Exhibit 10.2

AGREEMENT AND PLAN OF MERGER
by and among:
Ligand Pharmaceuticals Incorporated,
a Delaware corporation;

Taurus Acquisition Merger Sub, LLC,
a Delaware limited liability company;

Taurus Biosciences, LLC,
a Delaware limited liability company; and

The Other Signatories Hereto
___________________________
Dated as of September 9, 2020
___________________________

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TABLE OF CONTENTS
ARTICLE 1 CERTAIN DEFINITIONS      2
ARTICLE 2 THE MERGER; EFFECTIVE TIME     8
Section 2.1 Merger of Merger Sub into the Company    8
Section 2.2 Effect of the Merger       8
Section 2.3 Effective Time        9
Section 2.4 Certificate of Formation and Limited Liability Company Agreement;
Officers and Manager       9
Section 2.5 Closing         9
Section 2.6 Closing Deliveries       10
Section 2.7 Conversion of Company Interests     12
Section 2.8 Closing of the Company’s Transfer Books    13
Section 2.9 Exchange Procedures       13
Section 2.10 Holdback Distribution(s)      14
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE MEMBERS  14
Section 3.1 Ownership        14
Section 3.2 Authority; Non-Contravention      14
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY  15
Section 4.1 Organization, Standing and Power     15
Section 4.2 Capitalization        16
Section 4.3 Authority; Non-contravention; Voting Requirements   16
Section 4.4 Governmental Approvals      17
Section 4.5 Liabilities        17
Section 4.6 Legal Proceedings       17
Section 4.7 Compliance With Legal Requirements; Governmental Authorizations 18
Section 4.8 Bank Accounts; Powers of Attorney     18
Section 4.9 Tax Matters        18
Section 4.10 Employee Benefits and Labor Matters     19
Section 4.11 Contracts        20
Section 4.12 Environmental Matters       21
Section 4.13 Intellectual Property       21
Section 4.14 Assets         23
Section 4.15 Real Property        24
Section 4.16 Insurance        24
Section 4.17 Certain Business Relationships with Affiliates    24
Section 4.18 Products and Services       24
Section 4.19 Ordinary Course       24
Section 4.20 Brokers and Other Advisors      25
Section 4.21 State Takeover Statutes       25
Section 4.22 Bad Actor        25
Section 4.23 Disclosure        25
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB         25
Section 5.1 Organization and Standing      25
Section 5.2 Authority; Non-contravention      26
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Section 5.3 Ownership and Operations of Merger Sub    26
Section 5.4 Governmental Approvals      26
Section 5.5 Legal Proceedings       26
ARTICLE 6 COVENANTS; OTHER MATTERS      27
Section 6.1 Filings; Other Action       27
Section 6.2 Publicity        27
Section 6.3 Indemnification of D&O Indemnified Parties    28
Section 6.4 Further Assurances       28
Section 6.5 Post-Closing Confidentiality      28
Section 6.6 General Release        29
Section 6.7 Vaughn Smider Covenant Not To Compete    31
Section 6.8 Members’ Representative      32
ARTICLE 7 SURVIVAL AND INDEMNIFICATION     33
Section 7.1 Survival of Representations and Warranties    33
Section 7.2 Parent Representations       34
Section 7.3 Survival of Covenants       34
Section 7.4 Indemnification by the Members and Indemnification Amount  34
Section 7.5 Limitations        35
Section 7.6 Nonpayment After and Pending Determination(s)   36
Section 7.7 No Contribution       36
Section 7.8 Claim Procedure       37
Section 7.9 Indemnifiable Claims by Third Party     37
Section 7.10 Exercise of Remedies Other Than by Parent    38
Section 7.11 Expenses of the Members’ Representative    38
Section 7.12 Characterization of Payments      38
Section 7.13 Exclusive Remedy       39
Section 7.14 CVRs Catch-up After Determination     39
ARTICLE 8 MISCELLANEOUS PROVISIONS      39
Section 8.1 Amendment        39
Section 8.2 Waiver         39
Section 8.3 Entire Agreement; Counterparts      39
Section 8.4 Governing Law        40
Section 8.5 Arbitration        40
Section 8.6 Payment of Expenses       41
Section 8.7 Transfer Taxes        41
Section 8.8 Assignability; No Third Party Rights     41
Section 8.9 Notices         42
Section 8.10 Severability        43
Section 8.11 Specific Performance       44
Section 8.12 Remedies        44
Section 8.13 Construction        44

Exhibits
EXHIBIT A: Company Equity Interests
EXHIBIT B: Patents
EXHIBIT C: CVR Agreement
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INDEX OF DEFINED TERMS
(NOT OTHERWISE DEFINED IN ARTICLE 1)
Agreement Preamble
Bankruptcy and Equity Exception Section 3.2(a)
Certificate of Merger Section 2.3
Claim Notice Section 7.8(a)
Claimed Amount Section 7.8(a)
Closing Section 2.5(a)
Closing Date Section 2.5(a)
Company Preamble
Company Charter Documents Section 4.1(c)
Company Confidential Information Section 6.5(a)
Company Disclosure Letter Article 3 Preamble
Company Manager Recitals
Company Plan Section 4.10(a)
Company Equityholder Approval Section 4.3(a)
DLLC Act Recitals
Dispute Period Section 7.8(b)
Environmental Laws Section 4.12(a)
Indemnification Amount Section 7.4
Indemnified Party(ies) Section 7.4
Insurance Policies Section 4.16
Members Preamble
Members’ Representative Section 6.8(a)
Merger Recitals
Merger Consideration Section 2.7(c)
Merger Sub Preamble
Minotaur License Section 2.6(a)(x)
Minotaur Services Agreement Section 2.6(a)(x)
Owned Company Patents Section 4.13(b)
Parent Preamble
Provisional IL-5 Patent Section 2.6(a)(v)
Released Claims Section 6.6(a)
Released Parties Section 6.6(a)
Releasing Party(ies) Section 6.6(a)
Restricted Period Section 6.7(a)
Restricted Person Section 6.7(a)
Surviving Company Section 2.1
Total Indemnification Amount Section 7.4
Transfer Taxes Section 8.7

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AGREEMENT AND PLAN OF MERGER
This Agreement And Plan Of Merger (“Agreement”) is made and entered into as of
September 9, 2020, by and among Ligand Pharmaceuticals Incorporated, a Delaware
corporation (“Parent”); Taurus Acquisition Merger Sub, LLC, a Delaware limited
liability company and a wholly-owned Subsidiary of Parent (“Merger Sub”); Taurus
Biosciences, LLC, a Delaware limited liability company (also sometimes known as
Taurus Bioscience, LLC) (formerly Taurus Biosciences, Inc.) (the “Company”); the
members of the Company signatory hereto (collectively, the “Members” and each, a
“Member”); Vaughn Smider, in his capacity as the Restricted Person (as
hereinafter defined); and Vaughn Smider, in his capacity as the Members’
Representative (as hereinafter defined).
Capitalized terms used but not otherwise defined in this Agreement shall have
the meanings given to them in Article 1.
WHEREAS, upon the terms and subject to the conditions set forth in this
Agreement, Merger Sub shall merge with and into the Company (the “Merger”) and
each Company Interest that is issued and outstanding immediately before the
Effective Time will be canceled and converted into the right to receive the
Merger Consideration, all upon the terms and subject to the conditions set forth
herein;
WHEREAS, the manager of the Company (the “Company Manager”) has, upon the terms
and subject to the conditions set forth herein, duly adopted resolutions
(i) determining that the transactions contemplated by this Agreement, including
the Merger, are advisable and in the best interests of the Company and its
members, (ii) approving this Agreement and the Transactions in accordance with
the Delaware Limited Liability Company Act (the “DLLC Act”), (iii) directing
that this Agreement be submitted to the members of the Company for adoption, and
(iv) recommending that the members of the Company adopt this Agreement and
approve the Transactions;
WHEREAS, concurrently with the execution of this Agreement, and as a condition
and material inducement to Parent’s and Merger Sub’s willingness to enter into
this Agreement, the Company is delivering to Parent a written consent action
representing the Company Equityholder Approval (as hereinafter defined) in
accordance with the DLLC Act and the Company Charter Documents;
WHEREAS, the board of directors of Parent and the manager of Merger Sub have,
upon the terms and subject to the conditions set forth herein, unanimously and
duly approved and declared advisable this Agreement and the Transactions, and
Parent, in its capacity as the sole member of Merger Sub, has adopted this
Agreement, in each case, in accordance with the DLLC Act;
WHEREAS, Parent, Merger Sub, the Company and the Members desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and the other transactions contemplated by this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements herein contained, and intending to be legally bound hereby, the
parties hereto hereby agree as follows:
ARTICLE 1.

CERTAIN DEFINITIONS
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For purposes of the Agreement:
“Affiliate” shall mean a Person who is related to another Person such that such
Person directly or indirectly controls, is directly or indirectly controlled by
or is directly or indirectly under common control with such other Person.
“Applicable Law” means all applicable statutes, ordinances, regulations, rules,
or orders of any kind whatsoever of any governmental authority, all as amended
from time to time, together with any rules, regulations, and compliance guidance
promulgated thereunder, as well as foreign equivalents of any of the foregoing.
“Business Day” shall mean any day other than a Saturday, Sunday or a day on
which the banks in San Diego, California are authorized by applicable Legal
Requirement or executive order to be closed.
“Closing Cash” shall mean the aggregate amount of cash in the Company’s bank
accounts immediately prior to the Closing as evidenced by any statement or
certificate reasonably acceptable to Parent.

“Closing Payments” shall mean the payments referred to in Section 2.5(b).
“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time.
“Company Contract” shall mean any Contract (including all material amendments,
modifications, extensions or renewals with respect thereto) to which the Company
is a party and which fall into any of the following categories:
i.of the sort which, if the Company were a reporting company under the Exchange
Act, would be required to be filed as an exhibit to any report of the Company
filed pursuant to the Exchange Act of the type described in Item 601(b)(10) of
Regulation S-K promulgated by the SEC;
ii.that contains a covenant restricting the ability of the Company to (i)
compete in any business or with any Person or in any geographic area, or (ii)
generate or isolate or commercialize antibodies (for its own account or for the
benefit of Persons other than the Contract counterparty) against any particular
target or disease;
iii.that contains a “most-favored-nation” type of provision;
iv.with any Affiliate or member of the Company;
v.between the Company and any Company employee, with regard to employment
services or compensation;
vi.between the Company and any Company consultant, with regard to consultant
services or compensation;
vii.which entitles any Person to any payment or benefit in the event of a change
in control of the Company (whether or not any other eventuality must also occur
in order for the Person to be so entitled);
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viii.under which the Company is the lessee of, or is provided the use of, (i)
any equipment or other tangible property owned by any third party, (ii) any
employees employed by any third party, or (iii) any real property;
ix.any Contract containing provisions restricting the Company’s right to seek,
hire or retain any employees, customers, vendors, suppliers or other service
providers;
x.which primarily relates to (i) the granting to the Company of any license in
or to any Licensed Intellectual Property, or (ii) the granting by the Company to
a third party of any license in or to any Intellectual Property;
xi.relating to any joint venture, partnership or other similar arrangement
involving co-investment, collaboration, partnering or a sharing of liabilities,
revenues, profits or losses with a third party;
xii.with a Governmental Entity;
xiii.pursuant to which any Indebtedness of the Company is outstanding or may be
incurred or pursuant to which the Company has guaranteed any Indebtedness of any
other Person;
xiv.pursuant to which the Company or any other party thereto has continuing
obligations, rights or interests relating to the research, development, clinical
trial, distribution, supply, manufacture, marketing or co-promotion of, or
collaboration with respect to, any product or product candidate for which the
Company is currently engaged in research or development;
xv.which relate to (i) the disposition or acquisition of any material assets or
properties, or (ii) any merger or other business combination transaction; and
xvi.any Contract which commits the Company to enter into any of the foregoing.
“Company Intellectual Property” means all Owned Intellectual Property and all
Licensed Intellectual Property.
“Company Interests” shall mean all Units or other limited liability company
membership interests of the Company.
“Company Material Adverse Effect” shall mean, in reference to any fact,
circumstance, event, change or occurrence, any such fact, circumstance, event,
change or occurrence that, individually or in the aggregate with all other
facts, circumstances, events, changes or occurrences, has or would reasonably be
expected to have a material adverse effect on the results of operations or
financial condition of the Company, other than changes, events, occurrences or
effects arising out of, resulting from or attributable to (a) changes in
conditions in the United States or global economy or capital or financial
markets generally, including changes in interest or exchange rates,
(b) conditions (or changes therein) in any industry or industries in which the
Company operates, (c) any change in Legal Requirements or GAAP or interpretation
of any of the foregoing, (d) acts of war, sabotage or terrorism, or any
escalation or worsening of any such acts of war, sabotage or terrorism
threatened or underway as of the date of this Agreement, or (e) pandemics,
storms, earthquakes or other natural disasters; except, in the case of the
foregoing clauses (a), (b), (c), (d) and (e), to the extent that any such
condition has a materially
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disproportionate adverse effect on the Company, relative to other companies of
comparable size to the Company operating in the industry in which the Company
operates.
“Company Patents” shall mean all U.S. and foreign patents and patent
applications, including reissues, divisions, continuations,
continuations-in-part, extensions and reexaminations thereof as of the date of
this Agreement owned by or licensed to, or purported to be owned by or licensed
to, the Company (whether exclusively, jointly with another Person, or
otherwise).
“Confidentiality Agreement” shall mean the Mutual Confidentiality Agreement
dated February 7, 2018, and as may be thereafter extended/amended, between
Parent and the Company.
“Contract” shall mean any written or oral contract or other legally binding
promise, commitment, agreement, instrument, arrangement, understanding,
obligation or undertaking (each, including all amendments thereto), whether
express or implied.
“CVR” shall mean a contingent value right having the terms and conditions set
forth in the CVR Agreement to be issued in accordance with Section 2.7 in
respect of each Outstanding Company Interest.
“CVR Agreement” shall mean the agreement governing the terms and conditions of
the CVRs, dated as of the date of this Agreement and entered into between Parent
and the Members’ Representative, substantially in the form attached hereto as
Exhibit C.
“D&O Indemnified Party” shall mean each individual who is or was an officer,
manager, director, employee or agent of the Company at any time on or before the
Effective Time who is or was entitled to indemnification pursuant to the DLLC
Act, the Company Charter Documents or any Contract with such Person.
“Effective Time” shall mean the time at which the Merger becomes effective upon
the Certificate of Merger being filed with the Secretary of State of the State
of Delaware, or upon such later time as is agreed to in writing by the parties
hereto and specified in the Certificate of Merger.
“Encumbrance” shall mean, with respect to any property or asset, any mortgage,
easement, lien, pledge (including any negative pledge), security interest or
other encumbrance of any nature whatsoever in respect of such property or asset.
“Entity” shall mean any corporation (including any non-profit corporation),
general partnership, limited partnership, limited liability partnership, joint
venture, estate, trust, company (including any company limited by shares,
limited liability company or joint stock company), firm, society or other
enterprise, association, organization or entity (including any Governmental
Entity).
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
“GAAP” shall mean United States generally accepted accounting principles.
“Governmental Authorization” shall mean any permit, license, registration,
qualification, certificate, clearance, variance, waiver, exemption, certificate
of occupancy, exception, franchise, entitlement, consent, confirmation, order,
approval or authorization granted by any Governmental Entity.
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“Governmental Entity” shall mean any foreign, federal, state or local government
or body or any agency, authority, subdivision or instrumentality of any of the
foregoing, including any court, tribunal, department, bureau, administrative
agency, commission or board, or any quasi-governmental or private body duly
exercising any regulatory, taxing, inspecting or other governmental authority.
“Holdback Amount Unpaid” shall mean the applicable Member’s pro rata share of
the Holdback Distribution Amount, before any subtractions as contemplated by the
definition of “Holdback Distribution Amount.”
“Holdback Distribution” shall mean the payment of the Holdback Distribution
Amount to the former holders of Outstanding Company Interests as provided for in
Section 2.10.
“Holdback Distribution Amount” shall mean $500,000 minus the sum of (a) each
Claimed Amount for which indemnifiability and the size of the Loss have been
finally determined (and which has thereby become an established Indemnification
Amount) and (b) pending final determination, each Claimed Amount for which final
determination has not yet occurred.
“Indebtedness” shall mean (a) indebtedness for borrowed money, including
indebtedness evidenced by a note, bond, debenture or similar instrument and all
guaranties, sureties, assumptions and other contingent obligations in respect
of, or to purchase or to otherwise acquire, any of the foregoing whether on the
debtor’s account or with respect to the indebtedness of others, or
(b) obligations in respect of outstanding letters of credit, acceptances and
similar obligations created for the account of such Person.
“Indemnifiable Claim By Third Party” means an indemnifiable claim under this
Agreement resulting from the assertion of liability by any third party.
“Intellectual Property” means any and all of the following in any jurisdiction
throughout the world: (a) patents and patent applications, including reissues,
divisions, continuations, continuations-in-part, extensions and reexaminations
thereof, any counterparts claiming priority therefrom and like statutory rights;
(b) works of authorship and copyrights, and registrations and applications for
registration thereof; (c) trademarks, service marks, trade dress, logos, trade
names and other source identifiers, and registrations and applications for
registration thereof; (d) trade secrets, business, technical and know-how
information, including inventions, whether patentable or unpatentable, and
confidential information; (e) rights of publicity and privacy; (f) computer
software and firmware, including source code, object code, files, documentation
and other materials related thereto; (g) proprietary databases and data
compilations; (h) domain names and registrations and applications for
registration thereof; (i) any other intellectual property; and (j) rights in any
of the foregoing, including rights to sue or recover and retain Losses for past,
present, and future infringement, dilution, misappropriation or other violation
of any of the foregoing.
“IRS” shall mean the United States Internal Revenue Service.
“Knowledge of Parent” shall mean the actual knowledge, after reasonable inquiry,
of Matthew Foehr.
“Knowledge of the Company” shall mean the actual knowledge, after reasonable
inquiry, of Vaughn Smider; provided, that reasonable inquiry is stipulated to
exclude any search or other inquiry as to patents or patent applications.
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“Legal Proceeding” shall mean any claim (presented formally to a judicial or
quasi-judicial Governmental Entity), lawsuit, court action, suit, arbitration or
other judicial or administrative proceeding.
“Legal Prohibition” shall mean any final, permanent Legal Requirement that is in
effect and that prevents or prohibits consummation of the Transactions.
“Legal Requirement” shall mean any foreign, federal, state or local law,
statute, code, ordinance, regulation, order, judgment, writ, injunction,
decision, ruling or decree promulgated by any Governmental Entity.
“Liability” means any debt, obligation, duty, commitment or liability of any
nature whatsoever (including any unknown, undisclosed, unmatured, unaccrued,
unasserted, unliquidated, contingent, indirect, conditional, implied, vicarious,
derivative, joint, several or secondary liability), regardless of whether such
debt, obligation, duty, commitment or liability would be required to be
disclosed on a balance sheet prepared in accordance with GAAP and regardless of
whether such debt, obligation, duty, commitment or liability is immediately due
and payable.
“Licensed Intellectual Property” means all Intellectual Property licensed to the
Company.
“Loss” shall mean any injury, diminution of value, Tax, Encumbrance, liability,
debt, loss, Legal Proceeding, judgment, settlement, order, injunction, decree,
ruling, assessment, arbitration award, damage, fine, penalty, expense (including
one’s own (and, if chargeable, one’s adversary’s) reasonably attorneys’ or other
professional fees and expenses and court costs), or other obligations of any
nature, whether absolute, contingent, liquidated, unliquidated or otherwise, due
or to become due or otherwise, and whether or not required to be reflected on a
balance sheet prepared in accordance with GAAP, whether or not involving the
claim of another Person.
“Minotaur” means Minotaur Therapeutics, Inc.
“Outstanding Company Interests” shall mean the Company Interests issued and
outstanding immediately before the Effective Time.
“Owned Intellectual Property” means all Intellectual Property in which the
Company has (or purports to have) an ownership interest of any nature (whether
exclusively, jointly with another Person or otherwise).
“Ownership Interest” means, with respect to any Person, any (a) equity security
in such Person, (b) option, warrant or other right to purchase, acquire or
subscribe for any equity security in such Person, (c) Contract relating to the
issuance of or obligating such Person to issue any equity security or any
securities convertible into or exchangeable for any equity security in such
Person, (d) equity appreciation, phantom equity, profits interests or similar
right in such Person, or (e) security convertible into or exchangeable for any
of the foregoing.
“Parent Material Adverse Effect” shall mean, in reference to any fact,
circumstance, event, change or occurrence, any such fact, circumstance, event,
change or occurrence that, individually or in the aggregate with all other
facts, circumstances, events, changes or occurrences, has or would reasonably be
expected to have a material adverse effect on the results of operations or
financial condition of Parent, other than changes, events, occurrences or
effects arising out of, resulting from or attributable to (a) changes in
conditions in the United States or global economy or capital or financial
markets generally,
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including changes in interest or exchange rates, (b) conditions (or changes
therein) in any industry or industries in which Parent operates, (c) any change
in Legal Requirements or GAAP or interpretation of any of the foregoing,
(d) acts of war, sabotage or terrorism, or any escalation or worsening of any
such acts of war, sabotage or terrorism threatened or underway as of the date of
this Agreement, or (e) pandemics, storms, earthquakes or other natural
disasters; except, in the case of the foregoing clauses (a), (b), (c), (d) and
(e), to the extent that any such condition has a materially disproportionate
adverse effect on Parent, relative to other companies of comparable size to
Parent operating in such industry or industries.
“Permitted Encumbrances” shall mean: (a) Encumbrances for Taxes not yet due and
payable or for Taxes that are being contested in good faith by appropriate
proceedings; (b) Encumbrances or imperfections of title, resulting from or
otherwise relating to any Contracts, to the extent the Company Disclosure Letter
expressly identifies such Encumbrance or imperfection of title (or such is
obvious on the face of the Contract); and (c) Encumbrances arising from or
otherwise relating to transfer restrictions under the Securities Act and the
securities laws of the various states.
“Person” shall mean any individual or Entity.
“Representatives” means, when used with respect to any Person, such Person’s
officers, directors, managers, employees, agents, bona fide potential financing
sources, advisors and other representatives (including any investment banker,
financial advisor, attorney or accountant retained by or on behalf of such
Person or any of the foregoing).
“Restricted Business” means the development or exploitation of long/ultra-long
H3 transgenic animal platform technology for the generation and discovery of
antibodies, for use in humans, upon immunization of genus-bos animals or of
other animals with genus-bos genes. It is expressly and specially agreed,
however, that “Restricted Business” does not include the performance of Applied
Biomedical Science Institute’s work under any project funded by the National
Institutes of Health or any other governmental or non-profit entity, and does
not include any activities by Minotaur so long as the Minotaur License
(including, without limitation, Section 2.6 thereof) remains in effect
(including as it may be amended).
“Scripps License” means the Exclusive License Agreement dated as of July 2, 2020
between Taurus and The Scripps Research Institute, as it may hereafter be
amended.
“SEC” shall mean the United States Securities and Exchange Commission.
“Securities Act” shall mean the United States Securities Act of 1933, as
amended.
“Subsidiary” shall mean an Entity that is related to another Entity such that
such other Entity directly or indirectly owns, beneficially or of record: (a) an
amount of voting securities or other interests in such Entity that is sufficient
to enable such other Entity to elect at least a majority of the members of such
Entity’s board of directors or comparable governing body; or (b) more than 50%
of the outstanding equity interests issued by such Entity.
“Tax” or “Taxes” shall mean (a) all federal, state, local or foreign taxes,
including all net income, gross receipts, capital, sales, use, ad valorem, value
added, transfer, franchise, profits, inventory, capital stock, license,
withholding, payroll, employment, social security, unemployment, excise,
severance, stamp, occupation, property and estimated taxes or other taxes any
kind whatsoever, and (b) all interest,
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penalties, fines, additions to tax or additional amounts imposed by any
Governmental Entity in connection with any item described in clause (a).
“Tax Returns” shall mean any return, report, claim for refund, estimate,
information return or statement or other similar document relating to or
required to be filed with any Governmental Entity with respect to Taxes,
including any schedule or attachment thereto, and including any amendment
thereof.
“Territory” means worldwide.
“Total Merger Consideration” shall mean (a) the sum of $4,500,000, plus the
amount of the Closing Cash, less the aggregate amount of the Closing Payments,
plus (b) a number of CVRs equal to the number of Outstanding Company Interests,
plus (c) the right to receive, at the time of the Holdback Distribution as
provided in Section 2.10, the Holdback Distribution Amount.
“Transaction Expenses” shall mean all amounts paid or payable by the Company in
connection with the preparation, negotiation, execution or performance of this
Agreement and the Transactions, including the fees and expenses of the Company’s
legal counsel, financial advisors and accountants.
“Transactions” shall mean the transactions contemplated by this Agreement,
including the Merger, and shall also include, unless the context clearly
otherwise requires, the Minotaur License and the Minotaur Services Agreement.
ARTICLE 2.

THE MERGER; EFFECTIVE TIME
Section 2.1 Merger of Merger Sub into the Company. Upon the terms and subject to
the conditions set forth in this Agreement and in accordance with the DLLC Act,
at the Effective Time, Merger Sub shall be merged with and into the Company, and
the separate existence of Merger Sub shall cease. The Company will continue as
the surviving Entity in the Merger (the “Surviving Company”).
Section 2.2 Effect of the Merger. The Merger shall have the effects set forth in
this Agreement and in the applicable provisions of the DLLC Act. Without
limiting the generality of the foregoing and subject thereto, at the Effective
Time, all the property rights, privileges, immunities, powers and franchises of
the Company and Merger Sub shall vest in the Surviving Company and all the
debts, liabilities and duties of the Company and Merger Sub shall become the
debts, liabilities and duties of the Surviving Company.
Section 2.3 Effective Time. Subject to the provisions of this Agreement, Parent,
Merger Sub and the Company will cause a properly executed certificate of merger
conforming to the requirements of the DLLC Act (the “Certificate of Merger”) to
be filed with the Secretary of State of the State of Delaware on the Closing
Date. The Merger shall become effective at the Effective Time.
Section 2.4 Certificate of Formation and Limited Liability Company Agreement;
Officers and Manager. At the Effective Time:
a.Subject to Section 6.3(a), (i) the certificate of formation of the Company as
in effect immediately before the Effective Time, shall be amended as a result of
the Merger so as to read in its entirety in the form of the certificate of
formation of Merger Sub, except that the name of the Surviving Company shall be
“Taurus Biosciences, LLC” and, as so amended, shall be the certificate of
formation of the Surviving Company, until thereafter changed or amended as
provided therein or by
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applicable Legal Requirements, and (ii) the limited liability company agreement
of the Company, as in effect immediately before the Effective Time, shall be
amended as a result of the Merger to read in its entirety in the form of the
limited liability company agreement of Merger Sub, except that the name of the
Surviving Company shall be “Taurus Biosciences, LLC” and, as so amended, shall
be the limited liability company agreement of the Surviving Company, until
thereafter duly amended as provided therein, or as provided by the certificate
of formation of the Surviving Company or by applicable Legal Requirements.
b.The manager and officers of Merger Sub immediately before the Effective Time
shall be the initial manager and officers, respectively, of the Surviving
Company, each to hold office in accordance with the certificate of formation and
limited liability company agreement of the Surviving Company.
Section 2.5 Closing.
a.The closing of the Transactions (the “Closing”) will take place at 10:00 a.m.
(San Diego time) on the date hereof, or on such other date or at such other time
and place as the parties hereto may mutually agree in writing. The date on which
the Closing occurs is hereinafter referred to as the “Closing Date”. The Closing
shall be held at the offices of Stradling Yocca Carlson & Rauth, A Professional
Corporation, located at 4365 Executive Drive, Suite 1500, San Diego, California
92121, unless another place is agreed to in writing by the parties. At the
Closing, documents and signature pages may be exchanged remotely via email/.pdf
or other electronic exchange (with originals to be delivered to the other
parties as soon as reasonably practicable after the Closing and requested by
such other party).
b.At the Closing, Parent shall pay all known Liabilities of the Company (i.e.,
shall pay the Closing Payments) pursuant to a schedule (certified by an officer
of the Company to be true and correct) delivered to Parent at least one Business
Day (but in no event more than four Business Days) before the Closing by an
officer of the Company, to the respective holders of such Liability obligations,
including without limitation:
i.all Indebtedness;
ii.any unpaid fees and expenses for legal services rendered by Pillsbury
Winthrop Shaw Pittman LLP to the Company through the Closing;
iii.any unpaid fees and expenses for legal services rendered by Morrison &
Foerster LLP to the Company through the Closing;
iv.any unpaid fees and expenses for legal services rendered by Crosbie Gliner
Schiffman Southard & Swanson LLP to the Company through the Closing;
v.any unpaid patent cost reimbursement owed to The Scripps Research Institute
pursuant to the Scripps License; and
vi.any unpaid fees and expenses for services rendered to the Company through the
Closing by any other attorneys, any accountants and any financial advisors.
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Section 2.6 Closing Deliveries. At the Closing:
a.The Company shall deliver, or cause to be delivered, to Parent or any other
Person designated by Parent (unless the delivery is waived in writing by
Parent), the following documents, in each case duly executed or otherwise in
proper form:
i.A certificate, in a form satisfactory to Parent, signed by the Company Manager
and dated as of the Closing Date, certifying: (A) the Company Charter Documents;
(B) the satisfaction by the Company of all advance notice rights, if any,
pursuant to the Company Charter Documents and the DLLC Act (or the enforceable
waiver thereof by every Person entitled to such advance notice); and
(C) the resolutions of the Company Manager (I) determining that it is in the
best interests of the Company and the Members, and declaring it advisable, to
enter into this Agreement, (II) approving the execution, delivery and
performance by the Company of this Agreement and the consummation of the
Transactions, including the Merger, and (III) recommending adoption of this
Agreement and approval of the Transactions, including the Merger, by the
Members;
ii.A good standing certificate with respect to the Company issued by the
Delaware Secretary of State, dated as of a date not more than ten Business Days
before the Closing Date;
iii.Payoff letters, in form and substance satisfactory to Parent, from each
holder of Indebtedness or Transaction Expenses or other Liabilities to be paid
by Parent pursuant to Section 2.5(b) evidencing the discharge or payment in full
of the applicable Liability to such holder and releasing the Company, Parent and
their respective Affiliates from any and all claims that such holder of
Liabilities may have against the Company (or, through the Company, against any
Affiliate of the Company or against Parent or any Affiliate of Parent) at the
Effective Time, in each case duly executed by each holder of such of
Liabilities, and with an agreement to upon request provide termination
statements on Form UCC-3, or other appropriate releases following any payoff
thereof, which when filed will release and satisfy any and all Encumbrances
relating to such of Liabilities, together with proper authority to file such
termination statements or other releases at and following the Closing;
iv.Liability satisfaction letters, in form and substance satisfactory to Parent,
from each service provider owed money or equity interests by the Company
(including Applied Biomedical Science Institute), evidencing the issuance of
Units to such service providers as satisfaction in full of the applicable claims
of such service providers for money or equity interests and releasing the
Company, Parent and their respective Affiliates from any and all claims that
such service providers may have against the Company (or, through the Company,
against any Affiliate of the Company or against Parent or any Affiliate of
Parent) at the Effective Time, in each case duly executed by such service
provider, and with an agreement to upon request provide termination statements
on Form UCC-3, or other appropriate releases, which when filed will release and
satisfy any and all Encumbrances relating to such claims, together with proper
authority to file such termination statements or other releases at and following
the Closing;
v.A “terminal assignment” in favor of the Company executed and acknowledged by
Applied Biomedical Science Institute, assigning to the Company (free and clear
of all Encumbrances) all of Applied Biomedical Science Institute’s right, title
and interest in and to any and all Intellectual Property which pertains to the
Restricted Business (identifying and assigning such Intellectual Property with
specificity insofar as possible and also assigning generally all other
(unspecified) Intellectual Property which pertains to the Restricted Business),
including United States provisional Patent No. 62/925,740 (“Chimeric Cytokine
Modified Antibodies and Methods of Use Thereof”) (the “Provisional
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IL-15 Patent”) as well as any and all related rights, including as to (i) all
patent applications filed either from the Provisional IL-15 Patent or from an
application claiming priority from either of these, including divisionals,
continuations, continuations-in-part, provisionals, converted provisionals and
continued prosecution applications, (ii) any and all patents that issue from the
foregoing patent applications, (iii) any and all extensions or restorations by
existing or future extension or restoration mechanisms, including revalidations,
reissues, re-examinations and extensions (including any supplementary protection
certificates and the like) of the foregoing patents or patent applications, and
(iv) all counterparts of any of the foregoing in any jurisdiction throughout the
world;
vi.Resignations, in customary form, of each manager, director and officer of the
Company, which resignations shall be effective as of the Effective Time;
vii.(A) A properly executed statement, dated as of the Closing Date, stating
under penalties of perjury that the Company is not, and has not been, a “United
States real property holding corporation” as defined in Section 897(c)(2) of the
Code during the applicable period described in Section 897(c)(1)(A)(ii) of the
Code, in form and substance reasonably acceptable to Parent, and (B) proof
reasonably satisfactory to Parent that the Company has provided notice of such
verification to the Internal Revenue Service in accordance with the provisions
of Treasury Regulations Section 1.897-2(h)(2), if such is required;
viii.Evidence reasonably satisfactory to Parent that the Company has
(A) obtained consents or approvals from all parties in the absence of whose
consent or approval the consummation of the Merger and the Transactions would
violate or constitute a default under any Company Contract, and (B) obtained,
made or received all consents or approvals of, or filings, declarations or
registrations with, any Governmental Entity necessary for the execution and
delivery of this Agreement and the CVR Agreement by the Company and the
consummation by the Company of the Transactions, other than the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware
pursuant to the DLLC Act;
ix.A counterpart signature page to the CVR Agreement, duly executed by the
Members’ Representative;
x.Copies of the fully executed Commercial License Agreement (the “Minotaur
License”) and Master Services Agreement (the “Minotaur Services Agreement”),
each dated on or before the Closing Date and entered into by and between the
Company and Minotaur, inclusive of any and all amendments thereto, in form and
substance satisfactory to Parent, and complete and correct copies of the
certificate of incorporation and bylaws of Minotaur, in each case as amended
through the date of this Agreement;
xi.Counterpart signature pages to the fully completed Professional Services
Agreement and Consultant Confidential Information and Invention Assignment
Agreement, each dated the Closing Date and in form and substance satisfactory to
Parent, duly executed by Vaughn Smider; and
xii.All other instruments, agreements, certificates and documents required to be
delivered by the Company at or before the Closing pursuant to this Agreement and
such other certificates of authority and similar instruments as Parent or Merger
Sub has reasonably requested before the Closing.
b.Parent shall pay, or cause to be paid, the Closing Payments, in the amounts
and to the payees set forth in the schedule delivered to Parent by the Company
as provided in Section 2.5(b) and shall deliver, or cause to be delivered, to
the Company or any other Person designated by the Company
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(unless the delivery is waived in writing by the Company), in each case duly
executed or otherwise in proper form, all instruments, agreements, certificates
and documents required to be delivered by Parent or Merger Sub at or before the
Closing pursuant to this Agreement and such other certificates of authority and
similar instruments as the Company has reasonably requested before the Closing.
Section 2.7 Conversion of Company Interests. At the Effective Time, by virtue of
the Merger and without any further action on the part of Parent, Merger Sub, the
Company or any member of the Company or member of Merger Sub:
a.any Company Interests then held by the Company (or held in the Company’s
treasury) shall cease to exist, and no consideration shall be paid in exchange
therefor;
b.any Company Interests then held by Parent, Merger Sub or any other
wholly-owned Parent Subsidiary shall cease to exist, and no consideration shall
be paid in exchange therefor;
c.except as provided in clauses (a) and (b) above, each issued and outstanding
Company Interest shall be converted into the right to receive a portion of the
Total Merger Consideration as follows:
i.an amount in cash equal to the quotient of (A) the sum of $4,500,000, plus the
amount of the Closing Cash, less the aggregate amount of the Closing Payments,
divided by (B) the number of Outstanding Company Interests;
ii.at the time set forth in Section 2.10 for payment of the Holdback
Distribution, an amount in cash equal to the quotient of (A) the Holdback
Distribution Amount (if any), divided by (B) the number of Outstanding Company
Interests;
iii.at the time of any supplemental post-365th-day Holdback Distribution Amount
distributions described in Section 2.10, an amount in cash equal to the quotient
of (A) such supplemental payment amount, divided by (B) the number of
Outstanding Company Interests; and
iv.one CVR
d.(all referred to herein, as applicable in context per former Outstanding
Company Interest, as the “Merger Consideration”); and
e.all of the limited liability company membership interests of Merger Sub then
outstanding shall be converted into all of the limited liability company
membership interests of the Surviving Company, such that immediately after the
Effective Time Parent shall, as the former holder of all the limited liability
company membership interests of Merger Sub, own all the limited liability
company membership interests of the Surviving Company.
Section 2.8 Closing of the Company’s Transfer Books. At the Effective Time:
(a) all Company Interests outstanding immediately before the Effective Time
shall cease to exist as provided in Section 2.7 and all holders of Company
Interests that were outstanding immediately before the Effective Time shall
cease to have any rights as members of the Company except the right to receive
the applicable Merger Consideration therefor; and (b) the limited liability
company membership interest transfer books of the Company shall be closed with
respect to all Company Interests. No further transfer of any such Company
Interests shall be made on such limited liability company membership interest
transfer books after the Effective Time.
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Section 2.9 Exchange Procedures.
a.Surrender of a Member’s Company Interests requires only that such Member duly
execute this Agreement in order to trigger payment of the applicable Merger
Consideration with respect to such Member’s Company Interests. Each Member
acknowledges and agrees that all of such Member’s Company Interests are hereby
surrendered to be exchanged for the applicable Merger Consideration on the terms
set forth herein and that the Merger Consideration paid in exchange for such
Member’s Company Interests shall be deemed to have been issued in full
satisfaction of all rights pertaining to such Company Interests.
b.Parent shall ensure that, after the Merger and upon surrender to Parent of
Company Interests, the holder of such Company Interests shall promptly receive
in respect thereof the applicable Merger Consideration (including the CVRs and
any payment distributed between the Effective Time and the time of such
surrender on the CVRs), without interest. Payment of the cash portion of the
applicable Merger Consideration shall be made by Parent to each Member by wire
transfer of immediately available funds in accordance with the wire transfer
instructions provided no less than three Business Days before the Closing Date
in writing by the Company to Parent.
c.Neither Parent nor the Surviving Company shall be liable to any holder of
Company Interests for any amount properly paid to a public official pursuant to
any applicable abandoned property or escheat Legal Requirements.
d.Parent and the Surviving Company shall be entitled to deduct and withhold from
the consideration otherwise payable pursuant to the Merger or this Agreement to
any holder of Outstanding Company Interests, such amounts as Parent or the
Surviving Company are required to deduct and withhold under the Code with
respect to the making of such payment. To the extent that amounts are so
withheld and paid over to the appropriate Tax authority or other Governmental
Entity by Parent or the Surviving Company, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the holder of
Outstanding Company Interests, in respect of whom such deduction and withholding
was made by Parent or the Surviving Company.
Section 2.10 Holdback Distribution(s). The Holdback Distribution shall be made
on the 365th day after the date of this Agreement; provided, that if as of such
365th day there is any Claimed Amount for which final determination has not yet
occurred (and for which the Holdback Distribution Amount is therefore reduced
pending final determination), then upon any final determination of
non-indemnifiability or of a smaller size of Loss, within 30 days thereafter a
supplemental Holdback Distribution shall be made in respect of the indicated
amount (or applicable portion thereof) that had been held back beyond such 365th
day.
ARTICLE 3.

REPRESENTATIONS AND WARRANTIES OF THE MEMBERS

Each Member hereby represents and warrants to Parent and Merger Sub solely with
respect to such Member, of the date of this Agreement, which representations and
warranties shall however be deemed qualified by disclosures set forth in the
letter delivered by the Company to Parent before the execution of this Agreement
(the “Company Disclosure Letter”). The Company Disclosure Letter is arranged in
sections and subsections corresponding to the numbered and lettered sections and
subsections contained in this Article 3 and in Article 4. The disclosures in any
section or subsection of the Company
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Disclosure Letter shall qualify only the corresponding section or subsection in
this Article 3 or in Article 4 and any other Sections where the applicability
thereof is clearly apparent from the face of such Company Disclosure Letter:
Section 3.1 Ownership. All of the Company Interests set forth opposite such
Member’s name on Exhibit A hereto under the “Number of Interests Units” column
are owned beneficially and of record by such Member free and clear of any
Encumbrances or any other restrictions on transfer (except for Permitted
Encumbrances). Such Member is not party to any option, warrant, purchase right
or other Contract (other than this Agreement) that (including upon the
occurrence of any contingency or event) requires such Member to sell, transfer
or otherwise dispose of any Company Interests or any direct or indirect interest
therein. Such Member is not party to any voting trust, proxy or other agreement
or understanding with respect to the voting of any of the Company Interests.
Such Member has good and valid title to such Member’s Company Interests.
Section 3.2 Authority; Non-Contravention.
a.Such Member has all requisite power and authority (and, if an individual,
legal capacity) to execute and deliver this Agreement and to perform his, her or
its obligations hereunder, including, but not limited to surrendering such
Member’s Company Interests as provided herein for payment as provided herein.
Such Member has duly executed and validly delivered this Agreement, which
constitutes a valid and legally binding obligation of such Member, enforceable
against such Member in accordance with its terms and conditions, except that
such enforceability (i) may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other similar Legal Requirements of
general application affecting or relating to the enforcement of creditors’
rights generally and (ii) is subject to general principles of equity, whether
considered in a proceeding at law or in equity (the “Bankruptcy and Equity
Exception”).
b.Such Member is not required to give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any Governmental Entity in
connection with the execution and delivery of this Agreement by such Member or
the consummation of the Transactions. To the extent that such Member is an
Entity, the execution and delivery of this Agreement by such Member and the
consummation by such Member of the Transactions have been duly authorized by all
necessary action on the part of such Member (including by the board of
directors, manager, managing member, or other managing body of such Member, if
required) and no other corporate, limited liability company or other action, as
the case may be, on the part of such Member is necessary to authorize the
execution and delivery of this Agreement by such Member or the consummation by
such Member of the Transactions.
c.Neither the execution and the delivery of this Agreement, the performance by
such Member of his, her or its obligations hereunder nor the consummation of the
Transactions will (i) violate any Legal Requirement applicable to such Member,
(ii) if such Member is an Entity, violate or conflict with any provision of the
undersigned’s governing documents, (iii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel or give rise to any
obligation of such Member to make any payments under, any material Contract to
which such Member is a party, (iv) require any notice to, filing with or
authorization, consent or approval of any Person (other than a Governmental
Entity), or (v) result in the creation of any material Encumbrance on such
Member’s Company Interests.
d.Such Member is not aware of any obligation or liability to pay any fees or
commissions to any broker, finder, financial adviser, investment banker or agent
with respect to the Transactions based upon any agreements, Contracts or other
arrangements made by or on behalf of such
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Member for which the Company, Parent, the Surviving Company or any of their
respective Affiliates would be responsible.
ARTICLE 4.

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company hereby represents and warrants to Parent and Merger Sub as set forth
in all the respective sections of this Article 4, which representations and
warranties shall however be deemed qualified by disclosures set forth in the
Company Disclosure Letter:
Section 4.1 Organization, Standing and Power.
a.The Company is a limited liability company duly organized, validly existing
and in good standing under the Legal Requirements of the State of Delaware and
has all requisite limited liability company power and authority necessary to own
or lease all of its properties and assets and to carry on its business as it is
now being conducted. The Company is duly licensed or qualified to do business
and is in good standing in each jurisdiction in which the nature of the business
conducted by it or the character or location of the properties and assets owned
or leased or held under license by it makes such licensing or qualification
necessary.
b.The Company has no Subsidiaries and has never had any Subsidiaries.
c.The Company has delivered to Parent complete and correct copies of the
certificate of formation and limited liability company agreement of the Company,
in each case as amended through the date of this Agreement (the “Company Charter
Documents”). The Company has made available to Parent and its representatives
true and complete copies of the minutes (or, in the case of minutes that have
not yet been finalized, a brief summary of the meeting, including in each case a
summary of any resolutions adopted by the Company Manager), of all meetings of
the members, the Company Manager and each committee thereof, if any, held since
its formation.
Section 4.2 Capitalization.
a.The only authorized Ownership Interests of the Company are Units. At the
execution and delivery of this Agreement the only Company Interests outstanding
are, and as of the Effective Time the only Company Interests outstanding will
be, 141,612 Units outstanding, all as specified on Exhibit A hereto.
Collectively, the Members hold of record and own beneficially, free and clear of
any Encumbrances or any other restrictions on transfer (except for Permitted
Encumbrances), all of the issued and outstanding Company Interests. There are no
other issued and outstanding Ownership Interests of the Company other than the
Company Interests. Since its formation, the Company has not issued, or reserved
for issuance, any securities convertible into or exchangeable or exercisable for
any of its Ownership Interests.
b.There are no outstanding contractual obligations of the Company requiring the
issuance, sale, repurchase, redemption or disposition of, or containing any
right of first refusal with respect to, any Company Interests. There are no
options or warrants outstanding to purchase any Company Interests and the
Company has never issued any options or warrants to purchase any Company
Interests. There are no bonds, debentures, notes or other indebtedness or
liabilities of the Company
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having the right to vote (or convertible into or exchangeable for securities
having the right to vote) on any matters.
Section 4.3 Authority; Non-contravention; Voting Requirements.
a.The Company has all necessary limited liability company power and authority to
execute and deliver this Agreement and the CVR Agreement and, subject to the
holders of a majority of outstanding Company Interests of the Company entitled
to vote thereon voting in favor of the adoption of this Agreement and approval
of the Transactions (the “Company Equityholder Approval”), to perform its
obligations hereunder and consummate the Transactions. The execution, delivery
and performance by the Company of this Agreement and the CVR Agreement, and the
consummation by it of the Transactions, have been duly authorized and approved
by the Company Manager, and except for obtaining the Company Equityholder
Approval, no other limited liability company action on the part of the Company
or any member of the Company is necessary to authorize the execution, delivery
and performance by the Company of this Agreement and the CVR Agreement and the
consummation by it of the Transactions. This Agreement has been duly executed
and delivered by the Company and, assuming due authorization, execution and
delivery hereof by the other parties hereto, constitutes a legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, subject to the Bankruptcy and Equity Exception.
b.The Company Manager has, upon the terms and subject to the conditions set
forth in this Agreement, unanimously duly adopted resolutions by written consent
(i) determining that this Agreement and the Transactions are advisable and in
the best interests of the Company and its members, (ii) approving this Agreement
and the Transactions, including the Merger, in accordance with the DLLC Act,
(iii) directing that this Agreement be submitted to the members of the Company
for adoption, and (iv) recommending that the members of the Company adopt this
Agreement and approve the Transactions.
c.Neither the execution and delivery of this Agreement by nor the execution and
delivery of the CVR Agreement by the Members’ Representative nor the
consummation by the Company of the Transactions, nor compliance by the Company
with any of the terms or provisions hereof, will (i) conflict with or violate
any provision of the Company Charter Documents or (ii) assuming that the filing
referred to in Section 4.4 is made, (x) violate any Legal Requirement applicable
to the Company or (y) violate or constitute a default under any Company
Contract.
d.The Company Equityholder Approval is the only vote or approval of the holders
of limited liability company membership interests of the Company (or of any
class or series thereof) which is necessary to adopt this Agreement and approve
the Transactions and the Company has obtained the Company Equityholder Approval
on or before the date of this Agreement.
e.The Company Manager personally and exclusively possesses all of the authority
(for and on behalf of the Company) customarily associated with sole managers of
Delaware manager-managed limited liability companies.
Section 4.4 Governmental Approvals. Except for the filing of the Certificate of
Merger with the Secretary of State of the State of Delaware pursuant to the DLLC
Act, no consents or approvals of, or filings, declarations or registrations
with, any Governmental Entity are necessary for the execution and delivery of
this Agreement by the Company and the Members, the execution and delivery of the
CVR Agreement by the
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Members’ Representative, and the consummation by the Company, the Members and
the Members’ Representative of the Transactions.
Section 4.5 Liabilities.
a.The Company has (and as of the Effective Time will have) no liabilities of any
nature (whether accrued, absolute, determined, determinable, fixed or
contingent), except (i) Transaction Expenses, (ii) $250,000 in principal amount
of Indebtedness (plus accrued interest) consisting of promissory notes payable
to certain Members that will be paid at the Closing pursuant to Section 2.5(b),
and (iii) other liabilities that will be paid at the Closing pursuant to Section
2.5(b).
b.Since its formation, (i) except for actions taken in connection with this
Agreement and the Transactions, the Company has conducted its business in all
material respects in the ordinary course, and (ii) there has not been any
Company Material Adverse Effect or any change, event, development, condition,
occurrence or effect that has had or would reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect.
Section 4.6 Legal Proceedings. There is no pending or, to the Knowledge of the
Company, threatened Legal Proceeding by or against the Company or relating to
the Company or its properties or assets, nor is there any injunction, order,
judgment, ruling or decree imposed upon the Company, in each case, by or before
any Governmental Entity.
Section 4.7 Compliance With Legal Requirements; Governmental Authorizations. The
Company is in compliance in all material respects with all Legal Requirements
applicable to the Company. The Company holds all Governmental Authorizations
necessary for the lawful conduct of its business, and all such Governmental
Authorizations are valid and in full force and effect. The Company is in
compliance with the terms of all Governmental Authorizations.
Section 4.8 Bank Accounts; Powers of Attorney. A statement delivered by the
Company to Parent before the date hereof, and so designated, sets forth: an
accurate, correct and complete list of the names and addresses of all banks,
commercial lending institutions and other financial institutions in which the
Company has an account, deposit, safe-deposit box, line of credit or other loan
facility or relationship, or lock box or other arrangement for the collection of
accounts receivable, with the names of all Persons authorized to draw or borrow
thereon or to obtain access thereto, and an accurate, correct and complete list
of the names and addresses of all persons holding powers of attorney for the
Company or for any officer or agent thereof.
Section 4.9 Tax Matters.
a.(i) The Company has timely filed, or has caused to be timely filed on its
behalf (taking into account any extension of time within which to file), all
income Tax Returns and all other material Tax Returns required to be filed by
it, and all such filed Tax Returns are correct and complete in all material
respects; (ii) all Taxes shown to be due on such Tax Returns have been timely
paid; (iii) no deficiency with respect to Taxes has been proposed, asserted or
assessed in writing against the Company which have not been fully paid; and
(iv) to the Knowledge of the Company, no audit or other administrative or court
proceedings are pending with any Governmental Entity with respect to Taxes of
the Company, and no written notice thereof has been received.
b.The Company is not a party to or bound by any Tax allocation, Tax sharing
agreement, Tax indemnity agreement, or similar agreement or arrangement, other
than customary
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commercial Contracts entered into in the ordinary course of business the
principal subject matter of which is not Taxes.
c.The Company (i) has never been a member of an affiliated group filing a
consolidated federal income Tax Return and (ii) has no liability for the Taxes
of any Person (other than the Company) under United States Treasury Regulation
Section 1.1502-6 (or any similar provision of any Legal Requirement), as a
transferee or successor, by Contract, or otherwise.
d.There are no liens for Taxes upon any material property or other material
assets of the Company.
e.All income and other material Taxes required to be withheld, collected or
deposited by or with respect to the Company have been timely withheld, collected
or deposited, as the case may be, and to the extent required, have been paid to
the relevant Tax authority or other Governmental Entity.
f.The Company is a not a party to any agreement, contract, arrangement or plan
that has resulted or would result, individually or in the aggregate, in the
payment of any “excess parachute payment” within the meaning of Section 280G of
the Code (or any corresponding provision of state, local or foreign Tax law).
g.The Company has not been a party to a transaction governed in whole or part by
Code Section 355.
h.No position has been taken on any Tax Return with respect to the business or
operations of the Company for a taxable period for which the statute of
limitations for the assessment of any Taxes with respect thereto has not expired
that is contrary to any publicly announced position of a taxing authority or
that is substantially similar to any position which a taxing authority has
successfully challenged in the course of an examination of a Tax Return of the
Company. The Company has disclosed on its federal income Tax Returns all
positions taken therein that could give rise to a substantial understatement of
income Tax under Section 6662 of the Code.
i.The Company has not entered into any transaction identified as a “listed
transaction” for purposes of Treasury Regulations Sections 1.6011-4(b)(2) or
301.6111-2(b)(2).
j.The Company has delivered or made available to Parent complete and accurate
copies of all Tax Returns of the Company for each fiscal year since the
Company’s formation.
k.The Company has, at all times since its inception, been taxable as a
partnership and not as a corporation. Neither the Company nor any of its members
has ever made any election or filed any Tax Return inconsistent with the
foregoing sentence.
l.The Company Manager has taken into full consideration the difficulty of
determining with certainty from the tax literature whether the IRS would take
the position that the taxable gain or loss of holders of Outstanding Company
Interests as a result of the Merger would be based on “closed transaction”
treatment or the IRS would take the position that the taxable gain or loss of
holders of Outstanding Company Interests as a result of the Merger would be
based on “open transaction” treatment; and that the tax value assigned to the
CVRs for the purposes of “closed transaction” tax treatment (if such treatment
were applicable) might differ from the tax value which the Company or any holder
of Outstanding Company Interests might consider to be appropriate or accurate.
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Section 4.10 Employee Benefits and Labor Matters.
a.The Company has never had any “employee benefit plan” (as defined in
Section 3(3) of ERISA) or any other material employee plan or agreement or
similar Contract maintained by the Company and with respect to which the Company
would reasonably be expected to have any liability (each, a “Company Plan”). The
Company is in material compliance with the applicable provisions of ERISA, the
Code and all other applicable Legal Requirements. There never have been any
Company Plans that constitute “employee pension plans” (as defined in
Section 3(3) of ERISA) and are intended to be Tax qualified under Section 401(a)
of the Code. The Company has never contributed or been obligated to contribute
to an “employee benefit plan” subject to Title IV of ERISA, a “multiemployer
plan,” as defined in Section 3(37) of ERISA, or an “employee benefit plan”
subject to Sections 4063 or 4064 of ERISA.
b.The Company has no liability for life, health, medical or other welfare
benefits for former employees or beneficiaries or dependents thereof under any
Company Plans.
c.There are no claims, lawsuits, arbitrations or audits asserted or instituted
against any Company Plan, any fiduciary (as defined by Section 3(21) of ERISA)
thereto, the Company or any employee or administrator thereof in connection with
the existence, operation or administration of a Company Plan.
d.The Company has no employees and has not had any since its formation. There is
no agreement or arrangement for any Person to provide (or “lease”) personnel to
or for the use of the Company, or to second personnel to or for the use of the
Company, except for agreements or arrangements which the Company and the
counterparty thereto have agreed are being wholly terminated (without liability
to the Company) as of no later than the Closing.
e.There is no stay or severance or bonus or employment agreement or other
similar Contract between the Company and any of its managers, directors,
officers, employees or consultants.
f.The Company has not committed any unfair labor practice, nor has there been
any charge or complaint of unfair labor practice filed or threatened against the
Company before the National Labor Relations Board or any other Governmental
Entity. There has been no complaint, claim or charge of discrimination filed or
threatened against the Company with the Equal Employment Opportunity Commission
or any other Governmental Entity.
g.The Company has never had an employee equity incentive plan.
Section 4.11 Contracts.
a.The Company has made available to Parent correct and complete copies of each
Company Contract.
b.Each Company Contract is valid and binding on the Company and on each other
party thereto, subject to the Bankruptcy and Equity Exception, and is in full
force and effect, and the Company has performed all obligations required to be
performed by it before the date hereof under each Company Contract and, to the
Knowledge of the Company, each other party to each Company Contract has
performed all obligations required to be performed by it before the date hereof
under such Company Contract, except for such failures to be in compliance as
would not, individually or in the aggregate, reasonably be expected to result in
an allegation of material breach thereof. With respect to each
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Company Contract, the Company has not provided to or received from any
counterparty thereto any written notice announcing, contemplating or threatening
to, and, to its Knowledge, the Company is not otherwise aware of any intention
by any counterparty thereto to: (A) repudiate, terminate or not renew such
Company Contract, or (B) seek the renegotiation of such Company Contract in any
material respect.
c.The Company has not received or enjoyed any benefit, inducement or incentive
from any Governmental Entity which will, as a result of this Agreement or the
Transactions or the reduction of or (should it occur) cessation of the Company’s
business operations in the geographic area where they are currently conducted or
the reduction in force of or (should it occur) the termination of any or all
Company employees, result in any clawback, recapture, recoupment, repayment
obligation, penalty, Tax or other such liability.
Section 4.12 Environmental Matters.
a.The Company is and always has been in compliance with (i) all applicable Legal
Requirements concerning pollution or protection of the environment, including
all those relating to the presence, use, production, generation, handling,
transportation, treatment, storage, disposal, distribution, labeling, testing,
processing, discharge, release, threatened release, control or cleanup of any
hazardous materials, substances or wastes (“Environmental Laws”), and (ii) any
Governmental Authorizations required, issued, held or obtained under
Environmental Laws for the operations of the Company.
b.There has been no violation of, and the Company has never received any written
notice or report regarding any actual or alleged violation of, any Environmental
Law or any liabilities of the Company arising under Environmental Laws. No event
has occurred, and no circumstance exists, at any location or in connection with
the business or assets of the Company, in each case that to the Knowledge of the
Company could reasonably be expected to (with or without notice or lapse of
time): (i) materially prevent, hinder or limit continued compliance with
Environmental Laws; (ii) give rise to any investigatory, monitoring, remedial or
corrective action obligations pursuant to Environmental Laws, which obligations
are or would be material; or (iii) result in the imposition of any material
Liability or costs pursuant to any Environmental Law.
Section 4.13 Intellectual Property.
a.Exhibit B hereto sets forth as of the date hereof a true, complete and correct
list of all Company Patents, and identifies which are Owned Company Patents and
which are not.
b.The Company is the sole and exclusive assignee (or otherwise the sole and
exclusive owner) of all Company Patents that are Owned Intellectual Property
(“Owned Company Patents”). All Owned Company Patents are subsisting, in full
force and effect and have not lapsed, expired or been abandoned.
c.To the Knowledge of the Company, the actions of the Company in the conduct of
its business do not, never have, and have not been alleged to infringe,
constitute contributory infringement, inducement to infringe, misappropriation
or unlawful use of, or otherwise violate any valid and enforceable Intellectual
Property of any Person. The Company has not received any notice or other
communication asserting or alleging that the actions of the Company in the
conduct of its business infringe, constitute contributory infringement,
inducement to infringe, misappropriation or unlawful use of, or otherwise
violate any valid and enforceable Intellectual Property of any Person. No
settlement agreements, consents, orders, forbearances to sue or similar
obligations to which the Company is a party
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limit or restrict any rights of the Company in and to any Company Patents or
other Company Intellectual Property.
d.No third party has challenged or has threatened to challenge the Company’s
(or, to the Knowledge of the Company, the Company’s licensor’s) right, title or
interest in, to or under any Company Patent or other Company Intellectual
Property, or the validity, enforceability or claim scope of any (now- or
hereafter-) issued patent within the Owned Company Patents (or, to the Company’s
Knowledge, any other Company Patents), nor are there any facts known to the
Company that the Company believes are reasonably likely to give rise to a
conclusion of invalidity, unenforceability or narrowing of claim construction of
any (now- or hereafter-) issued patent within the Company Patents. No
interference, inter partes review, post-grant review, opposition, reissue,
reexamination or other Legal Proceeding is or has been pending or, to the
Knowledge of the Company, threatened in writing, in which the ownership, scope,
validity or enforceability of any Owned Company Patent is being, has been or
would be contested or challenged. To the Knowledge of the Company, no
interference, inter partes review, post-grant review, opposition, reissue,
reexamination or other Legal Proceeding is or has been pending or threatened in
writing, in which the ownership, scope, validity or enforceability of any
Company Intellectual Property other than Owned Company Patent is being, has been
or would be contested or challenged.
e.No Person has asserted or threatened a claim which if adversely resolved would
adversely affect the Company’s ownership or license rights to or under (nor are
there any facts known to the Company that the Company believes are reasonably
likely to adversely affect the Company’s ownership or license rights to or
under) any of the Company Patents or other Company Intellectual Property.
f.To the Knowledge of the Company, (i) all Company Patents have been prosecuted
in good faith, (ii) there are no inventorship challenges to any Company Patents,
(iii) no interference has been declared or provoked relating to any Company
Patents, (iv) all issued patents within the Company Patents are valid and
enforceable, and (v) all required maintenance and annual fees for all issued
patents within the Company Patents have been fully paid, and all fees paid
during prosecution and after issuance of any patents within the Company Patents
have been paid in the correct entity status amounts, with respect to such
patents. To the Knowledge of the Company, there does not exist any material fact
that the Company reasonably believes would (i) preclude the issuance of any
patents from patent applications included in the Company Patents, (ii) render
any (now- or hereafter-) issued patents included in the Company Patents invalid
or unenforceable, or (iii) cause any claims included in the Company Patents to
be materially narrowed.
g.The Company has taken all commercially reasonable steps and precautions to
protect and maintain the confidentiality of all confidential know-how, trade
secrets and other confidential items included within the Company Intellectual
Property and otherwise to maintain and protect the value of all such
confidential know-how, trade secrets and other confidential items.
h.Other than pursuant to the express terms of the Minotaur License, the Company
has not granted, licensed or conveyed to any third party, pursuant to any
written or oral contract, agreement, license or other arrangement, any license
or other right, title or interest in, to or under (i) any Company Intellectual
Property, or (ii) any future intellectual property (or any tangible embodiment
thereof) that may be developed from Company Intellectual Property.
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i.With respect to in-licensed Company Intellectual Property: the Company
possesses appropriate, valid and subsisting in-licenses to all such in-licensed
Company Intellectual Property; neither party is in breach of any such
in-license; there exists no default which (or condition which, with the passage
of time, the giving or notice or both) would give rise to a right to terminate,
convert rights to non-exclusive or otherwise limit rights granted to the Company
under any such in-license; neither party thereto has terminated or non-renewed
any such in-license nor expressed an intent to do so; each such in-license is an
exclusive in-license; no such in-license contains any diligence or milestones
obligation which if not satisfied would allow the counterparty to terminate the
in-license; and no such in-license has a scheduled expiration date which is
sooner than December 31, 2035.
j.The Company has never disclosed confidential information or other confidential
items (including any tangible embodiment) included within Company Intellectual
Property to a third party without having the recipient thereof execute a written
agreement regarding the non-disclosure and non-use (other than research uses
only) thereof, other than the disclosure of patent rights after the filing of
any application in respect thereof.
k.Other than pursuant to the express terms of the Minotaur License and the
Scripps License, there are no royalties, fees or other amounts payable by the
Company to any Person by reason of the ownership (other than customary fees and
amounts payable for filing, prosecuting and maintaining patents and patent
applications), use, sale or disposition of Company Intellectual Property (or any
tangible embodiment thereof), and there are no obligations to pay any such
royalties, fees or other amounts that are currently payable or past due.
l.To the Knowledge of the Company, no Company Intellectual Property has been
infringed or misappropriated by any third party.
m.The Company has never entered into any Contract to indemnify any other person
against any charge of infringement of any Intellectual Property.
n.All current and former managers, officers and employees of the Company
(including “leased employees”) have executed and delivered to the Company an
agreement regarding the protection of proprietary information and assigning to
the Company (and requiring the assignment to the Company of) any Intellectual
Property arising from services performed for the Company by such persons, the
form of which has been provided to Parent. All current and former consultants
and independent contractors to the Company (including “leased consultants”) have
executed and delivered to the Company an agreement in the form provided to
Parent regarding the protection of proprietary information and assigning to the
Company (and requiring the assignment to the Company of) any intellectual
property arising from services performed for the Company by such persons. No
current or former employee or independent contractor of the Company is in
material violation of any term of any such proprietary information/assignment
agreement, or any patent disclosure agreement, intellectual property disclosure
agreement or employment contract or any other contract or agreement relating to
the relationship of any such employee or independent contractor with the
Company, nor has the Company waived or failed to enforce any such violation.
o.No university, Governmental Entity or other organization sponsored research
and development conducted by the Company in such a way as to have any claim of
right to or ownership of or other Encumbrance on any Owned Intellectual
Property. No research and development conducted by the Company was performed by
a graduate student or employee of any Governmental Entity.
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p.The Transactions will not, with or without notice or lapse of time, result in,
or give any other Person the right or option to cause or declare: (i) a loss of,
or Encumbrance on, any Company Intellectual Property; (ii) the release,
disclosure or delivery of any Company Intellectual Property by or to any escrow
agent or other Person; or (iii) the grant, assignment or transfer to any other
Person of any license or other right or interest under, to or in any of the
Company Intellectual Property.
Section 4.14 Assets. The Company has good and valid title to all of its assets
(tangible or intangible), free and clear of any Encumbrances, other than
Permitted Encumbrances. (It is understood that for in-licensed intangible
assets, “good and valid title” to the asset shall be understood to mean good and
valid title to the in-license agreement.) There is no agreement or arrangement
for any Person to provide (or “lease”) equipment or other personal property to
or for the use of the Company, except for agreements or arrangements which the
Company and the counterparty thereto have agreed are being wholly terminated
(without liability to the Company) as of no later than the Closing.
Section 4.15 Real Property.
(i)The Company does not own any real property, nor has the Company ever owned
any real property.
(ii)The Company does not lease any real property, nor has the Company since its
formation used or occupied under lease (or had the right to use or occupy under
lease) any real property. There is no agreement or arrangement for any Person to
provide (or “lease”) real property to or for the use of the Company, except for
agreements or arrangements which the Company and the counterparty thereto have
agreed are being wholly terminated (without liability to the Company) as of no
later than the Closing.
Section 4.16 Insurance. A statement delivered by the Company to Parent before
the date hereof, and so designated, sets forth, as of the date of this
Agreement, a complete and accurate list of all policies or binders of insurance
covering the Company, in each case held by the Company or any other Person (the
“Insurance Policies”), setting forth, in respect of each such Insurance Policy:
(a) the policy number; (b) the insurer and the named insured(s); (c) policy
limits and deductibles; (d) the dates of premiums or payments due thereunder;
and (e) the expiration date. Each Insurance Policy is in full force and effect.
To the Knowledge of the Company, there have been no gaps in insurance coverage
that could expose the Company to uninsured material liability for events that
occurred before the date of this Agreement. There is no material claim pending
under any Insurance Policy as to which coverage has been questioned, denied or
disputed by the underwriters of such Insurance Policy. All premiums due and
payable to date under all Insurance Policies have been paid and the Company is
otherwise in compliance in all material respects with the terms of such policies
and Contracts.
Section 4.17 Certain Business Relationships with Affiliates. No event has
occurred, and, other than entry into the Minotaur License and the Minotaur
Services Agreement, there has been no transaction, or series of similar
transactions, agreements, arrangements or understandings to which the Company is
a party, of the sort which, if the Company were a reporting company under the
Exchange Act, would be required heretofore or ultimately to be reported pursuant
to Item 404 of Regulation S-K promulgated by the SEC.
Section 4.18 Products and Services. The Company has never offered or sold any
product or service, except the provision of research and development services to
customers, collaborators and licensees.
Section 4.19 Ordinary Course.
a.The Company has since its formation conducted its business in the ordinary
course of its business and not otherwise.
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b.The Company has at all times exercised commercially reasonable efforts to (i)
maintain its books and records (including both detailed and summary records of
scientific data) in any and all tangible and intangible media, in accordance
with commercially reasonable practices, and (ii) cause its consultants and
counterparties to maintain books and records pertaining to Company matters
(including both detailed and summary records of scientific data) in any and all
tangible and intangible media, in accordance with commercially reasonable
practices; and it and they have not destroyed any of such books and records.
Section 4.20 Brokers and Other Advisors. No broker, investment banker, financial
advisor, agent or other Person is entitled to any broker’s, finder’s, financial
advisor’s, agent’s or other similar fee or commission in connection with the
Transactions based upon arrangements made by or on behalf of the Company. Except
for the reasonable Transactions-related fees and expenses of Pillsbury Winthrop
Shaw Pittman LLP, Morrison & Foerster LLP and Crosbie Gliner Schiffman Southard
& Swanson LLP, which will be paid by the Company whether or not the Merger
occurs, there are and will be no other Transaction Expenses.
Section 4.21 State Takeover Statutes. No DLLC Act takeover or
business-combinations statute is applicable to the Merger. The Company does not
have any “poison pill” or similar antitakeover device.
Section 4.22 Bad Actor. Neither (a) any record or beneficial equityholder of the
Company, or (b) any of such person’s managers, directors, executive officers,
other officers that may serve as a manager, director or officer of any company
in which it invests, general partners or managing members, is subject to any
“Bad Actor” disqualifying event described in Rule 506(d)(1)(i) to (viii) of the
Securities Act, except for disqualifying events covered by Rule 506(d)(2)(ii) or
(iii) or (d)(3) under the Securities Act and disclosed reasonably in advance of
the Closing in writing in reasonable detail to Parent.
Section 4.23 Disclosure. No representation or warranty of the Company in this
Agreement (as modified by the Company Disclosure Letter), including all
exhibits, certificates and schedules delivered in connection herewith, and no
statement in the Company Disclosure Letter, contains any material untrue
statement or omits to state a material fact necessary to make the statements
herein or therein, in light of the circumstances in which they were made, not
misleading.
ARTICLE 5.

REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub hereby represent and warrant to the Company and the
Members that:
Section 5.1 Organization and Standing. Parent is a corporation duly organized,
validly existing and in good standing under the Legal Requirements of the State
of Delaware and Merger Sub is a limited liability company duly organized,
validly existing and in good standing under the Legal Requirements of the State
of Delaware. Each of Parent and Merger Sub has all requisite corporate or
limited liability company power and authority necessary to own or lease all of
its properties and assets and to carry on its business as it is now being
conducted.
Section 5.2 Authority; Non-contravention.
a.Each of Parent and Merger Sub has all necessary corporate or limited liability
company power and authority to (as applicable) execute and deliver this
Agreement and the CVR Agreement, to perform their respective obligations
hereunder and thereunder and to consummate the Transactions. The execution,
delivery and performance by Parent and Merger Sub of (as applicable) this
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Agreement and the CVR Agreement, and the consummation by Parent and Merger Sub
of the Transactions, have been duly authorized and approved by their board of
directors and manager, respectively, and adopted and approved by Parent as the
sole member of Merger Sub, and no other corporate or limited liability company
action on the part of Parent and Merger Sub or any stockholders of Parent is
necessary to authorize the execution, delivery and performance by Parent and
Merger Sub of (as applicable) this Agreement and the CVR Agreement and the
consummation by them of the Transactions. This Agreement has been duly executed
and delivered by Parent and Merger Sub and, assuming due authorization,
execution and delivery hereof by the Company, constitutes a legal, valid and
binding obligation of each of Parent and Merger Sub, enforceable against each of
them in accordance with its terms, subject to the Bankruptcy and Equity
Exception.
b.Neither the execution and delivery of this Agreement by Parent and Merger Sub,
nor the execution and delivery of the CVR Agreement by Parent, nor the
consummation by Parent or Merger Sub of the Transactions, nor compliance by
Parent or Merger Sub with any of the terms or provisions hereof, will
(i) conflict with or violate any provision of the certificate of incorporation
or bylaws of Parent or the certificate of formation or limited liability company
agreement of Merger Sub or (ii) assuming that the filing and compliance referred
to in Section 4.4 are effected, (x) violate any Legal Requirement of any
Governmental Entity applicable to Parent or any of its Subsidiaries, or
(y) violate or constitute a default under any of the terms, conditions or
provisions of any Contract to which Parent, Merger Sub or any of their
respective Subsidiaries is a party, except, in the case of clause (ii), for such
violations or defaults as would not, individually or in the aggregate,
reasonably be expected to have a Parent Material Adverse Effect, impair in any
material respect the ability of Parent or Merger Sub to perform their
obligations hereunder or prevent or materially delay consummation of the
Transactions.
Section 5.3 Ownership and Operations of Merger Sub. Parent owns all of the
outstanding limited liability company membership interests of Merger Sub. Merger
Sub was formed solely for the purpose of engaging in the Transactions, has
engaged in no other business activities and has conducted its operations only as
contemplated hereby.
Section 5.4 Governmental Approvals. Except for the filing of the Certificate of
Merger with the Secretary of State of the State of Delaware pursuant to the DLLC
Act, no consents or approvals of, or filings, declarations or registrations
with, any Governmental Entity are necessary for the execution, delivery and
performance of this Agreement by Parent and Merger Sub, the execution, delivery
and performance of the CVR Agreement by Parent or the consummation by Parent and
Merger Sub of the Transactions, other than such other consents, approvals,
filings, declarations or registrations that, if not obtained, made or given,
would not, individually or in the aggregate, reasonably be expected to have a
Parent Material Adverse Effect, impair in any material respect the ability of
Parent or Merger Sub to perform their obligations hereunder or prevent or
materially delay consummation of the Transactions.
Section 5.5 Legal Proceedings. There is no pending or, to the Knowledge of
Parent, threatened Legal Proceeding against or relating to Parent, nor is there
any injunction, order, judgment, ruling or decree imposed upon Parent, in each
case, by or before any Governmental Entity, that would, individually or in the
aggregate, reasonably be expected to have a Parent Material Adverse Effect,
impair in any material respect the ability of Parent or Merger Sub to perform
their obligations hereunder or prevent or materially delay consummation of the
Transactions.
ARTICLE 6.

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COVENANTS; OTHER MATTERS

Section 6.1 Filings; Other Action.
a.Each of the Company, Parent, the Members’ Representative and Merger Sub shall:
(i) promptly make and effect all registrations, filings and submissions required
to be made or effected by it pursuant to applicable Legal Requirements with
respect to the Transactions; and (ii) use its reasonable best efforts to cause
to be taken, on a timely basis, all other actions necessary or appropriate for
the purpose of consummating and effectuating the transactions contemplated by
this Agreement.
b.For avoidance of doubt, the parties recognize that Parent shall, upon issuance
thereof, not register the CVRs under the Exchange Act, and Parent shall have no
obligation under this Agreement or the CVR Agreement to ever list or include the
CVRs, or any of them, on any national securities exchange or any quotation
system.
Section 6.2 Publicity.
a.So long as this Agreement is in effect, none of the Company, the Members or
any of their respective Affiliates (excluding, for the avoidance of doubt,
Parent and the Surviving Company after the Effective Time) shall issue or cause
the publication of any press release or other public or industry announcement,
statement or acknowledgment with respect to the Merger, this Agreement or any of
the other Transactions. Parent and its Affiliates (including, for the avoidance
of doubt, the Surviving Company after the Effective Time) shall be permitted to
issue, in their sole discretion, one or more press releases or other public or
industry announcements, statements or acknowledgments with respect to this
Agreement or any of the Transactions, including the Merger.
b.Each Member shall, and shall cause his, her or its Affiliates to, and shall
cause his, her or its and their respective Representatives to, hold in
confidence the existence of this Agreement, the ancillary documents contemplated
by this Agreement, and the terms hereof and thereof, and each such Person shall
not disclose any such information to any other Person; provided, however, that
such Person may disclose any such information: (i) that after the date of this
Agreement becomes generally available to the public other than through a breach
by the applicable Member, any of his, her or its Affiliates or any of his, her
or its or their respective Representatives of their respective obligations under
this Section 6.2(b) (ii) to his, her or its respective tax, accounting or legal
Representatives who have a need to know such information and are informed of the
confidential nature of such information; (iii) as required by applicable Legal
Requirements, by any Governmental Entity or under any subpoena, civil
investigative demand or other similar process by a court of competent
jurisdiction having jurisdiction over such Person; or (iv) with Parent’s prior
written consent.
Section 6.3 Indemnification of D&O Indemnified Parties.
a.From and after the Effective Time, Parent will cause the Surviving Company to
fulfill and honor in all respects the obligations of the Company pursuant to
(i) any indemnification provision and any exculpation provision in favor of a
D&O Indemnified Party (as such) that is set forth in the Company Charter
Documents in effect as of the date of this Agreement, and (iii) any other rights
to indemnification now existing in favor of any D&O Indemnified Party (as such)
under any statute or any express written Contract, in each case with respect to
claims arising out of matters occurring at or before the Effective Time. The
certificate of formation and limited liability company agreement of the
Surviving Company shall contain provisions no less favorable with respect to
indemnification and exculpation from
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liability of present and former managers, directors and officers as set forth in
the Company’s Charter Documents on the date of this Agreement, and, from and
after the Effective Time, such provisions shall not be amended, repealed or
otherwise modified in any manner that could adversely affect the rights
thereunder of any D&O Indemnified Party (as such).
b.Parent and the Surviving Company jointly and severally agree to pay all
expenses, including reasonable attorneys’ fees, that are incurred by the D&O
Indemnified Parties in successfully enforcing their indemnity rights and other
rights provided in this Section 6.3.
c.This Section 6.3 shall survive the Effective Time and the consummation of the
Merger. This Section 6.3 is intended to benefit, and may be enforced by, the
Indemnified Parties and their respective heirs, representatives, successors and
assigns, and shall be binding on all successors and assigns of Parent and the
Surviving Company.
Section 6.4 Further Assurances. The parties hereto shall execute and deliver
such certificates and other documents and take such other actions as may be
reasonably necessary or appropriate in order to effect and to more perfectly
evidence the Merger and the Transactions, including, but not limited to, making
filings, recordings or publications required under the DLLC Act. Without
limitation, if at any time after the Effective Time any further action is
necessary to vest in the Surviving Company the title to all property or rights
of Merger Sub or the Company, the officers of the Surviving Company are fully
authorized in the name of Merger Sub or the Company, as the case may be, to
take, and shall take, any and all such lawful action.
Section 6.5 Post-Closing Confidentiality.
a.From and after the Closing, each Member shall, and shall cause his, her or its
Affiliates to, and shall instruct his, her or its and their respective
Representatives to, hold in confidence any and all confidential, proprietary and
non-public information and materials, whether in written, verbal, graphic or
other form, concerning Parent, the Company or any of their respective Affiliates
or any of their respective Intellectual Property (collectively, “Company
Confidential Information”), except that no Member shall have any obligation
under this Section 6.5 with respect to any Company Confidential Information
that: (i) after the date of this Agreement becomes generally available to the
public other than through a breach by the applicable Member, any of his, her or
its Affiliates or any of his, her or its or their respective Representatives of
their respective obligations under Section 6.2 or this Section 6.5; or (ii) is
provided to the applicable Member or any of his, her or its Affiliates by a
third party that was not known to the receiving party to be bound by any duty of
confidentiality to Parent, the Surviving Company or any of their respective
Affiliates. In addition, each Member is allowed to disclose any particular item
of Company Confidential Information to his, her or its respective tax,
accounting or legal Representatives to the extent such tax, accounting or legal
Representative has a need to know such information (in the provision of the
Representative’s tax, accounting or legal services to the Member) and is
informed of the confidential nature of such information.
b.From and after the Closing, no Member shall, and each Member shall cause his,
her or its Affiliates not to, and shall instruct his, her or its and their
respective Representatives not to, use any Company Confidential Information
except as expressly authorized in writing by Parent or the Surviving Company.
Each Member shall, and shall cause his, her or its Affiliates to, and shall
instruct his, her or its and their respective Representatives to, take the same
degree of care to protect the Company Confidential Information that such Person
uses to protect his, her or its own trade secrets and confidential information
of a similar nature, which shall be no less than a reasonable degree of care.
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c.Notwithstanding the foregoing, no Member shall be in breach of this
Section 6.5 as a result of any disclosure of Company Confidential Information
that is required by applicable Legal Requirements or that is required by any
Governmental Entity or under any subpoena, civil investigative demand or other
similar process by a court of competent jurisdiction having jurisdiction over
such Member; provided, however, that the applicable Member shall give advance
written notice of such compelled disclosure to Parent, and shall cooperate with
Parent in connection with any efforts to prevent or limit the scope of such
disclosure; and provided further, that the applicable Member shall disclose no
larger portion of such Company Confidential Information than that which is
legally required to be disclosed.
d.Each Member agrees to accept responsibility and liability for any breach of
this Section 6.5 by any of his, her or its Affiliates or any of his, her or its
or their respective Representatives.
Section 6.6 General Release.
a.Each Member, on behalf of himself, herself or itself and each of his, her or
its past, present and future Affiliates, firms, corporations, limited liability
companies, partnerships, trusts, associations, organizations, Representatives,
investors, stockholders, members, partners, trustees, principals, consultants,
contractors, family members, heirs, executors, administrators, predecessors,
successors and assigns (each, a “Releasing Party” and, collectively, the
“Releasing Parties”), hereby absolutely, unconditionally and irrevocably
releases, acquits and forever discharges the Company, its former, present and
future Affiliates, parent and subsidiary companies, joint ventures,
predecessors, successors and assigns (including Parent, the Surviving Company
and their respective Affiliates), and their respective former, present and
future Representatives, investors, stockholders, members, partners, insurers and
indemnitees (collectively the “Released Parties”), of and from any and all
manner of action or inaction, cause or causes of action, Legal Proceedings,
Encumbrances, Contracts, promises, or Losses (whether for compensatory, special,
incidental or punitive Losses, equitable relief or otherwise) of any kind or
nature whatsoever, past, present or future, at law, in equity or otherwise
(including with respect to conduct which is negligent, grossly negligent,
willful, intentional, with or without malice, or a breach of any duty, Legal
Requirement or rule), whether known or unknown, whether fixed or contingent,
whether concealed or hidden, whether disclosed or undisclosed, whether
liquidated or unliquidated, whether foreseeable or unforeseeable, whether
anticipated or unanticipated, whether suspected or unsuspected, which such
Releasing Parties, or any of them, ever have had or ever in the future may have
against the Released Parties, or any of them, and which are based on acts,
events or omissions occurring up to and including the Effective Time (the
“Released Claims”); provided, however, that the foregoing release shall not
release, impair or diminish, and the term “Released Claims” shall not include,
in any respect any rights of: (i) the Members under this Agreement; (ii) the
Members under the CVR Agreement; or (iii) the Releasing Parties to
indemnification, reimbursement or advancement of expenses under the provisions
of the Company Charter Documents (or any directors’ and officers’ liability
insurance policy maintained by the Company in respect of the same) if any
Releasing Party is made a party to a Legal Proceeding as a result of such
Releasing Party’s status as an officer, manager, director or employee of the
Company with respect to any act, omission, event or transaction occurring on or
before the Effective Time.
b.Without limiting the generality of Section 6.6(a), with respect to the
Released Claims, each Member, on behalf of himself, herself or itself and each
Releasing Party, hereby expressly waives all rights under Section 1542 of the
California Civil Code and any similar Legal Requirement or common law principle
in any applicable jurisdiction prohibiting or restricting the waiver of unknown
claims. Section 1542 of the California Civil Code reads as follows:
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“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING
PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, AND THAT IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.”

Notwithstanding the provisions of Section 1542 of the California Civil Code or
any similar Legal Requirement or common law principle in any applicable
jurisdiction, and for the purpose of implementing a full and complete release
and discharge of the Released Parties, each Member, on behalf of himself,
herself or itself and each Releasing Party, expressly acknowledges that the
foregoing release is intended to include in its effect all claims which any
Member or any Releasing Party does not know or suspect to exist in his, her or
its favor against any of the Released Parties (including unknown and contingent
claims), and that the foregoing release expressly contemplates the
extinguishment of all such claims (except to the extent expressly set forth
herein).
c.Each Member, on behalf of himself, herself or itself and each Releasing Party,
acknowledges that he, she or it may hereafter discover facts in addition to or
different from those which he, she or it now knows or believes to be true with
respect to the subject matter of the Released Claims, but each Member, on behalf
of himself, herself or itself and each Releasing Party, intends to and, by
operation of this Agreement shall have, fully, finally and forever settled and
released any and all Released Claims without regard to the subsequent discovery
of existence of such different or additional facts.
d.Each Member, on behalf of himself, herself or itself and each Releasing Party,
represents, warrants, covenants and agrees that such Releasing Party has not
assigned or transferred and will not assign or transfer any Released Claim or
possible Released Claim against any Released Party. Each Member, on behalf of
himself, herself or itself and each Releasing Party, agrees to indemnify and
hold the Released Parties harmless from any Losses or costs arising as a result
of any such assignment or transfer by such Member.
e.Each Member, on behalf of himself, herself or itself and each Releasing Party,
covenants and agrees not to, and agrees to cause his, her or its respective
Affiliates not to, whether in his, her or its own capacity, as successor, by
reason of assignment or otherwise, assert, commence, institute or join in, or
assist or encourage any third party in asserting, commencing, instituting or
joining in, any Legal Proceeding of any kind whatsoever, in law or equity, in
each case against the Released Parties, or any of them, with respect to any
Released Claims.
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Section 6.7 Vaughn Smider Covenant Not to Compete.
a.For a period commencing on the Closing Date and ending on the fourth
anniversary of the date of this Agreement (the “Restricted Period”), Vaughn
Smider (the “Restricted Person”) shall not, nor shall he permit any of his
Affiliates to, directly or indirectly: (i) engage in or assist others in
engaging (whether through employment, consultation, advisory services,
representation on a board of directors or other similar governing body or by any
financial or other investment) in the Restricted Business in the Territory;
(ii) have an interest in any Person that engages directly or indirectly in the
Restricted Business in the Territory in any capacity, including as a partner,
stockholder, manager, member, employee, principal, agent, trustee or consultant;
or (iii) intentionally interfere in any material respect with the business
relationships involving the Restricted Business (whether formed prior to or
after the date of this Agreement) between the Surviving Company or Parent and
any customer, supplier, licensee, licensor, client or distributor of the
Surviving Company or Parent. Notwithstanding the foregoing, the Restricted
Person may own, directly or indirectly, solely as an investment, securities of
any Person traded on any national securities exchange if the Restricted Person
is not a controlling Person of, or a member of a group which controls, such
Person and does not, directly or indirectly, own 2% or more of any class of
securities of such Person. For the avoidance of doubt, the Restricted Person may
engage in the Restricted Business on behalf of Minotaur, solely to the extent
that such engagement is necessary for and in compliance with the terms of any
Contract entered into between the Surviving Company or Parent and Minotaur.
b.During the Restricted Period, the Restricted Person shall not, nor shall he
permit any of his Affiliates to, directly or indirectly, solicit or entice, or
attempt to solicit or entice, any customers, suppliers, vendors, licensees,
licensors, clients or distributors of the Company or Parent or potential
customers, suppliers, vendors, licensees, licensors, clients or distributors of
the Company for purposes of diverting their business or services, to the extent
relating to the Restricted Business, from the Surviving Company or Parent,
respectively.
c.If the Restricted Person breaches, or threatens to commit a breach of, any of
the provisions of this Section 6.7, Parent and the Surviving Company shall have
the following rights and remedies not subject to any limitations under Article
7, each of which rights and remedies shall be independent of the others and
severally enforceable, and each of which is in addition to, and not in lieu of,
any other rights and remedies available to Parent or the Surviving Company under
law or in equity:
i.the right and remedy to have such provision specifically enforced by any
arbitration forum or court having jurisdiction (and with any requirement for
posting a bond or other security in connection therewith being hereby waived by
the Restricted Person), it being acknowledged and agreed that any such breach or
threatened breach may cause irreparable injury to each of Parent and the
Surviving Company and that money damages may not provide an adequate remedy to
Parent and the Surviving Company; and
ii.the right and remedy to recover from the Restricted Person all monetary
damages suffered by Parent or the Surviving Company, as the case may be, as the
result of any acts or omissions constituting a breach of this Section 6.7.
d.The Restricted Person acknowledges that the restrictions contained in this
Section 6.7 (i) are reasonable and necessary to protect the legitimate interests
of Parent and the goodwill, customer relationships, and Intellectual Property
purchased by Parent and (ii) constitute a material inducement to Parent to enter
into this Agreement and consummate the Transactions. In the event that
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any covenant contained in this Section 6.7 should ever be ruled or adjudicated
to exceed the time, geographic, product or service, or other limitations
permitted by applicable Legal Requirements in any jurisdiction, then any
arbitration forum or court is expressly requested and empowered to “blue-pencil”
and reform such covenant, and such covenant shall be deemed reformed, in such
jurisdiction within the Territory to the maximum time, geographic, product or
service, or other limitations permitted by applicable Legal Requirements. The
covenants contained in this Section 6.7 and each provision hereof are severable
and distinct covenants and provisions. The invalidity or unenforceability of any
such covenant or provision (or portion thereof) as written shall not invalidate
or render unenforceable the remaining covenants or provisions hereof (or the
remaining portions of the subject covenant or provision), and any such
invalidity or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such covenant or provision in any other jurisdiction.
Section 6.8 Members’ Representative.
a.For purposes of (i) negotiating and settling, on behalf of the Members, any
dispute that arises under this Agreement or the CVR Agreement after the
Effective Time, (ii) accepting delivery of notices hereunder to the Members
after the Effective Time, (iii) confirming the satisfaction of Parent’s
obligations under the CVR Agreement, including receiving and reviewing the
certificates and/or reports to be provided to the Members’ Representative
thereunder and (iv) negotiating and settling matters with respect to the amounts
to be paid to the holders of CVRs pursuant to the CVR Agreement, Vaughn Smider
is hereby appointed, authorized and empowered to be the exclusive
representative, agent and attorney-in-fact of the Members and holders of CVRs
(the “Members’ Representative”), with full power of substitution, to make all
decisions and determinations and to act (or not act) and execute, deliver and
receive all agreements, documents, instruments and consents on behalf of and as
agent for such Members or holders of CVRs at any time in connection with, and
that may be necessary or appropriate to accomplish the intent and implement the
provisions of this Agreement and the CVR Agreement, and to facilitate the
consummation of the transactions contemplated hereby and thereby. By executing
this Agreement, the Members’ Representative accepts such appointment, authority
and power. Without limiting the generality of the foregoing, the Members’
Representative shall have the power to take any of the following actions on
behalf of the Members: to give and receive notices, communications and consents
under this Agreement and the CVR Agreement on behalf of the Members and holders
of CVRs; to negotiate, enter into settlements and compromises of, resolve and
comply with orders of courts and arbitration forums with respect to any disputes
arising under this Agreement or the CVR Agreement; and to make, execute,
acknowledge and deliver all such other agreements, guarantees, orders, receipts,
endorsements, notices, requests, instructions, certificates, stock powers,
letters and other writings, and, in general, to do any and all things and to
take any and all action that the Members’ Representative, in Members’
Representative’s sole and absolute discretion, may consider necessary or proper
or convenient in connection with or to carry out the activities described in
this Section 6.8.
b.The appointment of the Members’ Representative by each Member and holder of
CVRs by the Members’ collective adoption of this Agreement is coupled with an
interest and may not be revoked in whole or in part (including upon the death or
incapacity of any member). Such appointment shall be binding upon the heirs,
executors, administrators, estates, personal representatives, officers,
directors, security holders, successors and assigns of each Member. All
decisions of the Members’ Representative shall be final and binding on all of
the Members and holders of CVRs, and no Member or holder of CVRs, shall have the
right to object, dissent, protest or otherwise contest the same. Parent shall be
entitled to rely upon, without independent investigation, any act, notice,
instruction or communication from the Members’ Representative and any document
executed by the Members’ Representative on behalf of any Member or holder of
CVRs and shall be fully protected in connection with any action or
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inaction taken or omitted to be taken in reliance thereon by Parent absent
willful misconduct by Parent. The Members’ Representative shall not be
responsible for any Loss suffered by the Members or holders of CVRs arising out
of any act done or omitted by the Members’ Representative in connection with the
acceptance or administration of the Members’ Representative’s duties hereunder,
unless such act or omission involves gross negligence or willful misconduct.
c.In the event that the Members’ Representative dies, becomes unable to perform
the Members’ Representative’s responsibilities hereunder or resigns from such
position, the holders of at least 50.1% of the then outstanding CVRs shall be
authorized to and shall select another representative reasonably acceptable to
Parent to fill such vacancy and such substituted representative shall be deemed
to be the Members’ Representative for all purposes of this Agreement and the CVR
Agreement. The newly-appointed Members’ Representative shall notify Parent, the
Surviving Company and any other appropriate Person in writing of his or her
appointment and provide appropriate contact information for purposes of this
Agreement and the CVR Agreement. Parent shall be entitled to rely upon, without
independent investigation, the identity and validity of such newly-appointed
Members’ Representative as set forth in such written notice. If for any reason
there is no Members’ Representative at any time, all references herein to the
Members’ Representative shall be deemed to refer to all of the Members.
d.The Members’ Representative shall serve without compensation.
ARTICLE 7.

SURVIVAL AND INDEMNIFICATION

Section 7.1 Survival of Representations and Warranties. For purposes of
determining each Indemnification Amount and the Total Indemnification Amount (as
defined below), (a) all representations and warranties contained in Article 4 or
any certificate, instrument or document delivered by the Company in connection
with this Agreement (and all claims based upon preclosing covenants and
agreements herein) shall survive the Closing, irrespective of any facts known to
Parent at or before the Closing or any investigation at any time made by or on
behalf of Parent, for a survival period of 48 months from the Effective Time,
and (b) all representations and warranties contained in Article 3 or any
certificate, instrument or document delivered by the Company or any Member in
connection with this Agreement shall survive the Closing, irrespective of any
facts known to Parent at or before the Closing or any investigation at any time
made by or on behalf of Parent, until the date which is 60 days following the
applicable status of limitations and no longer - provided, that if Parent
delivers to the Members’ Representative, before expiration of such survival
period, either a notice asserting a Loss that would constitute an
Indemnification Amount, or a notice that, as a result of a Legal Proceeding
instituted or claim made by a Person not a party to this Agreement, Parent
reasonably expects that Parent or any other Indemnified Party may incur Losses
which would constitute an Indemnification Amount, then the applicable
representation, warranty, covenant or agreement will survive until, but only for
purposes of, the resolution of the matter covered by such notice and the final
determination of the actual Loss and the related Indemnification Amount, if any.
This Section 7.1 and the determination of each of the Indemnification Amount and
of the Total Indemnification Amount will not be affected by any investigation
conducted with respect to, or any knowledge acquired (or capable of being
acquired) at any time, whether before or after the execution and delivery of
this Agreement or the Closing Date, by or on behalf of Parent.
Section 7.2 Parent Representations. All representations and warranties made by
Parent and Merger Sub shall terminate and expire at the Effective Time, and any
liability of Parent or Merger Sub with respect to such representations and
warranties shall thereupon cease.
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Section 7.3 Survival of Covenants. All covenants and agreements of the parties
hereto contained herein shall survive the Effective Time until fully waived in
writing, performed or complied with.
Section 7.4 Indemnification by the Members and Indemnification Amount. From and
after the Effective Time (but subject to Section 7.1 and Section 7.5), the
Members shall hold harmless and indemnify each of Parent, any of Parent’s
Affiliates, the Surviving Company or any of their respective directors,
managers, officers, employees, agents, consultants, advisors, representatives
and equityholders (individually the “Indemnified Party” and collectively, the
“Indemnified Parties”) from and against, and shall (subject to any limitations
expressly set forth herein) compensate and reimburse each Indemnified Party for
100% of the monetary value of any and all Losses directly or indirectly arising
out of, relating to or resulting from any of the following, and incurred or
suffered by any Indemnified Party (the monetary value of each such Loss being an
“Indemnification Amount” and the aggregate monetary value of all Indemnification
Amounts being, on a cumulative basis, the “Total Indemnification Amount”):
a.any inaccuracy in or breach of any representation or warranty of the Company
and the Members contained in Article 4 of this Agreement or in any certificate,
instrument or document delivered by the Company in connection with this
Agreement;
b.any breach or inaccuracy of any representation or warranty made by the Members
in Article 3 of this Agreement; provided, however, that that the indemnification
obligations for any such breach or inaccuracy by a Member shall be limited to
the applicable Member;
c.the nonfulfillment, nonperformance or other breach of any covenant or
agreement of the Company contained in this Agreement or in any certificate,
instrument or document delivered pursuant hereto;
d.the nonfulfillment, nonperformance or other breach of any covenant or
agreement of any Member contained in this Agreement or in any certificate,
instrument or document delivered pursuant hereto; provided, however, that the
indemnification obligations for such a breach or nonperformance by any Member
shall be limited to the applicable breaching or nonperforming Member;
e.any Transaction Expenses which are not paid in full at or before the Closing
or otherwise reflected as a deduction in the determination of the Merger
Consideration;
f.any Indebtedness of the Company which is not paid in full at or before the
Closing;
g.any Tax arising during, or payable with respect to, any period ending on or
before the Closing (or any portion of any such period) or payable with respect
to anything which occurred before the Closing, whether or not known as of the
Closing to be owing; and
h.any claim by any actual or purported holder of a CVR, member or former member
of the Company, or any other Person, against any of the Indemnified Parties or
against any actual or purported holder of a CVR, member or former member of the
Company, relating to the Transactions or seeking to assert, or based upon,
(i) ownership or rights to ownership of any equity securities of the Company,
(ii) any rights of a member of the Company (other than the right of any actual
holder of a CVR to receive such member’s portion of the Total Merger
Consideration pursuant to the express provisions of this Agreement), including
any option, preemptive rights or rights to notice or to vote, (iii) any rights
as a member of the Company under the DLLC Act or the Company Charter Documents,
in effect as of immediately before the Effective Time, (iv) any fiduciary or
statutory duties of the Company or any of its
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managers, directors, officers or controlling persons, or (v) any claim that his,
her or its equity securities of the Company were wrongfully repurchased by the
Company.
Section 7.5 Limitations.
a.For purposes of Section 7.4, with respect to each representation, warranty,
covenant or agreement contained in this Agreement that is subject to a
“materiality,” “material,” “Material Adverse Effect,” “in all material respects”
or similar qualification (but not including knowledge or Knowledge of the
Company), any such qualification shall be disregarded for purposes of
calculating the amount of any Losses that is subject to indemnification
hereunder (but not for purposes of determining whether a breach of or inaccuracy
in such representation, warranty, covenant or agreement has occurred).
b.Except in the case of fraud by such Member, the liability of each Member
pursuant to Section 7.4 shall be capped at 100% of the applicable Member’s
Holdback Amount Unpaid plus 50% of the Merger Consideration which would be
payable to such Member pursuant to such Member’s CVRs plus (in the case of
Vaughn Smider and his Affiliates only) 40% of any cash actually paid to Vaughn
Smider and his Affiliates at the Closing and 40% of any Holdback Distribution
Amount actually paid to Vaughn Smider and his Affiliates; provided, however,
that these limits shall not apply (and, instead, the foregoing caps shall all be
100% instead of 40% or 50%) with respect to the following: (i) Section 7.4(b)
(regarding any breach or inaccuracy of any representation or warranty made by
the applicable Member in Article 3 of this Agreement); (ii) Section 7.4(d)
(regarding the nonfulfillment, nonperformance or other breach of any covenant or
agreement of the applicable Member contained in this Agreement or in any
certificate, instrument or document delivered pursuant hereto); (iii) Section
7.4(g) (regarding any Tax arising during, or payable with respect to, any period
ending on or before the Closing (or any portion of any such period) or payable
with respect to anything which occurred before the Closing); and (iv) clause (i)
of Section 7.4(h) (regarding any claim by any actual or purported holder of a
CVR, member or former member of the Company, or any other Person, in each
instance other than a Member, against any of the Indemnified Parties or against
any actual or purported holder of a CVR, member or former member of the Company,
seeking to assert, or based upon, ownership or rights to ownership of any equity
securities of the Company).
c.The obligations of each respective Member under Section 7.4 shall be limited
by the principle of several-but-not-joint liability.
d.Except in the case of fraud by such Member, the obligations of each respective
Member (other than Vaughn Smider and his Affiliates) under Section 7.4 (as
limited under Section 7.5(a)-(c)) may be enforced only by debiting
(dollar-for-dollar, upon demand and as incurred) against the Member’s Holdback
Amount Unpaid and by debiting (dollar-for-dollar, upon demand and as incurred)
amounts that would otherwise have been payable to the Member under the Member’s
CVRs (i.e., that would otherwise have been payable to the Member in such
Member’s capacity as a “Holder” under the CVR Agreement). For avoidance of
doubt: except in the case of fraud by such Member, the obligations of each
respective Member (other than Vaughn Smider and his Affiliates) under Section
7.4 (as limited under Section 7.5(a)-(c)) may not be enforced against any cash
actually paid to such Member at the Closing, against any Holdback Distribution
payments made to such Member or against any cash actually paid to such Member in
such Member’s capacity as a “Holder” under the CVR Agreement.
e.The obligations of Vaughn Smider and his Affiliates under Section 7.4 (as
limited under Section 7.5(a)-(c)) may be enforced not only by debiting
(dollar-for-dollar, upon demand
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and as incurred) against the Holdback Amount Unpaid of Vaughn Smider and his
Affiliates and by debiting (dollar-for-dollar, upon demand and as incurred)
amounts that would otherwise have been payable to Vaughn Smider and his
Affiliates under the CVRs of Vaughn Smider and his Affiliates (i.e., that would
otherwise have been payable to Vaughn Smider and his Affiliates in the capacity
as a “Holder” under the CVR Agreement), but also and in addition by a direct
claim under Section 8.5 to recover such liability (dollar-for-dollar, upon
demand and as incurred) in the form of cash (provided that, except in the case
of fraud by Vaughn Smider, the amount of the recovery in the form of cash shall
not exceed the sum of 40% of any cash actually paid to Vaughn Smider and his
Affiliates at the Closing and 40% of any Holdback Distribution Amount actually
paid to Vaughn Smider and his Affiliates). The Indemnified Party(ies) shall not
be subject to any election of remedies or to any required sequencing of
remedies. Notwithstanding the foregoing, no such direct claim under Section 8.5
to recover such liability shall be commenced after the date which is 24 months
after the Effective Time, except in the case of fraud by Vaughn Smider.
Section 7.6 Nonpayment After and Pending Determinations. Parent shall have the
right to, subject to any limitations expressly set forth herein, subtract and
withhold from any sum that is or may be owed to any Member for the Holdback
Distribution or in such Member’s capacity as a “Holder” under the CVR Agreement
: (a) each Claimed Amount for which indemnifiability and the size of the Loss
have been finally determined (and which has thereby become an established
Indemnification Amount); and (b) pending final determination, each Claimed
Amount for which final determination has not yet occurred.
Section 7.7 No Contribution. Without limiting the provisions of Section 6.3, no
Member has and shall have, as a member or former member of the Company, (and by
execution of this Agreement and acceptance of CVRs each Holder, as a
member/former member of the Company, waives) any right of subrogation,
indemnification or contribution against the Company or any of its pre-Merger
managers or other officials with respect to any breach by the Company or any of
its pre-Merger managers or other officials or any other Member of any of their
respective representations, warranties, covenants or agreements in this
Agreement or any duty owed by any of them to such Member (as a Holder or in a
prior capacity as a member of the Company) or to the Members generally (as
Holders or in their prior capacity as members of the Company), whether by virtue
of any equitable, fiduciary, contractual or statutory right of indemnity or
otherwise, and all claims to the contrary are hereby waived and released.
Section 7.8 Claim Procedure.
a.If an Indemnified Party determines to seek indemnification under this Article
7, it shall give notice in writing to the Members’ Representative (each such
notice, a “Claim Notice”), which notice shall set forth such material
information with respect to such claim for indemnification as is then reasonably
available to the Indemnified Party and shall contain a good faith, non-binding,
preliminary estimate of the aggregate amount of the actual and potential Losses
that the Indemnified Party believes have arisen and may arise as a result of
such facts and circumstances (the aggregate amount of such estimate, as it may
be modified by such Indemnitee in good faith from time to time, being referred
to as the “Claimed Amount”). In the event that a Claim Notice is given with
respect to an Indemnifiable Claim by Third Party, such notice shall be delivered
to the Members’ Representative within 20 calendar days of the Indemnified Party
becoming aware of such claim.
b.If the Members’ Representative disputes liability with respect to any Claimed
Amount or disputes the size of the claimed Loss, the Members’ Representative
shall, within 20 calendar days after receiving the Claim Notice (the “Dispute
Period”), give written notice of such dispute to the Indemnified Party in which
event the parties will negotiate in good faith to mutually agree to resolve such
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dispute. If the parties are unable to resolve the indemnifiability of such
Claimed Amount and the size of the Loss within 30 calendar days after the
Members’ Representative delivers such notice, then (i) such dispute shall be
settled in accordance with Section 8.5 hereof upon invocation of such procedure
by the Indemnified Party or the Members’ Representative, and (ii) if such
dispute relates to an Indemnifiable Claim by Third Party, then pending
resolution of any such dispute, the Indemnified Party shall have the right to
defend, compromise, or settle such Indemnifiable Claim By Third Party (although
any compromise or settlement shall require the consent of the Members’
Representative, not to be unreasonably withheld, conditioned or delayed) – but
all, if it is ultimately determined that the Indemnifiable Claim By Third Party
was indemnifiable, with the same indemnification effect as if there had never
been such an indemnifiability dispute. If no written notice of dispute is
delivered by the Members’ Representative before the expiration of the Dispute
Period, then the Members shall be conclusively deemed to have agreed that the
full Claimed Amount is owed to the Indemnified Party (albeit subject in all
instances to any limitations expressly set forth herein).
Section 7.9 Indemnifiable Claims By Third Party. A Claim Notice with respect to
an Indemnifiable Claim By Third Party shall set forth such material information
with respect to such Indemnifiable Claim By Third Party as is then reasonably
available to the Indemnified Party. If any such liability is asserted against
the Indemnified Party and the Indemnified Party notifies the Members’
Representative of such liability, the Members’ Representative shall be entitled,
if the Members’ Representative so elects by written notice delivered to the
Indemnified Party within 20 calendar days after receiving the Claim Notice, to
assume the defense of such asserted liability with counsel reasonably
satisfactory to the Indemnified Party (provided, that the Members’
Representative shall have no such entitlement if Parent reasonably determines,
and notifies the Members’ Representative of such determination, that the
Members’ Representative lacks the financial wherewithal to properly conduct such
defense). If the Members’ Representative elects to assume the defense of such
asserted liability, the claims made by such third party shall be conclusively
established as being within the scope of and subject to the indemnification
provisions of this Agreement. Notwithstanding the foregoing, the Indemnified
Party shall have the right to employ its own counsel in any such case, but the
fees and expenses of such counsel shall be payable by the Indemnified Party, and
the right to (in the scenario where the Members’ Representative shall fail to
assume in a timely manner the defense of and reasonably defend such
Indemnifiable Claim By Third Party or in the scenario where Parent reasonably
determines, and notifies the Members’ Representative of such determination, that
the Members’ Representative lacks the financial wherewithal to properly conduct
such defense) control the defense and settlement. If the Members’ Representative
shall be entitled to and does control the defense of any such Indemnifiable
Claim By Third Party, the Members’ Representative shall have the right to settle
such Indemnifiable Claim By Third Party; provided, that the Members’
Representative agrees to obtain the prior written consent (which shall not be
unreasonably withheld, conditioned or delayed) of the Indemnified Party before
entering into any settlement of (or resolving by consent to the entry of
judgment upon) such Indemnifiable Claim By Third Party unless (A) there is no
finding or admission of any violation of Applicable Law or any violation of the
rights of any Person by an Indemnified Party, no requirement that the
Indemnified Party admit fault or culpability, and no adverse effect on any other
claims that may be made by or against the Indemnified Party and (B) the sole
relief provided is monetary damages that are paid in full by the Members’
Representative and such settlement does not require the Indemnified Party to
take (or refrain from taking) any action. With respect to any assertion of
liability by a third party that results in an Indemnifiable Claim By Third
Party, the parties shall make reasonably available to each other all relevant
information in their possession that is material to any such assertion and
otherwise cooperate in the defense of the Indemnifiable Claim By Third Party
subject to their respective attorney-client privileges and work product doctrine
protections.
Section 7.10 Exercise of Remedies Other Than by Parent. No Indemnified Party
(other than Parent, the Surviving Company or any successor thereto or assign
thereof) shall be permitted to assert any
36

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indemnification claim or exercise any other remedy under this Agreement unless
Parent, the Surviving Company or any successor thereto or assign thereof, as the
case may be, shall have consented to the assertion of such indemnification claim
or the exercise of such other remedy. The parties acknowledge and agree that, if
the Surviving Company suffers, incurs or otherwise becomes subject to any Losses
as a result of or in connection with any inaccuracy in or breach of any
representation, warranty, covenant or obligation, then (without limiting any of
the rights of the Surviving Company as an Indemnified Party) Parent shall also
be deemed, by virtue of its ownership of the Ownership Interests of the
Surviving Company, to have incurred Losses as a result of and in connection with
such inaccuracy or breach; provided, that this Section 7.10 shall not, however,
allow a duplicative recovery of the same Losses by Parent, on the one hand, and
the Indemnified Parties other than Parent, on the other hand).
Section 7.11 Expenses of the Members’ Representative. The Members’
Representative shall be entitled to recover, on a dollar-for-dollar basis from
the next payment(s) otherwise due (after application of all other provisions of
the CVR Agreement) to the Holders (as defined in the CVR Agreement), any amounts
expended by the Members’ Representative for indemnification/defense or other
out-of-pocket costs and expenses pursuant to this Article 7.
Section 7.12 Characterization of Payments.  Any indemnity payments made pursuant
to this Article 7 shall constitute an adjustment to the Total Merger
Consideration for Tax purposes and shall be treated as such by the parties to
this Agreement and the Members on their Tax Returns unless otherwise required by
applicable law.
Section 7.13 Exclusive Remedy. Subject to Section 8.11, and except with respect
to fraud, Parent and Merger Sub acknowledge and agree that the remedies provided
for in this Article 7 shall be the sole and exclusive remedies of Parent, Merger
Sub and any other Indemnified Parties with respect to any and all claims against
or in respect of any Member relating to this Agreement or the Transactions
(including, without limitation, the matters set forth in Section 7.4 as well as
any breach, inaccuracy, misrepresentation or nonperformance of any
representation, warranty, covenant, agreement or obligation).
Section 7.14 CVRs Catch-Up After Determination. Similarly to Section 2.10, if as
of any CVR Payment Date (as defined in the CVR Agreement) there is any Claimed
Amount for which final determination has not yet occurred (and for which the CVR
Payment Amount (as defined in the CVR Agreement) is therefore reduced), then
upon any final determination of non-indemnifiability or of a smaller size of
Loss, within 30 days thereafter Parent shall pay each Holder the indicated
Claimed Amount (or applicable portion thereof) that had been held back beyond
such CVR Payment Date, plus interest as set forth in Section 2.4(a) of the CVR
Agreement
ARTICLE 8.

MISCELLANEOUS PROVISIONS
Section 8.1 Amendment. This Agreement may be amended, modified or supplemented
in any and all respects by (but only by) written agreement of the parties
hereto; provided, that a majority in interest of the Members together with a
majority per capita of the Members, both together, shall be and hereby are
empowered and authorized to amend, modify, supplement or waive this Agreement or
any provision thereof on behalf of all Members, so long as any such amendment,
modification, supplement or waiver affects all Members equally or
proportionately with respect to their Company Interests, and any such amendment,
modification, supplement or waiver shall be binding on all Members, even Members
who did not themselves agree to so amend, modify, supplement or waive (or who
even opposed doing so).
37

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Section 8.2 Waiver.
a.No failure on the part of any party to exercise any power, right, privilege or
remedy under this Agreement, and no delay on the part of any party in exercising
any power, right, privilege or remedy under this Agreement, shall operate as a
waiver of such power, right, privilege or remedy; and no single or partial
exercise of any such power, right, privilege or remedy shall preclude any other
or further exercise thereof or of any other power, right, privilege or remedy.
b.Subject to the proviso sentence of Section 8.1, no party shall be deemed to
have waived any claim arising out of this Agreement, or any power, right,
privilege or remedy under this Agreement, unless the waiver of such claim,
power, right, privilege or remedy is expressly set forth in a written instrument
duly executed and delivered on behalf of such party; and any such waiver shall
not be applicable or have any effect except in the specific instance in which it
is given.
Section 8.3 Entire Agreement; Counterparts. This Agreement, the CVR Agreement,
any other agreements expressly referred to herein, and the Confidentiality
Agreement constitute the entire agreement of the parties hereto and supersede
all prior or contemporaneous agreements, commitments and understandings, both
written and oral, among or between any of the parties hereto with respect to the
subject matter hereof and thereof. This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same instrument. Parent has made no promises,
representations, warranties, covenants, or undertakings, other than those
expressly set forth herein and in the CVR Agreement, to induce the Company or
the Members to execute and deliver this Agreement, and the Company and each
Member, respectively, acknowledges that the Company and such Member has not
executed or delivered this Agreement in reliance upon any such promise,
representation, or warranty, covenant or undertaking not contained herein. The
Company has made no promises, representations, warranties, covenants, or
undertakings, other than those expressly set forth herein and in the CVR
Agreement, to induce Parent and Merger Sub to execute and deliver this
Agreement, and Parent and Merger Sub acknowledge that Parent and Merger Sub have
not executed or delivered this Agreement in reliance upon any such promise,
representation, or warranty, covenant or undertaking of the Company not
contained herein.
Section 8.4 Governing Law. This Agreement, and all claims or causes of action
(whether in contract, tort or statute) that may be based upon, arise out of or
relate to this Agreement or the negotiation, execution or performance of this
Agreement (including any claim or cause of action based upon, arising out of or
related to any representation or warranty made in or in connection with this
Agreement or as an inducement to enter into this Agreement), shall be governed
by, construed in accordance with and enforced in accordance with the internal
laws of the State of Delaware (including its statutes of limitations and of
repose, and without giving effect to any conflicts of law principles that
require the application of the law of a different state or country).
Section 8.5 Arbitration.
a.Any and all any disputes, controversies or claims between or among the parties
(whether based on contract, tort or otherwise) arising out of or relating to
this Agreement shall be exclusively and finally resolved by binding arbitration
(using the English language) in accordance with the commercial arbitration rules
and administration rules of JAMS then in effect, in San Diego, California, USA.
The arbitration shall be conducted by an arbitrator reasonably knowledgeable
about acquisition transactions in the pharmaceutical/biotechnology industry and
reasonably acceptable to Parent and the Members’ Representative. If Parent and
the Members’ Representative cannot agree on a single arbitrator within 30 days
after a demand for arbitration has been made, Parent shall appoint an
arbitrator, the Members’ Representative shall appoint an arbitrator, the two
arbitrators shall appoint a third
38

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arbitrator, and the three arbitrators shall hear and decide the issue in
controversy. If a party fails to appoint an arbitrator within 45 days after
service of the demand for arbitration, then the arbitrator appointed by the
other party shall arbitrate any controversy in accordance with this
Section 8.5(a). Except as to the selection of arbitrators, the arbitration
proceedings shall be conducted promptly and in accordance with the commercial
arbitration rules of JAMS then in effect. The expenses of any arbitration,
including the reasonable attorney fees and expenses of the prevailing party,
shall be awarded by the arbitrator(s) to the prevailing party against the other
party.
b.All arbitration proceedings hereunder shall be confidential, and the
arbitrator(s) shall issue appropriate protective orders to safeguard each
party’s confidential information. Except as required by applicable Legal
Requirements, neither Parent nor the Members’ Representative shall make (or
instruct the arbitrator(s) to make) any public announcement with respect to the
proceedings or decision of the arbitrator(s) without prior written consent of
the other.
c.Each party recognizes that the covenants and agreements herein and their
continued performance as set forth in this Agreement are necessary and critical
to protect the legitimate interests of the other parties, that each other party
would not have entered into this Agreement in the absence of such covenants and
agreements and the assurance of continued performance as set forth in this
Agreement, and that a party’s breach or threatened breach of such covenants and
agreements (including, without limitation, Section 6.2, Section 6.5 and Section
6.7) may cause another party irreparable harm and significant injury, the amount
of which will be extremely difficult to estimate and ascertain, thus potentially
making any remedy at law or in damages inadequate. Therefore, each party
confirms and agrees that, notwithstanding Section 8.5(a), any other party shall
be entitled to seek (from the arbitrator(s) and/or from any court of competent
jurisdiction) on an interim or permanent basis an order for specific
performance, an order restraining any breach or threatened breach (of
Section 6.2, Section 6.5, Section 6.7 and/or of any or all other provisions of
this Agreement), and any other equitable relief (including but not limited to
temporary, preliminary and/or permanent injunctive relief), all without need to
post any bond or other security, and in addition to and not exclusive of any
other remedy available to such other party at law or in equity.
d.No party shall commence any court proceeding or action against the other to
resolve any dispute, except to enforce an arbitral award rendered pursuant to
this Section 8.5 or for equitable relief. For all purposes of this Agreement
(but subject to the preceding sentence), the parties hereby irrevocably consent
to personal jurisdiction and venue in the state and federal courts located in
San Diego County, California, USA, and irrevocably agree to service of process
issued or authorized by any such court in any such action or proceeding. The
parties hereby irrevocably waive any objection which they may now have or
hereafter have to the laying of venue in the federal or state courts located in
San Diego County, California, USA in any such action or proceeding, and hereby
irrevocably waive and agree not to plead or claim in any such court that any
such action or proceeding brought in any such court has been brought in an
inconvenient forum. Notwithstanding anything in this Section 8.5, a party may
seek to enforce an arbitral award or pursue equitable relief at any time in any
court of competent jurisdiction.
e.The provisions of this Section 8.5 shall survive any termination of this
Agreement, and shall be severable and binding on the parties hereto,
notwithstanding that any other provision of this Agreement may be held or
declared to be invalid, illegal or unenforceable.
Section 8.6 Payment of Expenses. Whether or not the Merger is consummated, each
party hereto shall (subject to express provisions hereof resulting in reduction
of the Total Merger Consideration) pay its own expenses incident to this
Agreement and preparing for, and otherwise in connection with, the Transactions.
39

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Section 8.7 Transfer Taxes. All transfer, documentary, sales, use, stamp,
registration and other substantially similar Taxes and fees (including any
penalties and interest) incurred in connection with this Agreement
(collectively, “Transfer Taxes”) shall be paid by Parent and Merger Sub when
due, and Parent and Merger Sub will, at their own expense, file all necessary
Tax Returns and other documentation with respect to all such Transfer Taxes.
Section 8.8 Assignability; No Third Party Rights. Before the Effective Time,
neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned, in whole or in part, by operation of a Legal Requirement or
otherwise, by any of the parties without the prior written consent of the other
parties and any purported assignment without such consent shall be void. This
Agreement shall be binding upon, and shall be enforceable by and inure to the
benefit of, the parties hereto and their respective permitted successors and
assigns. Except (a) any rights of holders of Company Interests to receive
payment in accordance with Article 2 after the Effective Time, and (b) as set
forth in Section 6.3 (Indemnification of D&O Indemnified Parties), nothing in
this Agreement, express or implied, is intended to or shall confer upon any
Person, other than the parties hereto, any right, benefit or remedy of any
nature. To the extent permitted by applicable Legal Requirements, it is
expressly agreed that in no event shall any former members of the Company (as
opposed to the Members’ Representative in the name of and on behalf of such
former member(s) of the Company) or any holders of CVRs (as opposed to the
Members’ Representative in the name of and on behalf of such holder(s) of CVRs)
have, after the Effective Time, any power or right to commence or join in any
Legal Proceeding based on or arising out of the Transactions, this Agreement,
the CVR Agreement or the CVRs.
Section 8.9 Notices. Any notice, request, approval, consent or other such
communication required or permitted to be given under this Agreement or the CVR
Agreement shall be in writing and shall be deemed to have been sufficiently
given if and only if delivered in person, by email or by internationally
recognized overnight courier service to the party to which it is directed at its
physical or email address shown below or such other physical or email address as
such Party shall have last given by such written notice to the other party in
accordance with this Section:
if to Parent or (before the Effective Time) to Merger Sub or (after the
Effective Time) to the Surviving Company:
Ligand Pharmaceuticals Incorporated
3911 Sorrento Valley Boulevard, Suite 110
San Diego, CA 92121
Attention: Charles Berkman, Senior Vice President
Email: cberkman@ligand.com

with a copy (which shall not constitute notice) to:
Ligand Pharmaceuticals Incorporated
3911 Sorrento Valley Boulevard, Suite 110
San Diego, CA 92121
Attention: General Counsel
Email: cberkman@ligand.com
if to the Company (before the Effective Time):
Taurus Biosciences, LLC
10929 Technology Place
40

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San Diego, CA 92127
Attention: Vaughn Smider
Email: vaughn.smider@taurusbiosciences.com
with a copy (which shall not constitute notice) to:
Pillsbury Winthrop Shaw Pittman LLP
12255 El Camino Real, Suite 300
San Diego, CA 92130
Attention: Mike Hird
Email: mike.hird@pillsburylaw.com

if to a Member:
[to the address or email address of such Member as set forth on Exhibit A
hereto]

if to the Restricted Person or to the Members’ Representative:
Vaughn Smider
8205 Torrey Gardens Place
San Diego, CA 92129
Email: vaughn.smider@taurusbiosciences.com
with a copy (which shall not constitute notice) to:
Pillsbury Winthrop Shaw Pittman LLP
12255 El Camino Real, Suite 300
San Diego, CA 92130
Attention: Mike Hird
Email: mike.hird@pillsburylaw.com

If sent by email, the date on which such notice, request, approval or consent
shall be deemed delivered is the date of confirmed transmission, if such notice,
request, approval or consent is sent via email to such email address before 5:00
p.m. at the location of receipt on a Business Day, or the first Business Day
after the date of transmission, if such notice, request, approval or consent is
sent via email to such email address at or after 5:00 p.m. at the location of
receipt on a Business Day or on a day that is not a Business Day. If sent by
internationally recognized overnight courier, the date on which such notice,
request, approval or consent shall be deemed delivered is the next Business Day
after the date of deposit with such courier (by the courier’s stated time for
enabling next-business-day delivery), and if delivered after such stated time
shall be deemed to be the second Business Day after the date of deposit.

Section 8.10 Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court (or
arbitration forum) of competent jurisdiction declares that any term or provision
hereof is invalid or unenforceable, the parties hereto agree that the court (or
arbitration forum) making such determination shall have the power to limit the
term or provision, to delete specific words or phrases or to replace any invalid
or unenforceable term or provision with a term or provision that is valid and
41

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

enforceable and that comes closest to expressing the intention of the invalid or
unenforceable term or provision, and this Agreement shall be enforceable as so
modified. In the event such court (or arbitration forum) does not exercise the
power granted to it in the prior sentence, the parties hereto agree to negotiate
in good faith to replace such invalid or unenforceable term or provision with a
valid and enforceable term or provision that will achieve, to the extent
possible, the economic, business and other purposes of such invalid or
unenforceable term.
Section 8.11 Specific Performance. The parties hereto agree that irreparable
damage would occur in the event any of the provisions of this Agreement were not
to be performed in accordance with the terms hereof and that the parties shall
be entitled to specific performance of the terms hereof and/or to temporary,
preliminary and/or permanent injunctive relief, in addition to any other
remedies at law or in equity. Each party agrees to waive any requirement for the
posting of, or securing of, a bond in connection with any such remedy.
Section 8.12 Remedies. All rights and remedies of either party hereto are
cumulative of each other and of every other right or remedy such party may
otherwise have at law or in equity, and the exercise of one or more rights or
remedies shall not prejudice or impair the concurrent or subsequent exercise of
other rights or remedies.
Section 8.13 Construction.
a.For purposes of this Agreement, whenever the context requires: the singular
number shall include the plural, and vice versa; the masculine gender shall
include the feminine and neuter genders; the feminine gender shall include the
masculine and neuter genders; and the neuter gender shall include the masculine
and feminine genders.
b.The parties hereto agree that any rule of construction to the effect that
ambiguities are to be resolved against the drafting party shall not be applied
in the construction or interpretation of this Agreement.
c.As used in this Agreement, the words “include” and “including,” and variations
thereof, shall not be deemed to be terms of limitation, but rather shall be
deemed to be followed by the words “without limitation.”
d.Except as otherwise indicated, all references in this Agreement to “Articles,”
“Sections” and “Exhibits” are intended to refer to Articles, Sections or
Exhibits to this Agreement, as the case may be.
e.All references in this Agreement to “$” are intended to refer to U.S. dollars.
f.Unless otherwise specifically provided for herein, the term “or” shall not be
deemed to be exclusive.
g.The titles, captions or headings of the Sections herein are inserted for
convenience of reference only and are not intended to be a part of or to affect
the meaning or interpretation of this Agreement.
[The remainder of this page has been left blank intentionally.]

42

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IN WITNESS WHEREOF, Parent, Merger Sub, the Company, the Members, the Restricted
Person and the Members’ Representative have caused this Agreement and Plan of
Merger to be executed as of the date first written above.
Ligand Pharmaceuticals Incorporated
By: /s/ Charles S. Berkman 
Name: Charles S. Berkman 
Title: SVP, General Counsel and Secretary 
Taurus Acquisition Merger Sub, LLC
By: /s/ Charles S. Berkman 
Name: Charles S. Berkman 
Title: SVP, General Counsel and Secretary 
Taurus Biosciences, LLC
By: /s/ Vaughn Smider 
Name: Vaughn Smider
Title: Manager
MEMBERS:
        /s/ Vaughn Smider 
Vaughn Smider
Alexandra Wood America LLC

By: /s/ D. Asher Bistricer  
Name and Title: D. Asher Bistricer ASO 

Aperture Healthcare Ventures LLC 

By: /s/ Justine Turner  
Name and Title: Justine Turner Director 

43

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Maplebrook LLC 

By: /s/ Ezra Friedberg  
Name and Title: Ezra Friedberg Member 

        /s/ Michael Weiss 
Michael Weiss
        /s/ Kent Iverson 
Kent Iverson

Applied Biomedical Science Institute

By: /s/ David Rabuka  
Name and Title: David Rabuka Member 

        /s/ Ruiqi Huang 
Ruiqi Huang

        /s Gabriella Warner 
Gabrielle Warner

        /s/ Duncan McGregor 
Duncan McGregor

        /s/ Peter Slover 
Peter Slover

        /s/ Ronald Martell 
Ronald Martell

        /s/ Michael Gilman 
Michael Gilman
44

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        /s/ Michael King 
Michael King

        /s/ Mike Hird 
Mike Hird

        /s/ David Sheehan 
David Sheehan

        /s/ Tom Boone 
Tom Boone

        /s/ Waithaka Mwangi 
Waithaka Mwangi

        /s/ Michael Criscitiello 
Michael Criscitiello

        /s/ Ian Wilson 
Ian Wilson

        /s/ Dennis Burton 
Dennis Burton

        /s/ Richard Lerner 
Richard Lerner

45

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AS ACCEPTED AND AGREED:
        /s/ Vaughn Smider 
Name: Vaughn Smider
As: The Restricted Person

        /s/ Vaughn Smider 
Name: Vaughn Smider
As: The Members’ Representative

46

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EXHIBIT A
COMPANY EQUITY INTERESTS

Owner (and address/email address)Type of Interests [Units]Number of Interests
[Units]
Vaughn Smider
8205 Torrey Gardens Place
San Diego, CA 92129

Email: vaughn.smider@taurusbiosciences.com
outstanding Units92,500
Alexandra Wood America LLC
Attn: Brenda Elston or Marc Bistricer
145 Adelaide St West #500
Toronto, Ontario, Canada M5H 4E5

Email: mjb@murchinsonltd.com
             belston@taliskercorp.com
outstanding Units6,700
Aperture Healthcare Ventures LLC
Attn: Avi Wachsman
970 Lawrence Avenue West Suite 904
Toronto, Ontario, Canada M6A 3B6
Email: avi@btcapital.ca
outstanding Units6,700
Maplebrook LLC
Attn: Ezra Friedberg
4680 Livingston Ave
Bronx, NY 10471
Email: ezra@ezrafriedberg.com
outstanding Units1,500
Michael Weiss
9 East 96th Street
Apartment 8A
New York, New York 10128
Email: weissweather@gmail.com
outstanding Units5,276
Kent Iverson
455 Eastin Drive
Sonoma, CA 95476
Email: ks_iverson@yahoo.com
outstanding Units5,000
Applied Biomedical Science Institute
Attn: Board of Directors
10929 Technology Place
San Diego, CA 92127

Email: david.rabuka@gmail.com
            jwlarrick@gmail.com
outstanding Units12,832
Ruiqi Huang
12609 Robison Blvd, Apt 204
Poway, CA 92064

Email: ruiqi.huang@absinstitute.org
outstanding Units1,388
Gabrielle Warner
13592 Jadestone Way
San Diego, CA 92130

Email: gabrielle.warner@absinstitute.org
outstanding Units1,388
Duncan McGregor
4862 Dixie Drive
San Diego, CA 92109

Email: Duncan.mcgregor@absinstitute.org
outstanding Units1,388
Peter Slover
9324 Fostoria Court
San Diego, CA 92127

Email: peter.slover@absinstitute.org
outstanding Units694
Ronald Martell
256 Casitas Ave.  
San Francisco, CA 9412

Email: Ronald.martell@gmail.com
outstanding Units1,041
Michael Gilman
550 Chestnut St
Waban MA 02468

Email: Michael.gilman@gmail.com
outstanding Units694
Michael King
1340 Paine Road
Hewlett Bay Park NY 11557

Email: mike@rexbiomed.com
outstanding Units347
Mike Hird
1508 Rancho Encinitas Drive
Encinitas, CA 92024

Email: mike.hird@pillsburylaw.com
outstanding Units1,388
David Sheehan
17515 Valle Verde Rd.   
Poway, CA  92064

Email: dsheehan@nucleusbiologics.com
outstanding Units694
Tom Boone
2715 Kelly Knoll Lane
Newbury Park, CA, 91320

Email: tcboone28@verizon.net
outstanding Units347
Waithaka Mwangi
4420 Grande Bluffs Ct.
Manhattan, KS 66503.
Email: wmwangi@vet.k-state.edu
outstanding Units347
Michael Criscitiello
812 Pine Valley Drive
College Station, TX 77845

Email: mcriscitiello@cvm.tamu.edu
outstanding Units347
Ian Wilson
1025 Newkirk Drive
La Jolla, CA 92037

Email: wilson@scripps.edu
outstanding Units347
Dennis Burton
6044 Beaumont Ave
La Jolla, CA 92037

Email: burton@scripps.edu
outstanding Units347
Richard Lerner
7750 East Roseland Drive,
La Jolla, CA 92037

Email: rlerner@scripps.edu
outstanding Units347TOTALoutstanding Units141,612

A-1

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

EXHIBIT B
PATENTS

OWNED:Atty. Ref.CountryTitle
App No.
 Filing Date

Patent/Publication No.
Filing Date
Status20001.00USANTI-DLL4 ANTIBODIES AND USES THEREOF
13/128,236
11-04-2009

9,403,904
08-02-2016
Issued20001.30USCOMBINATORIAL ANTIBODY LIBRARIES AND USES THEREOF
13/128,219
11-04-2009

9,221,902
12-29-2015
Issued20001.02USCOMBINATORIAL ANTIBODY LIBRARIES AND USES THEREOF
14/959,940
12-04-2015
10,774,138
09-15-2020
Allowed20001.10USCOMBINATORIAL ANTIBODY LIBRARIES AND USES THEREOF
17/002,749
08-25-2020
Pending20001.51CanadaCOMBINATORIAL ANTIBODY LIBRARIES AND USES THEREOF 
2,742,968
11-04-2009

Granted20001.52EuropeCOMBINATORIAL ANTIBODY LIBRARIES AND USES THEREOF 
09748671.6
11-04-2009

2356270
08-24-2016
Granted20001.53JapanCOMBINATORIAL ANTIBODY LIBRARIES AND USES THEREOF 
2011-535649
11-04-2009

5882058
02-12-2016
Granted20001.55SwitzerlandCOMBINATORIAL ANTIBODY LIBRARIES AND USES THEREOF 
09748671.6
11-04-2009

2356270
08-24-2016

Validated20001.56GermanyCOMBINATORIAL ANTIBODY LIBRARIES AND USES THEREOF 
09748671.6
11-04-2009

602009040618.3
08-24-2016

Validated20001.57DenmarkCOMBINATORIAL ANTIBODY LIBRARIES AND USES THEREOF 
09748671.6
11-04-2009

2356270
08-24-2016Validated20001.58FranceCOMBINATORIAL ANTIBODY LIBRARIES AND USES
THEREOF 
09748671.6
11-04-2009

2356270
08-24-2016

Validated20001.59BritainCOMBINATORIAL ANTIBODY LIBRARIES AND USES THEREOF 
09748671.6
11-04-2009

2356270
08-24-2016

Validated20001.60NetherlandsCOMBINATORIAL ANTIBODY LIBRARIES AND USES THEREOF 
09748671.6
11-04-2009

2356270
08-24-2016

Validated20001.61NorwayCOMBINATORIAL ANTIBODY LIBRARIES AND USES THEREOF 
09748671.6
11-04-2009

2356270
08-24-2016

Validated20001.62SwedenCOMBINATORIAL ANTIBODY LIBRARIES AND USES THEREOF 
09748671.6
11-04-2009

2356270
08-24-2016Validated20002.01USMETHODS FOR AFFINITY MATURATION-BASED ANTIBODY
OPTIMIZATION
14/692,646
04-21-2015
10,101,333
10-16-2018
Issued20003.00USHUMANIZED ANTIBODIES WITH ULTRALONG COMPLEMENTARY DETERMINING
REGIONS
14/905,765
07-18-2014

10,640,574
05-05-2020
Issued

20003.01USHUMANIZED ANTIBODIES WITH ULTRALONG COMPLEMENTARY DETERMINING REGIONS
16/831,508
03-26-2020
Pending

20003.41AustraliaHUMANIZED ANTIBODIES WITH ULTRALONG COMPLEMENTARY DETERMINING
REGIONS
2014290361
07-18-2014

2014290361
07-30-2019

Granted20003.42CanadaHUMANIZED ANTIBODIES WITH ULTRALONG COMPLEMENTARY
DETERMINING REGIONS
2,918,370
07-18-2014
Pending20003.43ChinaHUMANIZED ANTIBODIES WITH ULTRALONG COMPLEMENTARY
DETERMINING REGIONS
201480051514.8
07-18-2014
ZL 201480051514.8
04-21-2020
Granted20003.48ChinaHUMANIZED ANTIBODIES WITH ULTRALONG COMPLEMENTARY
DETERMINING REGIONS
202010240256.5
7-18-2014
Pending20003.44EuropeHUMANIZED ANTIBODIES WITH ULTRALONG COMPLEMENTARY
DETERMINING REGIONS
14748405.9
07-18-2014
Pending20003.45JapanHUMANIZED ANTIBODIES WITH ULTRALONG COMPLEMENTARY
DETERMINING REGIONS
2016-527148
07-18-2014

6687520
04-06-2020
Granted20003.47JapanHUMANIZED ANTIBODIES WITH ULTRALONG COMPLEMENTARY
DETERMINING REGIONS
2020-066669
04-02-2020
Pending30007.00USCHIMERIC CYTOKINE MODIFIED ANTIBODIES AND METHODS OF USE
THEREOF (*)
62/925,740
10-24-2019
Pending

(*) Note: This is the Provisional IL-15 Patent that will be assigned to the
Company by Applied Biomedical Science Institute pursuant to the terminal
assignment contemplated by Section 2.6(a)(v) of the Agreement.

B-1

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

LICENSED (Scripps):

Atty. Ref.CountryTitle
App No.
 Filing Date

Publication/Patent No.
Filing Date
Status20005.01USHUMANIZED ANTIBODIES
15/801,251
01-09-2012

10,562,980
02-18-2020

Issued20005.10USHUMANIZED ANTIBODIES
16/735,070
01-06-2020
Pending20005.42AustraliaHUMANIZED ANTIBODIES
2017265152
01-09-2013

Pending20005.45EuropeHUMANIZED ANTIBODIES
13701317.3
01-09-2013

2802601
10-17-2019

Granted20005.48JapanHUMANIZED ANTIBODIES
2019-206681
11-15-2019
Pending20005.49EuropeHUMANIZED ANTIBODIES WITH ULTRALONG CDR3S
19208487.9
11-12-2019
Pending20005.50BelgiumHumanized Antibodies
13701317.3
01-09-2013

        
2802601
11-13-2019
Validated20005.51SwitzerlandHumanized Antibodies
13701317.3
01-09-2013

2802601
11-13-2019 
Validated20005.52GermanyHumanized Antibodies
13701317.3
01-09-2013

2802601
11-13-2019
Validated20005.53FranceHumanized Antibodies
13701317.3
01-09-2013

        
2802601
11-13-2019
Validated20005.54BritainHumanized Antibodies
13701317.3
01-09-2013

2802601
11-13-2019
Validated20005.55IrelandHumanized Antibodies
13701317.3
01-09-2013

2802601
11-13-2019
Validated20005.56NetherlandsHumanized Antibodies
13701317.3
01-09-2013

2802601
11-13-2019
Validated20006.00USULTRALONG COMPLEMENTARITY DETERMINING REGIONS AND USES
THEREOF
13/737,910
01-09-2013

10,774,132
09-15-2020
Allowed20006.10USULTRALONG COMPLEMENTARITY DETERMINING REGIONS AND USES THEREOF
16/742,759
01-14-2020
US 2020-0181241 
06-11-2020
Pending20006.41AustraliaULTRALONG COMPLEMENTARITY DETERMINING REGIONS AND USES
THEREOF
2013208003
01-09-2013

2013208003
03-29-2018

Granted20006.45EuropeULTRALONG COMPLEMENTARITY DETERMINING REGIONS AND USES
THEREOF
13735853.7
01-09-2013

Pending20006.46JapanULTRALONG COMPLEMENTARITY DETERMINING REGIONS AND USES
THEREOF
2014-552273
01-09-2013

6684490
04-1-2020

Issued

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

EXHIBIT C
CVR AGREEMENT