract.

 

(e) To Seller’s knowledge, each Person against which Seller has or may acquire
any rights under any Assumed Contract is (i) solvent and (ii) able to satisfy
such Person’s material obligations and liabilities to Seller.

 

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(f) The performance of the Assumed Contracts will not result in any violation of
or failure by Seller to comply with Legal Requirements.

 

Section 7.8 Exports and Customs. To Seller’s knowledge, Seller’s transfer,
conveyance or assignment of any Assets hereunder is not restricted by government
regulations relating to exports or customs that would otherwise prevent or
materially limit the licenses and transfers granted and made hereunder. Seller
is in compliance with applicable export and customs statutes, rules and
regulations of the United States and any other applicable Governmental Authority
relating to the Assets.

 

Section 7.9 Brokers. Seller has not agreed or become obligated to pay, or taken
any action that might result in any Third Party claiming to be entitled to
receive, any brokerage commission, finder’s fee or similar commission or fee in
connection with entering into this Agreement or consummating the Transaction.

 

Section 7.10 Purchase Entirely for Own Account. Except for the contemplated
distribution of the Shares to be received in the Transaction to the Shareholders
(the “Seller Distribution”), Seller is acquiring the Shares to be received in
the Transaction for investment for Seller’s own account, not as a nominee or
agent and not with a view to the resale or distribution of any part thereof.

 

Section 7.11 Disclosure of Information. Seller has received all the information
from Purchaser which it considers necessary or appropriate for deciding whether
to obtain the Shares as consideration in this Transaction. Seller has had an
opportunity to ask questions and receive answers from Purchaser regarding the
Shares and the business, properties, prospects and financial condition of
Purchaser. To the knowledge of Seller, in connection with the Seller
Distribution, Seller has provided to all of the Shareholders all of the
information required to be provided under any Legal Requirement.

 

Section 7.12 Investment Experience. Seller acknowledges that Seller is able to
fend for itself, can bear the economic risk of owning the Shares, and has such
knowledge and experience in financial or business matters that it is capable of
evaluating the merits and risks of owning the Shares. Seller acknowledges and
has informed each Shareholder that ownership of the Shares involves a high
degree of risk and that Seller and each Shareholder must be able, without
materially impairing its financial condition, to hold the Shares for an
indefinite period of time and to suffer a complete loss of its investment.

 

Section 7.13 Accredited Investors. Seller and each of the Shareholders that are
receiving Shares is an “accredited investor” within the meaning of Rule 501 of
Regulation D promulgated under the Securities Act.

 

Section 7.14 Restricted Securities. Seller understands and has informed each
Shareholder that the Shares are characterized as “restricted securities” under
the federal securities laws in that they are being acquired from Purchaser in a
transaction not involving a public offering and that under such laws and
applicable regulations such Shares may not be resold without registration under
the Securities Act except in certain limited circumstances. In this connection,
Seller is familiar with Rule 144 promulgated under the Securities Act, as

 

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presently in effect, and understands the resale limitations imposed thereby and
by the Securities Act. SELLER UNDERSTANDS AND ACKNOWLEDGES HEREIN AND HAS
INFORMED EACH SHAREHOLDER THAT IS RECEIVING SHARES (AS DEFINED) THAT AN
INVESTMENT IN THE SHARES INVOLVES AN EXTREMELY HIGH DEGREE OF RISK AND MAY
RESULT IN A COMPLETE LOSS OF ITS INVESTMENT. Seller understands and has informed
each Shareholder that, except as set forth in the Stockholder and Registration
Rights Agreement, the Shares have not been and will not be registered under the
Securities Act and have not been and will not be registered or qualified in any
state in which they are offered, and thus Seller will not be able to resell or
otherwise transfer the Shares unless they are registered under the Securities
Act and registered or qualified under applicable state securities laws, or an
exemption from such registration or qualification is available. Seller has
informed each Shareholder that such Shareholder will have no immediate liquidity
in connection with this investment.

 

Section 7.15 Further Limitations on Disposition. Without in any way limiting the
representations set forth above, Seller further agrees not to make any
distribution or disposition of all or any portion of the Shares to the
Shareholders or otherwise unless and until the transferee has agreed in writing
for the benefit of Purchaser to be bound by Section 7.14, and:

 

(a) There is then in effect a registration statement under the Securities Act
covering such proposed disposition and such disposition is made in accordance
with such registration statement; or

 

(b) Seller shall have notified Purchaser of the proposed distribution or other
disposition and shall have furnished Purchaser with an opinion of counsel
reasonably satisfactory to Purchaser that such distribution or other disposition
will not require registration under the Securities Act.

 

Section 7.16 Legends. It is understood that the certificates evidencing the
Shares may bear one or all of the following legends:

 

(a) “THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN
THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES
UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT.”

 

(b) Any legend required by the Bylaws of the Purchaser or applicable state
securities laws.

 

Section 7.17 Reliance by Purchaser. Seller understands that the representations,
warranties, covenants and acknowledgments set forth in this Article VII
constitute a material inducement to Purchaser to enter into this Agreement.

 

CONFIDENTIAL

 

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Section 7.18 No Reliance on Others. Seller acknowledges that it is not relying
upon any person, firm or corporation, other than Seller and its officers and
directors, in making its decision to enter into this Agreement, including the
investment in Purchaser’s Common Stock.

 

Section 7.19 Solvency. Seller is not entering into the Transaction with the
intent to hinder, delay or defraud any Person to which it is, or may become,
indebted. Seller’s assets, at a fair valuation, exceed its liabilities, and
Seller will continue to be able after the Closing of the Transaction to meet its
debts as they mature and will not become insolvent as a result of the
Transaction or the Seller Distribution.

 

Section 7.20 Absence of Certain Changes or Events. Except as set forth in
Section 7.20 of the Seller Disclosure Schedule, or except as expressly
contemplated by this Agreement, since December 22, 2004 Seller has not suffered
a Material Adverse Effect with respect to the Program and has conducted the
Program in the ordinary course and Seller has not, with respect to the Program:
(a) sold, assigned, gifted, leased, subleased, granted any licenses to, or
waived any material rights with respect to, any properties or assets necessary
for the conduct of or used in the Program, other than in the ordinary course of
business; (b) entered into, terminated or amended any Assumed Contract, other
than in the ordinary course of business; (c) agreed, whether in writing or
otherwise, to do any of the foregoing, except in the ordinary course of business
or as expressly contemplated by this Agreement.

 

Article VIII

Representations and Warranties of Altor

 

Altor represents and warrants to Purchaser that each of the following statements
are true and accurate as of date hereof and as of the Closing Date:

 

Section 8.1 Authority; Binding Obligation. Altor is a corporation duly organized
and validly existing under the laws of its jurisdiction of incorporation and has
full right, power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. The execution, delivery and performance by
Altor of this Agreement, and the performance by Altor of its obligations
hereunder, have been duly and validly authorized by all necessary corporate
action on the part Altor. This Agreement has been executed and delivered by
Altor and constitutes a legal, valid and binding obligation of Altor enforceable
against Altor in accordance with its terms.

 

Section 8.2 Noncontravention. Neither the execution and delivery by Altor of
this Agreement nor the performance by Altor of its obligations hereunder, will:

 

(a) conflict with or violate any Legal Requirement;

 

(b) conflict with any provision of the articles or certificate of incorporation
or by-laws of Altor; or

 

(c) conflict with, result in a breach of, constitute (with or without due notice
or lapse of time or both) a default under, result in the acceleration of
obligations under, create in any Person the right to terminate, modify or
cancel, or require any notice, consent or waiver under any material contract or
instrument to which Altor is a party or by which Altor is bound.

 

CONFIDENTIAL

 

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Article IX

Representations and Warranties of Purchaser

 

Purchaser represents and warrants to Seller and Altor that each of the following
statements are true and accurate as of date hereof and as of the Closing Date:

 

Section 9.1 Authority; Binding Obligation. Purchaser is a corporation duly
organized and validly existing under the laws of its jurisdiction of
incorporation and has full right, power and authority to execute and deliver
this Agreement, the Side Letter, the Ancillary Agreements, and the Transition
Services Agreement and to perform its obligations hereunder and thereunder. The
execution, delivery and performance by Purchaser of this Agreement, the Side
Letter, and the Ancillary Agreements, and the consummation by Purchaser of the
Transaction, have been duly and validly authorized by all necessary corporate
action on the part of Purchaser. Each of this Agreement and the Side Letter has
been executed and delivered by Purchaser and constitutes a legal, valid and
binding obligation of Purchaser enforceable against Purchaser in accordance with
its terms; and each of the Ancillary Agreements, and the Transition Services
Agreement, when executed and delivered by Purchaser, shall constitute a legal,
valid and binding obligation of Purchaser enforceable against Purchaser in
accordance with its terms.

 

Section 9.2 Consents. All necessary permits, consents, approvals and
authorizations of all Governmental Authorities and other Persons required to be
obtained by Purchaser in connection with its execution, delivery and performance
of this Agreement and the Ancillary Agreements (“Purchaser Consents”) have been
obtained.

 

Section 9.3 Noncontravention. Neither the execution and delivery by Purchaser of
this Agreement or the Ancillary Agreements, nor the consummation by Purchaser of
the transactions contemplated hereby or thereby, will:

 

(a) conflict with or violate any Legal Requirement;

 

(b) conflict with any provision of the articles or certificate of incorporation
or by-laws of Purchaser; or

 

(c) conflict with, result in a breach of, constitute (with or without due notice
or lapse of time or both) a default under, result in acceleration of obligations
under, create in any Person the right to terminate, modify or cancel, or require
any notice, consent or waiver under, any material contract or instrument to
which Purchaser is a party or by which Purchaser is bound.

 

Section 9.4 SEC Filings; Financial Statements.

 

(a) Purchaser has filed all periodic reports required to be filed with the
Securities and Exchange Commission (“SEC”) under the Securities Exchange Act of
1934 for the fiscal year ended December 31, 2004 and thereafter (collectively,
the “SEC Reports”), each of which, as amended, complied as to form in all
material respects with the applicable requirements of the Securities Exchange
Act of 1934 and the rules and regulations promulgated thereunder, as in effect
on the date so filed.

 

CONFIDENTIAL

 

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(b) The consolidated financial statements of Purchaser (including any related
notes thereto) included in the SEC Reports (the “SEC Financial Statements”),
fairly present in all material respects the consolidated financial position of
Purchaser and its consolidated subsidiaries as of the dates thereof and the
consolidated results of their operations, changes in stockholders’ equity and
cash flows for the respective periods set forth therein, in each case in
accordance with GAAP applied on a basis consistent with prior periods (except,
in the case of unaudited consolidated statements, (i) as permitted by Form 10-Q
of the SEC, (ii) as may be indicated in footnotes thereto or in the SEC Reports,
(iii) as may be subject to normal and recurring year-end adjustments, or (iv)
the absence of notes that, if presented, would not differ materially from the
notes included in the immediately preceding year-end financial statements).

 

Section 9.5 Brokers. Purchaser has not agreed or become obligated to pay, or
taken any action that might result in any Third Party claiming to be entitled to
receive, any brokerage commission, finder’s fee or similar commission or fee in
connection with entering into this Agreement or consummating the Transaction.

 

Section 9.6 Capitalization. As of March 2, 2005, the authorized capital stock of
the Purchaser consists of 120,000,000 shares of Common Stock, of which
44,000,398 shares are issued and outstanding and 10,000,000 shares of preferred
stock, $0.01 par value per share, none of which are issued and outstanding. As
of the date hereof and other than as described in the financial statements and
the notes thereto included in the Purchaser’s Annual Report on Form 10-K for the
year ended December 31, 2003, as filed with the SEC, or except as may be issued
in accordance with the Purchaser’s stock option plans, there are no outstanding
warrants, options or other rights to purchase or acquire any of the authorized
capital of the Purchaser. The Shares to be issued as contemplated by this
Agreement will, upon such issuance, be duly authorized, validly issued, fully
paid and non-assessable and not subject to any Encumbrances or preemptive
rights.

 

Article X

Disclaimer of Warranties

 

Section 10.1 Disclaimer of Warranties. EXCEPT AS EXPRESSLY PROVIDED FOR IN THIS
AGREEMENT OR THE SIDE LETTER, NEITHER PARTY MAKES, AND EACH PARTY HEREBY
DISCLAIMS, ANY AND ALL REPRESENTATIONS AND WARRANTIES OF ANY KIND, EXPRESS OR
IMPLIED, WITH RESPECT OT THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING,
WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE AND NONINFRINGEMENT AND ANY WARRANTY ARISING OUT OF PRIOR COURSE OF
DEALING AND USAGE OF TRADE.

 

Article XI

Certain Additional Covenants

 

Section 11.1 Cooperation. After the Closing, upon the request of Purchaser and
at Purchaser’s expense, Seller shall (i) execute and deliver any and all further
materials, documents and instruments of conveyance and assignment as may
reasonably be requested by Purchaser to effect, record or verify the transfer
to, and vesting in, Purchaser of Seller’s right, title and interest

 

CONFIDENTIAL

 

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in and to the Assets, free and clear of all liens, pledges, hypothecations,
charges and other security interests, in accordance with the terms of this
Agreement and (ii) cooperate with Purchaser to enforce the terms of any Assumed
Contracts and Confidentiality Agreements, including terms relating to
confidentiality and intellectual property rights. After the Closing, Seller
shall promptly deliver to Purchaser (i) any mail, packages and other
communications addressed to Seller and relating to the Program or the Assets,
(ii) any cash or other property that Seller receives that is payable to
Purchaser as set forth in Section 2.1(i), and (iii) any cash or other property
that Seller receives pursuant to the BioCryst Agreement for any Materials (as
defined in the BioCryst Agreement) supplied by Seller to BioCryst under such
BioCryst Agreement solely in the event, and only to the extent, such Materials
are used by BioCryst to research and develop Tissue Factor Antagonist; in each
case, provided that Seller shall have no obligation to actively collect any such
cash or property. After the Closing, Seller shall cooperate with Purchaser, upon
the request of Purchaser and at Purchaser’s expense, to provide Purchaser with
the benefits owed to Seller under the Confidentiality Agreements.

 

Section 11.2 Non-Disclosure. Following the Closing Date, all Assets shall be
deemed, for purposes of this Section 11.2 and Section 11.3, below, to be
Confidential Information of Purchaser, and Seller shall be deemed the receiving
party with respect thereto, provided that an Asset will not be deemed to be
Confidential Information if such Asset (i) is lawfully disclosed to Seller after
the Closing Date by another source rightfully in possession of, and with the
right to disclose, such Asset (provided that such source did not have a
confidentiality obligation to Seller on or prior to the Closing Date with
respect to such Confidential Information); or (ii) becomes published or
generally known to the public (including information known to the public through
the sale of any Tissue Factor Antagonist in the ordinary course of business)
through no fault or omission on the part of Seller or its Affiliates. After the
Closing Date, and except to the extent necessary to perform the transitional
services for Purchaser pursuant to the Transition Services Agreement and as
permitted under Section 3.4(b), neither Seller nor Altor nor any of their
successors and assigns shall (a) retain any document, databases or other media
embodying any Confidential Information which constitutes a part of the Assets or
use, publish or disclose to any Third Party any such Confidential Information
(provided that notwithstanding the foregoing, Seller and Altor shall be entitled
to retain one (1) copy of the foregoing Confidential Information for
administrative and legal purposes), nor (b) use, publish or disclose any
Confidential Information concerning Purchaser or its Affiliates. In the event of
any termination of this Agreement, (i) each Party shall treat as confidential
and shall not disclose or use, directly or indirectly, or permit others under
its control to disclose or to use, any Confidential Information concerning the
other Party or its business or products, which Confidential Information was
obtained pursuant to or in connection with the negotiation of this Agreement,
unless such information is or becomes a matter of public knowledge through no
fault of the receiving Party or can be shown to have been in its possession
prior to disclosure by the disclosing Party and (ii) the receiving Party shall
promptly return to the disclosing Party, upon written request, all written
information and documents received from the disclosing Party, its affiliates,
accountants or counsel, including all copies thereof. The Parties acknowledge
that, in the event of breach or threatened breach of the covenants in this
Section 11.2, the damage or imminent damage to the value and the goodwill of the
disclosing Party, particularly of the Purchaser and the Program, will be
irreparable and extremely difficult to estimate, making any remedy at law or in
damages inadequate. Accordingly, the Parties agree, in addition to any other
remedies available, injunctive relief may be granted for any such breach. The
provisions of this Section 11.2 shall survive any termination of this Agreement.

 

CONFIDENTIAL

 

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Section 11.3 Confidential Information. “Confidential Information” shall mean all
confidential and/or proprietary information of a Party, including without
limitation Know-How and information derived from reports, investigations,
research, work in progress, codes, marketing and sales programs, financial
projections, cost summaries, pricing formula, contract analyses, financial
information, projections, confidential filings with any state or federal agency,
and all other confidential concepts, methods of doing business, ideas, materials
or information prepared or performed for, by or on behalf of such Person by its
employees, officers, directors, agents, representatives, or consultants.
Information shall not be deemed Confidential Information hereunder if it (i) was
known by the receiving Party prior to its date of disclosure by the disclosing
Party (provided that, with respect to the Assets, the “date of disclosure” by
Purchaser shall be deemed to be the date the Confidential Information was first
identified or created by Seller); (ii) either before or after the date of the
disclosure by the disclosing Party is lawfully disclosed to the receiving Party
by other sources rightfully in possession of, and with the right to disclose,
the Confidential Information; (iii) either before or after the date of the
disclosure by the disclosing Party, becomes published or generally known to the
public (including information known to the public through the sale of any Tissue
Factor Antagonist in the ordinary course of business) through no fault or
omission on the part of the receiving Party; or (iv) is independently developed
by or for the receiving Party without reference to or reliance upon the
Confidential Information.

 

Section 11.4 Non-Compete Agreement.

 

(a) After the Closing Date, and except as provided pursuant to Section 3.3
hereof or to the extent necessary to perform the transitional services for
Purchaser pursuant to the Transition Services Agreement, Seller and Altor agree,
for a period of seven (7) years following the Closing Date, that neither they
nor their Affiliates (collectively, the “Restricted Parties”) shall directly or
indirectly engage in the research, development, manufacture, or
commercialization of any Tissue Factor Antagonist (the “Competitive Activity”);
provided, however, that it shall not be a violation of this Section 11.4(a) for
a Restricted Party to (i) own any debt securities or other debt obligations
(other than convertible debt) of any Person, (ii) invest in securities
representing less than five percent (5%) of the outstanding capital stock of any
Person, the securities of which are publicly traded or listed on any securities
exchange or automated quotation system, or (iii) be employed by or be an officer
of any Person that is not significantly engaged in a Competitive Activity
(provided that the Restricted Party does not participate in the Competitive
Activity). For purposes of this Section 11.4, “significantly engaged in a
Competitive Activity” shall mean that at least 10% of the consolidated net
revenue derived during the last complete fiscal year of the Person is derived
from a Competitive Activity.

 

(b) The Parties hereto agree that the covenants set forth in this Section 11.4
shall be enforced to the fullest extent permissible under applicable Legal
Requirements. If all or any part of this Section 11.4 is held invalid, illegal
or incapable of being enforced by any Legal Requirement or public policy, all
other terms and provisions of this Agreement shall nevertheless remain in full
force and effect. Seller agrees that in the event of a breach or threatened
breach by it or any of the Restricted Parties of the provisions of this Section
11.4, money damages would

 

CONFIDENTIAL

 

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not be an adequate remedy and that Purchaser shall be entitled to seek
temporary, preliminary or permanent injunctive relief without the necessity of
posting a bond. If any part of this Section 11.4 is held to be excessively broad
as to duration, scope, activity or subject, such part will be construed by
limiting and reducing it so as to be enforceable to the maximum extent
compatible with applicable Legal Requirements.

 

Section 11.5 Covenants of Seller Prior to Closing. During the period from the
date of this Agreement and continuing until the earlier of the termination of
this Agreement and the Closing Date, except as otherwise consented to or
approved by Purchaser in writing, Seller covenants and agrees that:

 

(a) Seller shall provide Purchaser and its representatives full access to all
Assets, including without limitation the records relating to the ongoing
clinical study of cH36 for Acute Lung Injury (“ALI Study”); shall use
commercially reasonable efforts to maintain good relationships with licensors,
suppliers, employees, clinical sites and others having business dealings with
Seller, and shall make appropriate introductions at Seller’s various clinical
sites so as to facilitate a swift and orderly transition of the ALI Study to
Purchaser as soon as practicable following the Closing Date;

 

(b) Seller shall not transfer, assign, dispose of or otherwise create any liens,
pledges, hypothecations, charges or other security interests on any Assets;

 

(c) Seller shall cause the Assets to be maintained, preserved and operated in
the ordinary course of business in accordance with past practices, maintain
insurance now in force with respect to the Assets and such activities, and pay
or cause to be paid all costs and expenses with respect thereto;

 

(d) Seller shall continue to conduct the Program, including without limitation
the ALI Study, in the ordinary course of business;

 

(e) Seller shall perform its obligations under the Assumed Contracts and shall
not enter into any new Contract, or amend any Assumed Contract, related to
Tissue Factor Antagonists or the other Assets without prior written consent of
Purchaser; and

 

(f) Seller shall maintain and, in its reasonable judgment, protect all of the
Assigned Patent Rights.

 

Section 11.6 Existence of Seller. Seller agrees to maintain its corporate
existence and agrees not to take any action to approve or effect a dissolution
before the later of the Release Date or the resolution of any Purchaser Claims
under the Escrow Agreement.

 

Section 11.7 Transfer of IND to Purchaser. On the Closing Date, Seller shall
deliver to the FDA a notice of Investigational New Drug application transfer,
and to Health Canada, a comparable notice, each in the forms set forth on
Schedule 11.7 hereof, with respect to the clinical trials identified on such
Schedule, and Seller shall otherwise use commercially reasonable efforts, at
Purchaser’s expense, to assist Purchaser in effecting the transfer to Purchaser
of any Investigational New Drug applications that are part of the Assets (or to
otherwise apply for appropriate Investigational New Drug application(s) in its
own name in order

 

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to operate or assume the Assets), including by obtaining any approval, consent,
order, registration, license or other authorization from any applicable
Regulatory Authorities necessary to effect such transfer. From and after receipt
by the FDA of such notice, Purchaser shall assume responsibility as sponsor for
such clinical trials.

 

Section 11.8 Enforcement of Confidentiality Agreements. Following the Closing
Date, Seller will take reasonable measures to enforce for the benefit of
Purchaser the Confidentiality Agreements, as well as Contracts that do not
constitute Assumed Contracts and that have been fully performed other than
surviving confidentiality obligations, at Purchaser’s request and Purchaser’s
sole expense.

 

Section 11.9 Dow Reports. Seller agrees to provide to Purchaser, to the extent
it is entitled to do so, a copy of each report delivered to or received from The
Dow Chemical Company pursuant to the Dow Agreement reflecting the results of the
collaboration contemplated by the Dow Agreement. Purchaser hereby acknowledges
and agrees that Purchaser shall not be entitled to any payments payable to
Seller under the Dow Agreement.

 

Section 11.10 Altor Transfer. Contemporaneously with the consummation of the
Altor Transfer, Seller shall assign to Altor, and Altor shall assume, all or, as
appropriate, part of Seller’s rights and obligations under each of Sections 3.1,
3.2, 3.3, 3.4, 4.1, 4.2, and 11.9 of this Agreement and under the Transition
Services Agreement.

 

Section 11.11 Nonassignable Contract. Nothing in this Agreement, nor the
consummation of the transactions contemplated hereby, shall be construed as an
attempt or agreement to assign or transfer any Assumed Contract to Purchaser
which by its terms is nonassignable without the consent of a Third Party (a
“Nonassignable Contract”), unless and until such consent shall have been
obtained. From and after the Closing Date, Seller shall use commercially
reasonable efforts and shall cooperate with Purchaser to the extent reasonably
requested by Purchaser to obtain any such consents, and, to the extent that such
consents are not so obtained, use commercially reasonable efforts to provide
Purchaser with the benefits of such Nonassignable Contracts under reasonable and
lawful arrangements, as well as, to the extent necessary and to the extent
related to the Program, the benefits of the Alabama Agreement. Notwithstanding
anything to the contrary contained in this Agreement, to the extent that such
consents are not obtained, or the benefits of such Nonassignable Contracts are
not provided to Purchaser, Purchaser shall have no obligations with respect
thereto.

 

Section 11.12 No Diligence Obligation. Seller expressly acknowledges that,
following the Closing, Purchaser shall have no obligation to develop or
commercialize any Product. Even if Purchaser determines to develop one or more
Products, it shall have no obligation to develop or continue developing any such
Product for one or more Indications. Purchaser shall have no obligation to
deliver any reports to Seller regarding Purchaser’s development or
commercialization efforts, or lack thereof, with respect to any Product.

 

CONFIDENTIAL

 

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Article XII

Conditions to Closing

 

Section 12.1 Conditions to Purchaser’s Obligation to Close. The obligations of
Purchaser to consummate the Transaction shall be subject to the satisfaction, on
or prior to the Closing Date, of each of the following conditions, any of which
may be waived by Purchaser in writing:

 

(a) Representations, Warranties and Covenants. (i) Each of the representations
and warranties of the Seller contained in this Agreement shall be true and
correct when made and true and correct in all material respects (except to the
extent such representation is qualified by materiality in which case it shall be
true and correct in all respects) as of the Closing Date, as if made on and as
of such time, except that those representations and warranties which address
matters only as of a particular date shall remain true and correct as of such
date, and (ii) Seller shall have performed, in all material respects, all
covenants and obligations in this Agreement required to be performed by Seller
as of the Closing Date (except for covenants and obligations qualified by
materiality, which shall have been performed in all respects in accordance with
this Agreement), and, in the case of clauses (i) and (ii) above, Purchaser shall
have received a certificate of the President of the Seller to such effect;

 

(b) Condition of Program and Assets. The Program and the Assets shall not have
been adversely affected in any material way by any act of God, fire, flood,
accident, war, labor disturbance, legal requirement (proposed or enacted), or
other event or occurrence, whether or not covered by insurance;

 

(c) Deliveries. Seller shall have delivered to Purchaser all of the documents
and agreements set forth in Section 5.2;

 

(d) Consents. Subject to Section 2.1(f), above, Seller shall have delivered to
Purchaser all Seller Consents other than those which have been waived by
Purchaser;

 

(e) Encumbrances. All liens, pledges, hypothecations, charges and other security
interests, if any, with respect to the Assets shall be discharged;

 

(f) Shareholder Approval. To the extent required under applicable Legal
Requirements or the certificate of incorporation, bylaws or other organizational
documents of Seller, this Agreement and the consummation of the Transaction
shall have been approved and adopted by the requisite vote of the shareholders
of Seller; and

 

(g) No Legal Impediments. Since the date of this Agreement, there shall not have
been commenced or threatened any Proceeding seeking damages or other relief in
connection with the Transaction or that may have the effect of preventing,
delaying, making illegal, imposing limitations or conditions on, interfering
with the Transaction.

 

Section 12.2 Conditions to Seller’s Obligation to Close. The obligations of
Seller to consummate the Transaction shall be subject to the satisfaction, on or
prior to the Closing Date, of each of the following conditions, any of which may
be waived by Seller in writing:

 

(a) Representations, Warranties and Covenants. (i) Each of the representations
and warranties of the Purchaser contained in this Agreement shall be true and
correct when made and true and correct in all material respects (except to the
extent such representation is qualified

 

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by materiality in which case it shall be true and correct in all respects) as of
the Closing Date, as if made on and as of such time, except that those
representations and warranties which address matters only as of a particular
date shall remain true and correct as of such date, and (ii) Purchaser shall
have performed, in all material respects, all covenants and obligations in this
Agreement required to be performed by Purchaser as of the Closing Date (except
for covenants and obligations qualified by materiality, which shall have been
performed in all respects in accordance with this Agreement), and, in the case
of clauses (i) and (ii) above, Seller shall have received a certificate of the
President of the Purchaser to such effect;

 

(b) Wire Transfer. Purchaser shall have wire transferred the Cash Purchase Price
in accordance with Section 6.1.

 

(c) Deliveries. Purchaser shall have delivered to Seller all of the documents
and agreements set forth in Section 5.3;

 

(d) No Legal Impediments. Since the date of this Agreement, there shall not have
been commenced or threatened any Proceeding seeking damages or other relief in
connection with the Transaction or that may have the effect of preventing,
delaying, making illegal, imposing limitations or conditions on, interfering
with the Transaction; and

 

(e) Consents. Purchaser shall have delivered to Seller all Purchaser Consents.

 

Article XIII

Termination

 

Section 13.1 Termination. This Agreement may be terminated at any time prior to
Closing:

 

(a) By mutual consent of the Parties in a written instrument.

 

(b) By either Purchaser or Seller (provided that the terminating Party is not
then in material breach of any representation, warranty, covenant or other
agreement contained herein), if there has been a material breach on the part of
the other Party of any representation, warranty or agreement contained herein
which cannot be or has not been cured within thirty (30) days after written
notice of such breach by the terminating Party to the Party in breach;

 

(c) At the election of Purchaser or Seller, if the Closing shall not have
occurred on or before April 15, 2005 (the “Termination Date”), or such later
date as shall have been agreed to in writing by Purchaser and Seller; provided,
that no Party may terminate this Agreement pursuant to this Section 13.1(c) if
the failure of the Closing to have occurred on or before said date was due to
such Party’s breach of any of its obligations under this Agreement.

 

Section 13.2 Effect of Termination. In the event of termination of this
Agreement and abandonment of the Transaction as provided in Section 13.1, this
Agreement shall forthwith terminate and there shall be no liability or
obligation on the part of Purchaser or Seller or their respective officers or
directors, except that (i) the provisions of Sections 11.2 and 11.3 shall
survive such termination of this Agreement and remain in full force and effect
and (ii) notwithstanding anything to the contrary contained in this Agreement,
each Party shall remain

 

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liable (in an action at law or otherwise) for any liabilities or damages arising
out of material breach of any of its representations, warranties, covenants or
agreements set forth in this Agreement.

 

Article XIV

Indemnification

 

Section 14.1 Purchaser. Purchaser shall defend, indemnify and hold harmless
Seller, its Affiliates and its and its Affiliates’ directors, officers,
employees, consultants and agents (the “Seller Indemnified Parties”) from and
against any losses, costs, damages, fees or expenses (“Losses”) arising out of
or related to (a) a breach by Purchaser of any of its representations,
warranties or obligations pursuant to this Agreement, the Side Letter or any
Ancillary Agreement, (b) except to the extent Seller has an obligation to
indemnify Purchaser as set forth in Section 14.2(a) below (or Seller would have
had an obligation to indemnify Purchaser as set forth in Section 14.2(a) below
but for Section 14.6), relating to the infringement by Purchaser, its Affiliates
or its sublicensees, or licensees of any Third Party intellectual property
rights in the course of Purchaser’s research, development, manufacture,
commercialization and/or other use of any Assets after the Closing Date, (c)
personal injury, death, product liability, unfair competition, antitrust
violation, false advertising, misrepresentation, or property damage arising out
of the research, development, manufacture, commercialization and/or other use of
any Assets by Purchaser, its Affiliates, subcontractors or sublicensees, or (d)
any Liabilities accruing or arising under the Assumed Contracts after the
Closing Date.

 

Section 14.2 Seller. Seller shall defend, indemnify and hold harmless Purchaser,
its Affiliates, and its or its Affiliates’ directors, officers, employees,
consultants and agents (the “Purchaser Indemnified Parties”), from and against
any Losses arising out of or related to (a) a breach by Seller or Altor of any
of its representations, warranties or obligations pursuant to this Agreement,
the Side Letter, or any Ancillary Agreement, (b) any Liabilities accruing or
arising under any Assumed Contracts before the Closing Date, (c) any Liabilities
relating to any Excluded Assets, including any Contracts that are not Assumed
Contracts, or (e) the Seller Distribution.

 

Section 14.3 Indemnification Claims. The indemnified Party hereunder shall give
prompt written notification to the indemnifying Party of the commencement of any
Third Party claim brought against such indemnified Party for which
indemnification may be sought under Section 14.1 or 14.2, as applicable. The
indemnified Party may, in its discretion and at its sole expense, assume control
of the defense of such claim and its settlement with counsel reasonably
satisfactory to the indemnifying Party; provided, however, that the indemnifying
Party shall not agree to any settlement of, or the entry of any judgment arising
from, any claim without the prior written consent of the indemnified Party,
which shall not be unreasonably withheld, conditioned or delayed. The
indemnified Party shall cooperate with the indemnifying Party and may, at its
own option and expense, participate in such defense.

 

Section 14.4 Remedies. Any indemnification obligations of the Seller under
Section 14.2 shall be, subject to Section 14.5, below, satisfied by the delivery
of Shares to Purchaser or the disbursement of Holdback Shares to Purchaser as
provided in the Escrow Agreement. The number of Shares or Holdback Shares to be
delivered or disbursed to Purchaser

 

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shall be as calculated under the Escrow Agreement. The payment of such
indemnification obligations in Shares shall be delivered to Purchaser, and the
payment of indemnification obligations in Holdback Shares shall be disbursed in
accordance with the Escrow Agreement.

 

Section 14.5 Limitation of Liability.

 

(a) Prior to the Seller Distribution, the Seller shall have no liability to
Purchaser or any other Purchaser Indemnified Party with respect to Losses
described in Section 14.2 other than the Shares and the Cash Purchase Price.

 

(b) After the Seller Distribution, the Seller shall have no liability to
Purchaser or any other Purchaser Indemnified Party with respect to Losses
described in Section 14.2 other than the Holdback Shares.

 

(c) Notwithstanding anything herein to the contrary, neither Seller nor
Purchaser shall be obligated to indemnify any party under this Article XIV,
unless the aggregate of all Losses of the Purchaser Indemnified Parties or the
Seller Indemnified Parties, as the case may be, exceed Fifty Thousand Dollars
($50,000) (the “Indemnity Basket”), in which case the amount of Losses the
Purchaser Indemnified Parties or the Seller Indemnified Parties, as applicable,
shall be entitled to recover, subject to Section 14.4, above, and paragraphs (a)
and (b), above, of this Section 14.5, shall be all such Losses, including the
amount of the Indemnity Basket.

 

Section 14.6 Survival and Time Limitation. The representations, warranties,
covenants, and agreements made herein and in the Side Letter shall survive the
Closing, but such representations and warranties of the Parties shall terminate
as of the Release Date. After Closing, any assertion by a Party that another
Party is liable for indemnification under the terms of this Agreement or the
transactions contemplated in this Agreement must be made in writing and must be
given to the other Party on or prior to the Release Date (or not at all).

 

Section 14.7 Releases, Disclaimers, and Limitations on Liability. ALL
INDEMNITIES IN THIS ARTICLE XIV SHALL APPLY EVEN IN THE EVENT OF THE SOLE,
JOINT, AND/OR CONCURRENT NEGLIGENCE, STRICT LIABILITY, OR OTHER FAULT OF SELLER,
THE SELLER INDEMNIFIED PARTIES, PURCHASER OR THE PURCHASER INDEMNIFIED PARTIES.

 

Article XV

Miscellaneous Provisions

 

Section 15.1 Governing Law. This Agreement will be governed by and interpreted
in accordance with the laws of Delaware, without reference to conflicts of law
principles.

 

Section 15.2 Assignment. Neither Party may assign this Agreement, in whole or in
part, without the other Parties’ prior written consent, except that Purchaser
may assign its rights hereunder (a) to an Affiliate or (b) in connection with a
merger, acquisition or sale of all or substantially all of the business to which
the subject matter of this Agreement pertains, and Seller may assign its rights
and/or obligations to Altor as provided in Section 11.10. This Agreement shall
bind and inure to the benefit of each Party’s permitted successor and assigns.

 

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Section 15.3 Entire Agreement; Amendments. This Agreement (including all
Exhibits and Schedules hereto), the Side Letter, the Ancillary Agreements, and
the Transition Services Agreement, constitute the entire agreement between the
Parties with respect to the subject matter hereof, and supersede all previous
arrangements with respect to the subject matter hereof, whether written or oral.
Any amendment or modification to this Agreement shall be made in writing signed
by all the Parties.

 

Section 15.4 Notices. Any notice required or provided for by the terms of this
Agreement shall be in writing and shall be (a) sent by registered or certified
mail, return receipt requested, postage prepaid, (b) sent via a reputable
overnight or international express courier service, (c) sent by facsimile
transmission, or (d) personally delivered, in each case to the Party to which it
is directed at its address shown below. The effective date of notice shall be
the actual date of receipt by the Party receiving such notice.

 

If to Seller:

Sunol Molecular Corporation

2810 North Commerce Parkway

Miramar, FL 33025-3958

Attention: Hing C. Wong, Ph.D.

Facsimile No.: (954) 443-8610

  

            With a copy to:

            Morrison & Foerster LLP

            425 Market Street

            San Francisco, CA 94105-2482

            Attention: Bruce Mann, Esq.

            Facsimile No.: (415) 268-7522

If to Altor:

Altor Bioscience Corporation

2810 North Commerce Parkway

Miramar. Florida 33025-3958

Attention: Hing C. Wong. Ph.D.

Facsimile No.: (954) 443-8610

  

            With copy to:

            Morrison & Foerster LLP

            425 Market Street

            San Francisco, CA 94105-2482

            Attention: Bruce Mann, Esq.

            Facsimile No.: (415) 268-7522

If to Purchaser:

Tanox, Inc.

10301 Stella Link

Houston, Texas 77025

Attention: President

Facsimile No.: (713) 578-5000

  

            With a copy to:

            Tanox, Inc.

            10301 Stella Link

            Houston, Texas 77025

            Attention: General Counsel

            Facsimile No.: (713) 578-5000

 

Any Party may change its address by giving notice to the other Party in the
manner provided in this Section.

 

Section 15.5 Further Assurances. Each of the Parties agrees to execute,
acknowledge and deliver such further instruments, and to do all such other
reasonable acts, as may be necessary or appropriate in order to carry out the
purposes and intent of this Agreement, including without limitation, and as
provided in Sections 11.7, 11.8 and 11.11, above, cooperating with any other
party in the other Party’s efforts to obtain required Seller Consents or
Purchaser Consents and/or Regulatory Approvals from Regulatory Authorities.

 

Section 15.6 Force Majeure. No failure or omission by any Party in the
performance of any of its obligations under this Agreement, excluding payment
obligations, shall be deemed a

 

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breach of this Agreement by such Party or create any liability of such Party if
such failure or omission arises from any cause or causes beyond the control of
such Party, including without limitation, the following force majeure events:
acts of God; acts of terrorism; acts or omissions of any government; any rules,
regulations or orders issued by any Governmental Authority or Regulatory
Authority; fire; storm; flood; earthquake; accident; war; rebellion;
insurrection; riot; and invasion; provided that such failure or omission
resulting from one of the above causes is cured as soon as is practicable after
the occurrence of one or more of the above-mentioned causes. The Party claiming
force majeure shall notify the other Parties of the force majeure event as soon
as practicable, but in no event longer than ten (10) business days after its
occurrence, which notice shall reasonably identify such obligations under this
Agreement and the extent to which performance thereof will be affected. In such
event, the Parties shall meet promptly to determine an equitable solution to the
effects of any such event.

 

Section 15.7 Public Announcements. Except to the extent required by Legal
Requirements, none of the Parties shall disclose any terms or conditions of this
Agreement to any Third Party without the prior written consent of the other
Parties; provided that the Parties may describe the terms of this transaction to
the extent consistent with any press release approved by the Parties in writing.
Notwithstanding anything to this Agreement to the contrary, and, subject to
applicable Legal Requirements, Purchaser, its Affiliates, and its Affiliates’
sublicensees shall not refer publicly to Seller or Altor (including their
employees, agents, boards members and officers) by name or in any form of
promotion or in connection with the sale of Tissue Factor Antagonists without
the prior written consent of such Party.

 

Section 15.8 No Strict Construction. This Agreement has been prepared jointly
and shall not be strictly construed against any Party.

 

Section 15.9 Headings. The captions or headings of the sections or other
subdivisions hereof are inserted only as a matter of convenience or for
reference and shall have no effect on the meaning of the provisions hereof.

 

Section 15.10 No Implied Waivers; Rights Cumulative. No failure on the part of
any Party to exercise, and no delay in exercising, any right, power, remedy or
privilege under this Agreement, or provided by statute or at law or in equity or
otherwise, shall impair, prejudice or constitute a waiver of any such right,
power, remedy or privilege or be construed as a waiver of any breach of this
Agreement or as an acquiescence therein, nor shall any single or partial
exercise of any such right, power, remedy or privilege preclude any other or
further exercise thereof or the exercise of any other right, power, remedy or
privilege.

 

Section 15.11 Severability. If any provision hereof should be held invalid,
illegal or unenforceable in any respect in any jurisdiction, then, to the
fullest extent permitted by law, (a) all other provisions hereof shall remain in
full force and effect in such jurisdiction and shall be liberally construed in
order to carry out the intentions of the Parties as nearly as may be possible
and (b) such invalidity, illegality or unenforceability shall not affect the
validity legality or enforceability of such provision in any other jurisdiction.
To the extent permitted by applicable law, Seller, Altor and Purchaser hereby
waive any provision of law that would render any provision hereof prohibited or
unenforceable in any respect.

 

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Section 15.12 Execution in Counterparts. This Agreement may be executed in
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original, and all of which counterparts, taken together,
shall constitute one and the same instrument.

 

Section 15.13 No Third Party Beneficiaries. No Person other than Seller,
Purchaser and their respective Affiliates and permitted assignees hereunder
shall be deemed an intended beneficiary hereunder or have any right to enforce
any obligation of this Agreement.

 

Section 15.14 Sections and Articles Binding Altor. Notwithstanding any other
provision of this Agreement, Altor shall only be deemed to be bound to this
Agreement with respect to the following Sections and Articles hereof: Sections
11.2, 11.3, 11.4, and 11.10, Articles VIII, IX and XV and, to the extent Seller
assigns and Altor assumes rights and obligations pursuant to Section 11.10
above, Sections 3.1, 3.2, 3.3, 3.4, 4.1, 4.2, and/or 11.9 above.

 

[Remainder of This Page Intentionally Left Blank.]

 

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

 

SUNOL MOLECULAR CORPORATION By:  

/s/ Hing C. Wong

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

Name:   Hing C. Wong, Ph.D. Title:   Chairman and CEO TANOX, INC. By:  

/s/ Nancy T. Chang

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

Name:   Nancy T. Chang, Ph.D. Title:   President and CEO ALTOR BIOSCIENCE
CORPORATION By:  

/s/ Hing C. Wong

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

Name:   Hing C. Wong, Ph.D. Title:   President and CEO